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Turning Forty: Agricultural Subsidies and Farmers’ Suicides
w/ Francois BareilleAbstract: This study documents the unintended detrimental consequences of agricultural subsidies on farmers’ suicides. Using Italian administrative microdata and a sharp age threshold in the Common Agricultural Policy - where eligibility for “young farmer” support ends at age 40 - we show a significant increase in suicide rates just above age 40 among agricultural owners, with no corresponding discontinuity in hired agricultural workers or non-farmer population. This excess risk is concentrated before the 2015 CAP reform, when support took the form of lump-sum installation grants, and weakens after the introduction of progressive multi-year payments. The results highlight the importance of subsidy design for extreme well-being outcomes.
Clicking for Safety: The Effects of a Subsidy Program on Firms
w/ Caterina Pavese, Irene Ferrari, Domenico Depalo, Salvatore Lattanzio, Vincenzo ScrutinioAbstract: We examine the causal effects of targeted firm subsidies aimed at improving workplace health and safety, an understudied dimension of industrial policy. We analyze Italy’s INAIL ISI Calls program - the largest global initiative of its kind - which subsidizes firms’ investments in safer and more advanced capital equipment. Using matched employer-employee administrative data on the universe of applicant firms between 2011 and 2019, we exploit quasi-random variation generated by “click day” allocation rules: applications are submitted electronically and processed on a first-come, first-served basis until funds are exhausted. We implement a stacked difference-in-differences design comparing firms that narrowly receive funding to those that narrowly miss it to identify the impact of funding on firm performance and worker outcomes. We document sizable effects. Tangible capital increases by 15% in the treatment year and remains 7% higher four years later, while employment rises by 3% over the same horizon. Profits per worker also increase whereas we find no statistically significant effects on productivity. Overall, the evidence indicates that these subsidies primarily operate through firm expansion and cost savings, rather than productivity gains or improvements in measured efficiency.
Healthy Crops vs. Healthy Kids. The Effects of Pesticide Use on Children’s Health and Human Capital in California.
w/ Ludovica Gazzè, Claudia Persico and Joanna VenatorIn preparation
Dance for the Rain of Pay for Insurance? An Empirical Analysis of the Italian Crop-Insurance market
w/ Luca Citino and Matteo ParadisiAbstract: Despite the increased frequency of extreme weather events, the use of climate-related crop insurance contracts in European countries remains low. We investigate the economic factors behind these low coverage rates by linking Italian administrative data on insurance purchases and damage claims to high-frequency georeferenced data on weather events. We focus on two potential explanations: inefficient pricing of insurance contracts due to adverse selection and choice frictions that create a wedge between the value of insurance and actual demand. To identify adverse selection, we leverage a 2014 reform that lowered the cap for premium subsidies in EU countries. This policy caused a reduction in demand and an increase in average costs for insurers, indicating adverse selection. Regarding frictions, we document through a staggered difference-in-differences design that firms are more likely to buy insurance when faced with “salient” extreme events, suggesting that farmers are imperfectly informed about the value they assign to insurance. We conclude by discussing how current price subsidies may be less effective than insurance mandates in light of these uncovered market failures.
Some (don’t) Like it Hot. Persistent High Temperatures Increase Depression and Anxiety
w/ Giulia MartinelliAbstract: We study the impact of high temperatures on milder mental health outcomes using clinical data from a large-scale program in England that provides treatment for depression and anxiety in a setting with limited opportunities for heat avoidance. Exploiting monthly temperature variations at the Clinical Commissioning Group level, we find that extreme heat, i.e. temperatures above 34°C, increase the demand for mental health support, assess- ments, and treatments by approximately 10%, 15%, and 12%, respectively. The effects are particularly pronounced during prolonged heat shocks, especially heat waves lasting more than ten days. The results are not affected by prior exposure to similar heat stress and are more pronounced in areas with higher socio-economic status, as proxied by housing prices. We find similar effects within the same temperature range when examining medi- cal prescriptions for anxiolytics and antidepressants. Our back-of-the-envelope calculation suggests that the monetary health costs associated with heat stress are substantial.
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