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Coping with job loss: evidence from military base closures The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-12-26 Matz Dahlberg, Linna Martén, Björn Öckert
We examine how workers adjust in response to an unexpected job loss. Using the closure of military bases in Sweden, we find that displaced workers experience permanent income losses and immediately adjust along two main channels: regional and sector mobility. Displaced military workers are more likely to move to another municipality, start commuting, and change sectors. We also find that workers with
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Will the centralization of carbon pricing revenue in the European Union lead to laxer climate policy? The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-12-20 Clemens Fuest, Volker Meier
We analyze the economic impact of using carbon pricing revenue to fund the European Union (EU) budget. Such a reform would redistribute from countries with above-average carbon-intensive production to less-carbon-intensive countries. Once the reform is implemented, the low-carbon countries will prefer a lower carbon price (i.e., laxer climate policy at the EU level) than before the reform, and vice
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Inequality in Russia over time and over the life cycle The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-12-18 Maksym Bryukhanov, Dmytro Hryshko
Using Russian longitudinal data for 1994–2018, we document a secular decline in consumption and income inequality. Although within-cohort inequality is also declining, the life-cycle inequality profiles of income and consumption are surprisingly flat. A calibrated life-cycle model with incomplete markets, high initial variance of the persistent income component, and moderately persistent income shocks
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Reference points in sequential bargaining: theory and experiment The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-10-11 Kjell Arne Brekke, Alice Ciccone, Tom-Reiel Heggedal, Leif Helland
We introduce loss aversion in an infinite-horizon, alternating-offers model. When outside options serve as reference points, the equilibrium of our model follows that of the standard Rubinstein bargaining model, i.e., outside options do not affect the equilibrium unless they are binding. However, when reference points are given by the resources players contribute to the pie, the bargaining outcome
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Reference points in sequential bargaining: theory and experiment The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-10-11 Kjell Arne Brekke, Alice Ciccone, Tom-Reiel Heggedal, Leif Helland
We introduce loss aversion in an infinite-horizon, alternating-offers model. When outside options serve as reference points, the equilibrium of our model follows that of the standard Rubinstein bargaining model (i.e., outside options do not affect the equilibrium unless they are binding). However, when reference points are given by the resources that players contribute to the pie, the bargaining outcome
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Extended maternity leave and children's long-term development The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-10-03 Luc Behaghel, Maria Florencia Pinto
Countries around the world are increasingly expanding legal maternity leaves, with the dual objective of protecting mothers’ jobs during childbirth recovery and enhancing child development. Using exhaustive census data, we find that a three-year paid leave in France had zero average effects on children's long-term schooling achievement, and no detectable impact heterogeneity. The lack of positive effects
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Social security pension and the effect on household saving The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-10-02 Elin Halvorsen, Zhiyang Jia, Herman Kruse, Trond C. Vigtel
This paper examines the substitution between pension wealth and household saving. To identify the effect of reductions in social security pension wealth on household saving, we utilize variations in changes in social security pension wealth induced by Norway's 2011 reform across different cohorts, time periods, and sectors. Our study focuses on saving behavior of individuals between ages 57–61, and
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Extended maternity leave and children's long-term development The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-10-03 Luc Behaghel, Maria Florencia Pinto
Countries around the world are increasingly expanding legal maternity leaves, with the dual objective of protecting mothers' jobs during their recovery after childbirth and enhancing child development. Using exhaustive census data, we find that a three-year paid leave in France had zero average effects on children's long-term schooling achievement, and no detectable impact heterogeneity. The lack of
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Low-skilled jobs, language proficiency, and job opportunities for refugees: an experimental study The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-09-28 Simon Ek, Mats Hammarstedt, Per Skedinger
In a field experiment, we study the causal effects of previous experience and language skills when newly arrived Syrian refugees in Sweden apply for low-skilled jobs. We find no evidence of sizeable effects from previous experience or completed language classes on the probability of receiving callback from employers. However, female applicants were more likely than males to receive a positive response
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Low-skilled jobs, language proficiency, and job opportunities for refugees: an experimental study The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-09-28 Simon Ek, Mats Hammarstedt, Per Skedinger
In a field experiment, we study the causal effects of previous experience and language skills when newly arrived Syrian refugees in Sweden apply for low-skilled jobs. We find no evidence of sizable effects from previous experience or completed language classes on the probability of receiving a callback from employers. However, female applicants were more likely than males to receive a positive response
