nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒06‒12
twenty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  2. Cultural Transmission and Political Attitudes: Explaining Differences between Natives and Immigrants in Western Europe By Jérôme Gonnot; Federica lo Polito
  3. Intergenerational scars: The impact of parental unemployment on individual health later in life By Ubaldi, Michele; Picchio, Matteo
  4. Does Temporary Employment undermine the Quality of Permanent Jobs? By Pollio, Chiara; Landini, Fabio; Prodi, Elena; Arrighetti, Alessandro
  5. Immigrant entrepreneurship in Europe: a comparative empirical approach By Rinaldi, Riccardo; Arrighetti, Alessandro; Lasagni, Andrea; Canello, Jacopo
  6. Which income comparisons matter to people, and how? Evidence from a large field experiment By Xiaogeng Xu; Satu Metsälampi; Michael Kirchler; Kaisa Kotakorpi; Peter Hans Matthews; Topi Miettinen
  7. How much financial literacy matters? A simulation of potential influences on inequality levels By Gallo, Giovanni; Sconti, Alessia
  8. Family Firms: In All Shapes and Sizes By Gunnarsson, Emma; Kärnä, Anders; Olsson, Martin; Persson, Lars
  9. The concentration of personal wealth in Italy 1995–2016 By Acciari, Paolo; Alvaredo, Facundo; Morelli, Salvatore
  10. Employing the Unemployed of Marienthal: Evaluation of a Guaranteed Job Program By Maximilian Kasy; Lukas Lehner
  11. Are Women (Really) More Lenient? Gender Differences in Expert Evaluations By Bernd Frick; Clarissa Laura Maria Spiess Bru; Daniel Kaimann
  12. Why Are the Wealthiest So Wealthy? A Longitudinal Empirical Investigation By Elin Halvorsen; Joachim Hubmer; Serdar Ozkan; Sergio Salgado
  13. Minimum wage and tolerance for high incomes By Fazio, Andrea; Reggiani, Tommaso
  14. Young Voters and Budget Deficits By Ole Henning Nyhus; Bjarne Strøm
  15. Workers’ behavior after safety regulations: Impact evaluation of the Spanish Occupational Safety and Health Act By Delgado-Cubillo, Pablo; Martín-Román, Ángel L.
  16. Weight, Attractiveness, and Gender when Hiring. A Field Experiment in Spain By Catarina Goulão; Juan A.; Francisco Lagos; Dan-Olof Rooth
  17. When Workplace Democracy Backfires. Lab Evidence on Honesty and Cooperation By José J. Domínguez; Giulio Ecchia; Natalia Montinari; Raimondello Orsini
  18. Household wealth, neighbourhood deprivation and frailty amongst middle-aged and older adults in England: a longitudinal analysis over 15 years (2002-2017) By Maharani, Asri; Sinclair, David R.; Chandola, Tarani; Bower, Peter; Clegg, Andrew; Hanratty, Barbara; Nazroo, James; Pendleton, Neil; Tampubolon, Gindo; Todd, Chris; Wittenberg, Raphael; O'Neill, Terence W.; Matthews, Fiona E.
  19. Management and Performance in the Public Sector: Evidence from German Municipalities By Florian Englmaier; Gerd Muehlheusser; Andreas Roider; Niklas Wallmeier
  20. For Better or Worse? Subjective Expectations and Cost-Benefit Trade-Offs in Health Behavior: An application to lockdown compliance in the United Kingdom By Conti, G.; Giustinelli, P.

