Research Seminars

Using administrative data on jobseekers registered by the public employment agency, we describe the implementation of the Youth Guarantee through the Slovak active labour market policy (ALMP). By adopting a novel, double-machine-learning-based, dynamic estimation technique, we generate evidence on the impact of various types of ALMP programmes provided in different periods of the unemployment spell. The spectrum of ALMP programmes ranges from classroom training through hiring incentives and subsidised employment in the private sector to public works organised at the municipality level. We identify the impact of participation in a particular ALMP programme or sequences of ALMP programmes on the absence from registered unemployment after three years. Our empirical approach allows painting a complex picture of the Slovak Youth Guarantee implementation, yielding evidence in line with international experiences generalised by ALMP impact-evaluation meta-analyses. We contribute to this literature, by generating affirmative evidence from a particular case study which is only allowed thanks to the advanced functionality of our estimator.  (Authors: Soňa Dulíková, Lukáš Lafférs, Miroslav Štefánik)

This experimental study examines the effect of organizational membership fees on the willingness of association members to make charitable contributions (donations) to their association. Theoretically, the design tests six scenarios where public and private benefit are more prominent to explore and whether the amount of publicness in an organization’s mission (mission orientation) influences the donation amount. Practically, nonprofit leaders need more information regarding the relationship between membership dues and giving behavior to gauge the optimal membership scenario for maximum revenue generation. Using an explanatory sequential mixed methods design, the study assesses individuals’ willingness to donate to associations under three dues scenarios (no dues, dues with benefits, and sliding scale dues) with varying levels of public and private benefits. Responses demonstrate a significant difference between both professional and community association donations as well as between treatment groups. Themes emerged regarding dues and dues structures, personal finances, and the autonomy of giving to other charities.

We study the causal effects of previous experience and language skills when newly arrived refugees in Sweden apply for job openings by means of a field experiment. Applications were sent from randomly assigned fictitious Syrian refugees with experience in jobs with low skill requirements and completed language training in Swedish to employers advertising low-skilled job vacancies. We find no evidence of sizeable effects from previous experience or completed language classes on the probability of receiving callback from employers. However, female applicants were more likely than males to receive a positive response. We conclude that previous experience and completed language training seem to provide at best a small positive signaling value when refugees apply for low-skilled jobs through formal channels.

This paper investigates whether and how media exposure affects health behaviours. We exploit the idiosyncratic switchover to digital television in Italy and the consequent shift in the supply of food-related contents shown on the TV. By using a unique data-set based on four sources of data, we first provide evidence that food-shows contents affected individual choices, based on patterns of cuisine related information and recipes on the web. Then, we find that digital transition increased the size and improved the macronutrient composition of households’ food baskets, leading to a reduction in BMI among more exposed individuals. These findings question the negative stereotypes often associated with TV and highlight its potential as brand-new health policy lever.

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We utilize a natural experiment, an education reform increasing compulsory schooling from five to eight years in Turkey, to obtain endogeneity-robust estimates of the effect of male education on the incidence of domestic violence against women. We find that husband’s education lowers the probability of physical, emotional and economic violence. Schooling lowers also the likelihood of an arranged marriage, and makes men less inclined to engage in various socially unacceptable behaviors. We show that these findings are very robust, and can be attributed to men’s education rather than to the education of their wives.

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This paper investigates credit cycles by means of an experiment based on a Kiyotaki & Moore (1997) model with heterogeneous expectations. The aim is to examine how a credit squeeze caused by high lender-level risk perceptions affects the real prices of a collateralised asset, with a special focus on the macroeconomic implications of rising price volatility in terms of total welfare and the number of bankruptcies that occur. To do that, a learning-to-forecast experiment (LtFE) is run where participants are asked to predict the future price of a collateralised asset and then rewarded based on the accuracy of their forecasts. The setting includes one lender and five borrowers in each of the twelve sessions split between six control groups (G1) and six treatment groups (G2). While in G1 the lender always satisfies borrowers’ loan demand (bankruptcies permitting), in G2 he/she is forced to close the entire credit market in case three or more bankruptcies occur in the previous round. Experimental results show that negative risk-driven supply shocks amplify the volatility of collateral prices. This surge in uncertainty worsens the agents’ ability to predict the future value of the collateralised asset and, as a consequence, the number of defaults increases and total welfare deteriorates.

