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Wednesday, April 22, 2015

Gas problem

Climate Clubs: Overcoming Free-Riding in International Climate Policy

William Nordhaus
American Economic Review, April 2015, Pages 1339-1370

Abstract:
Notwithstanding great progress in scientific and economic understanding of climate change, it has proven difficult to forge international agreements because of free-riding, as seen in the defunct Kyoto Protocol. This study examines the club as a model for international climate policy. Based on economic theory and empirical modeling, it finds that without sanctions against non-participants there are no stable coalitions other than those with minimal abatement. By contrast, a regime with small trade penalties on non-participants, a Climate Club, can induce a large stable coalition with high levels of abatement.

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Environmental tipping points significantly affect the cost−benefit assessment of climate policies

Yongyang Cai et al.
Proceedings of the National Academy of Sciences, 14 April 2015, Pages 4606–4611

Abstract:
Most current cost−benefit analyses of climate change policies suggest an optimal global climate policy that is significantly less stringent than the level required to meet the internationally agreed 2 °C target. This is partly because the sum of estimated economic damage of climate change across various sectors, such as energy use and changes in agricultural production, results in only a small economic loss or even a small economic gain in the gross world product under predicted levels of climate change. However, those cost−benefit analyses rarely take account of environmental tipping points leading to abrupt and irreversible impacts on market and nonmarket goods and services, including those provided by the climate and by ecosystems. Here we show that including environmental tipping point impacts in a stochastic dynamic integrated assessment model profoundly alters cost−benefit assessment of global climate policy. The risk of a tipping point, even if it only has nonmarket impacts, could substantially increase the present optimal carbon tax. For example, a risk of only 5% loss in nonmarket goods that occurs with a 5% annual probability at 4 °C increase of the global surface temperature causes an immediate two-thirds increase in optimal carbon tax. If the tipping point also has a 5% impact on market goods, the optimal carbon tax increases by more than a factor of 3. Hence existing cost−benefit assessments of global climate policy may be significantly underestimating the needs for controlling climate change.

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Optimal Carbon Abatement in a Stochastic Equilibrium Model with Climate Change

Christoph Hambel, Holger Kraft & Eduardo Schwartz
NBER Working Paper, March 2015

Abstract:
This paper studies a dynamic stochastic general equilibrium model involving climate change. Our model allows for damages on economic growth resulting from global warming. In the calibration, we capture effects from climate change and feedback effects on the temperature dynamics. We solve for the optimal state-dependent abatement policy. In our simulations, the costs of this policy measured in terms of lost GDP growth are moderate. On the other hand, postponing abatement action could reduce the probability that the climate can be stabilized. For instance, waiting for 10 years reduces this probability from 60% to 30%. Waiting for another 10 years leads to a probability that is less than 10%. Finally, doing nothing opens the risk that temperatures might explode and economic growth decreases significantly.

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Emissions Abatement: Untangling the Impacts of the EU ETS and the Economic Crisis

Germà Bel & Stephan Joseph
Energy Economics, forthcoming

Abstract:
In this study we use historical emission data from installations under the European Union Emissions Trading System (EU ETS) to evaluate the impact of this policy on greenhouse gas emissions during the first two trading phases (2005–2012). As such the analysis seeks to disentangle two causes of emission abatement: that attributable to the EU ETS and that attributable to the economic crisis that hit the EU in 2008/09. To do so, we use a dynamic panel data approach. Our results suggest that, by far, the biggest share of abatement was attributable to the effects of the economic crisis. This finding has serious implications for future policy adjustments affecting core elements of the EU ETS, including the distribution of EU emission allowances.

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The Effect of Global Warming on Severe Thunderstorms in the United States

Jacob Seeley & David Romps
Journal of Climate, March 2015, Pages 2443–2458

Abstract:
How will warming temperatures influence thunderstorm severity? This question can be explored by using climate models to diagnose changes in large-scale convective instability (CAPE) and wind shear, conditions that are known to be conducive to the formation of severe thunderstorms. First, an ensemble of climate models from phase 5 of the Coupled Model Intercomparison Project (CMIP5) is evaluated on its ability to reproduce a radiosonde climatology of such storm-favorable conditions in the current climate’s spring and summer seasons, focusing on the contiguous United States (CONUS). Of the 11 climate models evaluated, a high-performing subset of four (GFDL CM3, GFDL-ESM2M, MRI-CGCM3, and NorESM1-M) is identified. Second, the twenty-first-century changes in the frequency of environments favorable to severe thunderstorms are calculated in these high-performing models as they are forced by the RCP4.5 and RCP8.5 emissions pathways. For the RCP8.5 scenario, the models predict consistent CONUS-mean fractional springtime increases in the range of 50%–180% by the end of the twenty-first century; for the summer, three of the four models predict increases in the range of 40%–120% and one model predicts a small decrease. This disagreement between the models is traced to divergent projections for future CAPE and boundary layer humidity in the Great Plains. This paper also explores the sensitivity of the results to the relative weight given to wind shear in determining how “favorable” a large-scale environment is for the development of severe thunderstorms, and it is found that this weighting is not the dominant source of uncertainty in projections of future thunderstorm severity.

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Joint effects of storm surge and sea-level rise on US Coasts: New economic estimates of impacts, adaptation, and benefits of mitigation policy

James Neumann et al.
Climatic Change, March 2015, Pages 337-349

Abstract:
Recent literature, the US Global Change Research Program’s National Climate Assessment, and recent events, such as Hurricane Sandy, highlight the need to take better account of both storm surge and sea-level rise (SLR) in assessing coastal risks of climate change. This study combines three models — a tropical cyclone simulation model; a storm surge model; and a model for economic impact and adaptation — to estimate the joint effects of storm surge and SLR for the US coast through 2100. The model is tested using multiple SLR scenarios, including those incorporating estimates of dynamic ice-sheet melting, two global greenhouse gas (GHG) mitigation policy scenarios, and multiple general circulation model climate sensitivities. The results illustrate that a large area of coastal land and property is at risk of damage from storm surge today; that land area and economic value at risk expands over time as seas rise and as storms become more intense; that adaptation is a cost-effective response to this risk, but residual impacts remain after adaptation measures are in place; that incorporating site-specific episodic storm surge increases national damage estimates by a factor of two relative to SLR-only estimates, with greater impact on the East and Gulf coasts; and that mitigation of GHGs contributes to significant lessening of damages. For a mid-range climate-sensitivity scenario that incorporates dynamic ice sheet melting, the approach yields national estimates of the impacts of storm surge and SLR of $990 billion through 2100 (net of adaptation, cumulative undiscounted 2005$); GHG mitigation policy reduces the impacts of the mid-range climate-sensitivity estimates by $84 to $100 billion.

