Research

This paper studies the role of information on the evolution of beliefs and smoking in the United States in the 20th and early 21st centuries. We develop a dynamic and dynastic model of smoking, mortality and beliefs. The information about the harmfulness of smoking comes from three different sources: (i) medical information or public health messages, including obfuscation from the tobacco industry, (ii) learning from individual health shocks,  and (iii) social learning, understood as the diffusion of information and beliefs within and across social groups over time. We estimate the model using data on smoking behavior, health information and data on beliefs on the effect of smoking on health that cover several decades and different social groups. The estimated model shows that each of these mechanisms played an important role in the formation of beliefs about the harmfulness of smoking and that social learning was particularly important for low-educated individuals.

We develop a joint model of disease diffusion and mental health, with endogenous mobility decisions and where individuals update their trust in the efficiency of public containment policies. Mental health and trust determine preferences for mobility and hence how successful current and future policies are. We estimate the model using high-frequency and geolocalised data on mobility and psychotropic drugs consumption, allowing for a large degree of heterogeneity at an individual level. We show that containment policies lead gradually to poorer mental health, driven by the accumulation of reduced mobility periods and a progressive distrust in the efficiency of the policy, undermining future ones. 

This paper analyses the marriage decisions of natives and migrants focusing on the role of legal status  and cultural distance. We exploit a natural experiment, the successive enlargements of the European Union, that shifted the incentives of some groups of foreigners to marry natives. Using Italian administrative data on the universe of marriages and separations, we show that it profoundly changed the composition of mixed marriages. Access to legal status reduces by half the probability of immigrants intermarrying with natives. Building on this evidence, we develop and structurally estimate a multidimensional equilibrium model of marriage and separation allowing for trade-offs between cultural distance, legal status, and other socio-economic spousal characteristics, where individuals match on observed and unobserved characteristics. We quantify the role of legal status and the strength of cultural affinity and show how it relates to linguistic, religious or genetic distance.

The paper develops a model of non-market allocation of resources such as the awarding of grants to meritorious projects, honors to outstanding students, or journal slots to quality publications. On the supply side, the available budget of grants is awarded to applicants who are evaluated most favorably according to the noisy information available to reviewers. On the demand side, stronger candidates are more likely to obtain grants and thus self-select into applying, given that applications are costly. We establish that if evaluation is perfect, grading on a curve inefficiently discourages even the very best candidates from applying. More generally, when the budget is insufficient to award grants to all applicants, the equilibrium unravels if information is symmetric enough—the paradox of relative evaluation. Leveraging a technique based on the quantile function pioneered by Lehmann, we characterize a broad set of non-market allocation rules under which an increase in evaluation noise in a field (or course) raises participation in that field, and reduces participation in all other fields. We illustrate the practical relevance of the model by exploiting a change in the rule for apportioning the total budget to applications in different fields at the European Research Council, showing that a one standard deviation increase in own evaluation noise leads to a 0.4 standard deviation increase in the number of applications and budget share. Moreover, we derive insights for the design of evaluation institutions, particularly regarding the endogenous choice of noise by fields or courses and the optimal aggregation of fields into panels.

This paper analyzes the career progression of workers over their life cycle. We develop a model that allows for wage growth to be determined by the accumulation of human capital, unobserved ability, and mobility. We add three important extensions. First, workers move between two occupational sectors that require cognitive-abstract (CA) and routine-manual (RM) skills. Second, we allow for endogenous job mobility induced by non-pecuniary job attributes. Third, individuals have the possibility to acquire vocational education at the start of their career. We estimate this model using longitudinal administrative data over three decades and exogenous variation to instrument initial choices. We confirm the importance of job mobility for early wage growth, but show that the contribution of search capital diminishes in the longer run due to spells of non-employment. Moreover, we show that RM skills are a key driver of early wage growth while CA skills become important later on, when opportunities materialize that require such skills for career progression. Further, job amenities are an important determinant of mobility decisions of young workers. Our results also suggest that vocational training has longer term effects on career outcomes, through the type and quality of matches that they obtain.

