Theodore Palivos - Academia.edu (original) (raw)
Papers by Theodore Palivos
Oxford Economic Papers-new Series, Aug 20, 2004
The Working Paper Series seeks to disseminate original research in economics and fi nance. All pa... more The Working Paper Series seeks to disseminate original research in economics and fi nance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment. The opinions and analyses in the Working Paper Series are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem. The Banco de España disseminates its main reports and most of its publications via the Internet at the following website: http://www.bde.es. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.
Edward Elgar Publishing eBooks, Oct 27, 2004
4. On the Relationship Between Fertility and Public Education in Different Stages of DevelopmentC... more 4. On the Relationship Between Fertility and Public Education in Different Stages of DevelopmentCarol Lehr and Theodore Palivos 1 INTRODUCTION This ... ae [0, 1], a+ y> 1,(4.2) where Et,//, _, and et denote, respectively, public provision of education services per old person (or ...
RePEc: Research Papers in Economics, Dec 1, 2007
This paper analyzes the welfare effect of illegal immigration on the host country within a dynami... more This paper analyzes the welfare effect of illegal immigration on the host country within a dynamic general equilibrium framework and shows that it is positive for two reasons. First, immigrants are paid less than their marginal product, and second, after an increase in immigration, domestic households find it optimal to increase their holdings of capital. It is also shown that dynamic inefficiency may arise, despite the fact that the model is of the Ramsey type. Nevertheless, the introduction of a minimum wage, which leads to job competition between domestic unskilled workers and immigrants reverses all of the above results.
RePEc: Research Papers in Economics, Apr 16, 2011
We construct an overlapping generations model in which parents vote on the tax rate that determin... more We construct an overlapping generations model in which parents vote on the tax rate that determines publicly provided education and offspring choose their effort in learning activities. The technology governing the accumulation of human capital allows these decisions to be strategic complements. In the presence of coordination failure, indeterminacy and, possibly, growth volatility emerge. This indeterminacy can be eliminated by an institutional mechanism that commits to a minimum level of public education provision. Given that, in the latter case, the economy moves along a uniquely determined balanced growth path, we argue that such structural differences can account for the negative correlation between volatility and growth.
Journal of Economic Behavior & Organization
This research revisits and extends the literature on the interplay between inequality and educati... more This research revisits and extends the literature on the interplay between inequality and education, by accounting for the role of institutions, the latter being a cornerstone of economies and societies. We establish that in the presence of weak tax institutions, the quality of public education is adversely affected by an increase in income inequality. Moreover, the adverse effect of inequality diminishes as the quality of institutions improves, suggesting that for sufficiently high quality of institutions, an increase in inequality would be less harmful for the quality of education. This effect operates via two channels, namely via an effect on the resources allocated to public education and via an effect on the number of individuals participating in the public schooling system.
RePEc: Research Papers in Economics, Mar 1, 1999
The Working Paper Series seeks to disseminate original research in economics and fi nance. All pa... more The Working Paper Series seeks to disseminate original research in economics and fi nance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment. The opinions and analyses in the Working Paper Series are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem. The Banco de España disseminates its main reports and most of its publications via the Internet at the following website: http://www.bde.es. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.
Research Papers in Economics, Dec 1, 2001
To explore the interplays between trade and institutions, we construct a staged development frame... more To explore the interplays between trade and institutions, we construct a staged development framework with multi-period discrete choices to study the colonization of Hong Kong, which served to facilitate the trade of several agricultural and manufactured products, including opium, between Britain and China. Based on the historical data and documents that we collected from limited sources, we design our dynamic trade model to capture several key features of the colonization process and use it to characterize the endogenous transition from the pre-Opium War era, to the post-Opium War era and then to the post-opium trade era, which span the period 1773-1933. We show that while the low opium trading cost and the high warfare cost initially postponed any military action, the high valuation of the total volume of bilateral trade, the rising opium trading cost and the anticipated increase in the demand for opium eventually led the British government to declare the Opium Wars, legalizing op...
