Amedeo Spadaro

Cooperation in an Adaptive Network

We study the dynamics of a set of agents distributed in the nodes of an adaptive network. Each agent plays with all its neighbors a weak prisoners dilemma collecting a total payoff. We study the case where the network adapts locally depending on the total payoff of the agents. In the parameter regime considered, a steady state is always reached (strategies and network configuration remain stationary), where co-operation is highly enhanced. However, when the adaptability of the network and the incentive for defection are high enough, we show that a slight perturbation of the steady state induces large oscillations (with cascades) in behavior between the nearly all-defectors state and the all-cooperators outcome.

Inequality of Life Chances and the Measurement of Social Immobility

This paper begins by proposing two cardinal measures of inequality in life chances as well as an ordinal representation of such inequality based on the use of so-called social immobility curves. Using as its database a matrix in which the lines correspond to the social category of parents (e.g., their occupation or educational level) and the columns to the income distribution of their children, it then highlights the importance of the marginal distributions when comparing social immobility within two populations, and shows how it is possible to neutralize differences in these margins. The idea is to adapt a method used in the field of occupational segregation measurement that allows one to make a distinction between differences in gross and net social immobility, assuming that the marginal distributions of the two populations are identical. Borrowing ideas from recent literature on the equality of opportunity, the paper then defines the concept of an inequality in circumstances curve and relates it to that of a social immobility curve. Two empirical datasets are used to determine the usefulness of the concepts presented. The first dataset comes from a survey conducted in France in 1998 and allows one to measure the degree of social immobility and of inequality in circumstances on the basis of the occupation of fathers or mothers and the income class to which sons or daughters belong. The second dataset, drawn from a social survey conducted in Israel in 2003, is the basis for a study of social immobility and inequality in circumstances, emphasizing the transition from the educational level of the fathers to the income class of the children. Both illustrations confirm the usefulness of the analytical tools described in this paper.

A MICROSIMULATION EVALUATION OF EFFICIENCY, INEQUALITY, AND POLARIZATION EFFECTS OF IMPLEMENTING THE DANISH, THE FRENCH, AND THE U.K. REDISTRIBUTION SYSTEM IN SPAIN

This paper provides evidence about the effects of possible reforms of the Spanish direct redistribution system. We perform an ex-ante evaluation of the impact upon efficiency, income distribution, and polarization of the replacement of the Spanish system with the ones enforced in France, the U.K., and Denmark (corporatist, liberal, and social-democratic model respectively). The analysis is performed using microsimulation models in which labor supply is explicitly taken into account. The results show that the simulated scenarios have little impact on the efficiency of the economy. We find that each of the new systems would reduce income inequality. However, when we take into consideration income polarization, the effects of the reforms are ambiguous: in some cases we observe a tendency toward an increased polarization.

Consumption and Investment Motives in Housing Wealth Accumulation of Spanish Households

The dual motives of housing behavior, consumption and investment make the analysis of housing purchases quite difficult. As a matter of fact, while a larger literature, theoretical and empirical, deals with housing tenure choice by modeling housing consumption demand, few studies have tried to analyze housing demand simultaneously with demand for other assets according to the portfolio choice theory. Fewer still have tried to consider simultaneously the two-dimensional aspect of housing, consumption and investment. Henderson and Ioannides [16] have built a model that is one of the first attempts to consider the two-dimensional aspect of housing. In the absence of institutional considerations, this model predicts that it is the difference between the investment demand for housing and the consumption demand that explains decisions to purchase dwellings for owner occupation and for renting out. We have tested the model on the Spanish Survey of Household Finances (EFF) conducted in 2002 by the Bank of Spain. Results show that even if the effect of some of the explanatory variables are consistent with those predicted by the model, the difference between the two demands is not statistically significant and it cannot in itself explain housing purchases. It seems that housing purchase is more a question of portfolio choices than of consumption of durable goods. Interestingly, we observe that Spanish households behave in a different way than French (Arrondel and Lefebvre [3]) and US (Ioannides and Rosenthal [20]) households: for them, the difference between the two demands for housing explains behavior and consumption motives dominate primary residence purchase. These results lead us to conclude that there is a “Spanish case” that is completely different and need to be analyzed in details.

Implicit Social Preferences and Fiscal Reforms: A Microsimulation Analysis for Spain

In this paper, I support the usefulness of using microsimulation models for the normative analysis of real redistribution system. Drawing from three recent works (Bourguignon & Spadaro, 2000, 2005; Oliver & Spadaro, 2004), I propose an application consisting in analyzing how social preferences on inequality have changed since the introduction of the 1999 reforms to the Spanish personal income tax (PIT). The starting point is the observed distribution of a populations gross and disposable incomes and the observed marginal tax rates as computed in standard microsimulation models. I show that, using a set of simplifying assumptions, it is possible to identify the social welfare function that would make the observed marginal tax rate schedule optimal. I apply this methodology to the 1998 and 1999 Spanish PIT, using the Eurostat (ECHP) dataset on the income and socio-demographic characteristics of Spanish households.

A Micro-Macro Simulation Model Applied to the French Economy: The Case of a Euro’s Real Depreciation

In this chapter, we use a Micro-Macro simulation model to evaluate the distributional effects of a real depreciation of the Euro on the French economy. Our Micro-Macro model consists of a microsimulation model and a CGE model which are integrated using an iterative approach. We find that a 10% real depreciation of the Euro stimulates the aggregate demand by increasing exports and reducing imports, which increases real GDP by 0.7% and reduces the unemployment rate in the economy by 2 percentage points. At the individual level, we find that the macroeconomic shock reduces poverty and, to a lesser extent, income inequality. In particular, the decrease in the equilibrium real wage slightly reduces disposable income for the employed, while the reduction of unemployment substantially increases disposable income of people who find a job, often bringing them out of poverty.

Active Welfare State Policies and Labour Supply in Spain

This paper shows the effect of tax reforms aimed at encouraging Spanish mothers to join the labour market (or not to abandon it). The simulated reforms replace the current in-work benefit (of €100 a month) with more generous scenarios. The analysis is conducted using a behavioural microsimulation model of the Spanish tax-benefit system. The results show that in-work benefits boost the female labour participation rate and labour supply of low-income households (those with higher elasticities). Indeed there is an improvement in social welfare, but we should not overlook the impact on tax revenue.