This paper develops and estimates a dynamic model where individuals differ in ability and location preference to evaluate the mechanisms that affect the evolution of immigrants’ careers in conjunction with their re-migration plans. Our analysis highlights a novel form of selective return migration where those who plan to stay longer invest more into skill acquisition, with important implications for the assessment of immigrants’ career paths and the estimation of their earnings profiles. Our study also explains the willingness of immigrants to accept jobs at wages that seem unacceptable to natives. Finally, our model provides important insight for the design of migration policies, showing that policies which initially restrict residence or condition residence on achievement shape not only immigrants’ career profiles through their impact on human capital investment but also determine the selection of arrivals and leavers. 

Clinical research should conform to high standards of ethical and scientific integrity, given that human lives are at stake. However, economic incentives can generate conflicts of interest for investigators, who may be inclined to withhold unfavorable results or even tamper with data in order to achieve desired outcomes. To shed light on the integrity of clinical trial results, this paper systematically analyzes the distribution of p-values of primary outcomes for phase II and phase III drug trials reported to the ClinicalTrials.gov registry. First, we detect no bunching of results just above the classical 5% threshold for statistical significance. Second, a density discontinuity test reveals an upward jump at the 5% threshold for phase III results by small industry sponsors. Third, we document a larger fraction of significant results in phase III compared to phase II. Linking trials across phases, we find that early favorable results increase the likelihood of continuing into the next phase. Once we take into account this selective continuation, we can explain almost completely the excess of significant results in phase III for trials conducted by large industry sponsors. For small industry sponsors, instead, part of the excess remains unexplained.

This paper studies the spread of antibiotic resistance and its determinants, relying on unique data at state, year, bacteria and drug level, covering all US states. I relate antibiotic resistance to the use of antibiotics in human prescription and in animal production in a triple difference in difference design to control for confounders. Despite that animal production absorbs most of the antibiotic production, the results show that the main determinant of resistance is in fact human prescriptions, emphasising the role of policies targeting hospitals and ambulatory care. Resistance is particularly sensitive to antibiotic use for newer drugs.

This paper assesses the effect of import competition on the labor market and health outcomes of US workers. We first show that import shocks affect employment and income, but only in areas where jobs are more intense in routine tasks.  Exploiting over 40 million individual observations on health and mortality, we find that import had a detrimental effect on physical and mental health that is concentrated in those areas and exhibits strong persistence. It worsened health behaviour, decreased health care utilisation and  increased hospitalisation for a large set of conditions, more difficult to treat. The mortality hazard of workers in manufacturing increased by up to 6  percent per billion dollar import increase.

This paper evaluates the effect of increased trade on the mortality of workers in the manufacturing sector. We exploit the large increase of Chinese exports in the last two decades to assess its effect in two different countries, Italy and the US. Exploiting longitudinal individual data, we find that trade leads to an increased mortality rate among these populations, the effect being higher in Italy than in the US. A one billion dollar increase in imports leads to a 4 percent mortality increase in the US and up to 7 percent in Italy. We show that mortality patterns are different across occupational groups, with a more pronounced effect on blue collar workers in the US and in Italy, a marked effect on managers of small firms. We show that there are important spatial inequalities in the mortality burden of trade.

We estimate a dynamic life cycle model of labor supply, fertility, and savings, incorporating occupational choices, with specific wage paths and skill atrophy that vary over the career. This allows us to understand the trade-off between occupational choice and desired fertility, as well as sorting both into the labor market and across occupations. We quantify the life cycle career costs associated with children, how they decompose into loss of skills during interruptions, lost earnings opportunities, and selection into more child-friendly occupations. We analyze the long-run effects of policies that encourage fertility and show that they are considerably smaller than short-run effects.

Viruses are a major threat to human health, and—given that they spread through social interactions—represent a costly externality. This article addresses three main questions: (i) what are the unintended consequences of economic activity on the spread of infections; (ii) how efficient are measures that limit interpersonal contacts; (iii) how do we allocate our scarce resources to limit the spread of infections? To answer these questions, we use novel high frequency data from France on the incidence of a number of viral diseases across space, for different age groups, over a quarter of a century. We use quasi-experimental variation to evaluate the importance of policies reducing interpersonal contacts such as school closures or the closure of public transpor- tation networks. While these policies significantly reduce disease prevalence, we find that they are not cost-effective. We find that expansions of transporta- tion networks have significant health costs in increasing the spread of viruses, and that propagation rates are pro-cyclically sensitive to economic conditions and increase with inter-regional trade. 

