Volker Grossmann, Johannes Schünemann, Holger Strulik
We study the optimal design of a fair public pension system in a multi-period overlapping generations model with occupation-specific morbidity and mortality that depends on the retirement age. The fairness constraint acts as institutional device ensuring that lifetime returns to contributions are equal across occupational groups. We consider group-specific replacement rates and a calculatory interest rate for early contributions as policy instruments. Calibrating the model to Germany, we find that the transition to optimal fair pension policies may induce early retirement of blue-collar workers and significantly raises their lifetime pension benefits and welfare. Aggregate welfare increases in all fair pension scenarios.
{"title":"Fair Pension Policies with Occupation-Specific Ageing","authors":"Volker Grossmann, Johannes Schünemann, Holger Strulik","doi":"10.1093/ej/ueae038","DOIUrl":"https://doi.org/10.1093/ej/ueae038","url":null,"abstract":"We study the optimal design of a fair public pension system in a multi-period overlapping generations model with occupation-specific morbidity and mortality that depends on the retirement age. The fairness constraint acts as institutional device ensuring that lifetime returns to contributions are equal across occupational groups. We consider group-specific replacement rates and a calculatory interest rate for early contributions as policy instruments. Calibrating the model to Germany, we find that the transition to optimal fair pension policies may induce early retirement of blue-collar workers and significantly raises their lifetime pension benefits and welfare. Aggregate welfare increases in all fair pension scenarios.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"275 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140935876","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Michelle Escobar Carias, David W Johnston, Rachel Knott, Rohan Sweeney
Does temperature affect decision-making abilities and rationality? Using Indonesian data, we estimate how risky choices, impatience and rational choice violations vary with exposure to temperature. We show that hot weather temporarily increases rational choice violations and impatience but does not affect risk-related decisions. These effects are primarily driven by nighttime rather than daytime temperatures. We provide suggestive evidence that the mechanism behind these effects is decreased sleep quality, affecting cognition the following day, particularly math skills. These skills are critical for rational and utility-maximizing decision-making. Effects are largest for economically disadvantaged households and in areas with low rates of air-conditioning.
{"title":"Temperature’s toll on decision-making","authors":"Michelle Escobar Carias, David W Johnston, Rachel Knott, Rohan Sweeney","doi":"10.1093/ej/ueae036","DOIUrl":"https://doi.org/10.1093/ej/ueae036","url":null,"abstract":"Does temperature affect decision-making abilities and rationality? Using Indonesian data, we estimate how risky choices, impatience and rational choice violations vary with exposure to temperature. We show that hot weather temporarily increases rational choice violations and impatience but does not affect risk-related decisions. These effects are primarily driven by nighttime rather than daytime temperatures. We provide suggestive evidence that the mechanism behind these effects is decreased sleep quality, affecting cognition the following day, particularly math skills. These skills are critical for rational and utility-maximizing decision-making. Effects are largest for economically disadvantaged households and in areas with low rates of air-conditioning.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"36 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140935874","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the performance of New Towns, i.e., planned large urban subcenters, as a central tool to accommodate the global rise in urbanisation. A spatial quantifiable general equilibrium framework suitable to study large-scale urban master plans is presented. The framework is then used to investigate the equilibrium effects of five New Towns developed in the 1970s in Paris’ metropolitan area. By 2015, the development of New Towns appears to have increased metropolitan population (+18%), metropolitan GDP (+11%), and reduced average commuting times (-6.9%). The results obtained for Paris’ metropolitan area are externally validated using a Difference-in-Differences approach on all 314 New Towns developed worldwide between 1992 and 2012.
{"title":"Accommodating the Rise in Urbanisation: Are New Towns a Good Solution?","authors":"Gabriel Loumeau","doi":"10.1093/ej/ueae031","DOIUrl":"https://doi.org/10.1093/ej/ueae031","url":null,"abstract":"This paper studies the performance of New Towns, i.e., planned large urban subcenters, as a central tool to accommodate the global rise in urbanisation. A spatial quantifiable general equilibrium framework suitable to study large-scale urban master plans is presented. The framework is then used to investigate the equilibrium effects of five New Towns developed in the 1970s in Paris’ metropolitan area. By 2015, the development of New Towns appears to have increased metropolitan population (+18%), metropolitan GDP (+11%), and reduced average commuting times (-6.9%). The results obtained for Paris’ metropolitan area are externally validated using a Difference-in-Differences approach on all 314 New Towns developed worldwide between 1992 and 2012.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"9 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140841742","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Does academic writing in economics reflect the political orientation of economists? We use machine learning to measure partisanship in academic economics articles. We predict observed political behavior of a subset of economists using the phrases from their academic articles, show good out-of-sample predictive accuracy, and then predict partisanship for all economists. We then use these predictions to examine patterns of political language in economics. We estimate journal-specific effects on predicted ideology, controlling for author and year fixed effects, that accord with existing survey-based measures. We show considerable sorting of economists into fields of research by predicted partisanship. We also show that partisanship is detectable even within fields, even across those estimating the same theoretical parameter. Using policy-relevant parameters collected from previous meta-analyses, we then show that imputed partisanship is correlated with estimated parameters, such that the implied policy prescription is consistent with partisan leaning. For example, we find that going from the most left-wing authored estimate of the taxable top income elasticity to the most right-wing authored estimate decreases the optimal tax rate from 84% to 58%.
