Government funds and demographic transition – alleviating ageing costs in a small open economy

This paper investigates public pension funding using a dynamic general equilibrium macroeconomic model (DSGE) that facilitates investigation of distortionary effects of fiscal and pension policy responses to ageing. The model is calibrated to the Finnish economy, which will encounter substantial ageing pressures in the near future. During the transition to an older population structure ageing costs can be substantially lowered by allowing public funds to smooth out the tax responses. Cutting down on pension prefunding at a time when the pace of ageing is at its peak reduces the necessary tax hikes and stimulates labour supply growth at the moment when the labour market is tightest. With smaller funding needs, ageing leads to a slower growth in labour costs, a better employment conditions and faster production growth.ageing; general equilibrium; public finance; government funds

Modelling the propensity to live and stay in the Åland Islands – a case of eroding insider advantages of immobility?

This article has a dual purpose. Firstly, it presents the nature and the recent development of migration to and from the Åland Islands by means of a probit model. Secondly, the model is estimated in such a fashion that its results are usable in a simulation model. The analysis is conducted by using individual data from longitudinal population censuses, which enables the use of individual-specific characteristics and a panel data specification in the analysis. The results lend support to Harris-Todaro –type expected wage hypothesis, as well to several suggestions of the human capital theory of migration. The results even support an insider advantage hypothesis by showing that staying in Åland is state and duration dependent, i.e. those who already live in Åland, have stayed longer, and are native Ålanders are more probable stayers. However, the results also reveal that there is a time trend in the tendency for native Ålanders to move away from Åland at an increasing rate, whereas the probability of Finnish-born migrants to stay in Åland has slightly risen during the 1990s. The author suggests that this development may be due to a growing internalisation, e.g. through the EU membership, as well as due to a failure to adjust the education policy to changing demand of language skills.

The Sources of Output Shocks in Finland and Other EU Countries

This paper examines the sources of output shocks in Finland as compared to other EU countries. The data consists of output fluctuations in main industries in nine current EU countries for the period 1978–1993. The sources of output shock are considered to consist of country-specific factors, sector-specific factors and a time factor, which is common to all countries and sectors. Fluctuation is partitioned using three-dimensional analysis of variance. Output shocks in Finland are clearly more country-specific than in other EU countries. A separate examination of the time period preceding the 1990s demonstrates that the result is not due to the exceptional recession in the beginning of the 1990s. The more central role that the country-specific factor has in Finland as compared to other EU countries is explained by the fact that average output growth was higher in Finland than in other EU countries until the end of the 1980s. Differences in growth rates between sectors also were larger than in other countries. Examination of the time period including the recession revealed that idiosyncratic economic cycle was clearly a more significant source of disturbances in Finland than in other countries. Examining the time period covering the depression also underlines the large volatility of the sheltered sector in Finland.output shocks; output by industry; variance partitioning; EU countries

What Predicts Social Casino Game Playing? Interrelations of Social Casino Gaming, Gambling, and Demographic Factors

Social casino games (SCG), for example those played on Facebook and on mobile devices, are one of the most profitable genres of free-to-play games. They are also an example of a convergence trend, where the line between gambling and digital gaming is blurring. Digital games integrate gambling elements, such as loot boxes, while new forms of digital, online and hybrid gambling games use similar immersive elements as those which are employed in video games. The Finnish Player Barometer 2018, a nationally representative dataset (n = 946), included questions about digital gaming, gambling and SCG. It reveals that 5.9% of Finns play SCG at least occasionally and 2% of Finns play them at least once of month. But how is SCG playing connected with offline and online gambling and with digital game playing? Ridge regression analysis was employed to investigate the predictive power of a range of variables regarding the frequency of SCG play. Results show that a higher frequency of SCG play is associated with higher frequency of digital game playing, but with lower frequency of both online and offline gambling. Furthermore, a higher frequency of playing skill based (digital) gambling games is the strongest predictor of SCG playing. Implications: Our analysis contribute to understanding better who SCG players, online and offline gamblers and digital game players are and how playing new forms of gaming and gambling are interrelated