U-shaped Female Labor Participation with Economic Development: Some Panel Data Evidence
Economic Letters , 110(2), 2011, pp. 140-142
Abstract: Using a panel data of about 130 countries from 1950 to 1980, we use dynamic panel data estimation to demonstrate that the U-shaped relationship between feminization of the labor force and real GDP per capita holds up as an intertemporal relationship.
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Explaining the Equity Premium in Hong Kong with C-CAPM: The Use of Emigration Growth as an Instrument
(with L. Lai)
Journal of International Financial Markets, Institutions and Money , 19(3), 2009, pp. 520-533
Abstract: We test the C-CAPM with CRRA utility using Hong Kong data. In 2SLS regressions, we obtain rather high estimates of the coefficient of relative risk aversion, which could explain the high equity premium in Hong Kong. Because we use lagged emigration growth as an instrument in the first-stage regression, which has significant negative impact on future stock market return in Hong Kong, the first-stage R2 and F-statistics are rather high and the weak instrument critique of the validity of 2SLS regressions is potentially resolved. Weak-instrument-robust tests also confirm that the degree of risk aversion is indeed high for Hong Kong.
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An Economic or Political Kuznets Curve?
Public Choice , 134(3-4), 2008, pp. 367-389
Abstract: This paper examines two closely related empirical hypotheses: an economic Kuznets curve and a political Kuznets curve. We find a robust inverted-U relationship between income inequality and political development, but not one between income inequality and economic development. Exploring the cross-section aspect of the panel data, we find that the economic Kuznets curve is sensitive to different control specifications and to different functional specifications, but the political Kuznets curve is robust. Using dynamic panel data estimation, we find that the economic Kuznets curve does not hold up intertemporally while the political Kuznets curve does.
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The Humean Critique of Lump Sum Taxation
Public Choice , 118(1-2), 2004, pp. 61-76
Abstract: This paper revives Hume's idea that it is unlikely forsovereign governments to implement pure lump-sum taxationbecause lump-sum taxes are arbitrary. We phrase the problem asone of time-inconsistency of tax collection for a tax revenuemaximizing Leviathan government. We demonstrate that whilelump-sum taxation is more efficient than distortionary incometax in terms of the ex anteamount of tax revenueraised, honoring a lump-sum tax is less likely to be crediblethan honoring a distortionary income tax. We also extend theframework to understanding the relationship betweenexpropriation risk and the lack of foreign direct investment.
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A Social Contract Approach to the Formation of National Borders
Public Choice , 118(1-2), 2004, pp. 183-209
Abstract: This paper explores an economic model that elucidates theformation of national borders and explains the cross-sectionalvariance in the size of nations around the world. According tothe present social contract approach, risk averse agents tryto get out of the ``state of nature'' and get together to formsocieties to reduce consumption uncertainty, but heterogeneityaverse agents will not allow nations to become too large. Themodel relates the geometry of a nation with the geography ofits border and predicts the empirical observation thatcountries with ``coastline'' borders are larger than``landlocked'' countries.
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