Carbon prices are the most cost-effective instrument to reduce CO2 emissions, but there is strong political opposition to raising them to the efficient level. Therefore, additional efforts of consumers, firms, and local governments are required. We study how different regulatory regimes affect moral behaviour and show that a carbon tax complements voluntary efforts to reduce emissions, while cap-and-trade discourages them. The opportunity to invest in offsets increases welfare, while the option to buy and delete emission rights induces more emissions and reduces welfare. Furthermore, cap-and-trade shifts the burden of adjustment to poor consumers and has dysfunctional incentive effects.
{"title":"How to Regulate Carbon Emissions with Climate-conscious Consumers","authors":"F. Herweg, Klaus M. Schmidt","doi":"10.1093/ej/ueac045","DOIUrl":"https://doi.org/10.1093/ej/ueac045","url":null,"abstract":"\u0000 Carbon prices are the most cost-effective instrument to reduce CO2 emissions, but there is strong political opposition to raising them to the efficient level. Therefore, additional efforts of consumers, firms, and local governments are required. We study how different regulatory regimes affect moral behaviour and show that a carbon tax complements voluntary efforts to reduce emissions, while cap-and-trade discourages them. The opportunity to invest in offsets increases welfare, while the option to buy and delete emission rights induces more emissions and reduces welfare. Furthermore, cap-and-trade shifts the burden of adjustment to poor consumers and has dysfunctional incentive effects.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"43 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-08-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75105989","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 develop a co-residence model between young adults and the elderly as an application of the Shapley-Shubik-Becker bilateral matching framework. This model captures competition between adult children and between parents and parents-in-law. Using micro data from China, we estimate our model by using a network simulation method to fill in partially unobservable marriage links. We find that our model explains the child-side and parent-side competitions observed in the data better than two alternative multinomial logit models with only one-side competition. In addition, counterfactual experiments quantify the effects of changes in the one-child policy and housing prices on intergenerational co-residence.
{"title":"A matching model of co-residence with a family network: Empirical evidence from China","authors":"Naijia Guo, Xiaoyu Xia, Junsen Zhang","doi":"10.1093/ej/ueac043","DOIUrl":"https://doi.org/10.1093/ej/ueac043","url":null,"abstract":"\u0000 We develop a co-residence model between young adults and the elderly as an application of the Shapley-Shubik-Becker bilateral matching framework. This model captures competition between adult children and between parents and parents-in-law. Using micro data from China, we estimate our model by using a network simulation method to fill in partially unobservable marriage links. We find that our model explains the child-side and parent-side competitions observed in the data better than two alternative multinomial logit models with only one-side competition. In addition, counterfactual experiments quantify the effects of changes in the one-child policy and housing prices on intergenerational co-residence.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"133 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86728395","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}
M. Draca, J. Garred, L. Stickland, Nele Warrinnier
How successful are sanctions at targeting the economic interests of political elites in affected countries? We study the case of Iran, using information on the stock exchange-listed assets of two specific political entities with significant influence over the direction of Iran’s nuclear programme. Our identification strategy focuses on the process of negotiations for sanctions removal, examining which interests benefit most from news about diplomatic progress. The results indicate the ‘bluntness’ of sanctions on Iran, but also provide evidence of their effectiveness in generating substantial economic incentives for elite policymakers to negotiate a deal for sanctions relief.
{"title":"On Target? Sanctions and the Economic Interests of Elite Policymakers in Iran","authors":"M. Draca, J. Garred, L. Stickland, Nele Warrinnier","doi":"10.1093/ej/ueac042","DOIUrl":"https://doi.org/10.1093/ej/ueac042","url":null,"abstract":"\u0000 How successful are sanctions at targeting the economic interests of political elites in affected countries? We study the case of Iran, using information on the stock exchange-listed assets of two specific political entities with significant influence over the direction of Iran’s nuclear programme. Our identification strategy focuses on the process of negotiations for sanctions removal, examining which interests benefit most from news about diplomatic progress. The results indicate the ‘bluntness’ of sanctions on Iran, but also provide evidence of their effectiveness in generating substantial economic incentives for elite policymakers to negotiate a deal for sanctions relief.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"91 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79980544","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}
Esteban M. Aucejo, Patrick Coate, Jane Cooley Fruehwirth, Sean Kelly, Zachary Mozenter
This paper provides evidence of match effects in the teacher labour market by considering how teacher effectiveness varies by classroom composition. We combine random assignment of teachers with rich measures of teaching practices based on a popular teacher-evaluation protocol to overcome endogeneity challenges. We find significant complementarities between teaching practice and classroom composition for maths achievement. We use these estimates to simulate the effects of reallocating classrooms among teachers within schools and find substantial differences between counterfactual and actual teacher effectiveness rankings. These findings support the importance of classroom composition for key teacher-related policies, including teacher allocations, accountability, and training.
