| 1. |
- Albrecht, James, et al.
(författare)
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The career dynamics of high-skilled women and men : Evidence from Sweden
- 2018
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 105, s. 83-102
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we use matched worker-firm register data from Sweden to examine the career dynamics of high-skill women and men. Specifically, we track wages for up to 20 years among women and men born in the years 1960-70 who completed a university degree in business or economics. These women and men have similar wages and earnings at the start of their careers, but their career paths diverge substantially as they age. These men and women also have substantial differences in wage paths associated with becoming a parent. We look at whether firm effects account for the differences we observe between women's and men's wage profiles. We document differences between the firms where men work and those where women work. However, a wage decomposition suggests that these differences in firm characteristics play only a small role in explaining the gender log wage gap among these workers. We then examine whether gender differences in firm-to-firm mobility help explain the patterns in wages that we see. Men and women both exhibit greater mobility early in their careers, but there is little gender difference in this firmto-firm mobility. We find that the main driver of the gender difference in log wage profiles is that men experience higher wage gains than women do both as switchers and as stayers.
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| 2. |
- Balleer, Almut, et al.
(författare)
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Does short-time work save jobs? A business cycle analysis
- 2016
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 84, s. 99-122
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Tidskriftsartikel (refereegranskat)abstract
- In the Great Recession most OECD countries used short-time work (publicly subsidized working time reductions) to counteract a steep increase in unemployment. We show that short-time work can actually save jobs. However, there is an important distinction to be made: while the rule-based component of short-time work is a cost-efficient job saver, the discretionary component is completely ineffective. In a case study for Germany, we use the rich data available to combine micro- and macroeconomic evidence with macroeconomic modeling in order to identify, quantify and interpret these two components of short-time work.
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| 3. |
- Bisin, Alberto, et al.
(författare)
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Bend it like Beckham : Ethnic identity and integration
- 2016
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 90, s. 146-164
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Tidskriftsartikel (refereegranskat)abstract
- We propose a theoretical framework to study the determinants of ethnic and religious identity along two distinct motivational processes: cultural distinction and cultural conformity. Under cultural conformity, ethnic identity is reduced by neighborhood integration, which weakens group loyalties and prejudices. On the contrary, under cultural distinction, ethnic minorities are more motivated in retaining their own distinctive cultural heritage the more integrated are the neighborhoods where they reside and work. Using data on ethnic preferences and attitudes provided by the Fourth National Survey of Ethnic Minorities in the UK we find evidence that might be consistent with intense ethnic and religious identity mostly formed as a cultural distinction mechanism. Consistently, we document that ethnic identities might be more intense in mixed than in segregated neighborhoods.
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| 4. |
- Broer, Tobias
(författare)
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The home bias of the poor : Foreign asset portfolios across the wealth distribution
- 2017
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 92, s. 74-91
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Tidskriftsartikel (refereegranskat)abstract
- This paper documents how the share of foreign stocks in US household portfolios rises with the ratio of financial wealth to non-financial income. This is both because wealthier households are more likely to participate in foreign asset markets, and because portfolio shares of participants increase with financial wealth but decrease with non-financial income. A simple, standard two-country general equilibrium model shows that hedging of terms of trade movements and non-financial income risk produces non-trivial heterogeneity in portfolios across the wealth and income distribution within countries that is qualitatively in line with this evidence.
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| 5. |
- Davidson, Carl, et al.
(författare)
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Global Engagement and the Occupational Structure of Firms
- 2017
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Ingår i: European Economic Review. - : Elsevier BV. - 1873-572X .- 0014-2921. ; 100, s. 273-292
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Tidskriftsartikel (refereegranskat)abstract
- Global engagement can impact firm organization and the occupations firms need. We use a simple task-based model of the firm's choice of occupational inputs to examine how that choice varies with global engagement. We reveal a robust and causal relationship between global engagement and the skill mix of occupations within firms, using Swedish matched employer-employee data that link firms and the labor force for 1997–2005. Taking an instrumental variable approach, we find that increased export shares (driven by higher world import demand) skew the labor mix more toward high-skill occupations. Our results suggest that global engagement may require firms to employ more skilled labor to undertake complex tasks embodied in international businesses, which have further implications for the demand for specific occupational skills and overall wage dispersion.
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| 6. |
- Elinder, Mikael, et al.
(författare)
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Promises, policies and pocketbook voting
- 2015
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Ingår i: European Economic Review. - : Elsevier. - 0014-2921 .- 1873-572X. ; 75, s. 177-194
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Tidskriftsartikel (refereegranskat)abstract
- Do voters respond to political parties' promises or to their past actions? We use a suitable sequence of events in Swedish politics to provide the first answer to this question. In the 1994 election campaign the Social Democrats proposed major cuts in transfers to parents with young children, whereas in the 1998 campaign they promised to increase transfers. The Social Democrats won both elections and delivered on both promises. Using voting among parents with slightly older children as counterfactual, we find that voters with young children responded markedly to economic promises rather than to implemented policies.
