This thesis investigates empirically the effects of the corporate income tax in an open economy. The analysis is carried out using linear panel-data regression methods. The first chapter studies the incidence of the corporate income tax. It introduces a model with location-specific rents which distinguishes between a direct effect and an indirect effect of the corporate income tax on labour. The former occurs when an increase in the corporate tax reduces the rent over which the employees and the company bargain. This reduces the bargained wage. The latter effect is the result highlighted in previous literature wherein an increase in the corporate tax reduces the stock of capital and consequently wages. Chapter 1 estimates the direct effect using accounting data from over 55,000 companies located in nine OECD countries (1996{2003) and finds that the tax is largely shifted to the labour force. Chapter 2 shows that measured productivity of multinational firms is overestimated in low-tax countries (and vice versa), because multinationals manipulate the value of sales upwards and the costs of intermediate inputs downwards. The analysis is carried out using accounts from about 16,000 firms located in 10 OECD countries (1998{2004). The results show that a 10 percentage points cut in the statutory corporate tax rate induces multinationals to increase their measured total factor productivity by about 10 per cent. Chapter 3 investigates the effect of tax haven operations in a corporate group. Using accounting data for about 3,400 corporate groups in 15 OECD countries (2003{2007), the study finds that tax haven operations reduce the tax liabilities of multinational companies by 7.4 per cent in the long run (at the mean). Also, the ETR of a corporate group with tax haven subsidiaries is one percentage point lower than the ETR of entities without such operations. Chapter 3 also finds that the marginal ETR of companies headquartered in a jurisdiction with a territorial system is lower than the marginal ETR of companies headquartered in jurisdictions adopting a worldwide taxation system.

This thesis wants to contribute to the understanding of the role of collective beliefs and incomplete information in the analysis of the dynamics of inequality, growth and redistributive politics. Extensive evidence shows that the difference in the political support for redistribution appears to reflect a difference in the social perceptions regarding the determinants of individual wealth and the underlying sources of income inequality. The thesis presents a theoretical framework of beliefs and redistribution which explains this evidence through multiple politico-economic equilibria. Differently from the recent literature which obtains multiple equilibria by modeling agents characterized by psychological biases, my framework is based on standard assumptions. Multiple equilibria originate from multiple welfare maximizing levels of information for the society. Multiplewelfare-maximizing levels of information exist because increasing the informativeness of an economy produces a trade-off between a decrease in adverse selection and an increase in moral hazard. The framework provides a new micro-foundation of incomplete information as an institutional feature and answers various macroeconomic policy questions with different models.

This study explores the international diffusion of new technology i.e. changes over time in the extent to which world output is produced using, or world consumption is made up of products incorporating, specific new technologies. This topic has received relatively little attention in the literature. Many of the theoretical arguments developed in the literature for the study of domestic diffusion are here systematically applied to international diffusion for the first time. We propose that patterns of international diffusion derive from two related processes: inter-country diffusion or the extensive margin, and intra-country diffusion or the intensive margin. We start with a study of the relative importance of these two processes. Using data on four technologies we show that the relative importance of the intensive to the extensive margin increases over time. The same pattern was identified by Battisti and Stoneman (2003) in their study of the importance of inter- and intra-firm diffusion in domestic diffusion. The main body of the thesis is concerned with the question how (if at all) does international diffusion affect domestic diffusion? Two theoretical arguments are explored: the first uses an epidemic and the second a decision-theoretic model. The models are extensions of the seminal models of Bass (1969), Mansfield (1961) and Reinganum (1981b). Two specific hypotheses arise, namely that international diffusion affects domestic diffusion through: i) an exogenous learning effect or inter-country spillovers; and ii) a negative stock effect. The hypotheses have contradictory empirical implications. The epidemic model is tested using data on steam- and motor ship diffusion. We find evidence of spillovers however the direction of the effect is not robust across countries. We discuss the time-series properties of the data, which is rarely done in the literature, and find some problems which may partly explain the results. We then develop an international stock effect hypothesis using a decision-theoretic model based on the closed economy model of Reinganum (1981b). This allows for firm heterogeneity in production costs. We discuss how heterogeneity impacts on international diffusion patterns when some of that heterogeneity is on the country-level. Empirically we find evidence of an international stock effect in the diffusion of the basic oxygen furnace. A number of explanatory variables which capture cross-country differences in production and adoption costs are also significant.

