The Blinder-Oaxaca decomposition for linear regression models

The counterfactual decomposition technique popularized by Blinder (1973, Journal of Human Resources, 436–455) and Oaxaca (1973, International Economic Review, 693–709) is widely used to study mean outcome differences between groups. For example, the technique is often used to analyze wage gaps by sex or race. This article summarizes the technique and addresses several complications, such as the identification of effects of categorical predictors in the detailed decomposition or the estimation of standard errors. A new command called oaxaca is introduced, and examples illustrating its usage are given.

Labour Migration, Trade and Investment: From Fragmentation to Coherence

Trade, investment and migration are strongly intertwined, being three key factors in international production. Yet, law and regulation of the three has remained highly fragmented. Trade is regulated by the WTO on the multilateral level, and through preferential trade agreements on the regional and bilateral levels – it is fragmented and complex in its own right. Investment, on the other hand, is mainly regulated through bilateral investment treaties with no strong links to the regulation of trade or migration. And, finally, migration is regulated by a web of different international, regional and bilateral agreements which focus on a variety of different aspects of migration ranging from humanitarian to economic. The problems of institutional fragmentation in international law are well known. There is no organizational forum for coherent strategy-making on the multilateral level covering all three areas. Normative regulations may thus contradict each other. Trade regulation may bring about liberalization of access for service providers, but eventually faces problems in recruiting the best people from abroad. Investors may withdraw investment without being held liable for disruptions to labour and to the livelihood and infrastructure of towns and communities affected by disinvestment. Finally, migration policies do not seem to have a significant impact as long as trade policies and investment policies are not working in a way that is conducive to reducing migration pressure, as trade and investment are simply more powerful on the regulatory level than migration. This chapter addresses the question as to how fragmentation of the three fields could be reme-died and greater coherence between these three areas of factor allocation in international economic relations and law could be achieved. It shows that migration regulation on the international level is lagging behind that on trade and investment. Stronger coordination and consideration of migration in trade and investment policy, and stronger international cooperation in migration, will provide the foundations for a coherent international architecture in the field.

Human rights and international trade

Economic globalization and respect for human rights are both highly topical issues. In theory, more trade should increase economic welfare and protection of human rights should ensure individual dignity. Both fields of law protect certain freedoms: economic development should lead to higher human rights standards, and UN embargoes are used to secure compliance with human rights agreements. However the interaction between trade liberalisation and human rights protection is complex, and recently, tension has arisen between these two areas. Do WTO obligations covering intellectual property prevent governments from implementing their human rights obligations, including rights to food or health? Is it fair to accord the benefits of trade subject to a clean human rights record? This book first examines the theoretical framework of the interaction between the disciplines of international trade law and human rights. It builds upon the well-known debate between Professor Ernst-Ulrich Petersmann, who construes trade obligations as human rights, and Professor Philip Alston, who warns of a merger and acquisition of human rights by trade law. From this starting point, further chapters explore the differing legal matrices of the two fields and examine how cooperation between them might be improved, both in international law-making and institutions,in dispute settlement. The interaction between trade and human rights is then explored through seven case studies:freedom of expression and competition law; IP protection and health; agricultural trade and the right to food; trade restrictions on conflict WHO convention on tobacco control; and, finally, human rights conditionalities in preferential trade schemes.

An International Regulatory Framework for National Employment Policies

Employment-related policies are sensitive by any standard, and they remain basically national despite international labour standards (ILS) being even older than the United Nations. Globalization is changing this situation where countries may have to choose between ‘more’ or ‘better’ jobs. The multilateral framework of the World Trade Organization (WTO) can only have an indirect impact. But Regional Trade Agreements (RTA) and International Investment Agreements (IIA) are emerging as a new way of gradually enhancing the impact of certain labour standards. In addition, unilateral measures both by governments and importers driven by social and environmental consumer preferences and pressure groups increasingly shape the international regulatory framework for national employment policies. Even small, locally operating enterprises risk marginalization and market exclusion by ignoring these developments. The long-term influence of this new ‘network approach’ on employment-related policies, including job location, gender issues, social coherence and migration remains to be seen. Nonetheless, the still flimsy evidence gathered here seems to indicate that this new, international framework might increase sustainable employment where and when supporting measures, including through unilateral preferences and even sanctions, form a ‘cocktail’ which export-oriented industries and their suppliers will find palatable.

