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on Unemployment, Inequality and Poverty |
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Issue of 2019‒04‒15
eight papers chosen by |
| By: | Benjamin Elsner (University College Dublin, School of Economics); Florian Wozny (Institute of Labor Economics (IZA)) |
| Abstract: | This paper studies the long-term effect of radiation on cognitive skills. We use regional variation in nuclear fallout caused by the Chernobyl disaster in 1986, which led to a permanent increase in radiation levels in most of Europe. To identify a causal effect, we exploit the fact that the degree of soil contamination depended on rainfall within a critical ten-day window after the disaster. Based on unique geo-coded survey data from Germany, we show that people who lived in highlycontaminated areas in 1986 perform significantly worse in standardized cognitive tests 25 years later. This effect is driven by the older cohorts in our sample (born before 1976), whereas we find no effect for people who were first exposed during early childhood. These results are consistent with radiation accelerating cognitive decline during older ages. Moreover, they suggest that radiation has negative effects even when people are first exposed as adults, and point to significant external costs of man-made sources of radiation. |
| Keywords: | Environment, Human Capital, Radioactivity, Cognitive Skills |
| JEL: | J24 Q53 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:duh:wpaper:1901&r=all |
| By: | James Andreoni; Amalia Di Girolamo; John A. List; Claire Mackevicius; Anya Samek |
| Abstract: | We conduct experiments eliciting risk preferences with over 1,400 children and adolescents aged 3-15 years old. We complement our data with an assessment of cognitive and executive function skills. First, we find that adolescent girls display significantly greater risk aversion than adolescent boys. This pattern is not observed among young children, suggesting that the gender gap in risk preferences emerges in early adolescence. Second, we find that at all ages in our study, cognitive skills (specifically math ability) are positively associated with risk taking. Executive functions among children, and soft skills among adolescents, are negatively associated with risk taking. Third, we find that greater risk-tolerance is associated with higher likelihood of disciplinary referrals, which provides evidence that our task is equipped to measure a relevant behavioral outcome. For academics, our research provides a deeper understanding of the developmental origins of risk preferences and highlights the important role of cognitive and executive function skills to better understand the association between risk preferences and cognitive abilities over the studied age range. |
| JEL: | C72 C91 C93 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25723&r=all |
| By: | Gabriele Camera (Economic Science Institute, Chapman University & University of Bologna); Cary Deck (University of Alabama & Chapman University); David Porter (Economic Science Institute, Chapman University) |
| Abstract: | We explore if fairness and inequality motivations affect cooperation in indefinitely repeated games. Each round, we randomly divided experimental participants into donor-recipient pairs. Donors could make a gift to recipients, and ex-ante earnings are highest when all donors give. Roles were randomly reassigned every period, which induced inequality in ex-post earnings. Theoretically, income-maximizing players do not have to condition on this inequality because it is payoff-irrelevant. Empirically, payoff-irrelevant inequality affected participants’ ability to coordinate on efficient play: donors conditioned gifts on their own past roles and, with inequalities made visible, discriminated against those who were better off. |
| Keywords: | cooperation, experiments, indefinitely repeated games, social dilemmas |
| JEL: | C70 C90 D03 E02 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:19-09&r=all |
| By: | Chrysanthou, Georgios Marios (University of Sheffield); Vasilakis, Chrysovalantis |
| Abstract: | We investigate the impact of nine types of adolescent (verbal, physical, indirect) school/domestic bullying on life satisfaction, and two mental health outcomes (emotional symptoms and hyperactivity/inattention) using the Understanding Society dataset during 2009-13. Bullying significantly increases hyperactive, inattentive and emotional symptoms and reduces life satisfaction. Non-domestic bullying has a stronger adverse impact on all three mental wellbeing outcomes. Domestic sibling victimisation does not affect life satisfaction. Lower levels of family income increase adolescent hyperactive/inattentive symptoms and reduce life satisfaction. Females are more vulnerable to emotional symptoms while males report higher levels of life satisfaction. Initial conditions precondition hyperactive and inattentive symptoms. |
| Keywords: | bullying, mental health, life satisfaction, unobserved heterogeneity |
| JEL: | C25 C35 J12 J13 I31 I10 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12206&r=all |
| By: | Brunello, Giorgio (University of Padova); Lodigiani, Elisabetta (University of Padova); Rocco, Lorenzo (University of Padova) |
