Marco G. Ercolani

SICKNESS ABSENCE: AN INTERNATIONAL COMPARISON*

This paper shows how internationally and intertemporally consistent information on sickness absence can be constructed from Labour Force Surveys, and describes some important features of data that we have generated using the Luxembourg Employment Study. We also analyse sickness absence rates by age, gender and other socio-economic characteristics of workers. These relationships prove to be similar across countries with widely differing mean rates of absence. In this dataset, workers with longer tenure tend to have higher absence rates even when age is controlled for. Absence is also positively correlated with higher usual hours of work.

An Empirical Analysis of China's Dualistic Economic Development: 1965–2009

We analyze Chinas rapid economic development in the context of the dualistic development theory. Over the period 1965–2009, we find that Chinas economic growth is mainly attributable to the development of the non-agricultural (industrial and service) sector, driven by rapid labor migration and capital accumulation. We find that the sectoral reallocation of labor plays a significant role in promoting Chinas economic growth. Further, we find that the marginal productivity of agricultural labor stopped stagnating in 1978, which indicates that China entered quickly into phase two of economic development with the initiation of market reforms. Moreover, by 2009, the marginal productivity of labor has likely exceeded the institutional wage, as defined by the initially low average labor productivity, indicating that China may be now in the process of entering phase three of economic development.

The lifetime cost to English students of borrowing to invest in a medical degree: a gender comparison using data from the Office for National Statistics

Objective To evaluate this impact on male and female English medical graduates by estimating the total time and amount repaid on loans taken out with the UKs Student Loans Company (SLC). Setting UK. Participants 4286 respondents with a medical degree in the Labour Force Surveys administered by the Office for National Statistics (ONS) between 1997 and 2014. Outcomes Age-salary profiles were generated to estimate the repayment profiles for different levels of initial graduate debt. Results 2195 female and 2149 male medical graduates were interviewed by the ONS. Those working full-time (73.1% females and 96.1% males) were analysed in greater depth. Following standardisation to 2014 prices, average full-time male graduates earned up to 35% more than females by the age of 55. The initial graduate debt from tuition fees alone amounts to £39 945.69. Owing to interest charges on this debt the average full-time male graduate repays £57 303 over 20 years, while the average female earns less and so repays £61 809 over 26 years. When additional SLC loans are required for maintenance, the initial graduate debt can be as high as £81 916 and, as SLC debt is written off 30 years after graduation, the average female repays £75 786 while the average male repays £110 644. Conclusions Medical graduates on an average salary are unlikely to repay their SLC debt in full. This is a consequence of higher university fees and as SLC debt is written off 30 years after graduation. This results in the average female graduate repaying more when debt is low, but a lower amount when debt is high compared to male graduates.

Unpaid caregiving and paid work over life-courses: Different pathways, diverging outcomes.

We investigate the extent to which peoples earlier circumstances and experiences shape subsequent life-courses. We do this using UK longitudinal data to provide a dynamic analysis of employment and caregiving histories for 4339 people over 15-20 years between 1991 and 2010. We analyse these histories as sequences using optimal matching and cluster analysis to identify five distinct employment-caregiving pathways. Regression analysis shows that prior to embarking on these pathways, people are already differentiated by life-stage, gender and attitudes towards family and gender roles. Difference-in-differences estimation shows that some initial differences in income, subjective health and wellbeing widen over time, while others narrow. In particular, those following the most caregiving-intensive pathways not only end up poorer but also experience a relative decline in subjective health and wellbeing. These results confirm that earlier circumstances exert a strong influence on later life-courses consistent with pre-determination, persistence and path dependence.

Age-training gaps in the European Union

ABSTRACT This paper examines the relationship between age and training in the 15 European Union countries (EU-15) that were member states prior to the 2004 enlargement. The analysis is carried out using European Union Labour Force Survey data. We report cross-country comparisons of the training undertaken by older people (aged 50–64) and younger people (aged 20–49). We extend previous research by adding an analysis of the training undertaken by non-workers as well as that of workers. We also consider whether training is work-related, whether it is undertaken during normal work-hours and the time spent in training. Our results show that across the EU-15 not only are older people less likely to participate in training in general but, more importantly, they are less likely to participate in work-related training. Our evidence suggests that there is considerable scope for raising the training rates of older people and particularly older people who are out of work.

