On the Persistence of Income Shocks over the Life Cycle: Evidence, Theory, and Implications,Second Version

How does the persistence of earnings change over the life cycle? Do workers at different ages face the same variance of idiosyncratic shocks? This paper proposes a novel specification for residual earnings that allows for an age profile in the persistence and variance of labor income shocks. We show that the statistical model is identified and estimate it using PSID data. We find that shocks to earnings are only moderately persistent (around 0:75) for young workers. Persistence rises with age up to unity until midway in life. The variance of persistent shocks exhibits a U-shaped profile over the life cycle (with a minimum of 0:01 and a maximum of 0:05). These results suggest that the standard specification in the literature (with constant persistence and variances) cannot capture the earnings dynamics of young workers. We also argue that a calibrated job turnover model can account for these non-at profiles. The key idea is that workers sort into better jobs and settle down as they age; in turn, magnitudes of wage growth rates decline, thereby decreasing variance of shocks. Furthermore the decline in job mobility results in higher persistence. Finally, we investigate the implications of age profiles for consumption-savings behavior. The welfare cost of idiosyncratic risk implied by the age-dependent income process is 34 percent lower compared with its age-invariant counterpart. This difference is mostly due to a higher degree of consumption insurance for young workers, for whom persistence is moderate. These results suggest that age profilles of persistence and variances should be taken into account when calibrating life-cycle models.Idiosyncratic income risk, Incomplete markets models, Earnings persistence, onsumption insurance

On the Persistence of Income Shocks over the Life Cycle: Evidence and Implications, Second Version

How does the persistence of earnings change over the life cycle? Do workers at different ages face the same variance of idiosyncratic shocks? This paper proposes a novel specification for residual earnings that allows for a lifetime profile in the persistence and variance of labor income shocks. We show that the statistical model is identified and estimate it using PSID data. We strongly reject the hypothesis of a at life-cycle profile for persistence and variance of persistent shocks, but not for the variance of transitory shocks. Shocks to earnings are only moderately persistent (around 0.75) for young individuals. Persistence rises with age up to unity until midway in life. On the other hand, the variance of persistent shocks exhibits a Ushaped profile over the life cycle (with a minimum of 0.01 and a maximum of 0.045). Our estimate of persistence, for most of the working life, is substantially lower than typical estimates in the literature. We investigate the implications of these profiles for consumption-savings behavior with a standard life-cycle model. The welfare cost of idiosyncratic risk implied by the age-dependent income process is 32% lower compared to an AR(1) process without age profiles. This is mostly due to a higher degree of consumption insurance for young workers, for whom persistence is moderate. We conclude that the welfare cost of idiosyncratic risk will be overstated if one does not account for the age profiles in the persistence and variance of shocks.: Idiosyncratic income risk, Incomplete markets models, Earnings persistence, Consumption insurance

On the Persistence of Income Shocks over the Life Cycle: Evidence and Implications

This paper proposes a novel specification for residual earnings that allows for a lifetime profile in the persistence and variance of labor income shocks. We show theoretically that the statistical model is identified and estimate it using data from the PSID. We strongly reject the hypothesis of a flat life-cycle profile for persistence and variance of persistent shocks, but not for the variance of transitory shocks. Shocks to earnings are only moderately persistent (around 0.75) for young individuals. Persistence rises with age up to unity until midway in life and decreases to around 0.95 toward the end of the life cycle. On the other hand, the variance of persistent shocks exhibits a U-shaped profile over the life cycle (with a minimum of 0.01 and a maximum of 0.045). Our estimate of persistence, for most of the working life, is substantially lower than typical estimates in the literature. We investigate the implications of these profiles for consumption-savings behavior with a standard life-cycle model. Under natural borrowing limits, the welfare cost of idiosyncratic risk implied by the age dependent income process is 32% lower compared to an AR(1) process without age profiles. This is mostly due to a higher degree of consumption insurance for young workers, for whom persistence is moderate. The results hold qualitatively for an economy with no borrowing, although the difference between specifications is smaller (23%). We conclude that the welfare cost of idiosyncratic risk is overstated.Idiosyncratic income risk, Incomplete markets models, Earnings persistence, Consumption insurance

Taxation of human capital and wage inequality: a cross-country analysis

Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts. We begin by documenting two new empirical facts that link these inequality differences to tax policies. First, we show that countries with more progressive labor income tax schedules have significantly lower before-tax wage inequality at different points in time. Second, progressivity is also negatively correlated with the rise in wage inequality during this period. We then construct a life cycle model in which individuals decide each period whether to go to school, work, or be unemployed. Individuals can accumulate skills either in school or while working. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. We find that these policies can account for half of the difference between the US and the CEU in overall wage inequality and 76% of the difference in inequality at the upper end (log 90-50 differential). When this economy experiences skill-biased technological change, progressivity also dampens the rise in wage dispersion over time. The model explains 41% of the difference in the total rise in inequality and 58% of the difference at the upper end.Wage inequality, human capital, skill-biased technical change, tax policies