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Rising concentration and wage inequality The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-09-25 Guido Matias Cortes, Jeanne Tschopp
Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in a small number of firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that an increase in consumer price sensitivity will lead to an increase in the sectoral concentration of revenues and employment, as well as an increase in wage
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Individual credit market experience and beliefs about bank lending policy: evidence from a firm survey The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-09-25 Jarko Fidrmuc, Christa Hainz, Werner Hölzl
Using the Austrian Business Survey between 2011 and 2016, we study how firms' individual credit market experiences influence their beliefs about the bank lending policy. Firms that have recently experienced a loan rejection are more likely to believe that the lending policy is restrictive. We see similar effects for firms that were granted loans, but with conditions worse than anticipated. Exploiting
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Rising concentration and wage inequality The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-09-25 Guido Matias Cortes, Jeanne Tschopp
Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in a small number of firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that an increase in consumer price sensitivity will lead to an increase in the sectoral concentration of revenues and employment, as well as an increase in wage
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Individual credit market experience and beliefs about bank lending policy: evidence from a firm survey The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-09-25 Jarko Fidrmuc, Christa Hainz, Werner Hölzl
Using the Austrian Business Survey between 2011 and 2016, we study how firms' individual credit market experiences influence their beliefs about the bank lending policy. Firms that have recently experienced a loan rejection are more likely to believe that the lending policy is restrictive. We see similar effects for firms that were granted loans, but with conditions worse than anticipated. Exploiting
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Asymmetric market power and wage suppression The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-08-21 Tomer Blumkin, David Lagziel
We study a labor market in which two identical firms compete over a pool of homogeneous workers. Firms pre-commit to their outreach to potential employees, either through their informative advertising choices, or through their screening processes, before engaging in a wage (Bertrand) competition. Although firms are homogeneous, the unique pure-strategy equilibrium is asymmetric: one firm maximizes
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Decomposing gender wage gaps: a family economics perspective The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-08-21 Dorothée Averkamp, Christian Bredemeier, Falko Juessen
We propose a simple way to embed family-economics arguments for pay differences between genders into standard decomposition techniques. To account appropriately for the role of the family in the determination of wages, one has to compare men and women with similar own characteristics – and with similar partners. In US survey data, we find that our extended decomposition explains considerably more of
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Banks and financial crises: contributions of Ben Bernanke, Douglas Diamond, and Philip Dybvig* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-07-26 Zhiguo He, Yunzhi Hu
The 2022 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was awarded to Ben S. Bernanke, Douglas W. Diamond, and Philip H. Dybvig “for research on banks and financial crises”. This article surveys the contributions of the three laureates and discusses how their insights have changed the way that academics and policymakers understand banks and their roles in financial crises.
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Experienced versus decision utility: large-scale comparison for income–leisure preferences* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-06-22 Alpaslan Akay, Olivier B. Bargain, H. Xavier Jara
Subjective well-being (SWB) data are increasingly used to perform welfare analysis. Interpreted as “experienced utility”, it has recently been compared to “decision utility” using small-scale experiments most often based on stated preferences. We transpose this comparison to the framework of non-experimental and large-scale data commonly used for policy analysis, focusing on the income–leisure domain
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Do tax subsidies for retirement saving affect total private saving? New evidence on middle-income workers* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-06-22 Camilla Skovbo Christensen, Bastian Emil Ellegaard
We exploit exogenous variation from a pension reform in Denmark to estimate the effect of tax subsidies on total private saving. We present new evidence on individuals in the middle of the income distribution and show that a reduction in tax subsidies for retirement saving reduces total private saving. The reform changed the tax incentives for saving in the pension scheme that holds the highest tax
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The effect of compulsory face mask policies on community mobility in Germany* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-05-29 Roxanne Kovacs, Maurice Dunaiski, Janne Tukiainen
There is an ongoing debate about face masks being made compulsory in public spaces to contain COVID-19. A key concern is that such policies could undermine efforts to maintain social distancing and reduce mobility. We provide first evidence on the impact of compulsory face mask policies on community mobility. We exploit the staggered implementation of policies by German states during the first wave
