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Collective vs. family remembrance: evidence from two Russian betrayals
Gharibyan, Sinara
Is family or collective remembrance of the distant past more powerful in shaping current behavior? To answer this question, I link two historical episodes from Armenian history separated by a century. During both World War I (WWI) and the 2020 Nagorno-Karabakh War, Russia was anticipated to provide military support to Armenia, its ally, but failed to do so. I demonstrate that the memories of the first Russian betrayal were activated after the second war. I identify family memory of the first betrayal using distinct West Armenian (Ottoman Armenian) surnames and proxy collective memory through locations renamed to commemorate lost Armenian localities during WWI. The difference-in-differences (DiD) approach shows that both family and collective remembrance negatively affect pro-Russian parties’ vote share, with all the conventional assumptions of DiD verified. Family remembrance influences behavior through traumatic recall, whereas collective remembrance operates via social capital.
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Winning culture, winning future: the effects of early-career success on long-run performance
Trestcov, Ivan ; Rakhmetova, Aizhamal
This paper investigates the influence of early-career environments on long-run performance. Utilizing quasi-randomness of the NBA Draft Lottery system, we isolate the impacts of initial team success, coaching experience, and the presence of a star player during a basketball player’s debut season. Our findings underscore the significant positive effects of early team wins and experienced coaches on future player performance. Surprisingly, playing alongside a star player in the first year does not show a strong influence. This study offers insights that extend beyond sports, emphasizing the lasting effects of early professional experience and mentorship on career trajectories.
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The U.S. low-wage structure: a McWage comparison
Ashenfelter, O. ; Jurajda, Štěpán
Thanks to standardized work protocol and technology of McDonald’s restaurants, the hourly wage of McDonald’s Basic Crew enables wage comparisons under near-identical skill inputs and hedonic job conditions. McWages capture labor costs in entry-level jobs, while the Big Macs (earned) Per Hour (BMPH) index measures corresponding purchasing power of wages. We document large and growing geographical wage differences in standardized jobs using data covering most U.S. counties during 2016-2023. Before the Covid-19 pandemic, there was no BMPH growth where minimum wages stayed constant, but the pandemic wage increase, which diminished the importance of minimum wages, was stronger in these areas.
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The heterogeneous consequences of reduced labor costs on firm productivity
Del Prato, F. ; Zacchia, Paolo
We document how a reduction in labor costs led to heterogeneous effects on the total factor productivity (TFP) of manufacturing firms. Leveraging an Italian labor legislation reform and unique institutional features of the local collective bargaining system, we show that such effects vary along the TFP distribution. Relative to the counterfactual, TFP markedly declines on the left tail, which we explain via selection mechanisms, on the right, TFP mildly increases as firms are able to expand and reallocate their workforce. To guide the evaluation of welfare implications, we develop a general equilibrium model featuring firm selection and frictions in input markets.
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Forced migration and crime: evidence from the 2014 immigration wave to Russia
Shcherbov, Arsenii
Recent years have spurred significant migration movements, underscoring the need to understand their impacts. This study explores a widely-debated correlation between crime and migration. Specifically, I investigate the 2014 migration wave, studying the response of Russian crime rates to the influx of immigrants from Ukraine. I approximate local crime rates using court data on sentencing decisions and describe relevant migration flows with internet search activity. The application of the difference-in-differences method reveals positive effects for property crime sentencing and the heterogeneous response of violent crime sentencing. The findings of this study are policy-relevant and could prove beneficial in understanding and mitigating the effects of future migration waves.
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Survey expectations, adaptive learning and inflation dynamics
Rychalovska, Y. ; Slobodyan, Sergey ; Wouters, R.
The use of survey information on inflation expectations as an observable in a DSGE model can substantially refine identification of the shocks that drive inflation. Optimal integration of the survey information improves the model forecast for inflation and for other macroeconomic variables. Models with expectations based on an Adaptive Learning setup can exploit survey information more efficiently than their Rational Expectations counterparts. The resulting time-variation in the perceived inflation target, in inflation persistence, and in the sensitivity of inflation to various shocks provide a rich and consistent description of the joint dynamics of realized and expected inflation. Our framework produces a reasonable interpretation of the post-Covid inflation dynamics. Our learning model successfully identifies the more persistent nature of the recent inflation surge.
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Financial skills and search in the mortgage market
Cota, Marta ; Šterc, Ante
Are households with low financial skills disadvantaged in the mortgage market? Using stochastic record linking, we construct a unique U.S. dataset encompassing a rich set of mortgage details and borrowers’ characteristics, including their objective financial literacy measure. We find that households with low financial literacy are up to 4% more likely to search less and lock in at 15-20 b.p. higher rates. Upon origination, unskilled borrowers face a 35-45% higher mortgage delinquency and end up with a 30% lower likelihood of refinancing. Overall, for a $100,000 loan, the potential losses from low financial literacy are more than $9,329 over the mortgage duration. To understand how financial education, more accessible mortgages, or mortgage rate changes affect households with low financial literacy, we formulate and calibrate a mortgage search model with heterogeneous search frictions and endogenous financial skills. Our model estimates show that search intensity and financial skill variations contribute to 55% and 10% of mortgage rate variations, respectively. We find that i) more accessible mortgages lead to a higher delinquency risk among low-skilled households, ii) financial education mitigates the adverse effects of increased accessibility, and iii) low mortgage rates favor high-skilled homeowners and, by reinforcing refinancing activity, deepen consumption differences across different financial skill levels.
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The risks of reforming doctoral studies
Grosman, Jiří ; Jurajda, Štěpán ; Münich, Daniel
The system of financing doctoral studies in the Czech Republic has long been inefficient. A reform currently underway aims to significantly increase the efficiency of the system. In this short text, we draw attention to potential problems associated with the distribution of public financial support for doctoral studies among universities. It would be problematic to distribute support based predominantly on degree completion rates. Allocation of public support for doctoral studies should take into account the results of evaluations of the quality of science produced by universities and their success in career placement of graduates, in addition to justifiable national disciplinary priorities.
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Pupils’ (dis)interest in the teaching profession: an international comparison
Federičová, Miroslava
Many European countries, including the Czech Republic, currently face a shortage of teachers, especially quality teachers. One possible solution to this would be to support aspiring teachers at a younger age, during their studies at primary and secondary school. This study provides an empirical overview of teaching aspirations among 15-year-old school pupils in European countries based on data from the international PISA survey.
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Analysis of the 2024 state budget revenue in light of the 2019 pre-crisis year
Janský, Petr ; Kolář, Daniel
This analysis compares planned state budget revenues in 2024 with the state budget outcomes of 2019. It charts a period in which the Czech economy and public budgets have been heavily impacted by the consequences of several major crises (coronavirus, the invasion of Ukraine and the war, an energy crisis, and an inflationary wave) as well as by significant parametric changes in the Czech tax system. 2019 can be considered the last pre-crisis year and 2024 the first post-crisis year, so they correspond to 'normal times' more closely than the years in between. This analysis builds on a previous analysis of the state budget expenditure development between 2019 and 2024 and includes a brief synthesis of findings on revenues and expenditures.
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