nep-law New Economics Papers
on Law and Economics
Issue of 2020‒03‒09
ten papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Organized crime and women in politics: Evidence from a quasi-experiment in southern Italy By Baraldi, Anna Laura; Ronza, Carla
  2. Debt Collection Agencies and the Supply of Consumer Credit By Viktar Fedaseyeu
  3. Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia By Gaurav Khanna; Carlos Medina; Anant Nyshadham; Jorge Tamayo
  4. Voice and Punishment : A Global Survey Experiment on Tax Morale By Sjoberg,Fredrik Matias; Mellon,Jonathan; Peixoto,Tiago Carneiro; Hemker,Johannes Zacharias; Tsai,Lily Lee
  5. Data and Competition: a General Framework with Applications to Mergers, Market Structure, and Privacy Policy By de Cornière, Alexandre; Taylor, Greg
  6. Parental Leave Reform and Long-Run Earnings of Mothers By Frodermann, Corinna; Wrohlich, Katharina; Zucco, Aline
  7. Technological Innovation and Discrimination in Household Finance By Adair Morse; Karen Pence
  8. Do Non-Resident Parents with Lower Labor Market Attachment React to Institutional Changes in Child Support Obligations? Evidence from IAB-PASS By Schaubert, Marianna; Hänisch, Carsten
  9. Does Employment Protection Affect Unemployment? A Meta-analysis By Philipp Heimberger
  10. Short-term Impacts of the GDPR on Firm Performance By Koski, Heli; Valmari, Nelli

  1. By: Baraldi, Anna Laura; Ronza, Carla
    Abstract: This paper provides new and unexplored evidence of a negative link between an increasing female participation in politics and the infiltration of organized crime in government. We perform an empirical analysis of about 1,700 Southern Italian municipalities between 1985 and 2013 exploiting two Italian laws: law no. 164/1991, which allows measure of mafia infiltration in the Italian municipalities, and law no. 81/1993, which creates an exogenous source of variation in the share of women on the council that allows for correction of endogeneity bias. Increasing the female proportion on the city council of 10 percentage points reduces the probability of dissolution for mafia infiltration of about 1.8 p.p.; the result is confirmed when considering a female mayor. This negative effect remains across several robustness checks. This research adds a further reason in favour of the reduction of the gender gap in politics. In fact, policies aimed at legitimizing democracy, such as gender quotas in electoral law, also have the effect of strengthening institutions in the fight against organized crime, which is always a key government agenda.
    Keywords: organized crime, gender gap, quasi-experiments, panel probit model
    JEL: D72 D78 J16 K42
    Date: 2019–12–01
  2. By: Viktar Fedaseyeu
    Abstract: This paper finds that stricter laws regulating third-party debt collection reduce the number of third-party debt collectors, lower the recovery rates on delinquent credit card loans, and lead to a modest decrease in the openings of new revolving lines of credit. Further, stricter third-party debt collection laws are associated with fewer consumer lawsuits against third-party debt collectors but not with a reduction in the overall number of consumer complaints. Overall, stricter third-party debt collection laws appear to restrict access to new revolving credit but have an ambiguous effect on the nonpecuniary costs that the debt collection process imposes on borrowers.
    Keywords: creditor rights; law and finance; contract enforcement; household finance; consumer credit; debt col-lection
    JEL: G20 D18 D12 K35 G18
    Date: 2020–02–12
  3. By: Gaurav Khanna (University of California - San Diego); Carlos Medina (Banco de la Republica de Colombia); Anant Nyshadham (University of Michigan; NBER); Jorge Tamayo (Harvard Business School)
    Abstract: Canonical models of crime emphasize economic incentive. Yet, causal evidence of sorting into criminal occupations in response to individual-level variation in incentives is limited. We link administrative socioeconomic microdata with the universe of arrests in Medellín over a decade. We exploit exogenous variation in formal-sector employment around a socioeconomic-score cutoff, below which individuals receive benefits if not formally employed, to test whether a higher cost to formal-sector employment induces crime. Regression discontinuity estimates show this policy generated reductions in formal-sector employment and a corresponding spike in organized crime, but no effects on crimes of impulse or opportunity.
