Center for Economic Policy Analysis (CEPA)
Refine
Has Fulltext
- yes (83)
Document Type
- Working Paper (83)
Language
- English (83)
Keywords
- experiment (13)
- communication (6)
- gender (5)
- COVID-19 (4)
- Entrepreneurship (4)
- Innovation (4)
- cartel (4)
- entrepreneurship (4)
- machine learning (4)
- E-DSGE (3)
Institute
Promoting fathers to take parental leave is seen as a promising way to advance gender equality. However, there is still a very limited understanding of its impact on fathers’ labor market outcomes. We conducted a correspondence study to analyze whether fathers who take parental leave face discrimination during the hiring process in three different occupations. Fathers who took parental leave in a female-dominated or gender-neutral occupation are not less likely to be invited to a job interview compared to fathers who did not take leave. However, in the male-dominated occupation, fathers who have taken long parental leave are penalized. Regardless of leave-taking, fathers are treated less favorably than mothers in the female-dominated and the gender-neutral occupation, while the opposite is true for the male-dominated occupation. This suggests the presence of strong gender norms concerning the perception of ideal employees in different occupations.
We build a dynamic model in which home owners decide when and how to switch to carbon-neutral heating. Agents differ with regard to carbon intensity and abatement costs, the latter being private information which is non-observable by the government. The heating-related investment model is nested in an overlapping generations Mirrlesian optimal taxation model with heterogeneous home ownership and labor productivity. We develop a compensation mechanism which guarantees a weak Pareto-improvement for every agent when aggregate benefits of climate policy exceed aggregate costs. The mechanism includes carbon pricing with category-based transfers, uniform ad-valorem subsidies on investments that are financed by public debt, and an income tax adjustment based on climate mitigation benefits, used to service debt. We show that exact compensation of homeowners’ dynamic abatement cost requires only minimal information: the interest rate and the future fossil fuel price path. By means of exact compensation, our model utilizes the income-tax system to redistribute heterogeneous transformation costs between households according to any number of normative considerations without efficiency losses. We numerically illustrate subsidy rates and income tax adjustments for Germany.
Child penalties in labour market outcomes are well-documented: after childbirth, mothers’ employment and earnings drop persistently compared to fathers. Beyond gender norms, a potential driver could be the loss in labour market skills due to mothers’ longer employment interruptions. This paper estimates child penalties in adult cognitive skills by adapting the pseudo-panel approach to a single cross-section of 29 countries in the PIAAC dataset. We find a persistent drop in numeracy skills after childbirth for both parents between 0.13 (short-run) and 0.16 standard deviations (long-run), but no statistically significant difference between mothers and fathers. Estimates of child penalties in skills strongly depend on controlling for pre-determined characteristics, especially education. Additionally, there is no evidence for worse occupational skill matches for mothers after childbirth. Our findings suggest that changes in general labour market skills cannot explain child penalties in labour market outcomes, and that a cross-sectional estimation of child penalties can be sensitive to characteristics of the outcome variable.
We investigate the long-term effects of the introduction of the German minimum wage in 2015 and its subsequent increases on regional employment. Using comprehensive survey data, we are able to measure the regional bite of the minimum wage in 2014, just before its introduction, as well as in 2018, before it was raised substantially in several steps. The introduction mainly affected the labour market in East Germany, while the minimum wage increases increasingly affected low-wage regions in West Germany, with about one third of regions changing their (binary) treatment status between 2014 and 2018. We use different specifications and extensions of the canonical difference-in-differences approach, as well as a set of new estimators that allow unbiased effect estimation with a staggered treatment adoption and heterogeneous treatment effects. Our results show a small negative effect on total dependent employment of 0.5%, driven by a significant reduction in marginal employment of 2.4%. The extended specifications suggest additional effects of the minimum wage increases, as well as stronger negative effects for those regions that were strongly affected by the minimum wage in both periods.
