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A Toast to Health? Local Pesticide Regulation in Italy’s Prosecco Region
w/ Giuliano Marco Federico Rolle and Daniela VuriAbstract: We study the effects of local pesticide regulation on child human capital and the incidence of its benefits across municipal borders. We exploit the staggered adoption of pesticide ordinances in Italy's Prosecco-producing region and link municipal adoption dates to population-level standardized test scores. Among municipalities adopting in 2012-2014, exposure to the regulatory regime beginning in utero increases second-grade mathematics scores by about 0.14 standard deviations, with no detectable effect on Italian-language performance. We find no comparable gains among municipalities adopting in 2015-2016. Local regulation also generates effects outside adopting jurisdictions: untreated municipalities exposed to nearby adopters experience mathematics gains of about 0.05--0.07 standard deviations, and accounting for these spillovers increases the estimated direct effect. Using longitudinal student records, we further document increased school-enrollment flows toward adopting municipalities. Municipal sanction revenues do not rise persistently after adoption. The results show that local pesticide regulation can improve child cognitive outcomes while generating benefits and behavioral responses beyond the populations directly governed by the policy.
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 Venator (in preparation)Dance for the Rain of Pay for Insurance? An Empirical Analysis of the Italian Crop-Insurance market
w/ Luca Citino and Matteo Paradisi (dormient paper)Abstract: 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.
Extreme Heat and Mental Health Care in a Low-Avoidance Setting
w/ Giulia Martinelli (R&R on Environmental & Resource Economics)Abstract: We estimate the effect of extreme heat on mental-health care use in England, where the prevalence of residential air conditioning is limited. We combine administrative records from NHS Talking Therapies, a large public programme for depression and anxiety, with pharmaceutical prescription data and weather information for 2015–2019. Exploiting monthly temperature variation across Clinical Commissioning Groups, we find that maximum temperatures above 34°C increase referrals, clinical assessments, and first treatments by approximately 7%, 15%, and 12%, respectively. Effects are stronger under persistent exposure, rising after consecutive hot days. Prescriptions for anxiolytics and antidepressants increase in the same temperature range, corroborating the evidence from psychological therapy records. Our back-of-the-envelope calculations indicate that heat-related changes in mental-health care use entail substantial direct NHS costs.
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