We propose a new method to test for the existence of the bandwagon effect, the notion that voters... more We propose a new method to test for the existence of the bandwagon effect, the notion that voters are more likely to vote for a given candidate if they expect the candidate to win. Two-round election systems with a large number of single-member districts offer an ideal testing ground because results from the first round provide a better benchmark for voter expectations than any possible alternative measure. Using data from the 2002 and 2006 general elections in Hungary, we find that the lead of a candidate in the first round is magnified by about 10 percent in the second round, controlling for country-wide swings of the electorate between the two rounds and for the behavior of voters of smaller parties. A separate exercise suggests that at least part of the effect is caused by the lower probability of individuals voting in the second round if their preferred candidate is likely to lose by a large margin.
This paper analyses some macroeconomic implications of the statutory minimum wage in the member s... more This paper analyses some macroeconomic implications of the statutory minimum wage in the member states of the European Union and assesses how its institutional design influences these outcomes. First, the paper looks at the institutional dimensions of statutory minimum wage setting. On the basis of this information, an indicator of institutional stringency is built to characterise the degree of predictability of minimum wage setting. Second, it explores the impact of minimum wage changes on employment, prices, consumption, and poverty.
Is Unemployment Structural or Cyclical? Main Features of Job Matching in the EU after the Crisis ... more Is Unemployment Structural or Cyclical? Main Features of Job Matching in the EU after the Crisis * The paper sheds light on developments in labour market matching in the EU after the crisis. First, it analyses the main features of the Beveridge curve and frictional unemployment in EU countries, with a view to isolate temporary changes in the vacancy-unemployment relationship from structural shifts affecting the efficiency of labour market matching. Second, it explores the main drivers of job matching efficiency, notably with a view to gauge whether mismatches became more serious across skills, economic sectors, or geographical locations and to explore the role of the policy setting. It emerges that labour market matching deteriorated after the crisis, but with a great deal of heterogeneity across EU countries. Divergence across countries increased. Matching deteriorated most in countries most affected by current account reversals and the debt crisis. The lengthening of unemployment spells appears to be a significant driver of matching efficiency especially after the crisis, while skill and sectoral mismatches also played a role. Active labour market policies are associated with a higher matching efficiency and some support is found to the hypothesis that more generous unemployment benefits reduce matching efficiency.
This paper explores how European integration, economic fluctuations, and the interactions of thes... more This paper explores how European integration, economic fluctuations, and the interactions of these factors affect bilateral migration flows. It focuses on how migration flows developed in the wake of the establishment of the European Monetary Union, and whether migration flows became stronger, and more responsive to economic fluctuations, in the euro area. It estimates a gravity equation of bilateral gross migration flows on a global sample and on a sample restricted to the first 12 members of the euro area. It is found that unemployment is a strong and robust determinant of bilateral migration flows both globally and in the euro area. EU accession and the lifting of labour market restrictions on new member states had a large effect on gross migration flows. While mutual euro area membership is not associated with an overall rise in migration, it is associated with increased flows from countries where unemployment is high to those where it is lower. Migration flows among the euro-area 12 have been on an increasing trend since the late 1990s; after falls in 2009 they picked up again in 2010 and 2011. The evidence overall suggests that labour mobility plays an increasing role in the adjustment to asymmetric shocks in the EU and the euro area.
This paper analyses the factors explaining moderate wage growth in the EU in the post-crisis peri... more This paper analyses the factors explaining moderate wage growth in the EU in the post-crisis period. It investigates whether the historical relationship between wages and unemployment has weakened and whether composition effects moderated wage growth. The results suggest a negative answer to both questions. Wages in the EU have not stopped reacting to unemployment developments after the 2008 crisis. Wage growth was moderate because of low inflation, low trend productivity growth, and high unemployment. There are only a few Member States with a significant 'shortfall' in wage growth, including both low and high-unemployment countries. Migration, ageing and collective bargaining institutions appear to have mostly transitory effects on wage growth. During the last decade, changes in the composition of the workforce had a small but positive impact on wage growth in most of the EU, especially due to increasing average age and education level. In some Member States such as Germany...
Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.
This paper assesses macroeconomic determinants of labour mobility and its role in the adjustment ... more This paper assesses macroeconomic determinants of labour mobility and its role in the adjustment to asymmetric shocks. First, the paper develops stylised facts of mobility at the national and sub-national levels in the EU. Then, it explores the macroeconomic determinants of bilateral migration flows. Econometric evidence suggests that labour mobility increases significantly when a country joins the EU. While euro area membership seems not to be associated with an overall rise in the magnitude of mobility flows, workers do appear more ready to move from countries where unemployment is high to those where it is lower. Thirdly, the paper looks at mobility as a channel of economic adjustment by means of a VAR analysis in the vein of . Results indicate that mobility absorbs about a quarter of an asymmetric shock within 1 year. Movements in response to shocks have almost doubled since the introduction of the euro. Real wages have also become more responsive to asymmetric shocks during the same period.
