nep-law New Economics Papers
on Law and Economics
Issue of 2018‒10‒08
nine papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Immigrant Crime and Legal Status: Evidence from Repeated Amnesty Programs By Francesco Fasani
  2. Can reputation discipline the gig economy? Experimental evidence from an online labor market By Alan Benson; Aaron Sojourner; Akhmed Umyarov
  3. Mergers and Investments in New Products By Jullien, Bruno; Lefouili, Yassine
  4. Preventing rather than Punishing: An Early Warning Model of Malfeasance in Public Procurement By Gallego, J; Rivero, G; Martínez, J.D.
  5. The impact of institutions on innovation By Alexander Donges; Jean Marie Meier; Rui Silva
  6. The impact of the New Poor Law on livelihoods of the poor in north Wales By Frances Richardson
  7. Income taxation of couples, spouses' labor supplies and the gender wage gap By Cremer, Helmuth; Roeder, Kerstin
  8. The Economic Effects of Canceling Scheduled Changes to Overtime Regulations By Congressional Budget Office
  9. Knowledge spillovers in the mutual fund industry through labor mobility By Cici, Gjergji; Kempf, Alexander; Peitzmeier, Claudia

  1. By: Francesco Fasani (Queen Mary University of London)
    Abstract: Do general amnesty programs lead to reductions in the crime rate among immigrants? We answer this question by exploiting cross-sectional and time variation in the number of immigrants legalized generated by the enactment of repeated amnesty programs between 1990 and 2005 in Italy. We address the potential endogeneity of the "legalization treatment" by instrumenting the actual number of legalized immigrants with alternative predicted measures based on past amnesty applications patterns and residential choices of documented and undocumented immigrants. We find that, in the year following an amnesty, regions in which a higher share of immigrants obtained legal status experienced a greater decline in non-EU immigrant crime rates, relative to other regions. The effect is statistically significant but relatively small and not persistent. In further results, we fail to find any evidence of substitution in the criminal market from other population groups - namely, EU immigrants and Italian citizens - and we observe a small and not persistent reduction in total offenses.
    Keywords: illegal migration, legalization, migration policy
    JEL: F22 J61
    Date: 2018–09–26
  2. By: Alan Benson (University of Minnesota, Carlton School of Management); Aaron Sojourner (University of Minnesota); Akhmed Umyarov (University of Minnesota)
    Abstract: Just as there are good and bad workers, there are also good and bad employers that will opportunistically depart from expectations, norms, or laws. However, prior research in economics and information sciences has focused sharply on the employer’s problem of identifying good workers and service providers rather than vice versa. This issue is especially pronounced in markets for gig work, including online labor markets, where platforms are developing strategies to help workers identify good employers. We build a theoretical model for the value of such reputation systems and test its predictions in on Amazon Mechanical Turk, where employers may decline to pay workers while keeping their work product and workers protect themselves using third-party reputation systems (such as Turkopticon). We find that: (1) in an experiment on worker arrival, a good reputation allows employers to operate on a larger scale and at a faster speed, higher quality, or lower cost; (2) in an experimental audit of employers, working for good-reputation employers pays 40 percent higher effective wages due to faster completion times and lower likelihoods of rejection; and (3) exploiting reputation system crashes, the reputation system is particularly important to small, good-reputation employers, which rely on the reputation system to compete for workers against more established employers. This is the first clean field evidence of the effects of employer reputation in any labor market and is suggestive of the special role that reputation-diffusing technologies can play in promoting gig work, where conventional labor and contract laws are weak.
    Keywords: labor, job search, screening, contracts, Reputation, online ratings, personnel, online labor markets
    JEL: L14 M55 J41 J20 L86 D82 K12 K42
    Date: 2018–09
  3. By: Jullien, Bruno; Lefouili, Yassine
    Abstract: We investigate the impact of a horizontal merger between two competitors on their incentives to develop new products. We show that a merger raises the incentives to innovate if and only if the merged entity's incremental gain from a second innovation is larger than the individual profit of an innovator when both firms innovate in the no-merger scenario. Applying this result to the Hotelling model, we find that a merger spurs innovation and can be beneficial to consumers if the degree of product differentiation is positive but not too high.
    Keywords: Merger Policy; Product Innovation; R&D Investments
    JEL: K21 L13 L40
    Date: 2018–08
  4. By: Gallego, J; Rivero, G; Martínez, J.D.
    Abstract: Is it possible to predict corruption and public inefficiency in public procurement? With the proliferation of e-procurement in the public sector, anti-corruption agencies and watchdog organizations in many countries currently have access to powerful sources of information. These may help anticipate which transactions become faulty and why. In this paper, we discuss the promises and challenges of using machine learning models to predict inefficiency and corruption in public procurement, both from the perspective of researchers and practitioners. We exemplify this procedure using a unique dataset characterizing more than 2 million public contracts in Colombia, and training machine learning models to predict which of them face corruption investigations or implementation inefficiencies. We use different techniques to handle the problem of class imbalance typical of these applications, report the high accuracy of our models, simulate the trade-off between precision and recall in this context, and determine which features contribute the most to the prediction of malfeasance within contracts. Our approach is useful for governments interested in exploiting large administrative datasets to improve provision of public goods and highlights some of the tradeoffs and challenges that they might face throughout this process.
