Topics in public finance: social security and taxation

Summary The field of public finance focuses on the spending and taxing activities of governments and their influence on the allocation of resources and distribution of income. This work covers in three parts different topics related to public finance which are currently widely discussed in media and politics. The first two parts deal with issues on social security, which is in general one of the biggest spending shares of governments. The third part looks at the main income source of governments by analyzing the perceived value of tax competition. Part one deals with the current problem of increased early retirement by focusing on Switzerland as a special case. Early retirement is predominantly considered to be the result of incentives set by social security and the tax system. But the Swiss example demonstrates that the incidence of early retirement has dramatically increased even in the absence of institutional changes. We argue that the wealth effect also plays an important role in the retirement decision for middle and high income earners. An actuarially fair, but mandatory funded system with a relatively high replacement rate may thus contribute to a low labor market participation rate of elderly workers. We provide evidence using a unique dataset on individual retirement decisions in Swiss pension funds, allowing us to perfectly control for pension scheme details. Our findings suggest that affordability is a key determinant in the retirement decisions. The higher the accumulated pension capital, the earlier men, and to a smaller extent women, tend to leave the workforce. The fact that early retirement has become much more prevalent in the last 15 years is a further indicator of the importance of a wealth effect, as the maturing of the Swiss mandatory funded pension system over that period has led to an increase in the effective replacement rates for middle and high income earners. Part two covers the theoretical side of social security. Theories analyzing optimal social security benefits provide important qualitative results, by mainly using one general type of an economy. Economies are however very diverse concerning numerous aspects, one of the most important being the wealth level. This can lead to significant quantitative benefit differences that imply differences in replacement rates and levels of labor supply. We focus on several aspects related to this fact. In a within cohort social security model, we introduce disability insurance with an imperfect screening mechanism. We then vary the wealth level of the model economy and analyze how the optimal social security benefit structure or equivalently, the optimal replacement rates, changes depending on the wealth level of the economy, and if the introduction of disability insurance into a social security system is preferable for all economies. Second, the screening mechanism of disability insurance and the threshold level at which people are defined as disabled can differ. For economies with different wealth levels, we determine for different thresholds the screening level that maximizes social welfare. Finally, part three turns to the income of governments, by adding an element to the controversy on tax competition versus tax harmonization.2 Inter-jurisdictional tax competition can generate at least two potential benefits or costs: On a public level, tax competition may result in a lower or higher efficiency in the production of public services. But there is also a more private benefit in the form of an option for individuals to move to a community with a lower tax rate in the future. To explore the value citizens attach to tax competition we analyze a unique popular vote for a complete tax harmonization between communities in the third largest Swiss canton, Vaud. Although a majority of voters would have seemingly benefited from replacing the current tax rate by a revenue-neutral average tax rate, the proposal was rejected by a large margin. Our estimates suggest that the estimated combined perceived benefit from tax competition is in the range of 10%.

Lost in translation : euro-compatibility, legal security, and the autonomous implementation of EU law in Switzerland

This article presents the legislative and judicial practice relating to the "autonomous implementation" of EU law in Switzerland. Given that "euro-compatibility" is the central consideration behind this legislative policy, one would expect Swiss authorities to have devised legislative and hermeneutical techniques guaranteeing high fidelity to EU "mother law". That is not the case, however, and as this article shows much is lost in the translation from EU to Swiss Law

Information security and the enforcement of secrecy : the practical application of quantum key distribution

