nep-law New Economics Papers
on Law and Economics
Issue of 2021‒12‒13
nine papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Discontinuities in the Age-Victimization Profile and the Determinants of Victimization By Anna Bindler; Randi Hjalmarsson; Nadine Ketel; Andreea Mitrut
  2. Assessing EU Merger Control through Compensating Efficiencies By Pauline Affeldt; Tomaso Duso; Klaus Gugler; Joanna Piechucka
  3. Statistical footprints of corruption:“Vanity Fair” of automobile license plates in Russia By Tom Eeckhout; Timur Natkhov; Leonid Polishchuk; Koen Schoors; Kevin Hoefman
  4. Prison, Mental Health and Family Spillovers By Bhuller, Manudeep; Khoury, Laura; Løken, Katrine V.
  5. Employer Sanctions: A Policy with a Pitfall? By Stark, Oded; Jakubek, Marcin
  6. Climate change litigation and central banks By Setzer, Joana; Higham, Catherine; Jackson, Andrew; Solana, Javier
  7. Managing Refugee Protection Crises: Policy Lessons from Economics and Political Science By Hangartner, Dominik; Sarvimäki, Matti; Spirig, Judith
  8. Employer Market Power in Silicon Valley By Gibson, Matthew
  9. Consumer and employer discrimination in professional sports markets – New evidence from Major League Baseball By Wolfgang Maennig; Steffen Q. Mueller

  1. By: Anna Bindler (University of Cologne and University of Gothenburg); Randi Hjalmarsson (University of Gothenburg); Nadine Ketel (Vrije Universiteit Amsterdam); Andreea Mitrut (University of Gothenburg)
    Abstract: Many rights are conferred on Dutch youth at ages 16 and 18. Using national register data for all reported victimizations, we find sharp and discontinuous increases in victimization rates at these ages: about 13% for both genders at 16 and 9% (15%) for males (females) at 18. These results are comparable across subsamples (based on socio-economic and neighborhood characteristics) with different baseline victimization risks. We assess potential mechanisms using data on offense location, cross-cohort variation in the minimum legal drinking age driven by a 2014 reform, and survey data of alcohol/drug consumption and mobility behaviors. We conclude that the bundle of access to weak alcohol, bars/clubs and smoking increases victimization at 16 and that age 18 rights (hard alcohol, marijuana coffee shops) exacerbate this risk; vehicle access does not play an important role. Finally, we do not find systematic spillover effects onto individuals who have not yet received these rights.
    Keywords: victimization, crime, youth, youth protection laws, alcohol, inequality, RDD
    JEL: K42 K36 J13 I12 I14
    Date: 2021–12
  2. By: Pauline Affeldt; Tomaso Duso; Klaus Gugler; Joanna Piechucka
    Abstract: Worldwide, the overwhelming majority of large horizontal mergers are cleared by antitrust authorities unconditionally. The presumption seems to be that efficiencies from these mergers are sizeable. We calculate the compensating efficiencies that would prevent a merger from harming consumers for 1,014 mergers affecting 12,325 antitrust markets scrutinized by the European Commission between 1990 and 2018. Compensating efficiencies seem too large to be achievable for many mergers. Barriers to entry and the number of firms active in the market are the most important factors determining their size. We highlight concerns about the Commission’s merger enforcement being too lax.
    Keywords: compensating efficiencies, efficiency gains, merger control, concentration, screens, HHI, mergers, unilateral effects, market definition, entry barriers
    JEL: L19 L24 L00 K21
    Date: 2021
  3. By: Tom Eeckhout; Timur Natkhov; Leonid Polishchuk; Koen Schoors; Kevin Hoefman (-)
    Abstract: We offer a novel big data approach to corruption detection and measurement by using statistical anomalies in publicly observable allocations which corruption affects in a predictable manner. While each individual incidence of corruption remains undetectable under the veil of secrecy, systemic corruption changes distributions of observable outcomes, and thus leaves measurable statistical footprints. We apply this approach to measuring corruption in Russian traffic police, which issues automobile license plates. Some of such plates serve as signs of status and prestige, and they are heavily concentrated among more expensive and especially luxury classes and brands, whereas if the official rules were followed, the distributions should have been close to uniform. Such discrepancies provide evidence-based measures of corruption in traffic police, which exhibit significant correlation with road accidents, injuries and fatalities.
    Keywords: Corruption, Police, Law Enforcement, Administrative data, Forensic Economics
    JEL: K13 K42 O17 P37
    Date: 2021–11
  4. By: Bhuller, Manudeep (University of Oslo); Khoury, Laura (Dept. of Economics, Norwegian School of Economics and Business Administration); Løken, Katrine V. (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Does prison cause mental health problems among inmates and their family members? Correlational evidence reveals that the prevalence of mental health problems is much higher among inmates than among the general population, but remains silent on the issue of causality. We exploit the strengths of the Norwegian setting and the richness of the data available to measure the impacts of incarceration on the health of defendants and their family members. We first use an event study design around the case decision event. We complement this with an instrumental variable strategy that takes advantage of the random assignment of criminal cases to judges differing in their stringency. Both methods consistently show that the positive correlation is misleading: incarceration in fact lowers the prevalence of mental health disorders among defendants as measured by mental health-related visits to health-care professionals. We further demonstrate that this effect lasts long after release and is unlikely driven by a shift in health-care demand holding health status constant. Family members, especially spouses, also experience positive spillovers on their mental health.