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We evaluate the impact on crime of a localized policing experiment that depenalized the possession of small quantities of cannabis in the London borough of Lambeth. We find that depenalization policy caused the police to reallocate effort toward nondrug crime. Despite the overall fall in crime attributable to the policy, we find that the total welfare of local residents likely fell, as measured by house prices. We shed light on what would be the impacts on crime of a citywide de- penalization policy by developing and calibrating a structural model of the market for cannabis and crime.

This paper shows that smoking intensity, i.e. the amount of nicotine extracted per cigarette smoked, responds to changes in excise taxes and tobacco prices. We exploit NHANES data covering the period 1988 to 2006 across many US states. Moreover, using panel data from the Coronary Artery Risk Development in Young Adults (CARDIA) study, we provide new evidence on the importance of cotinine measures in explaining long-run smoking behavior. We show the importance of smoking intensity as a long-run determinant of smoking cessation. We also investigate the sensitivity of smoking cessation to changes in excise taxes and their interaction with smoking intensity.

We show that individuals who are in poorer health, independently from smoking, are more likely to start smoking and to smoke more cigarettes than those with better non‐smoking‐related health. We present evidence of selection, relying on extensive data on morbidity and mortality. We show that health‐based selection into smoking has increased over the last 50 years with knowledge of its health effects. We show that the effect of smoking on mortality is greater for more highly educated individuals and for individuals in good non‐smoking‐related health.

This paper analyzes the effects on firms of a ban on smoking in public places. Our empirical strategy relies on comparing outcomes in Scotland before and after the Scottish smoking ban (introduced in March 2006) with those in northern England, where such a ban was not in place. Our analysis of survey data collected from public houses finds that the Scottish smoking ban reduced pub sales with no concomitant effect on prices. An event study analysis of the stock market performance of pub-holding companies corroborates the negative effect of the smoking ban on firm performance.

This paper analyzes the career progression of skilled and unskilled workers, with a focus on how careers are affected by economic downturns and whether formal skills, acquired early on, can shield workers from the effect of recessions. Using detailed administrative data for Germany for numerous birth cohorts across different regions, we follow workers from labor market entry onwards and estimate a dynamic life-cycle model of vocational training choice, labor supply, and wage progression. Most particularly, our model allows for labor market frictions that vary by skill group and over the business cycle. We find that sources of wage growth differ: learning-by-doing is an important component for unskilled workers early on in their careers, while job mobility is important for workers who acquire skills in an apprenticeship scheme before labor market entry. Likewise, economic downturns affect skill groups through very different channels: unskilled workers lose out from a decline in productivity and human capital, whereas skilled individuals suffer mainly from a lack of mobility.

This paper evaluates the long-term consequences of parental death on children’s cognitive and noncognitive skills, as well as on labor market outcomes. We exploit a large administrative data set covering many Swedish cohorts. We develop new estimation methods to tackle the potential endogeneity of death at an early age, based on the idea that the amount of endogeneity is constant or decreasing during childhood. Our method also allows us to identify a set of death causes that are conditionally exogenous. We find that the loss of either a father or a mother on boys' earnings is no higher than 6-7 percent and slightly lower for girls. Our examination of the impact on cognitive skills (IQ and educational attainment) and on noncognitive skills (emotional stability, social skills) shows rather small effects on each type of skill. We find that both mothers and fathers are important, but mothers are somewhat more important for cognitive skills and fathers for noncognitive ones.

We evaluate the effect of smoking bans and excise taxes on the exposure to tobacco smoke of nonsmokers, and we show their unintended consequences on children. Smoking bans perversely increase non-smokers' exposure by displacing smokers to private places where they contaminate nonsmokers. We exploit data on bio-samples of cotinine, time use, and smoking cessation, as well as state and time variation in anti-smoking policies across US states. We find that higher taxes are an efficient way to decrease exposure to tobacco smoke. 