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Transnational crimes: how nations should cooperate and why they don't* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-04-07 Mehmet Bac
Chain-form crime partnerships and intelligence sharing by national authorities to detect cross-border partners create multiple externalities in the combat against transnational crimes and illicit trafficking. Cooperative enforcements that minimize global harms prioritize the country with lower intelligence production and/or superior detection capability. In equilibrium, as in practice, national enforcements
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Hours risk and wage risk: repercussions over the life cycle* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-04-07 Robin Jessen, Johannes König
We decompose earnings risk into contributions from hours and wage shocks. To distinguish between hours shocks, modeled as innovations to the marginal disutility of work, and labor supply reactions to wage shocks, we formulate a life-cycle model of consumption and labor supply. For estimation, we use data on married American men from the Panel Study of Income Dynamics. Permanent wage shocks explain
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Unfair inequality and growth* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-04-06 Gustavo A. Marrero, Juan G. Rodríguez
Fighting against economic inequality is one fundamental social goal in the agendas of most governments. However, recent studies highlight that people actually prefer unequal societies, as they accept inequality generated by an individual's effort and wish to reduce only unfair inequality (generated by factors beyond an individual's control). This distinction might help to explain the fundamental unsolved
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The roots of inequality: estimating inequality of opportunity from regression trees and forests* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-02-20 Paolo Brunori, Paul Hufe, Daniel Mahler
We propose the use of machine learning methods to estimate inequality of opportunity and to illustrate that regression trees and forests represent a substantial improvement over existing approaches: they reduce the risk of ad hoc model selection and trade off upward and downward bias in inequality of opportunity estimates. The advantages of regression trees and forests are illustrated by an empirical
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Micro-responses to shocks: pricing, promotion, and entry* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-02-11 Alexis Antoniades, Sofronis Clerides, Mingzhi Xu
We study the market response to firm-specific demand shocks in a natural experiment setting. In 2006, a boycott of Danish products in several Arab countries was devastating for Danish cheese products firms. In Saudi Arabia, their market share collapsed from 16.5 percent in January to below 1 percent in March, and never fully recovered; by 2009, it was 6.3 percent. By analyzing micro-level (scanner)
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Marketed tax avoidance: an economic analysis∗ The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-02-11 Jiao Li, Duccio Gamannossi degl'Innocenti, Matthew D. Rablen
Recent years have witnessed the growth of mass-marketed tax avoidance schemes aimed at the middle (not top) of the income distribution, with significant implications for tax revenue. We examine the consequences for the structure of income tax, and for tax authority anti-avoidance efforts, of tax avoidance of this type. In a model that allows for both demand- and supply-side considerations, we find
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Penalty lottery* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-02-11 Duk Gyoo Kim
To control sequential public bad productions under imperfect monitoring, this paper proposes a penalty lottery: a violator passes the responsibility of the fine to the next potential violator with some probability and pays all the accumulated fines with the complementary probability. The penalty lottery does not merely impose extreme fines because an absorbing state is practically unreachable. It self-selects
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Price dispersion and the stability of trade* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2023-02-02 Atle Oglend, Frank Asche, Ruth Beatriz Mezzalira Pincinato, Hans-Martin Straume
Research on trade relationships has documented a high rate of relationship breakup and churning. We use data on Norwegian exports to document two stylized facts about the stability of trade relationships. First, the probability of relationship breakup increases in the deviation of the relationship-specific price from a reference price. Second, relationship hazards follow Zipf's law. We propose a search
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Public pension policy and the equity–efficiency trade-off∗ The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-10-31 Johan Gustafsson
This paper illustrates that the equity–efficiency trade-off between a redistributive, Beveridgean, pension system and an earnings-based, Bismarckian, scheme can collapse when accounting for labor supply effects on the extensive margins. I introduce a general equilibrium overlapping generations model with endogenous savings, human capital formation, and labor supply. The model is calibrated to an average
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The dynamic effects of monsoon rainfall shocks on agricultural yield, wages, and food prices in India* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-09-26 Björn Brey, Matthias S. Hertweck
This paper shows that, first, the effects of monsoon rainfall shocks on agricultural yield in India are highly asymmetric: yield falls strongly after droughts, whereas excessive rainfall has only little effects. Second, our key novel finding is that the short-lived yield loss after a widespread drought elicits a persistent decline (increase) in wages (food prices), which lasts for up to five years