The objective of this thesis is to identify various determinants of human capital development among Canadian youth. Three mediating agents are examined: parents, schools, and government. Considerable attention is paid throughout to identifying causal relationships with empirical data. The first chapter introduces the thesis by discussing its main goals, as well as the importance of the topic. This chapter also summarizes each of the following substantive chapters. I explore the relationship between family size and various components of the child quality production function in the second chapter. The findings suggest that larger families lead to reduced parental investments in children. Despite this, standardized test scores do not decline with family size. Three possible reasons for this puzzle are explored. In the third chapter, I estimate the relationship between fertility and the allocation of paid and unpaid labour among couples. Results indicate that additional children lead to a reduction in paid hours and to an even larger increase in unpaid hours among mothers. Additional children are not related to paternal paid hours, although fathers spend slightly more time performing unpaid childcare. In the fourth chapter, I estimate the impact of schooling on academic performance in high school. Additional schooling is associated with significant improvements in reading, mathematics, and science performance, but it confers the same benefits in each area to students across the conditional distribution of academic performance, as well as to both sexes and to students from high and low income families. I examine the relationship between prospective student debt load and postsecondary attendance in the fifth chapter. The results indicate that reduced prospective debt load raise university enrolment only among students facing lower net returns to attending. The final chapter summarizes the findings, highlights the contributions to the literature, discusses policy implications, and sets forth directions for future research.

Three main issues are explored in this thesis—volatility measurement, volatility spillover and large-dimension covariance matrices. For the first question of volatility measurement, this thesis compares two newly-proposed, high-frequency volatility measurement models, namely realized volatility and realized range-based volatility. It does so in the aim of trying to use empirical results to assess whether one volatility model is better than the other. The realized volatility model and realized range-based volatility model are compared based on three markets, five forecast models, two data frequencies and two volatility proxies, making sixty scenarios in total. Seven different loss functions are also used for the evaluation tests. This necessarily ensures that the empirical results are highly robust. After making some simple adjustments to the original realized range-based volatility, this thesis concludes that it is clear that the scaled realized range-based volatility model outperforms the realized volatility model. For the second research question on volatility spillover, realized range-based volatility and realized volatility models are employed to study the volatility spillover among the S&P 500 index markets, with the aim of finding out empirically whether volatility spillover exists between the markets. Volatility spillover is divided into the two categories of statistically significant volatility spillover and economically significant volatility spillover. Economically significant spillover is defined as spillover that can help forecast the volatility of another market, and is therefore a more powerful measurement than statistically significant spillover. The findings show that, in reality, the existence of volatility spillover depends on the choice of model, choice of volatility proxy and value of parameters used. The third and final research question in this thesis involves the comparison of various large-dimension multivariate models. The main contribution made by this specific study is threefold. First, a number of good performance multivariate volatility models are introduced by adjusting some commonly used models. Second, different models and various choices of parameters for these models are tested based on 26 currency pairs. Third, the evaluation criteria adopted possess much more practical implications than those used in most other papers on this subject area.

This thesis uses personnel records from a large UK based financial sector employer to aid investigation into questions relating to both wage determination and employee turnover.  The thesis begins by turning to the origins of the human capital earnings function (Mincer, 1974).  The emphasis of the discussion is that other specifications can also accommodate estimates that are consistent with the basic components of Mincer’s analysis.  Motivated by these theoretical considerations as well as existing empirical evidence, I model the earnings function as a semi-parametric partial linear model.  The estimation results reveal that conventional parametric specifications result in biased estimates of the growth in wages with within-firm experience.  In addition, conventional specifications do not adequately serve as control variables when the effects of other covariates on wages are of interest. Interpreting the relationship between tenure and wages forms the focus of the remainder of the thesis.  Several theoretical models predict a causal relationship between these variables and estimates of the causal effect of tenure on wages have ranged from negligible to substantial (Garen, 1988).  I begin the investigation by assessing the employee exit decision.  Utilising information on the exact states reason for each employee’s departure and available data on supervisor performance ratings, I also form and estimate models of employment duration.  Estimation results are consistent with the job matching model presented by Jovanovic (1979).  Results also show augmenting hazard models to incorporate reasons for departure is important for understanding gender differences in turnover.  Utilising the econometric methods developed by Altonji and Shakotko (1987) and Topel (1991), as well as evidence from the turnover investigation, I find notable effects of tenure on wages.  Interestingly, both estimators deliver similar estimates and there are small gender differences in wage – tenure profile.  Arguments are presented in order to explain these findings.