{"title":"Political Language in Economics","authors":"Zubin Jelveh, Bruce Kogut, Suresh Naidu","doi":"10.1093/ej/ueae026","DOIUrl":"https://doi.org/10.1093/ej/ueae026","url":null,"abstract":"Does academic writing in economics reflect the political orientation of economists? We use machine learning to measure partisanship in academic economics articles. We predict observed political behavior of a subset of economists using the phrases from their academic articles, show good out-of-sample predictive accuracy, and then predict partisanship for all economists. We then use these predictions to examine patterns of political language in economics. We estimate journal-specific effects on predicted ideology, controlling for author and year fixed effects, that accord with existing survey-based measures. We show considerable sorting of economists into fields of research by predicted partisanship. We also show that partisanship is detectable even within fields, even across those estimating the same theoretical parameter. Using policy-relevant parameters collected from previous meta-analyses, we then show that imputed partisanship is correlated with estimated parameters, such that the implied policy prescription is consistent with partisan leaning. For example, we find that going from the most left-wing authored estimate of the taxable top income elasticity to the most right-wing authored estimate decreases the optimal tax rate from 84% to 58%.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"21 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140841732","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper uses new data to study school management and productivity in India. We report five main results. First, management quality in public schools is low, and ∼2 standard deviations below high-income countries with comparable data. Second, private schools have higher management quality, driven by much stronger people management. Third, people management quality is correlated with independent measures of teaching practice, as well as school productivity measured by student value added. Fourth, better-managed schools have lower variation in within-school teacher effectiveness and higher levels of minimum teacher effectiveness. Fifth, consistent with better people management, teacher pay in private schools is positively correlated with teacher effectiveness, whereas we find no such correlation in public schools.
{"title":"Personnel Management and School Productivity: Evidence from India","authors":"Renata Lemos, Karthik Muralidharan, Daniela Scur","doi":"10.1093/ej/uead112","DOIUrl":"https://doi.org/10.1093/ej/uead112","url":null,"abstract":"This paper uses new data to study school management and productivity in India. We report five main results. First, management quality in public schools is low, and ∼2 standard deviations below high-income countries with comparable data. Second, private schools have higher management quality, driven by much stronger people management. Third, people management quality is correlated with independent measures of teaching practice, as well as school productivity measured by student value added. Fourth, better-managed schools have lower variation in within-school teacher effectiveness and higher levels of minimum teacher effectiveness. Fifth, consistent with better people management, teacher pay in private schools is positively correlated with teacher effectiveness, whereas we find no such correlation in public schools.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"118 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140804487","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I show that, in an extensive-form game, the outcomes that are consistent with Iterated Admissibility (i.e., with the iterated elimination of weakly dominated strategies) need not be consistent with Extensive-form Rationalizability.
我的研究表明，在广式博弈中，符合迭代可接受性（即迭代消除弱占优策略）的结果不一定符合广式合理性。
{"title":"Iterated Admissibility does not refine Extensive-Form Rationalizability","authors":"Emiliano Catonini","doi":"10.1093/ej/ueae032","DOIUrl":"https://doi.org/10.1093/ej/ueae032","url":null,"abstract":"I show that, in an extensive-form game, the outcomes that are consistent with Iterated Admissibility (i.e., with the iterated elimination of weakly dominated strategies) need not be consistent with Extensive-form Rationalizability.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"14 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140623086","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper introduces a new mechanism to distribute refugees within the European Union. The usual approach of assigning mandatory refugee quotas has been heavily opposed by several countries. Our mechanism adjusts these quotas to countries’ preferences on immigration. All countries become weakly better off, even though they do not exchange monetary transfers, which are ethically controversial. We formally model refugee relocation as a division problem with single-peaked preferences. Our ‘quota adjustment mechanism’ is the only one satisfying strategy-proofness, Pareto efficiency and a novel concept of fairness that takes account of the asymmetry across countries.
{"title":"Refugee relocation: A mechanism design approach","authors":"Martin Hagen","doi":"10.1093/ej/ueae028","DOIUrl":"https://doi.org/10.1093/ej/ueae028","url":null,"abstract":"This paper introduces a new mechanism to distribute refugees within the European Union. The usual approach of assigning mandatory refugee quotas has been heavily opposed by several countries. Our mechanism adjusts these quotas to countries’ preferences on immigration. All countries become weakly better off, even though they do not exchange monetary transfers, which are ethically controversial. We formally model refugee relocation as a division problem with single-peaked preferences. Our ‘quota adjustment mechanism’ is the only one satisfying strategy-proofness, Pareto efficiency and a novel concept of fairness that takes account of the asymmetry across countries.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"45 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140600201","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
On October 20, 2020, prior to the US presidential election, Twitter modified its user interface for sharing social media posts. In an effort to reduce the spread of misinformation on the platform, the new interface nudged users to be thoughtful about the content they were sharing. Using data on over 160,000 tweets by US news media outlets we show that this policy significantly reduced news sharing, but that the reductions varied heterogeneously by political slant: sharing of content fell significantly more for left-wing outlets relative to right-wing outlets. Examining Twitter activity data for news-sharing users, we find that conservatives were less responsive to Twitter’s intervention. Lastly, using web traffic data, we document that the policy significantly reduced visits to news media outlets’ websites.