    Keywords: mental health; incarceration; family spillovers
    JEL: I10 I18 K42
    Date: 2021–11–23
  5. By: Stark, Oded (University of Bonn); Jakubek, Marcin (Institute of Economics, Polish Academy of Sciences)
    Abstract: This chapter investigates the impact of the imposition of sanctions for employing illegal migrants on the welfare of native laborers. In response to such sanctions, managers in a firm may be reassigned from the supervision of production to the verification of the legality of the firm's labor force. The chapter analyzes three different conditions of the host country's labor market: full employment, voluntary unemployment, and minimal wage in combination with involuntary unemployment. It is shown that when the sanctions are steep enough, a profit-maximizing firm will assign managers to verification, which impedes the firm's productivity. The impact on the wages and / or employment of the native laborers depends on the efficiency of the verification technology, namely on the percentage of the "filtered out" illegal laborers in relation to the fraction of reassigned managers. If this efficiency is not high enough, the sanctions bring in their wake consequences that fly in the face of the very aim of their introduction: the welfare of the native laborers will take a beating.
    Keywords: employer sanctions, illegal migrant laborers, welfare of native laborers
    JEL: D21 I38 J21 J61 K31 L51
    Date: 2021–09
  6. By: Setzer, Joana; Higham, Catherine; Jackson, Andrew; Solana, Javier
    Abstract: Given the urgent need to dramatically reduce greenhouse gas emissions, and concern regarding insufficient climate action and ambition across the globe, NGOs and individuals are increasingly turning to the courts to force States, public authorities, and private entities to increase their climate action and ambition and hold them accountable through climate-related litigation. The three contributions in this legal working paper discuss various aspects of such climate change litigation around the world. The papers examine the evolution of climate-related cases, the scope of such cases and the varying grounds on which they have been based. They also focus in some detail on certain key judgments addressing novel issues, as well as a recent climate-related case brought against a national central bank. The papers were originally presented at the Legal Colloquium on “Climate change litigation and central banks – Action for the environment”, organised by the European Central Bank on 27 May 2021. JEL Classification: K32, K33, K39, K41, Q54
    Keywords: Article 11 TFEU, climate-related litigation, climate change, climate risk, compilation of cases, corporate sector purchase programme, European Convention on Human Rights, financial risk, Ireland, legal standing., litigation against financial institutions, monetary policy, right to an environment, transnational legal networks
    Date: 2021–12
  7. By: Hangartner, Dominik (Stanford University); Sarvimäki, Matti (Aalto University); Spirig, Judith (Stanford University)
    Abstract: We review and interpret research on the economic and political effects of receiving asylum seekers and refugees in developed countries, with a particular focus on the 2015 European refugee protection crisis and its aftermath. In the first part of the paper, we examine the consequences of receiving asylum seekers and refugees and identify two main findings. First, the reception of refugees is unlikely to generate large direct economic effects. Both labor market and fiscal consequences for host countries are likely to be relatively modest. Second, however, the broader political processes accompanying the reception and integration of refugees may give rise to indirect yet larger economic effects. Specifically, a growing body of work suggests that the arrival of asylum seekers and refugees can fuel the rise of anti-immigrant populist parties, which may lead to the adoption of economically and politically isolationist policies. Yet, these political effects are not inevitable and occur only under certain conditions. In the second part of the paper, we discuss the conditions under which these effects are less likely to occur. We argue that refugees' effective integration along relevant linguistic, economic, and legal dimensions, an allocation of asylum seekers that is perceived as 'fair' by the host society, and meaningful contact between locals and newly arrived refugees have the potential to mitigate the political and indirect economic risks.
    Keywords: refugees, asylum seekers, populism, integration policies
    JEL: D72 J61
    Date: 2021–10
  8. By: Gibson, Matthew (Williams College)
    Abstract: Adam Smith alleged that secret employer collusion to reduce labor earnings is common. This paper examines an important case of such behavior: no-poach agreements through which technology companies agreed not to compete for each other’s workers. Exploiting the plausibly exogenous timing of a US Department of Justice investigation, I estimate the effects of these agreements using a difference-in-differences design. Data from Glassdoor permit the inclusion of rich employer- and job-level controls. Estimates indicate each agreement cost affected workers approximately 2.5 percent of annual salary. Stock bonuses and ratings of job satisfaction were also negatively affected.
    Keywords: monopsony, oligopsony, employer market power, labor earnings
    JEL: J42 K21 J30 L41
    Date: 2021–11
  9. By: Wolfgang Maennig (Chair for Economic Policy, University of Hamburg); Steffen Q. Mueller (Chair for Economic Policy, University of Hamburg)
    Abstract: We investigate the relationship between consumer discrimination, racial matching strategies, and employer discrimination in Major League Baseball (MLB) from 1985 to 2016. To this end, we assess the extent to which both fan attendance and team performance respond to changes in teams’ and their local market areas’ racial compositions. We innovate by using a significantly enhanced data basis with individual player data that we derive from combining web scraping and using facial recognition techniques to identify player race and using County-level Census data instead of Metropolitan Statistical Area data. We find that fans in both MLB Leagues developed a taste for racial diversity in the late 1980s; since the 2000s, discrimination starts to increase again. However, this discrimination is not fully rationalizing the performance gap across athletes of different race and ethnicity; employer discrimination is not primarily driven by fans’ racial preferences.
    Keywords: Consumer preferences, Discrimination, Race, Ethnicity, Facial recognition, Ticket sales
    JEL: C5 J1 Z2
    Date: 2021–12–07

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