OECD Sample Research Articles

The Representation of Women as Post-Secondary Graduates and the Role of Educational Systems: Evidence From 51 Countries

Women now earn well over half of bachelor’s and master’s degrees awarded in most countries around the world. Although this gender revolution in higher education is a global one, there is a good deal of cross-national variation in the representation of women as recipients of post-secondary degrees. Using a sample of both OECD and non-OECD countries, this study examines whether differences in educational systems help explain this cross-national variation. Women’s representation as master’s degree recipients are most strongly correlated with the institutional features of a country’s education system. The empirical results show that countries with later ages of first selection into distinct educational programs are associated with a greater representation of women earning master’s and (though this finding is less robust) doctoral degrees. The empirical evidence also shows that those countries with more educational programs available to students at age 15 award greater shares of master’s degrees to women. JEL codes: I21, I23, I24, J16

Digital Competence, Validation and Differential Patterns between Spanish and Portuguese Areas as Assessed from the Latest PISA Report as a Pathway to Sustainable Education and Social Concerns

PISA reports aim both to analyze and describe the educational reality of each country and to assess different academic competences, including digital competence. In this paper, we are committed to the vision of digital literacy as an indispensable element of sustainable education and social concerns, which, together with the environment, the economy, social justice and human rights, form the basis of the concept of sustainability. From this point of view, it is considered that an improvement in digital competence has a positive impact on the use made of ICT and also on its link with sustainable development. The aim of this research is to comparatively analyze the results in terms of literacy itself, digital skills and digital resources and experiences according to the PISA 2018 report in four OECD countries: Spain, Portugal, Colombia and Brazil, specifically, two Latin countries (Brazil and Colombia) and two Hispanic countries (Spain and Portugal), and for the enjoyment in the use of digital devices between one country in each area (Brazil and Spain). The sample is composed of 54,323 participants (18,073 participants from Brazil and Colombia, Latin America, and 36,250 from Spain and Portugal, Iberian Peninsula), using as an instrument the surveys developed and implemented in the PISA 2018 dataset for the OECD sample, which is related to some aspect of digital skills. The main findings of this study confirm that the variables related to digital resources, digital literacy and digital skills are statistically significant in the four countries. Therefore, in view of this, we want to support the promotion of digital competence as a key element in the sustainable, educational and social development of a community. At a pedagogical level, this means that we are committed to different specific programs, innovative educational practices and the creation of resources that promote inclusion and educational quality, focusing on social concerns and the fit of each country and area for promoting sustainable education.

Stock market reactions to COVID-19 lockdown: A global analysis

The COVID-19 pandemic has caused dramatic changes in the way people around the globe live, and has had a profound negative impact on the global economy. Much of this negative impact did not result from the disease itself, but from the lockdown restrictions imposed to contain the spread of the virus. We investigate how national stock market indices reacted to the news of national lockdown restrictions in the period from January to May 2020. We find that lockdown restrictions led to different reactions in our sample of OECD and BRICS countries: there was a general negative effect resulting from the increase in lockdown restrictions, but we find strong evidence for underreaction during the lockdown announcement, followed by some overreaction that is corrected subsequently. This under-/overreaction pattern, however, is observed mostly during the first half of our time series, pointing to learning effects. Relaxation of the lockdown restrictions, on the other hand, had a positive effect on markets only during the second half of our sample, while for the first half of the sample, the effect is negative.

Does innovation co-move with FDI? Evidence from OECD countries

In this study, the panel co-integration test combined with structural breaks was used to explore the long-term co-movement between FDI and patent and trademark applications, in accordance with 33 OECD countries from 1999 to 2018. The robust results demonstrate that both innovation variables including patent and trademark co-move with FDI in the OECD sample. Furthermore, this long-term co-movement of FDI and innovation experiences some structural breaks during the period 2003-2010. Finally, there is a long-term co-movement between FDI inflows and innovation activity in OECD countries.