We analyze how conventional emissions trading schemes (ETS) can be modified by introducing “clean-up certificates” to allow for a phase of net-negative emissions. Clean-up certificates bundle the permission to emit CO2 with the obligation for its removal. We show that demand for such certificates is determined by cost-saving technological progress, the discount rate and the length of the compliance period. Introducing extra clean-up certificates into an existing ETS reduces near-term carbon prices and mitigation efforts. In contrast, substituting ETS allowances with clean-up certificates reduces cumulative emissions without depressing carbon prices or mitigation in the near term. We calibrate our model to the EU ETS and identify reforms where simultaneously (i) ambition levels rise, (ii) climate damages fall, (iii) revenues from carbon prices rise and (iv) carbon prices and aggregate mitigation cost fall. For reducing climate damages, roughly half of the issued clean-up certificates should replace conventional ETS allowances. In the context of the EU ETS, a European Carbon Central Bank could manage the implementation of cleanup certificates and could serve as an enforcement mechanism.
We study the effect of energy and transport policies on pollution in two developing country cities. We use a quantitative equilibrium model with choice of housing, energy use, residential location, transport mode, and energy technology. Pollution comes from commuting and residential energy use. The model parameters are calibrated to replicate key variables for two developing country cities, Maputo, Mozambique, and Yogyakarta, Indonesia. In the counterfactual simulations, we study how various transport and energy policies affect equilibrium pollution. Policies may be induce rebound effects from increasing residential energy use or switching to high emission modes or locations. In general, these rebound effects tend to be largest for subsidies to public transport or modern residential energy technology.
While the economic harm of cartels is caused by their price-increasing effect, sanctioning by courts rather targets at the underlying process of firms reaching a price-fixing agreement. This paper provides experimental evidence on the question whether such sanctioning meets the economic target, i.e., whether evidence of a collusive meeting of the firms and of the content of their communication reliably predicts subsequent prices. We find that already the mere mutual agreement to meet predicts a strong increase in prices. Conversely, express distancing from communication completely nullifies its otherwise price-increasing effect. Using machine learning, we show that communication only increases prices if it is very explicit about how the cartel plans to behave.
We examine how the gender of business-owners is related to the wages paid to female relative to male employees working in their firms. Using Finnish register data and employing firm fixed effects, we find that the gender pay gap is – starting from a gender pay gap of 11 to 12 percent - two to three percentage-points lower for hourly wages in female-owned firms than in male-owned firms. Results are robust to how the wage is measured, as well as to various further robustness checks. More importantly, we find substantial differences between industries. While, for instance, in the manufacturing sector, the gender of the owner plays no role for the gender pay gap, in several service sector industries, like ICT or business services, no or a negligible gender pay gap can be found, but only when firms are led by female business owners. Businesses in male ownership maintain a gender pay gap of around 10 percent also in the latter industries. With increasing firm size, the influence of the gender of the owner, however, fades. In large firms, it seems that others – firm managers – determine wages and no differences in the pay gap are observed between male- and female-owned firms.
The present paper proposes a novel approach for equilibrium selection in the infinitely repeated prisoner’s dilemma where players can communicate before choosing their strategies. This approach yields a critical discount factor that makes different predictions for cooperation than the usually considered sub-game perfect or risk dominance critical discount factors. In laboratory experiments, we find that our factor is useful for predicting cooperation. For payoff changes where the usually considered factors and our factor make different predictions, the observed cooperation is consistent with the predictions based on our factor.
In this paper, we study one channel through which communication may facilitate cooperative behavior – belief precision. In a prisoner’s dilemma experiment, we show that communication not only makes individuals more optimistic that their partner will cooperate but also increases the precision of this belief, thereby reducing strategic uncertainty. To disentangle the shift in mean beliefs from the increase in precision, we elicit beliefs and precision in a two-stage procedure and in three situations: without communication, before communication, and after communication. We find that the precision of beliefs increases during communication.
