Magnus Wikström

The impact of regional public expenditures on the local decision to spend

This paper studies the hypothesis that local (municipal) expenditures in part can be explained by the expenditures of the regional (county) government. To accomplish this task, we derive and estima ...

Local public expenditure in Sweden a model where the median voter is not necessarily decisive

Abstract This paper deals with local public expenditures, and the analysis is based on cross-section data for the Swedish municipalities. Two models are estimated; one is the basic median voter model where the decisive voter is assumed to be the voter with median income, while the other is a more general statistical alternative. The statistical alternative nests the basic median voter model as a special case, which makes it easy to test the null hypothesis that the basic median voter model is the correct model, given that the alternative is the true general structure. Although our results indicate a rejection of the null hypothesis, the estimation results are, nevertheless, similar for the two models.

Fixed budgets as a cost containment measure for pharmaceuticals.

In Västerbotten County, Sweden, there are two health centers which (in contrast to all other health centers in the region) bear strict responsibility over their pharmaceutical budget. This study examined whether the prices and quantities of pharmaceuticals prescribed by physicians working at these health centers differ significantly from those prescribed by physicians at health centers with open-ended budgets. Estimation results using matching methods, which allows us to compare similar patients at the different health centers, show that the introduction of fixed pharmaceutical budgets did not affect physicians’ prescription behavior, indicating that fixed budgets may not be an efficient measure to reduce costs. Another explanation is that the health centers under study already had taken measures to contain costs, making it hard to further reduce costs.

Optimal Taxes and Transfers in a Multilevel Public Sector

This paper analyzes taxes and transfers in an economy with three distinct levels of government. It is assumed that the different levels of government raise revenue through distortionary income taxation, resulting in vertical fiscal externalities. We show how to implement a socially optimal resource allocation when (i) the different levels of government act as Nash competitors to one another, and (ii) when one or several of the governmental entities act as Stackelberg leaders.

Municipal Preferences for State-imposed Amalgamations: : An Empirical Study Based on the Swedish Municipal Reform of 1952

This paper concerns municipal preferences for state-imposed municipal amalgamations, focusing on factors that may explain municipal acceptance of, or objection to, a state-imposed amalgamation decision. The empirical analysis is based on the extensive municipal reform that occurred in Sweden in 1952, which reduced the number of municipalities from 2498 to 1037. In 66 per cent of the amalgamated cases, at least one municipality complained. The results show that income differences affected the willingness to amalgamate; high-income municipalities opposed amalgamation with less wealthy municipalities. The results also indicate that the size (absolute and relative) of the municipalities affected their willingness to amalgamate. Small and large municipalities were most likely to accept the amalgamation decision and equally sized municipalities were less likely to amalgamate voluntarily.

Monopoly union versus efficient bargaining : Wage and employment determination in the Swedish construction sector

Abstract This paper estimates two models of wage and employment determination using time-series data for the Swedish construction sector: the monopoly union model and the model of efficient bargaining. The major purpose is to examine whether the models provide a theory consistent description of firm technology and union objectives. This gives a natural framework for model selection as the models are not nested. Two versions of the efficient bargaining model are estimated. The first version is based on the assumption that the bargainingpower of the union is constant over time, while we in the second version assume that the bargaining power develops with unemployment and labour market characteristics according to the logit distribution. The results from the estimation imply that the monopoly union model describes both a well defined firm technology and well defined union objectives. In the models of efficient bargaining we will, in both cases, end up at a point close to the labour demand curve, although that point seems to provide a less accurate description of data compared with the solution to the monopoly union model.

Nonlinear taxes in a life-cycle consistent model of family labour supply

This paper deals with family labour supply under nonlinear income taxation in a life-cycle consistent framework. A major purpose of the paper is, therefore, to bring together previous research on how to model joint supply decisions, life-cycle consistency and piecewise linear taxation, and then perform an econometric application using Swedish cross-section data. The paper starts by constructing an intertemporal model of household behaviour, which is used to derive optimal hours of work for the husband and the wife, respectively. Then, given the appropriate theoretical framework, the model is specified in a way suitable for econometric analysis. Regarding the estimation results, we find that both male and female labour supply are sensitive not only to changes in the own marginal wage rate and the virtual nonlabour income, but also to changes in the marginal wage rate of the spouse. The latter means that cross-wage effects are important when it comes to interpret the consequences of income taxation.

Group Differences in Student Performance in the Selection to Higher Education: Tests vs Grades

Student selection in the Swedish admission to higher education system is based on two fundamentally different performance measures: their criterion-referenced upper secondary grade point average (GPA) or their score on a norm-referenced and multiple-choice admissions test (SweSAT). Several student characteristics are known to affect rankings in such assessments. The objectives of this study are to assess main and interactive effects of several variables that influence rankings obtained from these measures in greater detail than previously attempted, and assess the findings from a fairness perspective. The data consist of test scores, upper secondary grades and background information for SweSAT participants, aged 19 to 25 years, who took the test in the autumn of 2011 (N=23,214) or spring of 2012 (N= 27,075). The data were analysed through correlation and regression analysis. The results support previous findings that gender, parents’ education, and immigration status are all influential. Males obtain better SweSAT scores than females while females obtain better GPAs, in accordance with previous findings regarding gender-related variations in rankings provided by similar instruments. Moreover, we found the same pattern in scores for specific components of the test and grades in specific subjects, suggesting that the test and GPA measure different, gender-related, things. In addition, students with an immigrant background seem to be more highly ranked by grades than by the SweSAT, largely due to differences in assessments of their verbal skills. □

Public provision and cross-border health care

Abstract We study how the optimal public provision of health care depends on whether or not individuals have an option to seek publicly financed treatment in other regions. We find that, relative to the first-best solution, the government has an incentive to over-provide health care to low-income individuals. When cross-border health care takes place, this incentive is solely explained by that over-provision facilitates redistribution. The reason why more health care facilitates redistribution is that high-ability individuals mimicking low-ability individuals benefit the least from health care when health and labor supply are complements. Without cross-border health care, higher demand for health care among high-income individuals also contributes to the over-provision given that high-income individuals do not work considerably less than low-income individuals and that the government cannot discriminate between the income groups by giving them different access to health care.

CHILDCARE REFORM: EFFECTS ON EARNINGS AND EMPLOYMENT AMONG NATIVE SWEDISH AND IMMIGRANT MOTHERS

This paper studies earnings and labor force participation of native Swedes and recent immigrants in Sweden in response to the childcare reforms of 2001 and 2002 using a difference-in-differences ap ...