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Volume loss from Antarctic ice shelves is accelerating

Fernando Paolo, Helen Fricker & Laurie Padman
Science, 17 April 2015, Pages 327-331

Abstract:
The floating ice shelves surrounding the Antarctic Ice Sheet restrain the grounded ice-sheet flow. Thinning of an ice shelf reduces this effect, leading to an increase in ice discharge to the ocean. Using eighteen years of continuous satellite radar altimeter observations we have computed decadal-scale changes in ice-shelf thickness around the Antarctic continent. Overall, average ice-shelf volume change accelerated from negligible loss at 25 ± 64 km3 per year for 1994-2003 to rapid loss of 310 ± 74 km3 per year for 2003-2012. West Antarctic losses increased by 70% in the last decade, and earlier volume gain by East Antarctic ice shelves ceased. In the Amundsen and Bellingshausen regions, some ice shelves have lost up to 18% of their thickness in less than two decades.

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Efficient use of land to meet sustainable energy needs

Rebecca Hernandez, Madison Hoffacker & Christopher Field
Nature Climate Change, April 2015, Pages 353–358

Abstract:
The deployment of renewable energy systems, such as solar energy, to achieve universal access to electricity, heat and transportation, and to mitigate climate change is arguably the most exigent challenge facing humans today. However, the goal of rapidly developing solar energy systems is complicated by land and environmental constraints, increasing uncertainty about the future of the global energy landscape. Here, we test the hypothesis that land, energy and environmental compatibility can be achieved with small- and utility-scale solar energy within existing developed areas in the state of California (USA), a global solar energy hotspot. We found that the quantity of accessible energy potentially produced from photovoltaic (PV) and concentrating solar power (CSP) within the built environment (‘compatible’) exceeds current statewide demand. We identify additional sites beyond the built environment (‘potentially compatible’) that further augment this potential. Areas for small- and utility-scale solar energy development within the built environment comprise 11,000–15,000 and 6,000 TWh yr−1 of PV and CSP generation-based potential, respectively, and could meet the state of California’s energy consumptive demand three to five times over. Solar energy within the built environment may be an overlooked opportunity for meeting sustainable energy needs in places with land and environmental constraints.

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Variability in the start, end, and length of frost-free periods across the conterminous United States during the past century

Gregory McCabe, Julio Betancourt & Song Feng
International Journal of Climatology, forthcoming

Abstract:
The timing of last spring frost dates (LSFDs), first fall frost dates (FFFDs), and frost-free period lengths (FFPLs) constrains freeze–thaw processes in hydrology, paces the annual life cycles of plants and animals, affects human food production, and influences land–atmosphere interactions, including the water and carbon cycles. Daily minimum temperature data for the conterminous United States (CONUS) from the Global Historical Climatology Network for the 1920–2012 period are used to determine LSFDs, FFFDs, and FFPLs. Analyses of trends and variability in these growing season components indicate a trend towards earlier LSFDs, later FFFDs, and longer FFPLs for most locations in the CONUS. A general change to earlier LSFDs appears to have occurred after about 1983, whereas a change to later FFFDs is most noticeable after about 1993. Comparisons of time series of LSFDs and FFFDs with well-known climate indices indicate only weak correlations for most sites.

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Agricultural Production under Climate Change: The Potential Impacts of Shifting Regional Water Balances in the United States

Elizabeth Marshall et al.
American Journal of Agricultural Economics, March 2015, Pages 568-588

Abstract:
General circulation models predict significant and accelerating changes in local patterns of precipitation and temperature during the twenty-first century. Agriculture's vulnerability to climate change will depend on both the biophysical impacts of climate change on crop yields and on the agricultural system's ability to adapt to changing production conditions. Shifts in the extent and distribution of irrigated and dryland production are a potentially important adaptation response. Farmer flexibility to adapt may be limited, however, by changes in the availability of irrigation water under future climate conditions. This study uses a suite of models to explore the biophysical and economic impacts of climate change on U.S. fieldcrop production under several potential future climate projections, and to explore the potential limits and opportunities for adaptation arising from shifting regional water balances. The study findings suggest that, while irrigation shortages attributable to climate change have varying effects on cropland use, the aggregate impacts on national production are small relative to the direct biophysical impacts of climate change on yield.

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Moving Matters: The Effect of Location on Crop Production

Jason Beddow & Philip Pardey
Journal of Economic History, March 2015, Pages 219-249

Abstract:
U.S corn output increased from 1.8 billion bushels in 1879 to 12.7 billion bushels in 2007. Concurrently, the footprint of production changed substantially. Failure to take proper account of movements means that productivity assessments likely misattribute sources of growth and climate change studies likely overestimate impacts. Our new spatial output indexes show that 16 to 21 percent of the increase in U.S. corn output over the 128 years beginning in 1879 was attributable to spatial movement in production. This long-run perspective provides historical precedent for how much agriculture might adjust to future changes in climate and technology.

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A bitter cup: Climate change profile of global production of Arabica and Robusta coffee

Christian Bunn et al.
Climatic Change, March 2015, Pages 89-101

Abstract:
Coffee has proven to be highly sensitive to climate change. Because coffee plantations have a lifespan of about thirty years, the likely effects of future climates are already a concern. Forward-looking research on adaptation is therefore in high demand across the entire supply chain. In this paper we seek to project current and future climate suitability for coffee production (Coffea arabica and Coffea canephora) on a global scale. We used machine learning algorithms to derive functions of climatic suitability from a database of geo-referenced production locations. Use of several parameter combinations enhances the robustness of our analysis. The resulting multi-model ensemble suggests that higher temperatures may reduce yields of C. arabica, while C. canephora could suffer from increasing variability of intra-seasonal temperatures. Climate change will reduce the global area suitable for coffee by about 50 % across emission scenarios. Impacts are highest at low latitudes and low altitudes. Impacts at higher altitudes and higher latitudes are still negative but less pronounced. The world’s dominant production regions in Brazil and Vietnam may experience substantial reductions in area available for coffee. Some regions in East Africa and Asia may become more suitable, but these are partially in forested areas, which could pose a challenge to mitigation efforts.