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Experiments involving multiple public goods with contribution thresholds capture many features of charitable giving environments. We present results from a laboratory experiment that introduces endowment and preference differences into such a framework to explore the impact of donor heterogeneity on public good success and payoffs. We observe that donors tend to focus on the recipients preferred by the wealthiest contributors, ignoring other potential recipients. We refer to this collective focus on the preferred good of the wealthiest as the Gates Effect, showing that the public goods preferred by the wealthiest are more salient even in the absence of seed money, matching grants, misperception of payoffs. The Gates Effect can reduce inequality within donor groups that succeed in funding a public good; however, it also affects the philanthropic agenda, reducing the variety of public goods that receive funding."

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Abstract: Nudging has become an important policy instrument to improve tax collection. Nudges in the taxation context are mainly notifications sent to taxpayers on behalf of tax authorities. Despite their similarity, these interventions have differential impact across countries and regions. We synthesize the growing experimental literature in a meta-analytical framework and provide estimates of the average effects of different nudges on tax compliance. Compared to the average share of compliant taxpayers that receive no notifications in the control group (29.8%), i) a neutral notification increases the probability of compliance by 6.4%, ii) non-deterrence nudges, various notifications that do not contain threats, increase the probability compliance by 12.8%, and iii) deterrence nudges, notifications that contain threats of audit or punishment, increase the probability of compliance by 22.8%. Lastly, our findings suggest that the sample of studies under scrutiny may be susceptible to selective reporting of results, and highlight few study characteristics that can make nudging interventions more effective.

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We estimate how policies that facilitate inter-temporal shifting of corporate tax liability via tax carry-forwards increase responsiveness of corporate tax base to taxation. Using administrative 2010-2018 tax return data from Slovakia and bunching designs, we estimate corporate elasticity of taxable income (CETI) at kinks in the marginal rate schedule. Using reforms of tax carry-forwards, we estimate that shifting via carry-forwards can account for the entire CETI at kinks for top 13% companies with turnover above €500k and 21% of CETI for VAT non-registered companies. We provide corrected estimates of marginal excess burden net of intertemporal shifting.

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This article deals with the revealed value of volunteering. The revealed value approach is one way to determine the value of non-market goods or services. Most studies focused on the value of volunteering have built their research on the presumption that there is no way to reveal the value of volunteering, and therefore proxies must be used. This research uses a plausibility probe case study to explore and identify revealed information about the value of volunteering. The research was conducted using data over a seven-year period (2012–18) from ADRA, a large volunteer centre network in the Czech Republic that has 14 volunteer centres coordinating more than 2,500 volunteers in about 50 cities. I used the data about all the public funding of all the centres in this network between 2012 and 2018 in order to calculate the revealed value of volunteering from the perspective of various governmental institutions. I calculated the total value of volunteering, including financial grants, donations, and the value of volunteer hours. Interestingly, all three values were found within or slightly around the interval estimate of the value of volunteering.

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Abstract: It is a standard practice to explain future stock returns by factors such as size or value premium. But the history of systemic events that led to asset bubbles and the advances in the behavioral finance field emphasized the importance of another factor influencing stock returns -- sentiment. Focusing on the direct survey-based measures of sentiment, we collect 1311 estimates from 30 primary studies to conduct the first meta-analysis of the underlying relation shedding light to ambiguous outcomes of current empirical literature. Our results suggest that there is non-negligible and negative relationship between sentiment and stock returns. In majority of specifications researchers tend to report this effect much stronger than it actually is but we also found presence of positive publication bias driving the results to less negative or even positive area. We reveal that sentiment effect is significantly stronger when flowing from individual investors compared to large institutions or when affecting stock market in US compared to Europe. Further, the effect also depends on several data and model characteristics. Finally, we propose implied estimates that may help to enhance predictive power of stock market models, but also conducting stress tests of financial markets and assessing risks to financial stability. Our results might be applied to specific pairs of survey-based sentiment and return series, but in general, we quantified the average effect of one unit increase in sentiment on monthly returns to be -0.54pp.

