De facto capital mobility, equality, and tax policy in open economies

This paper attempts at giving theoretical and empirical answers to the remaining puzzles in the literature on tax competition: the persistently high tax rates on mobile capital and the large variation in domestic tax systems. I argue that governments face a political trilemma, in which they cannot maintain the politically optimal level of public good provision, reduce capital taxes to competitive levels and implement a political support-maximizing mix of tax rates on capital and labour simultaneously. In particular, while legal restriction on capital flows have been eliminated by virtually all OECD countries, de facto capital mobility falls short of being perfect. Limits to full capital mobility result from ownership structures: the higher the concentration of capital, the higher the de facto mobility of capital and the lower the equilibrium tax rate. Second, the demand for the provision of public goods further constraints governments’ choices of the capital tax rate. If revenue from taxation of mobile factors declines, politicians cannot necessarily cut back spending without losing political support. Policy makers, accordingly, do not face a simple optimization problem when deciding on capital taxation. Rather, they have to choose a tax system which allows them to supply an appropriate level of public goods. Policy makers finally face a trade-off resulting from the redistributive conflict between capital-owners and workers. This conflict does not resemble a mere zero-sum game, because lower levels of capital taxation are likely to improve aggregate welfare, but the decision on capital taxation also cannot be analyzed in isolation from the distributive effects of reducing taxes on mobile factors. This political logic of tax competition generates important predictions which are tested empirically for 23 OECD countries over 30 years within a spatial econometrics framework

How much do children really cost? Maternity benefits and career opportunities of women in academia

Motherhood and professional achievements appear as conflicting goals even for academic women. This project explores this tension by focusing on a set of provisions on parental and maternity leaves across 165 higher education institutions in the UK. Generous maternity provisions generate countervailing incentives for female academics. On the one hand, advantageous policies can foster women’s productivity in terms of research outcomes allowing them to take time out of work without income and career break concerns. On the other hand, women can exploit generous provisions without generating returnable results for the academic institution. We argue that adverse selection problems lead universities to differentiate among academic staff by offering two different types of maternity provisions (more vs less generous maternity leaves) in order to “test” women’s commitment and research ability before offering permanent contracts. Our results support this this line of argumentation. We also find that generous maternity leaves and childcare provisions positively affect the number of women at research and professorship levels

Tax competition and income inequality : why did the welfare state survive?

Contrary to the belief of many, tax competition did not undermine the foundations of the welfare state and did not even abolish the taxation of capital. Instead, tax competition caused governments to shift the tax burden from capital to labor, thereby increasing income inequality in liberal market economies that traditionally redistribute income by relatively high effective capital taxes and relatively low effective labor taxes. In contrast, income inequality did increase little or not at all in social welfare states that dominantly use social security transfers to redistribute income. Governments in social welfare states found it easy to maintain high social expenditures because they increasingly taxed labor, which is relatively immobile, to finance social security transfers. We test the predictions of this theory using a simultaneous equation approach that accounts for the endogeneity of tax policies, fiscal policies, and deficits

The politics of strategic budgeteering

This paper analyzes how opportunistic governments choose between alternative fiscal policies in order to increases their chances of re-election. To increase the provision of public goods shortly before elections – and thus, to generate a fiscal political business cycles – governments may either increase deficits or redistribute governmental resources from longterm efficient sources to short-term efficient public programs. We argue that incumbents who face highly competed elections principally have an incentive to spend more on public goods even though these investments are not efficient in the long term. In principal, they would do so by increasing the deficits (with re-balancing the budget after the election). However, our model demonstrates that incumbents would even electioneer at the cost of long-term investments if the extent of fiscal transparency does not allow them to finance the provision of public goods with higher deficits. In other words, if elections are close and voters may observe the governmental deficit, then governments tend to increase the provision of public goods – and consequently, their electoral prospects – by a redistribution of budget resources from long-term efficient investment to a short-term provision of public goods. We test the predictions with new data on the composition of government consumption for 17 OECD countries over 35 years. The preliminary findings suggest that governments indeed reshuffle resources from long-term efficient investment to short-term public goods before elections especially if elections are contested

