Adverse selection, learning, and competitive search

A new GLO Discussion Paper develops a dynamic version of the competitive search model with adverse selection. Numerical results show that firm learning does not increase labor market efficiency.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 700, 2020

Adverse selection, learning, and competitive searchDownload PDF
by
Mayr-Dorn, Karin

GLO Fellow Karin Mayr-Dorn

Author Abstract: I develop a dynamic version of the competitive search model with adverse selection in Guerrieri, Shimer and Wright (2010). My model allows for an analysis of the effects of firm learning on labor market efficiency in the presence of search frictions. I find that firm learning increases relative expected earnings in high-ability jobs and, thereby, enhances imitation incentives of low-ability workers. The net effect on the aggregate expected match surplus and unemployment is indeterminate a priori. Numerical results show that firm learning does not increase labor market efficiency.

Featured image: Photo-by-Alex-Kotliarskyi-on-Unsplash

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Contact vs. Information: What shapes attitudes towards immigration? Evidence from an experiment in schools.

A new GLO Discussion Paper finds on experimental basis with students from middle- and high-school classes in the city of Rome that obtaining information about migrants shape open attitudes more effectively than meeting one, but neither treatment affects feelings associated to immigrants.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 699, 2020

Contact vs. Information: What shapes attitudes towards immigration? Evidence from an experiment in schools Download PDF
by
Florio, Erminia

GLO Affiliate Erminia Florio

Author Abstract: We analyze whether (correct) information provision on immigration is more effective than contact in shaping attitudes towards immigration. We collect data from a randomized experiment in 18 middle- and high-school classes in the city of Rome. Half of the classes meet a refugee from Mauritania, whereas the rest of them attend a lecture on figures and numbers on immigration in Italy and the world. On average, students develop better attitudes towards immigration (especially in the case of policy preferences and the perceived number of immigrants in their country) after the information treatment more than they do after the contact treatment, whereas neither treatment affects feelings associated to immigrants. Also, students having received the information treatment strongly adjust their knowledge on immigration. However, students’ individual characteristics and school type (i.e. middle vs. high school) affect treatments’ effectiveness.

Related research:

Immigration policy, assimilation of immigrants, and natives’ sentiments towards immigrants: evidence from 12 OECD countries, SWEDISH ECONOMIC POLICY REVIEW 7 (2000) 11-53, by Thomas Bauer, Magnus Lofstrom and Klaus F. Zimmermann

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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What Happens in Criminal Firms after Godfather Management Removal? Judicial Administration and Firms Performance.

A new GLO Discussion Paper finds that removing the criminal ties makes it challenging for the firm to maintain profitability and efficiency.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 698, 2020
What Happens in Criminal Firms after Godfather Management Removal? Judicial Administration and Firms Performance Download PDF
by
Calamunci, Francesca M.
GLO Fellow Francesca M. Calamunci

Author Abstract: In this paper, I assess the causal effects of judicial administration on a sample of Italian criminal firms in the period 2004-2016, to shed light on the dynamic path of the firm’s performance from pre-seizure to the post-entry judicial administration phase. By using exogenous enforcement law decisions imposed by authorities for each case, I estimate their impact, highlighting the economic consequences of having new legal governance aiming to establish legality and the perpetuation of activities. The results show that there are adverse effects on profitability and efficiency with an increase in the leverage level. The empirical evidence shows how organised crime firms are intrinsically managed by their dark criminal side; removing the criminal ties makes it challenging to maintain profitability and efficiency. Overall, the negative results are due to difficulty in establishing a new economic framework for (ex-criminal) firms in which they are able to operate efficiently and according to market rules.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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The COVID-19 Pandemic and the 2020 U.S. Presidential Election

A new GLO Discussion Paper suggests that Donald Trump would likely have won re-election if COVID-19 cases in the United States had been 5 percent lower.

