This paper estimates the welfare effects of TV advertising regulation. I develop a structural model of demand and supply in which both the broadcast content and the amount of advertising are endogenously determined. My results suggest that more varied content, and, in particular, more educational content, can be offered in a laissez-faire equilibrium. Children and teenagers would watch more educational content as more of this type of programming becomes available. Total consumer welfare is higher in a laissez-faire equilibrium than that under the current advertising restrictions.
{"title":"Welfare analysis of regulations on media platform advertising","authors":"Jiekai Zhang","doi":"10.1093/jeea/jvae032","DOIUrl":"https://doi.org/10.1093/jeea/jvae032","url":null,"abstract":"This paper estimates the welfare effects of TV advertising regulation. I develop a structural model of demand and supply in which both the broadcast content and the amount of advertising are endogenously determined. My results suggest that more varied content, and, in particular, more educational content, can be offered in a laissez-faire equilibrium. Children and teenagers would watch more educational content as more of this type of programming becomes available. Total consumer welfare is higher in a laissez-faire equilibrium than that under the current advertising restrictions.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"120 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140625213","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}
This paper investigates whether NGO-provided basic healthcare crowds out or crowds in similar services provided by the government in rural Uganda. We find that NGO entry reduces the number of government workers, which leads to a reduction in government-provided health services. The results are driven by the NGO often hiring the government worker in places where skilled labor is scarce. In places where skilled labor is relatively abundant, the NGO hires a second person and complements government healthcare. Thus, the effects of NGO entry on government capacity are nuanced.
{"title":"The Impact of NGO-Provided AID on Government Capacity: Evidence from Uganda","authors":"Erika Deserranno, Aisha Nansamba, Nancy Qian","doi":"10.1093/jeea/jvae029","DOIUrl":"https://doi.org/10.1093/jeea/jvae029","url":null,"abstract":"This paper investigates whether NGO-provided basic healthcare crowds out or crowds in similar services provided by the government in rural Uganda. We find that NGO entry reduces the number of government workers, which leads to a reduction in government-provided health services. The results are driven by the NGO often hiring the government worker in places where skilled labor is scarce. In places where skilled labor is relatively abundant, the NGO hires a second person and complements government healthcare. Thus, the effects of NGO entry on government capacity are nuanced.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"3 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140616196","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}
An increase in uncertainty is not contractionary per se. What is contractionary is a widening of the left tail of the GDP growth forecast distribution, the downside uncertainty. On the contrary, an increase of the right tail, the upside uncertainty, is mildly expansionary. The reason why uncertainty shocks have been previously found to be contractionary is because movements in downside uncertainty dominate existing empirical measures of uncertainty. The results are obtained using a new econometric approach which combines quantile regressions and structural VARs.
{"title":"Downside and Upside Uncertainty Shocks","authors":"Mario Forni, Luca Gambetti, Luca Sala","doi":"10.1093/jeea/jvae024","DOIUrl":"https://doi.org/10.1093/jeea/jvae024","url":null,"abstract":"An increase in uncertainty is not contractionary per se. What is contractionary is a widening of the left tail of the GDP growth forecast distribution, the downside uncertainty. On the contrary, an increase of the right tail, the upside uncertainty, is mildly expansionary. The reason why uncertainty shocks have been previously found to be contractionary is because movements in downside uncertainty dominate existing empirical measures of uncertainty. The results are obtained using a new econometric approach which combines quantile regressions and structural VARs.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"46 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140586936","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}
We study relational contracts among managers using unique data that tracks transfers of workers across teams in Indian ready-made garment factories. We focus on how relational contracts help managers cope with worker absenteeism shocks, which are frequent, often large, weakly correlated across teams, and which substantially reduce team productivity. Together these facts imply gains from sharing workers. We show that managers respond to shocks by lending and borrowing workers in a manner consistent with relational contracting, but many potentially beneficial transfers are unrealized. This is because managers’ primary relationships are with a very small subset of potential partners. A borrowing event study around main trading partners’ separations from the firm reinforces the importance of relationships. We show robustness to excluding worker moves least likely to reflect relational borrowing responses to idiosyncratic absenteeism shocks. Counterfactual simulations reveal large gains to reducing costs associated with forming and maintaining additional relationships among managers.