There is no doubt about the necessity of protecting digital communication: Citizens are entrusting their most confidential and sensitive data to digital processing and communication, and so do governments, corporations, and armed forces. Digital communication networks are also an integral component of many critical infrastructures we are seriously depending on in our daily lives. Transportation services, financial services, energy grids, food production and distribution networks are only a few examples of such infrastructures. Protecting digital communication means protecting confidentiality and integrity by encrypting and authenticating its contents. But most digital communication is not secure today. Nevertheless, some of the most ardent problems could be solved with a more stringent use of current cryptographic technologies. Quite surprisingly, a new cryptographic primitive emerges from the ap-plication of quantum mechanics to information and communication theory: Quantum Key Distribution. QKD is difficult to understand, it is complex, technically challenging, and costly-yet it enables two parties to share a secret key for use in any subsequent cryptographic task, with an unprecedented long-term security. It is disputed, whether technically and economically fea-sible applications can be found. Our vision is, that despite technical difficulty and inherent limitations, Quantum Key Distribution has a great potential and fits well with other cryptographic primitives, enabling the development of highly secure new applications and services. In this thesis we take a structured approach to analyze the practical applicability of QKD and display several use cases of different complexity, for which it can be a technology of choice, either because of its unique forward security features, or because of its practicability.

Job Insecurity and the Timing of Parenthood: A Comparison between Eastern and Western Germany

This article contributes to the ongoing debate on the economic deter- minants of fertility behavior by addressing the role of job insecurity in couples' intentions concerning parenthood and its timing. It starts from the hypothesis that cultural values moderate individuals' reactions to job insecurity and the way it is related to family formation. With a systematic thematic content analysis of a set of semi-structured interviews with childless men and women around the age of 30 in eastern and western Germany, we are able to show that there are substantial dif- ferences in the consequences of job insecurity on intentions to have a first child. In western Germany, a relatively secure job career is expected to precede family formation, and this sequence of transitions is rather rigid, whereas in eastern Germany job security and family formation are thought of and practiced as parallel investments. We suggest that the lack of convergence in family formation patterns between eastern and western Germany after the unification of the country in 1990 is partially related to different attitudes toward job insecurity in the two contexts.

Predicting root defence against herbivores during succession

P>1. Root herbivores and pathogens interfere with basic below-ground plant function, and can thereby affect plant fitness and spatial and temporal patterns in natural plant communities. However, there has been little development of concepts and theories on below-ground plant defence, a deficit that is in contrast to the abundance of theorizing for above-ground plant parts.2. A review of the past 10 years of research on below-ground plant-herbivore interactions has revealed that, similar to above-ground tissues, root defences can be expressed constitutively or induced upon herbivore attack, and can be classified into direct and indirect traits, tolerance, and escape. Indeed, it has been shown that roots tolerate herbivory by outgrowing or re-growing lost tissues, or resist it by producing secondary metabolites that are toxic to herbivores or attract natural enemies of herbivores.3. We propose that, similar to above-ground plant-herbivore theories, the partition of abiotic and biotic factors over ecological succession can serve as the basis for predicting investment in defence strategies below-ground.4. Investigation of herbivore pressure and root responses along primary and secondary successional gradients suggests that: (i) roots are often fast growing, thinner and softer in early compared to later succession. (ii) Insect and nematode herbivore pressure increases until mid-succession and later decreases. (iii) Mycorrhizal abundance increases with succession, and the composition of fungal species changes through succession, often shifting from arbuscular mycorrhizae to ecto-mycorrhizae.5. Based on these findings, and on classical (above-ground) plant defence theory, we suggest the following set of testable hypotheses for below-ground plant defence: (i) During succession, early plants invest most of their resources in growth and less in defences (associated with a general lack of herbivores and pathogens, and with limited availability of resources in the system), therefore relying more on re-growth (tolerance) strategies. (ii) During mid-succession, a buildup of herbivore pressure facilitates replacement by plant species that exhibit greater direct and indirect defence strategies. (iii) Constitutive and inducible levels of defences may trade-off, and early successional plants should rely more on induction of defences after herbivore attack, whereas late successional plants will increasingly rely on constitutively produced levels of physical and chemical defence. (iv) Successional changes in microbial associations have consequences for root defence by improving plant nutrition and defence expression as well as directly competing for root space; however, toxic or impenetrable root defences may also limit association with root symbionts, and so may constrain the expression of root defence.

