Volume 19, Issue 3 -

In the traditional Becker model of employer discrimination, discriminatory behavior arises from a utility-maximizing owner who balances firm profits against the disutility of hiring workers from the disadvantaged demographic group. However, in the modern firm, many human resource decisions are made by agents of the owner (managers) whose actions may not reflect the preferences of even profit-maximizing owners. We present a principal-agent model of discrimination with a profit-maximizing owner and a gender-discriminating manager and show that managerial discrimination is increasing with the degree of risk in the firm’s revenue stream. Empirical tests using a Colombian plant-level dataset support a prediction of our model that female workers should be under-represented in more revenue volatile firms and industries.

One out of five entering public school teachers leave the field within the first 4 years. Despite that the presence of a newborn child is the single most important determinant of exits of female teachers, retention policy recommendations rely on models that take children as predetermined. This article formulates and estimates a structural dynamic model that explicitly addresses the interdependence between fertility and labor force participation choices. The model with unobserved heterogeneity in preferences for children fits the data and produces reasonable forecasts of labor force attachment to the teaching sector. Structural estimates of the model are used to predict the effects that wage increases and reductions in the cost of childcare would have on female teachers’ employment and fertility choices. The estimates unpack important features of the interdependence of fertility and labor supply and contradict previous studies that did not consider the endogeneity between these two choices.

Why do people pay taxes? Rational choice theory has fallen short in answering this question. Another explanation, called “tax morale”, has been promoted. Tax morale captures the behavioral idea that non-monetary preferences (like norm-submission, moral emotions and moral judgments) might be better determinants of tax compliance than monetary trade-offs. Herein we report on two lab experiments designed to assess whether norm-submission, moral emotions (e.g. affective empathy, cognitive empathy, propensity to feel guilt and shame) or moral judgments (e.g. ethics principles, integrity, and moralization of everyday life) can help explain compliance behavior. Although we find statistically significant correlations of tax compliance behavior with empathy and shame, the economic significance of these correlations are low–—more than 80% of the variability in compliance remains unexplained. These results suggest that tax authorities should focus on the institutional context, rather than individual preference characteristics, to handle tax evasion.

This paper investigates how job separation and job-finding probabilities shape the non-employment risk across ages and working group characteristics. Improving on current methods, I estimate duration models for employment and non-employment separately. I then use the results to derive the individual age profiles of conditional transitions in and out of non-employment as well as the unconditional non-employment risk profile over the whole working life. This approach allows me to apply the decomposition of changes in individual non-employment risk. To date, this type of decomposition has only been used to study aggregate non-employment dynamics. I find that differences in job separation rates across ages underlie the observed age differences in non-employment risk. When differences between working groups are under consideration, the job finding probability is just as important as the job separation probability.

This paper sheds light on how labor market regulations affect the relationship between different types of innovation and employment in Latin America. We estimate the effect of process and product innovation on employment growth using Enterprise Surveys for 14 Latin American countries. We calculate the model for the whole sample and then classify countries according to the rigidness of their labor market regulations. We find that: (i) product innovations have a positive impact on employment growth; (ii) process innovations do not affect employment growth; and (iii) more rigid labor market regulations (minimum wages and severance payments) reduce the effects of innovation.

Consumers often stockpile goods to store for future consumption. The existing theoretical literature has focussed on a price-based explanation where stockpiling arises due to temporary price reductions. In contrast, this paper explores a transaction-cost-based explanation where consumers stockpile to avoid the need to incur future transaction costs. It shows how transaction costs lead to positive consumer stockpiling in an oligopoly equilibrium even when future prices are expected to fall. Relative to a no-stockpiling benchmark, such stockpiling lowers profits, but improves consumer and total welfare. Our results extend to the case of quantity discounts where stockpiling consumers pay relatively lower per-unit prices than non-stockpiling consumers, when purchasing multi-unit bundles.

This study empirically tests the effects of the introduction of copayments on healthcare utilization in the Korea’s medical aid program (MAP). Due to a growing concern about overutilization of public healthcare and government’s financial burden, the Korean government reformed the MAP in 2007 and introduced copayments for outpatient care of Type 1 enrollees who had borne no medical treatment cost until the reform. Exploiting the natural experiment of 2007 reform, we perform a difference-in-differences (DID) analysis with propensity score matching and conclude that the introduction of copayments reduces healthcare utilization in the short-run through heterogeneous effect on the outpatient services consumption distribution, but this effect rapidly disappears over time.

We investigate the relationship between self-reported importance of religion and risky behaviors in adolescence using data from a large and detailed longitudinal study of English teenagers. We use school and individual fixed effects, and treatment effects with inverse-probability-weighted regression adjustment, controlling for a rich set of characteristics, including individual personality traits. Our results show that individuals with low religiosity are more likely to engage in risky health behaviors.

Countries with varying degrees of pollution intensities, facing increasing global competition and addressing emissions from multiple pollutants may undertake policy reforms inconsistent with cooperative outcomes, where global welfare is higher. Among others, this is because of the incentives to set laxer policy to be more cost competitive. A number of welfare-enhancing and emissions-reducing policy reforms consistent with the cooperative equilibrium, but also consistent with addressing concerns about global competitiveness are derived. The analysis indicates that the nature of multiple pollutants and asymmetries in pollution intensities are key in the design of policy reform and characterization of optimal policy. With complementarity and asymmetry in pollution intensities, laxer taxation and stricter standards are consistent with welfare gains. Laxer taxation arises with large asymmetry in pollution intensities regardless of whether pollutants are complements/substitutes. The policy reform of standards requires both complementarity and asymmetry in pollution intensities. Results are reversed if pollutants are substitutes.

This paper deals with an important issue in the field of fiscal federalism, the effect of fiscal imbalances on the behaviour of sub-central governments. We provide a simple theoretical model that considers the effect of both forms of fiscal imbalances on the fiscal effort of local governments.

We study the behavioral link between NFL players’ off-field misconduct and their on-field infractions by matching a comprehensive dataset of players’ off-field arrests with detailed record of on-field penalty calls. Results from Poisson regressions indicate that players with arrest record are likewise observed to have significantly higher tendencies for aggression-related penalties, implying their inherent preferences toward risks or aggression. Such association is particularly salient among repeat offenders. We also find that repeat offenders boast stronger overall career performance and longer career span compared to non-offenders and one-time offenders, suggesting that the related behavioral traits can be instrumental to job performance in professional football.

Our analysis presents a case study on the impacts of Health Care Home (HCH) – a large-scale technology-based healthcare innovation in New Zealand’s primary healthcare system. For our analysis, we link the registered population of health practices within the Wellington region to administrative hospital admission data for quarterly periods between 2014 and 2017. By employing variation in the timing of HCH implementation across practices (selected via propensity score matching), we estimate differences-in-differences models to investigate the effects of the intervention on multiple patient outcomes. Additionally, we incorporate a number of empirical specifications to test the robustness of estimates. HCH results in a statistically significant reduction in the likelihood of emergency department (ED) presentations by 6–8 %, with no significant impacts on other health outcomes. The impact on ED presentations aligns with the expectation that the HCH intervention would produce downstream effects of a reduced economic burden on public hospital services.