  1. By: Paolo Emilio Mistrulli (Bank of Italy); Md Taslim Uddin (Independent University Bangladesh); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR)
    Abstract: In this paper, we explore empirically whether immigrants, other things being equal, pay more for mortgages than natives and whether the probability that banks approve their loan applications is systematically lower. To this aim, we use two extensive and unique dataset of mortgage contracts and banks' requests for initial information about potential mortgagors drawn from the Italian Credit Register for the period 2011-2016, and survey data from the Survey on Household Income and Wealth conducted by the Bank of Italy for the period 2006-2016. We find that immigrants pay 20-24 basis points more than native Italians on single-name mortgages and 28-40 basis points more on jointly-owned ones. This interest rate gap narrows significantly, but does not disappear, when immigrant borrowers' credit history lengthens or if they borrow from a cooperative bank. Finally we find that immigrants have a 2.7% smaller chance of getting a mortgage compared to natives, which decreases for mortgage applications submitted to cooperative banks. Overall, our findings suggest that the disparity of treatment of immigrants in the Italian mortgage market is mostly due to a greater difficulty of banks in assessing the credit-worthiness of culturally distant borrowers. However, we also detect that cultural distance may fuel persistent disparity between migrants and natives.
    Keywords: Immigrants; discrimination; mortgage lending; interest rates; loan approval
    JEL: G21 J15 J71
    Date: 2023–05
  2. By: Jérôme Gonnot; Federica lo Polito
    Abstract: This paper uses data on individual political opinions from the European Social Survey to study the role of horizontal cultural transmission on immigrants' political assimilation in Western Europe. We analyze five key political issues: redistribution, gay rights, EU integration, immigration policy and trust in political institutions. Controlling for individual socio-economic characteristics, we document that immigrants show identical support for redistribution as natives, display more conservative attitudes towards gay rights and more liberal views on the other three issues. These differences widen with the cultural and religious distance between immigrants' background and Western European norms, and decrease with the number of years since migration. Among immigrants that have spent at least 10 years in their host country, attitudes towards migration policy catch up with those of natives and the migrant-to-native gap on political trust is reduced by 80\%. In contrast, differences on EU integration and gay rights remain stable while immigrants' views on redistribution becomes relatively more conservative. These attitude-specific patterns are also salient when studying political preferences at the regional and sub-regional level. Our results strongly point towards the transmission of cultural values from natives to immigrants on matters of immigration policy and political trust, whereas attitudes towards redistribution seem immune to cultural influences at destination.
    Keywords: Immigration;Assimilation;Political Attitudes;Cultural Transmission
    JEL: D72 J15 P16 R23 Z1
    Date: 2023–05
  3. By: Ubaldi, Michele; Picchio, Matteo
    Abstract: This paper studies whether individuals that experienced parental unemployment during their childhood/early adolescence have poorer health once they reach the adulthood. We used data from the German Socio-Economic Panel from 2002 until 2018. Our identification strategy of the causal effect of parental unemployment relied on plant closures as exogenous variation of the individual labor market condition. We combined matching methods and parametric estimation to strengthen the causal interpretation of the estimates. On the one hand, we found a nil effect for parental unemployment on mental health. On the other hand, we detected a negative effect on physical health. The latter is stronger if parental unemployment occurred in early periods of the childhood, and it is heterogeneous across gender. The negative effect of parental unemployment on physical health may be explained by a higher alcohol and tobacco consumption later in life.
    Keywords: Parental unemployment, plant closure, mental health, physical health, health behaviors
    JEL: I14 J13 J62 J65
    Date: 2023
  4. By: Pollio, Chiara; Landini, Fabio; Prodi, Elena; Arrighetti, Alessandro
    Abstract: Standard screening and core-periphery theories claim that temporary employment does not undermine the quality of permanent jobs. In contrast, organizational approaches suggest that firms use temporary contracts to pursue low-road employment strategies, which involve the creation of cheap and low quality jobs also for permanent employees. We test these predictions by matching administrative data at the occupation, worker and firm level from the Emilia Romagna region (Italy). Job quality is measured through non-wage occupation-specific factors capturing self-realisation, recognition and social support. Baseline and IV estimates show that a larger use of temporary employees is associated with permanent jobs of lower quality. Moreover, in firms using more temporary workers the jobs of permanent employees are more routinized and less complex. Also, in such firms, permanent workers hold occupations that receive less training and involve less teamwork. These results suggest that where temporary work is used, the low quality of permanent positions is driven by work arrangements that tend to economize on individual skills and competences, which is consistent with the low-road employment hypothesis. Related managerial and policy implications are discussed.