Population differentiation and its consequences in the white campion "Silene latifolia" (Caryophyllaceae): a functional analysis

Summary In his theory On the Origin of Species by Means of Natural Selection (1859), Darwin describes evolution as a gradual change in population over time and that natural selection is a process that caused evolution. Because quantitative variation in species is partly influenced by several genes and thus heritable, association between levels of genetic variation at neutral markers and at quantitative traits and their partitioning within and among populations are important to study mechanisms that drive evolution in populations. Most studies addressing quantitative variation in plants focused on morphological and life history traits but not in traits affecting reproductive success. The aim of this thesis is to better understand how patterns of variation for neutral molecular markers and phenotypic traits drive the evolution of reproduction and defensive mechanisms in six European populations of Silene latifolia, a dioecious plant species. We found evidence for extremely high within and between population variation at six microsatellite loci and at most quantitative traits studied in plants grown under standardized conditions (morphology, life history and reproductive traits). Interestingly, there was clinal variation between age at first flowering and latitude. This pattern is likely due to natural selection since differentiation of this trait was high, heritable and probably higher than differentiation at neutral markers. Our study focused on sex specific selective pressures: mechanisms of intersexual coadaptation and defence mechanism against the seed predator Hadena bicruris. To address divergence at reproductive traits, we studied male and female population of origin effects and in particular pollen competitive ability on male post-pollination success in the study populations with within and between populations crosses. We crossed the same female plant with pollen from a male within the same population of origin and pollen from two males from two distinct populations, using a fixed tester male as a competitor. Additionally, we conducted control crosses with pollen from each male as a single donor. We analysed paternity success of each competitor with two microsatellite loci, seed set and offspring fitness. Male population of origin showed significant among-population variation for siring success at pollen competition. In vitro pollen germination rate showed heritable variation among populations and was positively correlated to siring success. Local or foreign pollen did not have a consistent advantage. Furthermore, female population of origin affected the outcome of pollen competition in some populations. There was no difference of seed set or offspring fitness in within/ between population crosses. This suggests that reproductive divergence may occur via pollen competition in Silene latifolia. The specialist seed predator Hadena bicruris may also induce divergence between populations. We tested potential constitutive and induced defence mechanisms against the specialist predator Hadena bicruris. Because fruit wall thickness is smaller in the invasive range (Northern America) were the moth is absent, this suggests that a thicker fruit wall is a potentially defensive trait against larval attack, and that relaxed selection in the absence of the seed predator has resulted in an evolutionary loss of this defence in the invasive range. Fruit wall thickness was different among three populations. Experimental exposure to moth eggs increased fruit abortion. Fruits built after attack on exposed plants did not have thicker fruit walls compared to fruits on non-exposed plants. Furthermore, fruits with thicker fruit walls were not less profitable, nor did they require longer handling time when exposed to larvae, suggesting no defensive role of fruit wall thickness. Our results show that there is high molecular and phenotypic variation in Silene latifolia and that traits potentially involved in reproductive success both for intra-specific (between sexes) and inter-specific interactions are heritable. Different selective forces may thus interact and cause differential evolution of geographically separated Silene latifolia populations in Europe, leading to the observed differentiation. Résumé Dans sa théorie de l'évolution, L'origine des espèces, ch. 4 (1859), Darwin décrit l'évolution comme un processus continu au cours du temps à l'intérieur de populations et que la sélection naturelle en est le moteur. La variation quantitative est en partie déterminée par plusieurs gènes, donc transmissible à la descendance. Associer le niveau de variation génétique à des marqueurs neutres au niveau de la variation à des traits quantitatifs, ainsi que la répartition à l'intérieur et entre les populations d'une espèce donnée de cette variation, sont importants dans la compréhension des forces évolutives. La plupart des études scientifiques sur la variation quantitative chez les plantes se sont intéressées à la morphologie et à la phénologie mais pas aux caractères impliqués dans le succès reproducteur. L'objectif de cette thèse est de mieux comprendre comment la répartition de la variation à des marqueurs neutres et des caractères quantitatifs influence l'évolution de la reproduction et des mécanismes de défense dans six populations Européennes de l'espèce dioïque Silene latifolia. Nous avons mis en évidence une grande diversité intra et inter-population à six loci microsatellites ainsi qu'à la plupart des caractères quantitatifs mesurés (morphologie, phénologie et traits reproducteurs) sur des plantes cultivées dans des conditions standardisées. Un résultat intéressant est la présence d'un cline latitudinal pour l'âge à la floraison. Ceci est probablement une conséquence de la sélection naturelle, puisque ce caractère est différencié entre les populations étudiées, héritable et que la différenciation de ce trait est supérieure à la différenciation des marqueurs neutres étudiés. Notre étude a ensuite porté plus précisément sur les pressions de sélection spécifiques aux sexes : la coadaptation entre les sexes et les mécanismes de défense contre l'insecte granivore Hadena bicruris. Afin d'évaluer la divergence sur les traits reproducteurs, nous avons étudié les effets des populations d'origine des mâles et des femelles et en particulier le succès reproducteur des mâles après pollinisation à l'aide de croisements inter et intra-population. Nous avons pollinisé la même femelle avec du pollen provenant d'un mâle de la même population ainsi qu'avec le pollen de deux mâles provenant de deux autres populations en situation de compétition avec un pollen provenant d'une population test. Des croisements contrôle ont été réalisés avec les mêmes mâles en pollinisation pure. Nous avons évalué le succès reproducteur de chaque mâle à l'aide d'analyses de paternité ainsi que la production de graines et la fitness de la descendance. L'origine du mâle avait un effet sur la paternité. Le taux de croissance in vitro du pollen est un caractère héritable et a eu un effet positif sur le succès reproducteur. De plus, l'origine de la femelle avait un effet sur le succès des mâles en compétition dans certaines populations. Nos résultats suggèrent qu'une divergence reproductive chez Silene latifolia pourrait apparaître suite à la compétition pollinique. Nous avons ensuite testé des mécanismes potentiels de défense constitutive et induite contre l'herbivore spécialiste Hadena bicruris, un papillon nocturne qui pourrait aussi jouer un rôle dans la différenciation des populations. L'épaisseur des fruits étant plus faible dans les régions où la plante est invasive (Amérique du Nord) et où l'insecte est absent, ce trait pourrait jouer un rôle défensif. Une pression de sélection plus faible causée par l'absence de l'herbivore aurait abouti à une perte de cette défense dans ces régions. Nous avons montré que l'épaisseur du fruit est variable selon les populations. L'infestation artificielle de fruit par l'insecte induit l'abscission sélective des fruits. Les fruits produits après une infestation n'étaient pas plus épais que les fruits issus de plantes non infestées. De plus, les fruits épais n'étaient pas moins nutritifs et ne causaient pas de perte de temps pour la prédation pour les larves, ce qui suggère que l'épaisseur des fruits ne joue pas un rôle défensif. Nos résultats montrent que plusieurs pressions de sélection interviennent et interagissent dans l'évolution de populations distantes, provoquant la divergence des populations Européennes de l'espèce Silene latifolia.