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Labor by design: contributions of David Card, Joshua Angrist, and Guido Imbens* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-09-23 Peter Hull, Michal Kolesár, Christopher Walters
The 2021 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was awarded to David Card “for his empirical contributions to labor economics” and to Joshua Angrist and Guido Imbens “for their methodological contributions to the analysis of causal relationships”. We survey these contributions of the three laureates, and discuss how their empirical and methodological insights transformed
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Commitment and discretion in contracts: theory and evidence from retirement plans* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-09-13 Jin-Hyuk Kim, Nick Vikander
We consider a firm's problem of incentivizing its workforce through relational contracts, when workers effectively face a shorter time horizon due to possible separation shocks. Commitment issues then generate a trade-off between efficiency and distribution, which affects both performance and profits. Profits under relational contracting can exceed those under formal contracting, despite lower performance
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Kant and Lindahl* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-09-08 John E. Roemer, Joaquim Silvestre
In 1896 and 1919, respectively, Wicksell and Lindahl analyzed the public provision of public goods through parliamentary negotiation. Later, Roemer applied Kant's 1785 imperatives to the private provision of public goods by voluntary contributions. Our focal equilibrium notions are the balanced linear cost-share equilibrium for the Wicksell–Lindahl approach and the multiplicative Kantian equilibrium
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Issue linkage versus ringfencing in international agreements* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-08-25 Ngo Van Long, Martin Richardson, Frank Stähler
Issue linkage is often regarded as a means to enhance international cooperation in the presence of a sovereignty constraint. This constraint means a country can leave an agreement whenever it likes, if the perceived gains from leaving are larger than the gains from staying in the agreement. We set up a model of international agreements in which future gains from cooperation are uncertain, and it is
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Fertility and climate change* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-08-14 Reyer Gerlagh, Veronica Lupi, Marzio Galeotti
A quarter of the total increase in emissions is attributable to the growth of emissions per capita, whereas three-quarters are due to population growth. This evidence notwithstanding, demography in climate–economy models typically follows exogenous trends. We develop a climate–economy integrated model with endogenous fertility through a quality–quantity trade-off. The decentralization of the social
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The Carbon Bubble: climate policy in a fire-sale model of deleveraging∗ The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-08-14 David Comerford, Alessandro Spiganti
Credible implementation of climate change policy, consistent with the 2 °C limit, requires a large proportion of current fossil-fuel reserves to remain unused. This issue, named the Carbon Bubble, is usually presented as a required asset write-off, with implications for investors. We embed the Carbon Bubble in a macroeconomic model exhibiting a financial accelerator: if investors are leveraged, then
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Firm creation, entry costs, and house-price volatility∗ The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-08-12 Brendan Epstein, Alan Finkelstein Shapiro, Andrés González Gómez
Amid growing work on the link between firm creation and cyclical housing-market dynamics, we document a significant, positive, and robust cross-country relationship between the level of new firm creation and the cyclical volatility of house prices. Using a business-cycle model with endogenous firm entry, housing, and housing-finance constraints and shocks, we show that, via general equilibrium effects
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Wage bargaining and employment revisited: separability and efficiency in collective bargaining* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-08-12 Claus-Jochen Haake, Thorsten Upmann, Papatya Duman
We analyse the two-dimensional Nash bargaining solution (NBS) by deploying the standard labour market negotiations model of McDonald and Solow. We show that the two-dimensional bargaining problem can be decomposed into two one-dimensional problems, such that the two solutions together replicate the solution of the two-dimensional problem if the NBS is applied. The axiom of “independence of irrelevant
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Monetary transmission with income risk* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-08-09 Martin B. Holm
In periods of distress, observed and perceived income risk tends to rise. Does this heightened income risk affect monetary transmission? This paper first shows that in partial equilibrium, heightened income risk dampens the substitution effect of interest rate changes but amplifies the indirect income effect of wage changes. The effects are sizable in partial equilibrium. An increase in income risk
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Strategy-proof size improvement: is it possible?* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-08-08 Mustafa Oğuz Afacan, Umut Dur
The number of assigned agents (i.e., size) is an important parameter in object allocations. While size maximality clashes with individual rationality and strategy-proofness, it can still be possible to increase the size over a mechanism while keeping these properties. To pursue this research, we devise a size comparison criterion to investigate the possibility of size increase. A mechanism ψ size-wise
