Abstract As children transition to adulthood, do they remain a major determinant of parental labor supply? To answer this question, we examine how college costs affect the labor supply of mothers and fathers by exploiting the roll-out of nine generous state merit aid programs in the United States from 1993 to 2004, which made college more affordable. Mothers of college-age children decreased their annual hours of work after the introduction of these state-wide programs, while fathers did not adjust their labor supply. Mothers of college-going children were entirely responsible for the decline in hours of work, where mothers of children who did not go to college experienced no change in hours of work. The decline in labor supply was mainly due to adjustments among high-income, married, more educated, and white mothers, whose labor supply was more elastic to college costs.
{"title":"Time to Grow UP? Adult Children as Determinants of Parental Labor Supply","authors":"Breno Braga, Olga Malkova","doi":"10.1093/jeea/jvad051","DOIUrl":"https://doi.org/10.1093/jeea/jvad051","url":null,"abstract":"Abstract As children transition to adulthood, do they remain a major determinant of parental labor supply? To answer this question, we examine how college costs affect the labor supply of mothers and fathers by exploiting the roll-out of nine generous state merit aid programs in the United States from 1993 to 2004, which made college more affordable. Mothers of college-age children decreased their annual hours of work after the introduction of these state-wide programs, while fathers did not adjust their labor supply. Mothers of college-going children were entirely responsible for the decline in hours of work, where mothers of children who did not go to college experienced no change in hours of work. The decline in labor supply was mainly due to adjustments among high-income, married, more educated, and white mothers, whose labor supply was more elastic to college costs.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135452281","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}
Pierre Cahuca, Stéphane Carcillo, Berengere Patault, Flavien Moreau
Abstract This paper documents the existence of judge-specific differences on granting compensation for wrongful dismissal and shows that their consequences are different for small low-performing firms than for other firms. Pro-worker judge bias reduces job creation for all firms, increases the destruction of permanent jobs in small and low-performing firms but reduces it in large high-performing firms. Pro-worker bias reduces employment and survival for small and low-performing firms but has no significant effects on these outcomes for the other firms. The probability that permanent incumbent workers keep their job in firms judged by a pro-worker judge increases in large and high-performing firms, while it decreases in small, poorly performing firms.
{"title":"Judge Bias in Labor Courts and Firm Performance","authors":"Pierre Cahuca, Stéphane Carcillo, Berengere Patault, Flavien Moreau","doi":"10.1093/jeea/jvad046","DOIUrl":"https://doi.org/10.1093/jeea/jvad046","url":null,"abstract":"Abstract This paper documents the existence of judge-specific differences on granting compensation for wrongful dismissal and shows that their consequences are different for small low-performing firms than for other firms. Pro-worker judge bias reduces job creation for all firms, increases the destruction of permanent jobs in small and low-performing firms but reduces it in large high-performing firms. Pro-worker bias reduces employment and survival for small and low-performing firms but has no significant effects on these outcomes for the other firms. The probability that permanent incumbent workers keep their job in firms judged by a pro-worker judge increases in large and high-performing firms, while it decreases in small, poorly performing firms.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135894824","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}
Abstract With relational contracts, increased uncertainty with no change in factor prices is shown to reduce investment in the long run even if the parties are risk neutral. This contrasts with models based on the impact of financial risk on the cost of capital and on the option value arising from irreversible investment. For the latter, Bloom et al. (Econometrica, 2018) find that a negative first-moment shock, in addition to increased uncertainty, best matches the data. This paper develops a relational contract model to demonstrate the impact of uncertainty on investment, depending on whether investment is general or specific. It then uses a specification calibrated with parameters from Bloom et al. (Econometrica, 2018) to show that this model can generate effects on productivity and investment of the magnitude of the negative aggregate shock in that paper purely with an increase in uncertainty.