This paper analyzes the effect of illegal immigration on the welfare of the host country, within ... more This paper analyzes the effect of illegal immigration on the welfare of the host country, within the Hazari and Sgro (2003) framework (also studied by Moy and Yip 2006). In contrast to these studies, which analyze the phenomenon from a social planner’s point of view, I focus on the competitive equilibrium. I arrive at a different conclusion, where illegal immigration unambiguously raises domestic welfare. I also show that in a competitive economy there can be over-accumulation of capital (dynamic inefficiency), despite the presence of a representative household with infinite horizon. JEL Classification: F2; O4.
We construct an overlapping generations model in which parents vote on the tax rate that determin... more We construct an overlapping generations model in which parents vote on the tax rate that determines publicly provided education and offspring choose their effort in learning activities. The technology governing the accumulation of human capital allows these decisions to be strategic complements. In the presence of coordination failure, indeterminacy and, possibly, growth cycles emerge. In the absence of coordination failure, the economy moves along a uniquely determined balanced growth path. We argue that such structural differences can account for the negative correlation between volatility and growth.
We analyze the impact of immigration on the host country within a search and matching model that ... more We analyze the impact of immigration on the host country within a search and matching model that allows for skill heterogeneity, endogenous skill acquisition, differential search cost between immigrants and natives, capital-skill complementarity and different degree of substitutability between unskilled natives and immigrants. Within such a framework, we find that although immigration raises the overall welfare, it may have distributional effects. Specifically, skilled workers gain in terms of both employment and wages. Unskilled workers, on the other hand, gain in terms of employment but may lose in terms of wages. Nevertheless, in one version of the model, where unskilled workers and immigrants are imperfect substitutes, we find that even the unskilled wage may rise. These results accommodate conflicting empirical findings.
This paper examines the effects of illegal immigration in a neoclassical growth model with two gr... more This paper examines the effects of illegal immigration in a neoclassical growth model with two groups of workers, skilled and unskilled. We show that although illegal immigration is a boon to a country as a whole, there are distributional effects, whose sign is in general ambiguous. This is because all sources of income of both groups are affected and some of these changes tend to move income in opposite directions. Nevertheless, a calibration exercise shows that the wealth distribution is likely to become more unequal as the number of illegal immigrants increases. We confirm most of our calibration results analytically in a small open economy version of the basic model.
Kyrkopoulou and Palivos examine the interaction between the informal sector of the economy and un... more Kyrkopoulou and Palivos examine the interaction between the informal sector of the economy and undocumented immigration. For this purpose, they use a search and matching model with two sectors, a formal and an informal one. Native workers can work in both sectors, whereas undocumented immigrants can work only in the latter. Both native workers and firms choose optimally the sector in which they operate, balancing costs and benefits, for example, taxation versus unemployment benefits and severance payments in the case of workers and taxation and auditing versus subsidies in the case of firms. The effects of three types of policies are analyzed and compared: deterrence, incentive, and immigration policies. Combinations of these are also considered.
Departmental Working Papers, 1996
... and make appropriate adjustments.): Theodore Palivos & Nikos Tsakiris, 2010. "Trade ... more ... and make appropriate adjustments.): Theodore Palivos & Nikos Tsakiris, 2010. "Trade and Tax Reforms ... Macedonia, revised Apr 2010. [Downloadable!] Other versions: Theodore Palivos & Nikos Tsakiris, 2009. "Trade and Tax Reforms ...
We use microeconomic data on wages and individual characteristics across twenty European economie... more We use microeconomic data on wages and individual characteristics across twenty European economies for the period 2004 to 2015, to detect patterns of misallocation arising in these economies based on individuals’ gender, immigrant status, or private versus public sector affiliation. We develop a theoretical model where being relatively isolated, e.g., due to gender, immigrant status, or private sector affiliation, leads to lower wages and talent misallocation. Our empirical results suggest that being a female or immigrant, and working in the private sector, exert a negative impact on one’s wages beyond that explained by their economic characteristics, suggestive of persistent talent misallocation in Europe during the period under study. Notably, countries such as Cyprus, Greece, Italy and Spain are systematically found at the top of the overall talent misallocation index we construct year-after-year for the period under study. Our work provides new cross-country micro-econometric ev...