Sex-specific estimates of dispersal show female philopatry and male dispersal in a promiscuous amphibian, the alpine salamander (Salamandra atra).

Amphibians display wide variations in life-history traits and life cycles that should prove useful to explore the evolution of sex-biased dispersal, but quantitative data on sex-specific dispersal patterns are scarce. Here, we focused on Salamandra atra, an endemic alpine species showing peculiar life-history traits. Strictly terrestrial and viviparous, the species has a promiscuous mating system, and females reproduce only every 3 to 4 years. In the present study, we provide quantitative estimates of asymmetries in male vs. female dispersal using both field-based (mark-recapture) and genetic approaches (detection of sex-biased dispersal and estimates of migration rates based on the contrast in genetic structure across sexes and age classes). Our results revealed a high level of gene flow among populations, which stems exclusively from male dispersal. We hypothesize that philopatric females benefit from being familiar with their natal area for the acquisition and defence of an appropriate shelter, while male dispersal has been secondarily favoured by inbreeding avoidance. Together with other studies on amphibians, our results indicate that a species' mating system alone is a poor predictor of sex-linked differences in dispersal, in particular for promiscuous species. Further studies should focus more directly on the proximate forces that favour or limit dispersal to refine our understanding of the evolution of sex-biased dispersal in animals.