A szakirodalom áttekintésével bemutatjuk az adósságleépítés (mérlegalkalmazkodás) jelenségét és g... more A szakirodalom áttekintésével bemutatjuk az adósságleépítés (mérlegalkalmazkodás) jelenségét és gazdaságpolitikai következményeit. A jelenség nagy figyelmet
kapott az utóbbi években, mivel magyarázatot ad arra, miért mélyebb ez a mostani
(az angol nyelvű szakirodalomban nagy recessziónak nevezett) válság, mint a szokványos ciklikus visszaesések. Először azt az állítást vizsgáljuk, hogy a pénzügyi válságokat követő recessziók mélyebbek és elhúzódóbbak, mint a többi. Ezután leírjuk, hogyan alakul a pénzügyi válságokat követő adósságleépítés a háztartások, a
pénzügyi és más vállalatok, valamint az állam esetében. Végül azt vitatjuk meg,
hogyan korlátozzák ezek a folyamatok az állam által bevethető gazdaságpolitikai
eszközöket a válságkezelés során. A válság egyik fontos tanulsága, hogy a fejlett és
feltörekvő országokat ugyanazok a globális folyamatok teljesen eltérő gazdaságpolitikai kihívások elé állították.
Labour market developments have been improving against the background of a gradual economic recov... more Labour market developments have been improving against the background of a gradual economic recovery in the EU. Unemployment in the EU has continued to fall and job finding rates have modestly improved. However, despite its recent fall, unemployment remains high. According to the findings of the new 2015 Labour Market and Wage Developments in Europe report, job creation was significant in 2014 considering the weak pace of recovery. After five years of almost continuous decline, in 2014 employment expanded at an annual rate of 1%. This unusually swift response of unemployment has been supported inter alia by supportive labour cost developments.
This paper analyses the main features and determinants of labour market reforms in the EU over th... more This paper analyses the main features and determinants of labour market reforms in the EU over the period of 2000–2011 using the European Commission LABREF database. The data suggests that the timing, focus, and geographical distribution of reforms reflect the interplay between economic shocks and existing institutions. The 2008 crisis was followed by increased policy activity in most policy domains in a large number of EU countries, initially to cushion the impact of the crisis on employment and incomes, subsequently to improve the adjustment capacity of labour markets. Regression analysis indicates that reform activism is stronger in countries with lower GDP per capita and long-standing EU membership, under critical economic and labour market conditions, and where political costs are low. The direction of reforms is affected by economic and labour market conditions, available fiscal space, and by initial policy settings.
Cet article estime l'effet de l'impôt sur les revenus et des transferts sociaux sur l'offre de tr... more Cet article estime l'effet de l'impôt sur les revenus et des transferts sociaux sur l'offre de travail à la marge extensive, i.e. la participation au marché du travail. Nous étendons les méthodes structurelles existantes en tenant compte simultanément de l'effet des impôts et des transferts. Les revenus non salariaux incluent le montant (hypothétique) des transferts que l'individu receverait sans travailler. Quant au salaire, il est remplacé par la différence entre le montant du salaire net et le montant des transferts perdus en devenant salarié ("gains to work", GTW ) . Afin d'intégrer ces composantes dans la contrainte budgétaire, nous avons recours à un modèle impôts-prestations détaillé. En utilisant les données de l'enquête sur le budget des ménages hongrois (HKF), nous trouvons que la probabilité de participation est fortement influencée par les transferts et le GTW, en particulier pour les individus peu qualifiés et les personnes âgées. De plus, le même changement dans le salaire net conduit à un changement beaucoup plus important dans le GTW pour les bas salaires, ce qui les rend encore plus sensibles aux impôts. Dans l'ensemble, nous constatons qu'une seule équation peut expliquer la grande partie de l'hétérogénéité des individus en termes de sensibilité aux impôts et aux transferts. Nos estimations paramétriques peuvent être aisément utilisées pour étudier les effets des réformes du système d'imposition et des transferts sur le bien-être et le comportement des individus.
The paper studies how high-income taxpayers responded to the introduction of the “extraordinary t... more The paper studies how high-income taxpayers responded to the introduction of the “extraordinary tax on individuals” in Hungary in 2007. The study is based on a panel of tax returns containing information on 10 % of tax filers from 2005 and three subsequent years. We estimate the elasticity of taxable income with respect to the marginal net-of-tax rate and find that the taxable income of Hungarian high earners is moderately responsive to taxation: the estimated elasticity is about 0.24. We also find evidence for a sizeable income effect. The estimated effect is not caused by income shifting.
