Options
Bargain, Olivier
Preferred name
Bargain, Olivier
Official Name
Bargain, Olivier
Research Output
Now showing 1 - 10 of 28
- PublicationFemale labor supply and divorce : new evidence from IrelandIf participation in the labor market helps to secure women's outside options in the case of divorce/separation, an increase in the perceived risk of marital dissolution may accelerate the increase in female labor supply. This simple prediction has been tested in the literature using time and/or spatial variation in divorce legislation (e.g., across US states), leading to mixed results. In this paper, we suggest testing this hypothesis by exploiting a more radical policy change, i.e., the legalization of divorce. In Ireland, the right to divorce was introduced in 1996, followed by an acceleration of marriage breakdown rates. We use this fundamental change in the Irish society as a natural experiment. We follow a difference-in-difference approach, using families for whom the dissolution risk is small as a control group. Our results suggest that the legalization of divorce contributed to a significant increase in female labor supply, mostly at the extensive margin. Results are not driven by selection and are robust to several specification checks, including the introduction of household fixed effects and an improved match between control and treatment groups using propensity score reweighting.
370 - PublicationRelative Concerns of Rural-to-Urban Migrants in China(University College Dublin. School of Economics, 2011-01)
; ; How the income of 'relevant others' affects well-being has received renewed interest in the recent literature using subjective data. Migrants constitutes a particularly interesting group to study this question: as they changed environment, they are likely to be concerned by several potential reference groups including the people 'left behind', other migrants and 'natives'. We focus here on the huge population of rural-to-urban migrants in China. We exploit a novel dataset that comprises samples of migrants and urban people living in the same cities, as well as rural households mostly surveyed in the provinces where migrants are coming from. After establishing these links, we find that the well-being of migrants is largely affected by relative concerns: results point to negative relative concerns toward other migrants and workers of home regions this status effect is particularly strong for migrants who wish to settle permanently in cities. We find in contrast a positive relative income effect vis-à -vis the urban reference group, interpreted as a signal effect: larger urban incomes indicate higher income prospects for the migrants. A richer pattern is obtained when sorting migrants according to the duration of stay, expectations to return to home countries and characteristics related to family circumstances, work conditions and community ties.287 - PublicationRevisiting the cost of children : theory and evidence from IrelandIn this paper, we suggest a collective model with parents and (young) children. We identify and estimate scale economies in households and the sharing rule between husband, wife and children. While adult shares and economies of scale are identi…ed thanks to the estimation of individual Engel curves on single individuals, the identi…cation of the resource share accruing to children (the cost of children) requires the observation of adult-speci…c goods as in the traditional Rothbarth method. The useful aspect of the present approach is that it requires only the estimation of Engel curves on cross-sectional data, i.e. price variation is not required. This is an advan- tage for many countries where price variations is indeed limited, as in our application on Irish data.
111 - PublicationAnalysing the effects of tax-benefit reforms on income distribution : a decomposition approachTo assess the impact of tax-benefit policy changes on income distribution over time, we suggest a methodology based on counterfactual simulations. We start by decomposing changes in inequality/poverty indices into three contributions: reforms of the tax-benefit structure (rules, rates, etc.), changes in nominal levels of market incomes and tax-benefit parameters (benefit amounts, tax bands, etc.), and all other changes in the underlying population (market income inequality, demographic composition, employment level, etc.). Then, the decomposition helps to extract an absolute measure of the impact of tax-benefit changes on inequality when evaluated against a distributionally-neutral benchmark, i.e. a situation where tax-benefit parameters are adjusted in line with income growth. We apply this measure to assess recent policy changes in twelve European countries. Finally, the full decomposition allows quantifying the relative role of policy changes compared to all other factors. We provide an illustration on France and Ireland and check the sensitivity of the results to the decomposition order.
347 - PublicationThe informal sector wage gap : new evidence using quantile estimations on panel dataThis paper provides new evidence on the wage gap between informal and formal salary workers in South Africa, Brazil and Mexico. We use rich datasets that allow us to de…fine informality in a relatively comparable fashion across countries. We compute precise wage differentials by accounting for taxes paid in the formal sector. For each country, we analyze how the sectoral wage gap varies within groups, between groups and over time. To account for unobserved heterogeneity, we use large (unbalanced) panels to estimate …fixed effects models at the mean and at different points of the wage distribution. We fi…nd that unobserved heterogeneity explains a large part of the (conditional) wage gap. The remaining informal sector wage penalty is large in the lower part of the distribution but almost disappears at the top. The penalty primarily concerns young workers and is found to be procyclical. We carefully investigate the robustness of these results and discuss their policy implications as well as regularities across countries.