The evolution of unicoloniality in ant societies : recognition, dispersal and population genetic structure

Introduction Societies of ants, bees, wasps and termites dominate many terrestrial ecosystems (Wilson 1971). Their evolutionary and ecological success is based upon the regulation of internal conflicts (e.g. Ratnieks et al. 2006), control of diseases (e.g. Schmid-Hempel 1998) and individual skills and collective intelligence in resource acquisition, nest building and defence (e.g. Camazine 2001). Individuals in social species can pass on their genes not only directly trough their own offspring, but also indirectly by favouring the reproduction of relatives. The inclusive fitness theory of Hamilton (1963; 1964) provides a powerful explanation for the evolution of reproductive altruism and cooperation in groups with related individuals. The same theory also led to the realization that insect societies are subject to internal conflicts over reproduction. Relatedness of less-than-one is not sufficient to eliminate all incentive for individual selfishness. This would indeed require a relatedness of one, as found among cells of an organism (Hardin 1968; Keller 1999). The challenge for evolutionary biology is to understand how groups can prevent or reduce the selfish exploitation of resources by group members, and how societies with low relatedness are maintained. In social insects the evolutionary shift from single- to multiple queens colonies modified the relatedness structure, the dispersal, and the mode of colony founding (e.g. (Crozier & Pamilo 1996). In ants, the most common, and presumably ancestral mode of reproduction is the emission of winged males and females, which found a new colony independently after mating and dispersal flights (Hölldobler & Wilson 1990). The alternative reproductive tactic for ant queens in multiple-queen colonies (polygyne) is to seek to be re-accepted in their natal colonies, where they may remain as additional reproductives or subsequently disperse on foot with part of the colony (budding) (Bourke & Franks 1995; Crozier & Pamilo 1996; Hölldobler & Wilson 1990). Such ant colonies can contain up to several hundred reproductive queens with an even more numerous workforce (Cherix 1980; Cherix 1983). As a consequence in polygynous ants the relatedness among nestmates is very low, and workers raise brood of queens to which they are only distantly related (Crozier & Pamilo 1996; Queller & Strassmann 1998). Therefore workers could increase their inclusive fitness by preferentially caring for their closest relatives and discriminate against less related or foreign individuals (Keller 1997; Queller & Strassmann 2002; Tarpy et al. 2004). However, the bulk of the evidence suggests that social insects do not behave nepotistically, probably because of the costs entailed by decreased colony efficiency or discrimination errors (Keller 1997). Recently, the consensus that nepotistic behaviour does not occur in insect colonies was challenged by a study in the ant Formica fusca (Hannonen & Sundström 2003b) showing that the reproductive share of queens more closely related to workers increases during brood development. However, this pattern can be explained either by nepotism with workers preferentially rearing the brood of more closely related queens or intrinsic differences in the viability of eggs laid by queens. In the first chapter, we designed an experiment to disentangle nepotism and differences in brood viability. We tested if workers prefer to rear their kin when given the choice between highly related and unrelated brood in the ant F. exsecta. We also looked for differences in egg viability among queens and simulated if such differences in egg viability may mistakenly lead to the conclusion that workers behave nepotistically. The acceptance of queens in polygnous ants raises the question whether the varying degree of relatedness affects their share in reproduction. In such colonies workers should favour nestmate queens over foreign queens. Numerous studies have investigated reproductive skew and partitioning of reproduction among queens (Bourke et al. 1997; Fournier et al. 2004; Fournier & Keller 2001; Hammond et al. 2006; Hannonen & Sundström 2003a; Heinze et al. 2001; Kümmerli & Keller 2007; Langer et al. 2004; Pamilo & Seppä 1994; Ross 1988; Ross 1993; Rüppell et al. 2002), yet almost no information is available on whether differences among queens in their relatedness to other colony members affects their share in reproduction. Such data are necessary to compare the relative reproductive success of dispersing and non-dispersing individuals. Moreover, information on whether there is a difference in reproductive success between resident and dispersing queens is also important for our understanding of the genetic structure of ant colonies and the dynamics of within group conflicts. In chapter