Fabrice Murtin

The Expansion and Convergence of Compulsory Schooling in Western Europe, 1950–2000

This paper examines the expansion of compulsory schooling in fifteen Western European countries over 1950–2000. We show that a convergence process has occurred across these countries since 1950. We argue that the major driver of this phenomenon is the existence of decreasing aggregate returns to education that have limited the extension of compulsory schooling. Then we test whether convergence holds when confronted with other explanations described in the literature. Conditional convergence does hold and we find that openness has been another significant determinant of compulsory years of schooling, reflecting the need of a skilled labour force in an increasingly globalized world.

Planning for the optimal mix of paygo tax and funded savings

The paper uses an overlapping generations model to analyse the problem of a benevolent planner determining the pay-as-you-go tax rate and the level of funded savings, in an economy where both are policy variables. We characterize the conditions under which it is desirable to have both a positive tax rate and a positive level of savings. The optimal size of the tax rate and of savings depend both on the stochastic characteristics of earnings growth and the return to savings, and on the shape of the utility function of the representative agent. Among the comparative statics results presented, the central one is that increasing the variability of earnings raises the desirability of a pay-as-you-go system, under general conditions. This is consistent with earlier analyses of pay-as-you-go as a provider of intergenerational insurance. A numerical example using the CARA utility and normal distributions illustrates the calculation of optimal tax and savings levels, using annual data for post-War France.

Prudential Regulation and Competition in Financial Markets

This paper examines how a range of stability-oriented regulatory policies for banking and insurance are related to selected stability and competition outcomes in these sectors. Based on survey information on financial market regulation, policy indicators for eight areas of prudential banking regulation are constructed, in addition to indicators for the insurance sector. Despite incomplete information on some areas that turned out to be important in the context of the recent financial crisis, the indicators correlate well with different measures of financial stability, both during the recent crisis and beyond. Furthermore, the results do not support the view that there is a general trade-off between stability-oriented regulatory policies and competition in banking and insurance. Regulation prudentielle et concurrence sur les marches financiers Cette etude examine le lien entre les politiques de regulation prudentielle des industries de la banque et de l’assurance et les resultats observes dans ces secteurs en termes de stabilite et de concurrence. Sur la base d’enquetes portant sur la regulation des marches financiers, des indicateurs sont construits pour evaluer les politiques touchant a huit segments differents de la regulation bancaire prudentielle, ainsi qu‘au secteur de l’assurance. En depit de lacunes dans le renseignement de certains segments de la regulation, lacunes prejudiciables dans le contexte recent de crise financiere, ces indicateurs presentent une correlation satisfaisante avec diverses mesures de stabilite financiere, a la fois dans ce contexte de crise et au-dela. En outre, les resultats ne confirment pas l’hypothese qu’il y aurait en general un arbitrage entre la regulation prudentielle et la concurrence dans les secteurs de la banque et de l’assurance.

What Determines Productivity in Senegal? Sectoral Disparities and the Dual Labour Market

Abstract This paper analyses the output gap between the formal and informal sectors in Senegal using a matched employer–employee database. While the production process in some informal sub-sectors is similar to the one in the formal sector, there is evidence that the economy is deeply cleaved between productive and non-productive firms within the informal sector and between voluntary and involuntary jobs on a labour market which proves to be dual. We find that education externalities are significant although modest in both sectors and that the differences in human and physical capital account for about two thirds of the output gap.