External Effects of Currency Unions

Argument: The paper argues that the introduction of the Euro has considerably reduced de facto monetary policy autonomy in non-ECU members. We start from a simple Mundellian model, in which currency unions raise economic efficiency but reduce monetary policy autonomy. Our main argument holds that governments in countries that did not join the currency union lose monetary policy autonomy if the establishment of a currency union increases the size of the key currency area. The increase in the size of the key currency area has two external effects on countries remaining outside the currency union: Firstly, it renders stable exchange-rates to the currency union slightly more important, because the value of goods imported from countries within the currency union increases and because the countries inside the union have more synchronized business cycles. Secondly and more importantly, we claim that any given change in the real interest-rate differential leads to an exchange-rate effect, which is larger the smaller the domestic currency area is relative to the key currency area. Consequently, governments in non-member countries have to pay a higher price if they seek to stimulate the domestic economy. Hypotheses: a) Exchange-rate effects on changes in the real interest rate differential are larger, if currency areas are less equal in size. b) Outsider countries more closely follow the interest-rate policy of the currency union than they had previously followed the monetary policy of the anchor currency. Empirics: We employ a panel-GARCH model to estimate the impact of changes in the key currency real interest rate on the real interest rate of other countries. Specifically, we analyze the influence of Germany’s and the Eurozone’s monetary policy on the monetary policy of Great Britain, Denmark, Norway, Sweden, and Switzerland. Results: Our results support the assumptions underlying our model as well as our main argument. De facto monetary autonomy of countries remaining outside a currency union declines with the establishment of the union. ZUSAMMENFASSUNG - (Externe Auswirkungen von Währungsunionen) Der Artikel argumentiert, dass die Einführung des Euro die faktische geldpolitische Autonomie auch in Staaten reduziert hat, die der Europäischen Währungsunion nicht beigetreten sind. Das Argument basiert auf einem einfachen Mudellianischen Modell, in dem Währungsunionen die wirtschaftliche Effizienz steigern aber zugleich die geldpolitische Autonomie reduzieren. Wir zeigen über das Standardmodell hinaus, dass Länder, die der Währungsunion nicht beitreten, geldpolitische Autonomie einbüßen, wenn sich durch die Währungsunion die Größe des Leitwährungsraumes erhöht. Diese Vergrößerung des Leitwährungsraumes hat zwei Auswirkungen auf Länder außerhalb der Union: Erstens steigt die Bedeutung stabiler Wechselkurse leicht an, weil der Wert importierter Güter aus dem Währungsgebiet zunimmt und weil die Länder der Union stärker synchronisierte Konjunkturzyklen aufweisen als vor der Gründung der Währungsunion. Zweitens steigt durch die Vergrößerung der Leitwährung aber der Einfluss von Veränderungen der Zinsdifferenz auf die Wechselkurse zwischen Währungen außerhalb der Währungsunion und der Unionswährung an. Folglich müssen Länder eine stärkere Abwertung ihrer Währung hinnehmen, wenn sie die Zinsen senken, um die Konjunktur anzukurbeln. Wir testen dieses Argument anhand der zwei Kernhypothesen: a) Wechselkurse reagieren umso stärker auf Veränderungen der Zinsdifferenz, je größer der Leitwährungsraum ist. b) Länder außerhalb der Währungsunion folgen der Geldpolitik der Union stärker, als sie der Geldpolitik der Leitwährung vor Gründung der Union folgten. Wir greifen auf Panel-GARCH Modelle zurück, um den Einfluss der Geldpolitik der EZB relativ zum Einfluss der Bundesbank auf die Geldpolitik in Großbritannien, der Schweiz, Norwegen, Dänemark und Schweden zu testen. Die empirische Analyse bestätigt die aus dem formalen Modell abgeleiteten Hypothesen. Die faktische geldpolitische Autonomie der Länder außerhalb der Währungsunion sinkt mit deren Etablierung.Interest Rates, Monetary Policy Autonomy, Currency Unions, Bundesbank, European Central Bank

Overview of current and alternative slaughter practices

The conventional cattle slaughtering process includes some critical stages where a dissemination of Specified Risk Material (SRM: brain, spinal cord) within or onto the carcass and within the slaughterhouse environment can occur. These processes are captive bolt stunning, removal of the head and first of all carcass splitting (sawing the spine lengthways). Captive bolt (CB) stunning results in massive brain tissue damage with bleeding, and in some cases brain tissue also emerges from the CB hole. As the heart is still functioning, there is a risk of brain tissue particles being transferred v i a the blood flow to heart and lungs or even in the whole carcass. This contamination risk is actually assessed to be low, but a continuing leakage of Central Nervous System (CNS) material from the captive bolt aperture in the further slaughter process may lead to direct and indirect contamination of carcass, meat and equipment. Therefore alternative stunning methods like electrical stunning or concussion stunning are discussed. A further critical point is the treatment of the head. When the head is removed, the spinal cord is cut with a knife. There is a danger of cross contamination due to spinal protein that may adhere to the knife and because of liquid cerebralis, which leaks from the foramen occipitale magnum. Further head cleaning with hand-held hoses following skinning also includes the danger of cross contamination from cleaning water or aerosol. Therefore measures regarding the safe handling of head and harvesting of head meat are proposed. The most critical point in terms of contamination of the meat surface with SRM is the currently common practise of sawing the spine vertically in the middle with hand-guided belt-type saws. A m i x t u r e of sawing residues and rinsing water (sawing sludge) collects in the housing of the saw, and if it contains infectious material this leads to contamination of the subsequent carcasses. The most promising methods available at present for minimising this risk appear to be in manual cattle slaughtering boning the entire (not split) carcass, either still warm or refrigerated and in industrial beef cattle slaughtering extraction of the spinal cord by vacuum from the whole carcass followed by conventional sawing or completely sawing out the spine including spinal ganglia