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Exceptional twentieth-century slowdown in Atlantic Ocean overturning circulation

Stefan Rahmstorf et al.
Nature Climate Change, forthcoming

Abstract:
Possible changes in Atlantic meridional overturning circulation (AMOC) provide a key source of uncertainty regarding future climate change. Maps of temperature trends over the twentieth century show a conspicuous region of cooling in the northern Atlantic. Here we present multiple lines of evidence suggesting that this cooling may be due to a reduction in the AMOC over the twentieth century and particularly after 1970. Since 1990 the AMOC seems to have partly recovered. This time evolution is consistently suggested by an AMOC index based on sea surface temperatures, by the hemispheric temperature difference, by coral-based proxies and by oceanic measurements. We discuss a possible contribution of the melting of the Greenland Ice Sheet to the slowdown. Using a multi-proxy temperature reconstruction for the AMOC index suggests that the AMOC weakness after 1975 is an unprecedented event in the past millennium (p > 0.99). Further melting of Greenland in the coming decades could contribute to further weakening of the AMOC.

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The Economic Costs of Environmental Regulation in U.S. Dairy Farming: A Directional Distance Function Approach

Eric Njuki & Boris Bravo-Ureta
American Journal of Agricultural Economics, forthcoming

Abstract:
Analyses of the costs of regulating greenhouse gas emissions from dairy production, which could be used to assess the effectiveness of alternative policy measures, is a missing link in the literature. This article addresses this gap by establishing the economic impact associated with a hypothetical greenhouse gas environmental regulatory regime across major dairy producing counties in the United States. In doing so, the article makes three important contributions to the literature. First, it develops a comprehensive pollution index based on Environmental Protection Agency methodologies, which contrasts with previous studies that rely on partial measures based only on surplus nitrogen stemming from the over-application of fertilizer. Second, the article uses a directional output distance function, an approach that has not been employed previously to evaluate polluting technologies in the U.S. dairy sector. Third, the article incorporates a four-way error approach that accounts for unobserved county heterogeneity, time-invariant persistent technical efficiency, time-varying transient technical efficiency, and a random error. The results indicate that regulating greenhouse gas emissions from dairy farming would induce a 5-percentage point increase in average technical efficiency. In addition, the economic costs of implementing this hypothetical regulatory framework exhibit significant spatial variation across counties in the United States.

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Long-term decline of the Amazon carbon sink

R.J.W. Brienen et al.
Nature, 19 March 2015, Pages 344–348

Abstract:
Atmospheric carbon dioxide records indicate that the land surface has acted as a strong global carbon sink over recent decades, with a substantial fraction of this sink probably located in the tropics, particularly in the Amazon. Nevertheless, it is unclear how the terrestrial carbon sink will evolve as climate and atmospheric composition continue to change. Here we analyse the historical evolution of the biomass dynamics of the Amazon rainforest over three decades using a distributed network of 321 plots. While this analysis confirms that Amazon forests have acted as a long-term net biomass sink, we find a long-term decreasing trend of carbon accumulation. Rates of net increase in above-ground biomass declined by one-third during the past decade compared to the 1990s. This is a consequence of growth rate increases levelling off recently, while biomass mortality persistently increased throughout, leading to a shortening of carbon residence times. Potential drivers for the mortality increase include greater climate variability, and feedbacks of faster growth on mortality, resulting in shortened tree longevity. The observed decline of the Amazon sink diverges markedly from the recent increase in terrestrial carbon uptake at the global scale, and is contrary to expectations based on models.

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Causal feedbacks in climate change

Egbert van Nes et al.
Nature Climate Change, forthcoming

Abstract:
The statistical association between temperature and greenhouse gases over glacial cycles is well documented, but causality behind this correlation remains difficult to extract directly from the data. A time lag of CO2 behind Antarctic temperature — originally thought to hint at a driving role for temperature — is absent at the last deglaciation, but recently confirmed at the last ice age inception and the end of the earlier termination II. We show that such variable time lags are typical for complex nonlinear systems such as the climate, prohibiting straightforward use of correlation lags to infer causation. However, an insight from dynamical systems theory now allows us to circumvent the classical challenges of unravelling causation from multivariate time series. We build on this insight to demonstrate directly from ice-core data that, over glacial–interglacial timescales, climate dynamics are largely driven by internal Earth system mechanisms, including a marked positive feedback effect from temperature variability on greenhouse-gas concentrations.

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The relative importance of climate change and shrub encroachment on nocturnal warming in the southwestern United States

Yufei He, Paolo D'Odorico & Stephan De Wekker
International Journal of Climatology, March 2015, Pages 475–480

Abstract:
Many regions of the world are affected by a major land cover change resulting from the encroachment of woody plants and the conversion of grasslands into shrublands. In the southwestern United States, such a change in vegetation cover has been found to increase the winter nighttime temperature, thereby contributing to a positive feedback between shrub encroachment and microclimate in areas encroached by cold-sensitive shrubs. Temperature measurements show that winter minimum temperatures are on average ∼2 K higher in shrubland than in adjacent grassland sites. It is unclear how the nighttime warming induced by shrub encroachment compares with regional climate trends. We address this question by analysing both the historical and future regional temperature trends in central New Mexico. The estimated regional increase in minimum winter temperature ranges from 1 to 4 K per century using observations and climate models. Thus, the warming resulting from shrub encroachment is equivalent to a change in regional climate over a time period of century scale, which suggests that shrub encroachment has an overall important effect on the regional climate.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, April 21, 2015

High on the agenda

The Kids Aren't Alright, But Older Adults Are: How Medical Marijuana Market Growth Impacts Adult and Adolescent Substance-Related Outcomes

Rosanna Smart
University of California Working Paper, March 2015

Abstract:
Public opinion has grown more favorable to legalizing the sale and use of cannabis; many states now have "medical marijuana" laws (MMLs), and a few have legalized commercial production and sale for non-medical purposes. Prior research examining the effects of MML adoption has largely found reassuring evidence on the consequences of such policies -- no impact on adolescent cannabis use, and large decreases in crime rates, motor vehicle fatalities, suicides, and prescription opioid overdoses for adults. However, medical marijuana regimes vary greatly, and simple comparisons of states with such laws to states without them miss that variability. Reanalysis using a more sensitive measure of MML penetration (per-capita adult medical marijuana registration rates) confirms that growth in medical marijuana market size lowers alcohol and opioid-related poisoning deaths for older adults, and lessens traffic fatalities in accidents involving older drivers. However, larger medical marijuana markets lead to increased cannabis consumption by adolescents, accompanied by increases in traffic fatalities and alcohol poisoning mortality for this age group.

