Economics Institute

Economics Institute 931 records found  previous11 - 20nextend  jump to record: Search took 0.00 seconds. 
Human capital affects religious identity: causal evidence from Kenya
Alfonsi, L. ; Bauer, Michal ; Chytilová, Julie ; Miguel, E.
We study how human capital and economic conditions causally affect the choice of religious denomination. We utilize a longitudinal dataset monitoring the religious history of more than 5,000 Kenyans over twenty years, in tandem with a randomized experiment (deworming) that has exogenously boosted education and living standards. The main finding is that the program reduces the likelihood of membership in a Pentecostal denomination up to 20 years later when respondents are in their mid-thirties, while there is a comparable increase in membership in traditional Christian denominations. The effect is concentrated and statistically significant among a sub-group of participants who benefited most from the program in terms of increased education and income. The effects are unlikely due to increased secularization, because the program does not reduce measures of religiosity. The results help explain why the global growth of the Pentecostal movement, sometimes described a “New Reformation”, is centered in low-income communities.
Professional survey forecasts and expectations in DSGE models
Rychalovska, Y. ; Slobodyan, Sergey ; Wouters, R.
In this paper, we demonstrate the usefulness of survey data for macroeconomic analysis and propose a strategy to integrate and efficiently utilize information from surveys in the DSGE setup. We extend the set of observable variables to include the data on consumption, investment, output, and inflation expectations, as measured by the Survey of Professional Forecasters (SPF). By doing so, we aim to discipline the dynamics of model-based expectations and evaluate alternative belief models. Our approach to exploit the timely information from surveys is based on re-specification of structural shocks into persistent and transitory components. Due to the SPF, we are able to improve identification of fundamental shocks and predictive power of the model by separating the sources of low and high frequency volatility. Furthermore, we show that models with an imperfectly-rational expectation formation mechanism based on Adaptive Learning (AL) can reduce important limitations implied by the Rational Expectation (RE) hypothesis. More specifically, our models based on belief updating can better capture macroeconomic trend shifts and, as a result, achieve superior long-term predictions. In addition, the AL mechanism can produce realistic time variation in the transmission of shocks and perceived macro-economic volatility, which allows the model to better explain the investment dynamics. Finally, AL models, which relax the RE constraint of internal consistency between the agents’ and model forecasts, can reproduce the main features of agents’ predictions in line with SPF evidence and, at the same time, can generate improved model forecasts, thus diminishing possible inefficiencies present in surveys.
Secondary school admissions: a sophisticated mechanism or a big national lottery?
Protivínský, Tomáš
The spring 2023 secondary school admissions process has fully revealed the shortcomings of the established admissions system. The combination of a baby boom and a large mismatch between the structure of supply and demand, the system has left many children\nand their parents unnecessarily uncertain about secondary education. Although the vast majority of applicants eventually get into a secondary school, the mechanism in place to match applicants with schools is inefficient and inequitable. The system forces students\nand parents to strategize ways to select schools, and disadvantages children of less informed and less sophisticated parents, contributing to high inequalities in access to education over the long term. The system also generates highly skewed information on the structure of demand, which complicates management of admissions. A major change in the admissions procedure is therefore planned for spring 2024. It is expected to eliminate at least some of the main problems. Electronic application should simplify the process, and will allow pupils to apply to three schools instead of two. Prioritization of schools should then allow for automatic enrollment of those admitted. It should also minimize the chaotic second round period when pupils who are not enrolled in the first round apply for vacant places.
Do we have too many university graduates? What lifetime earnings profiles can tell us
Hrendash, Taras ; Jurajda, Štěpán ; Münich, Daniel ; Doleželová, P. ; Mrázek, P.
Since the beginning of the 21st century, the Czech Republic has experienced dynamic growth in its university-educated workforce. This trend was initially driven by the foundation and growth of private universities in the Czech Republic in the late 1990s, followed from 2005 onwards by a substantial opening-up of public universities. The share of the population aged between 30 and 34 with higher education has more than doubled over the course of three decades. From an economic perspective, do we now have too many university graduates in the Czech Republic? The answer to this question is crucial when it comes to deciding the extent to which the state should – financially or otherwise – support future growth in the numbers of university students and graduates, and how much it should encourage citizens to pursue initial or lifelong university education. The answer is also an important factor in debates about the need to increase the currently low financial support available to university students. The study we present here provides descriptive statistics about employees’ wages and salaries, which serve as a useful basis for any discussion of this important question. We compare trends in university-educated employees’ wages and salaries for cohorts born in 1960, 1970, 1980 and 1990. The shares of university graduates in these cohorts differ substantially. Further, we observe trends in the earnings ratio for these cohorts between university- and secondary-educated employees, i.e., the percentage differences between the mean or median earnings of employees with higher education and those of employees with only secondary education.
