The private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU

This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under c

The Private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU

This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under conditions that approximate general equilibrium.

The effects of regional educational policies on school failure in Spain

This paper presents a regional analysis of the effects of educational policies implemented in Spain between 1992 and 2003, focusing specifically on school failure rates. We consider the impact of expenditure per pupil, class size, and pupil-teacher ratio on dropout rates at the end of compulsory education and on the proportion of early school-leavers in the 18-24 year age group. Our results indicate that higher levels of educational expenditure per pupil and lower class sizes and pupil-teacher ratios reduce rates of dropout and early school-leaving (although class-size is not always significant). However, the magnitude of the effects of these variables is small at the average level.

Classification of textures seen from different distances and under varying illumination direction

Changes in the angle of illumination incident upon a 3D surface texture can significantly alter its appearance, implying variations in the image texture. These texture variations produce displacements of class members in the feature space, increasing the failure rates of texture classifiers. To avoid this problem, a model-based texture recognition system which classifies textures seen from different distances and under different illumination directions is presented in this paper. The system works on the basis of a surface model obtained by means of 4-source colour photometric stereo, used to generate 2D image textures under different illumination directions. The recognition system combines coocurrence matrices for feature extraction with a Nearest Neighbour classifier. Moreover, the recognition allows one to guess the approximate direction of the illumination used to capture the test image

Effects of erythropoietin on muscle O2 transport during exercise in patients with chronic renal failure.

Erythropoietin (rHuEPO) has proven to be effective in the treatment of anemia of chronic renal failure (CRF). Despite improving the quality of life, peak oxygen uptake after rHuEPO therapy is not improved as much as the increase in hemoglobin concentration ([Hb)] would predict. We hypothesized that this discrepancy is due to failure of O2 transport rates to rise in a manner proportional to [Hb]. To test this, eight patients with CRF undergoing regular hemodialysis were studied pre- and post-rHuEPO ([Hb] = 7.5 +/- 1.0 vs. 12.5 +/- 1.0 g x dl-1) using a standard incremental cycle exercise protocol. A group of 12 healthy sedentary subjects of similar age and anthropometric characteristics served as controls. Arterial and femoral venous blood gas data were obtained and coupled with simultaneous measurements of femoral venous blood flow (Qleg) by thermodilution to obtain O2 delivery and oxygen uptake (VO2). Despite a 68% increase in [Hb], peak VO2 increased by only 33%. This could be explained largely by reduced peak leg blood flow, limiting the gain in O2 delivery to 37%. At peak VO2, after rHuEPO, O2 supply limitation of maximal VO2 was found to occur, permitting the calculation of a value for muscle O2 conductance from capillary to mitochondria (DO2). While DO2 was slightly improved after rHuEPO, it was only 67% of that of sedentary control subjects. This kept maximal oxygen extraction at only 70%. Two important conclusions can be reached from this study. First, the increase in [Hb] produced by rHuEPO is accompanied by a significant reduction in peak blood flow to exercising muscle, which limits the gain in oxygen transport. Second, even after restoration of [Hb], O2 conductance from the muscle capillary to the mitochondria remains considerably below normal.

Abnormalities of sodium excretion and other disorders of renal function in fulminant hepatic failure

Renal function was evaluated in 40 patients with fulminant hepatic failure, They were divided into two groups on the basis of glomerular filtration rates greater than 40 ml/min or less than 25 ml/min. A number of patients in group 1 had markedly abnormal renal retention of sodium together with a reduced free water clearance and low potassium excretion which could be explained by increased proximal tubular reabsorption of sodium. The patients in group 2 had evidence that renal tubular integrity was maintained when the glomerular filtration rate was greater than or equal ml/min (functional renal failure), but evidence of tubular damage was present when this was less than 3 ml/min (acute tubular necrosis).

Observability and overcoming coordination failure in organizations

Many organizations suffer poor performance because its members fail to coordinate on efficient patterns of behavior. In previous research, we have shown that financial incentives can be used to find a way out of such performance traps. Here we examine the sensitivity of this result to the ability of people to observe others' choices. Our experiments are set in a corporate environment where subjects' payoffs depend on coordinating at high effort levels; the underlying game being played repeatedly by the employees of an experimental firm is a weak-link game. Treatments vary along two dimensions. First, subjects either start with low financial incentives for coordination, which typically leads to coordination failure, and then are switched to higher incentives or start with high incentives, which typically yield effective coordination, and are switched to low incentives. Second, as the key treatment variable, subjects either observe the effort levels chosen by all employees in their experimenta

A change would do you good . . . An experimental study on how to overcome coordination failure in organizations

Many organizations suffer poor performance because individuals within the organization fail to coordinate on efficient patterns of behavior. Using controlled laboratory experiments, we study how financial incentives can be used to find a way out of such performance traps. Our experiments are set in a corporate environment where subjects' payoffs depend on coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In an initial phase, the benefits of coordination are low relative to the cost of increased effort. Play in this initial phase typically converges to an inefficient outcome with employees failing to coordinate at high effort levels. The experimental design then explores the effects of varying the financial incentives to coordinate at a higher effort level. We find that an increase in the benefits of coordination leads to improved coordination, but, surprisingly, large increases have no more impact than small increases. Once subj

The structural approach of a natrex model on equilibrium exchange rates

Following a general macroeconomic approach, this paper sets a closed micro-founded structural model to determine the long run real exchange rate of a developed economy. In particular, the analysis follows the structure of a Natrex model. The main contribution of this research paper is the development of a solid theoretical framework that analyse in depth the basis of the real exchange rate and the details of the equilibrium dynamics after any shock influencing the steady state. In our case, the intertemporal factors derived from the stock-flow relationship will be particularly determinant. The main results of the paper can be summarised as follows. In first place, a complete well-integrated structural model for long-run real exchange rate determination is developed from first principles. Moreover, within the concrete dynamics of the model, it is found that some convergence restrictions will be necessary. On one hand, for the medium run convergence the sensitivity of the trade balance to changes in real exchange rate should be higher that the correspondent one to the investment decisions. On the other hand, and regarding long-run convergence, it is also necessary both that there exists a negative relationship between investment and capital stock accumulation and that the global saving of the economy depends positively on net foreign debt accumulation. In addition, there are also interesting conclusions about the effects that certain shocks over the exogenous variables of the model have on real exchange rates.