    Keywords: job quality, temporary employment, skills, labour market institutions
    JEL: D22 J28 J41 L23
    Date: 2023
  5. By: Rinaldi, Riccardo; Arrighetti, Alessandro; Lasagni, Andrea; Canello, Jacopo
    Abstract: The aim of this paper is to use a multi-country approach to assess the role played by individual characteristics and local labor market conditions in influencing migrants’ self-employment decisions. The empirical investigation exploits data from the EU Labor Force Survey for the 2005-2016 period and focuses on two countries (Italy and the UK) characterized by significantly different labor market dynamics. Our findings suggest that the impact of individual characteristics is similar across countries, whereas the role of the local economic environment changes significantly, resulting in different migrant entrepreneurship patterns. These findings appear to be consistent with the most recent strand of literature, suggesting that while individual characteristics of self-employed migrants are similar across countries, national and regional differences play a key role in determining migrants’ entrepreneurial propensity.
    Keywords: migrant, entrepreneurship, regional economics
    Date: 2023
  6. By: Xiaogeng Xu; Satu Metsälampi; Michael Kirchler; Kaisa Kotakorpi; Peter Hans Matthews; Topi Miettinen
    Abstract: Received wisdom holds that income rank matters for life satisfaction. In much of the literature, however, income comparisons are limited to the national population and evidence is correlational. In this paper, we investigate differences in the causal effects of rank information across reference groups. In a representative sample of mid-career Finns, we randomize individuals to receive personal rank information about educational, municipal, occupational, or age reference groups, and compare the effects, for a set of alternative welfare measures, to the standard national reference group and to a control group that receives no information. We also characterize the accuracy of rank beliefs across groups. Our data, which integrates experimental and register data, finds that rank information causes differences in satisfaction with disposable income, perceived fairness of own income, and wage satisfaction, but not life satisfaction. We also find substantial variation in the effects across reference groups, with those for the national reference group both weak and insignificant.
    Keywords: Relative position, individual welfare, fairness, comparison group, information provision
    JEL: D63 D8 D91 I31
    Date: 2023–05
  7. By: Gallo, Giovanni; Sconti, Alessia
    Abstract: This paper aims to identify the potential influence of financial literacy's marginal change on households' income (wealth) inequality levels both at the mean value and along with the distribution value. Using data from the Bank of Italy Survey of Households Income and Wealth (SHIW)'s 2016 wave - which includes the Big Three questions, a widely used measure of financial literacy - we show that replacing 10% of respondents reporting no correct answers with respondents reporting two correct answers out of three correct answers would increase the mean value of the household equivalized disposable income by 0.8% (160€ per year). Additionally, the mean value would increase by +1.5% (285€ per year) if we replace 10% of respondents reporting no correct answers with those reporting three correct answers. These results are not trivial. A lump sum leading to the same household income increase would cost on average EUR 4.1 to 7.3 billion per year in Italy. Finally, heterogeneous analysis reveals that an increase in financial literacy levels is expected to have different outcomes across the population, engendering often a greater reduction of inequality levels among the most vulnerable groups. As a natural policy implication, our results strongly support mandatory financial education in schools.
