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on Law and Economics |
| By: | Dasgupta, Utteeyo (Wagner College); Radoniqi, Fatos (Whittier College) |
| Abstract: | The success of a country's anti-corruption policies can crucially depend on the citizens' beliefs about the existing legal environment. We test this key idea of Basu (2020) using a novel design which systematically manipulates beliefs of participants in an experiment. Our results suggest that Basu's "Republic of Beliefs" idea provides a critical insight in policy formulation; Merely introducing an anti-corruption law is not sufficient in aiding the country towards the desired equilibrium, especially in developing countries, where the existing legal enforcement machinery has severe scopes of leakages. |
| Keywords: | republic of beliefs, asymmetric punishment, harassment bribery, experiment |
| JEL: | C91 K42 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14130&r=all |
| By: | Francesco Aiello (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Graziella Bonanno (Departimento di Economia, Università di Salerno); Francesco Foglia (Università Dante Alighieri, Reggio Calabria) |
| Abstract: | This study performs a meta-regression analysis with the aim of explaining the differences in results obtained when estimating a frontier for judicial institutions. The metadata set comprises 264 efficiency scores retrieved from 36 papers published from 1992 to 2019. The empirical setting allows for the control of publication bias as in Aiello and Bonanno (2018; 2019) and is based on a random-effects model estimated with the two-step random-effects maximum likelihood (REML) technique proposed by Gallet and Doucouliagos (2014). Results show that primary papers using parametric methods yield higher efficiency scores than non-parametric studies. Additionally, the estimated efficiency scores in primary papers decrease with the number of inputs and outputs and the sample size. Importantly, the efficiency scores from studies that analyse the first-instance courts are higher than those obtained for the appeal courts. Meta-regressions also highlight that the efficiency scores retrieved from primary papers focusing on a specific court type (only tax, civil or criminal) are higher than those obtained when the analysed courts are mixed. |
| Keywords: | District courts, Efficiency, Frontier models, Judicial system, Meta-analysis |
| JEL: | C14 C80 D63 K40 P37 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:202102&r=all |
| By: | Andrea Fazio (Sapienza University of Rome, Department of Economics and Law, Rome, Italy); Tomasso Reggiani (Cardiff University, Cardiff Business School, United Kingdom, Masaryk University, Department of Public Economics - MUEEL Lab, Brno, Czech Republic, IZA, Bonn, Germany); Fabio Sabatini (Sapienza University of Rome, Department of Economics and Law, Rome, Italy, IZA, Bonn, Germany); |
| Abstract: | We study how the political cost of enforcing a lockdown in response to the COVID-19 outbreak relates to citizens’ propensity for altruistic punishment in Italy, the early epicenter of the pandemic. Approval for the government’s management of the crisis decreases with the amount of the penalties that individuals would like to see enforced for lockdown violations. People supporting stronger punishment are more likely to consider the government’s reaction to the pandemic as insufficient. However, after the establishment of tougher sanctions for risky behaviors, we observe a sudden flip in support for government. Higher amounts of the desired fines become associated with a higher probability of considering the government’s policy response as too extreme, lower trust in government, and lower confidence in the truthfulness of the officially provided information. Lockdowns entail a political cost that helps explain why democracies may adopt epidemiologically suboptimal policies. |
| Keywords: | COVID-19, Lockdown, Law enforcement, Altruistic punishment, In-cumbent support, Trust in institutions, Italy |
| JEL: | D12 D83 I12 K40 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:2021-04&r=all |
| By: | Dragone, Davide (University of Bologna); Migali, Giuseppe (Lancaster University); Zucchelli, Eugenio (Universidad Autónoma de Madrid) |
