Demographic Change and the Labour Share of Income

Despite similar levels of per capita income, education, and technology the development of labour shares in OECD countries has displayed different patterns since 1960. The paper examines the role of demography in this regard. Employing an overlapping generations model we first examine the mechanisms through which demographic change can affect labour shares. Model simulations show that demographic effects on the labour share are larger in open than in closed economies. Empirical estimates, conducted using panel cointegration techniques for a panel of 18 OECD countries, provide strong support for demographic effects on the labour share. In line with the simulation results, we also find evidence that openness increases this impact

Social Security, Benefit Claiming and Labor Force Participation: A Quantitative General Equilibrium Approach

We build a general equilibrium model of overlapping generations that incorporates endogenous saving, labor force participation, work hours, and Social Security benefit claims. Using this model, we study the impact of three Social Security reforms: 1) a reduction in benefits and payroll taxes; 2) an increase in the earliest retirement age, to sixty-four from sixty-two; and 3) an increase in the normal retirement age, to sixty-eight from sixty-six. We find that a 50 percent cut in the scope of the current system significantly raises asset holdings and the labor input, primarily through higher participation of older workers, and reduces the shortfall of the Social Security budget through a reduction in early claiming. Increasing the normal retirement age also raises saving and the labor supply, but the effects are smaller. Postponing the earliest retirement age has only a negligible effect. When the projected aging of the population is taken into account, the case for a reform that encourages labor force participation of the elderly appears to be much stronger

Automatic stabilizers—the intersection of labour market and fiscal policies

The Great Recession has revived aggregate demand management policies. In particular, automatic stabilizers are praised since they are rule based and thus operate swiftly and symmetrically across the cycle. However, automatic stabilizers are not a result of macro design but the structure of the social safety net and the taxation system. The participation tax is a key determinant of the strength of the automatic stabilizers. Paradoxically, the disincentive effects of high participation taxes are often discussed at the same time as automatic stabilizers are praised. The paper considers the sources of automatic stabilizers and whether they (un)intentionally have been weakened via structural reforms to strengthen work incentives. It is considered whether it is possible to maintain strong automatic stabilizers without jeopardizing incentives via the design of the social safety net (workfare) or business cycle-dependent unemployment insurance. The criticism that automatic stabilizers may prolong downturns is also considered. Finally, it is discussed to what extent aggregate demand management policy can stabilize labour markets and, in particular, whether it is well targeted towards marginalized groups. Also, the potential sources of marginalization in the labour market are discussed

Opposing effects of monomeric and pentameric C-reactive protein on endothelial progenitor cells

C-reactive protein (CRP) has been linked to the pathogenesis of atherosclerosis. The dissociation of native, pentameric (p)CRP to monomeric (m)CRP on the cell membrane of activated platelets has recently been demonstrated. The dissociation of pCRP to mCRP may explain local pro-inflammatory reactions at the site of developing atherosclerotic plaques. As a biomarker, pCRP predicts cardiovascular adverse events and so do reduced levels and function of circulating endothelial progenitor cells (EPCs). We hypothesised that mCRP and pCRP exert a differential effect on EPC function and differentiation. EPCs were treated with mCRP or pCRP for 72 h, respectively. Phenotypical characterisation was done by flow cytometry and immunofluorescence microscopy, while the effect of mCRP and pCRP on gene expression was examined by whole-genome gene expression analysis. The functional capacity of EPCs was determined by colony forming unit (CFU) assay and endothelial tube formation assay. Double staining for acetylated LDL and ulex lectin significantly decreased in cells treated with pCRP. The length of tubuli in a matrigel assay with HUVECs decreased significantly in response to pCRP, but not to mCRP. The number of CFUs increased after pCRP treatment. RNA expression profiling demonstrated that mCRP and pCRP cause highly contradictory gene regulation. Interferon-responsive genes (IFI44L, IFI44, IFI27, IFI 6, MX1, OAS2) were among the highly up-regulated genes after mCRP, but not after pCRP treatment. In conclusion, EPC phenotype, genotype and function were differentially affected by mCRP and pCRP, strongly arguing for differential roles of these two CRP conformations. The up-regulation of interferon-inducible genes in response to mCRP may constitute a mechanism for the local regulation of EPC function