{"title":"Teacher Effectiveness and Classroom Composition: Understanding Match Effects in the Classroom","authors":"Esteban M. Aucejo, Patrick Coate, Jane Cooley Fruehwirth, Sean Kelly, Zachary Mozenter","doi":"10.1093/ej/ueac046","DOIUrl":"https://doi.org/10.1093/ej/ueac046","url":null,"abstract":"\u0000 This paper provides evidence of match effects in the teacher labour market by considering how teacher effectiveness varies by classroom composition. We combine random assignment of teachers with rich measures of teaching practices based on a popular teacher-evaluation protocol to overcome endogeneity challenges. We find significant complementarities between teaching practice and classroom composition for maths achievement. We use these estimates to simulate the effects of reallocating classrooms among teachers within schools and find substantial differences between counterfactual and actual teacher effectiveness rankings. These findings support the importance of classroom composition for key teacher-related policies, including teacher allocations, accountability, and training.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"21 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79071627","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 document the emergence of spatial polarization in the U.S. during the 1980-2008 period. This phenomenon is characterised by stronger employment polarization in larger cities, both at the occupational and the worker level. We quantitatively evaluate the role of technology in generating these patterns by constructing and calibrating a spatial equilibrium model. We find that faster skill-biased technological change in larger cities can account for a substantial fraction of spatial polarization in the U.S. Counterfactual exercises suggest that the differential increase in the share of low-skilled workers across city size is due mainly to the large demand by high-skilled workers for low-skilled services and to a smaller extent to the higher complementarity between low- and high-skilled workers in production relative to middle-skilled workers.
{"title":"Spatial Polarization","authors":"F. Cerina, E. Dienesch, Alessio Moro, M. Rendall","doi":"10.1093/ej/ueac040","DOIUrl":"https://doi.org/10.1093/ej/ueac040","url":null,"abstract":"\u0000 We document the emergence of spatial polarization in the U.S. during the 1980-2008 period. This phenomenon is characterised by stronger employment polarization in larger cities, both at the occupational and the worker level. We quantitatively evaluate the role of technology in generating these patterns by constructing and calibrating a spatial equilibrium model. We find that faster skill-biased technological change in larger cities can account for a substantial fraction of spatial polarization in the U.S. Counterfactual exercises suggest that the differential increase in the share of low-skilled workers across city size is due mainly to the large demand by high-skilled workers for low-skilled services and to a smaller extent to the higher complementarity between low- and high-skilled workers in production relative to middle-skilled workers.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"38 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74067224","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 use Chinese manufacturing data to show that upstream manufacturing industries received higher credit during the monetary expansion of 2005-2011. However, the higher credit received by upstream industries did not generate a similar increase in ‘trade lending’ to downstream industries, which limited the transmission of the credit expansion to the whole manufacturing sector. We develop a model that formalizes some of the key features of the Chinese economy and show why a credit expansion tilted toward the upstream sector may not fully cascade to the whole economy.
{"title":"Dynamics of Trade Credit in China","authors":"Wu Cun, Vincenzo Quadrini, Q. Sun, Junjie Xia","doi":"10.1093/ej/ueac036","DOIUrl":"https://doi.org/10.1093/ej/ueac036","url":null,"abstract":"\u0000 We use Chinese manufacturing data to show that upstream manufacturing industries received higher credit during the monetary expansion of 2005-2011. However, the higher credit received by upstream industries did not generate a similar increase in ‘trade lending’ to downstream industries, which limited the transmission of the credit expansion to the whole manufacturing sector. We develop a model that formalizes some of the key features of the Chinese economy and show why a credit expansion tilted toward the upstream sector may not fully cascade to the whole economy.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"37 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74838568","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}
Kathryn E. Gary, P. S. Jensen, M. Olsson, C. Radu, Battista Severgnini, P. Sharp
We exploit a large historical shock to the Danish labour market to provide evidence of how restrictions on labour mobility increase monopsony power and thereby reduce wages. By severely limiting the possibility of the rural population to work beyond their place of birth, the reintroduction of serfdom in 1733 aimed to increase monopsony power and secure cheaper labour in the countryside. Using a unique data source based on the archives of estates from the eighteenth century, we test whether serfdom affected the wages of farmhands more strongly than other groups in the labour market, and results based on a difference-in-differences approach reveal evidence consistent with a strong negative effect following its introduction. This is confirmed when we use a different control group from the Swedish province of Scania. We also investigate whether one mechanism was that boys with rural backgrounds were prevented from taking up apprenticeships in towns and find suggestive evidence that this was indeed the case.
