This note identifies profit shifting in response to cross-countrydifferences in corporate tax rates as a source of productivitymismeasurement. To quantify the magnitude of mismeasurement, theprofit-shifting effect is isolated from other possible effects ofcorporatetax rates changes on real...

We construct and derive the properties of an estimator of welfarewhich takes advantage of the detailed nature of information about living standards available in small household surveys and the comprehensive coverage of a census. By combining the strengths of each, our estimator can be used at a...

We ask individuals for their reservation price of a specified lotteryand deduce their Arrow-Pratt measure of risk aversion.This allows direct testing of common hypotheses on risk attitudes inthree datasets. We find that risk aversion indeed fallswith income and wealth. Entrepreneurs are less...

In this paper we derive a structural measure for labor market density based on the Ellison and Glasear (1997) Index for industry concentration. This labor market density measure serves as a proxy for the number of workers that can reach a certain work area within a reasonal amount of traveling...

A recently much debated issue is why observed investment and growth rates inpoor countries are lower than traditional theory predicts. Empirical evidencesuggests that social and political instability is a major reason for thedivergence between poor and rich countries. However, there is still the...

In this paper, I study the wage a firm sets to attract high abilityworkers (hipo's) in situationsof unemployment. I show that the higher unemployment, the larger afirm's incentives to sorthigh and low ability workers. Moreover, workers will signal their(high) ability in situationsof (high)...

The paper studies the effects of cross-country differences in the productionprocess of human capital on income distribution and growth. Our overlapping gen-erations economy has the following features: (1) consumers are heterogenous withrespect to parental human capital and wealth; (2)...

Estimates of the effect of education on GDP (the social return) have been hard to reconcile with micro evidence on the private return to schooling. We present a simple explanation combining two ideas: imperfect substitution and endogenous skill-biased technological progress and use cross-country...

The paper studies the determinants of income distribution and growth in an overlapping generations economy withheterogenous households. Our framework has the following main features:heterogeneity of consumers with respect to wealth and parental human capital;intergenerational transfers,...

Most measures of vulnerability are a-theoretic and essentially static. In this paper we use a stochastic Ramsey model to find a household's optimal welfare and we measure vulnerability as the shortfall from the welfare attained if the household consumed permanently at the poverty line. The...