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| 7. |
- Engström, Per, et al.
(författare)
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Income underreporting among the self-employed : a permanent income approach
- 2017
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 92, s. 92-109
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Tidskriftsartikel (refereegranskat)abstract
- The consumption based method to estimate underreporting among self-employed, introduced by Pissarides andWeber (1989), is one of the workhorses in the empirical literature on tax evasion/avoidance. We show that failure to account for transitory income fluctuations in current income may overestimate the degree of underreporting by around 40 percent. Previous studies typically use instrumental variable methods to address the issue. In contrast, our access to registry based longitudinal income measures allows a direct approach based on more permanent income measures. This also allows us to evaluate the performance of a list of instruments widely used in the previous literature. Our analysis shows that capital income is the most suitable instrument in our application, while education and housing related measures do not seem to satisfy the exclusion restrictions.
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| 8. |
- Freier, Ronny, et al.
(författare)
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Do parties matter? Estimating the effect of political power in multi-party systems
- 2015
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 80, s. 310-328
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Tidskriftsartikel (refereegranskat)abstract
- When there are more than two parties, policy outcomes are typically the result of a bargaining process. We investigate whether changes in political power for various parties have an effect on tax policies. We use an instrumental variable approach where close elections provide the exogenous variation in our variable of interest: voting power. In order to isolate close elections in a proportional election system, we develop a new simulation algorithm. Using data from German municipalities in the state of Bavaria, our estimation results suggest that political power does matter for policies. Somewhat surprisingly, the center-left party SPD is found to lower all three locally controlled taxes, whereas The Greens increase both property taxes considerably. These results remain robust across a range of specifications. Our partisan effect for the SPD is also confirmed by a simple regression discontinuity estimation using mayoral elections.
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| 9. |
- Gaigné, Carl, et al.
(författare)
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Agglomeration, city size and crime
- 2015
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 80, s. 62-82
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Tidskriftsartikel (refereegranskat)abstract
- This paper analyzes the relationship between crime and agglomeration where the land, labor, product, and crime markets are endogenously determined. Our main theoretical findings are the following: (i) better accessibility to jobs decreases crime in the short run but may increase crime in the long run; (ii) the per-capita crime rate increases with city size; (iii) when allowing for endogenous policing, lower commuting costs make the impact of police on crime more efficient.
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| 10. |
- Habla, Wolfgang, et al.
(författare)
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The political economy of mitigation and adaptation
- 2017
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 92, s. 239-257
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Tidskriftsartikel (refereegranskat)abstract
- Climate policies have very uneven effects in terms of their fiscal impact. While mitigation of climate change typically raises revenues, adaptation is costly to the taxpayer, and the more so, the more distortionary the tax system. Moreover, the benefits and costs of mitigation and adaptation vary across generations. In an OLG model with majority voting, we show that even in the absence of international pollution spillovers and strategic considerations, neither mitigation nor adaptation can be expected to be set efficiently. The reason is that voters have incentives to use climate policy as an instrument for redistribution. We find that these incentives depend on the underlying tax system. Furthermore, the chosen mitigation or adaptation level may be inefficiently high in a political equilibrium with a distortionary income tax system, although not simultaneously. This finding suggests that a distortionary income tax system favors one policy (mitigation or adaptation) at the expense of the other. The calibration of our model to the German economy reveals that both mitigation and adaptation are lower than their socially optimal levels.
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| 11. |
- Kocher, Martin G., et al.
(författare)
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Ambiguity aversion is not universal
- 2018
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 101, s. 268-283
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Tidskriftsartikel (refereegranskat)abstract
- Assuming universal ambiguity aversion, an extensive theoretical literature studies how ambiguity can account for market anomalies from the perspective of expected utility-based theories. We provide a systematic experimental assessment of ambiguity attitudes in different likelihood ranges, and in the gain domain, the loss domain and with mixed outcomes. We draw on a unified framework to elicit preferences across these domains. We replicate the usual finding of ambiguity aversion for moderate likelihood gains. However, when introducing losses or lower likelihoods, we observe predominantly ambiguity neutrality or seeking, rejecting universal ambiguity aversion. (C) 2017 Elsevier B.V. All rights reserved.
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| 12. |
- Sato, Yasuhiro, et al.
