nep-neu New Economics Papers
on Neuroeconomics
Issue of 2023‒03‒27
five papers chosen by

  1. Long-Term Effects of Rainfall Shocks on Foundational Cognitive Skills: Evidence from Peru By Pazos, Nicolas; Favara, Marta; Sanchez, Alan; Scott, Douglas; Behrman, Jere R.
  2. Motivated Skepticism By Jeanne Hagenbach; Charlotte Saucet
  3. Paying Moms to Stay Home: Short and Long Run Effects on Parents and Children By Jonathan Gruber; Tuomas Kosonen; Kristiina Huttunen
  4. The association between Marital Locus of Control and break-up intentions By David Boto-Garc\'ia; Federico Perali
  5. The Value of Early-Career Skills By Christina Langer; Simon Wiederhold

  1. By: Pazos, Nicolas (University of Nottingham); Favara, Marta (University of Oxford); Sanchez, Alan (Group for the Analysis of Development (GRADE)); Scott, Douglas (University of Oxford); Behrman, Jere R. (University of Pennsylvania)
    Abstract: Global warming is changing precipitation patterns, harming communities strongly tied to agricultural production, particularly in low-and-middle income countries (LMICs). Whilst the long-term effects of being exposed to rainfall shocks early in life on school achievement tests are well-established, there is little population-based evidence from LMICs on the mechanisms through which these shocks operate. This paper analyses the effects of early exposure to rainfall shocks on four foundational cognitive skills (FCSs), including executive functions (EF) that have been found to be key predictors of educational success. These skills were measured via a series of tablet-based tasks administered in Peru as part of the Young Lives longitudinal study (YLS). We combine the YLS data with gridded data on monthly precipitation to generate monthly, community-level rainfall estimates. The key identification strategy relies on temporary climatic shocks being uncorrelated with other latent determinants of FCS development. Our results show significant negative effects of early life exposure to rainfall shocks on EF. We also find evidence of rainfall shocks decreasing households' abilities to invest in human capital, which may affect both FCS and domain-specific test scores. Interestingly, social policies providing affected households with additional resources partially offset the effects of the rainfall shocks.
    Keywords: skills formation, human capital, rainfall, Peru, early childhood
    JEL: J24 Q54 I24 I14
    Date: 2023–02
  2. By: Jeanne Hagenbach (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Charlotte Saucet (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We experimentally study how individuals read strategically-transmitted information when they have preferences over what they will learn. Subjects play disclosure games in which Receivers should interpret messages skeptically. We vary whether the state that Senders communicate about is ego-relevant or neutral for Receivers, and whether skeptical beliefs are aligned or not with what Receivers prefer believing. Skepticism is lower when skeptical beliefs are self-threatening than in neutral settings. When skeptical beliefs are self-serving, skepticism is not enhanced compared to neutral settings. These results demonstrate that individuals' exercise of skepticism depends on the conclusions of skeptical inferences.
    Keywords: Disclosure games, Hard information, Unraveling result, Skepticism, Motivated beliefs
    Date: 2022–07–15
  3. By: Jonathan Gruber; Tuomas Kosonen; Kristiina Huttunen
    Abstract: We study the impacts of a policy designed to reward mothers who stay at home rather than join the labor force when their children are under age three. We use regional and over time variation to show that the Finnish Home Care Allowance (HCA) decreases maternal employment in both the short and long term. The effects are large enough for the existence of home care benefit system to explain the higher short-term child penalty in Finland than comparable nations. Home care benefits also negatively affect the early childhood cognitive test results of children, decrease the likelihood of choosing academic high school, and increase youth crimes. We confirm that the mechanism of action is changing work/home care arrangements by studying a day care fee reform that had the opposite effect of raising incentives to work – with corresponding opposite effects on mothers and children compared to HCA. Our findings suggest that shifting child care from the home to the market increases labor force participation and improves child outcomes.
    JEL: H31 J13
    Date: 2023–02
  4. By: David Boto-Garc\'ia; Federico Perali
    Abstract: Understanding couple instability is a topic of social and economic relevance. This paper investigates how the risk of dissolution relates to efforts to solve disagreements. We study whether the prevalence of relationship instability in the past among couples is associated with marital locus of control. This is a noncognitive trait that captures individuals perception of control over problems within the couple. We implement a list experiment using the count-item technique to a sample of current real-life couples to elicit truthful answers about couple break-up intentions in the past at the individual level. We find that around 44 per cent of our sample has considered to end their relationship with their partner in the past. The intention to break-up is more prevalent among those who score low in marital locus of control, males, low-income earners, individuals with university studies and couples without children.
    Date: 2023–02
  5. By: Christina Langer; Simon Wiederhold
    Abstract: We develop novel measures of early-career skills that are more detailed, comprehensive, and labor-market-relevant than existing skill proxies. We exploit that skill requirements of apprenticeships in Germany are codified in state-approved, nationally standardized apprenticeship plans. These plans provide more than 13, 000 different skills and the exact duration of learning each skill. Following workers over their careers in administrative data, we find that cognitive, social, and digital skills acquired during apprenticeship are highly – yet differently – rewarded. We also document rising returns to digital and social skills since the 1990s, with a more moderate increase in returns to cognitive skills.
    Keywords: returns to skills, apprenticeship plans, labor market, earnings, early-career skills
    JEL: I21 I26 J24
    Date: 2023–02

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