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The effect of school grants on test scores: experimental evidence from Mexico Economica (IF 1.53) Pub Date : 2024-04-05 Mauricio Romero, Juan Bedoya, Monica Yanez‐Pagans, Marcela Silveyra, Rafael de Hoyos
We use a randomized experiment (across 200 public primary schools in Puebla, Mexico) to study the impact of providing schools with cash grants on student test scores. Treated schools received on average 16 USD per student each year for two years, an increase of 20% in public spending per child, after teacher salaries. Overall, the grants had no impact on student test scores. Lack of a treatment effect
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Neighbourhood labour structure, lockdown policies, and the uneven spread of COVID‐19: within‐city evidence from England Economica (IF 1.53) Pub Date : 2024-04-02 Carlo Corradini, Jesse Matheson, Enrico Vanino
We estimate the importance of local labour structure in the spread of COVID‐19 during the first year of the pandemic. We build a unique dataset across 6791 English neighbourhoods that distinguishes between people living (residents) and people working (workers) in a neighbourhood, and differentiate between jobs that can be done from home (homeworkers), jobs that likely continued on‐site (keyworkers)
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Debt, deficits and interest rates Economica (IF 1.53) Pub Date : 2024-03-25 Christopher D. Cotton
This paper identifies how a rise in the deficit/debt impacts interest rates by looking at the high‐frequency response of interest rates to fiscal surprises. The fiscal surprises are the unexpected components of deficit releases and the changes in official forecasts by the Congressional Budget Office and by the Office of Management and Budget. The paper estimates that a rise in the deficit‐to‐GDP ratio
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Do management practices matter in further education? Economica (IF 1.53) Pub Date : 2024-03-22 Sandra McNally, Luis Schmidt, Anna Valero
Further education and sixth form colleges are key institutions for facilitating skill acquisition among 16–19 year olds in the UK. They enrol half a school cohort after completion of their lower secondary education, and this includes a disproportionate number from low‐income backgrounds. Yet little is known about what could improve performance in these institutions. We conduct the world's first management
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Unequal ground: oil booms and income inequality in the USA Economica (IF 1.53) Pub Date : 2024-03-08 Loujaina Abdelwahed, Cole Campbell
This paper examines the impact of oil price and quantity shocks on income inequality in the USA. Using micro income data, we construct measures of pre‐tax money income inequality at the state level for the period 1980–2017. We find that a $10 increase in oil price increases inequality, measured by the ratio of pre‐tax income of the 90th percentile to 10th percentile (p90/p10), by 3.8 percentage points
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Measuring maternal autonomy and its effect on child nutrition in rural India Economica (IF 1.53) Pub Date : 2024-03-06 Wiji Arulampalam, Anjor Bhaskar, Nisha Srivastava
This paper examines the link between a mother's autonomy—the freedom and ability to think, express, make decisions and act independently—and the nutritional status of her children. We treat ‘autonomy’ as a latent variable, and design a novel statistical framework to measure this. This method allows us to separate the direct associations of maternal and family characteristics in our model for nutrition
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Do wages underestimate the inequality in workers' rewards? The joint distribution of job quality and wages across occupations Economica (IF 1.53) Pub Date : 2024-02-28 Andrew E. Clark, Maria Cotofan, Richard Layard
Information on both wages and job quality is needed in order to understand the occupational dispersion of wellbeing. We analyse subjective wellbeing in a large UK sample to construct a measure of ‘overall reward’, the sum of wages and the value of job quality, in 90 different occupations. If only wages are included, then labour market inequality is underestimated: the dispersion of overall rewards
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Market power and monetary policy transmission Economica (IF 1.53) Pub Date : 2024-02-23 Romain Duval, Davide Furceri, Raphaël Lee, Marina M. Tavares
We show that firms' market power dampens the response of their output to monetary policy shocks, using firm-level data for the USA and a large cross-country firm-level dataset for 14 advanced economies. We also find some evidence that the role of markups in monetary policy transmission, while independent from other channels, is greater for firms whose characteristics—notably size and age—are likely
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Economic insecurity and the demand for populism in Europe Economica (IF 1.53) Pub Date : 2024-02-13 L. Guiso, H. Herrera, M. Morelli, T. Sonno