    Keywords: organized crime, informality, occupational choice, gangs, Medellin
    JEL: K42 J46 J24
    Date: 2019–10–31
  4. By: Sjoberg,Fredrik Matias; Mellon,Jonathan; Peixoto,Tiago Carneiro; Hemker,Johannes Zacharias; Tsai,Lily Lee
    Abstract: An online survey experiment spanning 50 countries finds sizable improvements in tax morale when (a) the salience of anti-corruption efforts is increased and (b) citizens are allowed to voice their expenditure preferences to the government. These results hold very broadly across a uniquely large and diverse sample of respondents from all continents. The findings are consistent with theories emphasizing the role of democratic accountability, as well as of perceptions of legitimacy and"retributive justice,"in generating voluntary tax compliance. Implications and avenues for further research are discussed.
    Keywords: Tax Administration,Taxation&Subsidies,Macro-Fiscal Policy,Economic Adjustment and Lending,Legal Products,Judicial System Reform,Youth and Governance,Legal Reform,Legislation,Regulatory Regimes,Public Sector Economics,Public Finance Decentralization and Poverty Reduction,Government Policies,National Governance,Social Policy,Tax Law
    Date: 2019–05–15
  5. By: de Cornière, Alexandre; Taylor, Greg
    Abstract: What role does data play in competition? This question has been at the center of a fierce debate around competition policy in the digital economy. We use a competition-in-utilities approach to provide a general framework for studying the competitive effects of data, encompassing a wide range of markets where data has many different uses. We identify conditions for data to be unilaterally proor anti-competitive (UPC or UAC). The conditions are simple and often require no information about market demand. We apply our framework to study various applications of data, including training algorithms, targeting advertisements, and personalizing prices. We also show that whether data is UPC or UAC has important implications for policy issues such as data-driven mergers, market structure, and privacy policy.
    JEL: L1 L4 L5
    Date: 2020–02
  6. By: Frodermann, Corinna (Institute for Employment Research (IAB), Nuremberg); Wrohlich, Katharina (DIW Berlin); Zucco, Aline (DIW Berlin)
    Abstract: Paid parental leave schemes have been shown to increase women's employment rates but decrease their wages in case of extended leave durations. In view of these potential trade-offs, many countries are discussing the optimal design of parental leave policies. We analyze the impact of a major parental leave reform on mothers' long-term earnings. The 2007 German parental leave reform replaced a means-tested benefit with a more generous earnings-related benefit that is granted for a shorter period of time. Additionally, a "daddy quota" of two months was introduced. To identify the causal effect of this policy on long-run earnings of mothers, we use a difference-in-difference approach that compares labor market outcomes of mothers who gave birth just before and right after the reform and nets out seasonal effects by including the year before. Using administrative social security data, we confirm previous findings and show that the average duration of employment interruptions increased for high-income mothers. Nevertheless, we find a positive long-run effect on earnings for mothers in this group. This effect cannot be explained by changes in working hours, observed characteristics, changes in employer stability or fertility patterns. Descriptive evidence suggests that the stronger involvement of fathers, incentivized by the "daddy months", could have facilitated mothers' re-entry into the labor market and thereby increased earnings. For mothers with low prior-to-birth earnings, however, we do not find any beneficial labor market effects of this parental leave reform.
