How Much Sunlight Does it Take to Disinfect a Boardroom? A Short History of Executive Compensation Regulation

This paper reviews the history of executive compensation disclosure and other government policies affecting CEO pay, and as well surveys the literature on the effects of these policies. Disclosure has increased nearly uniformly since 1933. A number of other regulations, including special taxes on CEO pay and rules regarding votes on some pay packages have also been introduced, particularly in the last 20 years. However, there is little solid evidence that any of these policies have had any substantial impact on pay. Policy changes have likely helped drive the move towards more use of stock options, but there is no conclusive evidence on how policy has otherwise affected the level or composition of pay. I also review evidence from overseas on “Say on Pay,” recently proposed in the US, which would allow nonbinding shareholder votes on CEO compensation. The experiences of other countries have been positive, with tighter linkages between pay and performance and improved communication with investors. Mandatory say on pay would be beneficial in the US.

Selected Issues in the Rise of Income Inequality

macroeconomics, Income Inequality

Where Did Productivity Growth Go? Inflation Dynamics and the Distribution of Income

Starting from the standard Gordon inflation model, which explains price changes by inertia, demand shocks, and supply shocks but excludes wages, the first part of this paper returns wages to the analysis by developing a model that includes both price and wage equations. The model allows for feedback between the two and captures the effect of changes in trend productivity growth on inflation, nominal wages, and labor’s income share. In dynamic simulations, changes in the productivity growth trend strongly boosted inflation during 1965-79 and slowed it between 1995 and 2005. The paper’s second part links the productivity growth analysis to changes in the income distribution. It finds, using IRS data, that only the top decile experienced real wage and salary income growth equal to or above average economywide productivity growth. And increasing inequality within the top decile was as important a source of growing inequality as the gap between the top and bottom deciles.macroeconomics, Productivity Growth, Inflation Dynamics, Distribution of Income

Why did Europe’s productivity catch-up sputter out? a tale of tigers and tortoises

This paper takes a different approach to examining the sharp turnaround in EU relative to U. S. labor productivity growth since 1995. The vast majority of the literature focuses on the American growth revival. But close to half of the turnaround was caused by a European retardation. What caused that retardation? Our paper shows that none of the consensus explanations of the American revival provide any help at all in explaining the European retardation. It is sui generis and therein lies a tale that has not previously been told. ; Europe has faltered across the board. The deceleration of its productivity growth is not explained at all by ICT production and only to a small degree by retailing/wholesaling. Rather, the big European countries have failed in nearly every dimension. The retardation of Europe is illuminated by dividing up the EU-15 countries into Tigers, a Middle group, and Tortoises. ; Our first surprise in examining the data is to find that the EU-US turnaround in labor productivity growth was not just a reflection of an equivalent turnaround in total factor productivity growth. Capital deepening also faltered in Europe, indicting all the macroeconomic determinants of economy-wide investment as part of Europe’s problem. ; The most striking aspect of our results is that the failing of the Tortoise countries is widespread, spanning industries as diverse as agriculture, wholesale trade, mining, chemicals, construction, fabricated metals, and clothing. Our explanation is that Europe’s previous catch-up to the U. S. productivity level before 1995 was artificial – by making labor expensive, Europe raised its average product. But after 1995 as labor market reforms have helped to make labor cheaper, so the average product of labor has been pushed down and its growth rate has faltered. The falling behind of Europe is quite simple to explain; European regulations defied the laws of labor market equilibrium for decades, and a slight leak in the dam holding back market forces has already led to faster growth in European employment and slower growth in productivity.

How much sunlight does it take to disinfect a boardroom?: a short history of executive compensation regulation

This paper reviews the history of executive compensation disclosure and other government policies affecting CEO pay, and as well surveys the literature on the effects of these policies. Disclosure has increased nearly uniformly since 1933. A number of other regulations, including special taxes on CEO pay and rules regarding votes on some pay packages have also been introduced, particularly in the last 20 years. However, there is little solid evidence that any of these policies have had any substantial impact on pay. Policy changes have likely helped drive the move towards more use of stock options, but there is no conclusive evidence on how policy has otherwise affected the level or composition of pay. I also review evidence from overseas on Say on Pay, recently proposed in the US, which would allow nonbinding shareholder votes on CEO compensation. The experiences of other countries have been positive, with tighter linkages between pay and performance and improved communication with investors. Mandatory say on pay would be beneficial in the US