| Abstract: | We explore the relationship between high school dropout and pupils' adult crime by accounting for the role of the intergenerational transmission of crime. We employ a human capital model of schooling and crime and show that the intergenerational transmission of crime could have a direct effect on adult crime as well as an indirect effect mediated by high school dropout. We empirically assess the relevance of these relationships using fixed effects linear probability models and inverse probability weighting regression adjustment on US data from the National Longitudinal Study of Adolescent to Adult Health. We find that dropping out from high school and having a convicted father increase the probability of adult crime, with the former presenting a larger effect. Our empirical models also suggest that having a convicted father increases the probability of dropping out from school. This reveals that paternal crime imposes a double penalty on children: it increases their probability of committing crimes later on in life both directly and indirectly via school dropout. When considering the role of the environment, we find that while an early exposure to high levels of crime exacerbates dropping out, it has no direct long-term effect on adult crime. Finally, we show that individual traits may also play a role, as pupils with lower levels of cognitive skills present higher probabilities of adult criminal behaviour and stronger intergenerational effects. |
| Keywords: | intergenerational transmission, crime, high school dropout, Add Health |
| JEL: | I26 J62 K42 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14129&r=all |
| By: | Andrew C. Chang; Linda R. Cohen; Amihai Glazer; Urbashee Paul |
| Abstract: | We use new annual data on gasoline taxes and corporate income taxes from U.S. states to analyze whether politicians avoid tax increases in election years. These data contain 3 useful attributes: (1) when state politicians enact tax laws, (2) when state politicians implement tax laws on consumers and firms, and (3) the size of tax changes. Using a pre-analysis research plan that includes regressions of tax rate changes and tax enactment years on time-to-gubernatorial election year indicators, we find that elections decrease the probability of politicians enacting increases in taxes and reduce the size of implemented tax changes relative to non-election years. We find some evidence that politicians are most likely to enact tax increases right after an election. These election effects are stronger for gasoline taxes than for corporate income taxes and depend on no other political, demographic, or macroeconomic conditions. Supplemental analysis supports political salience over legislative e ort in generating this difference in electoral effects. |
| Keywords: | Corporate Income Taxes; Electoral Cycle; Gasoline Taxes; Pre-analysis Plan; Tax Salience |
| JEL: | D72 D78 H24 H71 K34 P16 |
| Date: | 2021–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2021-04&r=all |
| By: | Ioana Marinescu; Yue Qiu; Aaron Sojourner |
| Abstract: | Wage inequality does not fully capture differences in job quality. Jobs also differ along other key dimensions, including the prevalence of labor rights violations. We construct novel measures of labor violation rates using data from federal agencies. Within local industries over time, a 10% increase in the average wage is associated with a 0.15% decrease in the number of violations per employee and a 4% decrease in fines per dollar of pay. Reduced labor market concentration and increased union coverage rate are also associated with reductions in labor violations. Overall, labor violations are regressive: they increase inequality in job quality. |
| JEL: | J28 J31 J32 J33 J83 K31 K42 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28475&r=all |
| By: | Goerke, Laszlo (IAAEU, University of Trier); Pannenberg, Markus (Bielefeld University of Applied Sciences) |
| Abstract: | The German law on co-determination at the plant level (Betriebsverfassungsgesetz) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. This regulation contrasts with publicized instances of excessive payments. The divergence has sparked a debate about the need to reform the law. This paper provides representative evidence on wage payments to works councilors for the period 2001 to 2015. We find wage premia of 2% to 6% in OLS-specifications, which are more pronounced for long-term works councilors. Moreover, we observe no wage premia in linear fixed-effects panel data specifications, suggesting that the OLS-results capture the effect of selection into works councillorship. We obtain no evidence for a delayed compensation or a special treatment of works councilors released from work. Hence, our results indicate that payments to works councilors are broadly in line with legal regulations. |
| Keywords: | labor law, wages, works councils, socio-economic panel (SOEP) |
| JEL: | J30 J51 J53 J83 K31 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14143&r=all |
| By: | Laszlo Goerke; Markus Pannenberg |
| Abstract: | The German law on co-determination at the plant level (Betriebsverfassungsgesetz) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. This regulation contrasts with publicized instances of excessive payments. The divergence has sparked a debate about the need to reform the law. This paper provides representative evidence on wage payments to works councilors for the period 2001 to 2015. We find wage premia of 2% to 6% in OLS-specifications, which are more pronounced for long-term works councilors. Moreover, we observe no wage premia in linear fixed-effects panel data specifications, suggesting that the OLS-results capture the effect of selection into works councillorship. We obtain no evidence for a delayed compensation or a special treatment of works councilors released from work. Hence, our results indicate that payments to works councilors are broadly in line with legal regulations. |
