Centre for Law and Economics

Publications

CRISP Publications

Nine works have been published resulting from research under CRISP. These are:

Income Distribution in NZ

George Barker

New Light is increasingly being cast on the analysis of income distribution. New ways of thinking about the problem have been stimulated by the discovery of some new facts and methods of analysis. It is argued in this volume that these new facts and arguments need to be considered when people discuss whether it is true that the rich are getting richer and the poor are getting poorer, and more generally the role of policy in affecting social outcomes. Fundamentally, the main characteristic of this new approach is that it adopts a more dynamic perspective on the nature of the problem of income distribution and the role of social policy generally.

As the introduction to this series, this book aims to lay some groundwork and present some preliminary results. First, it briefly reviews the main elements that have contributed to the development of the new and more dynamic view on income distribution and social policy. Second, it examines available evidence on income dynamics and income distribution in New Zealand since the 1950s.

1996 • A5, paperback, 60 pp • 0-908935-09-9 • $29.50

Statistics and Dynamics of Income Distribution in New Zealand

John Creedy

John Creedy is the Truby Williams Professor of Economics at the University of Melbourne. He has published widely in the area of income distribution and public economics.

This volume expores a number of aspects of income distribution. It pays particular attention to the need to consider incomes measured over a longer period than simply one year. In examining longer period income measures, it is necessary to examine the extent to which individuals experience income changes relative to others within the income distribution. A preliminary analysis has been made possible by a new data set which provides a unique record of income mobility for men and women in New Zealand.

The first part of this book provides an introduction to inequality measurement. The second part begins with a survey of measurement issues in the context of cross-sectional studies and goes on to examine the effect of indirect tax changes and inflation in New Zealand, allowing for the effects of price changes on consumers' behaviour. The third part of the book surveys some issues in the collection and use of longitudinal data. It then explores the relationships between the cross-sectional and lifetime income distribution, and provides a statistical analysis of relative income mobility. Finally, simulation methods are used to examine the effects of different tax structures on alternative income distributions.

1997 • A5, paperback, 170 pp • 0-908935-17-X, • $35.50

The Employment Contracts Act: The Judicial Influence 1991 - 1997

Jack Hodder and Jane Foster

Jack Hodder is a litigation partner in the Wellington office of the national law firm, Chapman Tripp Sheffield Young. He has wide experience in civil and commercial litigation and, in the employment area, has acted for both employers and employees.

Jane Foster is an Assistant Crown Counsel in the Crown Law Office's Bill of Rights team in Wellington. At the time of contributing to this publication, she was a litigation solicitor with Chapman Tripp Sheffield Young, Wellington.

This book examines the influences of the Court of Appeal and the Employment, Court on the development and application of the Employment Contracts Act 1991 from 1991 to 1997. That influence was significant, establishing a complex layer of secondary rules around the broadly framed primary rules enacted by Parliament.

1998 • A5, paperback, 107 pp • 0-908935-32-3 • $35.50

Five Years After: The New Zealand Labour Market in the Employment Contracts Act

Tim Maloney

The Employment Contracts Act 1991 substantively altered the very nature of the industrial relations system in New Zealand. The ECA continued a trend of earlier industrial relations reforms by further decentralising and restricting the state's role in the collective bargaining process. However, this legislation represented a dramatic leap beyond these previous reforms. The ECA abolished New Zealand's centralised wage-setting system. It made compulsory unionism illegal. It made union representation 'contestable' in the labour market by allowing individuals to choose who will represent their interests in contract negotiations, and by stating that whether employment contracts are ultimately collective or individual agreements is itself subject to negotiations between parties.

Enough time has now elapsed to begin to estimate the effects of this industrial relations reform in the New Zealand labour market. Data from a number of sources are used in this study to isolate the effects of the ECA on average hourly earnings, aggregate employment and hours of work, and average labour productivity in this country. The principle estimation technique is multiple regression analysis. Industry-level data are used from the first quarter of 1986 through the second quarter of 1996.

Clear empirical evidence is found in this work to support the hypothesis that the ECA was primarily responsible for the substantial decline in the proportion of non-agricultural workers who were trade union members after 1991. This is an important consideration because the analysis suggests that this decrease in unionisation was solely responsible for any effects of this legislation in the labour market. There is no empirical evidence to suggest that the ECA reduced hourly earning in this country. Yet there is compelling evidence that this act caused an increase in both aggregate employment and hours of work. Between 8.4% and 18.2% of the overall increase in employment between the first two quarters of 1991 and the first two quarters of 1996 can be attributed to this industrial relations reform. Average annual labour productivity growth declined from 1.47% in the pre-ECA period to 0.25% in the post-ECA period. This legislation is capable of accounting for between one-quarter and one-half of this slowdown in the productivity growth.

