Seminar Series - Program Fall 2025
Seminar Series - Program Fall 2025
Sept 24th
Inheritance Expectations, Dynastic Altruism, and Education
Jan Mazza (Roma Tre University)
Abstract
This paper shows that intergenerational asset transfers matter for intragenerational education choices. Based on Italian micro-data, I document that, controlling for parental income, wealth, and education, (i) expecting an inheritance predicts university enrollment, and (ii) having received or expecting an inheritance predicts the intention to leave a bequest, consistent with heterogeneity in dynastic altruism. I rationalize these findings with a stylized model where individuals from altruistic dynasties accumulate human capital to increase long-term earnings, hence the ability to finance bequests. Through a richer quantitative lifecycle model, I show that heterogeneity in bequest motives and coresidence patterns can account for more than 40% of the observed university enrollment gap between youths who do and do not expect an inheritance, whereas the expected financial transfer itself disincentivizes education. Policy experiments indicate that (i) estate taxation can raise enrollment rates, and (ii) the link between inheritance expectations and education is stronger when the discounted returns to education are lower.
Oct 8th
Collective bargaining and the Italian wage structure
Bernardo Fanfani (University of Turin)
Abstract
(joint with Lorenzo Cappellari)
Relying on individual-level administrative data, this paper analyses the effect of the growth of bargained minimum wages set by collective agreements on the Italian wage structure. By means of distributional regression approaches, we show that bargained minimum wage growth is more effective in raising wages at the top than at the bottom of the pay distribution. Moreover, bargained minimum wage growth is more effective in raising full-time equivalent daily wages rather than monthly earnings. We provide evidence on three mechanisms rationalizing these results. First, the growth in contractual minimum wages induces a small but significant growth in under-payment at the bottom of the distribution. That is, the proportion of workers paid less than the statutory minimum floor increases in response to its growth. However, the size of this effect is quite small. Second, the growth in contractual minimum wages induces negative employment effects particularly at the bottom of the wage distribution. Thus, selection mechanisms may contribute to attenuate the positive wage effects at the bottom of the distribution. Third, employment intensity declines, which decreases the effectiveness of bargained minimum wages in rising workers’ earnings.
Oct 15th
Financial Market Effect of FOMC Communication: Evidence from a New Event-Study Database
Andrea Ajello (Board of Governors of the Federal Reserve System)
Abstract
(joint with Miguel Acosta, Andrea Ajello, Francesca Loria and Silvia Miranda-Agrippino)
High-frequency market movements around central bank announcements can help identify the effects of changes in monetary policy on interest rates, asset prices and macroeconomic outcomes. Despite the widespread use of monetary policy surprises in monetary economics and macro-finance, no common empirical benchmark is available for Federal Open Market Committee (FOMC) announcements and official communication, which has led to a profusion of datasets and surprise measures. This paper aims to establish this benchmark by providing a new, publicly available U.S. Monetary Policy Event-Study Database (USMPD) with changes in interest rates and asset prices around FOMC announcements, Chair press conferences, and Minutes releases. We document several new empirical findings. Policy surprises have a significantly negative impact on market-based inflation expectations, consistent with the inflation effects in monetary VARs. Financial markets, including bond yields and risky asset prices, respond very strongly to news conveyed during the Fed Chairʼs press conference. The effects of FOMC surprises on risk assets̶ including stock prices, exchange rates, and dividend derivatives̶are generally consistent with the transmission of monetary policy shocks. Based on term structure data for Treasury and dividend markets, we estimate significant expected lags in the monetary transmission to inflation and real activity.
Oct 22th
Welfare Effects of Social Security with Uninsured Income Risk
Pietro Reichlin (Luiss G. Carli)
Abstract
(joint with Gaetano Bloise, Pietro Reichlin)
We provide an analytical decomposition of the welfare effect of raising the contribution rate of a pay-asyou-go social security at equilibrium in an overlapping generations economy with productive uncertainty and idiosyncratic labor income risks. Based on the observed long-run pattern of GDP growth and safe rate for most advanced economies, we argue that social security is likely to be a Pareto improving policy due to the over accumulation of capital that arise from individual risk at competitive equilibria. Assuming Epstein-Zin preference representation and Cobb-Douglas technology, the welfare effect can be decomposed into a “direct” effect, which takes into account the inter-generations reallocation of consumption and risk at status quo, a “general equilibrium” effect, that takes into account the reallocation of capital and labor and an “idiosyncratic risk” component. The relevant statistics that affect these two components are the growth-adjusted dominant root of the stochastic discount factor at the competitive equilibrium and the covariance between wages and individual labor productivity. Since the estimated direct and general equilibrium effects are very small, the net effect of social security is almost entirely determined by the idiosyncratic risk component, which is shown to affect positively individuals’ welfare under crowding out.