Authors: Zuzana Gric (ČNB, MUNI),  Josef Bajzík (ČNB, IES FSV UK), Ondřej Badura (VŠB)

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Abstract: Can information provision reduce the risks associated with irregular migration? We address this question conducting a large-scale experiment with about 7,000 secondary school students in Guinea. Combining aggregate statistics and video-testimonies by migrants who settled in Europe, we study the effect of three information treatments: (i) about risks and costs of the journey; (ii) about economic outcomes in the destination country; and (iii) a treatment pooling (i) and (ii). We find that one month after the intervention, all three treatments affect beliefs about risks and economic conditions. However, 1.5 years after the intervention, only the first has a significant effect on migration outcomes: providing information about the risks and costs of the journey reduces international migration by 49%. The effect is driven by a decrease in migration without a visa (i.e., potentially risky and irregular). Furthermore, the reduction is bigger for students who at baseline underestimated the risks connected to international migration.

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This paper studies the effects that connectivity and centralisation have on the response of interbank networks to external shocks that generate phenomena of default contagion. We run numerical simulations of contagion processes on randomly generated networks, characterised by different degrees of density and centralisation. Our main findings show that the degree of robustness-yet-fragility of a network grows progressively with both its degree of density or centralisation, although at different paces. We also find that sparse and decentralised interbank networks are generally resilient to small shocks, contrary to what so far believed. The degree of robustness-yet-fragility of an interbank network determines its propensity to generate a too-many-to-fail problem. We argue that medium levels of density and high levels of centralisation prevent the emergence of a too-many-to-fail issue for small and medium shocks whilst drastically creating the problem in the case of large shocks. Finally, our results shed some light on the actual robustness-yet-fragility of the observed core-periphery national interbank networks, highlighting the existing risk of systemic crises.

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How do societies respond to epidemic crisis in both stated political preferences and revealed health-related behavior? To answer this question, we link overmortality during the 1918-influenza to the political support of compulsory vaccination and to real vaccination behavior before and after the 1918-flu. We rely on the 1922 popular vote in Grisons when Grisons’ voters have to decide about compulsory vaccination in their canton. We find that a 1% higher overmortality during the 1918-flu reduces the support of the compulsory vaccination bill by almost 3%. The results are robust to different specifications regarding the definition of flu-affectedness, the inclusion of regional fixed effects and socio-economic variables. Other popular votes, by contrast, do not correlate with overmortality neither before nor after 1918. We are now digitizing real vaccination behavior at the municipality level using smallpox vaccination reports from 1907 to 1933. We aim to show whether revealed health-related behavior differ from the political statement by investigating a potential shift in vaccination abstinence after 1918. We further aim to distinguish among two potential channels to explain the results – cognitive dissonance and mistrust into experts or the government. The results might improve our understanding how epidemics might shift a society towards ignorance and mistrust into experts. Parallels to the COVID-19 epidemic show that part of the population are still acting ignorant today as our ancestors have done so 100 years ago.

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Abstract: Experimental studies have modeled individual funding of social projects as contributions to a threshold public good. We examine contributors’ behavior when faced with multiple threshold public goods and the possibility of coordinating contributions via an intermediary. Employing the experimental design developed in Corazzini (2020), we vary both the size of a ‘destination rule’, which places restrictions on the intermediary’s use of a contributor’s funds, as well as the overhead cost of the intermediary, modeled as a sunk cost incurred by the intermediary whether or not any public good is successfully funded. In an online experiment with live interaction, we show that subjects behave in line with equilibrium predictions with regard to the size of the destination rule, only increasing their contributions when there is no threat of expropriation by the intermediary. However, we find that the positive effect of a high destination rule is undone in the presence of overhead costs for the intermediary. While this is in direct conflict with the theory that predicts no role of such costs, it is in line with the sunk-cost bias as well as the phenomenon of ‘overhead aversion’ that is commonly exhibited by donors when selecting charities.

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This study examines the unintended consequences of immigration enforcement policies on children’s human capital. Exploiting the temporal and geographic variation in the enactment of immigration enforcement policies, we find that English language proficiency of U.S.-born children with at least one undocumented parent is negatively affected by the introduction of immigration enforcement laws. We show that the reduction in children’s English proficiency are caused by changes in parental investment behavior. Increasing fear of being detected and deported leads undocumented parents to substitute children’s time in formal non-mandatory pre-school education with parental time spent at home. We find evidence that parental time investment is not as productive as time spent in pre-school. These developments lead ultimately to a reduction in children’s human capital. 

