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Research Institute for Quantitative Studies in Economics and Population

Abstracts of Research Reports: 2006

  1. Joint Taxation and the Labour Supply of Married Women: Evidence from the Canadian Tax Reform of 1988

    by Thomas F. Crossley and Sung-Hee Jeon

    The Canadian federal tax reform of 1988 replaced a spousal tax exemption with a non-refundable tax credit. This reduced the "jointness" of the tax system: after the reform, secondary earners' effective "first dollar" marginal tax rates no longer depended on the marginal tax rates of their spouses. In practice, the effective "first dollar" marginal tax rates faced by women with high income husbands were particularly reduced. Using difference-in-difference estimators, we find a significant increase in labour force participation among women married to higher income husbands.

  2. The Long-Run Cost of Job Loss as Measured by Consumption Changes

    by Martin Browning and Thomas F. Crossley

    The costs of involuntary job loss are of substantial research and policy interest. We consider the measurement of the cost of job displacement with household expenditure data. With a Canadian panel survey of individuals who experienced a job separation, we compare the consumption growth of households that experienced a permanent layoff to a control group of households that experienced a temporary layoff with known recall date. Because the firms employing the latter group are providing insurance, these workers approximate a bench mark of full insurance against job loss shocks. We estimate that permanent layoffs experience an average consumption loss of between 4 and 10 percent. Older workers and workers with high job tenure have losses closer to the top of this range.

  3. Do the Rich Save More in Canada?

    by Sule Alan, Kadir Atalay, and Thomas F. Crossley

    This paper is an attempt to answer the long standing question of whether households with higher lifetime income save a larger fraction of their income. The major difficulty in empirically assessing the relationship between lifetime incomes and saving rates is to construct a credible proxy for lifetime income. The Canadian Family Expenditure Survey (FAMEX) provides us with both unusually good data on savings rates and potential instruments with which we can construct reliable lifetime income proxies. Our empirical analysis suggests that the estimated relationship between saving rates and lifetime incomes is sensitive to the instrument used to proxy lifetime income. Nevertheless, our preferred estimates indicate that, except for poorest households (who simply do not save), saving rates do not differ substantially across lifetime income groups.

  4. The Social Cost-of-Living: Welfare Foundations and Estimation

    by Thomas F. Crossley and Krishna Pendakur

    We present a new class of social cost-of-living indices and a nonparametric framework for estimating these and other social cost-of- living indices. Common social cost-of-living indices can be understood as aggregator functions of approximations of individual cost-of-living indices. The Consumer Price Index (CPI) is the expenditure-weighted average of first-order approximations of each individual’s cost-of-living index. This is troubling for three reasons. First, it has not been shown to have a welfare economic foundation for the case where agents are heterogeneous (as they clearly are.) Second, it uses an expenditure-weighted average which downweights the experience of poor households relative to rich households. Finally, it uses only first-order approximations of each individual’s cost-of-living index, and thus ignores substitution effects.

    We propose a “common-scaling” social cost-of-living index, which is defined as the single scaling to everyone’s expenditure which holds social welfare constant across a price change. Our approach has an explicit social welfare foundation and allows us to choose the weights on the costs of rich and poor households. We also give a unique solution for the welfare function for the case where the weights are independent of household expenditure. A first order approximation of our social cost-of- living index nests as special cases commonly used indices such as the CPI. We also provide a nonparametric method for estimating second- order approximations (which account for substitution effects).

  5. The Top Shares of Older Earners in Canada

    by Michael R. Veall

    Within the 65+ age group, the percentage of labour market income received by the top 1% of earners has increased from about 30% in 1982 to more than 60% in 2002. The trend is smooth, is roughly uniform across provinces and does not appear to have been accelerated by top marginal tax rate reductions in 1988. Hence there is little evidence from this time series that further marginal tax rate reductions would have an important permanent effect on aggregate labour supply for this age group. Moreover, it is unlikely that this period could provide evidence regarding aggregate labour supply effects for this group with respect to reductions in Old Age Security or Guaranteed Income Supplement clawbacks, because the top 1% of earners are above the income range served by these programs.