Age model and sediment description of DSDP Hole 90-594, Chatham Ridge east of New Zealand

Detailed sedimentological investigations were performed on sediments from DSDP-Site 594 (Chatham Rise, east of New Zealand) in order to reconstruct the evolution of paleoclimate and paleoceanographic conditions in the Southwest Pacific during the last 6 million years. The results can be summarized as follows: (1) High accumulation rates of biogenic opal and carbonate and the dominance of smectites in the clay fraction suggest increased oceanic productivity and an equable dominantly humid climate during the late Miocene. (2) During Pliocene times, decreasing contents of smectites and increasing feldspar/quartz ratios point to an aridification in the source area of the terrigenous sediments, culmunating near 2.5 Ma. At that time, accumulation rates of terrigenous components distinctly increased probably caused by increased sediment supply due to intensified atmospheric and oceanic circulation, lowered sea level, and decreased vegetation cover. (3) A hiatus (1.45 to 0.73 Ma) suggests intensified intermediate-water circulation. (4) Major glacial/interglacial cycles characterize the upper 0.73 Ma. During glacial times, oceanic productivity and terrigenous sediment supply was distinctly increased because of intensified atmospheric and oceanic circulations and lowered sea level, whereas during interglacials productivity and terrigenous sediment supply were reduced. (5) An increased content of amphibols in the sediments of Site 594 indicates increased volcanic activities during the last 4.25 Ma.

Investigations on seven sediment cores from the New Ireland Basin, east of Papua New Guinea

Sediment cores were recovered from the New Ireland Basin, east of Papua New Guinea, in order to investigate the late Quaternary eruptive history of the Tabar-Lihir-Tanga-Feni (TLTF) volcanic chain. Foraminifera d18O profiles were matched to the low-latitude oxygen isotope record to date the cores, which extend back to the early part of d18O Stage 9 (333 ka). Sedimentation rates decrease from >10 cm/1000 yr in cores near New Ireland to ~2 cm/1000 yr further offshore. The cores contain 36 discrete ash beds, mostly 1-8 cm thick and interpreted as either fallout or distal turbidite deposits. Most beds have compositionally homogeneous glass shard populations, indicating that they represent single volcanic events. Shards from all ash beds have the subduction-related pattern of strong enrichment in the large-ion lithophile elements relative to MORB, but three distinct compositional groups are apparent: Group A beds are shoshonitic and characterised by >1300 ppm Sr, high Ce/Yb and high Nb/Yb relative to MORB, Group B beds form a high-K series with MORB-like Nb/Yb but high Ce/Yb and well-developed negative Eu anomalies, whereas Group C beds are transitional between the low-K and medium-K series and characterised by flat chondrite-normalised REE patterns with low Nb/Yb relative to MORB. A comparison with published data from the TLTF chain, the New Britain volcanic arc and backarc including Rabaul, and Bagana on Bougainville demonstrates that only Group A beds share the distinctive phenocryst assemblage and shoshonitic geochemistry of the TLTF lavas. The crystal- and lithic-rich character of the Group A beds point to a nearby source, and their high Sr, Ce/Yb and Nb/Yb match those of Tanga and Feni lavas. A youthful stratocone on the eastern side of Babase Island in the Feni group is the most probable source. Group A beds younger than 20 ka are more fractionated than the older Group A beds, and record the progressive development of a shallow level magma chamber beneath the cone. In contrast, Group B beds represent glass-rich fallout from voluminous eruptions at Rabaul, whereas Group C beds represent distal glass-rich fallout from elsewhere along the volcanic front of the New Britain arc.

Australia's Foreign Economic Policy: a 'State-Society Coalition' Approach and a Historical Overview

This paper aims to explain the historical development of Australia's foreign economic policy by using an analytical framework called a 'state-society coalition' approach. This approach focuses on virtual coalitions of state and society actors that share 'belief systems' and hold similar policy ideas, goals and preferences, as basic units (policy subsystems) of policy making. Major policy changes occur when a dominant coalition is replaced by another. The paper argues that, in Australia, there have been three major state-society coalitions in the foreign economic policy issue area: 'protectionists', 'trade liberalisers' and 'optional bilateralists'. The rise and fall of these coalitions resulted in distinctive shifts of Australia's foreign economic policy in the 1980s towards unilateral and multilateral liberalisation and in the late 1990s towards bilateral trade and investment arrangements.

Myanmar's Economic Relations with China: Can China Support the Myanmar Economy?

