Andrew Garin, Dmitri Koustas, Carl McPherson, Samuel Norris, Matthew Pecenco, Evan K. Rose, Yotam Shem-Tov, Jeffrey Weaver
We study the effect of incarceration on wages, self-employment, and taxes and transfers in North Carolina and Ohio using two quasi-experimental research designs: discontinuities in sentencing guidelines and random assignment to judges. Across both states, incarceration generates short-term drops in economic activity while individuals remain in prison. As a result, a year-long sentence decreases cumulative earnings over five years by 13%. Beyond five years, however, there is no evidence of lower employment, wage earnings, or self-employment in either state, as well as among defendants with no prior incarceration history. These results suggest that upstream factors, such as other types of criminal justice interactions or pre-existing labor market detachment, are more likely to be the cause of low earnings among the previously incarcerated, who we estimate would earn just $5000 per year on average if spared a prison sentence.
{"title":"The Impact of Incarceration on Employment, Earnings, and Tax Filing","authors":"Andrew Garin, Dmitri Koustas, Carl McPherson, Samuel Norris, Matthew Pecenco, Evan K. Rose, Yotam Shem-Tov, Jeffrey Weaver","doi":"10.3982/ECTA22028","DOIUrl":"https://doi.org/10.3982/ECTA22028","url":null,"abstract":"<div>\u0000 \t\t\t<p>We study the effect of incarceration on wages, self-employment, and taxes and transfers in North Carolina and Ohio using two quasi-experimental research designs: discontinuities in sentencing guidelines and random assignment to judges. Across both states, incarceration generates short-term drops in economic activity while individuals remain in prison. As a result, a year-long sentence decreases cumulative earnings over five years by 13%. Beyond five years, however, there is no evidence of lower employment, wage earnings, or self-employment in either state, as well as among defendants with no prior incarceration history. These results suggest that upstream factors, such as other types of criminal justice interactions or pre-existing labor market detachment, are more likely to be the cause of low earnings among the previously incarcerated, who we estimate would earn just $5000 per year on average if spared a prison sentence.</p>\u0000 \t\t</div>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"93 2","pages":"503-538"},"PeriodicalIF":6.6,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.3982/ECTA22028","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143726767","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-29DOI: 10.1016/j.iref.2025.104075
Huilian Fu , Jingyi Cai , Sinan Xia , Lianjie Zhou
In the context of an increasingly complex global financial environment, this study systematically analyzes the impact of regional financial regulatory intensity on corporate capital misallocation using macro data from 31 provinces and cities in China and micro data from listed companies between 2010 and 2022. The research finds that an increase in regional financial regulatory intensity significantly reduces the degree of corporate capital misallocation, with notable differences observed between enterprises with different ownership structures and those audited by the Big Four accounting firms, revealing the profound impact of financial regulation on corporate capital allocation. Further analysis indicates that financial regulation effectively alleviates corporate financing constraints, thereby promoting a more optimal allocation of capital. Additionally, the level of regional economic development serves as an important moderating variable, significantly moderating the impact of regional financial regulatory intensity on corporate capital misallocation, with this moderating effect exhibiting significant heterogeneity across different regions, providing a new perspective for understanding the regional differences in the effects of financial regulation.
{"title":"Regional financial regulatory intensity and corporate capital misallocation","authors":"Huilian Fu , Jingyi Cai , Sinan Xia , Lianjie Zhou","doi":"10.1016/j.iref.2025.104075","DOIUrl":"10.1016/j.iref.2025.104075","url":null,"abstract":"<div><div>In the context of an increasingly complex global financial environment, this study systematically analyzes the impact of regional financial regulatory intensity on corporate capital misallocation using macro data from 31 provinces and cities in China and micro data from listed companies between 2010 and 2022. The research finds that an increase in regional financial regulatory intensity significantly reduces the degree of corporate capital misallocation, with notable differences observed between enterprises with different ownership structures and those audited by the Big Four accounting firms, revealing the profound impact of financial regulation on corporate capital allocation. Further analysis indicates that financial regulation effectively alleviates corporate financing constraints, thereby promoting a more optimal allocation of capital. Additionally, the level of regional economic development serves as an important moderating variable, significantly moderating the impact of regional financial regulatory intensity on corporate capital misallocation, with this moderating effect exhibiting significant heterogeneity across different regions, providing a new perspective for understanding the regional differences in the effects of financial regulation.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"100 ","pages":"Article 104075"},"PeriodicalIF":4.8,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143748567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We estimate valence measures of candidates running in U.S. House elections from data on vote shares. Our identification and estimation strategy builds on ideas developed for estimating production functions, allowing us to control for possible endogeneity of campaign spending and sample selection of candidates due to endogenous entry. We find that incumbents have substantially higher valence measures than challengers running against them, resulting in about 3.5 percentage-point differences in the vote share, on average. Eliminating differences in the valence of challengers and incumbents results in an increase in the winning probability of a challenger from 6.5% to 12.1%. Our measure of candidate valence can be used to study various substantive questions of political economy. We illustrate its usefulness by studying the source of incumbency advantage in U.S. House elections.