{"title":"Uncertainty, Investment and Productivity with Relational Contracts","authors":"James Malcomson","doi":"10.1093/jeea/jvad048","DOIUrl":"https://doi.org/10.1093/jeea/jvad048","url":null,"abstract":"Abstract With relational contracts, increased uncertainty with no change in factor prices is shown to reduce investment in the long run even if the parties are risk neutral. This contrasts with models based on the impact of financial risk on the cost of capital and on the option value arising from irreversible investment. For the latter, Bloom et al. (Econometrica, 2018) find that a negative first-moment shock, in addition to increased uncertainty, best matches the data. This paper develops a relational contract model to demonstrate the impact of uncertainty on investment, depending on whether investment is general or specific. It then uses a specification calibrated with parameters from Bloom et al. (Econometrica, 2018) to show that this model can generate effects on productivity and investment of the magnitude of the negative aggregate shock in that paper purely with an increase in uncertainty.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135896059","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}
Elin Halvorsen, Hans A Holter, Serdar Ozkan, Kjetil Storesletten
Abstract This paper examines whether nonlinear and non-Gaussian features of earnings dynamics are caused by hours or hourly wages. Our findings from the Norwegian administrative and survey data are as follows: (i) Nonlinear mean reversion in earnings is driven by the dynamics of hours worked rather than wages since wage dynamics are close to linear, while hours dynamics are nonlinear—negative changes to hours are transitory, while positive changes are persistent. (ii) Large earnings changes are driven equally by hours and wages, whereas small changes are associated mainly with wage shocks. (iii) Both wages and hours contribute to negative skewness and high kurtosis for earnings changes, although hour-wage interactions are quantitatively more important. (iv) When considering household earnings and disposable household income, the deviations from normality are mitigated relative to individual labor earnings: changes in disposable household income are approximately symmetric and less leptokurtic.
{"title":"Dissecting Idiosyncratic Earnings Risk","authors":"Elin Halvorsen, Hans A Holter, Serdar Ozkan, Kjetil Storesletten","doi":"10.1093/jeea/jvad047","DOIUrl":"https://doi.org/10.1093/jeea/jvad047","url":null,"abstract":"Abstract This paper examines whether nonlinear and non-Gaussian features of earnings dynamics are caused by hours or hourly wages. Our findings from the Norwegian administrative and survey data are as follows: (i) Nonlinear mean reversion in earnings is driven by the dynamics of hours worked rather than wages since wage dynamics are close to linear, while hours dynamics are nonlinear—negative changes to hours are transitory, while positive changes are persistent. (ii) Large earnings changes are driven equally by hours and wages, whereas small changes are associated mainly with wage shocks. (iii) Both wages and hours contribute to negative skewness and high kurtosis for earnings changes, although hour-wage interactions are quantitatively more important. (iv) When considering household earnings and disposable household income, the deviations from normality are mitigated relative to individual labor earnings: changes in disposable household income are approximately symmetric and less leptokurtic.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"46 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-08-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134931136","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}
{"title":"Reflecting on the First 20 Years of the Journal of the European Economic Association","authors":"Romain Wacziarg","doi":"10.1093/jeea/jvad045","DOIUrl":"https://doi.org/10.1093/jeea/jvad045","url":null,"abstract":"","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":" ","pages":""},"PeriodicalIF":3.6,"publicationDate":"2023-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46011057","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}
In this paper, we develop a life cycle model that features pecuniary and non-pecuniary investments in health in order to rationalize the socioeconomic gradients in health and life expectancy in the United States. Agents accumulate health capital, which affects labor productivity, utility, the distribution of medical spending shocks, and life expectancy. We find that unequal health insurance coverage plays a negligible role in generating the observed gaps in health and longevity. Universal health insurance increases preventive medical spending but not time spent in health promoting activities, as individuals are no longer worried about avoiding high curative medical expenditure shocks due to increased health insurance coverage. Our findings suggest that differences in lifetime income, preferences and health shocks are the main determinants of inequality in life expectancy.
