OECD Journal: Economic Studies

Frequency :
Annual
ISSN :
1995-2856 (online)
ISSN :
1995-2848 (print)
DOI :
10.1787/19952856
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OECD Journal: Economic Studies publishes articles in the area of economic policy analysis, applied economics and statistical analysis, generally with an international or cross-country dimension. While it draws significantly on economic papers produced by the Economics Department and other parts of the OECD Secretariat for the Organisation’s intergovernmental committees, the submission of articles produced by non-OECD authors is encouraged. We also welcome comments on articles previously published in the journal. Now published as part of the OECD Journal package.

 

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Mark Number Date Article Volume and Issue Click to Access
  05 Feb 2014 Grade repetition
Miyako Ikeda, Emma García

This article explores country-by-country differences in academic performance and attitudes towards school between students who repeated a grade in primary school, in secondary school or never repeated a grade. The analyses use PISA 2009 for 30 countries in which a relatively high proportion of students repeated a grade before the age of 15. The comparisons across countries and the examination of models of both academic and non-academic performance contribute to shed some light on the consequences of repeating a grade for students. The estimated associations suggest that in most countries examined, at the age of 15, students who repeated a grade in secondary school tend to perform better academically than do students who repeated a grade in primary school, but worse than non-repeaters. In terms of the measure of behavioural performance chosen for this analysis, attitudes towards school, in the majority of countries, non-repeaters tend to report more positive attitudes towards schools than primary and secondary-school repeaters, but the comparison between repeaters in primary and secondary schools shows less consistent patterns across countries. These differences are observed after accounting for background characteristics of the students and exploring some differential relationships between grade repetition and education outcomes according to student characteristics. The achievement and behavioural gaps among groups of repeaters may reflect differences in the development of academic and behavioural skills over the school years, as well as differences in the way these groups of students are treated across different educational systems.

Volume 2013 Issue 1 Click to Access: 
  05 Feb 2014 Using a quasi-natural experiment to identify the effects of birth-related leave policies on subjective well-being in Europe
Anna Cristina D’Addio, Simon Chapple, Andreas Hoherz, Bert Van Landeghem

The purpose of this paper is to examine the welfare effects of birth-related leave (BRL) in terms of life satisfaction. To do so, we exploit variations in BRL policies to assess their impact on life satisfaction. The paper adds to the existing literature in various ways. First, it uses new data collected by Baldi et al. (2011) and Baldi and Chapple (2010) to describe how life satisfaction moves around the date of the reforms over time and in a number of EU countries covered in the Eurobarometer surveys. Second, the paper analyses the relation between life satisfaction and BRL in Germany and the United Kingdom with long individual panel data collected with the GSOEP and the BHPS survey. The potential endogeneity bias of the treatment effect is addressed by building a quasi-natural experiment using policy changes as the assignment rule. The results from a variety of different methods suggest that BRL polices generally have a significant positive effect on life satisfaction. Women on BRL have higher life satisfaction, controlling for observable and unobservable personal characteristics. This result is robust to alternative specifications.

JEL classification: H53, I16, J38
Keywords: Welfare, subjective well-being, difference-in-difference, birth-related leaves

Volume 2013 Issue 1 Click to Access: 
  05 Feb 2014 Towards global carbon pricing
Rob Dellink, Stéphanie Jamet, Jean Chateau, Romain Duval

Emissions trading systems (ETS) can play a major role in a cost-effective climate policy framework. Both direct linking of ETSs and indirect linking through a common crediting mechanism can reduce costs of action.We use a global recursive-dynamic computable general equilibrium model to assess the effects of direct and indirect linking of ETS systems across world regions. Linking of domestic Annex I ETSs leads to moderate aggregate cost savings, as differences in domestic permit prices are limited. Countries benefit directly from linking by either buying permits and avoiding investing in highcost mitigation options, or by exploiting relatively cheap mitigation options and selling permits at a higher price. Although the economy of the main permit sellers, such as Russia, is negatively affected by the real exchange rate appreciation that is induced by the large export of permits, on balance they also still benefit from linking. The costsaving potential for developed countries of well-functioning crediting mechanisms appears to be very large. Even limited use of credits would nearly halve mitigation costs; cost savings would be largest for carbon-intensive economies. However, one open issue iswhether these gains can be fully reaped in reality, given that direct linking and the use of crediting mechanisms both raise complex system design and implementation issues. The analysis in this paper shows, however, that the potential gains to be reaped are so large, that substantial efforts in this domain are warranted.

