This paper estimates dynamic employment multipliers in a U.S. county during 1998-2015. On average, one exogenous tradable job gain creates 1.1 jobs in the rest of the county economy in the same year, but is offset by losses of 0.23 job one year later and 0.32 job two years later.
... See More + The multiplier is modest during the 2002-2007 boom and is large during the Great Recession. It is smaller in the initial years of the Recovery but is larger in the latter years. Uncertainty and credit constraints are two possible hindrances to the propagation of job gains during the Recovery.
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Policy Research Working Paper WPS8105 JUN 19, 2017
Using close to 800,000 (2,000,000) transactions by 66,000 (303,000) households in the United States (in Finland), this paper shows that individual investors with longer holding periods choose to hold less liquid stocks in their portfolios, consistent with Amihud and Mendelson's (1986) theory of liquidity clienteles.
... See More + The relationship between holding periods and transaction costs is stronger among more financially sophisticated households. Households whose holding periods are positively related to transaction costs also earn higher gross returns on their investments before accounting for transaction costs, suggesting that attention to non-salient transaction costs is an indication of investing ability. The main findings are confirmed by analyzing changes in investors' holding periods around exogenous shocks to stock liquidity.
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Policy Research Working Paper WPS8098 JUN 09, 2017
This paper analyzes the spillover effects of U.S. monetary policy announcements on emerging market economies since end-2008, the period coinciding with the use of unconventional policy measures.
... See More + Monetary policy surprises are measured by changes in two-year Treasury yields in short windows of time around the Federal Reserve Board’s policy announcements. The analysis finds that U.S. monetary policy surprises have a significant impact on emerging economies' exchange rates, equity prices, and bond yields. The impact is larger for surprise tightening of policy than for surprise easing. The impact is disproportionately larger for large surprises, implying that emerging markets are relatively insulated from anticipated policy announcements. The spillover effects of policy announcements of other advanced economies, such as the euro area, Japan, and United Kingdom, are found to be much weaker than those of the United States.
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Policy Research Working Paper WPS8100 JUN 09, 2017
A substantial literature has examined the impact of stress during the early stages of life on later-life health. This paper contributes to that literature by examining the later-life health impact of stress during adolescence and early adulthood, using a novel proxy for stress: risk of military induction in the United States during the Vietnam War.
... See More + The paper estimates that a 10 percentage point (2 standard deviation) increase in induction risk in young adulthood is associated with a 1.5 percentage point (8 percent) increase in the probability of being obese, and a 1 percentage point (10 percent) increase in the probability of being in fair or poor health later in life. These findings do not appear to be due to cohort effects; the associations exist only for men who did not serve in the war, and are not present for women or men who did serve. These findings add to the evidence on the lasting consequences of stress, and indicate that induction risk during the Vietnam War may, in certain contexts, be an invalid instrument for education or marriage, because it appears to have a direct impact on health.
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Policy Research Working Paper WPS8063 MAY 16, 2017
Cawley,John Horan; De Walque,Damien B. C. M.; Grossman,DanielDisclosed
Social enterprises are emerging as a new area of public policy: several countries seek to stimulate private sector contribution to development outcomes, and social enterprises could be important players in that agenda.
... See More + However, those seeking a middle ground between for-profit and non-profit sectors to enable social enterprise have found legal frameworks to be lacking. This has triggered a range of legal developments over the past ten years, with a number of countries seeking to implement appropriate legal frameworks that can support and stimulate the development of social enterprise. These legal frameworks can both define social enterprise as well as to structure it, through the creation of new legal forms and regulations. The objective of this study is to analyze various definitions and forms under which social enterprises operate in five countries and the implications for public policies. The study is based on literature review and a small number of interviews clustered around Italy, Malaysia, South Korea, the United Kingdom, and United States, where social enterprise has attracted government`s interest. The study analyzes how the government operationalized its engagements with social enterprises. It takes a historical perspective to understand the legal forms available to, and adopted by, social enterprises, and the advantages and disadvantages of various approaches.
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Migration and trade are often linked through ethnic networks boosting bilateral trade. This study uses migration to quantify the importance of Ricardian technology differences for international trade.
... See More + The framework provides the first panel estimates connecting country-industry productivity and exports, and the study exploits heterogeneous technology diffusion from immigrant communities in the United States for identification. The latter instruments are developed by combining panel variation on the development of new technologies across US cities with historical settlement patterns for migrants from countries. The instrumented elasticity of export growth on the intensive margin with respect to the exporter's productivity growth is between 1.6 and 2.4, depending upon weighting. This provides an important contribution to the trade literature of Ricardian advantages, and it establishes a connection of migration to home country exports beyond bilateral networks.
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Policy Research Working Paper WPS8027 APR 10, 2017
This paper analyzes the role of the United States in the global economy and examines the extent of global spillovers from changes in U.S. growth, monetary and fiscal policies, and uncertainty in its financial markets and economic policies.