    Keywords: Financial literacy, Household finance, Wealth inequality, Income inequality, RIF regressions
    JEL: D31 D63 G53 G51
    Date: 2023
  8. By: Gunnarsson, Emma (Research Institute of Industrial Economics (IFN)); Kärnä, Anders (Research Institute of Industrial Economics (IFN)); Olsson, Martin (Research Institute of Industrial Economics (IFN)); Persson, Lars (Research Institute of Industrial Economics (IFN))
    Abstract: We study the heterogeneity of family firms using registry data on all private firms in Sweden. We restrict our sample to firms with at least one employee, and we define a family firm as a firm where two or more individuals among the owners or the board of directors are related. We focus on the heterogeneity in ownership, employee, and firm characteristics among family firms. We provide several new facts about family firms. The number of family members in family firms varies, consisting predominantly of two relatives, but a substantial share feature four or more. The share of multigenerational family firms has increased over time as has the share of women as owners and CEOs. Family firms employ more old and young workers, have a more compressed wage structure with a lower mean, and have a less compressed tenure distribution with a higher mean. The family firm age distribution is less compressed with a higher mean, and their location distribution is more equally distributed among metropolitan, urban, and rural areas.
    Keywords: Family Firms; Firm Organization; Employee Characteristics
    JEL: D22 D24 L25 L60 M11 M50
    Date: 2023–05–16
  9. By: Acciari, Paolo; Alvaredo, Facundo; Morelli, Salvatore
    Abstract: Italy is one the countries with the highest wealth-to-income ratio in the developed world, but knowledge about the size distribution of wealth is currently limited. In this paper we estimate the distribution of personal wealth between 1995 and 2016, a period of economic turbulence and structural reforms. For this, we use a novel source on the full records of inheritance tax files, combined with surveys and national accounts. Unlike available statistics from household surveys alone, our estimates point to a sharp inversion of fortunes between the top and the bottom of the wealth distribution since the mid-1990s. Whereas the level of wealth concentration in Italy is in line with other European countries, its time trend appears more in line with the U.S., showing a large increase. Moreover, Italy stands out as one of the countries with the strongest decline in the wealth share of the bottom 50% of the population. A range of alternative series of wealth concentration, including estimates applying no adjustments and imputations, confirm our main findings. The paper also sheds new light on the determinants of wealth inequality trends. First, we show that although average wealth increases with age, dispersion within age groups remains very high; hence age plays a marginal role in explaining wealth concentration. Second, we show that house prices explain little of the change in wealth across the distribution since 1995. Changes in equity prices account for a large share of wealth growth above the 99th percentile. However, all in all, changes in the volume of assets and savings appear to be the predominant force behind the increase in wealth inequality, even at the top. The probability of top earners to climb to the top of the wealth distribution has doubled since the 2000s. Third, we document the growing role of life-time wealth transfers receipts, their increasing concentration at the top, and their increasingly favourable tax treatment for the wealthy.
    Keywords: wealth inequality; wealth distribution; top wealth shares; distributional national accounts; estate concentration; inheritance and gifts; inheritance tax
    JEL: D30 H24 N30
    Date: 2023–04–01
  10. By: Maximilian Kasy; Lukas Lehner
    Abstract: We evaluate a guaranteed job program launched in 2020 in Austria. Our evaluation is based on three approaches, pairwise matched randomization, a pre-registered synthetic control at the municipality level, and a comparison to individuals in control municipalities. This allows us to estimate direct effects, anticipation effects, and spillover effects. We find positive impacts of program participation on economic and non-economic well-being, but not on physical health or preferences. At the municipality level, we find a large reduction of long-term unemployment, and no negative employment spillovers. There are positive anticipation effects on subjective well-being, status, and social inclusion for future participants.
    Keywords: job guarantee, pairwise matched randomization, synthetic control
    JEL: I38 J08 J45
    Date: 2023
  11. By: Bernd Frick (Paderborn University); Clarissa Laura Maria Spiess Bru (Paderborn University); Daniel Kaimann (Paderborn University)
    Abstract: This study investigates whether women are more lenient in evaluating the performance of others. We examine the gender-specific behavior of female and male critics in expert evaluations, considering their allocated level of experience by using data from high-prestige wine assessments. We demonstrate that women rate, on average, less generously than men, even in direct comparison. In addition, we show that women with advanced experience levels are less generous than the most experienced same-sex reviewer, whereas this effect is not observed for men. Finally, controlling for self-selection into a particular field (i.e., wine critics), this study confirms previous findings using data, e.g., from professional sports: unobserved heterogeneity drives results generated in lab experiments.
