Edlira Narazani

Behavioural and Welfare Effects of Basic Income Policies: A Simulation for European Countries

In this paper we develop and estimate a microeconometric model of household labour supply for four European countries representative of different economies and welfare policy regimes: Denmark, Italy, Portugal and United Kingdom. We then simulate, under the constraint of constant net tax revenue, the effects of 10 hypothetical tax-transfer reforms which include various alternative versions of a Basic Income policy. We produce various indexes and criteria according to which the reforms can be ranked. It turns out that in every country there are many reforms that can improve upon the current status according to many criteria and that might be “politically” feasible. Overall, the non meanstested policies have a better performance and progressive tax rules are somehow more efficient than the flat tax rules.

Labour and Capital Adjustment Dynamics Using Bivariate Random Probit

This paper provides empirical evidence on the interrelationship between employment and capital adjustment decisions using a sample of Italian firms during the period 1989-1997. A dynamic bivariate probit model is estimated using a short-cut in the spirit of Heckman estimator. Unobserved heterogeneity and state dependence are found to play an important role for both hiring and investment equations. The estimates of the state dependence are significant and positive for both capital and labour implying that the convex components of adjustment costs are important for the adjustment process of capital and labour. The significant positive correlation between random effects and errors is a strong evidence of the simultaneous interrelationship between factor demand adjustment processes. A positive relation is found only between the occurrence of hiring spikes in one year and the investment spikes in the next year (and not vice-versa) which can be due to the fact that firms need anticipation of skilled labour and training in order to appropriately challenge investment strategies.

Migration and Infant Mortality in Albania

Infant mortality rates are considered by UNICEF as one of the basic indicators to determine the degree of progress a country has in the areas of social and economic development. In the last two decades, Albania went through a substantial reduction in infant mortality rates together with a widespread migration experience. In this paper we investigate whether migration has played any role in this decreasing trend of infant mortality rates in Albania by using the Albanian Demographic and Health Survey 2008-09 (ADHS). We find that migrant households have had lower rates of infant mortality than non-migrant households but only once the endogeneity of migration is tackled with country-specific instrumental variables.

Evidences on Household Labour Supply: When Labour Demand is Not Perfectly Elastic

The simulations of tax-benefit reforms with labour supply models often implicitly assume perfectly elastic labour demand, an assumption that may lead to unrealistic results. In this study we attempt to address this limitation and show how the interaction between labour supply and labour demand would affect the outcome of a certain reform. We introduce a “wage subsidy scheme”, as it is commonly proved to produce labor incentives and find that, when labour demand is not considered as perfectly elastic, the simulated labor supply results to be lower for women compared to the perfectly elastic scenario but higher for their male partners. We explain this disparate behavior through the differences in cross wage elasticities the selected couples exhibit and the way labour preferences are shared between partners. These empirical findings provide a new understanding of behavioural microsimulation models and their ability to evaluate tax-transfer reforms.