We document the spiral of populism in Europe and the direct and indirect role of economic insecurity shocks. Using survey data on individual voting, we make two contributions to the literature. (i) Economic insecurity shocks have a significant impact on the populist vote share, directly as demand for protection, and indirectly through the induced changes in trust and attitudes. (ii) A key consequence
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The wage curve after the Great Recession Economica (IF 1.53) Pub Date : 2024-02-12 David Blanchflower, Alex Bryson, Jackson Spurling
Most economists maintain that the labour market in the USA (and elsewhere) is ‘tight’ because unemployment rates are low, and the Beveridge curve (the vacancies-to-unemployment ratio) is high. They infer from this that there is potential for wage-push inflation. However, real wages fell rapidly in 2022, and prior to that, real wages had been stagnant for some time. We show that unemployment is not
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On the inefficiency of non-competes in low-wage labour markets Economica (IF 1.53) Pub Date : 2024-02-07 Tristan Potter, Bart Hobijn, André Kurmann
We study the efficiency of non-compete agreements (NCAs) in an equilibrium model of labour turnover. The model is consistent with empirical studies showing that NCAs reduce turnover and average wages for low-wage workers. The model also predicts that, by reducing turnover, NCAs raise recruitment and employment. We show that optimal NCA policy: (i) is characterized by a Hosios-like condition that balances
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Exchange rates and political uncertainty: the Brexit case Economica (IF 1.53) Pub Date : 2024-01-15 Paolo Manasse, Graziano Moramarco, Giulio Trigilia
This paper studies the impact of political risk on exchange rates. We focus on the Brexit Referendum as it provides a natural experiment where both exchange rate expectations and a time-varying political risk factor can be measured directly. We build a portfolio model that relates changes in the Leave probability to changes of the British pound's market price, both via expectations and via a political
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The welfare effects of time reallocation: evidence from Daylight Saving Time Economica (IF 1.53) Pub Date : 2024-01-10 Joan Costa-Font, Sarah Fleche, Ricardo Pagan
Daylight Saving Time (DST) is a widely adopted practice implemented by over 70 countries to align sunlight with day-to-day activities and reduce energy demands. However, we do not have a clear knowledge of how it affects individuals' welfare. Using a regression discontinuity combined with a difference-in-differences design, we find that the Spring DST transition causes a significant decline in life
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The role of firm-to-firm relationships in exporter dynamics Economica (IF 1.53) Pub Date : 2024-01-09 Davide Rigo
This paper investigates the role of firm-to-firm relationships in export market dynamics, documenting the following stylized facts for French exporters. First, exporters grow in a foreign market by expanding their customer base; the average French exporter doubles its number of buyers after 8 years. Second, sales to existing customers remain the predominant source of growth in a foreign market, with
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Hyperbolic discounting and state-dependent commitment Economica (IF 1.53) Pub Date : 2023-12-09 Takayuki Ogawa, Hiroaki Ohno
In a stochastic economy with uninsurable endowment risk, we establish a condition under which hyperbolic-discounting consumers commit to a future consumption path using both illiquid assets and borrowing constraints as commitment devices. There is the possibility that a state-dependent commitment can be adopted as an equilibrium consumption strategy. On a path leading to low future endowment, the current
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Endogenous property rights and the nature of the firm Economica (IF 1.53) Pub Date : 2023-12-08 Carmine Guerriero, Giuseppe Pignataro
While focusing on residual control rights, the property rights theory of the firm overlooks that the legal protection of each party's input shapes its ex post bargaining power. To evaluate this issue, we assume that the property rights on the inputs are selected by a legislator to maximize full investment and, conditional on this goal being reached, minimize inefficient deviations to intermediate investment
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When populists deliver on their promises: the electoral effects of a large cash transfer programme in Poland Economica (IF 1.53) Pub Date : 2023-11-29 Jan Gromadzki, Katarzyna Sałach, Michał Brzeziński
We estimate the effects of the introduction of a large cash transfer programme on support for the ruling populist party in Poland. We exploit the variation at the municipal level in the annual cash transfer amount received per capita, and use a difference-in-differences research design to study the electoral effects of the transfer. Our results show that a cash transfer amount of $100 per capita translated