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Side effects of labor market policies* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-08-07 Marco Caliendo, Robert Mahlstedt, Gerard J. van den Berg, Johan Vikström
Labor market policies, such as training and sanctions, are commonly used to bring workers back to work. By analogy to medical treatments, exposure to these tools can have side effects. We study the effects on health using individual-level population registers on labor market outcomes, drug prescriptions, and sickness absence, comparing outcomes before and after exposure to training and sanctions. Training
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Working time reduction and employment in a finite world* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-07-20 Jean-François Fagnart, Marc Germain, Bruno Van der Linden
We study the consequences of a working time reduction (WTR) in a growth model with efficiency wages and an essential natural resource (natural capital), and in which technical progress cannot reduce the resource content of final production to zero. We show that if natural capital is scarce enough, a WTR increases the long-term levels of the hourly wage and employment. A numerical analysis of the transitory
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Consumer responses to the COVID-19 crisis: evidence from bank account transaction data* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-07-15 Asger Lau Andersen, Emil Toft Hansen, Niels Johannesen, Adam Sheridan
In this paper, we use transaction-level bank account data from Denmark to study the dynamics of consumer spending during the COVID-19 pandemic. We document that aggregate spending initially dropped by almost 30 percent but recovered almost fully after the first wave. While spending plummeted in categories severely affected by supply restrictions, it increased in unaffected categories. Individual exposure
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Where is the Land of Hope and Glory? The geography of intergenerational mobility in England and Wales* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-07-15 Brian Bell, Jack Blundell, Stephen Machin
We present a new analysis of intergenerational mobility across three cohorts in England and Wales using linked decennial census microdata, focusing on occupation, homeownership, and education. Four main results emerge. First, area-level differences in upward occupational mobility are highly persistent over time. Second, measures of absolute and relative mobility tend to be spatially positively correlated
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Do asylum-seekers respond to policy changes? Evidence from the Swedish–Syrian case* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-07-08 Henrik Andersson, Kristoffer Jutvik
Do asylum-seekers respond to policy changes in their destination country, and to what extent? We approach this question by using high-frequency data, and we focus on a sudden liberalization in Swedish policy toward Syrian asylum-seekers, which implied permanent instead of temporary residence. We show a clear and fast, yet temporary, increase in Syrian asylum applications in Sweden after the policy
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Do employers avoid hiring workers from poor neighborhoods? Experimental evidence from the real labor market* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-07-06 Magnus Carlsson, Stefan Eriksson
We investigate whether employers avoid hiring workers who live in neighborhoods with low socio-economic status and/or with long commuting times. In a large-scale field experiment in the Swedish labor market, we sent more than 4,000 fictitious résumés, with randomly assigned information about the applicants' residential locations, to firms with advertised vacancies. Our findings show that commuting
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Is the US Phillips curve stable? Evidence from Bayesian vector autoregressions* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-06-20 Sune Karlsson, Pär Österholm
It has been claimed that the fall in US inflation during the Great Recession was surprisingly small. One possible explanation for this is that the Phillips curve is unstable and that its slope was lower around the Great Recession. We investigate the importance of time-varying parameters using Bayesian vector autoregressions for inflation and unemployment. We find support for time variation in the inflation
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Trading offshore: evidence on banks’ tax avoidance* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-06-20 Dominika Langenmayr, Franz Reiter
Little is known about how banks shift profits to low-tax countries. Because of their specific business model, banks use other profit-shifting channels than non-financial firms. We propose a novel and bank-specific method of profit shifting: the strategic relocation of proprietary trading to low-tax jurisdictions. Using regulatory data from the German central bank, we show that a 1 percentage point
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Government ideology and international migration* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-06-13 Vincenzo Bove, Georgios Efthyvoulou, Harry Pickard
We provide the first empirical evidence that government ideology affects the choice of migration destinations. As ruling political parties differ in their discourse, policies, and positions on migration, the ideology differential between the host and home country governments can shape the relative generosity of the welfare system, the degree of tolerance towards out-groups, and the restrictiveness
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Wage-setting coordination in a small open economy* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-05-07 Petteri Juvonen
This paper studies wage-setting coordination in a two-sector, open economy dynamic stochastic general equilibrium model. Two large sectoral unions anticipate the effects of their wage demands on aggregate variables. In an open economy, there are externalities that the unions can take into account to increase aggregate welfare, but the strategic interaction between the sectoral unions tends to erode