The Drivers of Public Health Spending: Integrating Policies and Institutions

This paper investigates the impact of policies and institutions on health expenditures for a large panel of OECD countries for the period 2000-10. We use a set of 20 policy and institutional indicators developed by the OECD characterising the main supply-side, demand-side, and public management, coordination and financing features of health systems. The impact of these indicators is tested alongside control variables related to demographic (dependency ratio) and non-demographic (income, prices and technology) drivers of health expenditures per capita. Overall, there is a reasonably good fit between the expected signs of the coefficients for the institutional indicators and the actual estimates. By integrating the role of policies and institutions, together with the other primary determinants, our analysis is able to explain most of the cross-country variation in public health expenditures. Les determinants des depenses publiques de sante : Le role des politiques et des institutions Ce papier analyse l’impact des politiques et des institutions sur les depenses de sante pour un large ensemble de pays de l’OCDE durant la periode 2000-10. Nous utilisons un groupe de 20 indicateurs politiques et institutionnels developpes par l’OCDE et qui caracterisent principalement l’offre, la demande, la gestion publique, la coordination et le financement des systemes de sante. L’incidence de ces indicateurs est evaluee conjointement avec des variables de controle en lien avec les determinants demographiques (taux de dependance) et non demographiques (revenu, prix et technologie) des depenses de sante par tete. Globalement, il existe une adequation satisfaisante entre les signes attendus des coefficients des indicateurs institutionnels et les estimations. En integrant le role des politiques et des institutions avec les autres determinants principaux, notre analyse reussit a expliquer la majorite de la variation entre pays des depenses publiques de sante.

Unemployment at risk: the policy determinants of labour market exposure to economic shocks

This paper examines the vulnerability of labour markets to adverse economic shocks. We define labour market exposure as the cumulated amount of excess unemployment generated by a shock before unemployment returns to steady-state. We use a panel of 19 countries covering the period 1985–2010 to assess the influence of labour market policies on labour market exposure, which is also calculated country by country. We find that less generous unemployment insurance, more active labour market policies or a lower minimum wage imply a trade-off between average unemployment and labour market exposure, as they help low-skilled workers to get out of unemployment at the cost of increased vulnerability to adverse shocks. On the other hand, reducing the tax wedge is conducive to both lower steady-state unemployment and labour market exposure. — Alain de Serres and Fabrice Murtin

How Do Policies Affect the Exit Rate out of Unemployment? Disentangling Job Creation from Labour Market Frictions

This paper assesses the effects of labour market policies on the unemployment outflow rate while disentangling two channels, namely labour market tightness and employer–employee matching efficiency. Using a sample of 11 OECD countries over the period 1985–2007, we treat the endogeneity of market tightness with business cycle shocks and the tax wedge as instruments. We find that the replacement rate of unemployment benefits, Active Labour Market Policies as well as the tax wedge in countries with poorly representative unions, have a significant, robust, and large impact on market tightness. Employment protection has a negative but small impact on matching efficiency. Overall, policy effects appear to be mostly channeled through market tightness and job creation.

Where are the highest living standards? Measuring well-being and inclusiveness in OECD regions

ABSTRACT This paper assesses the levels and trends in living standards across regions in Organisation for Economic Co-operation and Development (OECD) countries from the early 2000s to 2012. It applies a measure of welfare called multidimensional living standards (MDLS) at the regional level. The MDLS builds on the equivalent-income approach by combining monetary income with non-monetary (health and jobs) outcomes and taking into account how such outcomes are distributed amongst individuals. Results highlight that regional disparities are amplified when observed through an MDLS lens, as opposed to purely income-based regional disparities. The paper also shows that metropolitan residents experience, on average, higher levels of the MDLS and income than those in other regions.

The Role of Policy and Institutions on Health Spending.

This paper investigates the impact of policies and institutions on health expenditures for a large panel of Organisation for Economic Co-operation and Development countries for the period of 2000-2010. A set of 20 policy and institutional indicators developed by the Organisation for Economic Co-operation and Development are integrated into a theoretically motivated econometric framework, alongside control variables related to demographic (dependency ratio) and non-demographic (income, prices and technology) drivers of health expenditures per capita. Although a large share of cross-country differences in public health expenditures can be explained by demographic and economic factors (around 71%), cross-country variations in policies and institutions also have a significant influence, explaining most of the remaining difference in public health spending (23%). Copyright

Health and Prosperity

While progress in longevity has had a crucial impact on long-term economic development, it has also had a dramatic impact on society’s “prosperity”, which consists of the aggregation of income and longevity expressed in a monetized way in order to reflect people’s preferences and willingness-to-pay for better health. Defined as such, this measure captures both the quantity of life (i.e., longevity) and the quality of life (as proxied by income). Importantly, it is shown that progress in longevity explains half of the growth of prosperity at the global level over the last two centuries. However, the contribution of health to prosperity is projected to decline significantly over the next decades due to the slowdown of the growth of longevity assumed in United Nations statistics.