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TBA

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We discuss the effects of offshoring on the labor market in a matching model with endogenous adjustment of educational skills. We carry out a comparative statics analysis and show that offshoring leads to a restructuring of the economy through skill-biased technical change (SBTC) where overall welfare is improved. In a policy exercise we show that, if offshoring were to be opposed by a protectionist agenda, labor market flexibility can bring about the same welfare gain. In addition, we offer an empirical analysis aimed at verifying the correlation between offshoring and SBTC in US manufacturing industries in recent years. Our results show that different offshoring strategies affect SBTC differently. In particular, the evidence suggests that while high-skill offshoring strategies open the skill gap, low-skill offshoring strategies tend to work in the opposite direction.

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Have you ever wondered how are colonies of ants able to efficiently search for food, birds or fish collectively defend themselves against predators by forming flocks or schools, and why crowds of people behave like a fluid? Recent advances in automated tracking technology resulted in high-resolution recordings of individual trajectories and behavior of groups, often complemented by identification of stereotypical behaviors. But the main hurdle still remains to be data analysis and inference of informative models. I will talk about a class of probabilistic models, which is general enough to apply to a broad range of systems, incorporating individual and collective behavior, spatial and temporal dependence, discrete and continuous variables, deterministic and stochastic components and internal cognitive or behavioral state dependence. Our approach has two desirable features: (1) the maximum likelihood inference is tractably solvable by gradient descent, (2) model selection can be used to adjust model complexity to data. Multiple toy/real examples will be shown during the talk.​

This paper studies the origins and consequences of the Russian Mafia (vory-v-zakone). Using a web scraping method, I obtained a unique dataset that contains detailed biographies of more than 5,000 mafia leaders operating in 15 countries of the (former) Soviet Union at some point between 1916 and 2018. Using this data, I first show that Russian Mafia originated in the Gulag - Soviet system of forced labor camps which housed around 18 million prisoners between 1920s-1950s. Second, I document that the distance to the nearest camp is a strong negative predictor of mafia presence in Russia's communities in the mid-1990s. Finally, using an instrumental variable approach which exploits the spatial distribution of the gulags, I examine the effects of mafia presence in mid-1990s on local crime and violence. In particular, I show that the communities with mafia presence experienced a dramatic rise in crime driven by turf wars which erupted among rival clans around 1993 and lingered on until the late 1990s. This is suggested by a sharp increase in attacks against members of Russia's economic elite in places under mafia control.  Further heterogeneity analysis reveals that mafia presence led to a spike in violence against businessmen, fellow criminals, as well as law enforcement officers and judges, while the attacks against politicians remained unaffected.

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In a 1-year randomized controlled trial involving thousands of university stu- dents, we provide real-time private feedback on relative performance in a semester-long on- line assignment. Within this setup, our experimental design cleanly identifies the behavioral response to rank incentives (i.e., the incentives stemming from an inherent preference for high rank). We find that rank incentives not only boost performance in the related assignment, but also increase the average grade across all course exams taken over the semester by 0.21 standard deviations. These beneficial effects remain sizeable across all quantiles and extend beyond the time of the intervention. The mechanism behind these findings involves social learning: rank incentives make students engage more in peer interactions, which lead them to perform significantly better across the board. Finally, we explore the virtues of real-time feedback by analyzing a number of alternative variations in the way it is provided.

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We study a real effort environment, where a delegator has to decide if and to whom to delegate a task. Delegating to a person who is better at the task increases welfare. Potential delegatees send cheap-talk messages about their past performance before the delegator decides. We experimentally test the theoretical prediction that information transmission cannot occur. In our experiment, we vary the message space available to the delegatees and compare the information transmitted and the level of efficiency. Depending on the treatment, the sender can either submit a number indicating how many tasks she solved previously, an interval in which the number of tasks falls, or a free text message. We observe that messages contain information in all treatments. Interestingly, information transmission occurs only in the treatments where messages are intervals or free text but not if messages are exact. The highest efficiency is obtained in the free-text treatment, as delegators are able to extract information contained in the different styles of messages sent by subjects with different abilities.

In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. Experts may exploit their informational advantage by defrauding customers. Market institutions have been shown theoretically to be effective in mitigating fraudulent expert behavior. We analyze whether this positive result carries over when experts are heterogeneous in their diagnostic abilities. We find that efficient market outcomes are always possible. However, inefficient equilibria can also exist. When such inefficient equilibria are played, a larger share of high-ability experts may lead to more inefficiencies relative to the efficient equilibria.

