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This paper applies the Inclusive Growth framework to the OECD Regional Well-being Database in order to compute multidimensional living standards (MDLS) among OECD regions from the early 2000s to 2012. MDLS are based on the equivalent income approach, where, for different income groups, the monetised value of health status and unemployment are added to disposable income and aggregated with a generalised mean function to allow inequality to be taken into account. Results highlight that, due to the spatial concentration of good and bad outcomes, regional disparities are amplified when observed through the lens of MDLS as opposed to income-based regional disparities. The paper also shows that people living in metropolitan regions experienced, on average, higher levels of MDLS but also a sharper decline during the economic crisis. Growth of MDLS in metropolitan regions during this period was characterised by a higher contribution of life expectancy and a lower contribution of income inequality with respect to the other regions.
There is a drive towards delivering and operating public infrastructure through public-private partnerships as opposed to traditional approaches. The assessment of the value for money achieved by the two alternative approaches rests on both the cost of financing, and the efficiency in delivery and operation. This paper focuses on the cost of financing, and in particular the cost associated with transferring risk from the public to private sphere. If capital markets are efficient and complete, the cost of private and public financing should be the same, with the relative delivery and operational efficiency remaining as the primary determinant of value for money. However, evidence suggests the risk transfer to a public-private partnership entails an inefficient risk pricing premium. We argue that a high price for public-private partnerships results from large risk transfers, risk treatment within the private sector, and uncertainty around the past and future performance of PPP consortiums. The corollary of the finding is that the efficiency gains from a PPP need to be much higher than previously understood to deliver better value for money than under a traditional approach.
This paper develops OECD information on housing policies and the degree to which OECD countries pursue social policy objectives them. Data collected by the OECD shows that most OECD countries provide considerable support to promote access to homeownership: reported spending can amount up to 2.3% of GDP. Most OECD countries also support the provision of social rental housing, but public support for social rental housing is declining in many countries and the private rental sector is playing an increasingly important role in promoting access to affordable housing. In almost all OECD countries housing support is also delivered through means-tested housing allowances, for which reporting countries spend between 0.6 and 1.8% of GDP. The available data do not allow for a comprehensive cross-country comparison of the housing policy mix but, where available, data suggest that owner-occupied housing receives significant support compared to other tenures.Access to housing and housing quality also remain pressing concerns in many OECD countries. Significant numbers of people are homeless: while statistics are difficult to compare, most OECD countries report that 1 to 8 people in every thousand lack regular access to housing. In addition, many households live in low-quality dwellings: 15% of low-income households live in overcrowded dwellings and 14% do not have access to an indoor flushing toilet. Neighbourhood crime and pollution are also problematic for many households throughout the OECD.
This paper provides comprehensive cross-country evidence on the relationship between earnings inequality and intra-generational mobility by simulating individual earnings and employment trajectories in the long-term using short panel data for 24 OECD countries. On average across countries, about 25% of earnings inequality in a given year evens out over the life cycle as a result of mobility. Moreover, mobility is not systematically higher in countries with more earnings inequality in general. However, a positive and statistically significant relationship is found only in the bottom of the distribution. This reflects the role of mobility between employment and unemployment and not that of mobility up and down the earnings ladder.
The development of a dashboard of statistics for the monitoring of equality of opportunity should recognize important lessons from economic theory: first, descriptive statistics associated with intergenerational mobility do not speak directly to equality of opportunity without accepting a value judgment that children should not be held responsible for circumstances beyond their control; and, second, the process of child development encourages a focus on different skills and competencies, as well as different stages in a child’s life. On the basis of these lessons, the paper offers three practical recommendations for the development of policy relevant indicators. First, use data appropriate for the country at hand to estimate summary measures of inter-generational mobility, including the intergenerational elasticity of earnings between parents and children, and associated transition matrices. Second, develop measures of absolute mobility, and in particular develop a poverty line based upon the minimal level of resources needed to reasonably lower the risk of intergenerational transmission of low status, and that could complement more traditional poverty lines. Finally, make full use of the information on 15 year-olds from the Programme for International Student Assessment (PISA), and expand its scope to include younger children by developing a PISA type instrument for four to five year old children across the OECD countries.
Non-official sources of data, big data in particular, are currently attracting enormous interest in the world of official statistics. An impressive body of work focuses on how different types of big data (telecom data, social media, sensors and geospatial data, etc.) can be used to fill specific data gaps, especially with regard to the post-2015 agenda and the associated technology challenges. This paper focuses on different aspects of big data, but ones that are of crucial importance: what are the perspectives of the commercial operations and national statistical offices that respectively produce and might use this data; and which incentives, business models and protocols are needed to leverage non-official data sources within the official statistics community?