While some people may argue that “A German – Turkish vaccine conspiracy has cost the US President the re-election!”, this is probably fake news. However, this GLO Discussion Paper No. 710 is based on fresh serious academic research and contributes to our proper understanding of voting behavior in the US.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

Abel Brodeur

GLO Discussion Paper No. 710, 2020

The COVID-19 Pandemic and the 2020 U.S. Presidential Election Download PDF
by
Baccini, Leonardo & Brodeur, Abel & Weymouth, Stephen

GLO Fellow Abel Brodeur

Photo by Charles Deluvio on Unsplash

Author Abstract: What is the effect of the COVID-19 pandemic on the 2020 U.S. presidential election? Guided by a pre-analysis plan, we estimate the effect of COVID- 19 cases and deaths on the change in county-level voting for Donald Trump between 2016 and 2020. To account for potential confounders, we include a large number of COVID-19-related controls as well as demographic and socioeconomic variables. Moreover, we instrument the numbers of cases and deaths with the share of workers employed in meat-processing factories to sharpen our identification strategy. We find that COVID-19 cases negatively affected Trump’s vote share. The estimated effect appears strongest in urban counties, in swing states, and in states that Trump won in 2016. A simple counterfactual analysis suggests that Trump would likely have won re-election if COVID-19 cases had been 5 percent lower. Our paper contributes to the literature of retrospective voting and demonstrates that voters hold leaders accountable for their (mis-)handling of negative shocks.

More from the GLO Coronavirus Cluster

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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The Regressive Costs of Drinking Water Contaminant Avoidance

A new GLO Discussion Paper documents that poorer households bear disproportionate costs of water quality violations in the United States.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 703, 2020

The Regressive Costs of Drinking Water Contaminant Avoidance Download PDF
by
Hyde, Kelly

GLO Fellow Kelly Hyde

Author Abstract: Up to 45 million Americans in a given year are potentially exposed to contaminated drinking water, increasing their risk of adverse health outcomes. Existing literature has demonstrated that individuals respond to drinking water quality violations by increasing their purchases of bottled water and filtration avoidance, thereby avoiding exposure to contaminants. This paper demonstrates that poorer households, for whom the costs of avoidance comprise a greater share of disposable income, bear disproportionate costs of water quality violations in the United States. Following a health-based water quality violation, poor households’ expenditure on nutritious grocery products in a nationally representative panel differentially decreases by approximately $7 per month. This is associated with a decrease of about 1,500 calories per household member per day, placing these individuals at a higher risk of food insecurity. This finding suggests that the indirect costs of drinking water contamination through economic channels exacerbate health disparities associated with poverty.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Journal of Population Economics Webinar on November 19, 2020: Kuznets Prize 2021 & Presentation of the newly published Issue 1, 2021.

Volume 34, issue 1, 2021 of the Journal of Population Economics is published online. See below the list of articles and access links to read or download the contributions.

PARTICIPATE in the November 19, 2020 (Thursday); (2-5 pm CET) Journal of Population Economics Online Workshop (Webinar). Hosted by UNU-MERIT. Maastricht .
Open to the general public. Mark your calendar. The detailed agenda is below presenting highlights on “Covid-19” and “societal conflict” from the new issue.

A LINK TO THE EVENT will be provided in time through special reminders, and the GLO & POP @ UNU-MERIT websites. For instance, HERE.

Program of the Event

2.00 – 2.15 pm CET Maastricht

Welcome: Michaella Vanore (Managing Editor; UNU-MERIT & Maastricht University)

Journal of Population Economics: Report
Klaus F. Zimmermann
(Editor-in-Chief; UNU-MERIT & Maastricht University)

2.15 – 2.45 pm CET Maastricht

Lead paper Issue 1/2021:Session Chair Terra McKinnish (Editor; University of Colorado Boulder)

“Names and behavior in a war” presented by Štěpán Jurajda (CERGE-EI, Prague)
Co-author: Dejan Kovač (Princeton University and Zagreb)

Discussion

2.45 – 3.15 pm CET Maastricht

Kuznets Prize 2021:
“Impacts of social and economic factors on the transmission of coronavirus disease 2019 (COVID-19) in China”, published in the Journal of Population Economics (2020), 33(4), pp. 1127–1172.

Klaus F. Zimmermann (Editor-in-Chief; UNU-MERIT & Maastricht University)
Bartel Van de Walle (Director, UNU-MERIT)

Panel with the authors:
Yun Qiu (Jinan University), Xi Chen (Yale University), and Wei Shi (Jinan University)

3.15 – 4.00 pm CET Maastricht

Panel: Publishing in Population Economics
Alessandro Cigno
(Editor; University of Florence), Shuaizhang Feng (Editor; Jinan University), Oded Galor (Editor; Brown University), Pierre Pestieau (Editor; Université de Liège), Erdal Tekin (Editor; American University), Katharina Wetzel-Vandai (Springer Nature), Junsen Zhang (Editor; Chinese University of Hong Kong), Klaus F. Zimmermann (Editor-in-Chief; UNU-MERIT & Maastricht University)