The paper applies recent developments in the theory of optimal income taxation to the Hungarian p... more The paper applies recent developments in the theory of optimal income taxation to the Hungarian personal income tax system. The main conclusion is that the optimal top marginal tax rate in Hungary is likely to be higher, perhaps substantially, than the actual rate. It is discussed how this result depends on the parameters describing labor-supply behavior, the income distribution, and the redistributive preferences of society.
We propose a new method to test for the existence of the bandwagon effect, the notion that voters... more We propose a new method to test for the existence of the bandwagon effect, the notion that voters are more likely to vote for a given candidate if they expect the candidate to win. Two-round election systems with a large number of single-member districts offer an ideal testing ground because results from the first round provide a better benchmark for voter expectations than any possible alternative measure. Using data from the 2002 and 2006 general elections in Hungary, we find that the lead of a candidate in the first round is magnified by about 10 percent in the second round, controlling for country-wide swings of the electorate between the two rounds and for the behavior of voters of smaller parties. A separate exercise suggests that at least part of the effect is caused by the lower probability of individuals voting in the second round if their preferred candidate is likely to lose by a large margin.
We propose a new method to test for the existence of the bandwagon effect, the notion that voters... more We propose a new method to test for the existence of the bandwagon effect, the notion that voters are more likely to vote for a given candidate if they expect the candidate to win. Two-round election systems with a large number of single-member districts offer an ideal testing ground because results from the first round provide a better benchmark for voter expectations than any possible alternative measure. Using data from the 2002 and 2006 general elections in Hungary, we find that the lead of a candidate in the first round is magnified by about 10 percent in the second round, controlling for country-wide swings of the electorate between the two rounds and for the behavior of voters of smaller parties. A separate exercise suggests that at least part of the effect is caused by the lower probability of individuals voting in the second round if their preferred candidate is likely to lose by a large margin.
This paper analyses some macroeconomic implications of the statutory minimum wage in the member s... more This paper analyses some macroeconomic implications of the statutory minimum wage in the member states of the European Union and assesses how its institutional design influences these outcomes. First, the paper looks at the institutional dimensions of statutory minimum wage setting. On the basis of this information, an indicator of institutional stringency is built to characterise the degree of predictability of minimum wage setting. Second, it explores the impact of minimum wage changes on employment, prices, consumption, and poverty.
Is Unemployment Structural or Cyclical? Main Features of Job Matching in the EU after the Crisis ... more Is Unemployment Structural or Cyclical? Main Features of Job Matching in the EU after the Crisis * The paper sheds light on developments in labour market matching in the EU after the crisis. First, it analyses the main features of the Beveridge curve and frictional unemployment in EU countries, with a view to isolate temporary changes in the vacancy-unemployment relationship from structural shifts affecting the efficiency of labour market matching. Second, it explores the main drivers of job matching efficiency, notably with a view to gauge whether mismatches became more serious across skills, economic sectors, or geographical locations and to explore the role of the policy setting. It emerges that labour market matching deteriorated after the crisis, but with a great deal of heterogeneity across EU countries. Divergence across countries increased. Matching deteriorated most in countries most affected by current account reversals and the debt crisis. The lengthening of unemployment spells appears to be a significant driver of matching efficiency especially after the crisis, while skill and sectoral mismatches also played a role. Active labour market policies are associated with a higher matching efficiency and some support is found to the hypothesis that more generous unemployment benefits reduce matching efficiency.
This paper explores how European integration, economic fluctuations, and the interactions of thes... more This paper explores how European integration, economic fluctuations, and the interactions of these factors affect bilateral migration flows. It focuses on how migration flows developed in the wake of the establishment of the European Monetary Union, and whether migration flows became stronger, and more responsive to economic fluctuations, in the euro area. It estimates a gravity equation of bilateral gross migration flows on a global sample and on a sample restricted to the first 12 members of the euro area. It is found that unemployment is a strong and robust determinant of bilateral migration flows both globally and in the euro area. EU accession and the lifting of labour market restrictions on new member states had a large effect on gross migration flows. While mutual euro area membership is not associated with an overall rise in migration, it is associated with increased flows from countries where unemployment is high to those where it is lower. Migration flows among the euro-area 12 have been on an increasing trend since the late 1990s; after falls in 2009 they picked up again in 2010 and 2011. The evidence overall suggests that labour mobility plays an increasing role in the adjustment to asymmetric shocks in the EU and the euro area.