Nov 5nd
From Tweets to Ballots: Refugee Inflows and Natives' Reactions
Olivier Marie (Erasmus School of Economics in Rotterdam)
(joint with Paul Bose, Renske Stans)
We examine the impact of the opening of refugee reception centers on natives' social media activity and voting behavior in the Netherlands during the large and unexpected refugee inflow of 2015-2016. Using over 100 million geocoded tweets and a difference-in-differences approach, we find a short-lived surge in refugee salience on social media, accompanied by a decline in expressed support for refugees and increased discussions about religious minorities, particularly Islam. Linking social media salience to voting behavior, we analyze detailed voting data and document a significant rise in anti-immigration voting near newly established reception centers. This effect diminishes over time and with distance from the centers. Furthermore, we show that areas with a strong initial salience response to refugees drive increased support for anti-immigration parties, while areas with high pre-existing refugee salience exhibit no such increase in anti-immigration votes.
Nov 19th
Home Improvements, Wealth Inequality and the Energy-Efficiency Paradox
Yasmine Van der Straten (Nova School of Business and Economics)
Abstract
(joint with Martijn Dröes, Yasmine Van der Straten)
We explore the pace at which households transition to greener housing and its effects on the distribution of wealth and CO2 emissions. Using unique Dutch data, we document that lower-income households are less likely to undertake energy-efficiency improvements, while higher-income households are more likely to sort into energy-efficient homes. Energy savings represent 17% of median net wealth, with sorting accounting for 65% of this effect. Policies encouraging green housing among lower-income households reduce poverty and wealth inequality, but only realize 37% of the potential CO2 emission reduction. Our findings highlight a fundamental trade-off between advancing climate goals and promoting redistribution.
Nov 26th
Patterns and drivers of EU income inequality: an analysis of EU-SILC data
Alberto Pozzolo (Roma Tre University)
Abstract
(joint with Filomena Pietrovito, Giuliano Resce, Antonio Scialà)
Focusing on the period 2007-2021, this paper applies the Analysis of Gini (ANOGI) methodology introduced by Yitzhaki (1994) to the decomposition of EU-SILC household-level income data, to investigate the evolution of income distribution among EU Member States. Our findings show that aggregate income inequality has decreased in the European Union between 2007 and 2021, mainly driven by a drop in between-country inequality, aided by a reduction of the dispersive effect of within-country overlapping inequality. Within-country inequality and between-country overlapping inequality have instead remained broadly stable. The analysis of the bilateral within-country overlapping components also show that they are explained by macroeconomic factors such as cultural distance, geographical separation, technological differences, trade intensity, migration flows, and public expenditure patterns. The results indicate that closer cultural ties and stronger economic interactions are associated with greater overlap, suggesting that these determinants foster convergence in income distributions across the EU.
Dec 3nd
Company Wage Policy in a Low-Wage Labor Market
Giulia Giupponi (Bocconi University)
Abstract
We study how firms set wages for their employees when they can legally age-discriminate across workers. We exploit an age-specific minimum wage change in the UK, which raised the minimum applying to workers aged 25 and over, leaving unchanged the minima for younger workers. Using matched employer-employee data on a low-paying sector, we show large, positive wage spillovers on workers aged under 25, which arise within firms from company wage policy. Pay equity norms offer the most plausible explanation for the emergence of spillovers. The effects that we document also operate in other low-paying sectors of the UK labor market.
