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How do tax incentives affect firms’ investment? Using confidential UK corporation tax returns, we provide new evidence on the effects of incentives in the form of depreciation allowances. We exploit a 2004 exogenous change in the qualifying thresholds for the first-year depreciation allowances (FYAs) and conduct a difference-in-difference analysis. Results suggest that the investment rate increased between 2.1 and 2.6 percentage points when firms became qualified for FYAs, relative to firms that never qualified. This implies an increase in investment rate of 11 percent at the mean. We exploit exogenous variation in the timing of tax payments to show that this large effect is not due to an increase in available cash and hence, this is primarily a cost of capital effect. Firms respond rather quickly to FYAs, within 12 to 18 months. Firms also bunch just below notches in the cost of capital created by the qualifying thresholds, suggesting salience of the FYAs. Such behaviour does not drive our main results.

Although the European Union allows citizens from member countries to migrate freely within its confines to facilitate integration, it may be alienating public support for Europe. This paper investigates this by extending group threat theory to explain how internal migration influences mass public support using annual data from 1998 to 2014 across 15 Western European countries. We find that increases in the presence of foreigners from new member countries in Central and Eastern Europe have raised collective concerns about EU membership and there is some evidence that it may have eroded trust in European institutions as well. The results also show that this effect is exacerbated during an economic downturn. Our findings imply that collective opinion has responded ‘rationally’ to contextual changes in Europe’s internal migration patterns. The study concludes by discussing how group threat theory is relevant for understanding collective sentiment about the European Union.

ABSTRACT Compared to older cohorts, young adults in developed societies delay their transition to adulthood. Yet within cohorts, variations in timing and sequencing of events still remain. A major determinant of life course events is social class. This characteristic can influence the sequence of events in terms of socioeconomic inequalities through a different availability of opportunities for social mobility. Several studies show that in North America, a higher familial status tends to decrease the complexity of trajectories, while the opposite effect has been found in Southern Europe. This research examines the sequence of transitions, highlighting in a comparative perspective how life trajectories are influenced by parental social class in the United States and Italy. The main result of the analysis is that the effect of parental background is different across countries. In the United States, we find that a high status favors not only a higher education and an early entry in the labor market, but also a higher heterogeneity of states and the occurrence of new behaviors like single living and cohabitation. In Italy, the effect of social class is gender-specific. Among men, a higher social class tends to delay transitions more than lead towards modern behaviors. Among women, a higher social class either tends to facilitate the experience of a more modern and independent transition, or it generates a higher probability of postponing exit from the parental home, and then family formation, among those who completed their education and found a job.

This paper provides some initial results of long-term trends in economic inequality in Catalonia from 1400-1800 ca. These first findings show that the evidence collected for Catalonia matches quite well with some hypotheses suggested previously in the literature. Namely, the high inequality levels prevalent across pre-industrial Europe; an inequality gradient that linked urban, more populated, and wealthier communities with greater inequality and vice versa; and the importance of the trends followed by the share owned by the wealthy as good predictors of economic inequality trends. However, at this stage, one of the most appealing propositions—the idea that economic inequality grew for the whole of Europe during the early-modern period, shaping a long left side of a “super Kuznets curve”—does not seem to be fully confirmed for Catalonia. From the mid-17th century, inequality growth seems to go hand-in-hand with growth in per capita GDP. In earlier periods, though, the inequality trend seems to be unrelated to economic growth and even, during the second half of the 16th century, there is some evidence of inequality decline coupled with economic growth.