This paper presents the first empirical analysis of the macroeconomic relationship between environmentally related taxes and inequality in income sources. The analysis also investigates whether this relationship differs between countries which have implemented environmental tax reforms (ETRs) and ones which have not. Following earlier empirical literature, income inequality is measured by the disposable-income-based Gini coefficient. The analysis is based on a panel of all 34 OECD countries spanning the period from 1995 to 2011. Information about the implementation of ETRS in the examined period is collected through a review of relevant academic and policy literature. Empirical results from econometric models reveal that, on average, there is no statistically significant relationship between the overall share of environmentally related tax revenues in GDP and inequality in income sources. However, the relationship varies with the taxed activity under consideration and the existence of an explicit mechanism to redistribute environmentally related tax revenues. In countries where such mechanisms are absent, energy tax revenues (% of GDP) are shown to have a positive, although modest, relationship with income inequality. In contrast, in countries where energy tax revenues are, at least partially, used to reduce tax burden on income and labour, there is a negative relationship between energy taxes and inequality in income sources. On the contrary, no significant relationship is identified between motor vehicle and other transport tax revenues and income inequality, while revenues from other environmentally related taxes, such as waste and air pollution taxes, are negatively associated with income inequality, regardless of the existence of an explicit revenue recycling mechanism.
This paper analyses two-way interactions between monetary policy and inequality in selected advanced economies. In the context of a highly accommodative monetary stance over recent years, the analysis focuses on the effects of monetary policy on inequality over the business cycle via its impacts on returns on assets, the cost of debt servicing and asset prices. While monetary policy easing has a priori ambiguous effects on income and net wealth inequality, in practice these effects are estimated to be small. Cross-country differences in the size and distribution of income and net wealth explain contrasting effects. A house price increase generally reduces net wealth inequality, while the opposite is true for increases in equity and bond prices. Higher inequality can reduce the effectiveness of monetary policy stimulus in boosting private consumption, but such effects are estimated to be small. Cross-country differences in the size and composition of household financial assets rather than in their distribution are more relevant for differences in the effectiveness of monetary policy, especially via the wealth channel.
This paper estimates the potential income gains associated with greater gender parity in social institutions and the cost of the current level of discrimination. Using cross-country analysis, it investigates how gender-based discrimination in social institutions, measured by the OECD Development Centre’s Social Institutions and Gender Index (SIGI), affects income per capita. First, the empirical results indicate that such discrimination impedes a country’s level of income beyond its effect on gender inequality in outcomes. Second, the effect is stronger for lowincome countries. Third, the channel decomposition analysis indicates that gender-based discrimination in social institutions tends to reduce income per capita by lowering both women’s human capital acquisition and labour force participation, as well as total factor productivity. Fourth, the income loss associated with gender discrimination in social institutions is estimated at up to USD 12 trillion, or 16% of world income. By contrast, a gradual dismantling of genderbased discriminatory social institutions by 2030 could increase the annual income global growth rate by 0.03 to 0.6 percentage points over the next 15 years, depending on the scenario. Such results are robust to changes in specifications and controls for potential endogeneity.
Chile has made considerable progress in promoting access to affordable good-quality housing over the past two decades. The proportion of households that have no housing or that live in sub-standard housing has fallen from 23% in 1992 to 10% in 2011 (Ministerio Desarrollo Social 2013). Nevertheless, the incidence of poor quality housing and overcrowding is still high by international standards and residential segregation continues to be significant in Chile’s urban areas. Compared to other OECD countries, Chile is also characterised by small rental housing sector, which accounts for 18% of the housing stock; on average this tenure comprises 32% of the housing stock across OECD countries (Salvi Del Pero et al. 2015 forthcoming). After highlighting some of Chile’s key policy challenges in supporting access to quality and affordable housing (Chapter 1), this brief reviews two of Chile’s housing policy programmes. The first is a government subsidy to promote access to homeownership among low-income households; this programme – through various modifications – has been a central component of housing policy in Chile for over two decades. Chapter 2 discusses the characteristics of the programme, its objectives and the changes introduced to it in 2011; the further changes to the programme being discussed during the preparation of this brief – are instead not part of the study. The second policy reviewed in this report is a programme that introduced for the first time a subsidy to provide support for rental costs to young low and middle income households. Chapter 3 presents the main objectives and characteristics of this programme.
This paper provides, for the first time, estimates of subjective well-being variables in 373 OECD subnational regions, allowing comparison of various measures of how people experience and evaluate their lives within and across all 34 OECD countries. Different weighting strategies as well as several robustness checks have been carried out to ensure regional representativeness and to provide reliable indicators. The results show that it is possible to obtain robust regional estimates of subjective well-being through the Gallup World Poll for the variables satisfaction with life and social support network. These estimates could be included in the OECD Regional Well-Being Database to provide two additional well-being dimensions measured uniquely with subjective indicators. In addition to these two variables, the paper explores the feasibility of other subjective indicators, either from Gallup or the European Statistics on Income and Living Standards (EU SILC), which are particularly meaningful when measured at the city or regional levels, such as satisfaction with the living environment, satisfaction with commuting time, trust in the political system, and feeling of safety in the community. Finally, a regression analysis is performed to give an insight of the explanatory power of both individual and regional specific characteristics to self-reported life satisfaction. The results show that regional fixed effects capture around 10 percentage points of the variation in life satisfaction, of which 30% can be associated to observable regional characteristics such as mortality rate and air pollution. Furthermore, life satisfaction tends to be negatively affected not only by the individual unemployment status but also by the level of unemployment of the region; in the OECD area, everything else equal, being unemployed is associated with 7 percentage points less of life satisfaction compared to someone that is employed; whereas, an increase of 1 percentage point in the unemployment rate at the regional level is related with 0.4 percentage points less of satisfaction with life as a whole.