{"title":"Absenteeism, Productivity, and Relational Contracts Inside the Firm","authors":"Achyuta Adhvaryu, Jean-François Gauthier, Anant Nyshadham, Jorge Tamayo","doi":"10.1093/jeea/jvae026","DOIUrl":"https://doi.org/10.1093/jeea/jvae026","url":null,"abstract":"We study relational contracts among managers using unique data that tracks transfers of workers across teams in Indian ready-made garment factories. We focus on how relational contracts help managers cope with worker absenteeism shocks, which are frequent, often large, weakly correlated across teams, and which substantially reduce team productivity. Together these facts imply gains from sharing workers. We show that managers respond to shocks by lending and borrowing workers in a manner consistent with relational contracting, but many potentially beneficial transfers are unrealized. This is because managers’ primary relationships are with a very small subset of potential partners. A borrowing event study around main trading partners’ separations from the firm reinforces the importance of relationships. We show robustness to excluding worker moves least likely to reflect relational borrowing responses to idiosyncratic absenteeism shocks. Counterfactual simulations reveal large gains to reducing costs associated with forming and maintaining additional relationships among managers.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"40 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140586974","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}
This paper studies the impact of immigration on U.S. local business dynamics using a comprehensive collection of survey and administrative data. It finds heterogeneous impacts across the employer productivity distribution that favor higher-productivity firms and lead to increases in average local earnings. Responses to immigration along the exit margin are particularly important. Immigrant inflows cull establishments from low-productivity firms while preserving establishments from high-productivity firms. Overall, reduced exit accounts for 43% of immigrant-induced job creation and 41% of immigrant-induced earnings growth. A general equilibrium model proposes a mechanism that ties immigrant workers to high-productivity employers and shows how accounting for changes to the employer productivity distribution can yield substantially larger estimates of immigrant-generated economic surplus than canonical models of labor demand.
{"title":"Immigration and Business Dynamics: Evidence from U.S. Firms","authors":"Parag Mahajan","doi":"10.1093/jeea/jvae022","DOIUrl":"https://doi.org/10.1093/jeea/jvae022","url":null,"abstract":"This paper studies the impact of immigration on U.S. local business dynamics using a comprehensive collection of survey and administrative data. It finds heterogeneous impacts across the employer productivity distribution that favor higher-productivity firms and lead to increases in average local earnings. Responses to immigration along the exit margin are particularly important. Immigrant inflows cull establishments from low-productivity firms while preserving establishments from high-productivity firms. Overall, reduced exit accounts for 43% of immigrant-induced job creation and 41% of immigrant-induced earnings growth. A general equilibrium model proposes a mechanism that ties immigrant workers to high-productivity employers and shows how accounting for changes to the employer productivity distribution can yield substantially larger estimates of immigrant-generated economic surplus than canonical models of labor demand.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"367 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140204174","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}
Online intermediaries greatly expand consumer information, but also raise sellers’ marginal costs by charging high commissions. To prevent disintermediation, some platforms adopted price parity and anti-steering provisions, which restrict sellers’ ability to use alternative sales channels. Whether to uphold, reform, or ban these provisions has been at the center of the policy debate, but, so far, little consensus has emerged. As an alternative, this paper studies how to cap platforms’ commissions. The utilitarian cap reflects the Pigouvian precept according to which the platform should charge net fees no greater than the informational externality it exerts on other market participants.
