nep-law New Economics Papers
on Law and Economics
Issue of 2021‒08‒30
twelve papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Parental Incarceration and Children's Educational Attainment By Carolina Arteaga
  2. The Effect of 3.6 Million Refugees on Crime By Kirdar, Murat G.; Cruz, Ivan Lopez; Türküm, Betül
  3. Can Restorative Justice Conferencing Reduce Recidivism? Evidence From the Make-it-Right Program By Yotam Shem-Tov; Steven Raphael; Alissa Skog
  4. Greek Myth or Fact? The Role of Greek Houses in Alcohol and Drug Violations on American Campuses By Raghav, Manu; Diette, Timothy M.
  5. Modern Slavery – An Empirical Analysis By Willert, Bianca
  6. The Effect of the Sex Buyer Law on the Market for Sex, Sexual Health and Sexual Violence By Peter Backus; Thien Nguyen
  7. Regulation and Informal Market for Schools in Delhi. By Bose, Sukanya; Ghosh, Priyanta; Sardana, Arvind; Boda, Manohar
  8. Hayek and the Texas blackout By Stephen Littlechild; Lynne Kiesling
  9. China’s Energy Law Draft and the Reform of its Electricity Supply Sector By Jun Xu; Michael Pollitt; Bai-Chen Xie; Chun-Han Yang
  10. Do bankruptcy protection levels affect households’ demand for stocks? By Dal Borgo, Mariela
  11. Going beyond default intensities in an EU carbon border adjustment mechanism By Michael Mehling; Robert Ritz
  12. Is consistency the panacea? Inconsistent or consistent tax transfer prices with strategic taxpayer and tax authority behavior By Diller, Markus; Lorenz, Johannes; Schneider, Georg; Sureth, Caren

  1. By: Carolina Arteaga
    Abstract: This paper presents new evidence showing that parental incarceration increases children's educational attainment. I collect criminal records for 90,000 low-income parents who have been convicted of a crime in Colombia, and link them with administrative data on the educational attainment of their children. I exploit exogenous variation in incarceration resulting from the random assignment of defendants to judges, and extend the standard framework to incorporate both conviction and incarceration decisions. I show that the effect of incarceration for a given conviction threshold can be identified. My results indicate that parental incarceration increases educational attainment by 0.78 years for the children of convicted parents on the margin of incarceration.
    Keywords: Incarceration, Education, Parenting
    JEL: I24 J24 K42
    Date: 2021–08–23
  2. By: Kirdar, Murat G. (Bogazici University); Cruz, Ivan Lopez (Sabanci University); Türküm, Betül (European Economic Institute)
    Abstract: Most studies examining the impact of migrants on crime rates in hosting populations are in the context of economic migrants in developed countries. However, we know much less about the crime impact of refugees in low- and middle-income countries—whose numbers are increasing worldwide. This study examines this issue in the context of the largest refugee group in any country—Syrian refugees in Turkey. Although these refugees are much poorer than the local population, have limited access to formal employment, and face partial mobility restrictions, we find that total crime per person (including natives and refugees) falls due to the arrival of the refugees. This finding also applies to several types of crime; the only exception is smuggling, which increases due to the population influx. We also show that the fall in crime does not result from tighter security; we find no evidence of a change in the number of armed forces (military and civil personnel) in the migrant-hosting regions.
    Keywords: refugees, crime, security, immigration-crime nexus, civil war
    JEL: J15 K42 D74
    Date: 2021–08
  3. By: Yotam Shem-Tov; Steven Raphael; Alissa Skog
    Abstract: This paper studies the effect of a restorative justice intervention targeted at youth ages 13 to 17 facing felony charges of medium severity (e.g., burglary, assault). Eligible youths were randomly assigned to participate in the Make-it-Right (MIR) restorative justice program or to a control group in which they faced criminal prosecution. We estimate the effects of MIR on the likelihood that a youth will be rearrested in the four years following randomization. Assignment to MIR reduces the likelihood of a rearrest within six months by 19 percentage points, a 44 percent reduction relative to the control group. Moreover, the reduction in recidivism persists even four years after randomization. Thus, our estimates show that juvenile restorative justice conferencing can reduce recidivism among youth charged with relatively serious offenses and can be an effective alternative to traditional criminal justice practices.
    JEL: J18 K14 K42
    Date: 2021–08
  4. By: Raghav, Manu (DePauw University); Diette, Timothy M. (Washington and Lee University)
    Abstract: Greek-letter student social groups, better known as fraternities and sororities, are a ubiquitous feature on many American higher education campuses. These organizations, especially fraternities, have a reputation for encouraging unruly and improper behavior among both members and non-members. This paper investigates the effect of the degree of prevalence of these Greek organizations at a campus, as measured by the percentage of students who are members of fraternities and sororities, on the instances of liquor and drug law violations on campuses, as measured by the number of arrests for liquor and drug laws violations. Using a unique dataset, which combines data from three sources, we find that a larger percentage of students in fraternities (but not sororities) is associated with an increase in the number of arrests for drug law violations. A larger percentage of students in sororities (but not the percentage of students in fraternities) is associated with a larger number of arrests for liquor law violations. This result is highly significant and is robust across various specifications.