The Role of Labor Market Changes in the Slowdown of European Productivity Growth

Throughout the postwar era until 1995 labor productivity grew faster in Europe than in the United States. Since 1995, productivity growth in the EU-15 has slowed while that in the United States has accelerated. But Europe's productivity growth slowdown was largely offset by faster growth in employment per capita, leaving little difference in growth of output per capita between the EU and US going back to 1980. This paper is about the strong negative tradeoff between productivity and employment growth within Europe. We document this tradeoff in the raw data, in regressions that control for the two-way causation between productivity and employment growth, and we show that there is a robust negative correlation between productivity and employment growth across countries and time. Our primary explanatory variables to explain both the revival of EU employment growth and the slowdown in productivity growth include six policy and institutional variables. We find that several of these variables have significant negative effects on employment per capita, both before and after 1995. We also find a significant time effect, that the increase in European employment per capita increased after 1995 for reasons that go beyond our six explanatory variables, and we link this time effect to a secular increase in the labor-force participation of women, particularly in southern European countries. We conclude by suggesting that evaluations of alternative policy reforms in Europe should take into account any offsetting effects on employment and productivity by examining the ultimate impact on changes in income per capita.

Controversies about the Rise of American Inequality: A Survey

This paper provides a comprehensive survey of seven aspects of rising inequality that are usually discussed separately: changes in labor's share of income; inequality at the bottom of the income distribution, including labor mobility; skill-biased technical change; inequality among high incomes; consumption inequality; geographical inequality; and international differences in the income distribution, particularly at the top. We conclude that changes in labor's share play no role in rising inequality of labor income; by one measure labor's income share was almost the same in 2007 as in 1950. Within the bottom 90 percent as documented by CPS data, movements in the 50-10 ratio are consistent with a role of decreased union density for men and of a decrease in the real minimum wage for women, particularly in 1980-86. There is little evidence on the effects of imports, and an ambiguous literature on immigration which implies a small overall impact on the wages of the average native American, a significant downward effect on high-school dropouts, and potentially a large impact on previous immigrants working in occupations in which immigrants specialize. The literature on skill-biased technical change (SBTC) has been valuably enriched by a finer grid of skills, switching from a two-dimension to a three- or five-dimensional breakdown of skills. We endorse the three-way "polarization" hypothesis that seems a plausible way of explaining differentials in wage changes and also in outsourcing. To explain increased skewness at the top, we introduce a three-way distinction between market-driven superstars where audience magnification allows a performance to reach one or ten million people, a second market-driven segment consisting of occupations like lawyers and investment bankers, and a third segment consisting of top corporate officers. Our review of the CEO debate places equal emphasis on the market in showering capital gains through stock options and an arbitrary management power hypothesis based on numerous non-market aspects of executive pay. Data on consumption inequality are too fragile to reach firm conclusions. We introduce two new issues, disparities in the growth of price indexes and also of life expectancy between the rich and the poor. We conclude with a perspective on international differences that blends institutional and market-driven explanations.

Assessing the cardiovascular effects of levothyroxine use in an ageing United Kingdom population (ACEL-UK) protocol: a cohort and target trial emulation study

Background Subclinical hypothyroidism is diagnosed when serum thyroid stimulating hormone levels are higher whilst free thyroxine levels remain within their respective reference ranges. These reference ranges are uniformly applied in all adults, despite serum thyroid stimulating hormone levels naturally increasing with age. Research has found that mildly elevated thyroid stimulating hormone levels may be associated with some benefits in ageing patients, including reduced mortality and better cardiorespiratory fitness. Levothyroxine is typically prescribed to patients with hypothyroidism, but no conclusive evidence exists on whether levothyroxine therapy is beneficial or detrimental in older subclinical hypothyroid patients. Despite this, prescriptions for levothyroxine are increasing yearon-year. This study aims to determine if receiving levothyroxine affects the cardiovascular and bone health outcomes of subclinical patients in primary care aged 50 years and over. Methods This project includes a retrospective cohort analysis and a target trial emulation study using electronic patient records collected between 2006 and 2021 and recorded in The Health Improvement Network database. The primary outcome of this study is to compare the cardiovascular outcomes of subclinical hypothyroid patients aged over 50 years treated with levothyroxine compared to those untreated. Secondary outcomes are bone health and allcause mortality outcomes. Descriptive and inferential statistics will both be employed to analyse the data. Secondary analysis will explore confounding factors, including age, sex, smoking status, body mass index, co-morbidities, and levothyroxine dosage. Discussion There needs to be a greater understanding of the potential risks of the current treatment for older patients with subclinical hypothyroidism in a primary care setting. We will investigate the clinical importance of this issue and whether older subclinical hypothyroid patients have poorer outcomes when treated. Clarifying this concern may help address the healthcare resource implications of ageing patients being misclassified as having mild hypothyroidism, as these patients are more likely to repeat their blood tests. This could reduce prescription wastage and improve patient outcomes and quality of life in the ageing population

Cardiovascular and bone health outcomes in older people with subclinical hypothyroidism treated with levothyroxine: a systematic review and meta-analysis.

