Love and taxes - and matching institutions

"We study a setting with search frictions in the marriage market and with incomplete contracting inside the family. Everyone prefers a partner that has high income and is a perfect emotional match, but compromises must often be struck. A high income earner may abstain from marrying a low-income earner even though they would be a perfect match emotionally, because the highincome earner may dislike the implicit income redistribution implied by the marriage. Redistributive income taxation may ease this problem. Income matching institutions that secure that people largely from the same income groups meet each other can substitute for redistribution, so that optimal redistribution is reduced. We also introduce a divorce option. Redistributive taxation is shown both to further and stabilize marriage." (author's abstract)"Wenn Menschen mit unterschiedlichem Einkommen heiraten, führt dies zu einer Umverteilung innerhalb der Ehe von der wirtschaftlich stärkeren zur wirtschaftlich schwächeren Person. Zwei Personen, die zufällig aufeinander treffen und aufgrund ähnlicher Interessen und Neigungen gut zueinander passen, werden auch die finanziellen Folgen einer Heirat berücksichtigen. Falls die Person mit hohem Einkommen diese Umverteilung als zu stark empfindet, kommt die Ehe nicht zustande. Die Rente, die z.B. dadurch entsteht, dass das Paar ähnliche Interessen hat oder gemeinsamen Hobbys nachgehen kann, geht in diesem Fall verloren. Progressive Besteuerung führt zu einer Angleichung der Einkommensverteilung und verringert daher die Wahrscheinlichkeit, dass Ehen aufgrund hoher Einkommensunterschiede nicht zustande kommen. Aus wohlfahrtstheoretischer Sicht ist dies ein positiver Aspekt umverteilender Besteuerung, der bisher in der Literatur nicht berücksichtigt wurde. Die optimale Höhe der Besteuerung hängt von den 'Matching-Institutionen' ab, d.h. davon wer wen auf dem Heiratsmarkt trifft. Treffen vorwiegend Personen mit unterschiedlichem Einkommen und ähnlichen Interessen aufeinander, ist der positive Effekt der Besteuerung besonders wirksam. In diesem Fall ist der optimale Steuersatz umso höher, je ähnlicher die Interessen der potentiellen Partner ist. Umgekehrt kann progressive Besteuerung in einer Gesellschaft, in der vorwiegend Personen mit ohnehin ähnlichem Einkommen aufeinandertreffen, kaum etwas bewirken. Daher fällt in diesem Fall der optimale Steuersatz umso geringer aus, je ähnlicher die Einkommen der potentiellen Paare auf dem Heiratsmarkt sind." (Autorenreferat

Occupational choice, number of entrepreneurs and output: theory and empirical evidence with Spanish data

This paper extends the (Lucas, Bell J Econ 9:508–523,1978) model of occupational choices by individuals with different skills, beyond the simple options of self-employment or wage-employment, by including a second choice for the self-employed. That is, an option to hire employees and so become self-employed with employees (SEWEs), or to be self-employed without employees (SEWNEs). We solve for the market equilibrium and examine the sensitivity of relative sizes of occupational groups, and of the level of productivity, to changes in the exogenous parameters. The results show that the positive (negative) association between number of SEWEs (SEWNEs) and productivity, observed in the Spanish data, can be explained, under certain conditions, as the result of cross-region and time differences in average skills. These findings point to the importance of distinguishing between SEWEs and SEWNEs in drawing valid conclusions concerning any link between entrepreneurship and economic development

Child mortality, commodity price volatility and the resource curse

Given many developing economies depend on primary commodities, the fluctuations of commodity prices may imply significant effects for the wellbeing of children. To investigate, this paper examines the relationship between child mortality and commodity price movements as reflected by country-specific commodity terms-of-trade. Employing a panel of 69 low and lower-middle income countries over the period 1970-2010, we show that commodity terms-of-trade volatility increases child mortality in highly commodity-dependent importers suggesting a type of 'scarce' resource curse. Strikingly however, good institutions appear able to mitigate the negative impact of volatility. The paper concludes by highlighting this tripartite relationship between child mortality, volatility and good institutions and posits that an effective approach to improving child wellbeing in low to lower-middle income countries will combine hedging, import diversification and improvement of institutional quality

EphA2-receptor deficiency exacerbates myocardial infarction and reduces survival in hyperglycemic mice