1998 • A5, paperback, 128 pp • 0-908935-29-3 • $35.50

Benefit Reform and Labour Market Behaviour in New Zealand

Tim Maloney

Tim Maloney is a Senior Lecturer in Economics at the University of Auckland, and a researcher at the Social Policy and Government Services unit at the New Zealand Treasury. He hold a PhD in Economics from the University of Wisconsin-Madison.

New Zealand has initiated sweeping reforms to its social welfare programmes by cutting benefits and tightening eligibility criteria. One of the objectives was to provide incentives for people to enter or re-enter the labour force. However, widening the income gap between being in paid work and on the benefit does not necessarily guarantee that people will respond in this way.

Previous research has often failed to measure accurately the extent of work disincentives, or to observe variation in programmes that would allow empirical analysis of labour market behaviour to take place. The structure of these benefit programmes in New Zealand, and the nature of the reforms, offer a unique opportunity for these behavioural responses to be identified.

This study finds compelling evidence that the benefit reforms increased both labour force participation and employment. Although these positive responses occurred among most demographic groups, they were notably larger for women and those aged 55-64.

1997 • A5, paperback, 70 pp • 0-908935-16-1 • $29.50

Investing in Minds: the Economics of Higher Education in New Zealand

Sholeh A Maani

Sholeh Maani is Associate Professor in Economics at the University of Auckland, and a research adviser to various government departments in New Zealand and overseas.

Because of major changes in the structure of the New Zealand economy, there have been significant increases in participation in higher education. An important implication of this increase has been the need to reassess the system of funding tertiary education. The introduction of student fees in 1990, and the targeting of allowances since 1992, figure prominently amongst changes which have been the subject of significant controversy and public debate in New Zealand.

This book is based on New Zealand and OECD research. The analyses, which span the period from 1980-1995, examine the links between higher education and income distribution, and access to higher education. The theoretical and empirical frameworks utilised incorporate the lifetime nature of education decisions, and use individual level data across census years in various analyses. the analysis includes:

1997 • A5, paperback 209 pp • 0-908935-11-0 • $35.50

Ethnicity and Schooling in New Zealand: an Economic Analysis Using a Survey of Twins

John Gibson

John Gibson is a Senior Lecture in Economics at the University of Waikato, and a consultant to the Population and Human Resources Division of the World Bank. He holds a PhD from Stanford University.

Do people from all ethnic groups get the same rate of payoff to their investments in schooling? This question is pertinent to New Zealand because of the below average schooling level of the Maori and Pacific Islands population. One economic explanation for this gap in schooling levels is that Maori and Pacific Islands families find it hard to fund education. This forces their children to leave school at a time when additional learning still gives a high rate of payoff. Another explanation is that discrimination and other forms of disadvantage lead people from these ethnic groups to expect lower rates of payoff on their schooling investments. This causes them to choose a lower level of schooling.

Previous international research estimating the rate of payoff to schooling investments has shown that omitted effects like unovserved ability, and measurement errors in self-reports of schooling, can seriously bias econometric results. Studies that use data on identical twins can overcome both these problems. The current study follows this line of research. It finds that, on average, each extra year of educationi gives an economic rate of return of 5%. The maori and Pacific Island members of the sample in this study had lower average incomes and levels of schooling, but significantly higher rates of return on their schooling investments, a finding which is consistent with the idea that difficulties in funding education contribute to the gap in schooling levels between ethnic groups.

1998 • A5, paperback, 63 pp • 0-908935-25-0 • $23.50

Cycles of Disadvantage?

Scott Bogges & Mary Corcoran, with Stephen P Jenkins

Paper one. 'Cycles of Disadvantage' by Scott Boggess and Mary Corcoran
This work reviews US evidence on cycles of disadvantage, or the question of how and to what extent economic and other background disadvantages are passed on to children by their parents. The review shows that snapshots of poverty rates mask the degree to which there is movement in and out of poverty. There is mobility in and out of poverty during childhood years. Moreover , childhood poverty does not necessarily lead to adult poverty. The factors that are associated with intergenerational poverty are reviewed, and the routes or mechanisms by which these factors, including poverty, operate are covered. Economic disadvantages are shown to play a significant role in determining life cycle incomes; however, other factors also play a role. In particular, the research examines the influence of family structure, neighbourhood effects, transmission of welfare dependence and social isolation.

Scott Boggess is an Assistant Professor of Demography at Georgetown University. He received his PhD in Economics from the University of Michigan in 1994. His research focuses on the causes and consequences of sexual and delinquent behaviour among US adolescents.

Mary Corcoran is Professor of Political Science, Public Policy, Social Work and Women's Studies at the University of Michigan. She received her PhD from MIT. She has written extensively on intergenerational poverty, women and work, and welfare policy. She is currently working on a three-wave study that follows women as they move from welfare to work.

Paper Two. 'The Intergenerational Transmission of Disadvantage: A UK Perspective' by Stephen P Jenkins
Stephen P Jenkins' Paper comments on the Boggess and Corcoran research and reviews the extent to which the findings for the USA about the role of poverty, the family and other background influences in the determination of economic disadvantage are applicable to other countries. In particular, he reviews UK research and concludes with some brief conjectural comments about the applicability of the results to New Zealand.

