Publications
This paper develops a search and matching framework in which workers are characterized by asymmetric reference-dependent reciprocity and firms set wages by considering the effect that these can have on workers' effort and, therefore, on output. The cyclical response of effort to wage changes can considerably amplify shocks, independently of the cyclicality of the hiring wage, which becomes irrelevant for unemployment volatility, and firms' expectations of downward wage rigidity in existing jobs increases the volatility of job creation. The model is consistent with evidence on hiring and incumbents' wage cyclicality, and provides novel predictions on the dynamics of effort.
Recent papers use regression discontinuity designs (RDDs) based on age discontinuity to evaluate social assistance (SA) and unemployment insurance (UI) extension policies. Job search theory predicts that such designs generate biased estimates of the policy-relevant treatment effect. Owing to market frictions, people below the age threshold modify their search behavior in expectation of future eligibility. We use a job search model to quantify the biases on various datasets in the literature. The impacts of SA benefits on employment are underestimated, whereas those of UI extensions on nonemployment duration are overestimated. The article provides insights for RDD evaluations of age-discontinuous policies.
We expand the theory of politician quality in electoral democracies with citizen candidates by supposing that performance while in office sends a signal to the voters about the politician's valence. Individuals live two periods and decide to become candidates when young, trading off against type-specific private wages. The valence signal increases the reelection chances of high valence incumbents (screening mechanism of reelection), and thus their expected gain from running for office (self-selection mechanism). Since self-selection improves the average quality of challengers, voters become more demanding when evaluating the incumbent's performance. This complementarity between the self-selection and the screening mechanisms may lead to multiple equilibria. We show that more difficult and/or less variable political jobs increase the politicians' quality. Conversely, societies with more wage inequality have lower quality polities. We also show that incumbency advantage blurs the screening mechanism by giving incumbents an upper-hand in electoral competition and may wipe out the positive effect of the screening mechanism on the quality of the polity.
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Using data on roughly half a million cases and 10,000 judges from Pakistan and India, Mehmood et al. estimate the impact of the Ramadan fasting ritual on criminal sentencing decisions. They find that fasting increases judicial leniency and reduces reversals of decisions in higher courts. We estimate the impact of the Ramadan fasting ritual on criminal sentencing decisions in Pakistan and India from half a century of daily data. We use random case assignment and exogenous variation in fasting intensity during Ramadan due to the rotating Islamic calendar and the geographical latitude of the district courts to document the large effects of Ramadan fasting on decision-making. Our sample comprises roughly a half million cases and 10,000 judges from Pakistan and India. Ritual intensity increases Muslim judges' acquittal rates, lowers their appeal and reversal rates, and does not come at the cost of increased recidivism or heightened outgroup bias. Overall, our results indicate that the Ramadan fasting ritual followed by a billion Muslims worldwide induces more lenient decisions.
We build up a general purpose decision model to predict the choice between going to war and staying at peace for a rational decision-maker. This model articulates root causes such as the risk of future war and parameters such as potential gains in case of victory, potential losses in case of defeat, the probability of victory and the war human losses. We apply and calibrate this model to the case of German and French decision-makers at the very end of July 1914, taking into account the decisions already taken by Austria-Hungary and Russia and the uncertainty surrounding the decision of Great Britain. We assume a short war that does not last beyond 1914. Our model predicts the entry into the war of Germany and France, the argument of preventive war (going to war today rather than tomorrow) proving to be decisive for both countries, with the added benefit for France of the potential recovery of Alsace-Moselle in the event of victory. The computation reveals that of the two countries, it was France that seems to have the most interest in the war, making it possible to explain the passive behavior of the French leaders, Raymond Poincaré in the first place, who, if they did not provoke the war, did not really try to avoid it either.
Semantic Scholar extracted view of "Introduction to the special issue on new insights into economic epidemiology: Theory and policy" by R. Amir et al.
As countries and firms increasingly seek ways to strengthen the resilience of their supply chains, this paper studies the global economic costs of a decoupling of global supply chains along geopolitical lines as well as in strategic sectors. We explore not only the long-run effects but also the short-run costs stemming from rigid wages and low substitutability across factors of production and input goods. We find that, in terms of welfare losses, the costs of decoupling are roughly five times higher in the short-run compared with the long-run, while country losses are heterogeneous. A reshaping of global supply chains increases the level of consumer prices in most countries, as well as producer prices, especially for trade-intensive manufacturing sectors. Global supply chain decoupling entails also a reallocation of labour across skill levels. Finally, global trade would decrease substantially, driven by lower trade in intermediate inputs and a higher reliance of countries on domestic production.
Many studies suggest that employees of social enterprises experience greater job satisfaction than employees of for-profit organizations, although their pay and employment contracts are usually less favorable. Based on linked employer–employee data from a French survey on employment characteristics and industrial relations and using a decomposition method developed by Gelbach (2016), this paper aims to explain this somewhat paradoxical result. Focusing on work organization variables, we show that the specific work organization of social enterprises explains a large part of the observed job satisfaction differential both in general and more specifically, in terms of satisfaction with access to training and working conditions. By detailing the components of work organization, the higher job satisfaction reported by employees in social enterprises stems from their greater autonomy and better access to information. In contrast to earlier studies, however, our results show that these work organization variables do not have more value for social enterprise employees than for for-profit organization employees in the case of overall job satisfaction. This result casts doubt on the widespread hypothesis that social enterprise employees attach more weight to the nonmonetary advantages of their work than their counterparts in for-profit organizations.