We study the effect of permanent income innovations on health for a prime-aged population. Using information on more than half a million individuals sampled over a 25-year period in three different cross-sectional surveys we aggregate data by date-of-birth cohort to construct a “synthetic cohort” data set with details of income, expenditure, socio-demographic factors, health outcomes, and selected risk factors. We then exploit structural and arguably exogenous changes in cohort incomes over the 1980s and 1990s to uncover causal effects of permanent income shocks on health. We find that such income innovations have little effect on a wide range of health measures, but do lead to increases in mortality and risky health behaviour.

The paper exploits the “Mad Cow” crisis as a natural experiment to gain knowledge on the behavioral effect of new health information. The analysis uses a detailed data set following a sample of households through the crisis. The paper disentangles the effect of non-separable preferences across time from the effect of previous exposure. It shows that new health information interacts in a non-monotonic way with disease susceptibility. Individuals at low or high risk of infection do not respond to new health information. The results show that individual behavior partly offsets the effect of new health information.

This paper assesses the impact of Swedish welfare-to-work programmes on labour market performance including wages, labour market status, unemployment duration and future welfare-to-work participation. We develop a structural dynamic model of labour supply which incorporates detailed institutional features of these policies and allows for selection on observables and unobservables. We estimate the model from a rich administrative panel data set and show that training programmes - which account for a large proportion of programmes - have a little effect on future outcomes, whereas job experience programmes have a beneficial effect.

This paper analyses the compensatory behavior of smokers. Exploiting data on cotinine concentration—a metabolite of nicotine—measured in a large population of smokers over time, we show that smokers compensate for tax hikes by extracting more nicotine per cigarette. Our study makes two important contributions. First, as smoking a given cigarette more intensively is detrimental to health, our results question the usefulness of tax increases. Second, we develop a model of rational addiction where agents can also adjust their intensity of smoking, and we show that the previous empirical results suffer from estimation biases.

Background We estimated the short-run economic impacts of the Scottish smoking ban on public houses. Previous findings on the effect of smoking bans on the hospitality sector have mainly focused on the United States. These studies have mostly found no negative economic effects of such legislation on the hospitality sector in the long run. However, differences in the social use of public houses in Great Britain in comparison with the United States may lead to different findings.

Methods We used a quasi-experimental research design that compared the sales and number of customers in public houses located in Scotland before and after the Scottish smoking ban was introduced, relative to a control group of establishments across the English border where no ban was imposed. To perform this analysis, we collected data on 2724 pubs, 1590 in Scotland and 1134 in Northern England by phone interviews using quota sampling.

Results We found that the Scottish ban led to a 10% decrease in sales [P = 0.02, 95% confidence interval (CI) −19% to −2%] and a 14% decrease in customers (P = 0.02, 95% CI −26% to −2%).

Conclusion Our study suggests that the Scottish smoking ban had a negative economic impact on public houses, at least in the short run, due in part to a drop in the number of customers.

This paper studies the role of economic policy for the transition from analogue to digital television, with particular attention to the switch off of the analogue terrestrial signal. The analogue signal cannot be credibly switched off until almost all viewers have migrated to digital, due to the policy objective of universal access to television. But before switch off, only part of the population can be reached with the digital signal. In addition, those who are reached need to spend more to upgrade their reception equipment than after switch off, because the capacity to increase the power of the digital signal will be made available only then.

After reviewing the competitive structure and the role of government intervention in television markets, we present the early experience of a number of industrialized countries in the transition to digital television. We then formulate a micro-econometric model of digital television adoption by individual viewers. The model is calibrated to UK data and simulated to predict the impact of government policies on the take-up of digital television. Policy makers can affect the speed of take up of digital television by: (1) controlling the quality of the signals and the content of public service broadcasters; (2) intervening in the market for digital equipment with subsidies; and (3) publicizing the conditions and date of switch off of the analogue signal. We find that if the analogue terrestrial signal is switched off only when certain aggregate adoption targets are reached, strategic delays may arise and expectations may affect the success of the switch off policy.