{"title":"Regulating Platform Fees Under Price Parity","authors":"Renato Gomes, Andrea Mantovani","doi":"10.1093/jeea/jvae014","DOIUrl":"https://doi.org/10.1093/jeea/jvae014","url":null,"abstract":"Online intermediaries greatly expand consumer information, but also raise sellers’ marginal costs by charging high commissions. To prevent disintermediation, some platforms adopted price parity and anti-steering provisions, which restrict sellers’ ability to use alternative sales channels. Whether to uphold, reform, or ban these provisions has been at the center of the policy debate, but, so far, little consensus has emerged. As an alternative, this paper studies how to cap platforms’ commissions. The utilitarian cap reflects the Pigouvian precept according to which the platform should charge net fees no greater than the informational externality it exerts on other market participants.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"69 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140153512","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}
We compare men and women who are displaced from similar jobs by applying an event study design combined with propensity score matching and reweighting to administrative data from Germany. After a mass layoff, women’ s earnings losses are about 35% higher than men’ s, with the gap persisting five years after displacement. This is partly explained by women taking up more part-time employment, but even women’ s full-time wage losses are almost 50% higher than men’ s. Parenthood magnifies the gender gap sharply. Finally, displaced women spend less time on job search and apply for lower-paid jobs, highlighting the importance of labor supply decisions.
{"title":"The Gender Gap in Earnings Losses After Job Displacement","authors":"Hannah Illing, Johannes Schmieder, Simon Trenkle","doi":"10.1093/jeea/jvae019","DOIUrl":"https://doi.org/10.1093/jeea/jvae019","url":null,"abstract":"We compare men and women who are displaced from similar jobs by applying an event study design combined with propensity score matching and reweighting to administrative data from Germany. After a mass layoff, women’ s earnings losses are about 35% higher than men’ s, with the gap persisting five years after displacement. This is partly explained by women taking up more part-time employment, but even women’ s full-time wage losses are almost 50% higher than men’ s. Parenthood magnifies the gender gap sharply. Finally, displaced women spend less time on job search and apply for lower-paid jobs, highlighting the importance of labor supply decisions.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"1 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140153709","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}
We show that the Brazilian trade liberalization in the early 1990s led to a permanent relative decline in the vote share of left-wing presidential candidates in the regions more affected by the tariff cuts. This happened even though the shock, implemented by a right-wing party, induced a contraction in manufacturing and formal employment in the more affected regions, and despite the left’s identification with protectionist policies. To rationalize this response, we consider a new institutional channel for the political effects of trade shocks: the weakening of labor unions. We provide support for this mechanism in two steps. First, we show that union presence—proxied by the number of workers directly employed by unions, by union density, and by the number of union establishments—declined in regions that became more exposed to foreign competition. Second, we show that the negative effect of tariff reductions on the votes for the left was driven exclusively by political parties with historical links to unions. Furthermore, the impact of the trade liberalization on the vote share of these parties was significant only in regions that had unions operating before the reform. These findings are consistent with the hypothesis that tariff cuts reduced the vote share of the left partly through the weakening of labor unions. This institutional channel is fundamentally different from the individual-level responses, motivated by economic or identity concerns, that have been considered in the literature.