Teacher salaries in 2022 and beyond: out of the abyss and back again
Münich, Daniel ; Smolka, Vladimír
The relative amounts of teachers‘ salaries helps to define the attractiveness of entering the teaching profession and can be a component in ensuring sufficient interest in the profession. Selectivity into teaching, both at entry and throughout the career, determines the quality of education. These processes are realised in the long term through continuous entries and exits from teaching, and ongoing training during the career. Therefore, the effects of teacher salaries on interest in entering the profession, the quality of teachers' work, and ultimately a country's educational outcomes can only be tracked over the long term.
The impact of debtor distress and unemployment on support for extremist and populist political parties in the Czech Republic 2001–2017
Grossmann, Jakub ; Jurajda, Štěpán ; Zapletalová, Lucie
In this study, we analyze the relationships between rising rates of distraint orders and electoral support for populist political parties and extreme left and right wing political parties at the local level.
Social ties at work and effort choice: experimental evidence from Tanzania
Chegere, M. ; Falco, P. ; Menzel, Andreas
Many firms hire workers via social networks. Whether workers who are socially connected to their employers exert more effort on the job is an unsettled debate. We address this question through a novel experiment with small-business owners in Tanzania. Participants are paired with a worker who conducts a real-effort task, and receive a payoff that depends on the worker’s effort. Some business owners are randomly paired with workers they are socially connected with, while others are paired with strangers. With a design that is sufficiently powered to detect economically meaningful effects, we find that being socially connected to one’s employer does not affect workers’ effort.\n
Sexual-orientation discrimination and biological attributions: experimental evidence from Russia
Baghumyan, Gayane
Understanding what drives discriminatory behavior is important in order to identify the best strategy to combat it. In this study, I exogenously manipulate participants’ beliefs about the origins of sexual orientation by providing evidence that supports biological causes of homosexuality. I employ money allocation tasks to measure discrimination. This allows me to causally identify the impact of information on discriminatory behavior. I first document the prevalence of discrimination against individuals with same-sex partners in Russia. On average, roughly 54% of participants exhibit discriminatory behavior against profiles with same-sex partners by allocating 16 percentage points less money to them. Further, the results suggest that exposure to evidence on the biological causes of homosexuality negatively affects discriminatory behavior. Participants in the treatment group allocate less money to profiles with same-sex partners, relative to participants in the baseline group. Potential rationales for this behavior could include the following: (i) the provision of information that contradicts existing beliefs might cause cognitive dissonance, triggering irritation and intensifying discriminatory tendencies, (ii) the information might foster beliefs that individuals in same-sex partnerships are fundamentally ’other’ - even at a biological level - thereby widening the perceived social gap between participants and these sexual minority groups and fostering discrimination further.
The long-term impact of energy poverty and its mitigation on educational attainment: evidence from China
Martirosyan, Yervand
Existing studies demonstrate the short-run connection between environmental conditions and academic performance. However, the long-term effects of exposure to adverse living conditions on academic achievement remain underexplored. This study investigates the long-term impact of energy poverty, and policy interventions aimed at alleviating it, on the academic performance of Chinese schoolchildren starting from infancy. It specifically utilizes the Huai River Policy, which provides free winter heating exclusively to northern regions in China but not to adjacent southern regions. My findings suggest a significant positive influence of winter heating on schoolchildren’s academic performance, with a more pronounced effect for children born during winter months. The insights gained from this research could inform policy debates to enhance educational outcomes and human well-being.\n
Quantitative easing in the euro area: implications for income and wealth inequality
Stojanović, Dušan
This study examines how and to what extent quantitative easing of the ECB affects household income and wealth inequality in the euro area. Previous theoretical models have investigated the dynamics of inequality measures through differential access of households to financial/capital market (the portfolio rebalancing channel), neglecting the labor market differential (the earnings heterogeneity channel). Although the portfolio rebalancing channel may provide insight into wealth inequality and non-labor income inequality, this is not the case with labor (and thus total) income inequality. To be in line with the empirical evidence on labor income inequality, this study also considers segmented labor market on the basis of capital-skill complementarity in production and asymmetric real wage rigidities. When only financial market segmentation is considered, the quantitative results indicate a drop in total income inequality that is diminished over time, while wealth inequality experiences a rise that gradually becomes weaker. The introduction of the segmented labor market significantly mitigates the observed drop in total income inequality, while a rise in wealth inequality is largely amplified. Given the possible broadening of the ECB’s mandate towards distributional issues in the future, the analysis of segmented labor and financial markets can be more beneficial to the ECB as it provides a clearer picture of the inequality effects.

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