Karina Doorley

To Own or Not to Own?: Household Portfolios, Demographics and Institutions in a Cross-National Perspective

Using harmonized wealth data and a decomposition approach novel to this literature, we identify differences in determinants and in income profiles of asset and debt portfolios in European and North American countries. We find that family structure and income play a significant role in explaining cross-country differences in asset participation for the younger cohort. Large unexplained differences in non-financial asset participation remain for younger households and for debt participation among older households. In more financially developed and economically open countries, households are less likely to own housing, but more likely to be in debt. Our findings could have important implications for policy setting, suggesting a scope for the promotion of asset holdings among younger households and debt holdings to facilitate consumption smoothing among older households.

The Effect of Social Benefits on Youth Employment: Combining RD and a Behavioral Model

Natural experiments provide robust identifying assumptions for the estimation of policy effects. Yet their use for policy design is often limited by the difficulty of extrapolating on the basis of reduced-form estimates. In this study, we exploit an age condition in the eligibility for social assistance in France, which lends itself to a regression discontinuity (RD) design. We suggest to make the underlying labor supply model explicit, i.e. to translate the reduced-form discontinuity in terms of discontinuous changes in disposable incomes. This exercise shows the potential of combining natural experiments and behavioral models. In particular, we can test the external validity of the combined approach. We find that it predicts the effect of a subsequent reform, which extends transfers to the working poor, remarkably well. The model is then used to simulate the extension of social assistance to young people and finds that a transfer program with an in-work component would not create further disincentives to work in this population.

Chapter 9 In-Work Transfers in Good Times and Bad: Simulations for Ireland

In-work transfers are often seen as a good trade-off between redistribution and efficiency, as they alleviate poverty among low-wage households while increasing financial incentives to work. The present study explores the consequences of extending these transfers in Ireland, where support for low-wage households has been of limited scope. The employment and poverty effects of alternative policies are analyzed thanks to counterfactual simulations built using a micro-simulation model, the Living in Ireland Survey 2001 and labour supply estimations. Firstly, we study the effect of recent extensions of the existing scheme, the Family Income Supplement (FIS), and of its replacement by the refundable tax credit in force in the UK. Secondly, little is known about the impact of macro-level changes on the distribution of resources at the household level, which is particularly relevant in a country deeply affected by the current economic downturn. We suggest a preliminary analysis of the capacity of alternative in-work transfer scenarios to cushion the negative impact of earnings losses and cuts in the minimum wage.