Dec 10th
The price of silence
Marianna Magagnoli (University of Barcelona)
Abstract
(joint with Filippo Tassinari)
This paper studies the causal impact of street noise on housing prices. It focuses on a very dense urban environment and its entire soundscape, using granular data on listed flats and street noise. We employ a combination of hedonic price and fixed effects model, exploiting the regular grid shape of the Eixample district, in Barcelona. Our results indicate that doubling the perceived street noise generates an average depreciation of 3.4% on sales and 2% on rents. We show that the lower semi-elasticity with which the rental market adjusts for the negative externality generates a higher turnover of tenants in louder streets. Moreover, we collect several pieces of evidence which suggest that the effect is not driven by sorting by neighbors. Lastly, we use our results to perform two cost-benefit analyses of policies which help reducing noise.
Feb 5th
The Strategic Allocation of Religious Investments
Massimo Pulejo (Roma Tre University)
Abstract
State and religious institutions are commonly considered competitors in the market for public goods, although their leaders are often ideologically aligned. We propose a simple model in which religious politicians are more likely to invest in religious public goods. We formally show that, if investments in religious public goods by the Church and the state are complements, the Church should invest more in places governed by religious politicians. To test this argument, we build a novel index for individual religious values and use it to gauge the religiosity of 85,358 mayoral candidates in 45,797 Italian municipal elections. Regression discontinuity analyses show that the Church doubles its investments in municipalities governed by religious mayors. Consistent with the key assumption of our model, we also show that religious mayors significantly increase public spending for religious goods and services. This shift in public goods provision boosts citizens' attachment to religion, increasing their propensity to enroll children in religious schools and to donate money to religious charities. These findings shed new light on the interactions between the state and religious institutions and their effects on citizens' attitudes and choices.
Feb 19th
Labour Market Power and Aggregate Productivity
Bernardo Mottironi (London School of Economics)
Abstract
This paper offers a novel perspective on the general equilibrium effects of labour market power. By developing a tractable model of entrepreneurship with monopsonistic labour markets and endogenous technology adoption, I show that labour market power diminishes aggregate productivity through three distinct channels: (i) misallocation of workers towards small firms, (ii) excess entry of low-ability entrepreneurs, and (iii) limited diffusion of productivity-enhancing technologies. The proposed theory generates testable predictions, which I validate with novel evidence from Italian microdata: at the province-level, weaker competition in labour markets is associated with greater misallocation, more entrepreneurship, reduced firm size, inferior use of intangibles, and lower productivity. To quantify aggregate losses, I calibrate the model with measures of market power from financial statements, information on IT adoption from survey data, and expenditure shares from national accounts. My results reveal a significant impact of labour market power: aggregate productivity in a typical province is 21% lower than in a competitive benchmark, with excess entry and limited technology diffusion being the dominant factors.
Mar 5th
Job protection deregulation, productivity and the distribution of income: Firm-level evidence from the Italian Jobs Act
Guido Franco (Research Centre of Confindustria)
This paper investigates the causal impact of job protection deregulation on firms' productivity, leveraging a size-based cutoff in the eligibility criteria of a pivotal 2014 labor market reform in Italy. The reform replaced reinstatement requirements with a progressive compensation system for unjust dismissals of new hires in firms with more than 15 employees, while leaving smaller firms unaffected. We find that the reform increased total factor productivity by 1% in treated firms relative to control firms, on average, over the five years following its implementation. Labor productivity gains were slightly larger, also driven by capital deepening. Next, we extend the analysis to uncover how the productivity gains were distributed between employers and workers. Capital owners benefited disproportionately more, as the reform led to a gradual decline in the labor share of value added, reaching 0.7 percentage points after five years.
Mar 19th
The Impact of Overtime Limits on Firms and Workers: Evidence from Japan's Work Style Reform
Gabriel Burdin (University of Siena)
Abstract
This study provides the first analysis of Japan's 2018 Work Style Reform (WSR) and its effects on firms and workers, using payroll and survey data in a difference-in-difference design. We find that the reform's introduction of an overtime cap reduces average monthly overtime hours by 5 hours (-25%) and compresses the distribution of overtime within establishments. Total earnings decrease by 2% due to reduced overtime pay, while hourly wages remain unchanged. Notably, the reform improves life and leisure satisfaction, but these well-being gains are observed only among women. This gender difference is not explained by variations in perceived work intensification or time use. Instead, we find evidence that men (but not women) substitute paid overtime for unpaid overtime, which is consistent with the lack of well-being gains for men. Finally, we document that the reform leads to women taking more career jobs (standard employment) relative to non-career jobs (nonstandard employment) as compared to their male counterparts, highlighting the potential of working-hour regulations to promote gender equality in the labor market.