In the last few years, the UK has adopted a fiercely competitive business tax policy by reducing the general tax burden on business and expanding individual regimes targeted to mobile factors: CFC rules, interest deductibility rules, and the Patent Box have made the UK very attractive for internationally mobile capital and profits. As the same time, the UK has strongly supported the OECD BEPS project aimed at reducing multinationals’ tax avoidance and, hence, we argue, at eliminating or constraining forms of tax competition among countries based on individual regimes targeted to mobile capital and profits. We claim that, especially in the implementation phase of the BEPS recommendations, there will be tensions between the UK competitiveness agenda and its support for the BEPS. Such tensions will be reconciled by shifting the UK tax competition policy from a mix of rate-based plus individual regimes policy to more of a rate-based approach. In this scenario, the government will have to tighten some specific measures aimed at attracting highly mobile capital and profits, such as the patent box regime and possibly interest deductions. At the same time, it will reduce the tax burden on both mobile and less mobile activities by implementing economy-wide cuts, allowed under BEPS. Most likely, such cuts would come from a further reduction in the headline corporate tax rate and the cuts announced in the July 2015 Budget should be interpreted in this light. Cuts in the headline rate essentially reduce the taxation on profits but they do not take account of the fact that for other decisions such as investment in tangible assets and information and communications technology, other elements of the tax code, such as capital allowances, are more important. To foster real investment, the government could consider an increase in capital allowances. Another option would be the introduction of an Allowance for Corporate Equity (ACE). The interesting feature of the ACE in the context of BEPS is that it reduces the incentive to classify financing instruments as tax-advantaged debt.

The paper analyses how individuals’ subjective well-being, measured both in terms of life satisfaction and mental health, is affected by the work-family balance. We measure the work-family balance so as to encompass individuals’ roles as a partner, parent and employee. We, also, consider life satisfaction in partnership, family, and work as result of satisfaction with the innate psychological needs of competence, autonomy, and relatedness. Analyses are conducted on sub-samples of parents and working parents from the German Family Panel. Findings show that, even though satisfaction in the three roles is important for both men and women, differences between the sexes persist, and that these are rooted in traditional gender roles. In particular, women’s perception of being a “good mother” and men’s perception of being a “good worker” are crucial for subjective emotional and cognitive well-being.

The general aim of this paper is to investigate the educational aspirations of the children of immigrants living in Italy and attending the last year of primary school (8th grade). We look at the educational aspirations both as a predictor of educational choice and as a measure of social integration. We consider both secondary school track and university aspirations as indicators of educational preferences in the short and long run. Data have been collected during the 2005-2006 school year and they come from the ITAGEN survey: the first Italian nation-wide extensive survey on children with at least one foreign-born parent. First, we analyze association between aspirations and structural characteristics (e.g. migration status and country of origin) and social aspects such as family socioeconomic status, and friendship ties. These aspects seem to be determinants in defining both short and long time aspirations, while long-term aspirations are not associated with migration status. Second, we investigate the relevance of context in delineating educational aspirations. To develop this second aspect we perform multilevel analysis that takes into account both individual and school level variables. Our hypothesis, confirmed both for short and long aspirations, is that attending a school where most of the Italian pupils have high educational aspirations may lead children of immigrants to enhance their own aspirations.

In this paper I study the determinants of height from birth to early adulthood in the Philippines. In order to do that, I specify a height production function. The structure of the production function allows height to be the result of the accumulation of inputs over time. I use a rich longitudinal data set on Filipino children born in 1983 and followed for more than 20 years. The results show that inputs from conception to birth are relevant at each age of the children. Nutrition inputs have a positive effect on the child's height, with similar effects across ages. The shorter the distance between the age when the nutrition input is applied and the age when height is measured, the higher the impact on height. The earlier disease inputs are experienced, the larger their negative effect on height. The older the child, the stronger the effects of past diseases. Thus my paper provides evidence on the importance of early life events also for final height.

In this paper we investigate the sensitivity of stochastic population forecasts produced by means of the Scaled Model of Error with respect to the choice of the correlation parameters. In particular, we evaluate the impact that a change in the specification of the correlation of the age-specific fertility forecast error increments across time and age and of the correlation of the age-specific mortality forecast error increments across time, age and sex has on the forecasts of the Total Fertility Rate and of the Male and Female Life Expectancies respectively. In our opinion a sensitivity analysis of this kind is extremely useful, since up to now the relevance and the impact of the choice of the Scaled Model of Error input parameters has not be discussed in detail. Such analysis will provide users with a better understanding of the model itself.

Are public good games really capturing individuals’ willingness to contribute to real-life public goods? To answer this question, we conducted a lab-in-the-field experiment with communities who own collective goods. In our experiment, subjects voluntarily contribute to a common pool, which can either be subdivided in individual vouchers, as in standard public good games, or used to acquire collective goods, as it happens for real-life public goods. We show that participants’ contributions are larger when the voucher is paid individually, suggesting that individuals’ willingness to contribute to public goods may be overestimated when based on results from laboratory experiments.