(författare)
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How urbanization affect employment and social interactions
- 2015
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 75, s. 131-155
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Tidskriftsartikel (refereegranskat)abstract
- We develop a model where the unemployed workers in the city can find a job either directly or through weak or strong ties. We show that, in denser areas, individuals choose to interact with more people and meet more random encounters (weak ties) than in sparsely populated areas. We also demonstrate that, for a low urbanization level, there is a unique steady-state equilibrium where workers do not interact with weak ties, while, for a high level of urbanization, there is a unique steady-state equilibrium with full social interactions. We show that these equilibria are usually not socially efficient when the urban population has an intermediate size because there are too few social interactions compared to the social optimum. Finally, even when social interactions are optimal, we show that there is over-urbanization in equilibrium.
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| 13. |
- Cohen, F., et al.
(författare)
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Consumer myopia, imperfect competition and the energy efficiency gap: Evidence from the UK refrigerator market
- 2017
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 93, s. 1-23
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Tidskriftsartikel (refereegranskat)abstract
- The empirical literature on the energy efficiency gap concentrates on demand inefficiencies in the energy-using durables markets and finds evidence that consumers underestimate future energy costs when purchasing a new appliance. We take a broader view and also consider the impact of imperfect competition. Using data on the UK refrigerator market (2002-2007), we find that the average energy consumption of appliances sold during this period was only 7.2% higher than what would have been observed under a scenario with a perfectly competitive market and non-myopic consumers. One reason for this small gap is that market power actually reduces energy use. (C) 2017 Elsevier B.V. All rights reserved.
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| 14. |
- de la Croix, David, et al.
(författare)
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How far can economic incentives explain the French fertility and education transition?
- 2018
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 108, s. 221-245
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Tidskriftsartikel (refereegranskat)abstract
- We analyze how much a core rational-choice model can explain the temporal and spatial variation in fertility and school enrollment in France during the 19th century. The originality of our approach is in our reliance on the structural estimation of a system of first-order conditions to identify the deep parameters. Another new dimension is our use of gendered education data, allowing us to have a richer theory having implications for the gender wage and education gaps. Results indicate that the parsimonious rational-choice model explains 38 percent of the variation of fertility over time and across counties, as well as 71 percent and 83 percent of school enrollment of boys and girls, respectively. The analysis of the residuals (unexplained by the economic model) indicates that additional insights might be gained by interacting incentives with cross-county differences in family structure and cultural barriers.
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| 15. |
- Esteban, J., et al.
(författare)
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Personal liberties, religiosity, and effort
- 2019
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 120
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we study the role of religiosity in influencing the choice of labor effort. Many religions promote restrictions on personal liberties such as divorce, abortion, gender parity, or gay marriage, often regulated by law. We assume that the higher the degree of religiosity of an individual, the less he enjoys such personal liberties, and the less he likes to be in a society which allows them, while seculars enjoy such liberties. By standard consumer theory, the differential valuation induced by religiosity influences individual decisions on other dimensions as well, notably labour supply. We show empirically that this nexus holds and that the size of the effect is large. Specifically, we construct an index of personal liberties and find solid evidence in support of the joint effect of religiosity and liberties on labor effort. Our empirical results indicate that religiosity interacted with the legal level of liberties has a significant and strong negative effect on labor supply and that increases in the cap on liberties have a negative effect on the labor supply of the religious individuals and positive for the secular. (C) 2019 Published by Elsevier B.V.
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| 16. |
- Gangadharan, Lata, et al.
(författare)
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Impact of social identity and inequality on antisocial behaviour
- 2019
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 119, s. 199-215
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Tidskriftsartikel (refereegranskat)abstract
- © 2019 Elsevier B.V. Antisocial behaviour can be observed in response to social comparisons with advantaged others. This paper uses a laboratory experiment to examine if social group affiliation mitigates or increases antisocial behaviour in the presence of inequality. While research has documented the harmful effects of inequality, less is known about how social identity may interact with income inequality to influence antisocial behaviour. In our experiment, participants play a modified version of an investment game in which they can reduce others’ payoff at a cost to themselves. Participants are identified by their income groups and/or social groups. We use naturally occurring and exogenously formed social groups to capture social identity. We find that, in settings where social identity is unknown relative to a setting where social identity is known, low-income participants are more antisocial towards others with the same income identity. We also show that sharing the same social identity mitigates this behaviour. In contrast, there are no differences in the behaviour of high-income participants across the different settings. The targeting of antisocial behaviour by low-income individuals is partially consistent with our theoretical framework and suggests that identity politics causes low-income people who are already in conflict with one another to shift their blame socially. Our findings suggest that the context in which inequality exists may have important effects on antisocial behaviour.
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| 17. |
- Kirchler, Michael, 1977, et al.