{"title":"Can Wealth Buy Health? A Model of Pecuniary and Non-Pecuniary Investments in Health","authors":"Panos Margaris, Johanna Wallenius","doi":"10.1093/jeea/jvad044","DOIUrl":"https://doi.org/10.1093/jeea/jvad044","url":null,"abstract":"\u0000 In this paper, we develop a life cycle model that features pecuniary and non-pecuniary investments in health in order to rationalize the socioeconomic gradients in health and life expectancy in the United States. Agents accumulate health capital, which affects labor productivity, utility, the distribution of medical spending shocks, and life expectancy. We find that unequal health insurance coverage plays a negligible role in generating the observed gaps in health and longevity. Universal health insurance increases preventive medical spending but not time spent in health promoting activities, as individuals are no longer worried about avoiding high curative medical expenditure shocks due to increased health insurance coverage. Our findings suggest that differences in lifetime income, preferences and health shocks are the main determinants of inequality in life expectancy.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":" ","pages":""},"PeriodicalIF":3.6,"publicationDate":"2023-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48937441","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}
A. Chevalier, Benjamin Elsner, Andreas Lichter, Nico Pestely
We study the effect of forced migration on public policy setting in the migrant-receiving country. After World War II, eight million expelled Germans arrived in West Germany within five years. We use regional variation in the population share of forced migrants across West German cities to estimate the effect of this inflow on cities’ taxation and spending decisions. To identify a causal effect, we pursue an instrumental variable strategy that leverages push factors of the expulsions while being orthogonal to local conditions in the destination regions. Our results show that cities with high inflows of forced migrants increased spending on welfare and education, decreased spending on infrastructure, raised local taxes, and incurred more debt. Part of these effects can be attributed to shifts in political preferences. The migrants held voting rights upon arrival and supported parties that explicitly catered to their interests and needs.
{"title":"Forced Migration and Local Public Policies: Evidence from Post-War West Germany","authors":"A. Chevalier, Benjamin Elsner, Andreas Lichter, Nico Pestely","doi":"10.1093/jeea/jvad043","DOIUrl":"https://doi.org/10.1093/jeea/jvad043","url":null,"abstract":"\u0000 We study the effect of forced migration on public policy setting in the migrant-receiving country. After World War II, eight million expelled Germans arrived in West Germany within five years. We use regional variation in the population share of forced migrants across West German cities to estimate the effect of this inflow on cities’ taxation and spending decisions. To identify a causal effect, we pursue an instrumental variable strategy that leverages push factors of the expulsions while being orthogonal to local conditions in the destination regions. Our results show that cities with high inflows of forced migrants increased spending on welfare and education, decreased spending on infrastructure, raised local taxes, and incurred more debt. Part of these effects can be attributed to shifts in political preferences. The migrants held voting rights upon arrival and supported parties that explicitly catered to their interests and needs.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":" ","pages":""},"PeriodicalIF":3.6,"publicationDate":"2023-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47693646","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}
Standard economic models view risk taking and time discounting as two independent dimensions of decision making. However, mounting experimental evidence demonstrates striking parallels in patterns of risk taking and time discounting behavior and systematic interaction effects, which suggests that there may be common underlying forces driving these interactions. Here we show that the inherent uncertainty associated with future prospects together with individuals’ proneness to probability weighting generates a unifying framework for explaining a large number of puzzling behavioral findings: delay-dependent risk tolerance, aversion to sequential resolution of uncertainty, preferences for the timing of the resolution of uncertainty, the differential discounting of risky and certain outcomes, hyperbolic discounting, subadditive discounting, and the order dependence of prospect valuation. Furthermore, all these phenomena can be accommodated by the same set of preference parameter values and plausible levels of inherent uncertainty.
{"title":"Risk in Time: The Intertwined Nature of Risk Taking and Time Discounting","authors":"Thomas Epper, Helga Fehr-Duda","doi":"10.1093/jeea/jvad041","DOIUrl":"https://doi.org/10.1093/jeea/jvad041","url":null,"abstract":"\u0000 Standard economic models view risk taking and time discounting as two independent dimensions of decision making. However, mounting experimental evidence demonstrates striking parallels in patterns of risk taking and time discounting behavior and systematic interaction effects, which suggests that there may be common underlying forces driving these interactions. Here we show that the inherent uncertainty associated with future prospects together with individuals’ proneness to probability weighting generates a unifying framework for explaining a large number of puzzling behavioral findings: delay-dependent risk tolerance, aversion to sequential resolution of uncertainty, preferences for the timing of the resolution of uncertainty, the differential discounting of risky and certain outcomes, hyperbolic discounting, subadditive discounting, and the order dependence of prospect valuation. Furthermore, all these phenomena can be accommodated by the same set of preference parameter values and plausible levels of inherent uncertainty.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":" ","pages":""},"PeriodicalIF":3.6,"publicationDate":"2023-06-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48789853","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}
Abstract We study horizontal between-group cultural transmission using Stalin’s ethnic deportations as a historical experiment. Over 2 million Soviet citizens, mostly Germans and Chechens, were forcibly relocated from the western to eastern parts of the USSR during WWII solely based on ethnicity. As a result, the native population of the deportation destinations was exogenously exposed to groups with drastically different gender norms and behavior. We combine historical and contemporary data to document that present-day gender equality in labor force participation, business leadership, and fertility as well as pro-gender-equality attitudes are higher among local native population of deportation destinations with a larger presence of Protestant compared to Muslim deportees. The effects are stronger for culturally closer groups and when adopting deportee norms is less costly. The results cannot be explained by selection, vertical cultural transmission, or deportee impact on the local economy. The evidence strongly suggests that gender norms diffused horizontally from deportees to the local population through imitation and learning.