    Keywords: greek system in higher education institutions, illegal drug and alcohol use, crimes on higher education campuses
    JEL: I23 K42
    Date: 2021–08
  5. By: Willert, Bianca
    Abstract: Contemporarily, modern slavery represents one of the most serious human rights violations. Although most countries officially abolished slavery and ratified the 1926 Slavery Convention of the League of Nations, slavery and slave like practices still exist in various forms throughout the world. This paper addresses why coercive relationships persist today and investigates how political decision-making, institutional environment and coercive labor practices are interlinked. Moreover, we investigate the interplay between domestic anti-slavery laws and the extent of modern slavery. This paper identifies social and economic determinants of modern slavery using a novel dataset. The panel data contain information on 189 countries and territories from 2002 – 2016 for various types of exploitation of adults and children. We study determinants of modern slavery using cluster analysis and fit a fixed-effects model to explain which factors drive exploitation. We find that different types of exploitation are driven by different factors. In addition, we show that slave-sending and slave-receiving countries differ significantly. We study transnational human trafficking and identify which social and economic factors determine this specialization. Moreover, we fit a model using Poisson regression to study why some countries detect victims, originating form more countries, than others do.
    Keywords: modern slavery,human trafficking,exploitation,human rights
    JEL: J47 K42 O15
    Date: 2021
  6. By: Peter Backus; Thien Nguyen
    Abstract: We evaluate the effect of the 2015 criminalization of the purchasing of sexual services in Northern Ireland on the market of such services, sexually transmitted infections and sexual violence. This sub-national change in sex market regulation gives us an opportunity to estimate the causal effects of this new law which has become increasingly popular with policymakers over the last 20 years. Based on newly constructed data sets, our results indicate that the law reduced, temporarily, the size of the market for sexual services and fees for sexual services, lowered sexually transmitted infection rates among women and increased sexual violence committed against women. These results are largely consistent with recent evidence on the effects of different kinds of sex market regulation.
    Date: 2021–08
  7. By: Bose, Sukanya (National Institute of Public Finance and Policy); Ghosh, Priyanta (Gour Banga University); Sardana, Arvind (Social Science Group, Eklavya); Boda, Manohar (JNU)
    Abstract: The unrecognised school sector in Delhi has grown significantly over the years, and since long ceased to be marginal. The aim of the study is to understand the regulatory practice on the ground in this sector. According to the law, private schools must seek recognition from the appropriate authorities such that their functioning is aligned to public interest. Reading of the laws and an important Court case provides the background to the primary fieldwork on which the analysis is based. The results of the field survey indicate that unrecognised schools are growing unfettered. There is incentive for informality, regulation is totally absent and vested interests attempt to perpetuate the practice. The continuation of hands-off policy of the government vis-à-vis the sector despite the clear pronouncements in the Right to Education Act is explored from a variety of perspectives. Some suggestions towards formalisation are presented.
    Keywords: Low fee private schools ; unrecognised schools ; regulation ; informality in schooling ; educational policy ; educational law ; RTE.
    Date: 2021–08
  8. By: Stephen Littlechild (EPRG, CJBS, University of Cambridge); Lynne Kiesling (University of Colorado-Denver)
    Keywords: Hayek, Texas blackout, scarcity pricing, retail electricity competition
    JEL: L94 L51 K23 D47 D82
    Date: 2021–06
  9. By: Jun Xu (Zhejiang University of Finance and Economics, China); Michael Pollitt (EPRG, CJBS, University of Cambridge); Bai-Chen Xie (College of Management and Economics, Tianjin University, China); Chun-Han Yang (University of Oxford)
    Keywords: No.9 Document, Energy Law, power market reform
    JEL: K32
    Date: 2020–09
  10. By: Dal Borgo, Mariela (Bank of Mexico)
    Abstract: This paper examines empirically the effect of the level of personal bankruptcy protection in the US on households’ demand for financial assets. A Chapter 7 bankruptcy allows protecting the home equity up to a certain limit or "exemption". Previous literature shows that such exemption biases investment towards home equity. This paper tests whether it also lowers investment in stocks, which are not protected in bankruptcy. Using an instrumental variable approach, I estimate a lower stock market participation when the home equity is below the exemption, but the result is not robust, and households at higher risk of bankruptcy do not exhibit a stronger response. Moreover, investment in home equity is not higher when the home is fully protected. These findings suggest no substantial portfolio distortions from the level of home equity that is protected in bankruptcy.
    Keywords: Personal bankruptcy law; Home equity protection; Stock market participation; Portfolio allocation JEL Classification: D14; G00; G11; K35
    Date: 2021
  11. By: Michael Mehling (MIT Center for Energy and Environmental Policy Research); Robert Ritz (EPRG, CJBS, University of Cambridge)
    Keywords: Border carbon adjustment, carbon pricing, Green Deal, international law, international trade
    JEL: H23 K33 Q54
    Date: 2020–09
  12. By: Diller, Markus; Lorenz, Johannes; Schneider, Georg; Sureth, Caren
    Abstract: This study investigates how strategic tax transfer pricing of a multinational company (MNC) and two tax authorities in different countries affects production and tax avoidance decisions at the firm level and tax revenues at the country level. We employ a game-theoretical model to analyze the costs and benefits of two tax transfer pricing regimes (consistency vs. inconsistency) under asymmetric information. Though tax transfer pricing harmonization is considered a promising instrument to fight undesired tax avoidance, the implications are largely unclear. We find tax avoidance in equilibrium in both countries under inconsistency. Surprisingly, we identify conditions under which low-tax countries benefit from consistency while high-tax countries benefit from inconsistency. This explains how the strategic interaction of taxpayer and tax authorities under firm-level heterogeneity challenges the implementation of consistent regimes. Understanding the implications of (in)consistent transfer pricing rules is crucial when reforming transfer pricing regulations to fight tax avoidance and double taxation.
    Keywords: transfer pricing,transfer pricing inconsistency,tax avoidance,tax harmonization,strategic behavior,real effects
    JEL: H20 H26 C72 K34 F53
    Date: 2021

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