Population Externalities and Optimal Social Policy

If fertility is not chosen in a socially optimal way, and if policies to directly target fertility are ineffective or politically infeasible, then public policies that affect fertility could have important welfare consequences through the fertility channel. We refer to these effects as population externalities, and in this paper we focus on one important variable that may have a causal impact on fertility: the education of potential parents. If increased education causes families to have fewer children, then a government would want to increase college tuition subsidies in the presence of environmental externalities such as climate change, to indirectly discourage families from having children who will generate future environmental costs. Alternatively, if fertility is inefficiently low, due to imperfect parental altruism for example, governments will want to lower tuition subsidies to encourage child-bearing. We present a simple model of the college enrollment decision and its fertility impacts, and show that such population externalities are quantitatively important: the optimal subsidy increases by about $5000 per year with climate change, and decreases by over $7000 per year with imperfect parental altruism. Our paper demonstrates how public economics can incorporate population externalities, and that such externalities can have significant impacts on optimal policy.

The Public Economics of Changing Longevity

Our societies are witnessing a steady increase in longevity. This demographic evolution is accompanied by some convergence across countries, but at the same time substantial longevity inequalities persist within nations across income classes. This Element aims to survey some crucial implications of changing longevity on the design of optimal public policy. For that purpose, it first focuses on some difficulties raised by risky and varying lifetime for the representation of individual and social preferences. Then, it explore some central implications of changing longevity for optimal policy making, regarding prevention against premature death, pension policies, education, health care and long-term care. The author distinguishes between the case when longevity is partially the responsibility of individuals and the case when longevity is plainly exogenous.

Retrospectives: James Buchanan: Clubs and Alternative Welfare Economics

James Buchanan wrote “An Economic Theory of Clubs” and invented clubs to support a form of welfare economics in which there is no social welfare function (SWF) and individual utility functions cannot be “read” by external observers. Clubs were a means to allow the implementation of individualized prices for public goods and services and to allow each individual to pay exactly the amount he wants to pay. He developed this project to answer and counter Paul Samuelson's analysis of public goods, in which social welfare functions play a crucial role. Buchanan and Samuelson disagreed over the allocation of the costs of the public good to each individual. To Buchanan, it was by relying on individual's preferences. To Samuelson, by using a SWF. Buchanan's clubs are thus foreign and incompatible with the traditional Samuelson-style public economics in which they are used.

Field Specializations among Beginning Economists: Are There Gender Differences?

We examine the process underlying field specialization among beginning economists. Our multivariate logit framework accommodates single-and dual-field specializations with correlated choices. Including field-specific relative salaries and expected probabilities of academic employment is a novel aspect of this research. After conditioning on personal, economic, and institutional variables, we find that women graduate students are less likely to specialize in labor/health, macro/finance, industrial organization, public economics, and development/growth/international fields and are more likely to specialize in agricultural/resource/environmental fields. The Duncan dissimilarity index suggests that 14 percent of either sex would have to change specialization in order to achieve complete parity.

Public Economics and Inequality: Uncovering Our Social Nature

This paper argues that the social nature of humans, absent from the standard economic model, is crucial for understanding our large modern social states and why concerns about inequality are so pervasive. A social solution arises when a situation is resolved at the group level (rather than the individual level) through cooperation and fair distribution of the resulting surplus. In human societies, childcare and education for the young, retirement benefits for the old, health care for the sick, and income support for those in need are resolved at the social level and through the social state in advanced economies. Social situations are pervasive even outside government and play a significant role in the distribution of pretax market incomes.

Regulatory mechanisms and incentives nexus in taxation and governance of West African economies

<p>Despite the evident and contemporaneous concurrences in the political-economy and governance histories of Nigeria and Ghana, scholarly attention devoted to comparative interrogation of the public finance and the governance in the states is at low ebb. In this paper, we draw conceptual insights from public economics discourses of taxation and governance to argue that people-centered revenue profile relates significantly with comparative performances of government institutions. Matrix data were obtained from sampled respondents in Nigeria and Ghana and analysed for percentage analysis to validate the research conjectures. As predicted, the nexus between taxation and governance was generally weak, but nevertheless stronger in Ghana than Nigeria. In addition, the regulatory mechanisms for tax administration related positively to determine the nexus between taxation and governance in the study area. In addition, the study demonstrated a divergence in the states’ political economies as well as in their regulatory mechanisms for taxation. Also, incentives played a key role in shaping the relationship between taxation and governance. Nevertheless, tax incentives fostered a weak positive relationship for taxation and governance in Nigeria and Ghana even though such appears stronger in the latter than the former.</p>

Regulatory mechanisms and incentives nexus in taxation and governance of West African economies

<p>Despite the evident and contemporaneous concurrences in the political-economy and governance histories of Nigeria and Ghana, scholarly attention devoted to comparative interrogation of the public finance and the governance in the states is at low ebb. In this paper, we draw conceptual insights from public economics discourses of taxation and governance to argue that people-centered revenue profile relates significantly with comparative performances of government institutions. Matrix data were obtained from sampled respondents in Nigeria and Ghana and analysed for percentage analysis to validate the research conjectures. As predicted, the nexus between taxation and governance was generally weak, but nevertheless stronger in Ghana than Nigeria. In addition, the regulatory mechanisms for tax administration related positively to determine the nexus between taxation and governance in the study area. In addition, the study demonstrated a divergence in the states’ political economies as well as in their regulatory mechanisms for taxation. Also, incentives played a key role in shaping the relationship between taxation and governance. Nevertheless, tax incentives fostered a weak positive relationship for taxation and governance in Nigeria and Ghana even though such appears stronger in the latter than the former.</p>