University student enrollment forecasts by analysis structural ratios using ARIMA-methods

Summary Forecasts for the number of students in Germany are conducted by the Kultusministerkonferenz. They use a transition model which does not allow for prediction intervals and therefore lack a measure of uncertainty of the forecast. Since the uncertainty is high for such forecasts, this lack is of importance. In this paper, structural ratios, relating the number of university students to the population of the same age, are analyzed and forescasted using ARIMA-models with outliers. Multiplying these ratios with official population forecasts for Germany provides the future number of students, additionally giving prediction intervals. This number will increase from 1.94 million in 2002 to 2.35 million in 2015. The uncertainty of the forecast is high; the forecast interval in 2015 will range between 1.72 and 2.98 million at a 95% confidence level. Supported by the German Research Foundation (DFG). We are grateful to an anonymous referee for some helpful comments.     

Growth impact of climate change and response policies: The advanced climate change long-term (ACCL) model

This paper provides a tool to build climate change scenarios to forecast Gross Domestic Product (GDP), modelling both GDP damage due to climate change and the GDP impact of mitigating measures. It adopts a supply-side, long-term view, with 2060 and 2100 horizons. It is a global projection tool (30 countries/regions), with assumptions and results both at the world and the country/regional level. Five different types of energy inputs are taken into account according to their CO₂ emission factors. Full calibration is possible at each stage, with estimated or literature-based default parameters. Compared to other models, it provides a comprehensive modelisation of Total Factor Productivity (TFP), which is the most significant determinant of the GDP projected path. We present simulation results of different energy policy scenarios. They illustrate both the “tragedy of the horizon” and the “tragedy of the commons”, which call for a policy framework that adequately integrates a long run perspective, through a low-enough discount rate and an effective intergenerational solidarity as well as international cooperation.     

The impact of physical activity on employment

Using cross-sectional data from 25 European countries this study estimates the probability of an individual being employed controlling for his/her participation and frequency of participation in physical activity. Accounting for endogeneity, the regional prevalence of physical activity calculated from the sample is used as an instrument for individual participation suggesting a causal effect of physical activity on employment, especially for males.     

MATERIALS PRICES AND PRODUCTIVITY

There is substantial within‐industry variation in the prices that plants pay for their material inputs. Using plant‐level data from the US Census Bureau, I explore the consequences and sources of this variation in materials prices. For a sample of industries with relatively homogeneous products, the standard deviation of plant‐level productivity would be 7% smaller if all plants faced the same materials prices. Moreover, plant‐level materials prices are persistent, spatially correlated, and positively associated with the probability of exit. The contribution of entry and exit to aggregate productivity growth is smaller for productivity measures that are purged of materials price variation. After documenting these patterns, I discuss three potential sources of materials price variation: geography, differences in suppliers' marginal costs, and within‐supplier markup differences. Together, these variables explain 15% of the variation of materials prices.     

BUILDING REPUTATION FOR CONTRACT RENEWAL: IMPLICATIONS FOR PERFORMANCE DYNAMICS AND CONTRACT DURATION

We study how career concerns affect the dynamics of incentives in a multi‐period contract, when the agent's productivity is a stochastic function of his past productivity and investment. We show that incentives are stronger and performance is higher when the contract approaches its expiry date. Contrary to common wisdom, long‐term contracts may strengthen reputational effects whereas short‐term contracting may be optimal when investment has persistent, long‐term effects.     

Combining coordinates in simultaneous estimation of normal means

The problem of combining coordinates in Stein-type estimators, when simultaneously estimating normal means, is considered. The question of deciding whether to use all coordinates in one combined shrinkage estimator or to separate into groups and use separate shrinkage estimators on each group is considered. A Bayesian viewpoint is (of necessity) taken, and it is shown that the ‘combined’ estimator is, somewhat surprisingly, often superior.     

Product Market Regulation and Labor Market Performance around the World

Using annual data on 80 countries for 1980–2007 and a new indicator of product market regulation, this paper studies the effects of product market regulation on labor market performance among the total population as well as among two important groups of labor market outsiders: women and youth. It finds that stricter regulation is likely to both increase the unemployment rate and decrease the employment rate. The magnitude of the estimated effects is substantial. There are above‐average effects on both groups of outsiders, with the effects being particularly strong on youth. The results are robust to variations in specification.     

An Assessment of the Italian 2007 Complementary Social Security Reform: A Simulation Approach

In this paper we aim at assessing the outcomes of the 2007 Italian reform of the complementary social security scheme and at identifying the determinants behind them. The reform provided workers with relevant incentives to switch the investment of about 7 per cent of their gross yearly wages from a firm‐managed scheme (which took the form of a termination indemnity payment, the Trattamento di Fine Rapporto scheme) to an external pension fund. We provide a theoretical framework to model the workers' problem of choosing between these two different forms of complementary social security schemes and we then perform an agent‐based simulation taking into account all the details of the reform. Differently from previous contributions, we stress the impact that the investment decision has on the financial health of firms and, consequently, on workers' employment stability. Our simulations are able to replicate the Italian data in terms of adhesion rates to complementary social security and also to identify some of the key determinants of that outcome, such as fiscal incentives, individual preferences, the working of both the Italian labour and the financial markets and the productive structure of the Italian economy.     

Heterogeneous Firm Responses to Rising Teenage Wages

Substantial youth minimum wage changes in New Zealand between 2000 and 2007 raised teenage average wages by 5–10 per cent relative to those for adults. We use Statistics New Zealand's Linked Employer–Employee Database (LEED) to examine whether firms' teenage labour demand responses to these changes are greater for firms with higher teenage‐employment share. We find evidence that high teen‐employers reduced their teen employment relative to other firms and had lower survival rates over the period. However, firms that entered the main teen‐employment industries had higher teen‐employment shares than continuing firms. The results are consistent with endogenous technology adoption in response to non‐marginal changes in relative wages.     

Remittances,growth and poverty: New evidence from Asian countries

The present study re-examines the effects of remittances on growth of GDP per capita using annual panel data for 24 Asia and Pacific countries. The results generally confirm that remittance flows have been beneficial to economic growth. However, our analysis also shows that the volatility of capital inflows such as remittances and FDI is harmful to economic growth. This means that, while remittances contribute to better economic performance, they are also a source of output shocks. Finally, remittances contribute to poverty reduction – especially through their direct effects. Migration and remittances are thus potentially a valuable complement to broad-based development efforts.