JEL classification: H23, O41, Q54
Keywords: Climate mitigation policy, emissions trading systems, general equilibrium models, linking carbon markets

Volume 2013 Issue 1 Click to Access: 
  05 Feb 2014 Demographic or labour market trends
Wen-Hao Chen, Michael Förster, Ana Llena-Nozal

This article assesses various underlying driving factors for the evolution of household earnings inequality for 23 OECD countries from the mid-1980s to the mid-2000s. There are a number of factors at play. Some are related to labour market trends – increasing dispersion of individual wages and changes in men’s and women’s employment rates. Others relate to shifts in household structures and family formation – more single-headed households and increased earnings correlation among partners in couples. The contribution of each of these factors is estimated using a semi parametric decomposition technique. The results reveal that marital sorting and household structure changes contributed, albeit moderately, to increasing household earnings inequality, while rising women’s employment exerted a sizable equalising effect. However, changes in labour market factors, in particular increases in men’s earnings disparities, were identified as the main driver of household earnings inequality, contributing between one-third and one-half to the overall increase in most countries. Sensitivity analysis applying a reversedorder decomposition suggests that these results are robust.

Volume 2013 Issue 1 Click to Access: 
  05 Feb 2014 Technological effects of intra-OECD trade in manufacturing
Javad Abedini

This article seeks to study how intra-OECD trade in manufacturing goods has affected technological heterogeneity across member states during 1988-2008. To this aim, we derive a panel data version of the Eaton and Kortum (2002) normalised trade model to estimate, annually, the technological heterogeneity of OECD countries. We find a gradual technological convergence across the group as the sensitivity of intra-group trade to price factors increases over time. However, the results diverge when considering European and non-European OECD sub-samples, separately. We find that technological convergence is not an automatic result of intra-group trade but, for that, a more general programme of economic liberalisation, including free movement of capital and labour, is also required.

Volume 2013 Issue 1 Click to Access: 
  05 Feb 2014 Policy incentives for private innovation and maximising the returns
OECD, Ben Westmore

This paper uses panel regression techniques to assess the policy determinants of private-sector innovative activity – proxied by R&D expenditure and the number of new patents – across 19 OECD countries. The relationship between innovation indicators and multifactor productivity (MFP) growth is also examined with a particular focus on the role of public policies in influencing the returns to new knowledge. The results establish an empirical link between R&D and patenting, as well as between these measures of innovation intensity and MFP growth. Innovation-specific policies such as R&D tax incentives, direct government support and patent rights are found to be successful in encouraging the innovative activities associated with higher productivity growth. However, direct empirical evidence of the positive effects of these policies on productivity is less forthcoming. A pervasive theme from the analysis is the importance of coupling policies aimed at encouraging innovation or technological adoption with well-designed framework policies that allow knowledge spillovers to proliferate. In particular, the settings of framework policies relating to product market regulation, openness to trade and debtor protection in bankruptcy provisions are found to be important for the diffusion of new technologies.

JEL classification: L20, O30, O40
Keywords: Intangible assets, innovation, productivity growth, public policy

Volume 2013 Issue 1 Click to Access: 
  05 Feb 2014 Choosing the pace of fiscal consolidation
Łukasz Rawdanowicz

In many OECD countries debt has soared to levels threatening fiscal sustainability, necessitating its reduction over the medium to longer term. This paper proposes a stylised model, featuring endogenous interactions between fiscal policy, growth and financial markets, to highlight how economic shocks and structural features of an economy can affect consolidation strategy and resulting growth and inflation developments. The fiscal authorities are assumed to choose a consolidation path from a predetermined set of possible paths by maximising cumulative GDP growth and minimising cumulative squared output gaps, with the objective to reach a given debtto- GDP level within a finite horizon and stabilise debt afterwards under the assumption of the unchanged fiscal policy stance. Illustrative simulations for a hypothetical economy show, among other things, that by requiring debt to stabilise part of the initial adjustment can be reversed; some stepping up of the fiscal adjustment can be optimal if bond yields increase due to an exogenous shock; and for some debt reduction targets, high fiscal multipliers, hysteresis effects and higher government bond yields imply protracted deflation and large negative output gaps, stressing the need to select reasonable fiscal targets consistent with market conditions.

JEL classification: E61, E62, H6
Keywords: Fiscal consolidation, sovereign debt, government budget balance, fiscal rules

Volume 2013 Issue 1 Click to Access: 
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