The nexus between economic institutions and unemployment: evidence from sub-Saharan Africa

PurposeThis paper aims to investigate the nexus between economic institutions (EI) and unemployment in sub-Saharan African (SSA) countries. Specifically, the paper examines the impact of aggregate EI and ten different components of institutions on total, male and female unemployment in SSA.Design/methodology/approachThe paper used unbalanced panel data of 37 SSA countries covering the period between 1995 and 2018. A dynamic heterogenous panel data model is specified for the study. Two alternative estimation techniques of dynamic fixed effect and pool mean group methods were used to estimate the models. The choice of appropriate method is based on Hausman specification test.FindingsThe findings reveal that aggregate EI and institutions related to the monetary system, trade flows, government spending and fiscal process significantly lead to less unemployment in the long-run. However, there is no evidence of a significant relationship between EI and unemployment in the short-run. These findings are consistent for total, male and female unemployment, respectively.Practical implicationsTo reduce unemployment significantly in the long run, policymakers in SSA need to build more market-friendly institutions that will incentivize private investment, allow free movement of labour and goods, as well as guarantee a stable macroeconomic environment and efficient fiscal system.Originality/valueMost of the existing studies focused on the influence of labour market institutions on unemployment ignoring the effects of other forms of institutions. While available studies on the link between institutions and unemployment used either OECD or other developed countries sample, with scanty evidence from Africa. However, the effects of EI could vary across regions. Thus, generalizing the findings from developed countries for SSA countries and other developing countries may be misleading. Hence, this paper contributes to the existing literature by examining the nexus between different types of EI and unemployment using the SSA sample.

Freedom of the press, inequality and environmental policy

AbstractThis paper contributes to the literature on the determinants of environmental standards by studying the role of income inequality and freedom of the press. Given that evidence of the environmental Kuznets curve has only been found for some countries, it is thus crucial to investigate whether other factors besides income per capita levels may be affecting countries' decisions to pass environmentally-friendly legislation. We investigate the effects that inequality and freedom of the press have on environmental stringency for a sample of OECD and BRIICS countries and a global sample of 82 countries using data over the period 1994–2015. We hypothesize that the more unequal a society is, and the greater the oppression of the press is, the less stringent environmental policies are. The results partially confirm our hypothesis. In particular, lack of press freedom is negatively correlated with environmental stringency, whereas inequality shows a non-linear effect only for non-high-income countries.

The Impact of Government Borrowing Costs on Fiscal Discipline

SummaryThis paper studies the impact of government borrowing costs on fiscal discipline against the background of unprecedentedly low interest rates in advanced economies brought about by ultra‐expansionary monetary policies of recent years. Applying the panel data econometric approach for a sample of OECD and 11 early euro area countries over the period 1985–2015, the study suggests a positive and statistically significant impact of government borrowing costs on cyclically adjusted primary balances, indicating that a decrease in borrowing costs leads to a deterioration of fiscal policy stance. The findings herein also suggest that this effect in the euro area seems to be driven by a group of its peripheral rather than core countries and appears to work through the expenditure (more specifically, current expenditure) channel. From the economic policy perspective, these findings imply that monetary policy measures resulting in ultra‐low interest rates may cause negative side effects for fiscal discipline.

Bankruptcy and cross-country differences in productivity

For a sample of OECD countries, I document a systematic positive relationship between (i) aggregate productivity, (ii) the employment share by large firms and (iii) the proportion of large firms in the economy. I propose that differences in bankruptcy procedures can explain this relationship. In a model of financial intermediation and informational frictions, I show that as bankruptcy procedures worsen—measured by the amount a lender can recover from bankrupt borrowers—lenders respond by (i) shifting their portfolio of loans to smaller (less productive) firms and (ii) lending less. This finding is supported by empirical evidence: across countries, efficient bankruptcy procedures are associated with a higher proportion of new bank loans allocated to large firms. In the model, moving the level of recovery rate from the U.S. level to that of the lowest recovery rate country in the OECD sample reduces TFP by around 30 percent.

Tax Havens, Tax Evasion and Tax Information Exchange Agreements in the OECD

AbstractUsing data on Foreign Portfolio Investment (FPI), we find a positive relationship between higher tax burden and OECD residents’ tax evasion, especially via tax havens. Contrary to established investor preference for certain country characteristics, we find they are less important to tax evaders who value privacy and want to remain undetected by their home tax authorities. We find very limited evidence that OECD Tax Information Exchange Agreements (TIEAS) reduce tax evasion, controlling for other determinants of overall OECD FPI. Without the US in the OECD sample, tax havens play a lesser role and OECD policies appear to make a marginal impact.