{"title":"Monopsony Power and Wages: Evidence from the Introduction of Serfdom in Denmark","authors":"Kathryn E. Gary, P. S. Jensen, M. Olsson, C. Radu, Battista Severgnini, P. Sharp","doi":"10.1093/ej/ueac037","DOIUrl":"https://doi.org/10.1093/ej/ueac037","url":null,"abstract":"\u0000 We exploit a large historical shock to the Danish labour market to provide evidence of how restrictions on labour mobility increase monopsony power and thereby reduce wages. By severely limiting the possibility of the rural population to work beyond their place of birth, the reintroduction of serfdom in 1733 aimed to increase monopsony power and secure cheaper labour in the countryside. Using a unique data source based on the archives of estates from the eighteenth century, we test whether serfdom affected the wages of farmhands more strongly than other groups in the labour market, and results based on a difference-in-differences approach reveal evidence consistent with a strong negative effect following its introduction. This is confirmed when we use a different control group from the Swedish province of Scania. We also investigate whether one mechanism was that boys with rural backgrounds were prevented from taking up apprenticeships in towns and find suggestive evidence that this was indeed the case.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"45 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91286058","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 political selection matter for policy in representative governments? I use administrative data on local politicians in Finland and exploit exogenous variation generated by close elections to show that electing more high-income, incumbent, and competent politicians (who earn more than observably similar politicians) improves fiscal sustainability outcomes but does not decrease the size of the public sector. I also provide suggestive evidence that electing more university-educated local councillors leads to more public spending without adverse effects on fiscal sustainability. I reconcile these findings with survey data on candidate ideology and demonstrate that different qualities are differentially associated with economic ideology.
{"title":"Political Selection and Economic Policy","authors":"Jaakko Meriläinen","doi":"10.1093/ej/ueac035","DOIUrl":"https://doi.org/10.1093/ej/ueac035","url":null,"abstract":"\u0000 Does political selection matter for policy in representative governments? I use administrative data on local politicians in Finland and exploit exogenous variation generated by close elections to show that electing more high-income, incumbent, and competent politicians (who earn more than observably similar politicians) improves fiscal sustainability outcomes but does not decrease the size of the public sector. I also provide suggestive evidence that electing more university-educated local councillors leads to more public spending without adverse effects on fiscal sustainability. I reconcile these findings with survey data on candidate ideology and demonstrate that different qualities are differentially associated with economic ideology.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"44 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72668314","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}
R. Campos, J. I. Garc´ıa-P´erez, Iliana Reggio, Samuel Bentolila, Julio C´aceres-Delpiano, Ricardo Mora, Enrico Moretti, Jeff Wooldridge
We develop a novel way of identifying the liquidity and moral hazard effects of unemployment insurance exclusively from how job-finding rates respond to unemployment benefits that vary over an unemployment spell. We derive a sufficient statistics formula for the dynamically optimal level of unemployment benefits based on these two effects. Using a Regression Kink Design (RKD) that simultaneously exploits two kinks in the schedule of unemployment benefits, we apply our method to Spain for the years 1992–2012 and find that moral hazard effects dominated liquidity effects, suggesting that Spanish unemployment benefits exceeded the optimal level in that period.
{"title":"Moral Hazard Versus Liquidity and the Optimal Timing of Unemployment Benefits","authors":"R. Campos, J. I. Garc´ıa-P´erez, Iliana Reggio, Samuel Bentolila, Julio C´aceres-Delpiano, Ricardo Mora, Enrico Moretti, Jeff Wooldridge","doi":"10.1093/ej/ueac034","DOIUrl":"https://doi.org/10.1093/ej/ueac034","url":null,"abstract":"\u0000 We develop a novel way of identifying the liquidity and moral hazard effects of unemployment insurance exclusively from how job-finding rates respond to unemployment benefits that vary over an unemployment spell. We derive a sufficient statistics formula for the dynamically optimal level of unemployment benefits based on these two effects. Using a Regression Kink Design (RKD) that simultaneously exploits two kinks in the schedule of unemployment benefits, we apply our method to Spain for the years 1992–2012 and find that moral hazard effects dominated liquidity effects, suggesting that Spanish unemployment benefits exceeded the optimal level in that period.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"14 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89050500","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}
Female authors are underrepresented in top economics journals. In this paper, I investigate whether higher writing standards contribute to the problem. I find: (i) female-authored papers are 1–6 percent better written than equivalent papers by men; (ii) the gap widens during peer review; (iii) women improve their writing as they publish more papers (but men do not); (iv) female-authored papers take longer under review. Using a subjective expected utility framework, I argue that higher writing standards for women are consistent with these stylised facts. A counterfactual analysis suggests senior female economists may, as a result, write at least five percent more clearly than they otherwise would. As a final exercise, I show tentative evidence that women adapt to biased treatment in ways that may disguise it as voluntary choice.
{"title":"Are Women Held to Higher Standards? Evidence from Peer Review","authors":"E. Hengel","doi":"10.1093/ej/ueac032","DOIUrl":"https://doi.org/10.1093/ej/ueac032","url":null,"abstract":"\u0000 Female authors are underrepresented in top economics journals. In this paper, I investigate whether higher writing standards contribute to the problem. I find: (i) female-authored papers are 1–6 percent better written than equivalent papers by men; (ii) the gap widens during peer review; (iii) women improve their writing as they publish more papers (but men do not); (iv) female-authored papers take longer under review. Using a subjective expected utility framework, I argue that higher writing standards for women are consistent with these stylised facts. A counterfactual analysis suggests senior female economists may, as a result, write at least five percent more clearly than they otherwise would. As a final exercise, I show tentative evidence that women adapt to biased treatment in ways that may disguise it as voluntary choice.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"120 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77092932","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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