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Market concentration and the relative demand for college-educated labour Economica (IF 1.53) Pub Date : 2023-11-15 Anders Akerman
If large firms employ relatively more educated workers, will an increase in market concentration increase income inequality by raising the relative demand for skill? I use Swedish employer–employee data from 1997–2016 and find a strong correlation between firm size and the share of college-educated (‘skilled’) workers. An increase in a sector's market concentration is correlated with a higher skilled
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The real side of stock market exuberance: bubbles, output and productivity at the industry level Economica (IF 1.53) Pub Date : 2023-11-14 Francisco Queirós
There has been a growing interest in the theory of rational bubbles. Recent theories predict that bubbles are expansionary, but differ in the underlying mechanisms. This paper provides empirical evidence that helps us to assess different theories, and documents four main findings: stock market overvaluation is associated with (i) faster output and input growth, (ii) declining total factor productivity
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What drives the substitutability between native and foreign workers? Evidence about the role of language Economica (IF 1.53) Pub Date : 2023-11-02 Elena Gentili, Fabrizio Mazzonna
This paper investigates the role of language in determining the substitutability between foreign and native workers. Our identification strategy exploits the linguistic diversity of Switzerland, a country with three main official languages (German, French and Italian) shared by bordering countries. This makes the Swiss labour market very peculiar, since both immigrants and natives may (or may not)
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Bank ownership and firm performance Economica (IF 1.53) Pub Date : 2023-10-30 Pavel Chakraborty
Does a bank's ownership matter for the performance of a firm to which it is connected, especially in the event of a crisis? I study this question through the effect of the 2008–9 crisis on Indian manufacturing firms to provide evidence on a new channel that can matter significantly for a firm's performance—bank ownership. I find that firms connected to private (domestic and foreign) banks earned around
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Risk aversion and favourite–longshot bias in a competitive fixed-odds betting market Economica (IF 1.53) Pub Date : 2023-10-20 Karl Whelan
Research on sports betting has generally found a favourite–longshot bias: bets on longshots lose more than bets on favourites. Existing research focuses largely on pari-mutuel betting, but favourite–longshot bias is also evident in fixed-odds online betting markets of the type that are growing rapidly around the world. Explanations for this bias in previous work on pari-mutuel markets cannot explain
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Evaluating compliance gains of expanding tax enforcement Economica (IF 1.53) Pub Date : 2023-10-17 Knut Løyland, Oddbjørn Raaum, Gaute Torsvik, Arnstein Øvrum
This paper demonstrates how tax administrations can evaluate future compliance gains from risk-based tax enforcement that audits all taxpayers above a risk threshold. Expanding tax enforcement in this setting means reducing the audit threshold. The compliance gains from such an expansion consist of a mechanical audit correction effect and a behavioural effect that reflects changes in self-reporting
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Healthy climate, healthy bodies: Optimal fuel taxation and physical activity Economica (IF 1.53) Pub Date : 2023-10-13 Inge van den Bijgaart, David Klenert, Linus Mattauch, Simona Sulikova
Passenger transport has significant externalities, including carbon emissions and air pollution. Public health research has identified additional social gains from active travel, due to the health benefits of physical exercise. Per mile, these benefits greatly exceed the external costs from car use. We introduce active travel into an optimal fuel taxation model and characterize analytically the second-best
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Stigma and take-up of labour market assistance: Evidence from two field experiments Economica (IF 1.53) Pub Date : 2023-10-05 Adam Osman, Jamin D. Speer
Aversion to ‘stigma’—disutility associated with a programme or activity due to beliefs about how it is perceived—may affect labour market choices and utilization of social programmes, but empirical evidence of its importance is scarce. Using two randomized field experiments, we show that stigma can affect consequential labour market decisions. Treatments designed to alleviate stigma concerns about