{"title":"Estimating Candidate Valence","authors":"Kei Kawai, Takeaki Sunada","doi":"10.3982/ECTA20496","DOIUrl":"https://doi.org/10.3982/ECTA20496","url":null,"abstract":"<p>We estimate valence measures of candidates running in U.S. House elections from data on vote shares. Our identification and estimation strategy builds on ideas developed for estimating production functions, allowing us to control for possible endogeneity of campaign spending and sample selection of candidates due to endogenous entry. We find that incumbents have substantially higher valence measures than challengers running against them, resulting in about 3.5 percentage-point differences in the vote share, on average. Eliminating differences in the valence of challengers and incumbents results in an increase in the winning probability of a challenger from 6.5% to 12.1%. Our measure of candidate valence can be used to study various substantive questions of political economy. We illustrate its usefulness by studying the source of incumbency advantage in U.S. House elections.</p>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"93 2","pages":"463-501"},"PeriodicalIF":6.6,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143726766","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose two general equilibrium models, quota equilibrium, and emission tax equilibrium. Government specifies quotas or taxes on emissions, and then refrains from further action. All results remain valid regardless of how government chooses its emissions target. Quota equilibrium exists; the allocation of emission property rights impacts the distribution of welfare. If the only externality arises from total net emissions, quota equilibrium is Pareto optimal among all feasible outcomes with the same total net emissions. For certain tax rates, emission tax equilibrium may not exist. Every quota equilibrium can be realized as an emission tax equilibrium and vice versa. However, different quota prices may arise in equilibrium from a single quota, and different emission levels may arise in equilibrium from a single tax rate. This leads to inequivalence between quota and emission tax equilibria.
{"title":"Cap-and-Trade and Carbon Tax Meet Arrow–Debreu","authors":"Robert M. Anderson, Haosui Duanmu","doi":"10.3982/ECTA22923","DOIUrl":"https://doi.org/10.3982/ECTA22923","url":null,"abstract":"<div>\u0000 \t\t\t<p>We propose two general equilibrium models, quota equilibrium, and emission tax equilibrium. Government specifies quotas or taxes on emissions, and then refrains from further action. All results remain valid regardless of how government chooses its emissions target. Quota equilibrium exists; the allocation of emission property rights impacts the distribution of welfare. If the only externality arises from total net emissions, quota equilibrium is Pareto optimal among all feasible outcomes with the same total net emissions. For certain tax rates, emission tax equilibrium may not exist. Every quota equilibrium can be realized as an emission tax equilibrium and vice versa. However, different quota prices may arise in equilibrium from a single quota, and different emission levels may arise in equilibrium from a single tax rate. This leads to inequivalence between quota and emission tax equilibria.</p>\u0000 \t\t</div>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"93 2","pages":"357-393"},"PeriodicalIF":6.6,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.3982/ECTA22923","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143726950","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We develop a theory of monotone comparative statics for models with adjustment costs. We show that comparative-statics conclusions may be drawn under the usual ordinal complementarity assumptions on the objective function, assuming very little about costs: only a mild monotonicity condition is required. We use this insight to prove a general Le Chatelier principle: under the ordinal complementarity assumptions, if short-run adjustment is subject to a monotone cost, then the long-run response to a shock is greater than the short-run response. We extend these results to a fully dynamic model of adjustment over time: the Le Chatelier principle remains valid, and under slightly stronger assumptions, optimal adjustment follows a monotone path. We apply our results to models of saving, production, pricing, labor supply, and investment.
