LEM external seminar

Program for the year 2023-2024

UPCOMING SEMINARS

April 2

Jan van Ours, Erasmus University Rotterdam (Webpage)

Title: Non-Transitive Patterns in Long-Term Football Rivalries

Abstract: The phenomenon of non-transitivity in outcomes, typically observed in non-effort games with predetermined probabilities and immediate clarity, extends to team-based, time-consuming games requiring effort that unfold over several decades. This study explores this aspect through an empirical analysis of professional football matches in the Netherlands over a period of more than 60 years involving three prominent teams: Feyenoord, Ajax, and PSV. Contrary to conventional expectations, the results reveal a non-transitive pattern over the extended period, indicating that Feyenoord is more likely to triumph over PSV, PSV over Ajax, and Ajax over Feyenoord than the reverse scenarios. 

Paper

Meeting registration / Dinner registration

PAST SEMINARS

September 19

Patrick Puhani, University of Hannover (Webpage)

Title: Pension Reforms and Couples’ Labour Supply Decisions

Abstract: To determine how wives' and husbands' retirement options affect their spouses' (and their own) labour supply decisions, we exploit (early) retirement cutoffs by way of a regression discontinuity design. Several German pension reforms since the early 1990s  have gradually raised women's retirement age from 60 to 65, but also increased ages for several early retirement pathways affecting both sexes. We use German Socio-Economic Panel data for a sample of couples aged 50 to 69 whose retirement eligibility occurred (i) prior to the reforms, (ii) during the transition years, and (iii) after the major set of reforms. We find that, prior to the reforms, when several retirement options were available to both husbands and wives, both react almost symmetrically to their spouse reaching an early retirement age, that is both husband and wife decrease their labour supply by about 5 percentage points when the spouse reaches age 60). This speaks in favour of leisure complementarities. However, after the set of reforms, when retiring early was much more difficult, we find no more significant labour supply reaction to the spouse reaching a retirement age, whereas reaching one's own retirement age still triggers a significant reaction in labour supply. Our results may explain some of the diverse findings in the literature on asymmetric reactions between husbands and wives to their spouse reaching a retirement age: such reactions may in large parts depend on how flexibly workers are able to retire.

September 26

Steven Yamarik, California State University (Webpage)

Title: Is Public Capital Productive? New Evidence from American States (with Makram El-Shagi and Jarko Fidrmuc)

Abstract: In this paper, we re-examine the productivity of U.S. public capital on private output. We provide updated and improved estimates of state-level public capital data for 1960 to 2020. We then include public capital and its component parts into a production function. We use a variety of estimators to control for cross-sectional dependence and heterogeneity across states and through time. We find that total public capital in general and utilities (water, sewer, power) in particular are productive albeit with implied elasticities of 4 to 8 percent. With regards to the sub-periods, utility public capital has gone from highly productive to unproductive, while education and health public capital has gone from unproductive to productive.

October 3

Rosalie Paccula, University of Southern California (Webpage)

Title: Using Policy and Innovation to Improve Life-Saving Access to Naloxone (with Evan D. Peet and David Powell)

Abstract: Naloxone is a life-saving medication which helps reverse the effects of an opioid overdose. Improving naloxone access is a central pillar of the federal response to the worsening opioid crisis in the United States. Existing studies have evaluated the effects of naloxone access laws, such as standing/protocol orders and prescriptive authority laws, which permit naloxone to be dispensed by pharmacies directly to consumers without a patient-specific prescription. However, previous studies have ignored the role of pharmaceutical innovations like Narcan. Narcan, introduced to the marketplace in February 2016 after receiving FDA approval in November 2015, is a naloxone nasal spray that permits laypersons to successfully administer the drug without training. We test the hypotheses that naloxone access laws alone increased the distribution of naloxone, and that the introduction of Narcan further expanded naloxone’s distribution and its life-saving impacts. To test these hypotheses, we use a robust difference-in-differences method to analyze cross-state variation in the adoption of naloxone access laws and their timing relative to Narcan’s introduction. We show that states with permissive naloxone access laws experienced substantially faster adoption of Narcan after its introduction, resulting in naloxone dispensing which far outpaced the independent effects of naloxone access laws. We also find that while permissive naloxone access laws on their own did not reduce non-synthetic, opioid-related overdose mortality rates, once Narcan was introduced these mortality rates significantly declined. These findings indicate the important interaction of innovation and policy.