Stephen P Jenkins is Professor of Applied Economics at the Institute of Social and Economic Research, University of Essex, and previously worked at several universities in the UK and in New Zealand. His current research focuses on income distribution, poverty dynamics and the labour market.

1999 • A5, paperback, 187 pp • 0-908935-38-2 • $35.50

Cultural Capital and Policy

George Barker

This monograph addresses the question "Is there something called 'Cultural Capital' worth talking about and should the government be involved in encouraging its production?"

Dr George Barker tackles those questions in an essay commissioned by the New Zealand Film Commission.

His answers are "yes" and "maybe". As with other forms of capital, most is produced by individuals in their interactions with one another. Dr Barker sets out the factors which should be examined by a government concerned with social and cultural issues and which should determine whether the government should set about stimulating the production of cultural capital.

This work sets our timely guidelines for what is likely to be a lively public debate in New Zealand over the next few years.

$29.50

Today's Schools: Governance & Quality

Simon Smelt, 1998

The Tomorrow's Schools reforms in New Zealand have sought to simplify and remove bureaucracy and empower parents. The four pillars of the reforms are: parental choice, delegation of powers to school level, parental voice at school level and contractual relations between the school level and the center. In most of these areas, the reforms go further than reforms dare in other countries. However, they are far from creating a voucher scheme or a fully decentralized or market driven system.

The implementation of the reforms has not pursued some of the original vision in terms of teacher salaries, property, inter-school co-operation, parent power or zoning. There is some tension between the different pillars of the reforms, in particular between voice and choice. There are unavoidable tensions between the interests of the various stakeholders in the school system. The Crown itself has several different interests or stakes and, thus, competing objectives to pursue. In consequence of the problems in implementing the original blueprint, the various tensions and the uncertainties over the Crown's priorities, the actual school governance system is complex and distinct from the vision. Its operation displays in practice a number of problems or areas for concern, and in sum, each of the four pillars of the reforms have proved limited or flawed. The way forward ma lie first in the Crown more clearly identifying its priorities and accepting the consequential trade-offs between objectives; and second, in some modifications to strengthen the pillars of contractual relations, choice and voice.

Overall, there is considerable potential to further develop the existing system. The current balance of interests and powers is by no means the only one possible within a Crown-owned but decentralized system and the optimal balance is unlikely to have been struck as yet, given the dynamics and complexities of the reform process, the interest groups involved and the outcomes to date.

1998 • A5, paperback, 84 pp • 0-908935-27-7 • $25

Series in Public Policy, Law, Finance and Mangement

Public Sector Management in New Zealand

Graham Scott

Graham Scott led the most thorough rethink of public administration of any OECD country in the last two decades. His practitioner-led revolution in New  Zealand, fitted a robust intellectual framework to the loose set of commerce-based reforms which had hitherto comprised New Public Management. Key innovations pioneered by Scott in the late eighties are now being picked up as international best practice throughout the developed world, Scott is a man of big ideas who made things happen. The strength of this book is the coherence of its founding ideas, and the clarity and honesty of his reflections on the efforts to apply them. Alex Matheston IMF/POUMA

2001 • paperback, 407pp • 0-9582178-2-3 • $30

Competition Law Research Publications

Basis:

The research programme will examine competition law and regulation economics in terms of two sets of interlocked dynamics:

A: The tension in areas of "the commons" between:

B. The inter-relationships in the area of network industries between:

The hinge between A and B is the law, as providing a basis for contracting within and between consumption and investment interests. But the law is in danger of "capture" and/or inhibiting the dynamics of B and thus both long term consumption and investment interests.

Method

The dynamics within and between A and B and the rule of law can be examined in terms of:

Techniques of comparative institutional analysis relating to vertical/horizontal corporate form (ex Williamson, Teece), club theory and financial and statistical analysis can be applied in addition to competition and game theory.

Issues tackled; hypothesis tested

The key issue is identifying the optimal role and form of government regulation in areas of fast changing technology and corporate forms.

Changing technology has led and is leading to changes in corporate form and areas of competition within most network industries. Backward looking law, and myopic political pressures, may be imposing inappropriate regulatory and corporate structures and inhibiting investment and competition.

The law and politics may rest on inadequate and out of date understanding of competition and contracting in network industries. In particular:

As electricity wholesale markets have been established by collective contracting, particular interest may attach to this.

Specific issues may arise, e.g. government reviews, number portability etc.

One of the first activities of the Centre in this area has been its contribution to a Faculty of Law project on the accession of China to the World Trade Organisation.

China and World Trade Organisation Project

The Director of CLE Dr George Barker was Chief Investigator under ARC Grant No. C79804936. Through this project CLE has helped organise a major conference on March 17, 2001 and a series of publications to disseminate the results of the research.

– China and WTO Conference March 17, 2001
– Publications

 

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