2015

Quel impact la fiscalité québécoise a-t-elle sur les incitations au travail ?*

Quebec’s system of taxation and social transfers, relative to Ontario’s, generates large marginal effective tax rates (METR) and participation tax rates (PTR) on labor income. This is largely due to the steep claw back of transfers following increases in Quebecers’ labor income. Quebec’s METRs are particularly high and variable between $0 and $50,000. The METR of two-parent families with income around $20,000 even exceeds 125%; 40% of two-parent families face a METR that exceeds 50%.

The political economy of (in)formal long term care transfers*

Why are long-term care (LTC) social transfers so small in most countries? First, informal help may be politically preferred to LTC social transfers when dependent parents have a strong preference for such a form of assistance. Second, when the parents’ probability of becoming dependent is low, the children of autonomous parents may be numerous enough to democratically oppose the introduction of LTC social transfers. Third, a political majority may dislike small LTC social transfers and prefer much larger transfers (though these may completely crowd out family help).

Peer Effects, Fast Food Consumption and Adolescent Weight Gain*

Can friendship influence adolescent weight gain? Using Add Health data on US secondary schools, this paper indeed finds the presence of positive peer effects, significant though small, on junk food consumption. The results indicate for example that, in the long term, an additional weekly meal at a fast food restaurant increases adolescent standardized body mass index by 4.5% when peer effects are ignored and by 5.1% when peer effects are taken into account, this net effect being higher than the individual effect because friendship networks help transmit bad eating habits.

Using a Life Cycle Model to Evaluate Financial Literacy Program Effectiveness*

We investigate how financial education programs optimally shape key economic outcomes: wealth accumulation, financial knowledge, and participation in sophisticated assets (e.g. stocks). We then find that the more effective programs provide follow-up in order to sustain the knowledge acquired by employees via the programs; this follow-up can raise the value of savings at retirement by close to 10%. By contrast, one-time education programs produce short-term effects but few long-term ones.

The Evolution of Hourly Compensation in Canada between 1980 and 2010*

We find that wage inequality (as measured by the coefficient of variation) among full-time workers has almost doubled between 1980 and 2010. The rapid growth among the top 0.1% is the main driver of that increase. Changes in the characteristics of the workforce (such as age, experience and education) explain less than 25% of the rise in wage inequality; the rest is explained by increasing within-group inequality. However, changes in worker characteristics explain most of the increase in average hourly compensation over those three decades.

Effective Age of Retirement: Innovative Methodology and Recent Experience

Innovative ways to estimate retirement age make it possible to assess better effective retirement from employment and not only to focus on labor force participation rates. This makes it also possible to distinguish better between retirement from full-time employment and part-time employment. It is found that average effective retirement age is indeed lower when only considering retirement from full-time employment rather than considering jointly retirement from both full-time and part-time employment.

Eliciting Subjective Survival Curves: Lessons from Partial Identification*

Bounds for subjective survival curves and subjective life expectancy are constructed by interpolating beliefs between data points and by allowing for rounding of the data. This helps explain objective correlations of life expectancy with age and self-reported health. Women expect to live shorter on average than the published life-tables predict, the difference being the largest around the age of 60. Men have expectations that are on average in line with the actuarial forecasts.

The Financial Crisis and Consumers’ Income and Pension Expectations*

An analysis of the pension expectations of Dutch economic agents in the 2009-2012 period of economic crisis reveals that substantial heterogeneity prevailed in those expectations, and that there has been greater pessimism amongst the high educated. Crisis perceptions also contain private and plausible information on how the crisis affects different families in different ways. The expectations of large groups of people may, however, be unrealistically positive for some groups, such as those with lower income.

Quality, Quantity and Duration of Lives*

Assessing development and public policies often requires comparing social states that differ in income distributions, population sizes and individuals’ longevity. Depending on the approach taken to weight the quality, the quantity and the duration of lives, global social welfare in 2010 can be deemed to be between 1.8 and 407 times that of 1910. The importance given to the quantity of lives is particularly important in that assessment.

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