    Keywords: Corruption, Inefficiency, Machine Learning, Public Procurement
    JEL: C53 M42 O12
    Date: 2018–09–26
  5. By: Alexander Donges (University of Mannheim); Jean Marie Meier (University of Texas at Dallas); Rui Silva (London Business School)
    Abstract: "We study the impact of inclusive institutions on innovation using novel, hand- collected, county-level data for Imperial Germany. We use the timing and geography of the French occupation of different German regions after the French Revolution as an instrument for institutional quality. We find that the number of patents per capita was more than twice as high in counties with the longest occupation as in unoccupied counties. The impact of institutions on innovation is amplified in counties with a devel- oped banking sector, suggesting that financial development and inclusive institutions are complements in the production of innovation."
    Keywords: "Innovation, Patents, Institutions, Institutional Reform, Economic Growth"
    JEL: G38 O31 O43 N13 K40
    Date: 2017–04
  6. By: Frances Richardson (University of Oxford)
    Abstract: "By the 1830s, parishes in north-west Wales had developed a low-cost system of poor relief that suited the area’s largely informal economy. Poor relief was mainly used to top up the inadequate earnings of the elderly, single women adversely affected by declining proto-industrial earnings, and agricultural labourers with large families, while non-resident relief was widely paid to encourage migration. These practices were challenged by the 1834 Poor Law Amendment Act, which sought to draw a clear distinction between the able-bodied and the aged and infirm, and to curtail poor relief for able-bodied men except through a workhouse. Previous research has revealed considerable regional and local variation in the way the New Poor Law was implemented in England. However the detailed deconstruction of outdoor relief practice remains relatively rare and the impact of the Act in Wales has been little studied. This paper examines the impact of the New Poor Law on the livelihoods of the poor in north Wales through a case study of the Llanrwst Poor Law Union. It analyses over 1,400 poor relief cases in the union’s first year of operation to build up a picture of the ages, occupations and family situation of paupers, and how relief practice changed after the implementation of the New Poor Law. Three key factors are identified in shaping outcomes: whether elected union guardians saw the New Poor Law aims as cost-effective and relevant to local needs; the ability of the area’s Assistant Poor Law Commissioner to convince the board of the legal requirement for change; and the increased agency of the poor themselves."
    JEL: N00
    Date: 2017–04
  7. By: Cremer, Helmuth; Roeder, Kerstin
    Abstract: We study the taxation of couples when female wages do not re?ect their true productivity. We show that the expression for the marginal tax rates of the male spouses is the same as in a Mirrleesian world where wages re?ect true productivities. Marginal taxes for the female spouses are reduced because of a Pigouvian correction. Consequently, the wage discrimination pleads for a lower marginal tax on the female spouse. Furthermore, the distortion of a couples?tradeo¤ between male and female labor supply is the same as in a Mirrleesian world without a gender wage gap. It only depends on true productivities and not on wages. In other words, the tax system completely neutralizes the extra distortion introduced by the wedge between the female spouse?s wage and her true productivity.
    Keywords: Couples'income taxation; gender wage gap; optimal income taxation; household labor supply
    JEL: D10 H21 H31 J16 J22
    Date: 2018–09
  8. By: Congressional Budget Office
    Abstract: CBO analyzes how canceling scheduled changes to overtime regulations before they take effect would affect employers, employees, and family income. The potential economic impact of the scheduled changes has raised concerns among some policymakers. CBO finds that canceling the changes would reduce employers’ payroll and compliance costs and increase profits. The cancellation would also lower employees’ pay but increase real family income.
    JEL: J08 J30 J33 J80 K20 K31
    Date: 2016–11–14
  9. By: Cici, Gjergji; Kempf, Alexander; Peitzmeier, Claudia
    Abstract: Firms' competitive advantages are unsustainable when competitors poach their employees away to learn about their organization processes. We document inter-firm knowledge spillovers through such personnel moves in the mutual fund industry. Almost two thirds of the competitive advantage of the originating fund family spills over to the recipient family. This effect intensifies when the switching manager has amassed more organizational knowledge at the originating family. Performance deterioration at the originating family suggests erosion of its competitive advantage, which intensifies when more money chases the newly-transferred knowledge at the recipient family. This implies wealth transfers across investors in respective families.
    Keywords: organization capital,knowledge spillovers,mutual funds,learning-by-hiring
    JEL: D86 G23 K12 K31 M5
    Date: 2018

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