LATEST Melbourne Institute Working Papers:
How Valid are Synthetic Panel Estimates of Poverty Dynamics? by: Nicolas Hérault and Stephen P. Jenkins, Melbourne Institute Working Paper Series: WP 05/18
A growing literature uses repeated cross-section surveys to derive ‘synthetic panel’ data estimates of poverty dynamics statistics. It builds on the pioneering study by Dang, Lanjouw, Luoto, and McKenzie (Journal of Development Economics, 2014) providing bounds estimates and the innovative refinement proposed by Dang and Lanjouw (World Bank Policy Research Working Paper 6504, 2013) providing point estimates of the statistics of interest. We provide new evidence about the accuracy of synthetic panel estimates relative to benchmarks based on estimates derived from genuine household panel data, employing high quality data from Australia and Britain, while also examining the sensitivity of results to a number of analytical choices. Overall, we are more agnostic about the validity of the synthetic panel approach applied to these two rich countries than are earlier validity studies in their applications focusing on middle- and low- income countries
Parental Joblessness and the Moderating Role of a University Degree on the School-to-Work Transition in Australia and the United States / Matthew Curry, Irma Mooi-Reci and Mark Wooden, Melbourne Institute Working Paper Series: WP 06/18
Does parental joblessness delay young adults’ school-to-work transitions? If so, can a university degree moderate this relationship? We examine these questions using a representative sample of young adults under the age of 25 that lived with their parents prior to entering the labor market in Australia (N=2,151) and the U.S. (N=811) during the period 2001-2015. Results from Cox proportional hazards models, adjusting for clustering of siblings, demonstrate that parental joblessness is associated with slower school-to-work transitions in both the U.S. and Australia. University degree attainment mitigates much of this negative relationship in Australia, suggesting that parental joblessness is most harmful for Australians who leave school before earning a university degree. There is no evidence for a similar interaction in the U.S., suggesting that the relationship between education, parental joblessness, and the school-to-work transition may depend on contextual factors such as the welfare regime.
Microsimulation Analysis of Optimal Income Tax Reforms: An Application to New Zealand / John Creedy, Norman Gemmell, Nicolas Hérault and Penny Mok, Melbourne Institute Working Paper Series: WP 07/18
This paper examines the optimal direction of marginal income tax reform in the context of New Zealand, which recently reduced its top marginal income tax rate to one of the lowest in the OECD. A behavioural microsimulation model is used, in which social welfare functions are de?ned in terms of either money metric utility or net income. The model allows for labour supply responses to tax changes, in which a high degree of population heterogeneity is represented along with all the details of the highly complex income tax and transfer system. The implications of the results for speci?c combinations of tax rate or threshold changes, that are both revenue neutral and welfare improving, are explored in detail, recognising the role of distributional value judgements in determining an optimal reform. The potential impact of additional income responses is also examined, using the concept of the elasticity of taxable income. Results suggest, under a wide range of parameter values and assumptions, that raising the highest income tax rate and/or threshold, would be part of an optimal reform package.
SOURCE: Latest Melbourne Institute Working Papers: Melbourne Institute, May 2018.
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