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Over the last years, the use of experimental research has received an increasing attention from Management academics and journal editors. While experimental research is popular among social psychologists (actually my background) it is still rare in the field of International Human Resource Management. The objective of this seminar is not to explain how to design an experimental research, but instead, present my own experience of using experimental designs to answer a few common questions in the management and business fields, such as: (1) Does the academic performance (GPA) and the participation in extracurricular activities (ECAs) affect the perceived employability of business graduates? (2) Does the effect of GPA and ECAs vary with the characteristics of the respondents and the cultural context? (3) Does a facultative internship affect the perceived employability of marketing graduates? What about the effect of an international versus a domestic facultative internship? (4) Does the use of a facial piercing influence the perceptions of interpersonal attraction, confidence and job suitability of hospitality receptionists? Starting from my first published paper (Pinto & Ramalheira, 2017) employing an experimental design, I then illustrate how this method was applied more broadly to examine the perceived employability of business graduates in other cultural contexts (e.g. China, Brazil, Italy) and to advance research in other fields, such as hospitality management, higher education and leadership. The seminar ends with a discussion of the challenges and learnings from employing (quasi) experimental designs.

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Reporting a peer’s wrongdoing to an authority is a morally controversial decision: re-porting will likely result in a punishment for the peer (and harming others is unethical), but the punitive action might prevent further harm to the victims of the misconduct (which justifies reporting on a moral ground). A policymaker might want to encourage the solution of this moral dilemma in the direction of reporting, through financial incentives. Yet, material incentives sometimes backfire, especially in domains involving moral concerns. Using a field experiment with employees of the Ministry of Education in Afghanistan who are asked to confidentially report their colleagues’ absence, I show that reporting is lower among participants who are offered a monetary reward for their reports. This is the case, however, only for participants who expect their reports to be consequential (making their choice morally-charged). Among employees who are told instead that their reports are inconsequential and won't result in any penalty for their peers (making the choice more morally-neutral), incentives do not backfire.

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Abstract: OECD and other international organizations have been very keen in recommending principles and institutional safeguards to curb corruption and to enhance transparency and integrity in public procurement. Despite the fact that Portugal is being considered a good example of e-procurement policies and practices among European countries, this is a very sensitive issue.
Based on the the literature that provides evidence of a politicized administration of public procure- ment contracts, but limited to a specific municipality, this paper extends the analysis of political effects to other municipalities. Specifically, it asks if there is a relation between the political parties in power in a given municipality and the frequency of contracts awarded to a given firm?
Our results show that for political reasons private firms are more likely to win a contract in a given municipality if they have already won contracts in other municipalities led by the same political party. We rely on a dataset (’base.gov’) with information on all bids by private firms and all contracts awarded by the 308 Portuguese municipalities in the period between 2008 and 2017. This includes three electoral cycles and more than 250,000. The empirical results - the political proximity - is robust to a number controls, including geographic proximity. This result has political and public governance implications.

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Foreign-born individuals come with different health needs and different level of vulnerability. In the public debate today, immigration is often viewed as a threat to the access and the quality of health care services. The health needs of immigrants and refugees pose new challenges to health care systems. We discuss the main findings of the effects of immigration on demand and supply of health care in host countries. Moreover, immigrant inflows could have large effects on labour markets which can in turn affect natives’ health and their demand for health care. Understanding the health trajectories of immigrants are paramount to provide a correct assessment of the costs and benefits of migration.

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There is increasing acceptance of the role played by mood in decision-making. However, the evidence of mood effect in the field, as proxied by external factors such as weather and weekday, is limited. Using two large datasets containing all car inspections in Sweden and England during 2016 and 2017, we study whether inspectors are more lenient on days when their mood is predicted to be good, and if car owners exploit this mood effect by submitting lower quality cars to be inspected on these days. Different sources of good mood are studied: Fridays, last working days before public holidays, paydays, sunny days, and days following major sports results, in a decreasing order of the car owner’s ability to plan for inspection, and hence the likelihood of selection bias. We find limited evidence to support the existence of mood effect in this domain, despite survey results showing belief to the contrary. In Sweden, failure rate is in fact higher on Fridays and last days before holidays, suggesting that the selection effect is stronger than any mood effect.

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