Utilization of Employment Tax Credits: An Analysis of the Empowerment Zone Wage Tax Credit

This paper provides estimates of utilization for the Empowerment Zone (EZ) wage tax credit, a subsidy claimed by employers who operate in and hire residents of federally designated areas experiencing economic distress. The EZ credit is currently the largest employer‐based wage tax credit in the federal tax code in terms of dollars claimed, with almost $250 million claimed in 2002. I show that about 6.4 percent (and at least 3.5 percent) of the working age population was claimed under the EZ wage credit in 1999. In addition, I estimate that 24.2 percent (and at least 13.1 percent) of those employed inside of the target area were claimed for the credit. I create these national estimates of use with information on credit dollars claimed from the Internal Revenue Service and population data on the eligible population from the census. These measures of tax credit use are an alternative to the use rate of firms that are presented in the existing literature, and reveal how effective the credit is at reaching residents of the target area.     

An Options Pricing Method for Calculating the Market Price of Public Sector Pension Liabilities

State and local public sector employee pensions are widely known to be underfunded, but pension financial reports do not reveal the true extent of funding shortfalls. Pension accounting methods assume that plan investments can earn high returns without taking any account of the market risk involved. This gives a false sense of the financial strength of public sector pensions and understates risks to taxpayers. Since accrued pension benefits are legally and constitutionally protected, any pension funding shortfalls must be met by taxpayers. This benefit guarantee amounts to an effective put option on plan investments, the cost of which is not disclosed under current actuarial accounting. This paper uses an options pricing method to calculate the market value of taxpayer guarantees underlying public sector pensions. The average funding ratio declines from 83 percent under actuarial accounting to 45 percent under this options pricing approach. The typical state has unfunded public pension liabilities three times larger than its explicit government debt. Public pension shortfalls equal an average of 27 percent of state gross domestic product, posing a significant fiscal challenge in coming years. Accurate measures of public pension liabilities are important for policy makers, taxpayers, investors considering the economic environment in which to start or locate a business, and bond purchasers considering the risk premia appropriate to municipal government bonds that are in practice subordinate to public pension liabilities.     

The EU,UKIP and the Politics of Immigration in Britain

Immigration politics in Britain have been transformed by high levels of immigration, the effects of EU free movement, strong anti‐immigration sentiment and UKIP's rise. All are compounded by a more general discontent with politics and politicians. In face of claims that something must be done, politicians seek tougher controls on immigration and free movement, but these may be difficult to attain because of entanglement with EU rules, while failure to achieve stated objectives can further compound the disconnect that fuels support for UKIP.     

Better Off Out? Britain and Europe

The largest ever rebellion of Conservative MPs on Europe took place in October 2011 with 81 Conservative MPs defying the Conservative whip to vote for a referendum on Britain's continued membership of the European Union. This resurgence of dissent over Europe has been fuelled by the crisis in the eurozone. The Conservative party is now an overwhelmingly Eurosceptic party, but Conservative Eurosceptics are divided over whether the Government should use the opportunity of the eurozone crisis to take Britain out of the European Union, or whether it should seek to negotiate a looser arrangement, or do nothing at all. Conservative policy on Europe has been further complicated by the coalition with the Liberal Democrats, and by the consequences for the British economy if the eurozone disintegrates. Public opinion is also divided. British policy on the European Union remains ambivalent and muddled because British aims are inconsistent, and because there is no consensus on where Britain's interests truly lie.     

ADOLESCENT VIOLENT VICTIMIZATION AND PRECOCIOUS UNION FORMATION*

This article bridges scholarship in criminology and family sociology by extending arguments about “precocious exits” from adolescence to consider early union formation as a salient outcome of violent victimization for youths. Research indicates that early union formation is associated with several negative outcomes; yet the absence of attention to union formation as a consequence of violent victimization is noteworthy. We address this gap by drawing on life course theory and data from the National Longitudinal Study of Adolescent Health (Add Health) to examine the effect of violent victimization (“street” violence) on the timing of first coresidential union formation—differentiating between marriage and cohabitation—in young adulthood. Estimates from Cox proportional hazard models show that adolescent victims of street violence experience higher rates of first union formation, especially marriage, early in the transition to adulthood; however, this effect declines with age, as such unions become more normative. Importantly, the effect of violent victimization on first union timing is robust to controls for nonviolent delinquency, substance abuse, and violent perpetration. We conclude by discussing directions for future research on the association between violent victimization and coresidential unions with an eye toward the implications of such early union formation for desistance.     

MANAGEMENT INFORMATION FOR MINISTERS: THE MINIS SYSTEM IN THE DEPARTMENT OF THE ENVIRONMENT

MINIS, a management information system for ministers in the Department of the Enviroment, was introduced by Michael Heseltine in 1980. The article summarizes the main features of the system and analyses some of the issues arising from its introduction, in particular, whether it is likely to be adopted by other government departments or public bodies. The reasons offered by departments as to why it is difficult to transfer are examined, together with other factors which are likely to inhibit transfer to other public sector bodies. The mechanism for promoting the spread of such systems is also discussed. The conclusion is that MINIS ought to be considered by other bodies and it has almost certainly already had some impact on systems elsewhere in central government, but without a central initiative, more widespread adoption is on past evidence unlikely, although parts of it may be adopted.     

PRIVATIZATION AS INDUSTRIAL POLICY: STATE WITHDRAWAL FROM THE BRITISH MOTOR INDUSTRY

The distinctive feature of industrial policy towards the motor industry in the 1980s was the transformation in government policy from one of subsidizing bl to active encouragement of Japanese inward investment. This article focuses on the key events of the bl privatization and illustrates how the changing nature of the government's relationship with bl and the motor industry was a fundamental influence on policy change. It also examines the utility of policy network models in accounting for policy outcomes in a highly politicized policy environment.