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Why Are There So Few Breweries in the South?

Stephan Gohmann
Entrepreneurship Theory and Practice, forthcoming

Abstract:
Most southern states have fewer breweries per population than the rest of the country. This paper examines why. The main outcome is that in the South, the number of breweries is negatively associated with higher campaign contributions from big breweries, the number of beer distributors per capita, and the Southern Baptist adherence rate. In the non-South, these associations are insignificant or positive. The limited number of breweries in the South follows the idea of bootleggers and Baptists where those who gain economically from limited competition — large breweries and distributors — side with groups morally opposed to alcohol to keep breweries out.

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Does Prescription Drug Coverage Increase Opioid Abuse? Evidence from Medicare Part D

Rosalie Liccardo Pacula, David Powell & Erin Taylor
NBER Working Paper, April 2015

Abstract:
Opioid abuse, as measured by deaths involving opioid analgesics and substance abuse treatment admissions, has increased dramatically since 1999, including a 20% increase in opioid-related mortality between 2005 and 2006. This paper examines whether the introduction of the Medicare Prescription Drug Benefit Program (Part D) in 2006 may have contributed to the increase in prescription drug abuse by expanding access to prescription drug benefits among the elderly. We test whether opioid abuse increased not only for the population directly affected by Part D (ages 65+) but also for younger ages. We compare growth in opioid prescriptions and abuse in states with relatively large ages 65+ population shares to states with smaller elderly population shares. Using data from the Drug Enforcement Agency’s Automation of Reports and Consolidated Orders System (ARCOS), we find opioid distribution increased faster in states with a larger fraction of its population impacted by Part D. We also find that this relative increase in opioids resulted in increases in opioid-related substance abuse treatment admissions. Interestingly, these states experienced significant growth in opioid abuse among both the 65+ population and the under 65 population, though the latter was not directly impacted by the implementation of Medicare Part D. We also find that opioid-related mortality increased disproportionately in the high elderly share states, though this relationship is not statistically different from zero.

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Alcohol Use in Films and Adolescent Alcohol Use

Andrea Waylen et al.
Pediatrics, forthcoming

Objectives: To investigate whether exposure to alcohol use in films (AUFs) is associated with early alcohol use, binge drinking, and alcohol-related problems in British adolescents.

Methods: Cross-sectional study with 5163 15-year-olds from the Avon Longitudinal Study of Parents and Children in the United Kingdom. We measured adolescent exposure to AUFs, age at onset of alcohol use, and binge-drinking behavior. We adjusted for early childhood social, family and behavioral factors, adolescent tobacco use, and peer drinking.

Results: After adjustment, adolescents with the highest exposure to AUFs were 1.2 (95% confidence interval [CI]: 1.1–1.3) times more likely to have tried alcohol compared with those least exposed and 1.7 (95% CI: 1.5–2.0) times more likely to binge drink. They were 2.4 (95% CI: 1.9–3.1) times more likely to drink weekly and 2.0 (95% CI: 1.7–2.4) times more likely to have alcohol-related problems than those least exposed.

Conclusions: Exposure to AUFs is associated with higher risk of alcohol use and alcohol-related problems in UK adolescents. Our findings provide evidence to support the argument that a review of film-rating categories and alcohol ratings for all films may help reduce problem-related alcohol consumption in young people.

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Decreases in adolescent weekly alcohol use in Europe and North America: Evidence from 28 countries from 2002 to 2010

Margaretha de Looze et al.
European Journal of Public Health, April 2015, Pages 69-72

Background: This study examined trends in adolescent weekly alcohol use between 2002 and 2010 in 28 European and North American countries.

Methods: Analyses were based on data from 11-, 13- and 15-year-old adolescents who participated in the Health Behaviour in School-Aged Children (HBSC) study in 2002, 2006 and 2010.

Results: Weekly alcohol use declined in 20 of 28 countries and in all geographic regions, from 12.1 to 6.1% in Anglo-Saxon countries, 11.4 to 7.8% in Western Europe, 9.3 to 4.1% in Northern Europe and 16.3 to 9.9% in Southern Europe. Even in Eastern Europe, where a stable trend was observed between 2002 and 2006, weekly alcohol use declined between 2006 and 2010 from 12.3 to 10.1%. The decline was evident in all gender and age subgroups.

Conclusions: These consistent trends may be attributable to increased awareness of the harmful effects of alcohol for adolescent development and the implementation of associated prevention efforts, or changes in social norms and conditions. Although the declining trend was remarkably similar across countries, prevalence rates still differed considerably across countries.

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Bidirectional Associations Between Alcohol Use and Sexual Risk-Taking Behavior from Adolescence into Young Adulthood

Ross O’Hara & Lynne Cooper
Archives of Sexual Behavior, May 2015, Pages 857-871

Abstract:
Overwhelming evidence indicates that sexual risk-taking behavior and alcohol use are linked, but the nature, strength, and timing of these relations may differ between gender and racial subgroups. These issues were addressed by examining the course and interrelations of both behaviors from adolescence into young adulthood, as well as how these patterns differed between both men and women and between Blacks and Whites. Data came from a representative, community-based sample of 1867 urban participants surveyed up to 5 times over a 15-year period. Although both prospective and trajectory analyses showed that adolescent involvement in one behavior predicted later involvement in the other, most patterns were moderated by gender, race, or both. In general, positive, bidirectional associations were discovered among men and Whites. Among women, adolescent sexual risk-taking behavior positively predicted later drinking, but not vice versa. For Blacks, adolescent alcohol use was inconsistently related to later sexual risk-taking behavior, and adolescent sexual risk-taking negatively predicted later alcohol use. Results suggest that associations between sexual risk-taking behavior and alcohol use are more complex than previously thought and that an adequate understanding of these links must account for both gender and racial differences.

