Economic crisis and tourism competitiveness in Spain: permanent effects or transitory shocks?

This paper considers the influence of business cycles and economic crises on Spain's tourism competitiveness. This competitiveness is measured by its share in world tourism. Analysing the presence of unit roots in the market share series from 1958 to 2010, the permanent effects of economic crises on competitiveness are evaluated. The evidence from standard linear unit root tests indicates that crises on Spanish market shares are highly persistent. When we account for endogenously determined structural breaks, we obtain greater support for stationarity, but breakpoints are identified with major economic crises. Therefore the main conclusion obtained is that the effects of the economic shocks are not neutral on competitiveness, with the negative effects being more persistent in highly intensive crises. These crises reinforce a natural downward trend of the Spanish world tourism market share caused by the natural emergence of new competing destinations and by the maturity of the Spain's principal tourism product.

Intimate partner violence among women in Spain: the impact of regional-level male unemployment and income inequality

Background: Intimate partner violence (IPV) against women is a complex worldwide public health problem. There is scarce research on the independent effect on IPV exerted by structural factors such as labour and economic policies, economic inequalities and gender inequality. Objective: To analyse the association, in Spain, between contextual variables of regional unemployment and income inequality and individual women’s likelihood of IPV, independently of the women’s characteristics. Method: We conducted multilevel logistic regression to analyse cross-sectional data from the 2011 Spanish Macrosurvey of Gender-based Violence which included 7898 adult women. The first level of analyses was the individual women’ characteristics and the second level was the region of residence. Results: Of the survey participants, 12.2% reported lifetime IPV. The region of residence accounted for 3.5% of the total variability in IPV prevalence. We determined a direct association between regional male long-term unemployment and IPV likelihood (P = 0.007) and between the Gini Index for the regional income inequality and IPV likelihood (P < 0.001). Women residing in a region with higher gender-based income discrimination are at a lower likelihood of IPV than those residing in a region with low gender-based income discrimination (odds ratio = 0.64, 95% confidence intervals: 0.55–0.75). Conclusions: Growing regional unemployment rates and income inequalities increase women’s likelihood of IPV. In times of economic downturn, like the current one in Spain, this association may translate into an increase in women’s vulnerability to IPV.

Essays in dynamic optimal taxation: working experience, unemployment scarring and poverty

This thesis investigates the design of optimal tax systems in dynamic environments. The first essay characterizes the optimal tax system where wages depend on stochastic shocks and work experience. In addition to redistributive and efficiency motives, the taxation of inexperienced workers depends on a second-best requirement that encourages work experience, a social insurance motive and incentive effects. Calibrations using U.S. data yield higher expected optimal marginal income tax rates for experienced workers for most of the inexperienced workers. They confirm that the average marginal income tax rate increases (decreases) with age when shocks and work experience are substitutes (complements). Finally, more variability in experienced workers' earnings prospects leads to increasing tax rates since income taxation acts as a social insurance mechanism. In the second essay, the properties of an optimal tax system are investigated in a dynamic private information economy where labor market frictions create unemployment that destroys workers' human capital. A two-skill type model is considered where wages and employment are endogenous. I find that the optimal tax system distorts the first-period wages of all workers below their efficient levels which leads to more employment. The standard no-distortion-at-the-top result no longer holds due to the combination of private information and the destruction of human capital. I show this result analytically under the Maximin social welfare function and confirm it numerically for a general social welfare function. I also investigate the use of a training program and job creation subsidies. The final essay analyzes the optimal linear tax system when there is a population of individuals whose perceptions of savings are linked to their disposable income and their family background through family cultural transmission. Aside from the standard equity/efficiency trade-off, taxes account for the endogeneity of perceptions through two channels. First, taxing labor decreases income, which decreases the perception of savings through time. Second, taxation on savings corrects for the misperceptions of workers and thus savings and labor decisions. Numerical simulations confirm that behavioral issues push labor income taxes upward to finance saving subsidies. Government transfers to individuals are also decreased to finance those same subsidies.

