ON THE INTERACTION BETWEEN EDUCATION AND SOCIAL SECURITY

This paper uses an overlapping generations model with endogenous fertility choices to analyze the quantitative costs and benefits of subsidizing higher education, paying particular attention to the interaction between such policy and the sustainability of the social security system. The paper focuses on the demographic change as the mechanism that link both policies. It is found that an increase in education subsidies changes the educational composition of the population and lowers average fertility. Lower average fertility and higher life expectancy of educated individuals translates into changes in the age structure of the population that requires an increase in the social security tax rate in order to balance the pension budget. Such process reduces the welfare benefits of this educational policy since the rise in social security taxes lowers the after-tax lifetime earnings of almost all individuals born in the period of the policy reform and over.

IMMIGRATION AND THE PENSION SYSTEM IN SPAIN

In this paper we use a large overlapping generations model with individuals that differ across age, productivity and native status to assess the effects on the pension system of different immigration quotas in the context of an aging population by computing how much should social security taxes be rised in order to pay for the pension burden in two model economies. The first one is the standard model pioneered by Auerbach and Kotlikoff (1987) where skilled and unskilled workers are perfect substitutes in the production process. In the second model economy, individuals with different skill levels are imperfect substitutes as in Canova and Ravn (1998). The main result of the paper is that half of the reduction of the social security tax rate associated with immigration in the standard model is lost when skilled and unskilled individual are imperfect substitutes. Consequently, the standard model with perfect substitution overestimates the ability of immigration inflows to sustain the pension system in Spain.

Quantum localized states in photonic flat-band lattices

The localization of light in flat-band lattices has been recently proposed and experimentally demonstrated in several configurations, assuming a classical description of light. Here, we study the problem of light localization in the quantum regime. We focus on quasi one-dimensional and two-dimensional lattices which exhibit a perfect flat-band inside their linear spectrum. Localized quantum states are constructed as eigenstates of the interaction Hamiltonian with a vanishing eigenvalue and a well defined total photon number. These are superpositions of Fock states with probability amplitudes given by positive as well as negative square roots of multinomial coefficients. The classical picture can be recovered by considering poissonian superpositions of localized quantum states with different total photon number. We also study the separability properties of flat band quantum states and apply them to the transmission of information via multi-core fibers, where these states allow for the total passive suppression of photon crosstalk and exhibit robustness against photon losses. At the end, we propose a novel on-chip setup for the experimental preparation of localized quantum states of light for any number of photons.Comment: 12 pages, 5 figure

Immigration and the pension system in Spain

In this paper we use a large overlapping generations model with individuals that differ across age, productivity and native status to assess the effects on the pension system of different immigration quotas in the context of an aging population by computing how much should social security taxes be rised in order to pay for the pension burden in two model economies. The first one is the standard model pioneered by Auerbach and Kotlikoff (1987) where skilled and unskilled workers are perfect substitutes in the production process. In the second model economy, individuals with different skill levels are imperfect substitutes as in Canova and Ravn (1998). The main result of the paper is that half of the reduction of the social security tax rate associated with immigration in the standard model is lost when skilled and unskilled individual are imperfect substitutes. Consequently, the standard model with perfect substitution overestimates the ability of immigration inflows to sustain the pension system in Spain

Instrumental variables quantile regression for panel data with measurement errors

This paper develops an instrumental variables estimator for quantile regression in panel data with fixed effects. Asymptotic properties of the instrumental variables estimator are studied for large N and T when Na/T ! 0, for some a > 0. Wald and Kolmogorov-Smirnov type tests for general linear restrictions are developed. The estimator is applied to the problem of measurement errors in variables, which induces endogeneity and as a result bias in the model. We derive an approximation to the bias in the quantile regression fixed effects estimator in the presence of measurement error and show its connection to similar effects in standard least squares models. Monte Carlo simulations are conducted to evaluate the finite sample properties of the estimator in terms of bias and root mean squared error. Finally, the methods are applied to a model of firm investment. The results show interesting heterogeneity in the Tobin’s q and cash flow sensitivities of investment. In both cases, the sensitivities are monotonically increasing along the quantiles