Apr 2nd
Child Disability and Family Spillover Effect
Nicoletta Balbo (Bocconi University)
Across the European Union, approximately 4% of individuals under age 16 have a disability, and over 15 million school-age children are known to have special educational needs. Disabilities limit children in their everyday activities and impact families in myriad ways. This talk focuses on how children disability affects the life of their parents. It will be shown how the disability of a child shapes health and employment trajectories of mothers and fathers. Leveraging on both, survey and administrative Italian data, we compare parents having a child with or without a disability. Findings show that parents who have a child with a disability are more likely to have a worse mental and general health. Moreover these analyses underscore a pronounced and statistically significant downturn in income levels and active participation in the labour market for parents having child with a disability. Remarkably, this adverse effects are more severe for mothers than fathers.
Apr 9th
The Market Externalities of Tax Evasion
Enrico Rubolino (University of Lausanne and CREST)
Abstract
This paper presents evidence of the market externalities of tax evasion: firms’ tax noncompliance distorts the outcomes of their competitors. Using novel administrative data on the universe of Italian firms, we compute a tax evasion proxy as the fraction of individual firms who manipulate their revenue to meet eligibility criteria for preferential tax regimes. Our empirical approach uses policy-induced changes in tax notch sizes to predict the fraction of non-compliant firms in each market. We find that non-compliant firms generate significant revenue and productivity losses for their competitors, who then pass on some of this burden to their workers. This unfair competition harms aggregate productivity, partly due to a worsening of allocative efficiency. Our findings show that cracking down on tax evasion not only increases tax revenues and promotes tax fairness, but can also enhance market efficiency by levelling the playing field.
Apr 30th
The College Melting Pot Peers, Culture and Women's Job Search
Federica Meluzzi (Institut Polytechnique de Paris)
Abstract
Gender norms are widely recognized as key determinants of persistent gender gaps in the labor market, yet our understanding of their drivers remains limited. This paper addresses this gap by examining how cultural assimilation from college peers influences women's early-career labor market decisions. I leverage idiosyncratic cross-cohort variation in peers' geographical origins within Master's programs, combined with unique administrative and survey data covering the universe of students in Italy. The main finding is that exposure to female classmates born in areas with a more egalitarian gender culture significantly increases women's labor supply, primarily through increased uptake of full-time jobs. Specifically, socialization with peers from areas with a one standard deviation higher female labor force participation offsets much of the negative impact of limited female role models in childhood, resulting in a 21-40% decrease in early-career gender gaps. Using original data on students' beliefs that I collected, I find that decreases in women's valuation of work hours flexibility, coupled with learning about the job offer distribution primarily drive the observed effects. Since peer effects are highly asymmetric, with benefits concentrated among women from less egalitarian backgrounds, education policies that promote diversity could play a crucial role in shifting gender norms and advancing gender equality in the labor market.
May 14th
Warning Words in a Warming World: Central Bank Communication and Climate Change
Emanuele Campiglio (University of Bologna)
Abstract
We study climate-related central bank communication using a novel dataset containing 35,487 speeches delivered by 131 central banks from 1986 to 2023. We employ natural language processing techniques to identify and trace the evolution of key climate-related narratives centred around (i) green finance, and (ii) climate-related financial risks. We find that central bank public communication strategies are primarily driven by underlying institutional factors, rather than exposure to climate-related risks. We then study the impact of climate-related communication on financial market dynamics through both a portfolio and a firm-level analysis. We find that equity returns of ‘green’ firms outperform those of ‘dirty’ firms when central banks engage more frequently and intensely with climate-related topics.
May 28th
Robust Estimation of Private Business Wealth
Simon Toussaint (Utrecht School of Economics)
Abstract
Estimating the market value of private businesses is essential for understanding both aggregate firm dynamics and top wealth inequality, yet these values are inherently unobservable. This paper introduces an econometric approach that treats the gap between true market values and initial estimates as measurement error. I employ time-series restrictions on these errors as moment conditions within a GMM framework, and use the fitted values from these estimations as error-free estimates of private business wealth and capital stocks. Applying this method to Dutch administrative data linking the universe of firms to their owners, I find that aggregate private business wealth increases by 30% of GDP initially, and is more stable than the unadjusted series. Top 1% and 0.1% wealth shares increase by 3-5 percentage points, peaking at 38% and 20%, respectively. Adjusted returns to firm wealth exhibit a steeper gradient across the wealth distribution than unadjusted returns, consistent with models of return heterogeneity.
