Ethnic differences in household incomes in the USA
16 Sep 2016 Leave a comment
in discrimination, human capital, labour economics, labour supply, politics - USA Tags: racial discrimination, racial wage gaps
Arin Dube: The impact of a minimum wage
14 Sep 2016 Leave a comment
in labour economics, minimum wage
Viagers as a way of funding retirements
12 Sep 2016 Leave a comment
in labour economics, labour supply, poverty and inequality, welfare reform Tags: economics of retirement, French law, old age pensions, property law, reverse mortgages, social insurance
A Viager is a French way of buying and selling property. We just watched the Kelvin Klein – Maggie Smith movie about it.
Not only does the seller remain as a life tenant of the property they sold, the buyer pays them an annuity as well as a down payment. The buyer gambles as all annuity providers do on the life expectancy of the vendor. One such vendor lived to 123 in France.
Back in 1965, when Mrs Calment was aged 90, she sold her apartment in Arles to a 44-years old man, on contract-conditions that seemed reasonable given the value of the apartment and the life-expectancy statistics that prevailed at the time.
The man turned out to be unlucky since Jeanne Calment lived a very long life. He died in 1995, two years before Mrs Calment, after having paid about FFr900,000 (twice the market value) for an apartment he never lived in.
The viager system is similar to the equity release and reverse mortgage systems more familiar in Anglo-Saxon countries. The viager shares the risk of running out of equity with the buyer. The contract is between two private parties and does not involve banks or insurance companies.
Sellers are typically widows, or widowers, who want to cash out the value of their property with a lump sum – the bouquet – and a monthly payment from the buyer for the rest of their lives. The seller remains as a life tenant. The bouquet is normally 15-30% of the value of the property.
French viager investors tend to be in their late 40s and early 50s wanting to set themselves up with a retirement home and hopefully get a good deal. If the buyer dies before the seller his children will be obliged to carry on paying the viager if they want to maintain the deal. In that sense, the vendor is gambling on the buyer’s life expectancy is well.
I have no information on who is responsible for payment of rates and the maintenance of the property. The maintenance of the property would be a bigger moral hazard problem than with tenants because of the difficulties with eviction and repair. The market for Viagers is fairly small.
Should the buyer default on the monthly instalments, he is warned to pay up. After a second warning, normally within weeks, he will get a further warning and one month to get up to date with payments. If this does not happen the seller keeps keeps the bouquet, all money received so far and gets back absolute ownership of the property they sold.
This home annuity option for selling the house could be away of getting around the rather small to non-existent annuity market in New Zealand for retirees. They have the advantage of sharing the risk of exhausting the equity of the property at the price of the buyer sometimes gets a really good deal. Sellers have on average shorter survival times than the general French population.
The Real “Truth About the Economy:” Have Wages Stagnated?
12 Sep 2016 Leave a comment
in applied welfare economics, economics, labour economics, poverty and inequality Tags: middle class stagnation, top 1%
Women and WW II – Rosie the Riveter
10 Sep 2016 Leave a comment
in economics, labour economics, labour supply, occupational choice, politics - USA, population economics, war and peace Tags: female labour force participation, female labour supply, World War II
Latest cherry picking of homelessness data allegation is from @MaxRashbrooke
09 Sep 2016 Leave a comment
in labour economics, politics - New Zealand, poverty and inequality Tags: homelessness, social insurance, social safety net, welfare state
I cherry picked data again by plotting it in full using the data labels and headings in the data tables at the original data source. I stand accused.
Max Rashbrooke is the latest to spit the dummy when reminded that the Otago report on homelessness actually was about the seriously housing deprived; their words, not mine.
UOW researcher Dr Kate Amore, from the Health Research Council-funded He Kainga Oranga/Housing and Health Research Programme, measured the “severely housing deprived” population.
Table 2 below is from the media release Rashbrooke suggested I read to enlighten myself as to what homelessness is and is not. I am going to commit my third strike at cherry picking with snap-shots of the tables from the original source. I am a recidivist cherry picker.
Source: 3 June 2016, Homelessness accelerates between censuses, News, University of Otago, New Zealand.
Labour, the Greens and Max Rashbrooke all conflated living with friends and family or in commercial accommodation with homelessness. Saying that serious housing deprivation has gone up is not much of a sound bite compared to claiming homelessness is up with the associated images of people living rough or in cars. Who is spinning, who is cherry picking and who just can’t handle the truth? Homelessness has not increased under the National party government.
A statistical definition of homelessness that includes 70% of data observations as people living with friends and relatives on a temporary basis is miles away from sleeping rough, in a car or emergency accommodation such as a shelter or refuge run by an NGO. But at one point the Otago study does include these vastly different social situations under the same heading
“If the homeless population were a hundred people, 70 are staying with extended family or friends in severely crowded houses, 20 are in a motel, boarding house or camping ground, and 10 are living on the street, in cars, or in other improvised dwellings. They all urgently need affordable housing.”
Definitions are supposed to clarify, not confuse but the Statistics New Zealand definition does
Homelessness is defined as a living situation where people with no other options to acquire safe and secure housing are: without shelter, in temporary accommodation, sharing accommodation with a household, or living in uninhabitable housing.
The Oxford dictionary definition of homeless is “ (Of a person) without a home, and therefore typically living on the streets”.
Homelessness is different from those living in a hotel paid for by WINZ pending rehousing. Sleeping in the streets, in a car or living in emergency accommodation and waiting in a hotel for social housing are separate policy problems.
Source: Severe housing deprivation in Aotearoa/New Zealand 2001-2013 Kate Amore (2016).
Some of the seriously housing deprived data from the Otago study show the system failing, such as sleeping rough or in a car. Other parts of the data shows the social safety net working when people are in a hotel or emergency accommodation pending a move to better quarters.
Including in the same definition of homelessness someone who is sleeping in the street or in a car with someone who is in the queue for social housing but booked into a hotel insults those who are homeless. This spin mixes up situations where the social safety net has failed with situations where it is working to help those down on their luck but perhaps not to our full satisfaction.
Does it Feel Good or Does it Do Good?
08 Sep 2016 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, economics, labour economics, minimum wage, Public Choice Tags: expressive voting, rational irrationality
Is the union wage premium negative in New Zealand? @FairnessNZ
07 Sep 2016 Leave a comment
in economics of education, labour economics, unions
20 Years Ago, Welfare Reform Was Signed Into Law
07 Sep 2016 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, economic history, labour economics, labour supply, politics - USA Tags: 1996 US welfare reforms
Fast Car – Tracy Chapman: the trap of intergenerational poverty
06 Sep 2016 Leave a comment
in applied price theory, applied welfare economics, economics of media and culture, labour economics, poverty and inequality Tags: child poverty, family poverty, intergenerational poverty, Tracey Chapman
Poverty in America after 20 years of welfare reform
01 Sep 2016 Leave a comment
in applied welfare economics, economic history, labour economics, politics - USA, welfare reform Tags: 1996 US welfare reforms, child poverty, family poverty, single mothers, single parents, social insurance, welfare state
Source: Did Welfare Reform Increase Extreme Poverty in the United States?
Source: Did Welfare Reform Increase Extreme Poverty in the United States?
Fewer in emergency accommodation under @NZNationalParty? @PhilTwyford @cjsbishop
31 Aug 2016 Leave a comment
in labour economics, politics - New Zealand, poverty and inequality, urban economics Tags: homelessness, social insurance, social safety net, welfare state
Source: 24 August 2016, Most homeless people working or studying, News, University of Otago, New Zealand, table 4.
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