Oxford Economic Papers-new Series, Aug 20, 2004
The Working Paper Series seeks to disseminate original research in economics and fi nance. All pa... more The Working Paper Series seeks to disseminate original research in economics and fi nance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment. The opinions and analyses in the Working Paper Series are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem. The Banco de España disseminates its main reports and most of its publications via the Internet at the following website: http://www.bde.es. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.
Edward Elgar Publishing eBooks, Oct 27, 2004
4. On the Relationship Between Fertility and Public Education in Different Stages of DevelopmentC... more 4. On the Relationship Between Fertility and Public Education in Different Stages of DevelopmentCarol Lehr and Theodore Palivos 1 INTRODUCTION This ... ae [0, 1], a+ y> 1,(4.2) where Et,//, _, and et denote, respectively, public provision of education services per old person (or ...
RePEc: Research Papers in Economics, Dec 1, 2007
This paper analyzes the welfare effect of illegal immigration on the host country within a dynami... more This paper analyzes the welfare effect of illegal immigration on the host country within a dynamic general equilibrium framework and shows that it is positive for two reasons. First, immigrants are paid less than their marginal product, and second, after an increase in immigration, domestic households find it optimal to increase their holdings of capital. It is also shown that dynamic inefficiency may arise, despite the fact that the model is of the Ramsey type. Nevertheless, the introduction of a minimum wage, which leads to job competition between domestic unskilled workers and immigrants reverses all of the above results.
RePEc: Research Papers in Economics, Apr 16, 2011
We construct an overlapping generations model in which parents vote on the tax rate that determin... more We construct an overlapping generations model in which parents vote on the tax rate that determines publicly provided education and offspring choose their effort in learning activities. The technology governing the accumulation of human capital allows these decisions to be strategic complements. In the presence of coordination failure, indeterminacy and, possibly, growth volatility emerge. This indeterminacy can be eliminated by an institutional mechanism that commits to a minimum level of public education provision. Given that, in the latter case, the economy moves along a uniquely determined balanced growth path, we argue that such structural differences can account for the negative correlation between volatility and growth.
Journal of Economic Behavior & Organization
This research revisits and extends the literature on the interplay between inequality and educati... more This research revisits and extends the literature on the interplay between inequality and education, by accounting for the role of institutions, the latter being a cornerstone of economies and societies. We establish that in the presence of weak tax institutions, the quality of public education is adversely affected by an increase in income inequality. Moreover, the adverse effect of inequality diminishes as the quality of institutions improves, suggesting that for sufficiently high quality of institutions, an increase in inequality would be less harmful for the quality of education. This effect operates via two channels, namely via an effect on the resources allocated to public education and via an effect on the number of individuals participating in the public schooling system.
RePEc: Research Papers in Economics, Mar 1, 1999
The Working Paper Series seeks to disseminate original research in economics and fi nance. All pa... more The Working Paper Series seeks to disseminate original research in economics and fi nance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment. The opinions and analyses in the Working Paper Series are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem. The Banco de España disseminates its main reports and most of its publications via the Internet at the following website: http://www.bde.es. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.
Research Papers in Economics, Dec 1, 2001
To explore the interplays between trade and institutions, we construct a staged development frame... more To explore the interplays between trade and institutions, we construct a staged development framework with multi-period discrete choices to study the colonization of Hong Kong, which served to facilitate the trade of several agricultural and manufactured products, including opium, between Britain and China. Based on the historical data and documents that we collected from limited sources, we design our dynamic trade model to capture several key features of the colonization process and use it to characterize the endogenous transition from the pre-Opium War era, to the post-Opium War era and then to the post-opium trade era, which span the period 1773-1933. We show that while the low opium trading cost and the high warfare cost initially postponed any military action, the high valuation of the total volume of bilateral trade, the rising opium trading cost and the anticipated increase in the demand for opium eventually led the British government to declare the Opium Wars, legalizing op...