238 - PublicationThe informal sector wage gap : new evidence using quantile estimations on panel dataThis paper provides new evidence on the wage gap between informal and formal salary workers in South Africa, Brazil and Mexico. We use rich datasets that allow us to define informality in a relatively comparable fashion across countries. We compute precise wage differentials by accounting for taxes paid in the formal sector. For each country, we analyze how the sector wage gap varies within groups, between groups and over time. To account for unobserved heterogeneity, we use large (unbalanced) panels to estimate fixed effects models at the mean and at different quantiles of the wage distribution. We find that unobserved heterogeneity explains a large part of the (conditional) wage gap. The remaining informal sector wage penalty is large in the lower part of the distribution but almost disappears at the top. The penalty primarily concerns young workers and is found to be procyclical. We carefully investigate the robustness of these results and discuss their policy implications as well as regularities across countries.
536 - PublicationA theory of child targetingThere is a large empirical literature on policy measures targeted at children but surprisingly very little theoretical foundation to ground the debate on the optimality of the different instruments. In the present paper, we examine the merit of targeting children through two general policies, namely selective commodity taxation and cash transfer to family with children. We consider a household that comprises an adult and a child. The household behavior is described by the maximization of the adult’s utility function, which depends on the child’s welfare, subject to a budget constraint. The relative effects of a price subsidy and of a cash benefit on child welfare are then derived. In particular, it is shown that ‘favorable’ distortions from the price subsidies may allow to redistribute toward the child. The framework is extended to account for possible paternalistic preferences of the State. Finally, it is shown that, in contrast to the traditional view, well-chosen subsidies can be more cost effective than cash transfers in alleviating child poverty.
155 - PublicationBack to the future - decomposition analysis of distributive policies using behavioural simulationsFor policy makers and analysts, it is important to isolate the redistributive impact of tax-benefit policy changes from changes in the environment in which policies operate. When actual reforms are motivated by work incentives, it is also crucial to evaluate behavioural responses and the distributional consequences thereof. For that purpose, we embed counterfactual simulations in a formal framework based on the Shapley value decomposition and quantify the relative roles of (i) tax-benefit policy changes (direct policy effect), (ii) labour supply responses to the policy reforms (in- direct effect) and (iii) all other factors affecting income distribution over time. An application to the UK shows that the redistributive reforms of the 1998-2001 period have offset the increase in inequality that would have occurred otherwise. They also contribute to a strong decline in child poverty and poverty amongst single parent households. In the latter group, a third of the headcount poverty reduction (and half of the reduction in the depth of poverty) is on account of the very large incentive effect of policy changes.
555 - PublicationTax-Benefit Systems in Europe and the US: Between Equity and Efficiency(University College Dublin. School of Economics, 2011-01)
; ; ; ; Whether observed differences in redistributive policies across countries are the result of differences in social preferences or efficiency constraints is an important question that paves the debate about the optimality of welfare regimes. To shed new light on this question, we estimate labor supply elasticities on microdata and adopt an inverted optimal tax approach to characterize the redistributive preferences embodied in the welfare systems of 17 EU countries and the US. Implicit social welfare functions are broadly compatible with the fiction of an optimizing Paretian social planner. Some exceptions due to generous demogrant transfers are consistent with the ignorance of behavioral responses by some European governments and are partly corrected by recent policy developments. Heterogeneity in leisure-consumption preferences somewhat affect the international comparison in degrees of revealed inequality aversion, but differences in social preferences are signi ficant only between broad groups of countries.97 - PublicationNo claim, no pain - measuring the non-take-up of social assistance using register data(University College Dublin. School of Economics, 2009-12)
; ; The main objectives of social assistance bene…fits, including poverty alleviation and labor-market or social reintegration, can be seriously compromised if support is difficult to access. While recent studies point to high non-take-up rates, existing evidence does not make full use of the information recorded by benefi…t agencies. Most studies have to rely on interview-based data, with misreporting and measurement errors affecting the variables needed to establish both bene…fit receipt and benefi…t entitlement. In this paper, we exploit a unique combination of Finnish administrative data and eligibility simulations based on the tax-benefi…t calculator of the Finnish authorities, carefully investigating the measurement issues that remain. We …nd rates of non-take-up that are both substantial and robust: 40% to 50% of those eligible do not claim. Using repeated cross-section estimations for years 1996-2003, we identify a set of stable determinants of claiming behavior and suggest that changes in behavior could drive the observed downward trend in take-up rates during the post-recession period. We discuss the poverty implications of our results.548