Research
Price Information, Inter-Village Networks, and Bargaining Spillovers: Experimental Evidence from Ghana (with N. Hildebrandt, Y. Nyarko, G. Romagnoli - Journal of Development Economics) - Through a randomized experiment and detailed data on communications across farmer communities, we identify the impact of text-messages- based commodity price information on rural farmers revenues. The intervention affected prices received by farmers in two ways: (1) a long-lasting increase of about 9% for treatment group farmers, and (2) substantial indirect benefits for certain control group farmers, which cannot be explained solely by classical informational spillovers. We discuss a novel mechanism of bargaining spillovers that can explain the rise of such positive externalities, even in the absence of information sharing between the treatment and control groups. Our results highlight the importance of accounting for longer-run spillovers and the potential of ICT interventions in emerging markets. [Read the working paper on SSRN]
Media coverage: World Bank Blog
Public Kindergarten, Maternal Labor Supply, and Earnings: Too Little Too Late? (LABOUR Review of Labour Economics and Industrial Relations, 2021) - Does access to public kindergarten have persistent impacts on maternal labor market outcomes? Can we rely on between-individuals differences in quarter of birth to identify such effects? I isolate the effect of interest from spurious associations through difference-in-difference, exploiting across-states and over-time variation in public kindergarten eligibility regulations in the US. The estimates document very limited impacts in the first year and no longer run impacts. Even in states where it does not affect kindergarten eligibility, quarter of birth is strongly and significantly correlated with maternal outcomes, casting doubts on its validity as an instrumental variable in this context. [Read the previous version on SSRN]
Stick or carrot? Asymmetric Responses to Vehicle Registration Taxes in Norway (with A. Ciccone - Environmental and Resource Economics, 2021) - Vehicle registrations have been shown to strongly react to tax reforms aimed at reducing CO2 emissions from passengers’ cars, but are the effects equally strong for positive and negative tax changes? The literature on asymmetric reactions to price and tax changes has documented asymmetries for everyday goods but has not yet considered durables. We leverage multiple vehicle registration tax (VRT) reforms in Norway to show that, within the car model, new car registrations react to tax cuts and fee-bates significantly more than to tax increases. The estimated elasticity is -1.99 for VRT decreases and 0.77 for increases.
The post-COVID-19 labour shortages across OECD countries: a short overview (with M. Abendschein, O. Causa, N. Lu, C. Soriolo) OECD Economics Department Working Papers, No. 1721, OECD Publishing, Paris, https://doi.org/10.1787/e60c2d1c-en - The labour market recovery from the COVID-19 pandemic has been strong among advanced countries, partly reflecting massive and unprecedented policy support to workers and firms. This paper provides evidence and stylised facts about labour market tightening and labour shortages since the onset of the pandemic. Labour shortages have been widespread across countries, yet particularly in Australia, Canada and the United States; and across industries, yet particularly in contact-intensive ones like accommodation and food, but also manufacturing. This picture is to a good extent driven by cyclical factors: in tight labour markets, workers are more likely to switch for better job opportunities. But this paper argues, based on illustrative evidence, that other factors beyond the economic cycle may also play a role: the post-COVID-19 increase in labour shortages may partly reflect structural changes, in particular changes in preferences, as some workers may no longer accept low-pay and poor or strenuous working conditions.
Media coverage: Atlantico.fr and VoxEU
A cost-of-living squeeze? Distributional implications of rising inflation (with Orsetta Causa, Nhung Luu and Chiara Soriolo) - OECD Economics Department Working Papers, No. 1744, OECD Publishing, Paris, https://dx.doi.org/10.1787/4b7539a3-en, manuscript currently under peer review - Inflation has quickly and significantly increased in most OECD countries since the end of 2021 and further accelerated after Russia’s war of aggression against Ukraine, mostly driven by surging energy and food prices. Certain categories of households are particularly vulnerable, as large parts of their consumption expenditures are devoted to energy and food. Drawing on national micro-based household budget surveys and on CPI data, this paper provides a quantification of the impact of rising prices on households’ welfare.Declines in household purchasing power between August 2021 and August 2022 are estimated to range from 3% in Japan to 18% in the Czech Republic. This decline is driven by energy prices in most countries, especially Denmark, Italy, and the United Kingdom, while energy prices play a lesser role in countries where inflation is more broad-based like the Czech Republic and the United States. In all considered countries, inflation weighs relatively more on low than high-income households. Rural households are hit particularly hard, most often more than low-incomes ones, and this is driven by energy price inflation. To cushion vulnerable households from rising inflation, especially from energy prices, these findings call for a careful targeting of income and price support measures, notwithstanding their administrative and logistical complexity, taking into account their effects on economic activity, inflation, and, last but not least, environmental goals.
Media coverage: VoxEU
Essays and policy briefs
Devesh Rustagi, Rajesh Ramachandran and Emilia Soldani, Vulnerable Groups and the COVID-19: The Indian Case (Economic Development and Institutions COVID-19 Essay Series)
Jacobian Transformations And female Labor Supply: Quantifying The Welfare Benefits of A Tax Reform In Norway To Labor Supply Modeling (with J. Dagsvik, M. Locatelli, S. Strøm; status: dormient) - We show how a neoclassical labor supply model with optimal decisions for labor force participation and hours of work, derived from first order conditions, can be taken to data even in the presence of a step-wise linear progressive tax system which may imply non-convex budget sets. The estimated model is used to simulate the optimal behavior when the tax system of 2001 is replaced by the less progressive tax system of 2006. The latter tax system implies a lower labor market participation among married women in Norway, a higher working load, given participation, and a more uneven distribution of household income.
Work in progress
Customizing incentives to combat discrimination (with D. Rustagi and R. Ramachandran - draft coming soon) We evaluate interventions with teachers in India that aim to mitigate discrimination towards scheduled caste (SC) students in the formation of human capital. We recruit a sample of teachers online and randomly expose one set to SC individuals who attained eminent success in non-affirmative action domains. Another set of teachers is exposed to videos that generate scenarios in which perpetrators of caste-based discrimination could also be subject to discrimination that is arbitrary and based on identity. We then elicit data on grades given by teachers on exams by General Caste (GC) and SC students. We find that in the control group, teachers discriminate towards SC students by giving them a lower grade on an otherwise equal quality exam. Our treatments mitigate this kind of discrimination qualitatively. To understand these results, we collect data on a variety of caste-related attitudes. Our results reveal that treatments generate optimistic beliefs about the performance of SC students in verbal and quantitative exams, and also increase support for affirmative action. We ensure that these results are not due to social desirability. These findings suggest that our treatments are effective in mitigating statistical discrimination.
Press coverage: Economic Development and Institutions blog.
Happily unequal? Recent trends in self-reported happiness and income inequality (with L. Endres)
Lost in transition? - The labour market effects of greening the economy (with Orsetta Causa)