4.00 – 5.00 pm CET Maastricht

Covid-19 in Issue 1/2021: Session Chair Madeline Zavodny (Managing Editor; University of North Florida)

Fabio Milani (University of California, Irvine): “COVID-19 outbreak, social response, and early economic effects: a global VAR analysis of cross-country interdependencies”

Discussion

Domenico Depalo (Bank of Italy): “True COVID-19 mortality rates from administrative data”

Discussion

Fabrizio Patriarca (University of Modena and Reggio Emilia): “Identifying policy challenges of COVID-19 in hardly reliable data and judging the success of lockdown measures”
Co-authors: Luca Bonacini (University of Modena and Reggio Emilia); Giovanni Gallo (National Institute for Public Policies Analysis)

Discussion

Sergio Scicchitano (National Institute for Public Policies Analysis): “Working from home and income inequality: risks of a ‘new normal’ with COVID-19”
Co-authors: Luca Bonacini (University of Modena and Reggio Emilia); Giovanni Gallo (National Institute for Public Policies Analysis)

Discussion

END of the event

Issue 1/2021 of Volume 34

SPRINGER Website, Volume 34, issue 1, January 2021

LEAD ARTICLE
Štěpán Jurajda & Dejan Kovač: Names and behavior in a warREADLINK: https://rdcu.be/b9xkX

HOUSEHOLD
Lixing Li, Xiaoyu Wu & Yi Zhou: Intra-household bargaining power, surname inheritance, and human capital accumulationREADLINK: https://rdcu.be/b9xkY
Gigi Foster & Leslie S. Stratton: Does female breadwinning make partnerships less healthy or less stable?READLINK: https://rdcu.be/b9xk0

MIGRATION
Jakub Lonsky: Does immigration decrease far-right popularity? Evidence from Finnish municipalities — OPEN ACCESS: PDF
Sandra V. Rozo, Therese Anders & Steven Raphael: Deportation, crime, and victimizationREADLINK: https://rdcu.be/b9xlf
Cristina Bellés-Obrero, Nicolau Martin Bassols & Judit Vall Castello: Safety at work and immigration — OPEN ACCESS: PDF

COVID-19 (Springer presents all Covid-19 articles open accessible)
Fabio Milani: COVID-19 outbreak, social response, and early economic effects: a global VAR analysis of cross-country interdependencies — OPEN ACCESSIBLE; READLINK: https://rdcu.be/b9xlh
Domenico Depalo: True COVID-19 mortality rates from administrative data — OPEN ACCESSIBLE; READLINK: https://rdcu.be/b9xlj
Luca Bonacini, Giovanni Gallo & Fabrizio Patriarca: Identifying policy challenges of COVID-19 in hardly reliable data and judging the success of lockdown measures — OPEN ACCESSIBLE; READLINK: https://rdcu.be/b9xll
Luca Bonacini, Giovanni Gallo & Sergio Scicchitano: Working from home and income inequality: risks of a ‘new normal’ with COVID-19 — OPEN ACCESSIBLE; READLINK: https://rdcu.be/b9xln

KUZNETS PRIZE
2021 Kuznets Prize awarded to Yun Qiu, Xi Chen, and Wei Shi

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Industrialization under Medieval Conditions? Global Development after COVID-19.

A new GLO Discussion Paper makes the case that the COVID-19 pandemic may cause a permanent reduction in innovation and entrepreneurship and may even bring the 4th industrial revolution to a premature end.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 704, 2020

Industrialization under Medieval Conditions? Global Development after COVID-19 Download PDF
by
Naudé, Wim

GLO Fellow Wim Naudé

Author Abstract: Industrialization is vital for inclusive and sustainable global development. The two engines of industrialization – innovation and trade – are in danger of being compromised by the COVID-19 pandemic, under conditions increasingly reminiscent of the medieval world. It comes at a time when innovation had already been stagnating under guild-like corporate concentration and dominance, and the multilateral trade system had been buckling under pressure from a return to mercantilist ideas. The COVID-19 pandemic may cause a permanent reduction in innovation and entrepreneurship and may even bring the 4th industrial revolution (4IR) to a premature end. Hence the post-COVID-19 world may be left with trade as the only engine for industrialization for the foreseeable future. If the global community fails to fix the multilateral trade system, the world may start to resemble the Middle Ages in other, even worse, aspects.