Against the background of closer diplomatic, political and security ties between Myanmar and China since 1988, their economic relations have also grown stronger throughout the 1990s and up to 2005. China is now a major supplier of consumer and capital goods to Myanmar, in particular through border trade. China also provides a large amount of economic cooperation in the areas of infrastructure, energy and state-owned economic enterprises. Nevertheless, Myanmar’s trade with China has failed to have a substantial impact on its broad-based economic and industrial development. China’s economic cooperation apparently supports the present regime, but its effects on the whole economy will be limited with an unfavorable macroeconomic environment and distorted incentives structure. As a conclusion, strengthened economic ties with China will be instrumental in regime survival, but will not be a powerful force affecting the process of economic development in Myanmar.

Public Support for Enlargement: Economic, Cultural, or Normative?

The current research questioned whether public opinion on enlargement can be adequately explained only by economic calculation and cultural/community identity. When the analytical viewpoint was expanded from the conventional individual level to state level, it was revealed that constructivist considerations-such as the democratization and reunification of Europe-play a critical role in pushing forward enlargement. Drawing on the perspective of international relations, this study introduced a synthetic model to analyze public opinion on enlargement in the EU's 15 old member states. The analysis using a Eurobarometer dataset showed that on public support for enlargement, constructivist attitudes held as much sway as cultural/community attitudes. In fact, expectations of democratization were the most important determinant of support for enlargement in the case of Turkey.

Development of Border Economic Zones in Thailand: Expansion of Border Trade and Formation of Border Economic Zones

In the wake of economic globalization and development in Thailand, movement of people and commodities at the Thai borders is also becoming pronounced. Economic interdependence between Thailand and neighboring countries is growing through border customhouses. As a policy, Thailand is trying to stimulate trade and investment with neighboring countries following the ACMECS (Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy) scheme. In this report, first, movement of people and goods at the borders will be examined. Second, clarification of where and how development is proceeding will be presented. Last, this study will attempt to review the perspectives of policies on neighboring countries after Thaksin.

Empirical global value chain analysis in electronics and automobile industries :An application of Asian international input-output tables

This study aims to examine the international value distribution structure among major East Asian economies and the US. The mainstream trade theory explains the gains from trade; however, global value chain (GVC) approach emphasises uneven benefits of globalization among trading partners. The present study is mainly based on this view, examining which economy gains the most and which the least from the East Asian production networks. Two key industries, i.e., electronics and automobile, are our principle focus. Input-output method is employed to trace the creation and flows of value-added within the region. A striking fact is that some ASEAN economies increasingly reduce their shares of value-added, taken by developed countries, particularly by Japan. Policy implications are discussed in the final section.

Who Uses FTAs?

It is noted that utilization of AFTA is low by international standards. In order to clarify the reasons for such low utilization, this paper investigates what kinds of Japanese affiliates in ASEAN are more likely to use FTAs in their exporting, by employing unique affiliate-level data. Our findings are as follow. First, the larger the affiliate is, or the more diversified its procurements’ origins are, the more likely it is to utilize an FTA scheme in its exporting. Second, affiliates exporting actively to developing countries are more likely to use FTAs than those exporting to developed countries. Third, there are clear differences in FTA utilization depending on affiliates’ locations and sectors. These results afford a clue to the reasons for the low FTA utilization in East Asia.

Recent trends in Asian integration and Japanese participation

In East Asia, de facto integration is taking place because Free Trade Agreements (FTAs) and Economic Partnership Agreements (EPAs) are flourishing in the region. ASEAN aims to form an ASEAN Economic Community (AEC) by 2015 with the completion of the ASEAN Free Trade Area (AFTA). Surrounding countries have been competing with each other to forge FTAs or EPAs with ASEAN, including China, Japan, Korea, Australia and New Zealand, and India. As a result, ASEAN has become a trading hub in East Asia. Bilateral FTAs/EPAs are also partly in place among 16 countries (ASEAN + 6). These economic ties in trade, services and investment are accelerating this region’s development as the world’s largest production base and biggest consumption market, helping to turn around the global recession in the aftermath of the so-called Lehman Shock. However, some problems also need to be pointed out in the East Asian integration such as the spaghetti bowl effect, severe competition, labor issues, environmental destruction and power struggles.

International real business cycles : a re-visit

It is well known that several quantitative properties of international real business cycle models with are at odds with the data. First, the cross-country correlations are much higher for consumption than for output, while in the data the opposite is true (the BKK puzzle). Second, cross-country correlations of employment and investment are negative, while in the data they are positive. This paper quantitatively shows that preferences with a zero income effect on labor supply help generate a correct cross-country correlation in employment even without any restrictions on financial markets. In a bond economy, a zero income effect in labor supply, combined with time-to-build investment, can generate a positive cross-country correlation in investment, and the BKK puzzle is also resolved when the inter-temporal elasticity of substitution in labor supply is low.