October 10

Marie-Claire Villeval, GATE - University of Lyon (Webpage)

Title: The power of leadership in changing social norms (with F. Galeotti and J. Krutaj)

Abstract: We investigate whether a leader can trigger or impede the abandon of social norms that became detrimental over time in the society when the leader’s interests are misaligned with the preferences of the society. Additionally, we examine whether the leaders’ impact on the speed of transitioning to the new norm depends on their leadership style: top-down or bottom-up. We focus on the dynamic setting introduced by Andreoni et al. (2021) in which a norm that was beneficial for the society becomes detrimental over time. In a laboratory experiment, we introduced Progressive leaders in Conservative societies and Conservative leaders in Progressive societies. Whereas norms are sticky in the absence of a leader, we found that both types of leaders were equally successful in moving the society to a more efficient norm. In addition, normative change happened slower (resp. faster) in the Conservative societies than in the Progressive societies in presence of a bottom-up (resp. top-down) leader. In a follow-up experiment, we introduce imperfect communication among the members of the society and show that this motivates leaders to favor a bottom-up strategy.

October 17

Matloob Piracha, University of Kent (Webpage)

Title: Ethnic identity and educational outcomes

Abstract: We study the role of ethnic identity on educational performance and aspirations of immigrant children in Italy. We find that students with a weak sense of Italian identity perform worse in the Italian and Math subjects and have a higher probability of grade retention compared to the more assimilated children. Furthermore, immigrants in middle secondary school with a weak sense of Italian identity have a low preference towards academically-oriented high secondary track while the intention of immigrant children in high secondary schools to enrol at university decreases if they have a weak Italian identity. We exploit gender heterogeneity finding girls face adverse outcomes than boys, in terms of aspirations, when they have not build a strong sense of Italian identity. Immigrant children will soon form an important component of the Italian labour force and shedding light on their educational outcomes and preferences will help us understand their possible future labour market outcomes.

November 7

Panagiotis Konstantinou, Athens University (Webpage)

Title: Fiscal Adjustments and Firms’ Financial Performance (with Elena Chroni and Dimitrios Konstantios)

Abstract: We study the impact of fiscal adjustment plans on firms’ financial performance using a dataset from 11 European countries over the period from 1995 to 2018. Our analysis includes a total of 6,824,912 firms-year observations. We find that fiscal adjustment plans tend to have a negative effect across all firm sizes after three years of the implementation period of a fiscal adjustment. Furthermore, our results indicate that tax-based fiscal adjustment plans have a more detrimental effect on small firms compared to very large, large, and medium-sized firms, while expenditure-based plans are relatively costlier for the latter.  We also observe a strongly negative effect of fiscal adjustment plans on firm performance during both efficient and less efficient government periods.

November 14

João Pereira dos Santos, University of Lisbon (Webpage)

Title: Cousins From Overseas: The Labor Market Impact of a Major Forced Return Migration Shock (with Lara Bohnet and Susana Peralta)

Abstract: The 1975 eruption of Civil Wars in Portuguese-speaking Africa sparked the return of half a million retornados to Portugal. We use census data from 1960 and 1981 to study the labor market impacts of this massive influx of workers who are more educated than natives. Natives bear a high cost: dependent employment decreases for males, who become self-employed. The impact on female employment is around four times higher, accompanied by a move to inactivity. Our findings suggest that the effects are driven by the 80% of the repatriates who were Portuguese-born.  The identification strategy  exploits the repatriates' municipality of birth and a large-scale resettlement program relying on hotel capacity.

November 21

Léa Marchal, University of Paris 1 (Webpage)

Title: Does Immigration Affect Wages? A Meta-Analysis (with Amandine Aubry, Jérôme Héricourt and Clément Nedoncelle)

Abstract: The impact of immigration on native workers’ wages has been a topic of long-standing debate. This meta-analysis reviews 42 studies spanning from 1987 to 2019, offering a comprehensive assessment of the wage effects attributed to immigration. The results suggest that immigration typically has a negligible effect on native wages, with many findings being statistically insignificant. Notably, a more pronounced wage impact is observable in the U.S. and in recent years. This analysis underscores the influence of methodological advancements and increased data accessibility on wage effect estimates. It also shows the importance of the estimator choice, comparing OLS to IV-2SLS and distinguishing shift-share IVs, in determining estimate precision. Furthermore, this study reveals a discrepancy between estimates published in top academic journals and those in other outlets; the former often report larger effects.