Standard Economics assumes that decision makers carefully reflect and meditate on each alternative. Grounded on evidence from Psychology this thesis relaxes this assumption and develops a theoretical framework with imperfect reflection. We analyse the implications for both Positive and Normative Economics, and for Public Policy and introduce novel applications. We begin in Chapter 1 with a review of the main arguments and results. Chapter 2 develops a decision-making framework with imperfect reflection and studies the implications for Positive Economics. Our approach relies on two key premises: (a) preferences parameters are endogenously determined by choices and (b) the decision maker, due to imperfect reflection, may not fully internalize that effect. A decision problem is labelled 'Standard' (SDP) when the decision maker internalizes the effect and 'Behavioural' (BDP) when she does not. A number of general results are obtained. First, under incomplete and acyclic preferences there exists a solution to both SDP and BDP. Second, BDPs have testable restrictions and they are di¤erent from those of SDPs. Third, for almost all classes of preferences, SDP and BDP are distinguishable from each other. Chapter 3 focuses on the normative implications of our framework in relation to the existing normative approaches to Behavioural Economics. We show that, with imperfect reflection, revealed preferences cannot in general underpin individual welfare, though we offer conditions to recover such a link. The degree of 'autonomy' emerges as a natural normative criterion and offers theoretical grounds for public policy interventions that aim to empower individuals. Chapter 4 extends our framework to an N-person strategic setting. We label 'psycho-social' games to normal-form games in which players, due to imperfect reflection, do not internalize the e¤ect of their actions on their preferences parameters. We prove existence under weak assumptions, link our framework to the existent literature on social preferences and provide new examples. We associate psycho-social games to standard normal-form games and show that, typically, the set of Nash equilibria and the set of psycho-social equilibria of an associated psycho-social game are distinct from each other. Finally, we show that (strict) Nash equilibria in pure strategies are robust to any degree of imperfect reflection. Chapter 5 applies our framework to analyse poverty and polarization persistence as a result of an aspirations failure. Reflection involves imagination which is, in turn, needed to form aspirations: i.e. we can only aspire to what we can imagine. Initial circumstances such us poverty and polarization restrict the scope of people's imagination and consequently of their aspirations. We develop a model consistent with this argument and study the importance of role models to break aspirations failures. Chapter 6 combines experimental data with a survey and shows evidence that the more frustrated people are income-wise, the lower is their propensity to cooperate to provide global (e.g. environment) and national public goods. Finally, chapter 7 concludes and highlights avenues for future research.

This thesis studies the provision of public pension system through three different approaches. Part one focuses on demographic change and pension system reforms in China. It reviews the historical reforms and the problems and suggestions associated with the current system. More importantly, by applying a calibrated overlapping generations general equilibrium simulation model, it investigates the impact of the demographic changes and the choice of pension system to the individual choices and macroeconomic variables in the future. As with all social insurance programs, the provision a public pension system involves a trade-off between protection and distortion. The second part is a theoretical study about the optimal level of public pension system. It derives the optimal pension benefit level by considering the welfare loss imposed by the saving and labour supply distortion. The third part of the thesis, is an empirical study investigating the reasons for different choices in pension systems. There are three types of public pension systems popular throughout the world: Pay-As-You-Go (PAYG), Funded and Mixed. The latter two have grown up largely since 1980s, after Chile successfully built its Funded system. By applying logistic regression tests, we examine the likely social and economic variables which have been affecting the choices.

This thesis deals with the optimal design of pensions systems in the face of demographic changes. Though the chapters differ in terms of the key questions addressed, the unifying theme remains which pensions system yields the highest welfare under differing economic conditions. We use a standard overlapping generations model with heterogeneous agents to address the various questions. The role of the pensions system varies between consumption smoothing and redistribution, or a combination of both. The provision of pensions, whether universal or targeted, has a signficant impact on capital formation and by extension on a host of economic aggregates and welfare. Capital is always higher under a fully-funded scheme. Under certain conditions, it is optimal to have no pay-as-you-go pensions in place and a fully-funded scheme is thus optimal. With a redistributive pensions system, the welfare gain of the poor exceeds the fall in the welfare of the rich thereby resulting in an increase in aggregate welfare. This thesis thus brings together the issues involved in pensions design in a theoretical framework and aims to provide an insight into the various channels at work.

The government uses a range of mechanisms to mitigate market failure in the provision of health care in the United Kingdom. Explicit financial incentives are increasingly used within the UK. However, there is some evidence that providing explicit incentives may not have the desired effect on the supply of healthcare as healthcare professionals are intrinsically motivated. This thesis reviews the literature defining and measuring intrinsic motivation in economics. It then presents a developed theoretical model of work motivation among healthcare providers which informs the empirical analysis. This thesis estimates four empirical applications to test the theoretical model of intrinsic motivation. Two applications use the British Quarterly Labour Force Survey data to examine: 1) differences in the motivation structure of employees in caring public sector from employees in other employment sectors, 2) the impact of income and employment sector on intrinsic motivation, and 3) the reason for the high levels of intrinsic motivation for employees in the caring public sector. The other two empirical works explore how the changes of financial incentives under Quality and Outcomes Framework have affected Scottish General Practitioners’ intrinsic motivation. The findings of this thesis have important policy implications. Mainly, they suggest that policy makers should be careful when using financial incentives to motivate healthcare professionals, as the unintended impact on intrinsic motivation may undermine the effectiveness of the policy.