    Keywords: Gender Differences, Information Asymmetry, Competitiveness, Overconfidence, Gender Bias, Reviews and Ratings
    JEL: J16 C33 L66 J2
    Date: 2023–05
  12. By: Elin Halvorsen; Joachim Hubmer; Serdar Ozkan; Sergio Salgado
    Abstract: We use Norwegian administrative panel data on wealth and income between 1993 and 2015 to study lifecycle wealth dynamics, focusing on the wealthiest households. On average, the wealthiest start their lives substantially richer than other households in the same cohort, own mostly private equity, earn higher returns, derive most of their income from dividends and capital gains, and save at higher rates. At age 50, the excess wealth of the top 0.1% group relative to mid-wealth households is accounted for in about equal terms by higher saving rates (34%), higher initial wealth (32%), and higher returns (27%), while higher labor income (5%) and inheritances (1%) account for the small residual. There is significant heterogeneity among the wealthiest: one-fourth of them—which we dub the “New Money”—start with negative wealth but experience rapid wealth growth early in life. Relative to the quartile of top owners that already started their life rich—the “Old Money”—the New Money are characterized by even higher saving rates and returns and also by higher labor income. Their excess wealth is mainly explained by higher saving rates (46%), higher returns (34%), and higher labor income (16%).
    Keywords: wealth inequality; lifecycle wealth dynamics; rate of return heterogeneity; bequests; saving rate heterogeneity
    JEL: D14 D15 E21
    Date: 2023–03–09
  13. By: Fazio, Andrea; Reggiani, Tommaso (Cardiff Business School)
    Abstract: We suggest that stabilizing the baseline income can make low-wage workers more tolerant towards high income earners. We present evidence of this attitude in the UK by exploiting the introduction of the National Minimum Wage (NMW), which institutionally sets a baseline pay reducing the risk of income losses and providing a clear reference point for British workers at the lower end of the income distribution. Based on data from the British Household Panel Survey (BHPS), we show that workers who benefited from the NMW program became relatively more tolerant of high incomes and more likely to support and vote for the Conservative Party. As far as tolerance for high incomes is related to tolerance of inequality, our results suggest that people advocate for equality also because they fear income losses below a given reference point.
    Keywords: Inequality, Redistribution, Minimum wage, Loss aversion, Reference Point, UK
    JEL: H10 H53 D63 D69 Z1
    Date: 2023–05
  14. By: Ole Henning Nyhus; Bjarne Strøm
    Abstract: This paper exploits a novel trial in Norwegian local elections in 2011 to provide empirical evidence on fiscal performance from lowering the minimum voting age from 18 to 16. Using a difference in differences research strategy, we find that this voting age change reduced the net operating surplus by around 600NOK (€60) per capita. This finding is consistent with micro evidence that young individuals have higher discount rates and are more likely to take risk than older ones, although other evidence is needed to confirm that interpretation. Further heterogeneity analysis demonstrates that increased deficits (reduced net operating surplus) due to the extension of the youth voting franchise mainly appear in governments with low party fragmentation and a large share of socialist politicians in the local council.
    Keywords: local public finance, fiscal performance, minimum voting age
    JEL: C23 D72 H72
    Date: 2023
  15. By: Delgado-Cubillo, Pablo; Martín-Román, Ángel L.
    Abstract: While the 1995 Occupational Safety and Health Act (OSH) regulation transformed the outlook on workplaces in Spain, characterized by a lack of preventive protection, public statistics have reported an increasing trend in the postregulation workplace accident rates. This study uses microdata from official national statistics to examine the effect of the OSH regulation on the reported accidents while focusing on its severity. Accordingly, we apply a difference-in-difference assessment method where a comparable group is formed by the contemporaneous in itinere accidents (commuting), which are legally and statistically considered work-related accidents but not directly impacted by the OSH regulation, with a focus on the workplace environment. The results reveal that the nonfatal accident rate decreased after the implementation of the regulation. However, when we isolate the effect of the regulation on accidents that usually provoke hard-to-diagnose injuries (dislocations, back pain, sprains, and strains), we obtain a significant increase in the accident rate. Moral hazard mixed effects seem to have played a crucial role in these dynamics through overreporting and/or Peltzman effects, often offsetting accident reduction intended by the OSH regulation.