| Keywords: | Labor Law, Wages, Works Councils, Socio-Economic Panel (SOEP) |
| JEL: | J30 J51 J53 J83 K31 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1122&r=all |
| By: | R. Brau; M. G. Nieddu; S. Balia |
| Abstract: | This paper investigates how a vehicle power limit on young novice drivers impacts teen traffic accidents in Italy. First introduced in 2011, the reform prevents drivers from using high-performance vehicles during their first license year. We combine rich administrative data on severe accidents over the period 2006-2016 with the driving license census to assess whether undergoing the power limit lowers the likelihood of causing a traffic accident. Our difference- in-difference estimates – we leverage on the between-cohort differences in the exposure to the reform – reveal that the power limit reduces road accidents per capita by about 18%, and accidents per licensee by 13%. The effect is entirely determined by a drop in accidents caused by above-limit vehicles and is primarily driven by fewer speed violations. Moreover, the beneficial impact of the one-year restriction period persists even after its expiration. Our findings highlight the importance of policies that, instead of directly targeting risky behaviours, are aimed at reducing exposure to high-risk settings. In frameworks where deterrence policies and screening mechanisms are hard to implement and maintain, these policies stand out as an effective, yet feasible strategy to increase teen road safety. |
| Keywords: | youth road accidents;risky behaviours;risk exposure;graduated licensing;driving restriction |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:202101&r=all |
| By: | Zhijun Chen; pch346; Chongwoo Choe; Jiajia Cong; Noriaki Matsushima |
| Abstract: | Recent years have seen growing cases of data-driven tech mergers such as Google/Fitbit, in which a dominant digital platform acquires a relatively small firm possessing a large volume of consumer data. The digital platform can consolidate the consumer data with its existing data set from other services and use it for personalization in related markets. We develop a theoretical model to examine the impact of such mergers across the two markets that are related through a consumption synergy. The merger links the markets for data collection and data application, through which the digital platform can leverage its market power and hurt competitors in both markets. Personalization can lead to exploitation of some consumers in the market for data application. But insofar as competitors remain active, the merger increases total consumer surplus in both markets by intensifying competition. When the consumption synergy is large enough, the merger can result in monopolization of both markets, leading to further consumer harm when stand-alone competitors exit in the long run. Thus there is a tradeoff where potential dynamic costs can outweigh static benefits. We also discuss policy implications by considering various merger remedies. |
| Keywords: | big data, personalization, tech mergers |
| JEL: | D43 L13 L41 K21 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2020-16&r=all |
| By: | Christoph Engel (Max Planck Institute for Research on Collective Goods) |
| Abstract: | The German Constitutional Court is radically different from the (mostly US) courts in which panel effects have been studied so widely. On the one hand, to a large extent, ideo-logical and gender bias are neutralized by design. On the other hand, panels are not ran-domly composed. This makes it possible to study a panel effect that has escaped atten-tion. It results from the degree of familiarity among the judges on the bench. The longer their joint experience on the bench, the higher the chances that a complaint is successful. Regression discontinuity allows for a causal interpretation, at least near regular, exoge-nous recompositions of the bench. |
| Keywords: | panel effect, German Constitutional Court, familiarity, regression discontinuity |
| JEL: | C12 D71 D73 D91 H11 K41 |
| Date: | 2021–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2021_05&r=all |
| By: | Dilger, Alexander |
| Abstract: | There is a reward for a project that can be increased through ability, effort, and cheating. This is analysed for one agent and a team of two. As an extension, a preference for honesty is added, which can prevent cheating but not without limit and not so easily in the team context. |
| JEL: | D82 K42 Z20 Z22 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:umiodp:12021&r=all |