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Behavioral Responses to Taxation: Cigarette Taxes and Food Stamp Take-Up

Kyle Rozema & Nicolas Ziebarth
Cornell University Working Paper, March 2015

Abstract:
This paper investigates a previously unexplored behavioral response to taxation: whether smokers compensate for higher cigarette taxes by enrolling in food stamps. First, we show theoretically that increases in cigarette taxes can induce food stamp take-up of non-enrolled, eligible smoking households. Then, we study the theoretical predictions empirically by exploiting between and within-household variation in food stamp enrollment from the Current Population Survey as well as data from the Consumer Expenditure Survey. The empirical evidence strongly supports the model predictions. Higher cigarette taxes increase the probability that low-income smoking households take-up food stamps.

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The Highs That Bind: School Context, Social Status and Marijuana Use

Matt Vogel et al.
Journal of Youth and Adolescence, May 2015, Pages 1153-1164

Abstract:
Substance use has been closely linked with the structural characteristics of adolescent social networks. Those who drink, smoke, and use drugs typically enjoy an elevated status among their peers. Rates of substance use vary substantially across schools, and indicators of school structure and climate account for at least part of this variation. Emerging research suggests peer-group processes are contingent on school context, but questions remain regarding the school-level mechanisms which condition the influence of network characteristics on substance use. The present study uses multilevel logistic regression models to examine the moderating influence of school connectedness, school drug culture, and global network density on the association between peer network status and marijuana use. The analyses draw on self, peer, and parental data from a sample of 7,548 high-school aged youth nested within 106 schools participating in the National Longitudinal Study of Adolescent to Adult Health (mean age = 15.2; % white = 59 %; male = 45 %). The results indicate that school connectedness significantly reduces the effect of social status on marijuana use. This provides evidence that school-level mechanisms can reduce the instrumentality of marijuana consumption in the status attainment process in adolescence.

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What Can the Brain Teach Us about Winemaking? An fMRI Study of Alcohol Level Preferences

Ram Frost et al.
PLoS ONE, March 2015

Abstract:
Over the last few decades, wine makers have been producing wines with a higher alcohol content, assuming that they are more appreciated by consumers. To test this hypothesis, we used functional magnetic imaging to compare reactions of human subjects to different types of wine, focusing on brain regions critical for flavor processing and food reward. Participants were presented with carefully matched pairs of high- and low-alcohol content red wines, without informing them of any of the wine attributes. Contrary to expectation, significantly greater activation was found for low-alcohol than for high-alcohol content wines in brain regions that are sensitive to taste intensity, including the insula as well as the cerebellum. Wines were closely matched for all physical attributes except for alcohol content, thus we interpret the preferential response to the low-alcohol content wines as arising from top-down modulation due to the low alcohol content wines inducing greater attentional exploration of aromas and flavours. The findings raise intriguing possibilities for objectively testing hypotheses regarding methods of producing a highly complex product such as wine.

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The Impact of Marijuana Decriminalization on California Drivers

Robin Pollini et al.
Drug and Alcohol Dependence, May 2015, Pages 135–140

Background: The liberalization of marijuana laws has led to concerns that such changes will increase “drugged driving” and crash-related mortality. California decriminalized marijuana effective January 1, 2011; we examine the impact of this change on marijuana-involved driving.

Methods: We used laboratory testing from roadside surveys and the Fatality Analysis Reporting System (FARS) to assess impacts on weekend nighttime drivers and fatally injured drivers, respectively. We calculated marijuana prevalence (measured by laboratory-confirmed delta-9-tetrahydrocannabinol [THC] in roadside surveys and cannabinoids in FARS) and compared corresponding 95% confidence intervals (CI) to identify statistically significant changes post-decriminalization. We also conducted multiple logistic regression analyses to determine whether the odds of marijuana-involved driving increased significantly after controlling for potential confounders.

Results: There was no statistically significant change in the prevalence of THC-positive driving among weekend nighttime drivers (n = 894) in 2012 (9.2%; 95% CI: 6.3, 12.2) compared to 2010 (11.3%; 95% CI: 8.5, 14.0) or in the adjusted odds of testing positive for THC (adjusted odds ratio [AOR] = 0.96; 95% CI: 0.57, 1.60). In contrast, we found a statistically significant increase in the prevalence of cannabinoids among fatally injured drivers in 2012 (17.8%; 95% CI: 14.6, 20.9) compared to the pre-decriminalization period 2008-2010 (11.8%; 95% CI: 10.3, 13.3). The adjusted odds of testing positive for cannabinoids were also significantly higher in 2012 (AOR = 1.67; 95% CI: 1.28, 2.18).

Conclusions: Our study generated discrepant findings regarding the impact of decriminalization on marijuana-involved driving in California. Factors that may have contributed to these findings, particularly methodological factors, are discussed.

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'High' Achievers? Cannabis Access and Academic Performance

Olivier Marie & Ulf Zölitz
London School of Economics Working Paper, March 2015

Abstract:
This paper investigates how legal cannabis access affects student performance. Identification comes from an exceptional policy introduced in the city of Maastricht which discriminated legal access based on individuals' nationality. We apply a difference-in-difference approach using administrative panel data on over 54,000 course grades of local students enrolled at Maastricht University before and during the partial cannabis prohibition.We find that the academic performance of students who are no longer legally permitted to buy cannabis increases substantially. Grade improvements are driven by younger students, and the effects are stronger for women and low performers. In line with how THC consumption affects cognitive functioning, we find that performance gains are larger for courses that require more numerical/mathematical skills. We investigate the underlying channels using students' course evaluations and present suggestive evidence that performance gains are driven by improved understanding of material rather than changes in students' study effort.

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A tale of two urbanicities: Adolescent alcohol and cigarette consumption in high and low-poverty urban neighborhoods

Brennan Davis & Sonya Grier
Journal of Business Research, forthcoming

Abstract:
Urbanicity encompasses the different aspects of living in an urban area. While past research treats urban areas as homogeneous, this research employs an empirical study to show how intra-urban differences by poverty are associated with cigarette and alcohol consumption by adolescents. Results demonstrate that for higher poverty adolescents, those living in urban versus less urban areas consume significantly more alcohol and cigarettes. At the same time, for wealthier adolescents, those living in urban versus less urban areas consume significantly fewer of those items. The results are mediated by convenience store density, contributing to our understanding of the relationship between urban environments, specific area characteristics and problem consumption among adolescents. The results suggest that it might be useful to consider new ways of understanding problem consumption by studying distinct aspects of urbanicity related to the retail environment.

