Structural work

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.

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. 

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.

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 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 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 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.

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.