Background We have previously shown that EphrinA1/EphA expression profile changes in response to myocardial infarction (MI), exogenous EphrinA1-Fc administration following MI positively influences wound healing, and that deletion of the EphA2 Receptor (EphA2-R) exacerbates injury and remodeling. To determine whether or not ephrinA1-Fc would be of therapeutic value in the hyperglycemic infarcted heart, it is critical to evaluate how ephrinA1/EphA signaling changes in the hyperglycemic myocardium in response to MI. Methods Streptozotocin (STZ)-induced hyperglycemia in wild type (WT) and EphA2-receptor mutant (EphA2-R-M) mice was initiated by an intraperitoneal injection of STZ (150 mg/kg) 10 days before surgery. MI was induced by permanent ligation of the left anterior descending coronary artery and analyses were performed at 4 days post-MI. ANOVAs with Student-Newman Keuls multiple comparison post-hoc analysis illustrated which groups were significantly different, with significance of at least p < 0.05. Results Both WT and EphA2-R-M mice responded adversely to STZ, but only hyperglycemic EphA2-R-M mice had lower ejection fraction (EF) and fractional shortening (FS). At 4 days post-MI, we observed greater post-MI mortality in EphA2-R-M mice compared with WT and this was greater still in the EphA2-R-M hyperglycemic mice. Although infarct size was greater in hyperglycemic WT mice vs normoglycemic mice, there was no difference between hyperglycemic EphA2-R-M mice and normoglycemic EphA2-R-M mice. The hypertrophic response that normally occurs in viable myocardium remote to the infarct was noticeably absent in epicardial cardiomyocytes and cardiac dysfunction worsened in hyperglycemic EphA2-R-M hearts post-MI. The characteristic interstitial fibrotic response in the compensating myocardium remote to the infarct also did not occur in hyperglycemic EphA2-R-M mouse hearts to the same extent as that observed in the hyperglycemic WT mouse hearts. Differences in neutrophil and pan-leukocyte infiltration and serum cytokines implicate EphA2-R in modulation of injury and the differences in ephrinA1 and EphA6-R expression in governing this are discussed. Conclusions We conclude that EphA2-mutant mice are more prone to hyperglycemia-induced increased injury, decreased survival, and worsened LV remodeling due to impaired wound healing

Gender gaps in education

This chapter reviews the growing body of research in economics which concentrates on the education gender gap and its evolution, over time and across countries. The survey first focuses on gender differentials in the historical period that roughly goes from 1850 to the 1940s and documents the deep determinants of the early phase of female education expansion, including preindustrial conditions, religion, and family and kinship patterns. Next, the survey describes the stylized facts of contemporaneous gender gaps in education, from the 1950s to the present day, accounting for several alternative measures of attainment and achievement and for geographic and temporal differentiations. The determinants of the gaps are then summarized, while keeping a strong emphasis on an historical perspective and disentangling factors related to the labor market, family formation, psychological elements, and societal cultural norms. A discussion follows of the implications of the education gender gap for multiple realms, from economic growth to family life, taking into account the potential for reverse causation. Special attention is devoted to the persistency of gender gaps in the STEM and economics fields

Gender Gaps in Education

This chapter reviews the growing body of research in economics which concentrates on the education gender gap and its evolution, over time and across countries. The survey first focuses on gender differentials in the historical period that roughly goes from 1850 to the 1940s and documents the deep determinants of the early phase of female education expansion, including preindustrial conditions, religion, and family and kinship patterns. Next, the survey describes the stylized facts of contemporaneous gender gaps in education, from the 1950s to the present day, accounting for several alternative measures of attainment and achievement and for geographic and temporal differentiations. The determinants of the gaps are then summarized, while keeping a strong emphasis on an historical perspective and disentangling factors related to the labor market, family formation, psychological elements, and societal cultural norms. A discussion follows of the implications of the education gender gap for multiple realms, from economic growth to family life, taking into account the potential for reverse causation. Special attention is devoted to the persistency of gender gaps in the STEM and economics fields

Inspired or foolhardy: sensemaking, confidence and entrepreneurs' decision-making.

The purpose of this paper is to investigate the role of confidence in how both new and experienced entrepreneurs interpret and make sense of their business environment to inform decision-making. We illustrate our conceptual arguments with descriptive results from a large-scale (n = 6289) survey on entrepreneurs' perception of business performance and their decisions taken at a time of uncertainty in an economic downturn. Quantitative findings are stratified along experiential lines to explore heterogeneity in entrepreneurial decision-making and directly inform our conceptual arguments, while qualitative data from open questions are used to explain the role of confidence. Newer entrepreneurs are found to be more optimistic in the face of environmental risk, which impacts on their decision-making and innovative capabilities. However, the more experienced entrepreneurs warily maintain margin and restructure to adapt to environmental changes. Instead of looking directly at the confidence of individuals, we show how confidence impacts sensemaking, and ultimately, decision-making. These insights inform research on the behaviour of novice and experienced entrepreneurs in relation to innovative business activities. Specifically, blanket assumptions on the role of confidence may be misplaced as its impact changes with experience to alter how entrepreneurs make sense of their environment