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The roles of outlet density and norms in alcohol use disorder

Jennifer Ahern, Laura Balzer & Sandro Galea
Drug and Alcohol Dependence, forthcoming

Background: Alcohol outlet density and norms shape alcohol consumption. However, due to analytic challenges we do not know: (a) if alcohol outlet density and norms also shape alcohol use disorder, and (b) whether they act in combination to shape disorder.

Methods: We applied a new targeted minimum loss-based estimator for rare outcomes (rTMLE) to a general population sample from New York City (n = 4000) to examine the separate and combined relations of neighborhood alcohol outlet density and norms around drunkenness with alcohol use disorder. Alcohol use disorder was assessed using the World Mental Health Comprehensive International Diagnostic Interview (WMH-CIDI) alcohol module. Confounders included demographic and socioeconomic characteristics, as well as history of drinking prior to residence in the current neighborhood.

Results: Alcohol use disorder prevalence was 1.78%. We found a marginal risk difference for alcohol outlet density of 0.88% (95% CI 0.00%-1.77%), and for norms of 2.05% (95% CI 0.89%-3.21%), adjusted for confounders. While each exposure had a substantial relation with alcohol use disorder, there was no evidence of additive interaction between the exposures.

Conclusions: Results indicate that the neighborhood environment shapes alcohol use disorder. Despite the lack of additive interaction, each exposure had a substantial relation with alcohol use disorder and our findings suggest that alteration of outlet density and norms together would likely be more effective than either one alone. Important next steps include development and testing of multi-component intervention approaches aiming to modify alcohol outlet density and norms towards reducing alcohol use disorder.

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Extraversion and the Rewarding Effects of Alcohol in a Social Context

Catharine Fairbairn et al.
Journal of Abnormal Psychology, forthcoming

Abstract:
The personality trait of extraversion has been linked to problematic drinking patterns. Researchers have long hypothesized that such associations are attributable to increased alcohol-reward sensitivity among extraverted individuals, and surveys suggest that individuals high in extraversion gain greater mood enhancement from alcohol than those low in extraversion. Surprisingly, however, alcohol administration studies have not found individuals high in extraversion to experience enhanced mood following alcohol consumption. Of note, prior studies have examined extraverted participants — individuals who self-identify as being highly social — consuming alcohol in isolation. In the present research, we used a group drinking paradigm to examine whether individuals high in extraversion gained greater reward from alcohol than did those low in extraversion and, further, whether a particular social mechanism (partners’ Duchenne smiling) might underlie alcohol reward sensitivity among extraverted individuals. Social drinkers (n = 720) consumed a moderate dose of alcohol, placebo, or control beverage in groups of 3 over the course of 36 min. This social interaction was video-recorded, and Duchenne smiling was coded using the Facial Action Coding System. Results indicated that participants high in extraversion reported significantly more mood enhancement from alcohol than did those low in extraversion. Further, mediated moderation analyses focusing on Duchenne smiling of group members indicated that social processes fully and uniquely accounted for alcohol reward-sensitivity among individuals high in extraversion. Results provide initial experimental evidence that individuals high in extraversion experience increased mood-enhancement from alcohol and further highlight the importance of considering social processes in the etiology of alcohol use disorder.

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The Intended and Unintended Consequences of a Legal Measure to Cut the Flow of Illegal Cigarettes Into New York City: The Case of the South Bronx

Marin Kurti, Klaus von Lampe & Jacqueline Johnson
American Journal of Public Health, April 2015, Pages 750-756

Objectives: We examined the impact of a change in New York tax law on the numbers of untaxed cigarettes bootlegged from Native American reservations and resold in the South Bronx.

Methods: Discarded cigarette packs were systematically collected in 30 randomized South Bronx census tracks before and after the amended tax law went into effect in 2011. Also, administrative data were gathered on the number of taxed cigarettes sold in New York State, including sales to Native American reservations.

Results: Before the tax amendment, 42% of discarded cigarette packs collected in the South Bronx had no tax stamp. After the tax law went into effect, the percentage of cigarette packs without tax stamps declined to 6.2%. Simultaneously, the percentage of packs with out-of-state tax stamps rose from 18.3% to 66.3%. The percentage of packs with a combined New York State and New York City tax stamp did not change after the tax amendment.

Conclusions: After the tax amendment, the supply of contraband cigarettes appears to have quickly shifted from one lower-priced jurisdiction to another without a change in the overall prevalence of contraband cigarettes.

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Women’s Drinking Decisions in Sexually Risky Situations: Effects of a Low Level of Intoxication

Nora Noel et al.
Addictive Behaviors, August 2015, Pages 61–65

Introduction: Alcohol administration studies assessing alcohol’s deleterious effects on women’s threat perception and response in potential sexual assault situations usually employ a moderate to high dose (.07% BAC or more) and measure alcohol’s effects specifically on women’s sexual decisions. The current study used a low dose (.03%, equivalent to about 1–2 drinks) to assess women’s projected decisions on a different risky behavior: decisions to continue drinking and to drink higher amounts in a series of ecologically-valid sexual risk situations.

Methods: Young adult women (n = 17; M age = 21.8, sd = 1.3, range 21–25) participated in a three-session double-blind within subjects 2 (type of scenario) X 3( beverage) experiment, responding each time to 6 vignettes with an attractive man who was either Familiar or had Just Met her. In each session participants consumed a beverage (alcohol, placebo or water, random order) and projected emotional reactions and drinking decisions (likelihood and amount) in each of the 6 scenarios.

Results: Regardless of beverage, women predicted greater happiness, drinking likelihood, and drinking amount with “Familiar” men. However, there was also an interaction: They projected increased subsequent amounts in the .03% BAC (vs. water and placebo) condition differentially in the “Familiar” scenarios.

Conclusion: When the woman is Familiar with the man in a risky sexual situation, just one drink may increase subsequent projected alcohol amount over that originally intended. Implications include a low dose as a possible prime for more drinking, increasing sexual assault risk.

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The relationship between cannabis involvement and suicidal thoughts and behaviors

M.J. Delforterie et al.
Drug and Alcohol Dependence, May 2015, Pages 98–104

Background: In the present study, we examined the relationship between cannabis involvement and suicidal ideation (SI), plan and attempt, differentiating the latter into planned and unplanned attempt, taking into account other substance involvement and psychopathology.