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Export-platform foreign direct investment and trade policy uncertainty: Evidence from brexit Economica (IF 1.53) Pub Date : 2023-09-12 Nicolò Tamberi
This paper analyses the effect of trade policy uncertainty in a customs union on export-platform foreign direct investment (FDI). First, I develop a partial equilibrium framework with heterogeneous firms based on the proximity–concentration trade-off that involves trade policy uncertainty about trade costs inside a customs union. Second, I derive an empirical equation that I test by exploiting the
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Driver's licences for undocumented immigrants and post-mortem organ donation Economica (IF 1.53) Pub Date : 2023-09-11 Tianyuan Luo, Cesar L. Escalante
This study examines the relationship between expanded access to driver's licences among undocumented immigrants and the number of post-mortem organ donors, using difference-in-differences modelling and event study estimation techniques. Results suggest that the adoption of laws that grant driver's licences to undocumented immigrants effectively increased the population of licensed drivers by about
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Consumption and time use responses to unemployment: Implications for the lifecycle model Economica (IF 1.53) Pub Date : 2023-08-28 Jim Been, Eduard Suari-Andreu, Marike Knoef, Rob Alessie
In this study, we analyse the effects of unemployment on consumption and time use. To do so, we employ a micro panel dataset for the Netherlands containing a large set of expenditure and time use categories. Our results show a small negative effect of unemployment on expenditures, and large positive effects on time spent on home production and leisure activities. We do not find evidence for complementarity
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Effects of the COVID-19 pandemic on domestic violence in Los Angeles Economica (IF 1.53) Pub Date : 2023-08-22 Amalia R. Miller, Carmit Segal, Melissa K. Spencer
From the onset of the COVID-19 pandemic, policymakers and news reports warned that restrictions on individual mobility and commercial activity could lead to a surge in domestic violence (DV). Some initial studies found evidence of greater DV incidence during the pandemic, but findings were inconsistent across locations and DV measures. This paper focuses on a single major city, Los Angeles (LA), to
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Retail pricing format and rigidity of regular prices Economica (IF 1.53) Pub Date : 2023-08-16 Sourav Ray, Avichai Snir, Daniel Levy
We study the rigidity of regular and sale prices, and how it is affected by pricing formats (i.e. pricing strategies). We use data from three large Canadian stores with different pricing formats (Every-Day-Low-Price, Hi-Lo and Hybrid) that are located within a 1 km radius of each other. Our data contain both the actual transaction prices and actual regular prices as displayed on the store shelves.
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The taxman cometh: Pathways out of a low-capacity trap in the Democratic Republic of the Congo Economica (IF 1.53) Pub Date : 2023-08-02 Jonathan L. Weigel, Elie Kabue Ngindu
How might fragile states escape a low-capacity trap in which citizens pay little tax and the government has insufficient revenue to increase enforcement or provide public goods? We argue that governments can escape such traps by regularizing tax collection. When citizens observe taxes being collected in a systematic, non-arbitrary manner, they are likely to update positively about the procedural performance
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Heterogeneous predictive association of CO2 with global warming Economica (IF 1.53) Pub Date : 2023-07-25 Liang Chen, Juan J. Dolado, Jesús Gonzalo, Andrey Ramos
Global warming is a non-uniform process across space and time. This opens the door to a heterogeneous relationship between CO 2 $$ {\mathrm{CO}}_2 $$ and temperature that needs to be explored going beyond the standard analysis based on mean temperature. We revisit this topic through the lens of a new class of factor models for high-dimensional panel data, called quantile factor models. This technique
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Productivity dispersion, wage dispersion and superstar firms Economica (IF 1.53) Pub Date : 2023-07-19 Yannick Bormans, Angelos Theodorakopoulos
Using a rich sample of firms in 14 EU countries from 2000 to 2016, we confirm increases in productivity dispersion, wage dispersion and superstar firms. Beyond reaffirming an incomplete pass-through from productivity to wages, we present novel empirical evidence of an even weaker pass-through in industries dominated by superstar firms. This effect is observed in both the lower and upper parts of the
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Investor beliefs about transformative innovations under uncertainty Economica (IF 1.53) Pub Date : 2023-07-12 Johannes Binswanger, Anja Garbely, Manuel Oechslin