    Keywords: OSH, impact evaluation, moral hazard, difference-in-difference
    JEL: D04 H43 I18 J28 K31
    Date: 2023
  16. By: Catarina Goulão (Toulouse School of Economics, INRAE, University Toulouse Capitole.); Juan A. (Department of Economic Theory and Economic History, University of Granada.); Francisco Lagos (Department of Economic Theory and Economic History, University of Granada.); Dan-Olof Rooth (Stockholm University, IZA.)
    Abstract: Being overweight or obese is associated with lower employment and earnings, possibly arising from employer discrimination. A few studies have used field experiments to show that obese job applicants are, in fact, discriminated against in the hiring process. However, whether overweight job applicants also face employer discrimination is still an open question. To this end, we have designed a correspondence testing experiment in which fictitious applications are sent to real job openings across twelve different occupations in the Spanish labor market. We compare the callback rate for applications with a facial photo of a normal weight person to the one for applications with a photo of the same person manipulated into looking overweight. Applications with a photo of the weight-manipulated male receive significantly fewer callbacks for a job interview compared to normal weight, and this differential treatment is especially pronounced in female-dominated occupations. For women, we find the opposite result. Weight-manipulated female applications receive slightly more callbacks, especially in female-dominated occupations. Our experimental design allows us to disentangle whether employers act on attractiveness or weight when hiring. For men, the weight manipulation effect is explained by an attractiveness premium, while for women we find evidence of an attractiveness penalty, as well as a weight penalty, in explaining the effect.
    Keywords: : Obesity, overweight, gender, attractiveness, hiring, correspondence testing
    JEL: J64 J71
    Date: 2023–05–06
  17. By: José J. Domínguez (Department of Economic Theory and Economic History, University of Granada.); Giulio Ecchia (Department of Economics, University of Bologna.); Natalia Montinari (Department of Economics, University of Bologna.); Raimondello Orsini (Department of Economics, University of Bologna.)
    Abstract: Democracy in the workplace often involves employee participation in decision-making and financial matters, both of which have been shown to increase employee effort. However, it is unclear whether these forms of participation also affect other important attitudes that are correlated with the spirit of democratic workplaces such as honesty and cooperation. To address this question, we conducted a laboratory experiment to examine the effects of employee participation on these attitudes. Our results show that both employees’ participation in decision-making and profit-sharing decrease honesty. This effect is stronger for employees involved in financial participation. Additionally, we found that the different treatments also affect productivity in the first and third tertiles of the productivity distribution. On the one side, employees in the first tertile are more productive and more cooperative when they are allowed to choose the type of organization compared to the one who are assigned to the no-participation treatment. On the other side, employees in the third tertile of the productivity distribution are more likely to free ride and reduce cooperation in settings with participation compared to the no-participation. Our study sheds light on the complex effects that participatory practices may have in modern workplaces.
    Keywords: Employee Participation, Attitudes, Honesty, Cooperation, Lab Experiment.
    Date: 2023–05–03
  18. By: Maharani, Asri; Sinclair, David R.; Chandola, Tarani; Bower, Peter; Clegg, Andrew; Hanratty, Barbara; Nazroo, James; Pendleton, Neil; Tampubolon, Gindo; Todd, Chris; Wittenberg, Raphael; O'Neill, Terence W.; Matthews, Fiona E.