Methods: We used two community-based twin samples from the Australian Twin Registry, including 9,583 individuals (58.5% female, aged between 27 and 40). The Semi-Structured Assessment of the Genetics of Alcoholism (SSAGA) was used to assess cannabis involvement which was categorized into: (0) no cannabis use (reference category); (1) cannabis use only; (2) 1-2 cannabis use disorder symptoms; (3) 3 or more symptoms. Separate multinomial logistic regression analyses were conducted for SI and suicide attempt with or without a plan. Twin analyses examined the genetic overlap between cannabis involvement and SI.

Results: All levels of cannabis involvement were related to SI, regardless of duration (Odds ratios [ORs] = 1.28–2.00, p < 0.01). Cannabis use and endorsing ≥3 symptoms were associated with unplanned (SANP; ORs = 1.95 and 2.51 respectively, p < 0.05), but not planned suicide attempts (p > 0.10). Associations persisted even after controlling for other psychiatric disorders and substance involvement. Overlapping genetic (rG = 0.45) and environmental (rE = 0.21) were responsible for the covariance between cannabis involvement and SI.

Conclusions: Cannabis involvement is associated, albeit modestly, with SI and unplanned suicide attempts. Such attempts are difficult to prevent and their association with cannabis use and cannabis use disorder symptoms requires further study, including in different samples and with additional attention to confounders.

By KEVIN LEWIS | 09:00:00 AM

Monday, April 20, 2015

It's your job

Creative Destruction and Subjective Wellbeing

Philippe Aghion et al.
NBER Working Paper, April 2015

Abstract:
In this paper we analyze the relationship between turnover-driven growth and subjective wellbeing, using cross-sectional MSA level US data. We find that the effect of creative destruction on wellbeing is (i) unambiguously positive if we control for MSA-level unemployment, less so if we do not; (ii) more positive on future wellbeing than on current well-being; (iii) more positive in MSAs with faster growing industries or with industries that are less prone to outsourcing; (iv) more positive in MSAs within states with more generous unemployment insurance policies.

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Declining Desire to Work and Downward Trends in Unemployment and Participation

Regis Barnichon & Andrew Figura
Federal Reserve Working Paper, March 2015

Abstract:
The US labor market has witnessed two apparently unrelated trends in the last 30 years: a decline in unemployment between the early 1980s and the early 2000s, and a decline in labor force participation since the early 2000s. We show that a substantial factor behind both trends is a decline in desire to work among individuals outside the labor force, with a particularly strong decline during the second half of the 90s. A decline in desire to work lowers both the unemployment rate and the participation rate, because a nonparticipant who wants to work has a high probability to join the unemployment pool in the future, while a nonparticipant who does not want to work has a low probability to ever enter the labor force. We use cross-sectional variation to estimate a model of nonparticipants' propensity to want a job, and we find that changes in the provision of welfare and social insurance, possibly linked to the mid-90s welfare reforms, explain about 50 percent of the decline in desire to work.

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Why are American Workers getting Poorer? China, Trade and Offshoring

Avraham Ebenstein, Ann Harrison & Margaret McMillan
NBER Working Paper, March 2015

Abstract:
We suggest that the impact of globalization on wages has been missed because its effects must be captured by analyzing occupational exposure to globalization. In this paper, we extend our previous work to include recent years (2003-2008), a period of increasing import penetration, China's entry into the WTO, and growing US multinational employment abroad. We find significant effects of globalization, with offshoring to low wage countries and imports both associated with wage declines for US workers. We present evidence that globalization has led to the reallocation of workers away from high wage manufacturing jobs into other sectors and other occupations, with large declines in wages among workers who switch, explaining the large differences between industry and occupational analyses. While other research has focused primarily on China's trade, we find that offshoring to China has also contributed to wage declines among US workers. However, the role of trade is quantitatively much more important. We also explore the impact of trade and offshoring on labor force participation rates. While offshoring to China has a negative impact on US labor force participation, other factors such as increasing computer use and substitution of capital for labor are significantly more important determinants of US employment rates across occupations.

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Leadership Activities and Future Earnings: Is There a Causal Relation?

Ozkan Eren & Serkan Ozbeklik
Journal of Human Capital, Spring 2015, Pages 45-63

Abstract:
This paper revisits the effect of high school leadership activities on young men's earnings. Using several data sets and extending a recently developed econometric technique, we show that even a small amount of selection on unobservables explains the entire high school leadership effect on earnings. We also show that the use of observables to address nonrandom selection bias may yield misleading results if the fixed effects are not dealt with properly.

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Robots Are Us: Some Economics of Human Replacement

Seth Benzell et al.
NBER Working Paper, February 2015

Abstract:
Will smart machines replace humans like the internal combustion engine replaced horses? If so, can putting people out of work, or at least out of good work, also put the economy out of business? Our model says yes. Under the right conditions, more supply produces, over time, less demand as the smart machines undermine their customer base. Highly tailored skill- and generation-specific redistribution policies can keep smart machines from immiserating humanity. But blunt policies, such as mandating open-source technology, can make matters worse.

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Is temporary employment a cause or consequence of poor mental health? A panel data analysis

Chris Dawson et al.
Social Science & Medicine, June 2015, Pages 50-58

Abstract:
Mental health status has an association with labour market outcomes. If people in temporary employment have poorer mental health than those in permanent employment then it is consistent with two mutually inclusive possibilities: temporary employment generates adverse mental health effects and/or individuals with poorer mental health select into temporary from permanent employment. We apply regression analyses to longitudinal data corresponding to about 50,000 observations across 8,000 individuals between 1991 and 2008 drawn from the British Household Panel Survey. We find that permanent employees who will be in temporary employment in the future have poorer mental health than those who never become temporarily employed. We also reveal that this relationship is mediated by greater job dissatisfaction. Overall, these results suggest that permanent workers with poor mental health appear to select into temporary employment thus signalling that prior cross section studies may overestimate the influence of employment type on mental health.

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Firm Leverage and Unemployment during the Great Recession

Xavier Giroud & Holger Mueller
NBER Working Paper, April 2015

Abstract:
We argue that firms' balance sheets were instrumental in the propagation of shocks during the Great Recession. Using establishment-level data, we show that firms that tightened their debt capacity in the run-up ("high-leverage firms") exhibit a significantly larger decline in employment in response to household demand shocks than firms that freed up debt capacity ("low-leverage firms"). In fact, all of the job losses associated with falling house prices during the Great Recession are concentrated among establishments of high-leverage firms. At the county level, we find that counties with a larger fraction of establishments belonging to high-leverage firms exhibit a significantly larger decline in employment in response to household demand shocks. Thus, firms' balance sheets also matter for aggregate employment.