Modern economies sometimes produce potentially transformative innovations whose development and implementation involves large amounts of capital. Often, the required initial investments are fraught with uncertainty, and there is a scarcity of objective information that would help interested investors to predict success. How, in this situation, do investors form subjective beliefs about prospective
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Migrants and imports: Evidence from Dutch firms Economica (IF 1.53) Pub Date : 2023-06-27 Aksel Erbahar, Ömer Tarık Gençosmanoğlu
This paper examines the effect of hiring migrants on firms' imports using a rich employer–employee dataset from the Netherlands for 2010–17. We use an instrumental variables strategy, and find that firms that employ migrants from a high-income country are more likely to import from that country. Our benchmark specification indicates that a one standard deviation increase in the share of migrant workers
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Accounting for the role of investment frictions in recessions Economica (IF 1.53) Pub Date : 2023-06-18 Fernando del Río, Francisco-Xavier Lores
Our business cycle accounting exercise reveals that both capital and investment efficiency declines played a prominent role in accounting for the output downturn during the US Great Recession. The evidence indicates that an increase in firms' investment costs may have played a substantial role during the US Great Recession, consistent with business cycle models in which firms face financial frictions
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Intra-EU migration, public transfers and assimilation Economica (IF 1.53) Pub Date : 2023-06-11 Eduard Suari-Andreu, Olaf van Vliet
In this study, we investigate the assimilation of EU migrants via the receipt of public transfers using high-quality administrative panel data for the Netherlands. Research on this topic has relevant implications for EU expansion policy, migration policy, and perception of migrants in host societies. The data that we employ contain comprehensive information on all public transfers that individuals
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Consequences of inconvenient information: Evidence from sentencing disparities Economica (IF 1.53) Pub Date : 2023-06-08 Michal Šoltés
Inconvenient information about the performance of public institutions may undermine public trust. In an experiment, I test how information about sentencing disparities among judges in the Czech Republic affects respondents' perception of the judicial system. I find no effect on respondents' declared institutional trust and willingness to rely on the formal judicial system. Instead, the information
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Are political and economic integration intertwined? Economica (IF 1.53) Pub Date : 2023-06-05 Bernt Bratsberg, Giovanni Facchini, Tommaso Frattini, Anna Cecilia Rosso
Economic incentives play a key role in the decision to run for office, but little is known on how they shape immigrants' self-selection into candidacy. We study this question using a two-period Roy model, and show that if returns to labour market experience differ between migrants and natives, then this will affect the relative likelihood to run for office for the two groups. We assess this prediction
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Seeking shelter in times of crisis? unemployment, perceived job insecurity and trade union membership Economica (IF 1.53) Pub Date : 2023-06-01 Adrian Chadi, Laszlo Goerke
Do trade unions benefit from economic crises by attracting new members among workers concerned about job security? To address this question, we provide a comprehensive empirical investigation based on panel data from Germany, where workers decide individually on their membership. We analyse whether exogenously manipulated perceptions of job insecurity encourage individuals to join a trade union. Firm-level
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The UK gender pay gap: Does firm size matter? Economica (IF 1.53) Pub Date : 2023-05-30 Melanie Jones, Ezgi Kaya
Motivated by the introduction of the UK Gender Pay Gap Reporting legislation to large firms, defined as over 250 employees, we use linked employee–employer panel data from the Annual Survey of Hours and Earnings to explore pre-legislation variation in the gender pay gap by firm size. In doing so, we contribute to the evidence on the relationship between two prominent empirical regularities in the labour
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Global banking, financial spillovers and macroprudential policy coordination Economica (IF 1.53) Pub Date : 2023-05-12 Pierre-Richard Agénor, Timothy P. Jackson, Luiz A. Pereira da Silva
The transmission of financial shocks and the gains from international macroprudential policy coordination are studied in a two-region, core–periphery model with a global bank, a two-level financial structure and imperfect financial integration. The model replicates the stylized facts associated with global banking shocks, with respect to output, credit, house prices and real exchange rate fluctuations