Designing and testing a 3D-printed specimen for combined loading

Failure prediction is of essential importance for everything built in today’s world. Components are fabricated lighter and more specific in shape in order to fulfil their purpose. For reasons both of safety and stability, an exact prediction of the potential failure location and path is required. Recently new failure criteria were found for uniaxial loading. Since loadings are very seldom uniaxial but combined, a specimen for combined bending and torsion was designed and tested in a uniaxial testing machine. The specimens were 3D printed with polycarbonate and various modifications such as holes and different loading cases. The purpose of this is to verify if the failure criteria are applicable for combined loading as well. Comparing the experimental failure stress, location and path with the prediction made by the criteria the results are very similar. This allows the assumption that the failure criteria are also valid for combined loading.Helut-Schmidt-Universität, Universität der Bundeswehr Hamburg Fakultät für Maschinenbau Professur für Mechatronik Holstenhofweg 85 22043 Hamburg, GermanGerman Armed ForcesApproved for public release; distribution is unlimited

Monetary policy flexibility in floating exchange rate regimes : currency denomination and import shares

This paper argues that the degree of monetary flexibility a government enjoys does not only depend on the implemented monetary institutions such as exchange rate arrangements and central bank independence but also on the economic and financial relationships with key currency areas. I develop a formal theoretical framework explaining the degree of monetary independence in open economies under flexible exchange rate regimes by trading relations and financial integration. The model suggests that a) higher import shares from the key currency area increase the imported inflation when monetary authorities try to offset an exogenous shock by cutting back the interest rate while the base country does not encounter a similar shock, and b) the more cross border assets of a country are denominated in the base currency the higher the exchange rate effects of interest rate differences to the interest rate of the key currency area. The presented empirical evidence largely supports the theoretical predictions

Teacher Job Satisfaction Among K-12 Public School Teachers: A Mixed Methods Study

Sadly, teacher job satisfaction has been recently depicted as a “portrait of broad teacher discontent” (Phi Delta Kappa, 2019, p. k3), negatively impacting teachers’ well-being and retention. This study employed a mixed-methodological approach, composed of (a) an exploratory factor analysis of participant responses to the Teacher Job Satisfaction Questionnaire (Lester, 1982), (b) two open-ended questions, and (c) the covariates of the participants. Participants were K-12 public teachers (n = 129), employed in Ulster, Dutchess, Orange, Rockland, and Putnam counties of New York State. Through exploratory factor analysis, this study discovered six factors of teacher job satisfaction: Supportive and Appreciative Supervisor (F1), Collegiality and Workplace Relationships (F2), Income and Job Security (F3), Autonomy, Creativity at Work, and Student Relationship (F4), Working Conditions and School Culture (F5), and Advancement and Professional Growth (F6). Qualitative responses, what teachers were and were not satisfied with in their jobs, augmented the exploratory factor analysis findings. A table of descriptive statistics and histograms were created, prompted by the exceptionality of F2, and a t-test indicated that females who shared views with F2 had more concerns than males over relationships with colleagues (20% at −3.0 SD), when working in schools. This study concluded six factors of teacher job satisfaction, where relationships emerged as the strongest indicator, especially among females. Recruiting, developing, rewarding, and retaining effective administrators, and creating nurturing work environments for teachers, can positively impact teacher job satisfaction, wellness, and retention. Keywords: teacher job satisfaction, teacher working conditions, teacher job dissatisfaction, school culture, relationships in school

Creating a Home Base for Treatment in Homeless Courts

As the number of unsheltered homeless increases, an alternative to criminalization, homeless courts, have also become more common. 18 States currently have one or more specialty court programs dedicated to meting out alternative sentencing to the local homeless. Homeless courts are a rehabilitative process with the end goal of reintegration into society. They allow nonviolent misdemeanors to be resolved without jail time or fines. In lieu of traditional sentencing is community service and mandated self-improvement. This chapter examines the current criminalization, and history, of homelessness in the United States. Of primary interest is the development of homeless courts as an attempt to respond to the underlying problems causing homelessness. Going back to the nation’s first in San Diego, the purpose of this investigation is to compare and contrast the strategies and goals of different specialty courts and to determine which if any have been successful in reducing the homeless population