(författare)
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The "inflow-effect"-Trader inflow and price efficiency
- 2015
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 77, s. 1-19
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Tidskriftsartikel (refereegranskat)abstract
- We investigate the impact of cash and trader inflow on price efficiency in multi-period experimental asset markets. Implementing eight treatments with 672 subjects, we find that (i) the joint inflow of cash and traders triggers strong overvaluation and massive price run-ups (inflow-effect). Remarkably, the effect occurs in almost all of the 30 markets with joint cash and trader inflow and is very robust. The effect even prevails in markets with complete and symmetric fundamental information. We further show that (ii) in treatments with the joint inflow of cash and traders, prices crash to fundamentals towards maturity of the asset. The analysis of traders' beliefs reveals that (iii) despite fundamental values staying constant, beliefs about fundamentals co-move with upwardly trending prices. Finally, we report a speculative motive only among the optimists in treatments where we observe the inflow-effect. (C) 2015 Elsevier BM. All rights reserved.
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| 18. |
- Kocher, Martin G., et al.
(författare)
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An experimental study of precautionary bidding
- 2015
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 78, s. 27-38
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Tidskriftsartikel (refereegranskat)abstract
- Auctions often involve goods exhibiting a common-knowledge ex-post risk. In such auctions, precautionary bidding predicts that under expected utility, DARA bidders reduce their bids by more than the appropriate risk premium. Because the degree of riskiness of an auctioned good and bidders' levels of risk aversion are difficult to observe in field settings, we conduct experimental auctions that allow us to identify the precautionary premium directly. We find strong evidence for precautionary bidding. The effect is robust to changes in experimental design features. Our experiment provides the first empirical demonstration of precautionary motives in a strategic setting. (C) 2015 Elsevier B.V. All rights reserved.
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| 19. |
- Le Coq, Chloé, et al.
(författare)
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On the effects of group identity in strategic environments
- 2015
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Ingår i: European Economic Review. - : Elsevier: 24 months. - 0014-2921. ; 76, s. 239-252
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Tidskriftsartikel (refereegranskat)abstract
- We examine differences in behavior between subjects interacting with a member of either the same or different identity group in both a centipede game and a series of stag hunt games. We find evidence that subjects interacting with outgroup members are more likely to behave as though best-responding to uniform randomization of the partner. We conclude that group identity not only affects player׳s social preferences, as identified in earlier research, but also affects the decision making process, independent of changes in the utility function.
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| 20. |
- Lemoine, Matthieu, et al.
(författare)
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Fiscal consolidation under imperfect credibility
- 2016
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Ingår i: European Economic Review. - : Elsevier: 24 months. - 0014-2921. ; 88:SI, s. 108-141
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Tidskriftsartikel (refereegranskat)abstract
- This paper examines the effects of expenditure-based fiscal consolidation when credibility as to whether the cuts will be long-lasting is imperfect. We contrast the impact limited credibility has when the consolidating country has the means to tailor monetary policy to its own needs, with the impact when the country is a small member of a currency union with a negligible effect on interest rates and on nominal exchange rates of the currency union. We find two key results. First, in the case of an independent monetary policy, the adverse impact of limited credibility is relatively small, and consolidation can be expected to reduce government debt at a relatively low output cost given that monetary policy provides more accommodation than it would under perfect credibility. Second, the lack of monetary accommodation under currency union membership implies that the output cost may be significantly larger, and that progress in reducing government debt in the short and medium term may be limited under imperfect credibility. (C) 2016 Elsevier B.V. All rights reserved.
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| 21. |
- Razen, M., et al.
(författare)
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Cash inflow and trading horizon in asset markets
- 2017
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 92, s. 359-384
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Tidskriftsartikel (refereegranskat)abstract
- It is conjectured that one of the major ingredients of historic financial bubbles was the inflow of money in various forms. We run 36 laboratory asset markets to investigate the joint effect of cash inflow and trading horizon on price efficiency. We show that markets with cash inflow and long trading horizon exhibit bubbles and crashes. We also observe that markets with extended trading horizon but without cash inflow and markets with shorter trading horizon do not trigger bubbles. Finally, we report that beliefs about prices and, importantly, about (constant) fundamentals follow bubble patterns as well.
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| 22. |
- van den Bijgaart, Inge, 1988
(författare)
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The unilateral implementation of a sustainable growth path with directed technical change
- 2017
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Ingår i: European Economic Review. - : Elsevier BV. - 0014-2921. ; 91, s. 305-327
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Tidskriftsartikel (refereegranskat)abstract
- We determine the conditions under which unilateral policies can implement global sustainable growth in a dynamic two-country directed technical change framework. Domestic climate policies alter the structure of domestic and foreign production and thereby innovation incentives across countries. Implementing sustainable growth requires redirecting global innovation to the nonpolluting sector. If most innovation takes place in the foreign country, policies must redirect foreign innovation by relocating clean production to the foreign country. A calibration exercise suggests that the US or EU alone are too small to implement sustainable growth. A coalition of Annex I countries that ratified the Kyoto protocol can implement sustainable growth, yet required tax rates are very high.
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