On the relation between tax rates and evasion in a multi-period economy

We extend the basic tax evasion model to a multi-period economy exhibiting sustained growth. When individuals conceal part of their true income from the tax authority, they face the risk of being audited and hence of paying the corresponding fine. Both taxes and fines determine individual saving and the rate of capital accumulation. In this context we show that the sign of the relation between the level of the tax rate and the amount of evaded income is the same as that obtained in static setups. Moreover, high tax rates on income are typically associated with low growth rates as occurs in standard growth models that disregard the tax evasion phenomenon.

Real equilibrium exchange rates. A panel data approach for advanced and emerging economies.

Based on an behavioral equilibrium exchange rate model, this paper examines the determinants of the real effective exchange rate and evaluates the degree of misalignment of a group of currencies since 1980. Within a panel cointegration setting, we estimate the relationship between exchange rate and a set of economic fundamentals, such as traded-nontraded productivity differentials and the stock of foreign assets. Having ascertained the variables are integrated and cointegrated, the long-run equilibrium value of the fundamentals are estimated and used to derive equilibrium exchange rates and misalignments. Although there is statistical homogeneity, some structural differences were found to exist between advanced and emerging economies.

Leadership and overcoming coordination failure with asymmetric costs

We study how the heterogeneity of agents affects the extent to which changes in financial incentives can pull a group out of a situation of coordination failure. We focus on the connections between cost asymmetries and leadership. Experimental subjects interact in groups of four in a series of weak-link games. The treatment variable is the distribution of high and low effort cost across subjects. We present data for one, two and three low-cost subjects as well as control sessions with symmetric costs. The overall pattern of coordination improvement is common across treatments. Early coordination improvements depend on the distribution of high and low effort costs across subjects, but these differences disappear with time. We find that initial leadership in overcoming coordination failure is not driven by low-cost subjects but by subjects with the most frequent cost. This conformity effect can be due to a kind of group identity or to the cognitive simplicity of acting with identical others.

Deconstructing Shocks and Persistence in OECD Real Exchange Rates

This paper analyzes the persistence of shocks that affect the real exchange rates for a panel of seventeen OECD developed countries during the post-Bretton Woods era. The adoption of a panel data framework allows us to distinguish two different sources of shocks, i.e. the idiosyncratic and the common shocks, each of which may have di¤erent persistence patterns on the real exchange rates. We first investigate the stochastic properties of the panel data set using panel stationarity tests that simultaneously consider both the presence of cross-section dependence and multiple structural breaks that have not received much attention in previous persistence analyses. Empirical results indicate that real exchange rates are non-stationary when the analysis does not account for structural breaks, although this conclusion is reversed when they are modeled. Consequently, misspecification errors due to the non-consideration of structural breaks leads to upward biased shocks' persistence measures. The persistence measures for the idiosyncratic and common shocks have been estimated in this paper always turn out to be less than one year.

Development of an optimized methodology for tensile testing of carbon steels in hydrogen environment

The study was performed at OCAS, the Steel Research Centre of ArcelorMittal for the Industry market. The major aim of this research was to obtain an optimized tensile testing methodology with in-situ H-charging to reveal the hydrogen embrittlement in various high strength steels. The second aim of this study has been the mechanical characterization of the hydrogen effect on hight strength carbon steels with varying microstructure, i.e. ferrite-martensite and ferrite-bainite grades. The optimal parameters for H-charging - which influence the tensile test results (sample geometry type of electrolyte, charging methods effect of steel type, etc.) - were defined and applied to Slow Strain Rate testing, Incremental Step Loading and Constant Load Testing. To better understand the initiation and propagation of cracks during tensile testing with in-situ H-charging, and to make the correlation with crystallographic orientation, some materials have been analyzed in the SEM in combination with the EBSD technique. The introduction of a notch on the tensile samples permits to reach a significantly improved reproducibility of the results. Comparing the various steel grades reveals that Dual Phase (ferrite-martensite) steels are more sensitive to hydrogen induced cracking than the FB (ferritic-bainitic) ones. This higher sensitivity to hydrogen was found back in the reduced failure times, increased creep rates and enhanced crack initiation (SEM) for the Dual Phase steels in comparison with the FB steels.

Living in the Wrong Neighbourhood: State Failure and its Implications for Neighbouring Countries

Why and how do failed states affect neighbouring countries? The attention of the international community towards state failure has grown significantly in recent years, improving the understanding of this phenomenon; nevertheless, the knowledge about the influence of state failure on neighbouring countries remain scarce. This research aims at contributing to filling up the existing gap by analyzing two different cases of state failure –Liberia and Afghanistan– and its consequences on four of their neighbours –Sierra Leone, Guinea, Pakistan and Tajikistan. More concretely, this research investigates the importance of insurgency movements in the relationship between these countries. The research argues that failed states generate conflict-enhancing mechanisms –which might lead to conflict outbreak– in their neighbours through the creation of informal networks. The empiric evidence shows how insurgency-based informal networks have a decisive role in the outbreak of conflict.