Volume 25, Issue 3

Leveraging a unique dataset encompassing choices made by the entire universe of Italian manufacturing firms regarding a short-time work scheme (STW), we investigate the impact of the pandemic’s relative local severity on firms’ altruistic tendencies and preferences towards inequality. We use the decision to advance income support payments to workers as a measure of firm altruism and the choice concerning the concentration of STW working hours among the workforce as a gauge of inequality preferences. Adopting a natural experiment-like approach, we find that, controlling for regional and industry fixed effects, in areas more severely hit by the pandemic firms were more likely to advance the STW payment to their employees and to opt for a lower STW concentration. The effects we find are larger for firms characterized by more intense ties between entrepreneurs and workers, suggesting that the pandemic has mainly enhanced parochial pro-social behaviour.

This work uses the models that preserve the ordinal nature of data to measure the overall health inequality in UK regions before and during the pandemic and it adopts the parametric approach to measure the portion of inequalities due to circumstances. The findings show that overall health inequalities decreased within UK regions during the pandemic, while the inequality of health opportunities remains stable in both regions. The health inequality between UK regions was greater in England than in Scotland during the pandemic, while inequalities in health opportunities were greater in Scotland than in England. This work also aims at assessing whether the trends in health inequalities could be related to the different national implementation of the second lockdown policy, also looking at the heterogeneous effect by gender. The findings show that the probability of being in the highest health status categories decreases in England by 15 percentage points for women.

We examine whether politicians avoid tax increases in election years. Using a pre-analysis plan and new data from U.S. states that distinguish between when taxes are legislated and when they come into force, we find that in an election year enacted gasoline and corporate income tax increases are less likely and implemented tax changes are smaller. We do not find evidence that these election-year effects depend on balanced budget rules, term limits, the state’s liberal-conservative ideological bent, demographics, macroeconomic conditions, or on changes in overall legislative output in election years. These effects are stronger for gasoline taxes, consistent with a legislative response to the high political salience of gasoline taxes.

This paper examines whether the gender gap in skills, favoring boys in mathematics and girls in language, contributes to the gender gap in STEM choices in high school. While previous research has linked skills to educational choices, it finds little evidence that these explain the gender gap in university field of study. However, the transition to upper secondary school – especially in tracked systems – may involve different dynamics, with school performance playing a more important role. We analyze this transition in Italy, where students choose between different school types at 14. This choice is crucial for students who do not attend university and provides insights into gender segregation in the labor market at lower socio-economic levels. We show that skills influence educational choices, but among children of less educated parents do not explain the gender gap. However, ability partially mediates the gender gap among students of more advantaged backgrounds.

This paper analyzes the impact of imitation and court efficiency on firms’ licensing and litigation strategies regarding patented technologies. It examines imperfect imitation and the limitations of patent protection, which is not absolute. The findings suggest that a high-cost firm should buy a license from a low-cost firm in the same industry before pursuing imitation for a minor technological innovation when the firms compete in quantities a la Cournot. Conversely, if the innovation is substantial, licensing after imitation becomes the dominant strategy. Furthermore, whether litigation goes to trial depends on the size of the damage award and the extent to which the litigants can influence the court. Interestingly, a patent holder may benefit from choosing not to act against a highly imperfect imitation.

A large literature finds mixed evidence on the direction and magnitude of the educational return to class size. A seminal paper by Lazear (2001. “Educational Production.” Quarterly Journal of Economics 116 (3): 777–803) attempted to reconcile these disparate findings by developing a theoretical model that allowed the return to class size to vary by the level of classroom disruption. In this study, we present new evidence on this topic. Our estimates indicate that larger class sizes reduce test scores in disruptive environments but not in settings where there is little disruption. Even though we find evidence consistent with the Lazear hypothesis, the estimates are small in magnitude and suggest that marginal changes in class size are not likely to be a primary factor in explaining variation in high-school aged student success, as measured by test scores.

This study investigates the significant factor influencing widespread non-compliance with COVID-19 preventive measures in Seoul, Korea, through the analysis of spatial mobility data: the disparity between government communications and health policies, alongside the role of political orientation. The study reveals that political messages regarding quarantine success downplayed the severity of the virus, consequently hindering policy compliance during the major waves of COVID-19 in 2020–2021. Individuals with high institutional trust align their mobility behavior with the government’s messaging, increasing social activities. Additional channels come from the area’s occupation and industry characteristics, particularly in sectors with limited remote work availability.