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Beyond windfall gains: The redistribution of apprenticeship costs and vocational education of care workers Economica (IF 1.53) Pub Date : 2023-05-04 Eric Schuss
In many countries, training subsidies and levy schemes are used to tackle the problem that company-based provision of apprenticeship training is low. In this paper, we consider the introduction of a levy scheme in the care sector and estimate the causal effect exerted by substantial redistribution of care worker apprenticeship costs on the training activity of care facilities. We exploit the fact that
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Children's social care and early intervention policy: Evidence from sure start Economica (IF 1.53) Pub Date : 2023-04-21 Dan Anderberg, Christina Olympiou
We study the effect of a key early intervention policy, designed to support families with children up to age 4, on the rate at which children up to age 9 are taken into social care. The gradual build-up of over 3600 Sure Start Children's Centres (SSCCs), operated by Local Authorities (LAs) across England, created large spatial and cohort variation in the provision of a service that included health
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‘Good jobs’, training and skilled immigration Economica (IF 1.53) Pub Date : 2023-04-17 Andrew Mountford, Jonathan Wadsworth
Has skilled immigration into the UK led to a reduction in the training of native-born workers? To address this concern, this paper describes a theoretical model where immigration can affect the training of native-born workers both positively and negatively, and where its effects may differ according to the characteristics of the migrant and of the training firm's sector. It then investigates this issue
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Firm-specific pay premiums and the gender wage gap in Europe Economica (IF 1.53) Pub Date : 2023-04-11 Jan-Luca Hennig, Balazs Stadler
We study how firm premia influence the gender wage gap for 21 European countries. We use a quadrennial harmonized matched employer–employee dataset to estimate gender-specific firm premia. Subsequently, we decompose the firm-specific wage premia differential into within- and between-firm components. On average, the former accounts mainly for the decline in the pay gap between 2002 and 2014. We pay
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Intellectual property and the organization of the global value chain Economica (IF 1.53) Pub Date : 2023-03-30 Stefano Bolatto, Alireza Naghavi, Gianmarco Ottaviano, Katja Zajc Kejžar
This paper highlights the role of intangible assets in a property rights model of firm organization with sequential production. Empirical evidence based on foreign direct investment and transaction-level trade data of Slovenian firms reveals that the strength of intellectual property rights (IPR) protection in the supplier's location affects firms' organizational choices whenever supplier investments
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Accounting for the slowdown in UK innovation and productivity Economica (IF 1.53) Pub Date : 2023-03-22 Peter Goodridge, Jonathan Haskel
This paper conducts a comprehensive sources-of-growth analysis for the UK market sector, 2000–19, using the latest ONS data, including new estimates of intangible investment, double deflated value-added, and updated price indices, all constructed bottom-up from data for 40 industries. The decomposition incorporates contributions from intangible assets, both capitalized and uncapitalized, in national
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The effect of child allowances on female labour supply: evidence from Israel Economica (IF 1.53) Pub Date : 2023-03-03 Yuval Mazar, Yaniv Reingewertz
This study estimates the effect of the sharp reduction in Israel's child allowances in the early 2000s on female labour supply. The study uses the difference-in-differences method to estimate changes in the labour supply of Israeli women with more children (four or five) compared to changes in the labour supply of women with fewer children (two or three). The results show an increase of approximately
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Taxes, subsidies and gender gaps in hours and wages Economica (IF 1.53) Pub Date : 2023-02-27 Robert Duval-Hernández, Lei Fang, L. Rachel Ngai
Using microdata from 17 OECD countries, this paper documents a negative cross-country correlation between gender gaps in market hours and wages. We find that the cross-country differences in market hours are mostly accounted for by female market hours and the size of the sector that produces close substitutes to home production. We quantify the role played by taxes and family care subsidies on the
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Exponential growth bias in the prediction of COVID-19 spread and economic expectation Economica (IF 1.53) Pub Date : 2023-02-21 Ritwik Banerjee, Priyama Majumdar