Jun 11th
The Firm as Tax Shelter. Micro Evidence and Aggregate Implications of Consumption Through the Firm
David Leite das Neves (Paris School of Economics)
Abstract
I present evidence that firms serve as tax-free consumption vehicles. Drawing on a unique combination of data from an electronic invoicing program in Portugal (e-Fatura), I show that individuals who control firms shift 36% of their monthly personal expenditures to firms and 31% of their household expenditures. The effects are driven by owner-managers of small closely held firms through expenditure categories on the border between business and final consumption but are widespread among business managers across the whole income distribution. My results suggest that the government revenue losses due to consumption through the firm amount to 1% of GDP. Reallocating the tax savings and personal expenditures hidden within f irms to the reported household income of business managers increases the Gini by one percentage point and the top 1% income share by half a percentage point.
Sept 25th
Intergenerational Discounting and Inequality
Paolo Piacquadio (University of St. Gallen)
Abstract
We study theories of justice that disentangle normative views on intergenerational discounting and intergenerational inequality. Any modular social welfare function is uniquely identified by a time-discounting function — capturing attitudes across generations— and an aggregator function — capturing attitudes towards inequality. The rich choice of such functions allows our theories to include the most common welfare criteria adopted in the literature as special cases and unveils yet unexplored families of alternative criteria. Our axiomatic characterization clarifies the properties and limits of disentangling discounting and inequality.
Oct 23rd
Financial Wealth in Italy: Evidence from Banking Supervisory Reports
Francesco Vercelli (Bank of Italy)
Abstract
This study analyses distributive features of household financial wealth in Italy from 2012 to 2023, exploiting the Italian Banking Supervisory Reports. For each custodian bank and geographical area, we have information on securities accounts divided into four groups according to their outstanding amounts of financial instruments (debt securities, listed shares, and mutual fund shares). We document that portfolio composition varies across amount brackets and has changed in the period of analysis. We compute indicators of inequality based on average amounts of financial instruments by bracket, and we find that inequality increased from 2012 to 2021 and decreased thereafter. Finally, we show that the richest class obtains larger holding gains than the other classes, which may be due to higher financial education and/or easier access to financial advice services.
Oct 30th
Mobility of the Innocents. Foundlings and their descendants in 19th-century Florence
Giuliana Freschi (Sant’Anna School of Advanced Studies)
Abstract
This paper (with B. A’Hearn, G. Freschi, G. Gabbuti) addresses social mobility in a disadvantaged group: foundlings’ descendants in the historic province of Florence, identified by means of the characteristic surname Innocenti. Following Clark et al. (2015), we compare the frequency of the surname Innocenti in well-defined status groups with their frequency in the general population. Combining different sources, we build a novel dataset to estimate the Innocenti share in the population, both historically and today. We find that during the 19th and early 20th century foundlings’ descendants were overrepresented among prison inmates, underrepresented among top income taxpayers, inheritance taxpayers, and city directories. In all cases, their relative representation was regressing towards the average, but at different rates.
This result highlights the complexity of the concept of mobility, as moving up from lower socio-economic strata does not always result in reaching the top, but may instead indicate the emergence of new opportunities. Our estimates are considerably lower than what Clark views as a near-universal persistence rate of 0.80, as well as the long-run persistence found by Barone and Mocetti (2021) linking contemporary taxpayers to the 1427 Florentine Catasto. Our view “from below” suggests surprising mobility for an economy that even in the 1930s was only semi-industrialised. Our findings confirm that persistence was very high in the elite, making it very difficult for foundlings’ descendants to break the glass ceiling. However, in the rest of the distribution mobility was possible, even in the 19th century: Foundlings and their descendants were not glued to a sticky floor.
