nep-law New Economics Papers
on Law and Economics
Issue of 2023‒02‒06
nine papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Border Apprehensions and Federal Sentencing of Hispanic Citizens in the United States By Bertoli, Simone; Laouénan, Morgane; Valette, Jérôme
  2. Occupational Regulation, Institutions, and Migrants' Labor Market Outcomes By Maria Koumenta; Mario Pagliero; Davud Rostam-Afschar
  3. Mandatory Seatbelt Laws and Traffic Fatalities: A Reassessment By Anderson, D. Mark; Liang, Yang; Sabia, Joseph J.
  4. Deterrence or Backlash? Arrests and the Dynamics of Domestic Violence By Amaral, Sofia; Dahl, Gordon B.; Endl-Geyer, Victoria; Hener, Timo; Rainer, Helmut
  5. International investment law, intellectual property and development By Oke, Emmanuel; Olabode, Olufunmilola
  6. Sustainable Development Goals and International Trade Law: A critical analysis By NAKAGAWA Junji
  7. Schools as Safety Nets: Break-Downs and Recovery in Reporting of Violence against Children By Clarke, Damian; Larroulet, Pilar; Pailañir, Daniel; Quintana, Daniela
  8. A managed dispute-resolution insurance scheme for countries in investor-state arbitration: Ensuring early legal representation of respondents By Onwuamaegbu, Ucheora
  9. Executive Labor Market Frictions, Corporate Bankruptcy and CEO Careers By Morten Grindaker; Andreas R. Kostøl; Kasper Roszbach

  1. By: Bertoli, Simone (CERDI, Université Clermont Auvergne); Laouénan, Morgane (CNRS); Valette, Jérôme (CEPII, Paris)
    Abstract: We provide evidence that Hispanic citizens receive significantly longer sentences than non-Hispanic citizens in the Federal Criminal Justice System in the United States when a higher number of illegal aliens are apprehended along the southwest border. Apprehensions can increase the salience of Hispanic ethnic identity, which is associated with persistent negative stereotypes, and can also deteriorate attitudes toward Hispanics. We rule out concerns that apprehensions might be conveying legally relevant information to judges. Thus, we provide direct evidence for time-varying discrimination toward Hispanic defendants. Our estimated effect is only at play for defendants without a heavy previous criminal record.
    Keywords: immigration, ethnic identity, discrimination, attitudes, salience, sentences
    JEL: K42 J15 F22
    Date: 2023–01
  2. By: Maria Koumenta; Mario Pagliero; Davud Rostam-Afschar
    Abstract: We study how licensing, certification and unionisation affect the wages of natives and migrants and their representation among licensed, certified, and unionized workers. We provide evidence of a dual role of labor market institutions, which both screen workers based on unobservable characteristics and also provide them with wage setting power. Labor market institutions confer significant wage premia to native workers (4, 1.6, and 2.7 log points for licensing, certification, and unionization respectively), due to screening and wage setting power. Wage premia are significantly larger for licensed and certified migrants (10.3 and 6.6 log points), reflecting a more intense screening of migrant than native workers. The representation of migrants among licensed (but not certified or unionized) workers is 15% lower than that of natives. This again implies a more intense screening of migrants by licensing institutions than by certification and unionization.
    Keywords: Occupational regulation, Licensing, Certification, Unionization, Migration, Wages
    Date: 2022
  3. By: Anderson, D. Mark (Montana State University); Liang, Yang (San Diego State University); Sabia, Joseph J. (San Diego State University)
    Abstract: Using data from the Fatality Analysis Reporting System for the period 1983-1997, Cohen and Einav (Review of Economics and Statistics 2003; 85(4): 828–843) found that mandatory seatbelt laws were associated with a 4 to 6 percent reduction in traffic fatalities among motor vehicle occupants. After successfully replicating their two-way fixed effects estimates, we (1) add 22 years of data (1998-2019) to capture additional seatbelt policy variation and observe a longer post-treatment period, (2) employ the interaction-weighted estimator proposed by Sun and Abraham (2021) to address potential bias due to heterogeneous and dynamic treatment effects, and (3) estimate event-study models to investigate pre-treatment trends and explore lagged post-treatment effects. Consistent with Cohen and Einav (2003), our updated estimates show that primary seatbelt laws are associated with a 5 to 9 percent reduction in fatalities among motor vehicle occupants. Estimated effects of secondary seatbelt laws are smaller in magnitude and sensitive to model choice.
    Keywords: mandatory seatbelt laws, traffic fatalities, traffic safety
    JEL: C13 I12 K32 K42
    Date: 2022–12
  4. By: Amaral, Sofia (University of Munich); Dahl, Gordon B. (University of California, San Diego); Endl-Geyer, Victoria (Ifo Institute for Economic Research); Hener, Timo (Aarhus University); Rainer, Helmut (University of Munich)
    Abstract: There is a vigorous debate on whether arrests for domestic violence (DV) will deter future abuse or create a retaliatory backlash. We study how arrests affect the dynamics of DV using administrative data for over 124, 000 DV emergency calls (999 calls) for West Midlands, the second most populous county in England. We take advantage of conditional random assignment of officers to a case by call handlers, combined with systematic differences across police officers in their propensity to arrest suspected batterers. We find that an arrest reduces future DV calls in the ensuing year by 51%. This reduction is not driven by reduced reporting due to fear of retaliation, but instead a decline in repeat victimization. We reach this conclusion based on a threshold reporting model and its testable implications regarding (i) the severity of repeat DV calls and (ii) victim versus third-party reporting. Exploring mechanisms, we find that arrest virtually eliminates the large spike in re-victimization which occurs in the 48 hours after a call, consistent with arrest facilitating a cooling off period during a volatile, at-risk time. In the longer run, we estimate a sizeable deterrence effect. Substantiating this, arrest increases the probability an offender is charged with a crime. Our findings argue against recent calls for a decriminalization of domestic violence and suggest the optimal police response is to lower the threshold for arrest.