The Impact of the Euro Changeover on Inflation: Evidence from the Harmonised Index of Consumer Prices

Although anecdotal evidence has emerged to suggest that the prices of some goods did rise substantially at the time euro notes and coins were introduced, there have been few studies that have attempted to test this formally. Here we present formal statistical tests for the occurrence of a sudden increase in the aggregate price level for the 12 countries that undertook the changeover to euro notes and coins on 1 January 2002. Any sudden increase in the price level can also be detected as a temporary but substantial one-period rise in the rate of inflation. We use the countries that did not participate in the euro-changeover — Denmark, Sweden and the UK — as a control group for the formal statistical tests. We find that although the results are sensitive to the estimation method and to how the data are treated, there is weak evidence of a slight temporary increase in aggregate inflation (EuroStat code cp00) in January 2002 for the countries that did join the euro compared to those that did not. The data we use are from the New Cronos HICP (2005) monthly Harmonised Index of Consumer Prices (HICP) as supplied by EuroStat and cover the period 1995 to 2005.

Overlooked and undervalued: the caring contribution of older people

Purpose - – Older people are often perceived to be a drain on health care resources. This ignores their caring contribution to the health care sector. The purpose of this paper is to address this imbalance and highlight the role of older people as carers. Design/methodology/approach - – The study uses a unique data set supplied by a charity. It covers 1,985 caregivers, their characteristics, type and amount of care provided and the characteristics and needs of those cared-for. Binary and ordered logistic regression is used to examine determinates of the supply of care. Fairlie-Oaxaca-Blinder decompositions are used to disentangle the extent to which differences in the supply of care by age are due to observable endowment effects or coefficient effects. Nationally representative British Household Panel Survey data provide contextualization. Findings - – Older caregivers are more intensive carers, caring for longer hours, providing more co-residential and personal care. They are therefore more likely to be in greater need of assistance. The decompositions show that their more intensive caring contribution is partly explained by the largely exogenous characteristics and needs of the people they care for. Research limitations/implications - – The data are regional and constrained by the suppliers design. Social implications - – Older carers make a significant contribution to health care provision. Their allocation of time to caregiving is not a free choice, it is constrained by the needs of those cared-for. Originality/value - – If the burden of care and caring contribution are measured by hours supplied and provision of intimate personal care, then a case is made that older carers experience the greatest burden and contribute the most to the community.

Hidden Economies and the Socially Optimal Fiscal-Tax to Liquidity-Tax Ratio

Differential tax analysis is used to show how the socially optimal fiscal-tax to liquidity-tax ratio changes with the relative size of the tax-evading hidden economy. The smaller the relative size of the hidden economy, the larger the optimal fiscal-tax to liquidity-tax ratio. The empirical cross-section and panel evidence supports this theoretical result.

Hard and soft choices? Subject selection by schools and students

ABSTRACT We present an analysis of A-level subject choices at around age 16 for a cohort of students in English schools who completed their studies in 2014. We examined both the National Pupil Database and a unique rich dataset on the subject preferences and subsequent choices between the ages of 16 and 18 (i.e. GCSE and A-level). We found substantive differences between students’ preferences and actual choices of ‘hard’ and ‘soft’ post-16 subjects (i.e. A-level). These differences were strongly associated with falsification of students’ expectations of examination grades taken at age 16 (i.e. GCSE) in the core subjects of English and mathematics. The sizes of these falsification effects were much larger than other significant associations such as gender, ethnicity, and social class. This suggests that subject choices are not rigidly framed by stable individual preferences and they are therefore open to influence from new information, persuasion, and opportunities.

Luck versus skill over time: time varying performance in the cross-section of mutual fund returns

ABSTRACT Using returns histories spanning January 1984 to October 2014 of 5785 actively managed US closed-end equity mutual funds, we address the ‘thorny problems’ highlighted by Fama and French (The Journal of Finance, 2010, vol. 65, p. 1925) that arise due to their resampling procedure. This prevents them from capturing time variation in the parameters of equilibrium asset pricing models. These problems are addressed by combining innovative procedures which allow for testing of multiple break dates on fund-specific parameters along with cross-section bootstraps that remain valid in the presence of time-varying parameters. We find that substantial proportion – 8% – of the estimated versions of the asset pricing model have significant changes in their parameters. The effects of this time variation on the cross-section distribution of the risk-adjusted performance measure are significant and substantially increase centiles of the right tail of this distribution when compared to those produced without time-varying parameters. Our evidence regarding the lack of actively managed US equity mutual funds that generate excess returns is significantly weaker than those of Fama and French but our results do not overturn their pessimistic conclusion regarding the lack of skilled managers. We do find, unlike Fama and French, that managers generating negative returns are just unlucky but have no skill.