Taxation of human capital and wage inequality: a cross-country analysis

Wage inequality has been significantly higher in the United States than in continental European countries (CEU) since the 1970s. Moreover, this inequality gap has further widened during this period as the US has experienced a large increase in wage inequality, whereas the CEU has seen only modest changes. This paper studies the role of labor income tax policies for understanding these facts. We begin by documenting two new empirical facts that link these inequality differences to tax policies. First, we show that countries with more progressive labor income tax schedules have significantly lower before-tax wage inequality at different points in time. Second, progressivity is also negatively correlated with the rise in wage inequality during this period. We then construct a life cycle model in which individuals decide each period whether to go to school, work, or be unemployed. Individuals can accumulate skills either in school or while working. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. We find that these policies can account for half of the difference between the US and the CEU in overall wage inequality and 76% of the difference in inequality at the upper end (log 90-50 differential). When this economy experiences skill-biased technological change, progressivity also dampens the rise in wage dispersion over time. The model explains 41% of the difference in the total rise in inequality and 58% of the difference at the upper end.Wages ; Human capital ; Taxation

The review of the law on abuse of a dominant position through soft law in the European Union and Turkey: the Commission’s guidance on article 102 TFEU and implications for the guidelines on Art.6 in Turkey

Issuing soft law instruments on the enforcement of abuse of a dominant position in different competition law systems has never been a global trend in the last decade than before. In the European Union (EU), the European Commission published the “Guidance on the Commission’s Enforcement Priorities in Applying Article 82 of the EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings” (the Guidance) in February 2009 as yet the final formal stage during the “modernisation” of Art.102 TFEU. As an official candidate for EU membership, Turkey is unlikely to distance itself from the developments in the EU. Within this context, “Guidelines on the Assessment of Abusive Exclusionary Conduct by Dominant Undertakings” (the Guidelines on Art.6) were published on April 7, 2014. Evident from their structure and substantive content, the Guidelines on Art.6 are closely modelled on the Guidance. Although the transposition of the Guidance into Turkish competition law seems prima facie desirable in terms of the harmonisation of Turkey’s domestic competition law with the EU acquis, the question as to whether the Guidelines on Art.6 have suited to Turkey’s own needs gains significance. Despite being the first secondary legislation on Art.6 of the Act on the Protection of Competition 1994 in Turkey, a lack of much-needed guidance on the problematic areas in the enforcement of Art.6 may well result in the Guidelines on Art.6 being a missed opportunity to establish a coherent policy on Art.6. This thesis explores whether there is a need for adopting Guidelines in relation to Art.6 in Turkish competition law, examines whether the Guidance can or should be used as a model, and finally gives reflections on how the legal regime and content of these Guidelines can be best tailored to the enforcement of Art.6 in Turkey

Muhasebe meslek mensuplarinin tukenmisligine etki eden faktorler : Gaziantep ilinde bir alan arastirmasi

Burnout syndrome, as a frequently encountered disorder in today's world, has many negative consequences like emotional exhaustion, desensitization and personal failure. To better cope with the burnout, underlying reasons has to be well-defined both for individuals and for different occupational groups. The study presented here, aiming to assess the burnout levels of accounting professionals, and identify the factors that play role in the course of their burnout, has been carried out in 225 individual accountants that serve in the city of Gaziantep. The study revealed that, for accountants who participated in the survey, main parameters of burnout including emotional exhaustion, desensitization and personal failure scored (2.87), (2.37) and (2.31), respectively, according to 5-point Likert scale. Among reasons of burnout, while a statement of "I think I am working too much at the office" reached to highest average score (3.58), "Since I am in this business, I have been ignorant of people" received the lowest score in average (2.21). In conclusion, according to the findings of the study, it has been concluded that burnout levels of accounting professionals is not high.peer-reviewe

Litigation risk, auditor conservatism and an overview of Turkey characteristic

In case of the occurrence of uncertain situations regarding the future, the investor is expected to assume that he is in a risky situation and act in a rational way. In this way, the investor will have been prudent and protected his capital. Auditor Conservatism is an approach that aims to make a more conservative audit by foreseeing a high audit risk for the financial statement disclosures of the company audited and thus protect the capital, creditors and investors. It is a likely outcome for the investor to encounter with the litigation case due to the possible presence of revenue losses that may be experienced and negatively affect the investment decisions of the third parties who will use the tables on which the auditor will express an opinion. Therefore auditors will want to set a high degree of audit for possible inconsistencies and choose the secure option against the case risk in order to protect the reputation of himself and the audit company against the possibility of audit failure by displaying a conservative approach this study, the relationship between the litigation risk and the auditor's conservative approach will be examined and these concepts will be comparatively assessed in terms of the accounting audit procedures.peer-reviewe

Boosted Multiple Kernel Learning for First-Person Activity Recognition

Activity recognition from first-person (ego-centric) videos has recently gained attention due to the increasing ubiquity of the wearable cameras. There has been a surge of efforts adapting existing feature descriptors and designing new descriptors for the first-person videos. An effective activity recognition system requires selection and use of complementary features and appropriate kernels for each feature. In this study, we propose a data-driven framework for first-person activity recognition which effectively selects and combines features and their respective kernels during the training. Our experimental results show that use of Multiple Kernel Learning (MKL) and Boosted MKL in first-person activity recognition problem exhibits improved results in comparison to the state-of-the-art. In addition, these techniques enable the expansion of the framework with new features in an efficient and convenient way.Comment: First published in the Proceedings of the 25th European Signal Processing Conference (EUSIPCO-2017) in 2017, published by EURASI