Steinar Strøm

Labour supply in Italy: an empirical analysis of joint household decisions, with taxes and quantity constraints

This study applies an econometric framework that allows for complex non-convex budget sets, highly nonlinear labour supply curves and imperfect markets with institutional constraints. A married couples version of the model is estimated on Italian microdata. The empirical results show that male labour supply is rather inelastic while labour supply among females, especially participation, is considerably more elastic. The elasticities depend strongly on household income. The largest elasticities are found for females living in poor households. The results of the tax simulations suggest that there are only modest labour supply responses from replacing the 1987 system by proportional taxes.

Manufacturing energy use in eight OECD countries: Decomposing the impacts of changes in output, industry structure and energy intensity

This paper examines trends in manufacturing energy use in eight OECD countries, decomposing the changes that occured between 1973 and 1987 into the effects of changes in aggregate manufacturing activity, industry structure and energy intensities measured at the industry group level. While manufacturing production grew in every country except the UK, the rate of growth was variable from nation to nation. Structural change led to modest reductions in energy use in most countries, although in Norway structural change led to substantial growth in energy use. The reduction in energy intensities was strikingly uniform across all nations, ranging from 20% (Norway) to 36% (Japan) over the period of the analysis. While other studies have used Divisia decomposition techniques, we use an alternative method based on Laspeyres indices. A comparison of the two techniques shows that they yield closely similar empirical results, although the Laspeyres approach is more easily interpreted. While the interactions between changes in structure and intensity are arbitrarily assigned to the two factors by the Divisia approach, the Lapeyres method yields interaction terms that explicitly account for such effects.

Early retirement and economic incentives

In Norway, early retirement programmes have gradually reduced the retirement age from 67 to 62 for a majority of the labour force. Based on micro data for 1990 and 1992, we estimate a competing-risk model with three states: full retirement, partial retirement/part-time work and full-time work. We then use the estimated model in simulations to study how financial incentives can be strengthened to extend working life. Financial incentives, educational background and industry affiliation are found to influence retirement behaviour. For low and medium incomes, the tax system shifts the incentives heavily towards early retirement and, in particular, towards partial retirement combined with part-time work. Copyright 2000 by The editors of the Scandinavian Journal of Economics.

The Hidden Economy: The Labor Market and Tax Evasion

When the option of tax evasion is included in the individual’s labor supply decisions, it is shown how the labor market is divided into an irregular and an official market. The impact of changes in tax rates, wage rates and the probability of being caught on the supply of labor in these two markets of the economy is calculated.

ENERGY USE IN PASSENGER TRANSPORT IN OECD COUNTRIES: CHANGES SINCE 1970

This paper analyzes some of the changes that took place in the structure of energy use for passenger travel in industrialized countries. Data is presented on energy use and travel activity for the four major modes of travel — automobile, bus, rail and air — for eight OECD countries: the United States, Japan, the United Kingdom, West Germany, France, Italy, Sweden, and Norway. We use the Laspeyres and Divisia indices to analyze the causes of the change in energy use between 1970 and 1987. The total change in energy use for travel is explained by changes in domestic passenger transport volumes, the mix of modes of travel, and the energy intensities of each mode.We have found two important effects that have a fundamental impact on energy use for travel since 1970. First, shifts among modes of transport towards more energy-intensive ones and large increases in volumes of travel (measured in passenger-kilometers) increased energy use for travel in many OECD countries, often more rapidly than the overall growth in GDP. Second, energy intensities, measured in mJ/passenger-kilometer, of passenger transport fell only in a few countries between 1970 and 1987. Even though individual automobiles have become more energy-efficient, greater size, power, and weight, worsening traffic conditions in Japan and Europe, and fewer people in cars restrained or even offset efficiency improvements. Particularly notable are the increases in intensities in Japan and Germany. The most important exception to this trend was the United States, but the intensities of land-based travel remain higher there than in most other countries. These findings lead to a pessimistic outlook for future energy use for travel. After all, if little or no energy was saved during the decades of high fuel prices, what can be expected in the 1990s?

Price regulation and generic competition in the pharmaceutical market

In March 2003 the Norwegian government implemented yardstick-based price regulation schemes on a selection of drugs subjected to generic competition. The retail price cap, termed the “index price,” on a drug (chemical substance) was set equal to the average of the three lowest producer prices on that drug, plus a fixed wholesale and retail margin. This is supposed to lower barriers of entry for generic drugs and to trigger price competition. Using monthly data over the period 1998–2004 for the six drugs (chemical entities) included in the index price system, we estimate a structural model enabling us to examine the impact of the reform on both demand and market power. Our results suggest that the index price helped to increase the market shares of generic drugs and succeeded in triggering price competition.

Nurses wanted Is the job too harsh or is the wage too low

When entering the job market, nurses choose among different kind of jobs. Each of these jobs is characterized by wage, sector (primary care or hospital) and shift (daytime work or shift). This paper estimates a multi-sector-job-type random utility model of labor supply on data for Norwegian registered nurses (RNs) in 2000. The empirical model implies that labor supply is rather inelastic; 10% increase in the wage rates for all nurses is estimated to yield 3.3% increase in overall labor supply. This modest response shadows for much stronger inter-job-type responses. Our approach differs from previous studies in two ways: First, to our knowledge, it is the first time that a model of labor supply for nurses is estimated taking explicitly into account the choices that RNs have regarding work place and type of job. Second, it differs from previous studies with respect to the measurement of the compensations for different types of work. So far, it has been focused on wage differentials. But there are more attributes of a job than the wage. Based on the estimated random utility model we therefore calculate the expected value of compensation that makes a utility maximizing agent indifferent between types of jobs, here between shift work and daytime work. It turns out that Norwegian nurses working shifts may be willing to work shift relative to daytime work for a lower wage than the current one.

What Money Buys: Clients of Street Sex Workers in the US

The article presents a review of current theoretical and empirical approaches to sex work, followed by the presentation of an original theoretical framework (Della Giusta et al., 2006), which is tested with an econometric model of the characteristics of demand for sex services by a sample of clients of street sex workers in the US. We present findings in relation to stigma and the relationship between paid and unpaid sex that corroborate our models hypotheses and are in line with findings from other empirical studies. Furthermore, we identify in our sample two diametrically opposite profiles: one for clients whom we label ‘experimenters’, and one for more experienced ones that we name ‘regulars’, we also estimate attitudes toward risk, and draw implications in terms of both policy and future theoretical and empirical research.

The generation of residual flows in Norway: an input-output approach

Abstract The generation of 35 different kinds of residuals is analyzed by an input-output approach for the Norwegian economy in 1970. The general tendency in the computations is that the final demand category, Export, especially export from the sectors Pulp and paper and Metals and minerals, is the main contributor of the flow of residuals generated each year.

Do medical doctors respond to economic incentives

A longitudinal analysis of married physicians labor supply is carried out on Norwegian data from 1997 to 1999. The model utilized for estimation implies that physicians can choose among 10 different job packages which are a combination of part time/full time, hospital/primary care, private/public sector, and not working. Their current choice is influenced by past available options due to a habit persistence parameter in the utility function. In the estimation we take into account the budget constraint, including all features of the tax system. Our results imply that an overall wage increase or less progressive taxation moves married physicians toward full time job packages, in particular to full time jobs in the private sector. But the overall and aggregate labor supply elasticities in the population of employed doctors are rather low compared to previous estimates.