THE EFFECTS OF EDUCATION ON FERTILITY: EVIDENCE FROM TAIWAN

This study investigates the impact of women's education on fertility. For identification, we use the 1968 compulsory education law change in Taiwan, which generated a regression discontinuity design (RDD) setting. We use the whole population of women from the 1980 and 2010 Population Censuses. Results of our RDD estimation using the exact date of birth suggest that the law change was effective in boosting women's education, but it did not have any impact on fertility. This is in stark contrast to most previous studies using only the birth year as the running variable or using it to construct instruments, which find that women's education depresses fertility. This study demonstrates that using a discrete running variable in RDD may generate a false discontinuity for an otherwise continuous regression function. (JEL J13, C21, I2)     

THE EFFECTS OF EMPLOYMENT PROTECTION ON LABOR TURNOVER: EMPIRICAL EVIDENCE FROM TAIWAN

This paper investigates the effects of employment protection legislation on the rates of hiring, separation, worker flows, job reallocation, and churning flows for the case of Taiwan. Our empirical identification takes advantage of a reform created by Taiwan's enactment of Labor Standards Law, which has substantially increased the costs of firing, and the implementation of the law's enforcement measures. Moreover, our identification also exploits the fact that the stringency of the law's provisions and the intensity of the law's enforcement vary with establishment size. On the basis of the monthly data at the establishment level for the period 1983–1995, we find that Taiwan's Labor Standards Law and its enforcement measures have dampened labor turnover for medium‐sized and large establishments, while that of small establishments was not affected. (JEL J65, J63, J88)     

A COMMENT ON COMPETITION AND BIDDING BEHAVIOR: SOME EVIDENCE FROM THE RICE MARKET

In testing agents' responses to increased competition in sealed-bid first price-rice auctions, Meyer [1988] makes two erroneous assumptions: (1) that agents know ex ante the number of bidders in the auction, and (2) that firms forecast resale prices with information unavailable at the time of the auction. These two misspecifications are identified and corrected. A probit model provides a forecast of market competition, and agents' bids are modeled as a function of expected competition and factors affecting the value of each rice lot. The bias toward zero in Meyer's estimated coefficient on market competition is reduced.     

TRACING THE DYNAMICS OF COMPETITION: EVIDENCE FROM COMPANY PROFITS

This article proposes a simple approach to analyzing profit dynamics, which allows for time-varying persistence of profits. The time series model is a simple autoregressive process where the dynamics of the persistence parameter follow an autoregressive process. Using the longest time series available on profits for more than a hundred U.S. firms, we find that there is ample evidence of time variation in the persistence parameter. ( JEL L00, C22)     

COMPETITION AND BIDDING BEHAVIOR: SOME EVIDENCE FROM THE RICE MARKET

When objects have uncertain value, the net effect of competition in sealed-bid auctions is ambiguous. The risk of succumbing to the "winner's curse" generally causes bidders to exhibit a non-aggressive response in addition to the standard competitive effect. Sellers can influence the size of the nonaggressive effect by responding to the value uncertainty. This paper focuses specifically on individual bidding behavior in a rice auction market in which sellers issue a product-quality guarantee. The empirical evidence supports my hypothesis that such a guarantee negates the significance of the nonaggressive bidder response.     

THE ROLE OF INFORMATION ON RETIREMENT PLANNING: EVIDENCE FROM A FIELD STUDY

Many households neglect the pivotal task of planning for retirement. Proposals to stimulate employees to save for retirement in the workplace include tax subsidies, which are costly, and using automatic defaults, which may not complement the heterogeneous preferences of savers. This randomized field study shows that an information‐based intervention increases reported retirement plan participation, emergency savings, and using a budget. Employees offered access to education increased actual retirement deferrals by $26 per month. These results suggest that retirement education programs may be an effective strategy to increase retirement planning and saving behavior. (JEL J26, D14, D91)     

WORKFORCE COMPOSITION AND FIRM PRODUCTIVITY: EVIDENCE FROM TAIWAN

We study the relationship between workforce composition and firm productivity based on a new employee‐employer‐matched data set, using an array of workforce characteristics and three alternative measures of firm productivity. While firm age is not essential for the performance of firms, those of smaller size and those in the steel and transportation industries outperform others. Moreover, labor quality, particularly the middle‐aged with higher education, contributes significantly to firms' productivity. Furthermore, economic incentives and market competition both play important roles in the performance of firms. Finally, there is an employer‐size premium with larger firms paying higher wages and nonwage benefits. (JEL C33, D20, J30)     