One in ten students at the master’s or equivalent level is an international student in OECD countries, rising to one in four at the doctoral level. Almost 60% of international doctoral students in OECD countries are enrolled in science, engineering or agriculture. The United States hosts 38% of international students enrolled in a programme at the doctoral level in OECD countries. Luxembourg and Switzerland host the largest proportion of international students, who make up more than half of their total doctoral students. International master’s and doctoral students tend to choose to study in countries investing substantial resources in research and development in tertiary educational institutions. Of all international students enrolled at the master’s or doctoral level across OECD countries, the majority (53%) are from Asia, and 23% are from China alone.
Dans les pays de l’OCDE, un étudiant sur dix en master (ou niveau équivalent) est en mobilité internationale, une proportion qui s’élève à un étudiant sur quatre en doctorat. Dans les pays de l’OCDE, près de 60 % des doctorants en mobilité internationale suivent une formation dans les domaines des sciences, de l’ingénierie ou de l’agriculture. Les États-Unis accueillent 38 % des doctorants en mobilité internationale dans les pays de l’OCDE. Ce sont le Luxembourg et la Suisse qui accueillent les pourcentages les plus élevés de doctorants en mobilité internationale : ils représentent plus de la moitié de leurs effectifs totaux à ce niveau d’enseignement. Les étudiants en mobilité internationale suivant une formation de master ou de doctorat choisissent en general d’étudier dans des pays consentant d’importants investissements au titre des activités de recherche et développement dans les établissements d’enseignement tertiaire. Parmi les effectifs totaux d’étudiants en mobilité internationale suivant une formation de master ou de doctorat dans les pays de l’OCDE, la majorité (53 %) vient d’Asie, la part de la Chine s’élevant à elle seule à 23 %.
This paper investigates the impact of policies and institutions on health expenditures for a large panel of OECD countries for the period 2000-10. We use a set of 20 policy and institutional indicators developed by the OECD characterising the main supply-side, demand-side, and public management, coordination and financing features of health systems. The impact of these indicators is tested alongside control variables related to demographic (dependency ratio) and non-demographic (income, prices and technology) drivers of health expenditures per capita. Overall, there is a reasonably good fit between the expected signs of the coefficients for the institutional indicators and the actual estimates. By integrating the role of policies and institutions, together with the other primary determinants, our analysis is able to explain most of the cross-country variation in public health expenditures.
There are now a large number of valuation studies on the benefits of biodiversity and on ecosystem services, the services provided by different ecosystems (ESS). Both ideas have been used to elicit values from nature but in recent years the research community has focussed on ESS as the main organising framework, with some additional use of the biodiversity concept to value entities that have intrinsic value and are of an extraordinary nature. Estimates are available for the services from most habitats, by type of ecosystem service, usually expressed in USD per hectare per year. Coverage varies by habitat and region, as does the quality of the assessment, but it is possible now to carry out an estimation of changes in values for a number of ecosystem services a result of the introduction of a new policy or of a physical investment that modifies the ecosystem. While this is a positive development, there remain some issues to be resolved. One is the possibility of double-counting of services when using the standard categories of provisioning, regulating/supporting and cultural ESS. Regulating and supporting services are the basis of the provisioning services and so value estimates for the two cannot always be added up. For example, air pollution absorption is often valued using the cost of alternative ways of reducing the pollutants from the atmosphere while recreation is often valued in terms of willingness-to-pay (WTP) through stated preference methods.
Some OECD jurisdictions exclude public interest policy considerations from merger control. Others consider public interest factors, such as financial stability, public security and plurality of media in their merger assessments. The paper gives an overview of whether public interest considerations, and other non-competition challenges faced by jurisdictions, are accommodated by competition law, and particularly by merger control rules. It was prepared as background for a discussion held at the OECD in June 2016 on public interest considerations in merger control.
This paper was prepared as background for a discussion held at the OECD in June 2016 on disruptive innovations in legal services. It introduces recent disruptive innovations in legal services markets, as well as the overarching trends giving rise to them. It also explores the role for competition authorities in the face of legal services disruptive innovation, particularly with respect to competition advocacy and summarises the rationale for legal services regulations and their composition.
This paper extends the tax analysis of knowledge-based capital (KBC) in several dimensions. The paper analyses non-R&D KBC: computer software, architectural and engineering designs, and economic competencies which account for over 70% of total KBC. The paper analyses the tax treatment of internally-developed KBC which is used in production by the developer versus KBC sold to third-party producers. The current tax rules generally favour internally-developed KBC, which disadvantages many SMEs and start-up companies specializing in innovation. The analysis reports two average effective tax rates (ETRs) depending on investors’ considerations of their investment opportunities. When KBC is unique, earns excess returns due to market power, or involves financing-constraints, ETRs are high despite immediate expensing. The paper also analyses the effects of tax limitations, where many SMEs and start-up companies can’t benefit from tax credits and deductions until having sufficient tax liability.