BACKGROUND Thyroid dysfunction is common in older people, with females at higher risk. Evidence suggests that thyroid-stimulating hormone (TSH) levels naturally increase with age. However, as uniform serum TSH reference ranges are applied across the adult lifespan, subclinical hypothyroidism (SCH) diagnosis is more likely in older people, with some individuals also being commenced treatment with levothyroxine (LT4). It is unclear whether LT4 treatment in older people with SCH is associated with adverse cardiovascular or bone health outcomes. METHODS A systematic review and meta-analysis were performed to synthesise previous studies evaluating cardiovascular and bone health outcomes in older people with SCH, comparing LT4 treatment with no treatment. PubMed, Embase, Cochrane Library, MEDLINE, and Web of Science databases were searched from inception until March 13, 2023, and studies that evaluated cardiovascular and bone health events in people with SCH over 50 years old were selected. RESULTS Six articles that recruited 3853 participants were found, ranging from 185 to 1642 participants, with the proportion of females ranging from 45 to 80%. The paucity of data resulted in analysis for those aged over 65 years only. Additionally, a study with 12,212 participants aged 18 years and older was identified; however, only data relevant to patients aged 65 years and older were considered for inclusion in the systematic review. Of these 7 studies, 4 assessed cardiovascular outcomes, 1 assessed bone health outcomes, and 2 assessed both. A meta-analysis of cardiovascular outcomes revealed a pooled hazard ratio of 0.89 (95% CI 0.71-1.12), indicating no significant difference in cardiovascular risk between older individuals with SCH treated with LT4 compared to those without treatment. Due to overlapping sub-studies, meta-analysis for bone health outcomes was not possible. CONCLUSIONS This systematic review and meta-analysis found no significant association between LT4 use and cardiovascular and bone health outcomes in SCH participants over 65 years. SYSTEMATIC REVIEW REGISTRATION PROSPERO CRD42022308006

Cardiovascular and bone health outcomes in older people with subclinical hypothyroidism treated with levothyroxine: a systematic review and meta-analysis

Background Thyroid dysfunction is common in older people, with females at higher risk. Evidence suggests that thyroid-stimulating hormone (TSH) levels naturally increase with age. However, as uniform serum TSH reference ranges are applied across the adult lifespan, subclinical hypothyroidism (SCH) diagnosis is more likely in older people, with some individuals also being commenced treatment with levothyroxine (LT4). It is unclear whether LT4 treatment in older people with SCH is associated with adverse cardiovascular or bone health outcomes. Methods A systematic review and meta-analysis were performed to synthesise previous studies evaluating cardiovascular and bone health outcomes in older people with SCH, comparing LT4 treatment with no treatment. PubMed, Embase, Cochrane Library, MEDLINE, and Web of Science databases were searched from inception until March 13, 2023, and studies that evaluated cardiovascular and bone health events in people with SCH over 50 years old were selected. Results Six articles that recruited 3853 participants were found, ranging from 185 to 1642 participants, with the proportion of females ranging from 45 to 80%. The paucity of data resulted in analysis for those aged over 65 years only. Additionally, a study with 12,212 participants aged 18 years and older was identified; however, only data relevant to patients aged 65 years and older were considered for inclusion in the systematic review. Of these 7 studies, 4 assessed cardiovascular outcomes, 1 assessed bone health outcomes, and 2 assessed both. A meta-analysis of cardiovascular outcomes revealed a pooled hazard ratio of 0.89 (95% CI 0.71–1.12), indicating no significant difference in cardiovascular risk between older individuals with SCH treated with LT4 compared to those without treatment. Due to overlapping sub-studies, meta-analysis for bone health outcomes was not possible. Conclusions This systematic review and meta-analysis found no significant association between LT4 use and cardiovascular and bone health outcomes in SCH participants over 65 years