two, we created single-queen colonies and then introduced a foreign queens originating from another colony kept under similar conditions in order to estimate the rate of queen acceptance into foreign established colonies, and to quantify the reproductive share of resident and introduced queens. An increasing number of studies have investigated the discrimination ability between ant workers (e.g. Holzer et al. 2006; Pedersen et al. 2006), but few have addressed the recognition and discrimination behaviour of workers towards reproductive individuals entering colonies (Bennett 1988; Brown et al. 2003; Evans 1996; Fortelius et al. 1993; Kikuchi et al. 2007; Rosengren & Pamilo 1986; Stuart et al. 1993; Sundström 1997; Vásquez & Silverman in press). These studies are important, because accepting new queens will generally have a large impact on colony kin structure and inclusive fitness of workers (Heinze & Keller 2000). In chapter three, we examined whether resident workers reject young foreign queens that enter into their nest. We introduced mated queens into their natal nest, a foreign-female producing nest, or a foreign male-producing nest and measured their survival. In addition, we also introduced young virgin and mated queens into their natal nest to examine whether the mating status of the queens influences their survival and acceptance by workers. On top of polgyny, some ant species have evolved an extraordinary social organization called 'unicoloniality' (Hölldobler & Wilson 1977; Pedersen et al. 2006). In unicolonial ants, intercolony borders are absent and workers and queens mix among the physically separated nests, such that nests form one large supercolony. Super-colonies can become very large, so that direct cooperative interactions are impossible between individuals of distant nests. Unicoloniality is an evolutionary paradox and a potential problem for kin selection theory because the mixing of queens and workers between nests leads to extremely low relatedness among nestmates (Bourke & Franks 1995; Crozier & Pamilo 1996; Keller 1995). A better understanding of the evolution and maintenance of unicoloniality requests detailed information on the discrimination behavior, dispersal, population structure, and the scale of competition. Cryptic genetic population structure may provide important information on the relevant scale to be considered when measuring relatedness and the role of kin selection. Theoretical studies have shown that relatedness should be measured at the level of the `economic neighborhood', which is the scale at which intraspecific competition generally takes place (Griffin & West 2002; Kelly 1994; Queller 1994; Taylor 1992). In chapter four, we conducted alarge-scale study to determine whether the unicolonial ant Formica paralugubris forms populations that are organised in discrete supercolonies or whether there is a continuous gradation in the level of aggression that may correlate with genetic isolation by distance and/or spatial distance between nests. In chapter five, we investigated the fine-scale population structure in three populations of F. paralugubris. We have developed mitochondria) markers, which together with the nuclear markers allowed us to detect cryptic genetic clusters of nests, to obtain more precise information on the genetic differentiation within populations, and to separate male and female gene flow. These new data provide important information on the scale to be considered when measuring relatedness in native unicolonial populations.

Transcriptome analysis of intraspecific competition in Arabidopsis thaliana reveals organ-specific signatures related to nutrient acquisition and general stress response pathways.

ABSTRACT: BACKGROUND: Plants are sessile and therefore have to perceive and adjust to changes in their environment. The presence of neighbours leads to a competitive situation where resources and space will be limited. Complex adaptive responses to such situation are poorly understood at the molecular level. RESULTS: Using microarrays, we analysed whole-genome expression changes in Arabidopsis thaliana plants subjected to intraspecific competition. The leaf and root transcriptome was strongly altered by competition. Differentially expressed genes were enriched in genes involved in nutrient deficiency (mainly N, P, K), perception of light quality, and responses to abiotic and biotic stresses. Interestingly, performance of the generalist insect Spodoptera littoralis on densely grown plants was significantly reduced, suggesting that plants under competition display enhanced resistance to herbivory. CONCLUSIONS: This study provides a comprehensive list of genes whose expression is affected by intraspecific competition in Arabidopsis. The outcome is a unique response that involves genes related to light, nutrient deficiency, abiotic stress, and defence responses.