This paper analyzes the effect of illegal immigration on the welfare of the host country, within ... more This paper analyzes the effect of illegal immigration on the welfare of the host country, within the Hazari and Sgro (2003) framework (also studied by Moy and Yip 2006). In contrast to these studies, which analyze the phenomenon from a social planner’s point of view, I focus on the competitive equilibrium. I arrive at a different conclusion, where illegal immigration unambiguously raises domestic welfare. I also show that in a competitive economy there can be over-accumulation of capital (dynamic inefficiency), despite the presence of a representative household with infinite horizon. JEL Classification: F2; O4.
We construct an overlapping generations model in which parents vote on the tax rate that determin... more We construct an overlapping generations model in which parents vote on the tax rate that determines publicly provided education and offspring choose their effort in learning activities. The technology governing the accumulation of human capital allows these decisions to be strategic complements. In the presence of coordination failure, indeterminacy and, possibly, growth cycles emerge. In the absence of coordination failure, the economy moves along a uniquely determined balanced growth path. We argue that such structural differences can account for the negative correlation between volatility and growth.
We analyze the impact of immigration on the host country within a search and matching model that ... more We analyze the impact of immigration on the host country within a search and matching model that allows for skill heterogeneity, endogenous skill acquisition, differential search cost between immigrants and natives, capital-skill complementarity and different degree of substitutability between unskilled natives and immigrants. Within such a framework, we find that although immigration raises the overall welfare, it may have distributional effects. Specifically, skilled workers gain in terms of both employment and wages. Unskilled workers, on the other hand, gain in terms of employment but may lose in terms of wages. Nevertheless, in one version of the model, where unskilled workers and immigrants are imperfect substitutes, we find that even the unskilled wage may rise. These results accommodate conflicting empirical findings.
This paper examines the effects of illegal immigration in a neoclassical growth model with two gr... more This paper examines the effects of illegal immigration in a neoclassical growth model with two groups of workers, skilled and unskilled. We show that although illegal immigration is a boon to a country as a whole, there are distributional effects, whose sign is in general ambiguous. This is because all sources of income of both groups are affected and some of these changes tend to move income in opposite directions. Nevertheless, a calibration exercise shows that the wealth distribution is likely to become more unequal as the number of illegal immigrants increases. We confirm most of our calibration results analytically in a small open economy version of the basic model.
Kyrkopoulou and Palivos examine the interaction between the informal sector of the economy and un... more Kyrkopoulou and Palivos examine the interaction between the informal sector of the economy and undocumented immigration. For this purpose, they use a search and matching model with two sectors, a formal and an informal one. Native workers can work in both sectors, whereas undocumented immigrants can work only in the latter. Both native workers and firms choose optimally the sector in which they operate, balancing costs and benefits, for example, taxation versus unemployment benefits and severance payments in the case of workers and taxation and auditing versus subsidies in the case of firms. The effects of three types of policies are analyzed and compared: deterrence, incentive, and immigration policies. Combinations of these are also considered.
Departmental Working Papers, 1996
... and make appropriate adjustments.): Theodore Palivos & Nikos Tsakiris, 2010. "Trade ... more ... and make appropriate adjustments.): Theodore Palivos & Nikos Tsakiris, 2010. "Trade and Tax Reforms ... Macedonia, revised Apr 2010. [Downloadable!] Other versions: Theodore Palivos & Nikos Tsakiris, 2009. "Trade and Tax Reforms ...
We use microeconomic data on wages and individual characteristics across twenty European economie... more We use microeconomic data on wages and individual characteristics across twenty European economies for the period 2004 to 2015, to detect patterns of misallocation arising in these economies based on individuals’ gender, immigrant status, or private versus public sector affiliation. We develop a theoretical model where being relatively isolated, e.g., due to gender, immigrant status, or private sector affiliation, leads to lower wages and talent misallocation. Our empirical results suggest that being a female or immigrant, and working in the private sector, exert a negative impact on one’s wages beyond that explained by their economic characteristics, suggestive of persistent talent misallocation in Europe during the period under study. Notably, countries such as Cyprus, Greece, Italy and Spain are systematically found at the top of the overall talent misallocation index we construct year-after-year for the period under study. Our work provides new cross-country micro-econometric ev...