{"title":"Comparative Statics With Adjustment Costs and the Le Chatelier Principle","authors":"Eddie Dekel, John K.-H. Quah, Ludvig Sinander","doi":"10.3982/ECTA22841","DOIUrl":"https://doi.org/10.3982/ECTA22841","url":null,"abstract":"<div>\u0000 <p>We develop a theory of monotone comparative statics for models with adjustment costs. We show that comparative-statics conclusions may be drawn under the usual ordinal complementarity assumptions on the objective function, assuming very little about costs: only a mild monotonicity condition is required. We use this insight to prove a general Le Chatelier principle: under the ordinal complementarity assumptions, if short-run adjustment is subject to a monotone cost, then the long-run response to a shock is greater than the short-run response. We extend these results to a fully dynamic model of adjustment over time: the Le Chatelier principle remains valid, and under slightly stronger assumptions, optimal adjustment follows a monotone path. We apply our results to models of saving, production, pricing, labor supply, and investment.</p>\u0000 </div>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"93 2","pages":"661-694"},"PeriodicalIF":6.6,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.3982/ECTA22841","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143726893","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Despite its importance for socio-economic equity and urban planning, transport poverty is a complex issue that lacks clear measurement tools. The paper seeks to bridge this gap by introducing a composite indicator to assess transport poverty vulnerability in the European Union. The newly constructed vulnerability index for transport poverty, which includes direct and indirect dimensions of affordability, accessibility and mobility from Eurostat and the World Bank, identifies EU-27 countries facing the greatest challenges. Further, the new index is compared with an augmented index that adjusts for externalities such as environmental impacts and demographic factors, providing a more nuanced analysis. The findings reveal a shift in the ranking of countries when the augmented index is considered. While Slovenia, Luxembourg and Austria initially ranked highest (indicating lower transport poverty vulnerability), with the augmented index Denmark, the Netherlands, Czech Republic and Germany emerge as the least transport vulnerable countries. The augmented index generally indicates that countries which invest heavily in transport infrastructure and maintain a balance between annual earnings and transport costs exhibit the least transport poverty vulnerability. Notably, approximately 90 to 125 million people in the EU-27 experience some form of transport poverty, driving the need for targeted policy interventions to address this pervasive issue.
{"title":"Transport poverty vulnerability index: Making use of standardised databases","authors":"Kaja Primc , Darja Zabavnik , Renata Slabe-Erker , Miha Dominko","doi":"10.1016/j.erss.2025.104041","DOIUrl":"10.1016/j.erss.2025.104041","url":null,"abstract":"<div><div>Despite its importance for socio-economic equity and urban planning, transport poverty is a complex issue that lacks clear measurement tools. The paper seeks to bridge this gap by introducing a composite indicator to assess transport poverty vulnerability in the European Union. The newly constructed vulnerability index for transport poverty, which includes direct and indirect dimensions of affordability, accessibility and mobility from Eurostat and the World Bank, identifies EU-27 countries facing the greatest challenges. Further, the new index is compared with an augmented index that adjusts for externalities such as environmental impacts and demographic factors, providing a more nuanced analysis. The findings reveal a shift in the ranking of countries when the augmented index is considered. While Slovenia, Luxembourg and Austria initially ranked highest (indicating lower transport poverty vulnerability), with the augmented index Denmark, the Netherlands, Czech Republic and Germany emerge as the least transport vulnerable countries. The augmented index generally indicates that countries which invest heavily in transport infrastructure and maintain a balance between annual earnings and transport costs exhibit the least transport poverty vulnerability. Notably, approximately 90 to 125 million people in the EU-27 experience some form of transport poverty, driving the need for targeted policy interventions to address this pervasive issue.</div></div>","PeriodicalId":48384,"journal":{"name":"Energy Research & Social Science","volume":"123 ","pages":"Article 104041"},"PeriodicalIF":6.9,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143725537","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-29DOI: 10.1016/j.resourpol.2025.105573
Umut Uzar , Kemal Eyuboglu
Despite a significant body of literature examining the drivers of environmental degradation, non-traditional political and economic factors have not been thoroughly investigated. In this context, there remains a gap in the literature regarding the asymmetric effects of less-studied factors such as democracy and natural resources. The key research question addressed by this study is: How do democracy and natural resources, as political and economic factors, impact the ecological footprint in South Africa? To answer this question, this study investigates the potential hidden impacts of democracy and natural resources on the ecological footprint in South Africa for the period 1970–2021 using the Fourier Nonlinear Autoregressive Distributed Lag (FNARDL) model. This study thus positions itself as a pioneering work in examining the determinants of ecological pressure using the FNARDL method. While findings from the ARDL model indicate that these factors are statistically insignificant, the FNARDL model reveals that democracy and natural resources significantly reduce the ecological footprint under structural breaks. Furthermore, it has been found that economic growth, urbanization, and energy consumption positively impact the ecological footprint. These findings help inform policy by clarifying the complex links between politics, economics, and environmental sustainability in South Africa.