  6. Estimating a Collective Household Model with Survey Data on Financial Satisfaction

    by Rob Alessie, Thomas F. Crossley, and Vincent Hildebrand

    We estimate a collective household model with survey data on financial satisfaction from the European Community Household Panel. Our estimates suggest that cohabitating individuals enjoy returns to scale in consumption that are towards the larger end of the range of estimates reported in the literature. They also suggest that the share of household income provided by the female partner is a significant determinant of her share of household consumption in most of the countries we study.

  7. Physician Labour Supply in Canada: a Cohort Analysis

    by Thomas F. Crossley, Jeremiah Hurley, and Sung-Hee Jeon

    This paper employs cohort analysis to examine the relative importance of different factors in explaining changes in the number of hours spent in direct patient care by Canadian general/ family practitioners (GP/FPs) over the period 1982 to 2002. Cohorts are defined by year of graduation from medical school. The results for male GP/FPs indicate that: there is little age effect on hours of direct patient care, especially among physicians aged 35 to 55; there is no strong cohort effect on hours of direct patient care; but there is a secular decline in hours of direct patient care over the period. The results for female GP/FPs indicate that: female physicians on average work fewer hours than male physicians; there is a clear age effect on hours of direct patient care; there is no strong cohort effect; there has been little secular change in average hours of direct patient care. The changing behaviour of male GP/FPs accounted for a greater proportion of the overall decline in hours of direct patient care from the 80’s through the mid 90’s than did the growing proportion of female GP/FPs in the physician stock.

  8. Well-Being Throughout the Senior Years: An Issues Paper on Key Events and Transitions in Later Life

    by Margaret Denton and Karen Kusch

    Social Development Canada’s mission is “to strengthen Canada’s social foundations by supporting the well-being of individuals, families and communities and their participation through citizen focused policies, programs and services” (Social Development Canada 2005a). Well-being is a concept that goes beyond good health to encompass physical and mental fitness as well as social fitness (being able to perform one’s social roles and the demands of everyday living adequately). As people age, they experience a number of transitions in their lives. They may retire, change residence, loose a spouse, become a caregiver, and/or develop a health problem or disability. These transitions, especially when they occur around the same time, may impact on their well-being and independence and prevent them from being contributing members of society.

    This paper summarizes the research on what we currently know about the key events and transitions experienced by seniors, their impacts, and the resources seniors have or need to successfully cope with these events throughout the senior years. It will also review what we know about opportunities, gaps or barriers in accessing social support programs and service delivery designed to assist seniors in coping successfully with adverse events and life transitions. Issues to be considered include availability, access and costs of community support and home health care services.

    Finally, the paper will attempt to provide potential policy research directions to address current knowledge gaps. This is an extensive literature, and we have limited the scope by focusing on the last 10 years of Canadian research published in Journals and by Statistics Canada. We have favored research based on national studies in this review, though there are many excellent case studies and qualitative studies that add texture to our knowledge. Recognizing that the senior population is a very heterogeneous group, this review will examine (where the research permits) differences by senior life-course stages, and other target groups such as women, the disabled, visible minority, immigrants, Aboriginal peoples, sub-regions, low income, and persons living alone. This review of the literature has shown that while we have basic information about many of the transitions in seniors’ lives, there is very little information about the various life course stages or about various sub groups of society.

  9. Satisfied Workers, Retained Workers: Effects of Work and Work Environment on Homecare Workers' Job Satisfaction, Stress, Physical Health, and Retention

    by Isik U. Zeytinoglu and Margaret Denton

    The goal of this project was to assist health system managers and policy makers develop policies and strategies to recruit and retain human resources in the homecare sector and have a satisfied, healthy workforce. The overall research question was: How do the work characteristics of homecare workers and the work environment in homecare contribute to job satisfaction, stress, physical health, and retention?

    The research is designed as a mixed-method approach with both qualitative and quantitative data. Results showed that restructuring and organizational change in the homecare sector has contributed to both mental and physical health problems (including job stress and musculoskeletal disorders), job dissatisfaction, and retention problems. Factors that contribute to higher levels of satisfaction and the propensity to stay with the organization include organizational and peer support, working one-on-one with clients, doing emotional labour (that is, the work involved in dealing with other people’s feelings), and satisfaction with schedules, pay, and benefits. This study also examined the association between job flexibility and job insecurity and self-reported musculoskeletal disorders and found no relationship between these variables and musculoskeletal disorders.

Last updated: Dec 21, 2006.
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