The Evasive Predictive Ability of Core Inflation

We explore the ability of traditional core inflation – consumer prices excluding food and energy – to predict headline CPI annual inflation. We analyze a sample of OECD and non-OECD economies using monthly data from January 1994 to March 2015. Our results indicate that sizable predictability emerges for a small subset of countries. For the rest of our economies predictability is either subtle or undetectable. These results hold true even when implementing an out-of-sample test of Granger causality especially designed to compare forecasts from nested models. Our findings partially challenge the common wisdom about the ability of core inflation to forecast headline inflation, and suggest a careful weighting of the traditional exclusion of food and energy prices when assessing the size of the monetary stimulus.

How Does Fiscal Policy Affect Investment? Evidence from a Large Panel

AbstractWe assess the relevance of fiscal components for private and public investment using data for a large panel of 95 countries for the period 1970–2008. Accounting for the usual econometric pitfalls, our results suggest a negative effect of government expenditure and of government consumption spending on private investment. Interest payments and subsidies have a negative effect on both types of investment (particularly in emerging economies). Social security spending has a negative effect on private investment for the full and OECD samples, whereas government health spending has a positive and significant impact on private investment. Moreover, stronger fiscal numerical rules decrease public investment. Copyright © 2015 John Wiley & Sons, Ltd.

The Changing Effect of Economic Development on the Consumption-Based Carbon Intensity of Well-Being, 1990–2008

Recent sustainability science research focuses on tradeoffs between human well-being and stress placed on the environment from fossil fuel consumption, a relationship known as the carbon intensity of well-being (CIWB). In this study we assess how the effect of economic development on consumption-based CIWB—a ratio of consumption-based carbon dioxide emissions to average life expectancy—changed from 1990 to 2008 for 69 nations throughout the world. We examine the effect of development on consumption-based CIWB for the overall sample as well as for smaller samples restricted to mostly high-income OECD nations, Non-OECD nations, and more nuanced regional samples of Non-OECD nations in Africa, Asia, and Latin America. We find that the effect of economic development on CIWB increased through time for the overall sample. However, analyses of the Non-OECD and OECD samples indicate that while the effect of development on CIWB increased from null to a moderate level for the Non-OECD nations, the effect of economic development was much larger, relatively stable through time, and more unsustainable for the OECD nations. Additional findings reveal important regional differences for Non-OECD nations. In the early 1990s, increased development led to a reduction in CIWB for Non-OECD nations in Africa, but in more recent years the relationship changed, becoming less sustainable. For the samples of Non-OECD nations in Asia and Latin America, we find that economic development increased consumption-based CIWB, and increasingly so throughout the 19 year period of study.

Do natural disasters increase the likelihood that a government is replaced?

We examine the impact of natural disasters on the likelihood that a government is removed from office using panel data for 156 countries over the period 1975–2010. Employing a conditional logit model, we find that the occurrence of natural disasters, the number of natural disasters and disaster-related losses increase the chances that a government will be replaced. The magnitudes of these effects differ widely across natural disaster types, but are robust to the inclusion of economic and political variables and to model specifications. Overall, these findings are consistent across our sample of OECD and non-OECD countries.

Another Look at the Comparisons of the Health Systems Expenditure Indicators

For policy purposes expenditure in health systems of extremely different natures are often compared without having a clear question to be addressed in such a comparison. For instance, comparisons made among OECD countries which have differing levels of development, and/or where the fusion of public and private finance differ; along with their sources of revenue, their finance levels and their degree of taxes and co-payments. Our objective in this paper is to analyze the factors that complicate international comparisons of health care expenditure across countries. We comment on some of these issues and shows how results and the interpretation of the gaps differ according to the refinements we make to the sampling and sub-sampling, as well as the definition of the variables we adopt. We considered as dependent variables total and health care expenditure per capita and as a percentage of GDP with and without out-of-pocket payments. We analyse the (complete) OECD sample for the period 2000–2010, as well as three sub-samples (European Union, countries with the Bismark model and countries with the Beveridge model). After calculating the means of the dependent variables, both without weights and weighting by GDP and population, we specified two different panel data models to explain the variation in the dependent variables, including as explanatory variables those that are most likely to affect health expenditure. Although other countries are mentioned in this paper, we take Spain as our example. We show how the results and the consequent interpretations of the gaps can differ according to the refinements we introduce into the sample and sub-samples; akin to the adjustments we are willing to make to the definition of the variables we choose to adopt. We show how Spanish ratios, as example, are generally well above those expected. In conclusion, there is a need for a better understanding of the settings of any comparison, along with a more appropriate sub sampling of the systems being analyzed in order to align any demand to the financial capabilities of the health care sector.