This paper analyses the factors explaining moderate wage growth in the EU in the post-crisis peri... more This paper analyses the factors explaining moderate wage growth in the EU in the post-crisis period. It investigates whether the historical relationship between wages and unemployment has weakened and whether composition effects moderated wage growth. The results suggest a negative answer to both questions. Wages in the EU have not stopped reacting to unemployment developments after the 2008 crisis. Wage growth was moderate because of low inflation, low trend productivity growth, and high unemployment. There are only a few Member States with a significant 'shortfall' in wage growth, including both low and high-unemployment countries. Migration, ageing and collective bargaining institutions appear to have mostly transitory effects on wage growth. During the last decade, changes in the composition of the workforce had a small but positive impact on wage growth in most of the EU, especially due to increasing average age and education level. In some Member States such as Germany...
Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.
This paper assesses macroeconomic determinants of labour mobility and its role in the adjustment ... more This paper assesses macroeconomic determinants of labour mobility and its role in the adjustment to asymmetric shocks. First, the paper develops stylised facts of mobility at the national and sub-national levels in the EU. Then, it explores the macroeconomic determinants of bilateral migration flows. Econometric evidence suggests that labour mobility increases significantly when a country joins the EU. While euro area membership seems not to be associated with an overall rise in the magnitude of mobility flows, workers do appear more ready to move from countries where unemployment is high to those where it is lower. Thirdly, the paper looks at mobility as a channel of economic adjustment by means of a VAR analysis in the vein of . Results indicate that mobility absorbs about a quarter of an asymmetric shock within 1 year. Movements in response to shocks have almost doubled since the introduction of the euro. Real wages have also become more responsive to asymmetric shocks during the same period.
A szakirodalom áttekintésével bemutatjuk az adósságleépítés (mérlegalkalmazkodás) jelenségét és g... more A szakirodalom áttekintésével bemutatjuk az adósságleépítés (mérlegalkalmazkodás) jelenségét és gazdaságpolitikai következményeit. A jelenség nagy figyelmet
kapott az utóbbi években, mivel magyarázatot ad arra, miért mélyebb ez a mostani
(az angol nyelvű szakirodalomban nagy recessziónak nevezett) válság, mint a szokványos ciklikus visszaesések. Először azt az állítást vizsgáljuk, hogy a pénzügyi válságokat követő recessziók mélyebbek és elhúzódóbbak, mint a többi. Ezután leírjuk, hogyan alakul a pénzügyi válságokat követő adósságleépítés a háztartások, a
pénzügyi és más vállalatok, valamint az állam esetében. Végül azt vitatjuk meg,
hogyan korlátozzák ezek a folyamatok az állam által bevethető gazdaságpolitikai
eszközöket a válságkezelés során. A válság egyik fontos tanulsága, hogy a fejlett és
feltörekvő országokat ugyanazok a globális folyamatok teljesen eltérő gazdaságpolitikai kihívások elé állították.
Labour market developments have been improving against the background of a gradual economic recov... more Labour market developments have been improving against the background of a gradual economic recovery in the EU. Unemployment in the EU has continued to fall and job finding rates have modestly improved. However, despite its recent fall, unemployment remains high. According to the findings of the new 2015 Labour Market and Wage Developments in Europe report, job creation was significant in 2014 considering the weak pace of recovery. After five years of almost continuous decline, in 2014 employment expanded at an annual rate of 1%. This unusually swift response of unemployment has been supported inter alia by supportive labour cost developments.
This paper analyses the main features and determinants of labour market reforms in the EU over th... more This paper analyses the main features and determinants of labour market reforms in the EU over the period of 2000–2011 using the European Commission LABREF database. The data suggests that the timing, focus, and geographical distribution of reforms reflect the interplay between economic shocks and existing institutions. The 2008 crisis was followed by increased policy activity in most policy domains in a large number of EU countries, initially to cushion the impact of the crisis on employment and incomes, subsequently to improve the adjustment capacity of labour markets. Regression analysis indicates that reform activism is stronger in countries with lower GDP per capita and long-standing EU membership, under critical economic and labour market conditions, and where political costs are low. The direction of reforms is affected by economic and labour market conditions, available fiscal space, and by initial policy settings.
