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Contents
Policies, institutions and fertility rates: a panel data analysis for OECD countries
Anna Cristina d’Addio and Marco Mira d’Ercole
With fertility rates now well below replacement levels throughout the developed world, several OECD governments are directing their attention to policies that may lessen the obstacles to childbearing that confront families. This paper provides an overview of recent trends in fertility rates and what is known about their determinants, including various public policies. Dynamic panel models of total fertility rates are then estimated using two different specifications: the GMM-system estimator and the pooled mean group estimator. The regression results confirm that a number of policies (e.g. transfers to families with children and leave provisions) and institutional factors (e.g. characteristics of the labour market) significantly affect childbearing decisions, suggesting that a better policy mix could contribute to raising fertility rates from the very low levels they have reached in several OECD countries.
Are structural reforms the answer to global current account imbalances?
Mike Kennedy and Torsten Sløk
It has been argued that one solution to global external imbalances is for countries with current account surpluses to undertake structural reforms. This would raise their potential growth, which is assumed to put downward pressure on external surpluses. This article takes a closer look at how structural reforms in labour, product and financial markets could be expected to affect current accounts. It then goes on to test empirically, using pooled time-series techniques (in a framework that controls for the influence of relative cyclical positions, government fiscal balances and the real exchange rate), whether or not reforms (based on OECD and other indicators for the areas mentioned) would have any significant link with external balances. The overall finding is that some of the indicators of structural reforms do have a significant relationship with the current account but their impact is quite limited. Moreover the relationship varies across reform areas and countries. Although reforms are beneficial in their own right, they are not always conducive to reducing global imbalances.
A comparison of structural levels of productivity in the major industrialised countries
Renaud Bourlès and Gilbert Cette
Hourly labour productivity levels in a number of European countries are thought to be very close to, or possibly even higher than the level “observed” in the United States. At the same time, however, there are big differentials between hours worked and/or employment rates in these countries and in the United States. Frequent mention is also made of the theory of diminishing returns to hours worked and the employment rate. The object of the analysis proposed here is to adjust the “observed” levels of hourly productivity for the effect of the differentials (with the United States) in the hours worked and/or employment rates of several categories of the population of working age in order to calculate “structural” hourly productivity. The results obtained confirm the diminishing returns to hours worked and the employment rate (especially where young and elderly people are concerned). The level of “structural” hourly productivity appears to be highest in the United States, suggesting that the differential between per capita GDP in the European countries and in the United States is attributable to hours worked and employment rates being at lower levels, and also to lower “structural” hourly productivity.
Foreign affiliates in OECD economies: presence, performance and contribution to host countries’ growth
Chiara Criscuolo
This study has four aims. Firstly, the study presents comparative evidence on the presence of foreign affiliates across OECD countries. Secondly, it reports the relative labour productivity of foreign affiliates across OECD countries. Thirdly, the study quantifies the contribution of foreign affiliates to labour productivity growth in OECD countries using a growth accounting approach. Fourthly, the analysis shows how much of this contribution derives from an increase in the employment share of foreign affiliates and how much from an increase in the productivity of foreign affiliates in the host country. The information is derived by matching three OECD data sources: the STAN database for industrial analysis, the AFA (Activities of Foreign Affiliates) and FATS (Foreign Affiliates in Trade and Services) databases. The study confirms that foreign affiliates are more labour productive than the average domestic firm and shows that this advantage remains after controlling for industrial composition of the foreign affiliates sector. Finally, the analysis shows that foreign affiliates can make an important contribution to labour productivity growth. The contribution is largest in the manufacturing sector. In the services sector and in low-tech manufacturing sectors, the largest component of the contribution of foreign affiliates is associated with the increased employment share of foreign affiliates. In medium- and high-tech sectors, the contribution is mainly driven by strong labour productivity growth of existing foreign affiliates. In the United States the contribution in both the manufacturing and the services sectors is consistently driven by strong labour productivity growth of existing foreign affiliates.
Sub-central government fiscal rules
Douglas Sutherland, Robert Price and Isabelle Joumard
Against a background of mounting demands for spending on services provided by sub-central governments, this paper examines how fiscal rules can help to ensure that pressure on resources is minimised and available resources are used efficiently. Drawing on questionnaire responses and other sources, this paper gives a detailed picture of fiscal rules for sub-central governments in place among a number of OECD countries. The paper examines the rationales for using fiscal rules, the various impacts fiscal rules can have, the factors making for effective implementation and the interactions between the various types of rule. It then constructs a number of synthetic sub-indicators designed to assess the extent to which sub-central government fiscal frameworks exhibit favourable characteristics for the achievement of fiscal objectives. It concludes with the construction of a composite indicator based on the combined impacts in the different areas of fiscal policy.
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