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Modelling Firm Innovation Using Panel Probit Estimators
by
Mark N. Harris, Mark Rogers and Anthony Siouclis
December 2001
Firm-level innovation is investigated using three probit panel estimators, which control for unobserved heterogeneity, and a standard probit estimator. Results indicate the standard probit model is misspecified and that inter-firm networks are important for innovation.
This paper evaluates different policy options to reduce unemployment by using a version of the TRYM model. For the purpose of this paper, the TRYM model has been modified in several respects, particularly by combining the private business and government trading enterprise sectors. For the long run, the neoclassical model closure means that the unemployment rate converges to an exogenously set NAIRU rate. For the short and medium run, periods well in excess of ten years, policy simulations show that macroeconomic policy changes, wage changes, labour productivity changes, and NAIRU changes affect employment and unemployment. Further, these policy effects are produced whether the model begins in a disequilibrium situation of unemployment above the NAIRU or at the long run equilibrium growth path with unemployment equal to the NAIRU.
A positive correlation between pecuniary and non-pecuniary job returns does not necessarily invalidate Adam Smith's thesis about compensating wage differentials. Compensation should still occur within a given set of job opportunities for each individual. This paper tests empirically a model that distinguishes between factors which affect the number and types of potential jobs open to a person, and, preferences which determine the ultimate choice from these options. It was found that women, especially women with children under 18 years of age, people who are more religious and people from English speaking backgrounds appear to value non-pecuniary job advantages more highly than other groups, ceteris paribus. Other labour market characteristics, such as further schooling, and maturity appear to make people select pecuniary job rewards over intrinsic satisfaction.
This paper reviews major features of the development of economic indicator analysis (EIA), notably its contribution to identifying, understanding, explaining and forecasting business cycles. The paper highlights the substantial pioneering role of Dr Geoffrey H. Moore in this development. The paper reviews some key issues regarding the selection and classification of economic indicators; and the methodologies developed to use these indicators to identify and measure business cycles on national, regional and sectoral bases. After making an overall assessment of EIA, acknowledgement is given to the widespread development and applications of EIA around the world to study the co-movements of key economic variables and to forshadow changes in them.
This publication is a manual for the use of the Melbourne Institute Tax and Transfer Simulator (MITTS). MITTS provides a tool for analysing policy changes. It allows us to examine the effect of a variety of policy changes on labour supply and income distribution for the Australian
This paper extends behavioural microsimulation modelling so that third round effects of a policy change can be simulated. The first round effects relate to fixed hours of work, while second round effects allow for changes in desired hours of work at unchanged wages. These allow for endogenous changes to the distribution of wage rates resulting from the labour supply responses to tax changes. This is achieved using the concept of an aggregate 'supply response schedule', which identifies the extent to which average labour supply responds to a proportional change in wage rates. The third round effect is obtained after re-running a microsimulation model with a suitable modification to individuals' wage rates. The method is illustrated using the MITTS behavioural microsimulation model.
This paper tests whether there is empirical evidence that two distinct Beveridge curves for the skilled and unskilled aggregate markets. The results support the dualism hypothesis and specifically find that the skilled labour segment is more efficient at matching workers with jobs and/or has lower turnover rates. Lower turnover rates may be indicative of a better prior match. It also found that other shift variables, such as the replacement rate, the incidence of long-term unemployment, the immigration rate and the market circumstances in the other segment, had differential effects on each curve.
This paper investigates the determinants of juvenile delinquency for males and females using the 1958 Philadelphia Birth Cohort Study. Ordered probit models for juvenile arrest are estimated separately for males and females. An adaptation of the EM-algorithm is used to estimate the model for females in order address a problem of missing values for the variable linking demographic and arrest data. The results indicate that juvenile arrests for both males and females are more likely for non-whites and for those who leave education early. Males and females behave differently, in that males are more likely to be repeat offenders.
The paper presents a monetary model of endogenous growth and specifies an econometric model consistent with it. The economic model suggests a negative inflation-growth effect, and one that is stronger at lower levels of inflation. Empirical evaluation of the model is based on a large panel of OECD and APEC member countries over the years 1961-1997. The hypothesized negative inflation effect is found comprehensively for the OECD countries to be significant and, as in the theory, to increase marginally as the inflation rate falls. For APEC countries, the results from using instrumental variables also show significant evidence of a similar behavior.
This paper provides new estimates of the revenue elasticity of income taxes in the UK over the period 1989-2000. It shows that changes in fiscal structure, including changes to income-related deductions, substantially affect these elasticities. Using new analytical expressions, estimates of consumption tax revenue elasticities for VAT and the main UK excises are also obtained. Changes in consumption patterns over time are found to be important for the magnitude of these consumption tax elasticities. A particular merit of the approach used here is that elasticity estimates can be obtained from information on relatively few parameters, almost all of which are available from published sources.
Melbourne Institute Working Paper No. 10/2001
The Effects of Flattening the Effective Marginal Rate Structure in Australia: Policy Simulations Using the Melbourne Institute Tax and Transfer Simulator
by
John Creedy, Guyonne Kalb and Hsein Kew
September 2001
This paper uses the Melbourne Institute Tax and Transfer Simulator (MITTS) to examine the effects of a reduction in the means-tested benefit taper, or withdrawal, rates in Australia to 30 per cent. That is, all taper rates of 50 per cent and 70 per cent in the 1998 system are reduced to 30 per cent, while leaving all basic benefit levels unchanged. This change is therefore expected to 'flatten' the tax structure by reducing the high marginal tax rates applying to those with relatively low incomes and increasing the marginal tax rates of medium incomes. Simulations in which all individuals are assumed to have an unchanged labour supply (using MITTS-A) are compared with behavioural simulations in which the majority of individuals are free to adjust the number of hours worked (using MITTS-B). The results reflect only the supply side of the labour market. The database used is the 1997 Income Distribution Survey (IDS), so that weekly incomes are based on the financial year 1997-98.
This paper examines the computation of exact welfare measures in the context of labour supply models. It is suggested that the standard method of computing compensating and equivalent variations does not allow su.ciently for the nonlinearity of the budget constraint. An exact method is suggested. The method is applied to contexts in which individuals are allowed to vary their hours continuously and where only a limited number of discrete hours of work are available. Discrete hours models have in recent years been used in view of the substantial econometric advantages when estimating the parameters of direct utility functions.
The 1990s has seen bargaining, and more specifically, enterprising bargaining supplant arbitration as the dominant industrial relations paradigm. In large part, this change reflects widespread belief that enterprise bargaining would stimulate greater levels of productivity. Evidence in support of this link between enterprise bargaining and productivity, however, is both scant and unconvincing. In this paper the relationship between enterprise bargaining and productivity is revisited using data from the Business Longitudinal Study. This data source is unique in that it provides firm-level data for Australia where the individual firms are tracked over a four-year period. Further, the survey period commenced in 1994-95, which is ideal for studying the impacts of the emerging growth in enterprise agreement coverage. Finally, the BLS data provide an objective measure of value added output.
Estimation of a simple production function using a random effects model revealed evidence of a strong contemporaneous relationship between registered enterprise agreements and productivity. Indeed, firms where all employees are on such agreements are estimated to have productivity levels that are 8.8 per cent higher than comparable firms but where no employees are covered by an enterprise agreement and are forced instead to rely on conditions specified in an industry award. However, despite this finding, it still proved impossible to establish a direct causal relationship between the introduction of enterprise agreements and subsequent productivity growth.
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