... See More + Developments in the U.S. economy, the world's largest, have effects far beyond its shores. A surge in U.S. growth could provide a significant boost to the global economy. Tightening U.S. financial conditions -- whether due to contractionary U.S. monetary policy or other reasons -- could reverberate across global financial markets, with adverse effects on some emerging market and developing economies that rely heavily on external financing. In addition, lingering uncertainty about the course of U.S. economic policy could have an appreciably negative effect on global growth prospects. While the United States plays a critical role in the world economy, activity in the rest of the world is also important for the United States.
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Policy Research Working Paper WPS7962 FEB 07, 2017
Different episodes of economic growth display widely varying distributional characteristics, both across countries and over time. Growth is sometimes accompanied by rising and sometimes by falling inequality.
... See More + Applied economists have come to rely on the Growth Incidence Curve, which gives the quantile-specific rate of income growth over a certain period, to describe and analyze the incidence of economic growth. This paper discusses the identification conditions, and develops estimation and inference procedures for both actual and counterfactual growth incidence curves, based on general functions of the quantile potential outcome process over the space of quantiles. The paper establishes the limiting 0 distribution of the test statistics of interest for those general functions, and proposes resampling methods to implement inference in practice. The proposed methods are illustrated by a comparison of the growth processes in the United States and Brazil during 1995-2007. Although growth in the average real wage was disappointing in both countries, the distribution of that growth was markedly different. In the United States, wage growth was mediocre for the bottom 80 percent of the sample, but much more rapid for the top 20 percent. In Brazil, conversely, wage growth was rapid below the median, and negative at the top. As a result, inequality rose in the United States and fell markedly in Brazil.
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Policy Research Working Paper WPS7933 JAN 05, 2017
Ferreira,Francisco H. G.; Firpo,Sergio; Galvao,Antonio F.Disclosed
The paths of many migrants include multiple destinations and transit routes, yet this pattern is almost never reflected in empirical analyses. For example, 9 percent of recent immigrants to the United States arrived from a transit country as opposed to the country where they were born.
... See More + Among those arriving from many high-income countries, the transit migration ratio exceeds 30 percent. To explain these patterns, this paper constructs a dynamic model of global migration that allows transit migration opportunities to impact the attractiveness of locations. After estimating the structural parameters of the model, the paper simulates various counterfactual scenarios to highlight the spillovers of transit migration paths.
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Policy Research Working Paper WPS7880 NOV 07, 2016
This economy profile presents the Doing Business indicators for San Marino. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator.
... See More + Doing Business 2017 is the 14th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. Economies are ranked on their ease of doing business; for 2016 San Marino ranks 79. Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation. Doing Business 2017 presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why. The data in this report are current as of June 1, 2016 (except for the paying taxes indicators, which cover the period January–December 2015).
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This economy profile presents the Doing Business indicators for United States. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator.
... See More + Doing Business 2017 is the 14th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. Economies are ranked on their ease of doing business; for 2016 United States ranks 8. Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation. Doing Business 2017 presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why. The data in this report are current as of June 1, 2016 (except for the paying taxes indicators, which cover the period January–December 2015).
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This economy profile presents the Doing Business indicators for Canada. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator.
... See More + Doing Business 2017 is the 14th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. Economies are ranked on their ease of doing business; for 2016 Canada ranks 20. Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, and labor market regulation. Doing Business 2017 presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The data in this report are current as of June 1, 2016 (except for the paying taxes indicators, which cover the period January-December 2015).
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Controlling for bond and issuer characteristics, bond spreads are expected to be equal across different legal jurisdictions, and differences are expected to disappear through arbitrage.
... See More + However, an analysis of 435 U.S. dollar–denominated bonds issued by 53 emerging market sovereigns during 1990-2015 reveals that after the financial crisis of 2008, the launch spread of sovereign bonds issued under U.K. law has been higher than those issued under U.S. law, by 130 basis points for BB+ bonds and 175 basis points for B- bonds. This effect was not significant for investment grade bonds. On average, bonds issued under U.K. law had weaker ratings and shorter tenors post-crisis. The post-crisis impact of governing law on sovereign bond spreads is not explained by collective action clauses, or first-time bond issuances. Instead, the difference seems to be related to the perception that U.S. law offers stronger investor protection, and that the investor base for bonds issued under U.S. law is larger than that for bonds issued under U.K. law. The difference in spreads persists in the secondary market even after 180 days, perhaps because of the lack of liquidity, as investors tend to buy and hold these more attractive bonds on a longer term basis.
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Policy Research Working Paper WPS7863 OCT 17, 2016
This paper argues that inequality can be both good and bad for growth, depending on what inequality and whose growth. Unequal societies may be holding back one segment of the population while helping another.