{"title":"Labor Unions and the Electoral Consequences of Trade Liberalization","authors":"Pedro Ogeda, Emanuel Ornelas, Rodrigo R Soares","doi":"10.1093/jeea/jvae020","DOIUrl":"https://doi.org/10.1093/jeea/jvae020","url":null,"abstract":"We show that the Brazilian trade liberalization in the early 1990s led to a permanent relative decline in the vote share of left-wing presidential candidates in the regions more affected by the tariff cuts. This happened even though the shock, implemented by a right-wing party, induced a contraction in manufacturing and formal employment in the more affected regions, and despite the left’s identification with protectionist policies. To rationalize this response, we consider a new institutional channel for the political effects of trade shocks: the weakening of labor unions. We provide support for this mechanism in two steps. First, we show that union presence—proxied by the number of workers directly employed by unions, by union density, and by the number of union establishments—declined in regions that became more exposed to foreign competition. Second, we show that the negative effect of tariff reductions on the votes for the left was driven exclusively by political parties with historical links to unions. Furthermore, the impact of the trade liberalization on the vote share of these parties was significant only in regions that had unions operating before the reform. These findings are consistent with the hypothesis that tariff cuts reduced the vote share of the left partly through the weakening of labor unions. This institutional channel is fundamentally different from the individual-level responses, motivated by economic or identity concerns, that have been considered in the literature.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"24 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140156662","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}
We conduct a field experiment in India comparing two ways of delegating selection of microcredit clients among smallholder farmers to local intermediaries: a private trader (TRAIL), versus a local-government appointee (GRAIL). Selected beneficiaries in both schemes were equally likely to take up and repay loans, and experienced similar increases in borrowing and farm output. However farm profits increased and unit costs of production decreased significantly only in TRAIL. While there is some evidence of superior selection by ability and landholding in TRAIL, the results are mainly driven by greater reduction of unit production costs for TRAIL treated farmers than GRAIL treated farmers of similar ability or landholding. We develop and test a model where the TRAIL agents’ role as middlemen in the agricultural supply chain enabled and motivated them to offer treated farmers business advice, which helped them lower unit costs.
{"title":"Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries","authors":"Pushkar Maitra, Sandip Mitra, Dilip Mookherjee, Sujata Visaria","doi":"10.1093/jeea/jvae018","DOIUrl":"https://doi.org/10.1093/jeea/jvae018","url":null,"abstract":"We conduct a field experiment in India comparing two ways of delegating selection of microcredit clients among smallholder farmers to local intermediaries: a private trader (TRAIL), versus a local-government appointee (GRAIL). Selected beneficiaries in both schemes were equally likely to take up and repay loans, and experienced similar increases in borrowing and farm output. However farm profits increased and unit costs of production decreased significantly only in TRAIL. While there is some evidence of superior selection by ability and landholding in TRAIL, the results are mainly driven by greater reduction of unit production costs for TRAIL treated farmers than GRAIL treated farmers of similar ability or landholding. We develop and test a model where the TRAIL agents’ role as middlemen in the agricultural supply chain enabled and motivated them to offer treated farmers business advice, which helped them lower unit costs.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"67 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140097704","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}
This paper presents a model of consumption behavior that explains the presence of ‘wealthy hand-to-mouth’ consumers using a mechanism that differs from those analyzed previously. We show that a two-asset model with temptation preferences generates a demand for commitment and thus illiquidity, leading to hand-to-mouth behavior even when liquid assets deliver higher returns than illiquid assets. This preference for illiquidity has important implications for consumption behaviour and for fiscal stimulus policies. Our model matches the recent empirical evidence that MPCs remain high even for large income shocks, suggesting a larger response to targeted fiscal stimulus than previously believed.
{"title":"Temptation and Commitment: A Model of Hand-to-Mouth Behavior","authors":"Orazio Attanasio, Agnes Kovacs, Patrick Moran","doi":"10.1093/jeea/jvae016","DOIUrl":"https://doi.org/10.1093/jeea/jvae016","url":null,"abstract":"This paper presents a model of consumption behavior that explains the presence of ‘wealthy hand-to-mouth’ consumers using a mechanism that differs from those analyzed previously. We show that a two-asset model with temptation preferences generates a demand for commitment and thus illiquidity, leading to hand-to-mouth behavior even when liquid assets deliver higher returns than illiquid assets. This preference for illiquidity has important implications for consumption behaviour and for fiscal stimulus policies. Our model matches the recent empirical evidence that MPCs remain high even for large income shocks, suggesting a larger response to targeted fiscal stimulus than previously believed.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"11 1","pages":""},"PeriodicalIF":3.6,"publicationDate":"2024-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140018541","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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