IMPACT OF COMPETITION,INVESTMENT, AND REGULATION ON PRICES OF MOBILE SERVICES: EVIDENCE FROM FRANCE

In this paper, we assess the impact of competition, investment, and regulation on prices of mobile services in France. We estimate hedonic price regressions using data on tariff plans offered by the main mobile telecommunications operator in France between May 2011 and December 2014. In this time period, the obtained quality‐adjusted price index decreased by about 42.8% as compared to a decline in weighted average prices without quality‐adjustment of 8.7%. In a second step, we relate the quality‐adjusted prices to a set of competition, investment, and regulation variables and find that the launch of 4G networks by mobile operators was the main driver of price reductions for classic tariffs with commitment. Low‐cost tariffs without commitment which were introduced to pre‐empt the entry of low‐cost competitor declined at the time of entry. Moreover, we find that regulation, which is approximated by the level of mobile termination charges and international roaming price caps for voice and data, has a joint significant impact on quality‐adjusted prices. In percentage terms, competition is responsible for about 23.4% of total price decline and investments in 4G for 56.1%. We conclude that the reduction in quality‐adjusted prices in the last years was largely caused by competition between operators for a new 4G technology and by entry of a fourth low‐cost operator. (JEL L13, L50, L96)     

VOUCHERS,PUBLIC SCHOOL RESPONSE,AND THE ROLE OF INCENTIVES: EVIDENCE FROM FLORIDA

This paper analyzes the incentives and responses of public schools in the context of an educational reform. Much of the literature studying the effect of voucher programs on public schools has looked at the effect on student and mean school scores. This paper tries to go inside the black box to investigate some of the ways in which schools facing the Florida accountability‐tied voucher program behaved. Schools getting an “F” grade for the first time were exposed to the threat of vouchers, but did not face vouchers unless and until they got a second “F” within the next 3 years. In addition, “F,” being the lowest grade, exposed the threatened schools to stigma. Exploiting the institutional details of this program, I analyze the incentives built into the system and investigate the behavior of the threatened public schools facing these incentives. There is strong evidence that they did respond to incentives. Using highly disaggregated school‐level data, a difference‐in‐differences estimation strategy as well as a regression discontinuity (RD) analysis, I find that the threatened schools tended to focus more on students below the minimum criteria cutoffs rather than equally on all. Second, consistent with incentives, the threatened school improvements were, by far, the largest in writing. These results are robust to controlling for differential preprogram trends, changes in demographic compositions, mean reversion, and sorting. These findings have important policy implications. (JEL H4, I21, I28)     

THE PROCYCLICAL LEVERAGE EFFECT OF COLLATERAL VALUE ON BANK LOANS—EVIDENCE FROM THE TRANSACTION DATA OF TAIWAN

We investigated the empirical relationship between firms' collateral values and land-secured loans over asset price cycles. A simultaneous equation model of loan demand and supply was estimated using a transaction-level data set from Taiwan. The data set contains collateral information and identifies lenders and borrowers. We found that the value of collateralizable assets has positive and significant effects on loan amounts and that the leverage effect of collateral is procyclical to asset price cycles. Firms in the electronics industry, the star industry in the sample period, are found to borrow more than other firms do at each marginal dollar of collateral . ( JEL C50, E30, G20)     

COMPETITION FOR UNIVERSITY PLACES AND PARENTAL TIME INVESTMENTS: EVIDENCE FROM THE UNITED KINGDOM

Across the industrialized world college‐educated parents invest more time in their children relative to noncollege‐educated parents. Yet, the reason for the education gradient in parental time investments is not well understood. Using 24‐hour diary surveys since the 1970s we document an inverse U‐shape in the education gradient in the United Kingdom. Theories unfolding gradually and monotonically cannot easily explain this pattern. Using an exogenous increase in the number of students going on to university in the 1980s, we show that an alternative explanation based on competition for university places can explain the temporal and spatial variation in the education gradient. (JEL J13, J24)     