Effects of Public Policy on Fixed and Mobile Broadband Infrastructure Quality

With the rapid diffusion of mobile and fixed access platforms, access to broadband services has become widely available in high and medium-income countries. While overcoming gaps in broadband access remains an important and pressing policy issue, the realization of the benefits of advanced information and communication services is increasingly dependent on the quality of the available connectivity. In spite of this increasing importance of quality attributes, such as download and upload speeds, most theoretical and empirical studies of broadband availability have thus far focused on adoption. Only a handful of recent papers have sought to address the factors influencing broadband infrastructure quality. This paper examines the factors that influence the quality of fixed and mobile broadband access. Drawing on institutional economics, the study provides an integrated conceptual framework that allows analyzing the interaction of supply, demand, policy, and contextual factors. This approach allows differentiated insights into the effects of policy choices and their interactions with other factors. Policy instruments that are examined in detail include forms of unbundling and open access, the creation of competitive conditions, and the importance of public-private partnerships. For wireless broadband, we also control for aspects of spectrum policy and management. As is known from policy research, it is often a specific combination of policy choices that affects outcomes rather than any single measure. Prior empirical research suggests that the implementation of a consistent combination of policy choices matters greatly. To address this unique interaction of policy arrangements with outcomes, we pursue a dual approach using empirical methods that allow complementary insights. The application of panel methods allows the examination of sufficient conditions and of effect sizes of drivers of broadband quality. A second method, Qualitative Comparative Analysis (QCA), pioneered by sociologists and political scientists, allows the systematic exploration of interdependencies among these drivers. This quantitative method is better suited than traditional econometric models to explore the interactions between policy choices and the quality of broadband access. QCA allows a systematic examination of the necessary and/or sufficient conditions that influence broadband quality. Because the method is based in principles of set theory, it allows a flexible analysis of not only single policy instruments but also of their interaction with other policy and external conditions. We explore the drivers of both fixed and mobile broadband quality and potential interdependencies between the developments of them. Using Ookla and Akamai data of download speeds that are actually realized over the network infrastructure for a cross-national sample of OECD and medium-income countries, we focus on the role of public policy decisions as a determinant of quality and quality upgrades of access networks. We find that the most important factor with a positive effect on quality and quality improvements is competition. We also find evidence that regulatory interventions such as unbundling or open access provision do have a positive contribution in markets with limited competition. However, the findings also provide evidence that the best policy approach is dependent on the specific context of a country so that no single best practice model emerges from the observations. This paper builds on and significantly expands earlier work, some of which was presented at conferences before (but has not yet been published). A first model of the determinants of fixed broadband quality was presented at the European Regional Conference of the International Telecommunications Society in Florence (October 2013) and a preliminary discussion of QCA with a more limited sample, also focusing on fixed broadband, will be presented at the CPR LATAM conference in Bogota (May 2014). Compared to these earlier versions, the present paper expands the number of countries and adds mobile broadband as well as the interdependencies between fixed and mobile to the analysis.The paper contains methodological, theoretical, and practical contributions. Theoretically, it provides a more comprehensive analysis of the factors that shape broadband speeds. Methodologically, it applies a dual empirical approach to communications policy issues. Because that approach allows exploring the levers available to policy-makers more fully than econometric analyses alone, the paper also contains directly applicable practical lessons for policy-makers.