November 28

Eric Strobl, University of Bern (Webpage)

Title: The Creative-Destructive Force of Hurricanes: Evidence from Technological Adoption in Colonial Jamaican Sugar Estates (with Joel Huesler)

Abstract: While in the early part of the 19th century Jamaica was one of the world's leading sugar producers, the abolition of slavery, the flooding of sugar markets with cheap European beet sugar, and the equalization and finally elimination of sugar import duties across the British empire led to a need for more efficient ways to produce sugar. However, it has been widely noted that Jamaica sugar estates were late in adopting more efficient production techniques, arguably due to inadequate financing. This paper investigates what role the destructive forces of hurricanes may have played in inducing Jamaica to finally modernize its sugar production. To this end we combine a geo-referenced exhaustive data set of Jamaican sugar estates with a measure of localized hurricane damage constructed from historical hurricane tracks over a 50 year period. Our econometric analysis shows that hurricane strikes increased the probability that a surviving estate upgraded its sugar processing technology, particularly when the price of sugar was high and the price of the other main exporting crop (bananas) was low.  Additionally, while a government hurricane loan program working through local loan banks did help plantations to adopt new machinery, this depended on the damage not being too large.

December 5

Joan Costa-Font, London School of Economics (Webpage)

Title: Brexiting the NHS? Health Workforce Conditions after Leaving the European Union

Abstract: We document that leaving the European Union (EU) exerted significant effects on the conditions and motivation of the health-related workforce in the United Kingdom (UK), which resulted in lower job satisfaction and a rise in working times. We examine a number of different channels such as understaffing, reliance on temporary recruitment and recruitment difficulties as well as lost motivation of teams made up of European Union nationals, and other wider crowding out of pro-social motivation to work for the National Health Service (NHS) after Brexit for both European and British medical professionals. We draw on evidence from event studies and a difference in strategy and longitudinal evidence to document robust evidence of the detrimental effect of Brexit on job satisfaction, influenced by both understaffing and wider mental health effects (burnout).

January 16

Thomas Dohmen, University of Bonn (Webpage)

Title: Worker Representatives (with Julian Budde, Simon Jäger and Simon Trenkle)

Abstract: We study the selection of worker representatives and how representation affects worker outcomes. We focus on German works councilors---shop-floor representatives elected from the workforce. We paint a comprehensive picture of representatives’ characteristics spanning a period of more than forty years, combining rich administrative panel and representative survey data. Contrary to other domains of power where blue-collar workers are often underrepresented, we document that blue-collar workers have been close to proportionally represented among works councilors for the past four decades with a shrinking representation gap over time. Worker representatives are positively selected in terms of earnings and person-fixed effects. They tend to have more extroverted, more open, and less neurotic personalities, show greater interest in politics, and lean left politically, compared to the populations they represent. Worker representatives experience higher wage gains and lower quit rates in the years preceding their election compared to similar non-elected workers at the same establishment. Drawing on event study designs around scheduled works council elections, as well as an instrumental variables strategy building on representatives retiring, we study the effects of blue-collar representation on worker outcomes. We find that electing blue-collar representatives protects workers from involuntary layoffs and mildly compresses wages. Our results support the hypothesis that blue-collar representatives place greater emphasis on job security, in line with stronger worries about layoffs and risk of unemployment faced by blue-collar workers.

January 23

Giacomo De Luca, University of Bozen-Bolzano (Webpage)

Title:  Elections for sale? Evidence from Italian local elections.

Abstract: This paper studies the dynamics of electoral corruption in the context of local elections in Italy. It exploits the asynchronous nature in the timing of mayoral elections to estimate a relationship between elections and the municipality-level amount exchanged through cash transactions. Cash transactions are sourced from a unique comprehensive dataset, taken from the Aggregate Anti-Money Laundering (AML) Reports between 2008 and 2018, which all Italian financial intermediaries are mandated to file with reference to transactions worth euros 15,000 or more. The difference-in-difference estimates, including municipality and time fixed effects, suggest that the municipal elections in Italy systematically trigger an anomalous increase in the volume of cash  transactions, which we interpret as evidence of electoral corruption, i.e. an intense circulation of money to secure electoral support in the shadow of the law. Exploring the heterogeneity of our main result along several potential mediating factors confirms some intuitively appealing patterns, such as tighter competition, the presence of active criminal organizations, as well as the size of the municipality budget, let us show which significantly affects the volume of cash transactions.