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Student performance and loss aversion* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-03-08 Heiko Karle, Dirk Engelmann, Martin Peitz
We match data on performance in a multiple-choice examination with data on risk preferences from a classroom experiment. Students who are more loss averse leave more questions unanswered and perform worse in the exam when an incorrect answer is penalized compared with no answer. Thus, loss aversion parameters extracted from lottery choices in a controlled experiment have predictive power in a field
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Sovereign bail-outs and fiscal rules in a banking union* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-03-05 Luigi Marattin, Simone Meraglia, Raoul Minetti
In this paper, we study optimal fiscal rules in a two-country economy in which cross-country linkages between sovereign debts and banking sectors motivate bail-outs among countries. The first-best sovereign borrowing, which is contingent on the output gap between the countries, cannot be achieved in the presence of asymmetric information on a country's potential output. Because bail-out induces overborrowing
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Can optimism solve the entrepreneurial earnings puzzle?* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-03-05 Michele Dell'Era, Luca David Opromolla, Luís Santos-Pinto
In this paper, we apply a general equilibrium occupational choice model to the study of the impact of optimism on the earnings of entrepreneurs and workers. We extend the work of Lucas (1978 Bell Journal of Economics 9, 508–523) by assuming a fraction of individuals are optimistic about their ability as entrepreneurs. The model shows that optimism leads to a misallocation of talent and inputs, which
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Co-worker peer effects on parental leave take-up The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-02-23 Magnus Carlsson, Abdulaziz Abrar Reshid
We investigate co-worker peer effects in the use of parental leave in Sweden. We use an instrumental variable approach called “peers of peers”, in which the parental leave taken by family peers (siblings and cousins) of co-workers is used as an instrument for co-workers’ use of parental leave. For fathers, we find that a 10-day increase in the average parental leave taken by co-workers increases their
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Exporting costs and multi-product shipments* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-02-08 David Gomtsyan, Alexander Tarasov
In this paper, employing transaction-level data for Russian imports, we explore the role of multi-product shipments in explaining shipping patterns across countries. In our data, an average shipment includes five different products. We document that firms from higher-income countries on average include a larger number of different products into a single shipment and have a larger number of shipments
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Gender identity and relative income within households: evidence from Sweden* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-02-05 Karin Hederos, Anders Stenberg
In their study of relative income within US households, Bertrand et al. (2015, Quarterly Journal of Economics 130, 571–614) show that the distribution of the wife's share of household income drops sharply where the wife starts earning more than her husband. They attribute the drop to a gender norm prescribing that a wife's income should not exceed her husband's income. We document a similar drop in
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Peer interactions and performance in a high-skilled labour market* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-02-04 Matteo Pazzona
It is not clear whether interactions among superstar employees lead to an increase in productivity. Such interactions are relatively rare, and measuring productivity is challenging. In this paper, it is suggested that these difficulties can be overcome by analysing changes in the performance of elite National Basketball Association (NBA) players who participate in the Olympic Games. By using advanced
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Premature deaths, accidental bequests, and fairness* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-02-04 Marc Fleurbaey, Marie-Louise Leroux, Pierre Pestieau, Gregory Ponthiere, Stephane Zuber
While there is little agreement regarding the taxation of bequests in general, there is a widely held view that accidental bequests should be subjected to a confiscatory tax. We re-examine the optimal taxation of accidental bequests by introducing a concern for compensating individuals for a premature death. Assuming that individuals care about what they leave to their children, we show that, whereas
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Cognitive consequences of iodine deficiency in adolescence: evidence from salt iodization in Denmark* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-01-29 Benjamin Ly Serena
Over the past three decades, many countries have introduced iodized salt policies to eradicate iodine deficiency. Iodine deficiency in utero is detrimental to cognitive ability, but little is known about the consequences of iodine deficiencies after birth. This paper examines the impact of iodine deficiency in adolescence on school performance. I exploit the introduction of iodized salt in Denmark
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To adjust or not to adjust? Spatial price variation and the measurement of poverty* The Scandinavian Journal of Economics (IF 1.109) Pub Date : 2022-01-29 Anders Kjelsrud
Publicly provided goods and services influence household consumption levels. Consumption estimates based solely on private expenses are therefore biased. Given that we usually are unable to account for consumption from public provision, I argue that we often should ignore spatial price differences in inter-household comparisons. The key reason is that prices and levels of public provision are likely