Will income inequality cause a middle-income trap in Asia? Bruegel Working Paper 2013/06, 10 October 2013

The Asian economy is expected to realise favourable growth during the first half of this century, but there is no guarantee. There is a discussion about a ‘middle-income trap’, which refers to a country that has realised rapid growth to become a middle-income country but is unable to grow further. A middle-income trap could occur not only if there is a delay in shifting the economy toward a productivity-driven structure, but also if there is a worsening of income distribution.We consider this in line with the theories of development economics and through a quantitative analysis. The relationship between income inequality and the trap can be explained by the Kuznets hypothesis and the basic-needs approach. Our quantitative analysis supports the Kuznets hypothesis, and indicates that,although a low-income country can accelerate its economic growth with the worsening of income distribution as an engine, a middle income country would experience a decreasing growth rate if it fails to narrow the income gap between the top and bottom income groups. The results also show that the basic-needs approach is also applicable in practice, and imply that the improvement of access to secondary education is important. A sensitivity analysis for three Asian upper-middle-income countries(China, Malaysia and Thailand) also shows that the situation related to a middle-income trap is worse than average in China and Malaysia. These two countries, according to the result of the sensitivity analysis, should urgently improve access to secondary education and should implement income redistribution measures to develop high-tech industries, before their demographic dividends expire. Income redistribution includes the narrowing of rural urban income disparities, benefits to low-income individuals, direct income transfers, vouchers or free provision of education and health-care, and so on, but none of these are simple to implement.

Essays on the Effects of Corporate Taxation

Cette thèse est une collection de trois articles en macroéconomie et finances publiques. Elle développe des modèles d'Equilibre Général Dynamique et Stochastique pour analyser les implications macroéconomiques des politiques d'imposition des entreprises en présence de marchés financiers imparfaits. Le premier chapitre analyse les mécanismes de transmission à l'économie, des effets d'un ré-échelonnement de l'impôt sur le profit des entreprises. Dans une économie constituée d'un gouvernement, d'une firme représentative et d'un ménage représentatif, j'élabore un théorème de l'équivalence ricardienne avec l'impôt sur le profit des entreprises. Plus particulièrement, j'établis que si les marchés financiers sont parfaits, un ré-échelonnement de l'impôt sur le profit des entreprises qui ne change pas la valeur présente de l'impôt total auquel l'entreprise est assujettie sur toute sa durée de vie n'a aucun effet réel sur l'économie si l'état utilise un impôt forfaitaire. Ensuite, en présence de marchés financiers imparfaits, je montre qu'une une baisse temporaire de l'impôt forfaitaire sur le profit des entreprises stimule l'investissement parce qu'il réduit temporairement le coût marginal de l'investissement. Enfin, mes résultats indiquent que si l'impôt est proportionnel au profit des entreprises, l'anticipation de taxes élevées dans le futur réduit le rendement espéré de l'investissement et atténue la stimulation de l'investissement engendrée par la réduction d'impôt. Le deuxième chapitre est écrit en collaboration avec Rui Castro. Dans cet article, nous avons quantifié les effets sur les décisions individuelles d'investis-sement et de production des entreprises ainsi que sur les agrégats macroéconomiques, d'une baisse temporaire de l'impôt sur le profit des entreprises en présence de marchés financiers imparfaits. Dans un modèle où les entreprises sont sujettes à des chocs de productivité idiosyncratiques, nous avons d'abord établi que le rationnement de crédit affecte plus les petites (jeunes) entreprises que les grandes entreprises. Pour des entreprises de même taille, les entreprises les plus productives sont celles qui souffrent le plus du manque de liquidité résultant des imperfections du marché financier. Ensuite, nous montré que pour une baisse de 1 dollar du revenu de l'impôt, l'investissement et la production augmentent respectivement de 26 et 3,5 centimes. L'effet cumulatif indique une augmentation de l'investissement et de la production agrégés respectivement de 4,6 et 7,2 centimes. Au niveau individuel, nos résultats indiquent que la politique stimule l'investissement des petites entreprises, initialement en manque de liquidité, alors qu'elle réduit l'investissement des grandes entreprises, initialement non contraintes. Le troisième chapitre est consacré à l'analyse des effets de la réforme de l'imposition des revenus d'entreprise proposée par le Trésor américain en 1992. La proposition de réforme recommande l'élimination des impôts sur les dividendes et les gains en capital et l'imposition d'une seule taxe sur le revenu des entreprises. Pour ce faire, j'ai eu recours à un modèle dynamique stochastique d'équilibre général avec marchés financiers imparfaits dans lequel les entreprises sont sujettes à des chocs idiosyncratiques de productivité. Les résultats indiquent que l'abolition des impôts sur les dividendes et les gains en capital réduisent les distorsions dans les choix d'investissement des entreprises, stimule l'investissement et entraîne une meilleure allocation du capital. Mais pour être financièrement soutenable, la réforme nécessite un relèvement du taux de l'impôt sur le profit des entreprises de 34\% à 42\%. Cette hausse du taux d'imposition décourage l'accumulation du capital. En somme, la réforme engendre une baisse de l'accumulation du capital et de la production respectivement de 8\% et 1\%. Néanmoins, elle améliore l'allocation du capital de 20\%, engendrant des gains de productivité de 1.41\% et une modeste augmentation du bien être des consommateurs.