Nov 6th
Markups, Taxes, and Rising Inequality
Aurélien Eyquem (Université de Lausanne)
Abstract
We analyze income and wealth inequality dynamics through the lens of an heterogeneous- agent model with three key features: (i) an explicit link between firms’ markups and top in- come shares, (ii) a granular representation of the tax and transfer system, and (iii) three assets with endogenous portfolio decisions. Using counterfactual analyzes, we look at how changes in markups, taxes, factor productivity, and asset prices affected inequalities between 1984 and 2018 in France. Rising markups account for the bulk of rising pretax income inequality. The drivers of rising wealth inequality are more complex. Rising markups and changes in taxes contribute to raise wealth inequality by increasing pretax income inequality and inequality in saving rates between wealth groups. Asset prices – the boom in housing prices – mechanically redistribute wealth from top and bottom wealth groups to the upper middle wealth group, whose wealth is mostly held in the form of housing, but are partly offset by a rise in saving rates of top wealth groups. Our results highlight the key role of endogenous saving decisions in response to exogenous variables as a key driver of wealth inequality.
Nov 27th
Weather Shocks and the Optimal Policy Mix in a Climate-Vulnerable Economy
Barbara Annichiarico (Roma Tre University)
Abstract
Using data from a selection of Latin American countries affected by El Niño-Southern Oscillation climate phenomena, we observe that extreme weather events can be highly disruptive for an economy, particularly in the agricultural sector, while also giving rise to inflationary pressures. Motivated by these findings, this paper examines the optimal stabilization policies for a climate-vulnerable economy with two segmented sectors: agriculture (producing food) and manufacturing. In response to climate disasters affecting agriculture, it is found to be optimal to increase fiscal transfers to farmers while maintaining core inflation at its target level. Deviating from the optimal policy mix results in smaller welfare losses as long as core inflation remains stabilized.
Dec 4th
Place-Based Industrial Policies and Local Agglomeration in the Long Run
Lorenzo Incoronato (University of Napoli Federico II CSEF)
Abstract
This paper studies a place-based industrial policy (PBIP) aiming to establish industrial clusters in Italy in the 1960s-70s. Combining historical archives spanning one century with administrative data and leveraging exogenous variation in government intervention, we investigate both the immediate effects of PBIP and its long-term implications for local development. We document agglomeration of workers and firms in the targeted areas persisting well after the end of the policy. By promoting high-technology manufacturing, PBIP favored demand for business services and the emergence of a skilled local workforce. Over time, this produced a spillover from manufacturing -- the only sector targeted by the program -- to services, especially in knowledge-intensive jobs. Accordingly, we estimate higher local wages, human capital, and house prices in the long run. We provide suggestive evidence that these persistent effects may depend on the initial conditions of targeted locations.
Dec 11th
Have recent changes in UK income inequality been significant
Stephen Jenkins (London School of Economics)
Abstract
Paper by Stephen P. Jenkins (LSE, EUI, and IZA) [Joint work with Nicolas Hérault (Université de Bordeaux)]
It has long been known that conventional approaches to finite sample inference for inequality measures based on asymptotic methods or the standard bootstrap do not perform well, even in large samples. See, e.g., Davidson and Flachaire (Journal of Econometrics, 2007) and Cowell and Flachaire (Journal of Econometrics, 2007). The source of the problem is the heavy-tailed nature of income distributions, with a relatively high prevalence of influential high-income outliers in datasets.
Can researchers do better? The answer is yes, in principle. Davidson and Flachaire (DF, 2007) and Cowell and Flachaire (CF, 2007) propose inference based on a semi-parametric percentile-t bootstrap in which the upper tail is modelled parametrically by a Pareto distribution, and show using simulated data that accurate inference is achievable with moderately large samples. (For a related approach, see also Alfons et al., JRSS(A) 2011.)
In this paper, we provide the first systematic application of the DF-CF inferential approach to real-world income data for multiple years (yearly, 1977-2018), i.e., the same survey data as used by the UK Office for National Statistics for official statistics on inequality. As part of this work, we extend the DF-CF approach to deal with weighted data and a range of inequality indices (Gini, Generalised Entropy family, percentile ratios, and top income shares).
We confirm that inequality indices are more precisely estimated using the DF-CF approach rather than the conventional asymptotic approach. But according to our DF-CF estimates we cannot reject the null hypothesis of no inequality difference between most pairs of years over the period 1977-2018 at conventional levels of statistical significance.