Exponential growth bias (EGB) is the pervasive tendency of people to perceive a growth process as linear when in fact it is exponential. We document that people exhibit EGB when asked to predict the number of COVID-19 positive cases in the future. Using four experimental interventions, we examine the effect of EGB on expectations about future macroeconomic conditions, and investment choices in risky
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The impact of place-based policies on interpersonal income inequality Economica (IF 1.53) Pub Date : 2023-02-15 Giuseppe Albanese, Guglielmo Barone, Guido de Blasio
This paper assesses the causal impact of the European Union (EU) cohesion policy, aimed at reducing the regional divide within the EU, on interpersonal income inequality in receiving areas. We leverage a severe contraction of financing, which took place in an Italian region in 2007, and adopt a difference-in-discontinuity empirical design to show that the Gini index (of income) at the municipality
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Network-based appointments and board diversity Economica (IF 1.53) Pub Date : 2023-02-15 Marie Lalanne
This paper investigates the occurrence of network-based appointments and its impact on board diversity. I use data on independent board appointments between 2006 and 2012 in large publicly listed firms in the USA, and exploit directors' CVs to uncover past social connections between candidates and current directors along various dimensions—from employment, education, army and social activities. I first
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A micro perspective on r > g Economica (IF 1.53) Pub Date : 2023-02-14 Roberto Iacono, Elisa Palagi
By exploiting large-scale administrative data on income and estimated personal wealth in Norway from 2010 to 2018, this paper establishes the first micro-level analysis of the difference between the real return on wealth and the real growth rate of total pre-tax income, across the entire net wealth distribution. We show that for the top 40% of the distribution, the aggregate R − G $$ R-G $$ of 1.8%
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Presenteeism when employers are under pressure: evidence from a high-stakes environment Economica (IF 1.53) Pub Date : 2023-01-24 Mario Lackner, Hendrik Sonnabend
This study analyses whether the decision to work while sick can be linked to workload fluctuations. Drawing on data collected from professional football, we exploit the dynamics of a season and use additional (national and international) cup games conducted in the second half of a season as a source of exogenous variation. We find robust evidence that players are 6.3 percentage points more likely to
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Support for small businesses amid COVID-19 Economica (IF 1.53) Pub Date : 2023-01-23 Charles A.E. Goodhart, Dimitrios P. Tsomocos, Xuan Wang
How should the government support small and medium-sized enterprises amid a pandemic crisis while balancing the trade-off between short-run stabilization and long-run allocative efficiency? We develop a two-sector equilibrium model featuring small businesses with private information on their likely future success and a screening contract. Businesses in the sector adversely affected by a pandemic can
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Diagnosing the UK productivity slowdown: which sectors matter and why? Economica (IF 1.53) Pub Date : 2023-01-13 Diane Coyle, Jen-Chung Mei
This paper explores the slowdown in labour productivity growth in the UK and other advanced economies by decomposing its growth into contributions from different sectors of the economy, looking at both within-industry productivity growth and labour reallocation between sectors. We find that the within-industry contribution is the main source of the slowdown. Comparing trends pre- and post-2008, the
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Artificial intelligence adoption in a competitive market Economica (IF 1.53) Pub Date : 2023-01-12 Joshua S. Gans
Economists have often viewed the adoption of artificial intelligence (AI) as a standard process innovation where we expect that efficiency will drive adoption in competitive markets. This paper models AI based on recent advances in machine learning that allow firms to engage in better prediction. Focusing on prediction of demand, it is demonstrated that AI adoption is a complement to variable inputs
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The long-run investment effect of taxation in OECD countries Economica (IF 1.53) Pub Date : 2022-12-07 Jakob B. Madsen, Antonio Minniti, Francesco Venturini
The gradually changing nature of production and the move away from tangible investment towards intangible investment over the past century suggest that the effects of the tax structure on investment need to be reassessed. To address this issue, we establish an endogenous growth model in which investment in tangible assets, R&D and education are influenced by different types of taxes. We test the long-run