{"title":"Sharing News Left and Right: Frictions and Misinformation on Twitter","authors":"Daniel Ershov, Juan S Morales","doi":"10.1093/ej/ueae027","DOIUrl":"https://doi.org/10.1093/ej/ueae027","url":null,"abstract":"On October 20, 2020, prior to the US presidential election, Twitter modified its user interface for sharing social media posts. In an effort to reduce the spread of misinformation on the platform, the new interface nudged users to be thoughtful about the content they were sharing. Using data on over 160,000 tweets by US news media outlets we show that this policy significantly reduced news sharing, but that the reductions varied heterogeneously by political slant: sharing of content fell significantly more for left-wing outlets relative to right-wing outlets. Examining Twitter activity data for news-sharing users, we find that conservatives were less responsive to Twitter’s intervention. Lastly, using web traffic data, we document that the policy significantly reduced visits to news media outlets’ websites.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"96 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140600067","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate whether experiencing a disability incidence in the household affects economic risk preferences in Vietnam leveraging: (i) ten years of individual-level panel data and (ii) data from a lab-in-the-field experiment. We find that individuals who experience a disability event in the household behave in a more risk-averse manner than individuals without such an experience. Examining potential underlying mechanisms, we demonstrate that a household disability shock leads to lower wealth, which in turn is related to higher levels of risk aversion. Furthermore, we provide evidence that cognitive mechanisms – fearful emotions and the updating of beliefs (becoming more pessimistic about the future) – are another, perhaps even more important channel through which disability shocks affect risk preferences.
我们利用 (i) 十年的个人层面面板数据和 (ii) 实验室实地实验数据，研究了家庭中发生的残疾事件是否会影响越南的经济风险偏好。我们发现，与没有残疾经历的人相比，在家庭中经历过残疾事件的人表现得更加规避风险。通过研究潜在的内在机制，我们证明家庭残疾冲击会导致财富减少，而财富减少又与风险规避水平提高有关。此外，我们还提供证据表明，认知机制--恐惧情绪和信念更新（对未来变得更加悲观）--是残疾冲击影响风险偏好的另一个或许更为重要的渠道。
{"title":"Disability and risk preferences: Experimental and survey evidence from Vietnam","authors":"Priebe Jan, Rink Ute, Stemmler Henry","doi":"10.1093/ej/ueae029","DOIUrl":"https://doi.org/10.1093/ej/ueae029","url":null,"abstract":"We investigate whether experiencing a disability incidence in the household affects economic risk preferences in Vietnam leveraging: (i) ten years of individual-level panel data and (ii) data from a lab-in-the-field experiment. We find that individuals who experience a disability event in the household behave in a more risk-averse manner than individuals without such an experience. Examining potential underlying mechanisms, we demonstrate that a household disability shock leads to lower wealth, which in turn is related to higher levels of risk aversion. Furthermore, we provide evidence that cognitive mechanisms – fearful emotions and the updating of beliefs (becoming more pessimistic about the future) – are another, perhaps even more important channel through which disability shocks affect risk preferences.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"300 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140600073","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper explores the link between trust in government, policymaking and compliance. It focuses on a specific channel whereby citizens who are convinced of the merits of a policy are more motivated to comply with it. This in turn reduces the government’s cost of implementing this policy and may also increase the set of feasible interventions. As a result, state effectiveness is greater when citizens trust their government. The paper discusses alternative approaches to modelling the origins of trust, especially the link to the design of political institutions. We then provide empirical evidence consistent with the model’s findings that compliance is increasing in government trust using the Integrated Values Survey and voluntary compliance during COVID-19 in the UK.
{"title":"Trust and State Effectiveness: The Political Economy of Compliance","authors":"Timothy Besley, Sacha Dray","doi":"10.1093/ej/ueae030","DOIUrl":"https://doi.org/10.1093/ej/ueae030","url":null,"abstract":"This paper explores the link between trust in government, policymaking and compliance. It focuses on a specific channel whereby citizens who are convinced of the merits of a policy are more motivated to comply with it. This in turn reduces the government’s cost of implementing this policy and may also increase the set of feasible interventions. As a result, state effectiveness is greater when citizens trust their government. The paper discusses alternative approaches to modelling the origins of trust, especially the link to the design of political institutions. We then provide empirical evidence consistent with the model’s findings that compliance is increasing in government trust using the Integrated Values Survey and voluntary compliance during COVID-19 in the UK.","PeriodicalId":501319,"journal":{"name":"The Economic Journal","volume":"79 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140600194","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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