    Abstract: BACKGROUND: frailty is a condition of reduced function and health due to ageing processes and is associated with a higher risk of falls, hospitalisation, disability and mortality. OBJECTIVE: to determine the relationship between household wealth and neighbourhood deprivation with frailty status, independently of demographic factors, educational attainment and health behaviours. DESIGN: population-based cohort study. SETTING: communities in England. SUBJECTS: in total 17, 438 adults aged 50+ from the English Longitudinal Study of Ageing. METHODS: multilevel mixed-effects ordered logistic regression was used in this study. Frailty was measured using a frailty index. We defined small geographic areas (neighbourhoods) using English Lower layer Super Output Areas. Neighbourhood deprivation was measured by the English Index of Multiple Deprivation, grouped into quintiles. Health behaviours included in this study are smoking and frequency of alcohol consumption. RESULTS: the proportion of respondents who were prefrail and frail were 33.8% [95% confidence interval (CI) 33.0-34.6%] and 11.7 (11.1-12.2)%, respectively. Participants in the lowest wealth quintile and living in the most deprived neighbourhood quintile had 1.3 (95% CI = 1.2-1.3) and 2.2 (95% CI = 2.1-2.4) times higher odds of being prefrail and frail, respectively, than the wealthiest participants living in the least deprived neighbourhoods Living in more deprived neighbourhood and poorer wealth was associated with an increased risk of becoming frail. Those inequalities did not change over time. CONCLUSIONS: in this population-based sample, living in a deprived area or having low wealth was associated with frailty in middle-aged and older adults. This relationship was independent of the effects of individual demographic characteristics and health behaviours.
    Keywords: English Longitudinal Study of Ageing; frailty; health inequalities; household wealth; neighbourhood deprivation; older people
    JEL: N0
    Date: 2023–03–29
  19. By: Florian Englmaier (LMU Munich); Gerd Muehlheusser (University of Hamburg); Andreas Roider (University of Regensburg); Niklas Wallmeier (University of Hamburg)
    Abstract: We study management practices and performance in a representative sample of German municipalities, which provide the bulk of direct administrative services for citizens and firms in Germany. Surveyed municipalities differ substantially in their use of structured management practices, and this heterogeneity is also pronounced within all federal states, regional types, and population size brackets. Moreover, we document a systematic positive relationship between the degree of structured management and a diverse set of performance measures capturing municipalities' attractiveness for citizens and firms. Topic modelling (LDA) of survey responses suggests that the predominant management style is to use relatively little structured management.
    Keywords: management practices; public sector organizations; local government; municipal performance; state capacity; World Management Survey (WMS);
    JEL: D20 D73 H11 H73 R50
    Date: 2023–05–14
  20. By: Conti, G.; Giustinelli, P.
    Abstract: We provide a framework to disentangle the role of preferences and beliefs in health behavior, and we apply it to compliance behavior during the acute phase of the COVID-19 pandemic. Using rich data on subjective expectations collected during the spring 2020 lockdown in the UK, we estimate a simple model of compliance behavior with uncertain costs and benefits, which we employ to quantify the utility trade-offs underlying compliance, to decompose group differences in compliance plans, and to compute the monetary compensation required for people to comply. We find that, on average, individuals assign the largest disutility to passing away from COVID-19 and being caught transgressing, and the largest utility to preserving their mental health. But we also document substantial heterogeneity in preferences and/or expectations by vulnerability status, gender, and other individual characteristics. In our data, both preferences and expectations matter for explaining gender differences in compliance, whereas compliance differences by vulnerability status are mainly driven by heterogeneity in preferences. We also investigate the relationship between own and others’ compliance. When others fail to comply and trust breaks down, individuals respond heterogeneously depending on their own circumstances and characteristics. When others around them comply less, those with higher risk tolerance and those without prior COVID-19 experience plan to comply less themselves, while the vulnerables plan to comply more. When a high-level public figure breaches the rules, supporters of the opposing political party plan to comply less. These findings emphasize the need for public health policies to account for heterogenous beliefs, preferences, and responses to others in citizens’ health behaviors.
    JEL: C25 C83 D84 I12 I18
    Date: 2023–05

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