{"title":"Diffusion of Gender Norms: Evidence from Stalin’s Ethnic Deportations","authors":"Alexandra Jarotschkin, Ekaterina Zhuravskaya","doi":"10.1093/jeea/jvad040","DOIUrl":"https://doi.org/10.1093/jeea/jvad040","url":null,"abstract":"Abstract We study horizontal between-group cultural transmission using Stalin’s ethnic deportations as a historical experiment. Over 2 million Soviet citizens, mostly Germans and Chechens, were forcibly relocated from the western to eastern parts of the USSR during WWII solely based on ethnicity. As a result, the native population of the deportation destinations was exogenously exposed to groups with drastically different gender norms and behavior. We combine historical and contemporary data to document that present-day gender equality in labor force participation, business leadership, and fertility as well as pro-gender-equality attitudes are higher among local native population of deportation destinations with a larger presence of Protestant compared to Muslim deportees. The effects are stronger for culturally closer groups and when adopting deportee norms is less costly. The results cannot be explained by selection, vertical cultural transmission, or deportee impact on the local economy. The evidence strongly suggests that gender norms diffused horizontally from deportees to the local population through imitation and learning.","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135288220","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}
Leonardo Bursztyn, Davide Cantoni, Patricia Funk, Felix Schönenberger, Noam Yuchtman
We provide evidence of a causal effect of anticipated election closeness on voter turnout, exploiting the precise day-level timing of the release of Swiss national poll results for high-stakes federal referenda, and a novel dataset on daily mail-in voting for the canton of Geneva. Using an event study design, we find that the release of a closer poll causes voter turnout to sharply rise immediately after poll release, with no differential pre-release turnout levels or trends. We provide evidence that polls affect turnout by providing information shaping beliefs about closeness. The effects of close polls are the largest where newspapers report on them most; and, the introduction of polls had significantly larger effects in politically unrepresentative municipalities, where locally available signals of closeness are less correlated with national closeness. We then provide evidence that the effect of close polls is heterogeneous, with an asymmetric effect leading to a higher vote share for the underdog. The effect sizes we estimate are large enough to flip high-stakes election outcomes under plausible counterfactual scenarios. (JEL: D72, D83, P16)
{"title":"Identifying the Effect of Election Closeness on Voter Turnout: Evidence from Swiss Referenda","authors":"Leonardo Bursztyn, Davide Cantoni, Patricia Funk, Felix Schönenberger, Noam Yuchtman","doi":"10.1093/jeea/jvad038","DOIUrl":"https://doi.org/10.1093/jeea/jvad038","url":null,"abstract":"\u0000 We provide evidence of a causal effect of anticipated election closeness on voter turnout, exploiting the precise day-level timing of the release of Swiss national poll results for high-stakes federal referenda, and a novel dataset on daily mail-in voting for the canton of Geneva. Using an event study design, we find that the release of a closer poll causes voter turnout to sharply rise immediately after poll release, with no differential pre-release turnout levels or trends. We provide evidence that polls affect turnout by providing information shaping beliefs about closeness. The effects of close polls are the largest where newspapers report on them most; and, the introduction of polls had significantly larger effects in politically unrepresentative municipalities, where locally available signals of closeness are less correlated with national closeness. We then provide evidence that the effect of close polls is heterogeneous, with an asymmetric effect leading to a higher vote share for the underdog. The effect sizes we estimate are large enough to flip high-stakes election outcomes under plausible counterfactual scenarios. (JEL: D72, D83, P16)","PeriodicalId":48297,"journal":{"name":"Journal of the European Economic Association","volume":" ","pages":""},"PeriodicalIF":3.6,"publicationDate":"2023-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47970175","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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