More from the GLO Coronavirus Cluster

Featured Image: Photo-by-Adli-Wahid-on-Unsplash

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Borderline Disorder: (De facto) Historical Ethnic Borders and Contemporary Conflict in Africa

A new GLO Discussion Paper documents that in Africa both the intensive and extensive margins of contemporary conflict are higher close to historical ethnic borders.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 697, 2020

Borderline Disorder: (De facto) Historical Ethnic Borders and Contemporary Conflict in Africa Download PDF
by
Depetris-Chauvin, Emilio & Özak, Ömer

GLO Fellow Ömer Özak

Author Abstract: We explore the effect of historical ethnic borders on contemporary conflict in Africa. We document that both the intensive and extensive margins of contemporary conflict are higher close to historical ethnic borders. Exploiting variations across artificial regions within an ethnicity’s historical homeland and a theory-based instrumental variable approach, we find that regions crossed by historical ethnic borders have 27 percentage points higher probability of conflict and 7.9 percentage points higher probability of being the initial location of a conflict. We uncover several key underlying mechanisms: competition for agricultural land, population pressure, cultural similarity and weak property rights.

Featured image: Sergey Pesterev on Unsplash; Amboseli National Park Kenya

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Expanding the Measurement of Culture with a Sample of Two Billion Humans

A new GLO Discussion Paper demonstrates that massive online social networks can advance the study of human culture by providing quantitative, scalable, and high-resolution measurement of behaviorally revealed cultural values and preferences.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 696, 2020
Expanding the Measurement of Culture with a Sample of Two Billion Humans Download PDF
by
Obradovich, Nick & Özak, Ömer & Martín, Ignacio & Ortuño-Ortín, Ignacio & Awad, Edmond & Cebrián, Manuel & Cuevas, Rubén & Desmet, Klaus & Rahwan, Iyad & Cuevas, Ángel

GLO Fellow Ömer Özak

Author Abstract: Culture has played a pivotal role in human evolution. Yet, the ability of social scientists to study culture is limited by the currently available measurement instruments. Scholars of culture must regularly choose between scalable but sparse survey-based methods or restricted but rich ethnographic methods. Here, we demonstrate that massive online social networks can advance the study of human culture by providing quantitative, scalable, and high-resolution measurement of behaviorally revealed cultural values and preferences. We employ publicly available data across nearly 60,000 topic dimensions drawn from two billion Facebook users across 225 countries and territories. We first validate that cultural distances calculated from this measurement instrument correspond to traditional survey-based and objective measures of cross-national cultural differences. We then demonstrate that this expanded measure enables rich insight into the cultural landscape globally at previously impossible resolution. We analyze the importance of national borders in shaping culture, explore unique cultural markers that identify subnational population groups, and compare subnational divisiveness to gender divisiveness across countries. The global collection of massive data on human behavior provides a high-dimensional complement to traditional cultural metrics. Further, the granularity of the measure presents enormous promise to advance scholars’ understanding of additional fundamental questions in the social sciences. The measure enables detailed investigation into the geopolitical stability of countries, social cleavages within both small and large-scale human groups, the integration of migrant populations, and the disaffection of certain population groups from the political process, among myriad other potential future applications.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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School Friendship Networks, Homophily and Multiculturalism: Evidence from European Countries

A new GLO Discussion Paper finds for European countries that school friendship networks arise according to homophily along many characteristics (gender, school achievement and ethnic and cultural backgrounds).

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 695, 2020

School Friendship Networks, Homophily and Multiculturalism: Evidence from European Countries Download PDF
by
Campigotto, Nicola & Rapallini, Chiara & Rustichini, Aldo

GLO Fellow Chiara Rapallini

Author Abstract: This paper investigates the determinants of school friendship networks among adolescents, proposing a model of network formation and estimating it using a sample (CILS4EU) of about 10,000 secondary school students in four countries: England, Germany, the Netherlands and Sweden. We test the idea that networks arise according to homophily along many characteristics (gender, school achievement and ethnic and cultural backgrounds), and assess the relative importance of each factor. In addition to gender, we find that country of origin, generational status and religion predict friendship for foreign-born students. For country-born individuals, ties depend on a broader set of factors, including socioeconomic status and school achievement. In sum, homophilic preferences go considerably beyond ethnicity. Multiculturalism, which gives prominence to ethnic backgrounds, risks emphasising the differences in that dimension at the expense of affinity in others.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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