Volume 17, Issue 2 -

We use data drawn from the National Longitudinal Survey of Youth 1979 Cohort to study the effects of leaving school in an economic downturn on sleep quality and quantity. We account for the potential endogeneity of economic conditions at school leaving using instrumental variables based on birth year and early state of residence. We find that men who leave school in an economic downturn initially experience lower quality sleep, but these men are able to experience improved sleep quality over time. Women who leave school in an economic downturn experience better sleep quality, although the effect emerges over time. We find that leaving school in an economic downturn increases sleep quantity among men and women. We document heterogeneity by work type.

The recession that started in the United States in December 2007 has had a significant impact on the Spanish economy through a large increase of the unemployment rate and the bursting of the housing and financial bubbles. We explore how the crisis and changes in the labor, housing, and financial markets might have impacted retirement patterns of Spanish men and women nearing retirement age. We find that the recession primarily reduced women’s retirement likelihood by 27%. The effect, which was associated with the labor market deterioration, as captured by higher unemployment rates, was circumscribed to women already at work, who chose to stay at work longer. In contrast, for the most part, men’s retirement likelihood did not change with the labor, housing, and financial market fluctuations. Overall, the findings suggest that working women might have prolonged their working lives to make up for lost household income.

This paper analyses the relationship between regular and irregular migration taking into account the migration network effect and the network creation mechanism. We assume that migrants can obtain a high payoff only if a critical mass of migrants is reached in the destination country. If candidates to migration receive biased signals about the economic situation of the destination country, the migrants’ decision problem can be analyzed as a standard global game. Tying the quota of regular migrants to the economic performance of countries might create large discontinuities in immigration flows, with some countries attracting the bulk of irregular migrants and the other being shunned by the migrants.

Divergent interests of bank managers and financial regulators potentially compromise the efficacy of bank rescue operations. This study empirically investigates the agency problem encountered in a capital injection program implemented in Japan. We hypothesize that the operations requirement to reduce workforce lead banks to overstate the extent of downsizing by reassigning older workers to bank subsidiaries. We implement a difference-in-differences analysis using a panel of Japanese banks from 1990 to 2010. We also employ propensity score matching to control for sample selection bias. The result shows that injected banks exhibit workforce rejuvenation relative to non-injected banks. Among injected banks, the average employee age falls by approximately 1 year, which is equivalent to a reduction of approximately seventy 65-year-old workers. On an unconsolidated basis, the number of employees in injected banks decreases as a response to the injection. However, on a consolidated basis, which accounts for subsidiary employment, the number of employees does not decrease. Our finding suggests that the Japanese practice of lifetime employment (LTE) survived, albeit in a limited form, among restructured banks.

We test whether adverse childhood experiences – exposure to parental maltreatment and its indirect effect on health – are associated with age 30 personality traits. We use rich longitudinal data from a large, representative cohort of young US Americans and exploit the differences across siblings to control for the confounding influences of shared environmental and genetic factors. We find that maltreatment experiences are significantly and robustly associated with neuroticism, conscientiousness, and openness to experience, but not with agreeableness and extraversion. High levels of neuroticism are linked to sexual abuse and neglect; low levels of conscientiousness and openness to experience are linked to parental neglect. The estimated associations are significantly reduced in magnitude when controlling for physical or mental health, suggesting that adolescent health could be one important pathway via which maltreatment affects adulthood personality. Maltreatment experiences, in combination with their health effects, explain a significant fraction of the relationship between adulthood conscientiousness and earnings or human capital. Our findings provide a possible explanation for why personality traits are important predictors of adulthood labor market outcomes.

In this paper I adapt a classic model of monopolistic competition where products are differentiated by quality, in order to study a market in which high-quality products can only be enjoyed by users with sufficient ability. Casting the model in the context of higher education – where selective colleges pledge quality by excluding low-ability students –, I show that there are two equilibrium market segmentations: one in which highly selective colleges serve high-income high-ability students, and another in which highly selective colleges are cheaper than the less selective competitors that cater to low-ability high-income students. I provide an example to illustrate the welfare implications of these two market configurations.

We consider a developing economy where multinational corporations compete with foreign and local firms in a monopolistically competitive market. The focus of our paper is on consequences of a policy mix of tariffs and foreign direct investment (FDI) tax in a developing economy. We assume all firms are technologically heterogeneous and that foreign firms are technologically superior to local firms. Central to our model is the assumption that FDI activities by multinational corporations would lead to diffusion of technology in the developing economy. We show the existence of a non-trivial equilibrium where most technologically advanced foreign firms emerge as multinationals, engage in FDI activities and this in turn leads to the diffusion of technology. We also show that trade liberalization without liberalization of foreign investment may lead to the protection of most technological backward local firms in the developing economy and such liberalization can reduce the welfare of a representative consumer.

Firms often invest resources in acquiring scientific evidence to evaluate the actual (more accurate) risk (i.e., the probability of occurrence) of any potential environmental hazards that might result from their own production processes and use this information in taking optimal preventive measures. In a symmetric duopoly where the acquired information about environmental risk is observed privately by the firms, I show that requiring firms to publicly report this information increases the strategic incentive of firms to invest in information acquisition. However, the net expected environmental damage of an investing firm is lower if there is no public disclosure.

We analyse the instantaneous relation between public spending and expenditure decentralization by means of a novel identification scheme suggested in Lewbel (2012). Our cointegration, error-correction approach indicates that expenditure decentralization impacts negatively on total public spending and most of its subcategories.