    Keywords: parental leave, wages, labor supply
    JEL: H31 J13 J22 J24 J31
    Date: 2020–01
  7. By: Adair Morse; Karen Pence
    Abstract: Technology has changed how discrimination manifests itself in financial services. Replacing human discretion with algorithms in decision-making roles reduces taste-based discrimination, and new modeling techniques have expanded access to financial services to households who were previously excluded from these markets. However, algorithms can exhibit bias from human involvement in the development process, and their opacity and complexity can facilitate statistical discrimination inconsistent with antidiscrimination laws in several aspects of financial services provision, including advertising, pricing, and credit-risk assessment. In this chapter, we provide a new amalgamation and analysis of these developments, identifying five gateways whereby technology induces discrimination to creep into financial services. We also consider how these technological changes in finance intersect with existing discrimination and data privacy laws, leading to our contribution of four frontlines of regulation. Our analysis concludes that the net effect of innovation in technological finance on discrimination is ambiguous and depends on the future choices made by policymakers, the courts, and firms.
    JEL: G2 G21 G28 K2 O33
    Date: 2020–02
  8. By: Schaubert, Marianna; Hänisch, Carsten
    Abstract: This paper investigates how parents who live apart from their children have responded to changes in the amount of the self-support reserves. Being financially able to pay maintenance is a precondition for the obligation to maintain children in Germany. Parents with incomes below the self-support reserve do not pay child support. In addition, the self-support reserve di ers for employed and unemployed parents. The difference between the two is considered to be a bonus for employment by competent courts, which they adjust over time. We exploited PASS panel data and individual fixed-effects models to observe parents' responses to these changes. We did not confirm the Higher Regional Courts' assertion that the increasing difference between the self-support reserves of employed and non-working parents is an incentive to work. Further, we found no evidence of any influence on attitudes towards the labor market or debt behavior.
    Keywords: Child support,low-income nonresidential fathers,child support guidelines,child support enforcement,labor supply,child support debt
    JEL: J08 J16 J18 K36
    Date: 2020
  9. By: Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Despite extensive research efforts, the magnitude of the effect of employment protection legislation (EPL) on unemployment remains unclear. Existing econometric estimates exhibit substantial variation, and it is therefore difficult to draw valid conclusions. This paper applies meta-analysis and meta-regression methods to a unique data set consisting of 881 observations on the effect of EPL on unemployment from 75 studies. Once we control for publication selection bias, we cannot reject the hypothesis that the average effect of EPL on unemployment is zero. The meta-regression analysis, which investigates sources of heterogeneity in the reported effect sizes, reveals the following main results. First, the choice of the EPL variable matters estimates that build on survey-based EPL variables report a significantly stronger unemployment-increasing impact of EPL than estimates developed using EPL indices based on the OECD’s methodology, where the latter relies on coding information from legal provisions. Second, we find that employment protection has a small unemployment-increasing effect on female unemployment, compared with a zero impact on total unemployment. Third, using multi-year averages of the underlying data tends to dampen the unemployment effects of EPL. Fourth, product market regulation is found to moderate the effect of EPL on unemployment. Disclaimer Funding from the Austrian Ministry of Social Affairs is gratefully acknowledged.
    Keywords: Unemployment; labour market institutions; employment protection; meta-analysis
    JEL: C54 C83 E24
    Date: 2020–02
  10. By: Koski, Heli; Valmari, Nelli
    Abstract: Abstract This paper uses extensive firm-level data on European and US companies from 2014–2018 to explore the short-term impacts of the General Data Protection Regulation (GDPR) on European companies’ financial performance. Our empirical analysis suggests that the costs of the GDPR during the first year of its implementation were substantial, at least for some European companies. The profit margins of the data-intensive firms increased, on average, by approximately 1.7 to 3.4 percentage points less than the profit margins of their US counterparts. The European data-intensive SMEs were the most disadvantaged group regarding their post-GDPR profit developments, while the large European data-intensive companies’ short-term post-GDPR profit margins dropped relatively less. We do not find any statistically significant difference in the profit margin developments of the very large European and US companies. This finding is consistent with the view that the very large, multinational US companies that often have European customers and deal with the personal data of EU citizens also faced substantial costs when they needed to comply with the GDPR.
    Keywords: Regulation, GDPR, Compliance costs, Firm profitability
    JEL: K2 L2 L5
    Date: 2020–02–25

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