... See More + Similarly, high levels of income inequality may be due to a variety of different factors; some of these may be good while others may be bad for growth. The paper tests this hypothesis by “unpacking” both inequality and growth. Total inequality is decomposed into inequality of opportunity, due to observed factors that are beyond the individual's control, and residual inequality. Growth is measured at different steps of the income ladder to verify whether low, middle, and top income households fare differently in societies with high (low) levels of inequality. In an application to the United States covering 1960 to 2010, the paper finds that inequality of opportunity is particularly bad for growth of the poor. When inequality of opportunity is controlled for, the importance of total income inequality is dramatically reduced. These results are robust to different measures of inequality of opportunity and econometric methods.
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Policy Research Working Paper WPS7853 OCT 11, 2016
Marrero,Gustavo Alberto; Rodriguez,Juan Gabriel; Van Der Weide,RoyDisclosed
In absence of deposit insurance, underdeveloped financial systems can exhibit a coordination failure between banks, unable to commit on safe asset holding, and depositors, anticipating low deposit repayment in bad states.
... See More + This paper shows conditions under which a government can solve this failure by imposing safe asset purchases, which boosts deposits by increasing depositor repayment in bad states. In so doing, financial regulation stimulates bank profits if subsequent deposit growth exceeds the intermediation margin decline. As a result, it also promotes loans and branch installation with deposits. Two empirical tests are presented: 1) a regulation change by the National Bank of Ethiopia in 2011; 2) the introduction of bank taxes in Antebellum USA (1800-1861). Analyzing bank balance sheets and long-term branch installation, the regulation effects are isolated exploiting heterogeneity in bank size and policies introduction respectively, and find increases in branches, deposits, loans, and safe assets, with no decline in overall profits.
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Policy Research Working Paper WPS7734 JUN 28, 2016
Devolving property rights to local institutions has emerged as a compelling management strategy for natural resource management in developing countries.
... See More + The use of property rights among fishing cooperatives operating in Mexico's Gulf of California provides a compelling setting for theoretical and empirical analysis. A dynamic theoretical model demonstrates how fishing cooperatives' management choices are shaped by the presence of property rights, the mobility of resources, and predictable environmental fluctuations. More aggressive management comes in the form of the cooperative leadership paying lower prices to cooperative members for their catch, as lower prices disincentivize fishing effort. The model's implications are empirically tested using three years of daily logbook data on prices and catches for three cooperatives from the Gulf of California. One cooperative enjoys property rights while the other two do not. There is empirical evidence in support of the model: compared to the other cooperatives, the cooperative with strong property rights pays members a lower price, pays especially lower prices for less mobile species, and decreases prices when environmental fluctuations cause population growth rates to fall. The results from this case study demonstrate the viability of cooperative management of resources but also point toward quantitatively important limitations created by the mismatch between the scale of a property right and the scale of a resource.
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Policy Research Working Paper WPS7662 MAY 05, 2016
Aburto-Oropeza,Octavio; Leslie,Heather M.; Mack-Crane,Austen; Nagavarapu,Sriniketh Suryasesha; Reddy,Sheila M.W.; Sievanen,LeilaDisclosed
What is the impact of fiscal policy shocks on key macroeconomic variables in Canada? This question triggered renewed interest in the aftermath of the 2008-09 Great Recession.
... See More + Indeed, as in many advanced economies, fiscal policy in Canada following the recession started with an expansionary phase to boost domestic demand. It progressed to an adjustment phase to reduce public debt and ensure long-term fiscal sustainability and sustained growth. This paper analyzes the effects of fiscal policy shocks on the Canadian economy, building on the sign-restrictions-VAR approach. Unlike previous studies, this paper explicitly accounts for spillovers from the U.S., Canada's main trading partner, and for oil price fluctuations. The findings show that the size and sign of the spending and tax revenue multipliers depend on whether the analysis controls for the exogenous factors. The tax-cut multiplier varies between 0.2 and 0.5, while the spending multiplier ranges between 0.2 and 1.1; the spending multiplier tends to be larger than the tax-cut multiplier over the past two decades.
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Policy Research Working Paper WPS7654 APR 27, 2016
Did unemployment in the Great Recession hurt people's health? The broad answer is no: job losses have statistically insignificant impacts on mortality.
... See More + The exogenous sources of job losses in a U.S. county is the tradable job losses driven by external demand collapses during the Great Recession. The insignificant relationship holds for males and females, for all age groups, and for almost all categories of mortality. Three important exceptions are Alzheimer's, poisoning, and homicide.
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Policy Research Working Paper WPS7603 MAR 16, 2016
This paper explores the spillover effects of job losses via input linkages during the Great Recession. Exploiting exogenous variation in tradable employment shocks across U.S. counties, the paper finds that job losses in the tradable sectors cause further job losses in local supporting services.
... See More + The result is not due to reverse causation, construction job losses, or credit shortages. In addition, the paper finds that logistic supporting services are relatively more affected by local tradable job losses, while professional supporting services, such as information technology and management consulting, are more affected by the job losses in neighboring counties.
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Policy Research Working Paper WPS7543 JAN 22, 2016