| Abstract: | We estimate the (causal) effects of low skill immigration on the performance of Italian manufacturing firms. We find that an increase of the local supply of low skilled immigrants by one thousand units – which corresponds to 8.5 percent of the mean value - raises profits on average by somewhat less than half a percentage point, reduces average labour costs by about 0.1 percent and has no effect on TFP. The positive effects on profits are larger for small firms operating in low tech sectors and for firms located in areas specializing in low skill productions. Our evidence suggests that the recent waves of low skilled immigration in Italy may have hampered the transition to an economic structure characterized by high productivity and wage growth. |
| Keywords: | low skilled immigration, profits, Italy |
| JEL: | J61 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12226&r=all |
| By: | Basu, Kaushik (World Bank) |
| Abstract: | The advance of digital technology is changing the nature of markets, enhancing the capacity of corporations to extract more consumers' surplus and lower the wages paid to workers. The rise of new technology has also diminished the efficacy of traditional laws to regulate firms and corporations. This is best illustrated by antitrust laws. With the new technology, there is greater returns to scale in production, and further, it is possible to have different components of the same final good be produced by different firms in faraway places. Unlike in earlier times the n firms in one industry, say the automobile industry, would all be producing cars, now the n firms in that industry produce n different parts of the product, thereby getting enormous returns to scale. Such markets are described as vertically serrated markets and their equilibria are characterized. Traditional antitrust law does not apply to these markets because the high returns to scale are natural and not artificially induced. This compels us to look for novel ways to regulate such markets. This paper discusses, in particular, laws that compel firms to have widely dispersed share holdings. |
| Keywords: | antitrust law, share distribution, technological advance, labor demand |
| JEL: | K21 L13 O33 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp146&r=all |
| By: | Giuseppe Attanasi (Université Côte d'Azur, CNRS, GREDEG, France); Kene Boun My (BETA, Université de Strasbourg); Nikolaos Georgantzís (Burgundy School of Business & Economics Department, Universitat Jaume I); Miguel Ginés (Economics Department, Universitat Jaume I) |
| Abstract: | In a two-stage investment-effort game, we model altruistic investment in another agent's capacity to benefit from synergies between the two agents' efforts. Contrary to most models in the literature on altruism, we assume that agents who invest in others have no direct utility from their giving behavior, ruling out any genuinely altruistic component in their utility function, i.e., stemming from other-regarding preferences. Furthermore, we disentangle this strategic ethics" from reputational e ects yielding incentives for a more pro-social action in the present in order to favor Pareto-superior outcomes in the future. Isolated consumption of one's own bene ts from own efforts is the worst equilibrium, which is globally stable and is shown to exist independently of the investment cost. However, for a low enough investment cost, there exist two alternative equilibria: an unstable intermediate equilibrium in which both agents make positive complementarity-building investments, and a stable one in which both agents invest all they can to complementarity building. Both equilibria Pareto-dominate the aforementioned no-investment equilibrium. Results of a laboratory experiment con rm our behavioral prediction that, for a low enough investment cost, subjects coordinate on positive complementarity-building investment, which in turn boosts their effort in the second stage. The latter increases in both own and others' complementarity-building investment, as predicted by our model. All this holds independently of subjects' risk and inequity aversion. The latter suggests that complementarity-building investment is not motivated by altruism. Rather, it is purely strategic. |
| Keywords: | Complementarity-building Investment, Strategic Complementarities, Altruism, Fairness, Risk Aversion |
| JEL: | C72 C73 C91 D64 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2019-13&r=all |
| By: | Meier, Armando N. (University of Basel); Odermatt, Reto (University of Basel); Stutzer, Alois (University of Basel) |
| Abstract: | We evaluate one of the most prevalent prohibitory policies: banning the sales of tobacco to teens. We exploit the staggered introduction of sales bans across Switzerland and the European Union from 1990 to 2016. The estimates indicate a less than 1 percentage point reduction in teen smoking because of the bans. The reduction is substantially lower than the 5 percentage point reduction expected by health officials. We examine additional outcomes relevant to assessing any prohibitory policy. We find that teens circumvent the bans through peers. Moreover, they consider smokers less cool but do not think smoking is more dangerous. |
| Keywords: | prohibition, tobacco sales bans, youth smoking, attitudes toward smoking, tobacco prevention |
| JEL: | D12 I12 I18 K42 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12231&r=all |