    Keywords: domestic violence, arrest, deterrence, repeat victimization
    JEL: J12 J16 K42
    Date: 2023–01
  5. By: Oke, Emmanuel; Olabode, Olufunmilola
    Abstract: This Perspective explores the interrelation between the international investment law (IIL) regime and the host countries' intellectual property policy space. It then suggests how host countries can shape their international investment agreements to ensure their consistency with the domestic IP legal framework and that both regimes contribute to economic development.
    Date: 2022
  6. By: NAKAGAWA Junji
    Abstract: The post-WWII international trade law system, which was established and developed to liberalise international trade, is facing multiple legitimacy crises. First, the system has contributed to the globalisation of the economy but has not addressed the income disparity within and among states. Second, multinational enterprises that have proliferated under the system have violated human rights, caused environmental degradation and engaged in anti-monopoly practices. Third, the system has not provided effective means for addressing global issues such as global warming and the COVID-19 pandemic. In light of these legitimacy crises of the post-WWII international trade law system, two fundamental questions should be raised: first, whether the system’s goal of trade liberalisation is adequate and, second, whether the structure and functions of the system’s regulation of international trade are adequate as well. To answer these fundamental questions, this study suggests (1) replacing the goal of the international trade law system from trade liberalisation to sustainability or sustainable development and (2) reconstructing the structure and functions of the regulation of international trade based on the broad definition of ‘international trade law system’, which comprises not only hard law on international trade but also soft law instruments regarding international trade addressed to states and private firms.
    Date: 2022–12
  7. By: Clarke, Damian (University of Chile); Larroulet, Pilar (Pontificia Universidad Catolica de Chile); Pailañir, Daniel (University of Chile); Quintana, Daniela (Central Bank of Chile)
    Abstract: Schools are a key channel in formal reporting of violence against children, but this channel broke down with the onset of the COVID-19 pandemic. We study how widespread such reporting declines are, and to what extent they were recovered once re-openings begin. Examining the universe of all criminal reports of violence against children in Chile, we observe sharp declines in reporting of all types of violence (psychological, physical, and sexual), and that full recovery in reporting had not occurred, even nearly 2 years following initial school closures. Our estimates suggest that school closure and incomplete re-opening resulted in around 2, 800 'missing' reports of intra-family violence against children, 2, 000 missing reports of sexual assault, and 230 missing reports of rape against children, equivalent to between 10-25 weeks of reporting at baseline. In the post-school closure period, we find that greater school attendance encourages faster and more complete recovery in reporting of violence against children, pointing to important non-cognitive costs of both school closure, and school absence.
    Keywords: violence against children, reporting, school closure, school attendance, COVID-19
    JEL: D10 I28 I18 K42
    Date: 2023–01
  8. By: Onwuamaegbu, Ucheora
    Abstract: The ISDS system is impacted negatively when all sides are not properly represented, especially, in the early stages of a proceeding when important deadlines and milestones occur. To address this, a new form of private insurance is proposed, which would fund prompt and effective representation for respondents in qualifying proceedings.
    Date: 2022
  9. By: Morten Grindaker; Andreas R. Kostøl; Kasper Roszbach
    Abstract: CEOs of large firms filing for bankruptcy are more likely to exit the executive labor market after bankruptcy and experience substantial compensation losses (Eckbo et al., 2016). While the fear of reputational scarring can lead to lower risk-taking and manifest itself as lower rates of entrepreneurship and job growth, the mechanisms through which bankruptcy affects CEO careers are not well understood. In this paper, we examine the effect of "random bankruptcy" decisions on small and medium-sized business CEOs’ careers. By random, we mean job separation for reasons unrelated to a firm or CEO quality but rather through a court’s bankruptcy decision. We control for the unobserved ability of bankrupt and non-bankrupt CEOs by using randomly assigned judges’ propensity to liquidate firms as an instrument. We then combine our sample of CEOs with administrative records containing granular information on income, wealth, new employers and job titles. Our results show that bankrupt CEOs find new employment quickly, but that a large share exits the executive labor force. On average, bankruptcy reduces CEOs’ variable income components. While the net present value of CEOs’ loss of future capital income equals more than 60 percent of annual pre-bankruptcy income, we observe no effect on wage income. We find that displaced CEOs are more likely to reallocate to new industries and new geographic areas, suggesting that managerial skills are portable. We explore how the income and employment effects of bankruptcy vary with industry conditions. Consistent with the executive labor market using bankruptcy as a noisy signal of managerial ability, we find the displacement effect is stronger when industry conditions are good. Our evidence is consistent with the presence of information frictions that could entail important social costs.
    Keywords: Occupational Choice, Bankruptcy, CEO, Organizations, Executive Compensation
    JEL: G33 J24 K22 L29 M12
    Date: 2021–12–16

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