This paper examines the impact of cost and technology asymmetry on social efficiency in a vertically related industry. If production costs for final goods are asymmetric and technology is symmetric, and if the entrant’s cost is moderate, then downstream entry is socially insufficient, regardless of whether there are economies or diseconomies of scale. Extending the analysis to asymmetric production technologies and symmetric cost, we show that the issue of socially insufficient entry persists. Thus, anti-competitive entry regulations should account for cost and technology asymmetries among competing firms.

This study analyzes the effects of carbon taxation and environmental awareness on wage inequality and economic growth. The findings reveal that a stricter carbon tax positively correlates with wage inequality and growth. When R&D firms lack complete control over the magnitude of innovation leaps, a tighter carbon tax exacerbates wage inequality while fostering income growth and green innovation. When firms fully determine their innovation leap, a stricter carbon tax reduces wage inequality and slows GDP growth. Changes in the population’s environmental awareness generate different results. When R&D firms lack complete control over innovation leaps, greater ecological awareness increases wage inequality and GDP growth, but only if green products command a higher markup. When firms fully determine innovation leaps, rising ecological awareness induces a U-shaped effect on the skill premium and an inverted U-shaped effect on the share of unskilled workers, while consistently supporting per capita GDP growth.

It has been argued in many policy circles that lack of access to credit by the poor may be a source of inefficiency in developing economies. Then, conventional wisdom may suggest that asset redistribution from the rich to the poor improves efficiency. In contrast, we develop a general equilibrium model with credit market and show that such an egalitarian redistribution of assets may indeed lead to inefficiency.

This paper examines the effect of growing up as an only child on individual psychological well-being. Using national survey data – the China Family Panel Studies (CFPS), we employ the Kessler-6 scale to measure psychological well-being. Considering family fertility decisions are made endogenously, we use the instrumental variable (IV) strategy using both regional and cohort variations generated by the One-Child Policy in China. Our results show that being an only child as a result of the One-Child Policy is associated with a higher level of psychological distress.

This study examines the spillover effects of the PROGRESA program on ineligible children’s participation in economic activities by exploiting the randomized design of the intervention and employing an instrumental variable strategy. We find that the incidence of child work among ineligible children is strongly affected by peer group’s child work decisions. We also find that peer group school attendance has a significant but smaller effect on ineligible children’s participation in economic activities. Our findings are relevant for policy makers as they show that cash transfer programs can have an indirect spillover effect on child work.

Using nationally representative data from Australia, the paper examines the relationship between time of day and cognitive performance among working-age individuals. We show that performance on cognitive tests involving fluid intelligence peaks in the afternoon, with poorer performance in the morning and evening. This time-of-day effect is most pronounced in the early afternoon and stronger for women than for men. However, there is no such evidence on an empirical link between time of day and crystallized intelligence. Overall, we show that the U-shaped profile of cognitive performance over the course of the day found in Gaggero, A., and D. Tommasi. (2023. “Time of Day and High-Stake Cognitive Assessments.” Economic Journal 133: 1407–29) for university students can be generalized to people of working age.

The workplace experienced a profound shift during the COVID-19 pandemic, in which many individuals reassessed their careers and considered leaving their jobs. However, this shift does not appear to have affected Europe, especially Luxembourg, as it did the United States. We show the share of employees actively seeking a new job actually declined in Luxembourg during the pandemic (2019–22). We argue this is likely due to relatively stable job satisfaction in the country, as well as the fact that job satisfaction is the strongest predictor of employees’ intentions to quit in Luxembourg. In particular, employees who were dissatisfied with their jobs were 22 percentage points more likely quit in 2023. We conclude with a broader discussion on the benefits of workplace well-being (including job satisfaction) and how to enhance it. Essentially, improving job quality should reduce employee resignations and lead to better workplace outcomes.

We investigate the stability of common ownership arrangements. In a duopolistic market, the owner of a firm acquires a non-controlling share in the rival firm. Then, the acquirer of the minority share considers reselling the share to an investor. Common ownership is stable and the acquirer retains part of the share when there is asymmetry in the production costs of the firms. Common ownership is more likely to be stable as the initially acquired share increases. The welfare effects of the stable common ownership scheme depend also on the cost-asymmetry.