{"title":"Examining the hidden effects of democracy and natural sources on ecological footprint in South Africa: Fourier NARDL approach","authors":"Umut Uzar , Kemal Eyuboglu","doi":"10.1016/j.resourpol.2025.105573","DOIUrl":"10.1016/j.resourpol.2025.105573","url":null,"abstract":"<div><div>Despite a significant body of literature examining the drivers of environmental degradation, non-traditional political and economic factors have not been thoroughly investigated. In this context, there remains a gap in the literature regarding the asymmetric effects of less-studied factors such as democracy and natural resources. The key research question addressed by this study is: How do democracy and natural resources, as political and economic factors, impact the ecological footprint in South Africa? To answer this question, this study investigates the potential hidden impacts of democracy and natural resources on the ecological footprint in South Africa for the period 1970–2021 using the Fourier Nonlinear Autoregressive Distributed Lag (FNARDL) model. This study thus positions itself as a pioneering work in examining the determinants of ecological pressure using the FNARDL method. While findings from the ARDL model indicate that these factors are statistically insignificant, the FNARDL model reveals that democracy and natural resources significantly reduce the ecological footprint under structural breaks. Furthermore, it has been found that economic growth, urbanization, and energy consumption positively impact the ecological footprint. These findings help inform policy by clarifying the complex links between politics, economics, and environmental sustainability in South Africa.</div></div>","PeriodicalId":20970,"journal":{"name":"Resources Policy","volume":"103 ","pages":"Article 105573"},"PeriodicalIF":10.2,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143734935","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-29DOI: 10.1016/j.intfin.2025.102137
Müge Demir , Zeynep Önder
This study investigates whether financial and legislative integration affects the relationship between financial stability and connectivity in the bank-to-bank and bank-to-non-bank cross-border lending markets of 25 European countries by using network analysis and the locational banking statistics of the Bank for International Settlements. We test whether connecting through a single market or a single currency affects the interplay between financial stability and connectivity across the members of the European Union. The results suggest that as the level of financial connectivity increases, using the single currency, the euro, helps to improve the resilience of the European Union in response to the crisis in both bank-to-bank and bank-to-non-bank lending markets but legislative-regulatory integration does not have any significant effect. The positive effect of the euro on financial stability is observed not only for systemic crises but also for residual events.
{"title":"Financial connectivity in cross-border lending and crises: Role of financial and legislative integration","authors":"Müge Demir , Zeynep Önder","doi":"10.1016/j.intfin.2025.102137","DOIUrl":"10.1016/j.intfin.2025.102137","url":null,"abstract":"<div><div>This study investigates whether financial and legislative integration affects the relationship between financial stability and connectivity in the bank-to-bank and bank-to-non-bank cross-border lending markets of 25 European countries by using network analysis and the locational banking statistics of the Bank for International Settlements. We test whether connecting through a single market or a single currency affects the interplay between financial stability and connectivity across the members of the European Union. The results suggest that as the level of financial connectivity increases, using the single currency, the euro, helps to improve the resilience of the European Union in response to the crisis in both bank-to-bank and bank-to-non-bank lending markets but legislative-regulatory integration does not have any significant effect. The positive effect of the euro on financial stability is observed not only for systemic crises but also for residual events.</div></div>","PeriodicalId":48119,"journal":{"name":"Journal of International Financial Markets Institutions & Money","volume":"101 ","pages":"Article 102137"},"PeriodicalIF":5.4,"publicationDate":"2025-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143724969","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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