In this paper, the conclusions of Adams et al.(2002) are investigated further by replicating their methodology on two different panel data sets, the Whitehall II study in the UK and the ULF study in Sweden. Given the universal nature of health care coverage in these countries (both in terms of coverage for all age groups and types of illnesses), these data could provide an interesting comparison with the AHEAD results in the US. Futhermore, some of the assumptions and implications underlying the conclusions made by Adams et al.(2002) are discussed and their results and the results of this paper are reinterpreted in terms of pathways from SES to health and mortality.

Study objective: To determine whether measures of income and wealth are associated with poor self rated health and GHQ depression.

Design: Whitehall II study of London based civil servants re-interviewed between 1997–1999; 7162 participants.

Main results: A twofold age adjusted difference in morbidity was observed between the top and bottom of the personal income hierarchy for both sexes. For household income and particularly for wealth these associations are stronger. After adjusting for health at baseline the associations between personal income and both health outcomes are reduced by about 40%–60%. For household income the attenuation is somewhat smaller and for wealth is about 30%. Adjusting for other sociodemographic factors leads to further attenuation of the effects.

Conclusions: The associations between income, particularly personal income, and morbidity can be largely accounted for by pre-existing health and other measures of social position. The strong independent association between household wealth—a measure of income earned over decades and across generations—and morbidity are likely to be related to a set of early and current material and psychosocial benefits.

This paper studies under which conditions a cross-sectional regression yields unbiased estimates of the parameters of an individual dynamic model with fixed effects and individual-specific responses to macro shocks. We show that the OLS estimation of a relationship involving non stationary variables on a cross-section yields estimates which converge to the true value when calendar time tends to infinity. We then consider the particular case of an AI demand model, and we show, using French quarterly aggregate time-series, that budget shares, relative prices and the log of real total expenditure are I (1) and form a cointegrated system. We compare these macro estimates to estimates obtained from three Family Expenditure Surveys and find large differences.

This paper studies the effects of subsidies on durable goods markets. In particular, we focus on a recent policy in France in which the governments of Balladur and Juppé subsidized the replacement of old cars with new ones. To study this policy, we construct a dynamic stochastic discrete choice model of car ownership at the household level. The resulting decision rules and equilibrium conditions are used to estimate the underlying parameters of the model using aggregate data. These policy functions are used to evaluate the short‐ and long‐run effects of the French policies. We find that these policies do stimulate the automobile sector in the short run but, through the induced changes in the cross‐sectional distribution of car ages, create the basis for subsequent low activity. Further, while these policies increase government revenues in the short run, revenues in the long run are lower relative to a baseline without intervention.

This paper studies the joint dynamics of aggregate car sales, prices and income. We analyze theses series using a dynamic discrete choice model which is consistent with microeconomic evidence on the infrequency of durable purchases. We estimate the parameters of this choice problem at the household level. Through aggregation we show that the model can reproduce the dynamics of demand captured by an ARMA model, as in Mankiw (1982), and the joint dynamics summarized through a VAR representation of car sales, income and prices. We find that most of the variation in car sales is due to shocks which influence the replacement probability rather than the cross sectional distribution of car vintages.

We develop a framework for estimating the optimal expenditure of agents subject to unobserved liquidity constraints. Our framework allows us to estimate credit ceilings as well as preference parameters. We apply the framework to data on net resource transfers from private lenders to twenty-nine sovereign debtors during 1973-1993. We obtain reasonable estimates of the discount factor, elasticity of marginal utility of expenditure, and the credit ceiling for most countries. Our estimated credit ceilings rise quite regularly with income across the countries of our sample, and are positively associated with a country's trade, in line with several theoretical arguments. Our estimates imply that slilghtly less than half the countries in our sample were liquidity constrained during the 1970s. The fraction rose to around 80 per cent in the mid 1980s, and subsequently declined.

The literature on unit roots and structural breaks has produced numerous tests that follow non-standard asymptotic distributions. By fitting a semi-non-parametric model to these distributions, this paper proposes a new simple way to calculate the p-values.