MONITORING OF WORKERS AND PRODUCT MARKET COMPETITION: THE ROLE OF WORKS COUNCILS

Often the consent of worker representations, such as works councils, is required before firms are allowed to install technologies that monitor workers' behavior. Absent monitoring, workers produce low output, while at the same time receiving an information rent. To gain the works council's consent to the installation of a monitoring technology, firms need to compensate workers for the lost information rent. Hence, by making it more costly to produce high output, works councils can serve firms as an instrument to commit to low output levels. This provides a rationale for why works council rights are not opposed more strongly by employers. (JEL D43, D86, J83, L13)     

DEVIATIONS FROM CONSTITUENT INTERESTS: THE ROLE OF LEGISLATIVE STRUCTURE AND POLITICAL PARTIES IN THE STATES

This paper investigates the determinants of state spending over 1960—1990. Recent empirical studies suggest that state government expenditure is greater than the electorate desires. Our main finding is that expenditure was positively related to the number of seats in a state's legislature. This is consistent with the hypothesis that logrolling leads representatives to spend more than their constituents would like. We also find that political parties do not have a pronounced effect on overall levels of expenditure, but do influence the composition of spending. In particular, Democratic control of state government is associated with higher levels of welfare spending.     

CONSOLIDATING THE EVIDENCE ON INCOME MOBILITY IN THE WESTERN STATES OF GERMANY AND THE UNITED STATES FROM 1984 TO 2006

The cross‐national intragenerational literature has often analyzed income mobility within short time periods over which mobility might reasonably be thought of as invariant. Here, we argue that a great social transformation—German reunification—abruptly and permanently altered mobility. Using standard measures (with panel data for the western states of Germany and the United States) over the period 1984–2006, we find the conventional result that income mobility is greater in Germany. But when we cut the data into 5‐year windows, we find that income mobility declines significantly over the years immediately following reunification in Germany but not in the United States, using both measures. (JEL J1, J6)     

THE IMPACT OF HIGH-TECH CAPITAL ON PRODUCTIVITY: EVIDENCE FROM AUSTRALIA

This article examines the relationship between high-tech capital use and productivity. Using Australian data, some evidence is found of a positive relationship between high-tech capital use and productivity in the market sector, but there is much less evidence of excess returns. These results are robust to the use of a variety of different measures of high-tech capital. At the industry level however, the relationship is significant and positive for only some industries. This suggests that the benefits of investment in high-tech capital are not spread evenly across the economy. (JEL O3 )     

GENDER PERFORMANCE GAPS: QUASI‐EXPERIMENTAL EVIDENCE ON THE ROLE OF GENDER DIFFERENCES IN SLEEP CYCLES

Sleep studies suggest that girls go to sleep earlier, are more active in the morning, and cope with sleep deprivation better than boys. We provide the first causal evidence on how gender differences in sleep cycles can help explain the gender performance gap. We exploit over 240,000 assignment‐level grades from a quasi‐experiment where students' schedules alternated between morning and afternoon start times each month. Relative to girls, we find that boys' achievement benefits from a later start time. For classes taught at the beginning of the school day, our estimates explain up to 16% of the gender performance gap. (JEL H52, I20, I21)     

REPUTATION EFFECTS IN THE MARKET OF CERTIFIERS: EVIDENCE FROM THE AUDIT INDUSTRY

Certifiers verify unobserved product characteristics for buyers and thereby alleviate informational asymmetries and facilitate trade. When sellers pay for the certification, however, certifiers can be tempted to bias their opinion to favor sellers. Indeed, accounting scandals and inflated credit ratings suggest sellers may prefer to select dishonest certifiers. I test this proposition by estimating the effect of adverse quality signals on audit demand. Exploiting the natural experiment of Arthur Andersen's demise, I find that auditors with worse quality signals experience a fall in demand. This suggests that reputation effects are at work even in the presence of conflicts of interest. (JEL L15, L8, M4)     

THE EFFECT OF HOUSE PRICE ON FERTILITY: EVIDENCE FROM HONG KONG

This article extends a standard Beckerian model of fertility behavior to formulate the effect of house price (HP) on fertility. The simple model predicts a negative effect of HP on the number of children for a representative household not only through the income effect but also through the compensated substitution effect. The prediction is confirmed by a cointegration analysis applied to the annual data at the aggregate level covering the period from 1971 to 2005 in Hong Kong. It is found that a 1% increase in HP is significantly related to a 0.45% decrease in total fertility rates (TFRs), which is robust in sensitivity tests with an alternative model specification and alternative measures of TFRs. This implies that high HP inflation can account for about 65% of the fertility decrease in Hong Kong in the past four decades. (JEL J13, J11, C32)