Research

Working Papers

Inflation Expectations in the Wake of the War in Ukraine  (with Misina Cato and Tobias Schmidt) - R&R,  Journal of Behavioral and Experimental Economics 

Russia's invasion of Ukraine is posing a range of new challenges to the global economy, including affecting the inflation expectations of individuals. In this paper, we aim to quantify the effect of the invasion on short- and long-term inflation expectations of individuals in Germany. We use microdata from the Bundesbank Online Panel - Households (BOP-HH), for the period from February 15th to March 29th, 2022. Treating the unanticipated start of the war in Ukraine on the 24th of February 2022 as a natural experiment, we find that both short- and long-term inflation expectations increased as an immediate result of the invasion. Long-term inflation expectations increased by around 0.4 percentage points, while the impact on short-term inflation expectations was more than twice as large - around one percentage point. Looking into the possible mechanisms of this increase, we suggest that it can be partially attributed to individuals’ fears of soaring energy prices and increasing pessimism about economic trends in general. Our results indicate that large economic shocks can have a substantial impact on both short and long-term inflation expectations. 

Deutsche Bundesbank Discussion Paper No. 03/2023 available here.  

CERGE-EI Working Paper Series No. 745  available here.

Who Divorces Whom: Unilateral Divorce Legislation and the Educational Structure of Marriage (with Štěpán Jurajda) - Accepted,Demography

There is evidence that the introduction of unilateral divorce legislation (UDL) starting in the late 1960s increased US divorce rates. We ask whether making divorce easier affected the educational structure of marriage. Based on marriage and divorce certificate data covering 1970-1988, we provide new evidence on the evolution of the educational structure of marriage inflows (newlyweds) and outflows (divorces), and estimate UDL difference-in-differences effects on both flows. While UDL did not contribute to rising homogamy (the tendency towards married partners having the same level of education), it did affect the educational structure of marriage: it made generally unstable hypogamous couples (women marrying less educated partners) less likely to divorce, and it made homogamous couples more stable than hypergamous ones  (women marrying more educated partners).

IZA Discussion Paper No. 15749 available here.  

CERGE-EI Working Paper Series No. 740  available here.

Seasonal Migration and Education of Children Left Behind: Evidence from Armenia (with Davit Adunts) 

There is much evidence that migration of a parent affects the educational performance of children left behind (CLB). Nevertheless, there is no agreement on the direction of the impact. In this paper, we use Armenian school data and report evidence of a negative impact of parental seasonal migration on the educational performance of CLB. We employ a different approach than those used in the prior literature by (i) using the intensity of seasonal migration (the number of times the parent migrated) instead of a binary variable (whether the parent migrated or not) and (ii) the number of children entering first grade whose parent is a seasonal migrant as an instrument for the intensity of seasonal migration. We find that seasonal migration negatively affects the educational performance of CLB, and that it mainly affects boys; there is no significant impact on girls. Additionally, we find that using a zero-one dummy for migration as prior studies have done upwardly biases the IV estimate by approximately a factor of three, while our intensity measure yields more accurate results. 

CERGE-EI Working Paper Series No. 641  available here. 

Other publications

Work in Progress 

The Effect of International Seasonal Migration on Human Capital Formation in Origin Countries (with Davit Adunts and Mariola Pytliková)

There is much evidence that migration of a parent affects the educational performance of children left behind (CLB). Nevertheless, there is no agreement on the direction of the impact. In this paper, we use class-school-level administrative and individual-level panel data to examine the impact of seasonal migration on the educational performance of CLB. To overcome the possible endogeneity issue, we use individual-level panel data from Armenian schools. It allows us to have individual fixed-effects that control for the time invariant unobserved sources of endogeneity. With this strategy we identify that the overall effects of seasonal migration of fathers on the math performance of CLB is negative and mainly affects boys; there is no significant impact on girls. Additionally, to separate the effect of remittances on children's educational performance from that overall effect, we use the sharp drop of the Russian Ruble in 2014. We examine the impact of remittances both on classroom-level and individual-level educational performance, which allows us to directly analyze the spillover effects of remittances on the performance of children from non-migrant sending families. Our results suggest that the decrease in remittances due to the fall of the Russian Ruble significantly decreases the performance of 12th-grade students in math, foreign language, and science. There is no evidence that remittances affect the performance of 4th- and 9th-grade students.

Climate Risk Perceptions and Property Prices (with Misina Cato,  Anne-Kathrin Fischer and  Iliriana Shala)

The aim of this project is to examine the link between perceptions about climate risks and house prices by designing a strategic survey (following Ameriks et al., 2011; Fuster and Zafar, 2021). We ask households about a hypothetical scenario of buying property and the willingness to buy or sell price of that property given a set of information about climate related risk for the region they live in. In the first step, respondents are asked about their priors: 1) perceptions about the occurrence of extreme weather events, 2) the property valuations in their regions, and 3) their willingness to sell or buy price. In the second step, individuals, who are chosen randomly, are presented with actual information about climate change a) in general, b) in Germany, and c) in the region where they live. The control group receives no information. In the third step, respondents are asked again about their willingness to buy/sell price in order to examine if they have taken into account the new information about climate change. 

Personal inflation rate: Subjective assessment and objective verification  (with Misina Cato and  Anne-Kathrin Fischer)

The consumer price index (CPI) measures the average price change of all goods and services purchased by a representative household. How much an individual household is affected can vary a lot due to diverging consumption patterns. There are significant differences in personal inflation rates between different groups (Michael,1975; Hagemann, 1982), with poorer households experiencing higher inflation than richer households (Hobijn et al.,2009). Calculating the personal inflation rate of respondents based on their individual expenditure patterns and analysing them, can deliver important insights for policy-makers, especially during global economic crisis. We ask the responds about their perceived personal inflation rate. Furthermore, we ask them to insert their individual consumption patterns, and thereby determine every respondent’s exact personal inflation rate. The calculated personal inflation rate can then be compared both with the official CPI and with their perceived personal inflation rates (subjective assessment). The first comparison would allow us to see which groups in Germany are most affected by the current inflation. The answer to this question has high policy relevance in the context of response to the crisis and increasing inflation. The second comparison, perceived vs. calculated personal inflation, will allow us to analyse how the personal consumption basket affects perceived inflation, and which groups in general over/underestimate their personal inflation. The latter comparison is important in the context of expectation formation. Therefore, as a last stage, we have a randomized controlled trial (RCT) to see if optimal communication of personal inflation calculation could be used to improve the accuracy of consumers’ inflation expectations and therefore, for stabilizing prices. 

Joint Custody Laws and Fertility Sorting on Education

It has been shown that the introduction of joint custody laws (JCLs) in the US affected family decisions, including overall fertility, but there is little research on whether these reforms' effects differ between homogamous and non-homogamous couples. I leverage the staggered introduction of JCLs across US states and employ large administrative data from birth certificates to investigate the reforms' effects on family structure at birth. I find that marginal-free measures of educational assortative matching of parents - the odds of homogamy - increase in states adopting JCLs. The channel that increases the odds of homogamy of parents is a relative increase in births for married homogamous couples rather than a change in the incentive to marry for pregnant couples.