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Dynamics of health and labour market risks
While there is little doubt that the probability of poor health increases with age, and that less healthy people face a more difficult situation on the labor market, the precise relationship between facing the risks of health deterioration and labor market instability is not well understood. Using 12 years of data from the German Socio-Economic Panel we study the nature of the relationship between poor health and non-employment on a sample of German men aged 30–59. We propose a joint model of health and labor market risks which identifies the mechanism through which poor health contributes to the probability of being jobless and vice versa. We find an important role of unobserved heterogeneity and evidence for correlation in the unobservable characteristics determining the two processes. The results also show strong persistence in the dynamics of health and labor market risks.
Altruism in the modern family: private transfers between parents and their biological and non-biological children
It has been recognized for a long time in the literature that there are altruistic relations within a family of parents and their biological children. The dispute on the sources of altruism refers usually to sociobiology and genetic improvement, even though there are also arguments for another mechanism in operation based rather upon social than biological relations. The changes in family formation, tenure and structure that took place over the previous century might have affected signicantly the relations within family. In addition to these processes Europe is facing opportunities and threats coming from ageing which makes mechanisms determining intergenerational interactions especially relevant. For these reasons the hypothesis on kinship altruism’s presence within families shall be investigated in more detail. We found evidence over the sample of 50+ population in Europe showing that there is no reason to believe that parents over 49 treat the biological childrenn in a different way than non-biological children as far as the intervivos transfers are concerned. However, children among which there is a non-biological one are less likely to provide financial and non-financial transfers to parents.
Count your hours: returns to education in Poland
Combining information from two Polish surveys from 2005 and taking advantage of the Polish microsimulation model (SIMPL) we demonstrate how different the estimates of returns to education can be depending on whether we use net or gross, and monthly or hourly wages, and we examine the role of correcting for employment selection. Annual rates of return to university education for men vary from 6.7% to 9.7% and for women from 8.0% to 13.4%. We show that simple linear estimation performs relatively well for men, while family demographics seem to be the “second best” exclusion restriction in the case of the estimation for women.
Dynamics of poor health and non-employment
While there is little doubt that the probability of poor health increases with age, and that less healthy people face a more difficult situation on the labour market, the precise relationship between facing the risks of health deterioration and labour market instability is not well understood. Using twelve years of data from the German Socio-Economic Panel we study the nature of the relationship between poor health and non-employment on a sample of German men aged 30-59. We propose to model poor health and non-employment as interrelated risks determined within a dynamic structure conditional on a set of individual characteristics. Applying dynamic panel estimation we identify the mechanism through which poor health contributes to the probability of being jobless and vice versa. We find an important role of unobserved heterogeneity and evidence for correlation in the unobservable characteristics determining the two processes. The results also show strong persistence in the dynamics of poor health and non-employment.
Dynamics of Earnings and Hourly Wages in Germany
There is by now a vast number of studies which document a sharp increase in cross-sectional wage inequality during the 2000s. It is often assumed that this inequality is of a “permanent nature” which in turn is used as an argument calling for government intervention. We examine these claims using a fully balanced panel of full-time employed individuals in Germany from the German Socio-Economic Panel for the years 1994-2006. In line with previous studies, our sample shows sharply rising inequality during the
2000s. Applying covariance structure models, we calculate the fraction of permanent and transitory wage and earnings inequality. From 1994 on, permanent inequality increases continuously, peaks in 2001 and then declines in subsequent years. Interestingly the decline in the permanent fraction of inequality occurs at the time of most rapid increases in cross-sectional inequality. It seems therefore that it is primarily the temporary and not the permanent component which has driven the strong expansion of cross-sectional inequality during the 2000s in Germany.
‘Klin’-ing up: effects of Polish tax reforms on those in and on those out
In 2007 and 2008 Polish governments introduced a series of reforms which led to a substantial reduction in the tax “wedge” (in Polish: “klin”) on labour. These consisted of reductions in the disability rate of Social Security Contributions (SSCs) and an introduction of an income tax credit for families with children. We show that the SSCs reforms on their own brought much greater reductions in the tax burden compared to a widely discussed 15% “flat tax”, despite a very similar simulated cost. When considered together the package of introduced reforms reduced the mean ATR on total labour cost from 41.6% to 35.7%. This compares to the mean ATR of 39.6% which would result from the introduction of the “flat tax”. In the analysis we present the effects of the reforms both for the employed and for the non-employed populations. The latter analysis is done in such a way as to account for the entire (simulated) distribution of wages of the non-employed and shows interesting differences between the effects of reforms on employed and non-employed individuals. We argue that to fully appreciate the effect of reductions in labour taxation it is important to bear in mind that one of the reasons for introducing them is to make employment more likely for those who currently do not work, and demonstrate that the introduced package has had a particularly important effect on non-employed second earners. Given the extent of the reductions in the “klin” it is somewhat surprising that so far so little attention has been given to the recent Polish reforms.
Multi-family households in a labour supply model: a calibration method with application to Poland
Models of cooperative and non-cooperative behaviour opened the household “black box” and allowed for individual treatment of partners in couples. However, labour supply literature has so far largely ignored a broader issue – the distinction of single versus multi-family (“complex”) households. We propose a method to account for multi-family household structure by borrowing from recent applications of the collective model to identify the degree of sharing. We assume that each household is characterised by a between-family sharing parameter, which is calibrated on estimated preferences, observed labour market status and other characteristics. We apply the method to Polish labour market data.
Physical activity patterns of European 50+ populations
Data from the Survey of Health, Ageing and Retirement in Europe (SHARE) shows very low levels of physical activity in Poland relative to populations aged 50+ in other European countries. We examine the extent to which the cross-country differences in the level of physical activity can be explained by differences in other characteristics such as education, residence and health, and to what extent the differences between countries – and the observed low levels of physical activity in Poland – relate to unobserved characteristics and could thus be referred to as differences in “activity habits”. We show that even controlling for a number of exogenous characteristics the Polish 50+ population is among the least active in Europe. Only when controlled for life-style and health characteristics (which are likely to be endogenous to physical activity), the level of physical activity in Poland is similar to several other countries but even then is still significantly lower compared to Switzerland, the Netherlands, Germany and the Nordic countries.
Alternative tax-benefit strategies to support children in Poland
Eurostat data shows that children and elderly are especially at risk of being in poverty. In 2004 the average rates of poverty risk in the European Union for these groups were about 19%. In Poland, the rate was 29% for children and only 7% for the elderly. We examine the role of the tax-benefit system in explaining this situation and analyse how much child poverty figures could change under several reform scenarios. In 2005, families with children were mainly supported by a means-tested family allowance and some supplements. This was extended in 2007 with the introduction of a non-refundable child tax credit. Making use of the European tax-benefit microsimulation model EUROMOD, this paper assesses the consequences of the recent reform in Poland. We examine the outcome in comparison to child policies in three other European systems and show that poverty reduction would have been more pronounced, if child policies were changed along the lines of the system in France or the United Kingdom. The Austrian system – relying primarily on universal benefits – would bring about a similar reduction in the poverty rate but with much greater reduction in the poverty gap. The paper presents detailed distributional analysis under the different systems assuming the cost of “importing” each of them to be the same as that of introducing the 2007 reform.
Health, work and life-style of the 50+ population in Poland in comparison with other European countries