January 30

Arthur Attema, Erasmus University Rotterdam (Webpage)

Title: Reference-dependent discounting for health and money

Abstract: Reference-dependence has become a widely established phenomenon in decision making under risk, not only for monetary outcomes but also for other outcomes, e.g. related to health. However, when the prospects involve risk about timing (the time of receipt of outcomes), rather than the outcomes themselves, much less is known about reference-dependence. This study extends discounted utility to incorporate reference-dependence and is the first to test for reference-dependence in timing prospects. Prospects were constructed for two contexts (health and money) and two kinds of outcomes (amount of the outcome and timing of the outcome). For all tasks, a majority of subjects is risk averse for gains and risk seeking for losses, with risk attitudes more mixed for losses. We also observe substantial pessimism with regard to probabilities, and loss aversion for both health and money, and both for risk regarding the outcomes and regarding timing. Therefore, we find substantial empirical support for reference-dependent discounting, both in the monetary and in the health domain. Our results show that psychological biases such as probability weighting and loss aversion are also important, some even more pronounced, when timing is risky. 

February 6

Georg Kirchsteiger, Université Libre de Bruxelles (Webpage)

Title: Voluntary versus mandatory information disclosure in the sequential prisoner’s dilemma (with T. Lenaerts and R. Suchon)

Abstract: In sequential social dilemmas with stranger matching, initiating cooperation is inherently risky for the first mover. The disclosure of the second mover’s past actions may be necessary to instigate cooperation. We experimentally compare the effect of mandatory and voluntary disclosure with non-disclosure in a sequential prisoner’s dilemma situation. Our results confirm the positive effects of disclosure on cooperation. We also find that voluntary disclosure is as effective as mandatory disclosure, which runs counter to the results of existing literature on this topic. With voluntary disclosure, second movers who have a good track record chose to disclose, suggesting that they anticipate non-disclosure would signal non-cooperativeness. First movers interpret non-disclosure correctly as a signal of non-cooperativeness. Therefore, they cooperate less than half as often when the second mover decides not to disclose.

March 12

Thorsten Beck, European University Institute  of Florence (Webpage)

Title: Incomplete supervisory cooperation (joint work with Consuelo Silva-Buston and Wolf Wagner)

Abstract: Banking supervisors frequently cooperate across countries, but cooperation only partially covers the global operations of large banking groups. We show that this causes significant third-country risk-shifting. Using hand-collected data on supervisory cooperation, we document that banking groups shift lending activities and risk into third-country subsidiaries when cooperation agreements cover their operations in other countries. We also provide evidence for the extent of risk-shifting being driven by higher supervisory stringency in the cooperating countries, but not by increased supervisory effectiveness. Overall, our results indicate that incompleteness in cooperation significantly lowers its global effectiveness, suggesting a need to ”cooperate on cooperation”.

March 19

Laurent Weill, University of Strasbourg (Webpage)

Title: Do Risky Banks Pay Their Employees More? (co-written with Laetitia Lepetit and Frank Strobel)

Abstract: This study investigates the relationship between bank risk and employee wage compensation using a comprehensive dataset from U.S. commercial banks spanning 1990 to 2022. Our key finding reveals a nonlinear association in the form of an inverted U-shape: higher bank risk initially leads to increased wage compensation, but beyond a certain threshold, this effect reverses. We interpret this pattern as a trade-off between risk and salary: higher risk necessitates higher compensation to mitigate bankruptcy risk for employees, but higher compensation through higher costs can hamper the bank's existence. This relationship is more pronounced in small banks and favorable economic conditions and when bank concentration is low.

March 26

Niclas Berggren, Research Institute of Industrial Economics of Stockholm (Webpage)

Title: Does capitalism disfavor women? Evidence from life satisfaction (co-author: Christian Bjørnskov)

Abstract: There is widespread concern, especially in certain feminist circles, that capitalism disfavors women. This could take many forms, e.g., lower wages for the same work, reduced career opportunities, disparities in ownership and the upholding of traditional gender roles, and it could result in capitalism conferring more life satisfaction on men than on women. We test empirically whether this concern is justified. Using the epidemiological approach to rule out reverse causality, we first confirm previous findings that most areas of economic freedom (legal quality in particular, but also monetary stability, openness and regulation) are beneficial for general life satisfaction. When looking at women and men separately, we find virtually no statistically significant differences, and in the cases we do, the estimates reveal a more beneficial outcome for women. Hence, we conclude that capitalism does not seem to favor men more than women in terms of life satisfaction.