An inexhaustible source of income? The significance of Belarusian refineries and the outlook for the future. OSW Commentary No. 81, 2012-06-20

Belarus generated a surplus at US$1.9 billion in foreign trade in goods and services in the first four months of 2012 as compared to a deficit of US$2.8 billion for the same timeframe a year earlier. Minsk owes this, its highest positive trade balance since 1991, mainly to a significant increase in exports of petroleum products manufactured by the refineries in Navapolatsk and Mazyr. This is a consequence of the favourable contract for supplies of Russian oil until 2015 which Belarus signed in December last year. This contract has resulted in a de facto resumption of Russia subsidising Belarus. The favourable conditions of Russian oil supplies will allow the Belarusian refineries to remain the driving force of the country’s economy, and the Belarusian government will not allow them to be privatised, which Russia has been seeking for years. The two refineries initiated an ambitious modernisation programme, which is aimed at increasing their output and improving the quality of their production. Owing to this, their share in the market of petroleum products in the region, including on the Polish market, may grow within the next few years.

Income Distributional Effects of Decoupled Payments Single Payment Scheme in the European Union. Factor Markets Working Paper No. 29, July 2012

This paper analyses the effects of the Single Payment Scheme (SPS) with and without farm structural change, and focuses on how income distributional effects and farm restructuring are impacted by the SPS under: alternative entitlement tradability, cross-compliance and CAP 'greening' requirements, different SPS implementation models, the entitlement stock, market imperfections and institutional regulations. The authors find that the SPS implication details are highly significant, since farmers’ benefits can range from 100% of the SPS value to a negative policy incidence, and farm structural change may also be hindered by the SPS.

Patterns and Determinants of Off-Farm Migration: Transfer frictions and persistency of relative income gaps. Factor Markets Working Papers No. 36, February 2013

The inter-sectoral migration of agricultural labour is a complex but fundamental process of economic development largely affected by the growth of agricultural productivity and the evolution of the agricultural relative income gap. Theory and some recent anecdotal evidence suggest that as an effect of large fixed and sunk costs of out-farm migration, the productivity gap between the agricultural and non-agricultural sectors should behave non-monotonically or following a U-shaped evolution during economic development. Whether or not this relationship holds true across a sample of 38 developing and developed countries and across more than 200 EU regions was empirically tested. Results strongly confirm this relationship, which also emphasises the role played by national agricultural policy.

Returns from Income Strategies in Rural Poland. Factor Markets Working Document No. 64, August 2013

In order to stabilise and improve their income situation, rural households are strongly encouraged to diversify their activities both within and outside the agricultural sector. Often, however, this advice is only moderately pursued. This paper addresses issues of rural household income diversification in the case of Poland. It investigates returns from rural household income strategies using propensity score matching methods and extensive datasets spanning 1998-2008. Results suggest that returns from combining farm and off-farm activities were lower than returns from concentrating on farming or on self-employment outside agriculture. This differential is stable over time although returns from diversification have relatively improved after Poland’s accession to the EU. This is also visible in the fact that since 2006 returns from combining farm and off-farm activities have evened with returns from relying solely on hired off-farm labour, thus smoothing the difference observed before the accession. Further, over the analysed period, households pursuing the diversification strategy performed better than those relying solely on unearned income. Finally, in general, the income in households combining farm and off-farm activities was higher than in those combining two off-farm income sources.