Cet article estime l'effet de l'impôt sur les revenus et des transferts sociaux sur l'offre de tr... more Cet article estime l'effet de l'impôt sur les revenus et des transferts sociaux sur l'offre de travail à la marge extensive, i.e. la participation au marché du travail. Nous étendons les méthodes structurelles existantes en tenant compte simultanément de l'effet des impôts et des transferts. Les revenus non salariaux incluent le montant (hypothétique) des transferts que l'individu receverait sans travailler. Quant au salaire, il est remplacé par la différence entre le montant du salaire net et le montant des transferts perdus en devenant salarié ("gains to work", GTW ) . Afin d'intégrer ces composantes dans la contrainte budgétaire, nous avons recours à un modèle impôts-prestations détaillé. En utilisant les données de l'enquête sur le budget des ménages hongrois (HKF), nous trouvons que la probabilité de participation est fortement influencée par les transferts et le GTW, en particulier pour les individus peu qualifiés et les personnes âgées. De plus, le même changement dans le salaire net conduit à un changement beaucoup plus important dans le GTW pour les bas salaires, ce qui les rend encore plus sensibles aux impôts. Dans l'ensemble, nous constatons qu'une seule équation peut expliquer la grande partie de l'hétérogénéité des individus en termes de sensibilité aux impôts et aux transferts. Nos estimations paramétriques peuvent être aisément utilisées pour étudier les effets des réformes du système d'imposition et des transferts sur le bien-être et le comportement des individus.
The paper studies how high-income taxpayers responded to the introduction of the “extraordinary t... more The paper studies how high-income taxpayers responded to the introduction of the “extraordinary tax on individuals” in Hungary in 2007. The study is based on a panel of tax returns containing information on 10 % of tax filers from 2005 and three subsequent years. We estimate the elasticity of taxable income with respect to the marginal net-of-tax rate and find that the taxable income of Hungarian high earners is moderately responsive to taxation: the estimated elasticity is about 0.24. We also find evidence for a sizeable income effect. The estimated effect is not caused by income shifting.
The paper applies recent developments in the theory of optimal income taxation to the Hungarian p... more The paper applies recent developments in the theory of optimal income taxation to the Hungarian personal income tax system. The main conclusion is that the optimal top marginal tax rate in Hungary is likely to be higher, perhaps substantially, than the actual rate. It is discussed how this result depends on the parameters describing labor-supply behavior, the income distribution, and the redistributive preferences of society.
We propose a new method to test for the existence of the bandwagon effect, the notion that voters... more We propose a new method to test for the existence of the bandwagon effect, the notion that voters are more likely to vote for a given candidate if they expect the candidate to win. Two-round election systems with a large number of single-member districts offer an ideal testing ground because results from the first round provide a better benchmark for voter expectations than any possible alternative measure. Using data from the 2002 and 2006 general elections in Hungary, we find that the lead of a candidate in the first round is magnified by about 10 percent in the second round, controlling for country-wide swings of the electorate between the two rounds and for the behavior of voters of smaller parties. A separate exercise suggests that at least part of the effect is caused by the lower probability of individuals voting in the second round if their preferred candidate is likely to lose by a large margin.
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Papers by Aron Kiss
kapott az utóbbi években, mivel magyarázatot ad arra, miért mélyebb ez a mostani
(az angol nyelvű szakirodalomban nagy recessziónak nevezett) válság, mint a szokványos ciklikus visszaesések. Először azt az állítást vizsgáljuk, hogy a pénzügyi válságokat követő recessziók mélyebbek és elhúzódóbbak, mint a többi. Ezután leírjuk, hogyan alakul a pénzügyi válságokat követő adósságleépítés a háztartások, a
pénzügyi és más vállalatok, valamint az állam esetében. Végül azt vitatjuk meg,
hogyan korlátozzák ezek a folyamatok az állam által bevethető gazdaságpolitikai
eszközöket a válságkezelés során. A válság egyik fontos tanulsága, hogy a fejlett és
feltörekvő országokat ugyanazok a globális folyamatok teljesen eltérő gazdaságpolitikai kihívások elé állították.
kapott az utóbbi években, mivel magyarázatot ad arra, miért mélyebb ez a mostani
(az angol nyelvű szakirodalomban nagy recessziónak nevezett) válság, mint a szokványos ciklikus visszaesések. Először azt az állítást vizsgáljuk, hogy a pénzügyi válságokat követő recessziók mélyebbek és elhúzódóbbak, mint a többi. Ezután leírjuk, hogyan alakul a pénzügyi válságokat követő adósságleépítés a háztartások, a
pénzügyi és más vállalatok, valamint az állam esetében. Végül azt vitatjuk meg,
hogyan korlátozzák ezek a folyamatok az állam által bevethető gazdaságpolitikai
eszközöket a válságkezelés során. A válság egyik fontos tanulsága, hogy a fejlett és
feltörekvő országokat ugyanazok a globális folyamatok teljesen eltérő gazdaságpolitikai kihívások elé állították.