Energy Efficiency with Undesirable Output at the Economy-Wide Level: Cross Country Comparison in OECD Sample

Measuring the environmental efficiency of countries is important in the climate change process. The aim of this paper is to measure the energy efficiency of OECD countries with undesirable output. For this purpose, the Bad Output index (non-radial and non-oriented, CRS) developed by Tone (2001) is used in order to obtain the efficiency scores for the period 1995-2009. In this paper, I focus on the production process where labour, capital stock (mostly omitted in such papers), and energy consumption are inputs, GDP is a desirable output and CO2 emission is an undesirable output. To see the energy inefficiencies separately, if there are any, energy input is considered as three separate variables in the model. For this purpose, oil and natural gas consumption are incorporated as one input. Hydropower and nuclear are incorporated as another input. Coal is the third input. An important contribution of this paper is to use various proxy variables for the capital stock. Determining the reasons of these inefficiencies is important for these countries. But modelling the factors behind these inefficiencies is the subject of another paper.

Fiscal sustainability using growth-maximizing debt targets

This article highlights the importance of debt-related fiscal rules and derives growth-maximizing public debt ratios from a simple theoretical model. On the basis of evidence on the productivity of public capital, we estimate public debt targets that governments should maintain if they wish to maximize growth for panels of OECD, EU and euro area countries. These are not arbitrary numbers, but are founded on long-run optimizing behaviour assuming that governments implement the golden rule of financing; that is, they contract debt only to finance public investment. Our estimates suggest that the euro area should target debt levels of around 50% of GDP if member states are to have common targets. That is about 15% points lower than the estimate for the growth-maximizing debt ratio in our OECD sample and comfortably within the Stability and Growth Pact’s debt ceiling of 60% of GDP. We also indicate how forward-looking budget reaction functions fit into a debt targeting framework.

Capitalism and labor shares: A cross-country panel study

We examine the empirical relationship between the institutions of economic freedom and labor shares in a panel of up to 93 countries covering 1970 through 2009. We find that a standard deviation increase in the Fraser Institute's Economic Freedom of the World (EFW) score is associated with about a 1/3 standard deviation increase in a country's labor share. Starting from the sample mean labor share in our panel, this amounts to about 4.26percentage points. This relationship is robust to considering OECD and non-OECD samples separately. It is also (both qualitatively and quantitatively) robust to controlling for differences in human capital levels, labor productivity, trade union density, and international economic flows. Breaking the EFW into its individual component areas, the regulation of credit, business and labor appears to be the most important source of the positive EFW–labor share relationship.

Comparative advantage, service trade, and global imbalances

The large current account deficit of the U.S. is the result of a large deficit in the goods balance and a modest surplus in the service balance. The opposite is true for Japan, Germany, and China. Moreover, I document the emergence from the mid-nineties of a strong negative relation between specialization in the export of services and the current account balances of a large sample of OECD and developing countries. Starting from these new stylized facts, I propose in this paper a service hypothesis for global imbalances, a new explanation based on the interplay between the U.S. comparative advantage in services and the asymmetric trade liberalization process in goods trade versus service trade that took place starting in the mid-nineties. First, I use a structural gravity model to show that service trade liberalization lagged behind goods trade liberalization, and I quantify the extent of this asymmetry. Second, I show that a simple two-period model can rationalize the emergence of current account deficits in the presence of such asymmetric liberalization. The key inter-temporal mechanism is the asymmetric timing of trade policies, which affects saving decisions. Finally, I explore the quantitative relevance of this explanation for global imbalances. I introduce trade costs in an otherwise standard 2-sector 2-country international real business cycle model. When fed with the asymmetric trade liberalization path found in the data, the model generates a trade deficit of about 5% of GDP. I conclude that the service hypothesis for global imbalances is quantitatively relevant.

Some comments on Antonelli and Quatraro’s paper of measuring effect of biased technology on TFP

The paper is a response to Antonelli and Quatraro’s paper named “The effects of biased technological change on total factor productivity: empirical evidence from a sample of OECD”. We point out that “so-called novel method” which is used to identify and disentangle the effects of the direction of technological change on total factor productivity (TFP) in the article is wrongly implemented. Antonelli and Quatraro introduce Solow’s methodology as part of his basic model to represent the effect of neutral technical change, ignoring the intrinsic consequence of Solow’s calculating which called technical progress productivity is far from neutral. Hence, his methodology has little significance, neither the empirical analysis. Lastly, we give a new method measuring whether the technology is appropriate to the factor endowments’ changing. That’s the effect of biased technology on TFP.