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Explaining the Public-Sector Pay Gap: The Role of Skill and College Major

Max Schanzenbach
Journal of Human Capital, Spring 2015, Pages 1-44

Abstract:
This paper reassesses the public-sector pay gap using AFQT score and college major as measures of skill. Among the college educated, there is strong evidence that those with lower skills enter the public sector. In contrast to the private sector, for college-educated public-sector workers, AFQT score is not correlated with pay, and college major is only weakly predictive of pay. Furthermore, simple controls for college major explain most of the public-private-sector pay gap. I conclude that the public-sector pay gap is much smaller than previously estimated and pay rigidities cause significant skill-based selection between the sectors.

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The Recent Decline of Single Quarter Jobs

Henry Hyatt & James Spletzer
U.S. Census Bureau Working Paper, January 2015

Abstract:
Rates of hiring and job separation fell by as much as a third in the U.S. between the late 1990s and the early 2010s. Half of this decline is associated with the declining incidence of jobs that start and end in the same calendar quarter, employment events that we call "single quarter jobs." We investigate this unique subset of jobs and its decline using matched employer-employee data for the years 1996-2012. We characterize the worker demographics and employer characteristics of single quarter jobs, and demonstrate that changes over time in workforce and employer composition explain little of the decline in these jobs.We find that the decline in these jobs accounts for about a third of the decline in the fraction of the population that holds a job in the private sector that occurred from the mid -2000s to the early 2010s. We also find little evidence that single quarter jobs are stepping stones into longer-term employment. Finally, we show that the inclusion or exclusion of these single quarter jobs creates divergent trends in average earnings and the dispersion of earnings for the years 1996-2012. To the extent that administrative records measure the volatile tail of the employment distribution better than conventional household surveys, these findings show that measurement of short duration jobs matters for economic analysis.

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Creating a More Quit-Friendly National Workforce? Individual Layoff History and Voluntary Turnover

Paul Davis, Charlie Trevor & Jie Feng
Journal of Applied Psychology, forthcoming

Abstract:
Although Bureau of Labor Statistics data reveal that U.S. employers laid off over 30 million employees since 1994, virtually no research has addressed the behavior of layoff victims upon reemployment. In a first step, we investigate how layoffs shape voluntary turnover behavior in subsequent jobs. Utilizing a recently developed fixed effects specification of survival analysis, we find that a layoff history is positively associated with quit behavior. This effect is partially mediated by underemployment and job satisfaction in the postlayoff job. The remaining direct effect is consistent with the notion that layoffs produce a psychological spillover to postlayoff employment, which then manifests in quit behavior. We also find that layoff effects on turnover attenuate as an individual's layoffs accumulate and vary in magnitude according to the turnover "path" followed by the leaver.

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Aggregate Demand, Idle Time, and Unemployment

Pascal Michaillat & Emmanuel Saez
Quarterly Journal of Economics, forthcoming

Abstract:
This paper develops a model of unemployment fluctuations. The model keeps the architecture of the general-disequilibrium model of Barro and Grossman (1971) but takes a matching approach to the labor and product markets instead of a disequilibrium approach. On the product and labor markets, both price and tightness adjust to equalize supply and demand. Since there are two equilibrium variables but only one equilibrium condition on each market, a price mechanism is needed to select an equilibrium. We focus on two polar mechanisms: fixed prices and competitive prices. When prices are fixed, aggregate demand affects unemployment: with a higher aggregate demand, firms find more customers; this reduces the idle time of their employees and thus increases their labor demand; and this reduces unemployment. We combine the predictions of the model and empirical measures of product market tightness, labor market tightness, output, and employment to assess the sources of labor market fluctuations in the US. First, we find that product market tightness and labor market tightness fluctuate a lot, which implies that the fixed-price equilibrium describes the data better than the competitive-price equilibrium. Next, we find that labor market tightness and employment are positively correlated, which suggests that the labor market fluctuations are mostly due to labor demand shocks and not to labor supply or mismatch shocks. Last, we find that product market tightness and output are positively correlated, which suggests that the labor demand shocks mostly reflect aggregate demand shocks and not technology shocks.

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Minimum Wage Channels of Adjustment

Barry Hirsch, Bruce Kaufman & Tetyana Zelenska
Industrial Relations, April 2015, Pages 199-239

Abstract:
We analyze the effects of minimum wage increases in 2007-2009 using a sample of restaurants from Georgia and Alabama. Store-level payroll records provide precise measures of compliance costs. We examine multiple adjustment channels. Exploiting variation in compliance costs across restaurants, we find employment and hours responses to be variable and in most cases statistically insignificant. Channels of adjustment to wage increases and to changes in nonlabor costs include prices, profits, wage compression, turnover, and performance standards.

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Agglomeration, Urban Wage Premiums, and College Majors

Shimeng Liu
University of Southern California Working Paper, April 2015

Abstract:
The aim of this paper is to examine the manner and extent to which worker skill type affects agglomeration economies that contribute to productivity in cities. I use college majors to proxy for skill types among workers with a Bachelor's degree. Workers with college training in information-oriented and technical fields (e.g. STEM areas such as Engineering, Physical Sciences, and Economics) are associated with economically important within-field agglomeration economies and also generate sizeable spillovers for workers in other fields. In contrast, within-field and across-field spillovers for workers with college training in the arts and humanities are much smaller and often non-existent. While previous research suggests proximity to college-educated workers enhances productivity, these findings suggest that not all college educated workers are alike. Instead, positive spillover effects appear to derive mostly from proximity to workers with college training in information-oriented and technical fields.

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The Importance of Unemployment Insurance as an Automatic Stabilizer

Marco Di Maggio & Amir Kermani
Columbia University Working Paper, March 2015

Abstract:
We assess the extent to which unemployment insurance (UI) mitigates the economy's sensitivity to shocks by working as an automatic stabilizer. Using a local labor market design based on the heterogeneity in UI generosity across regions (as defined as the percentage of household income recovered by the UI benefit), we estimate that a one standard deviation increase in UI generosity attenuates the effect of negative shocks on employment growth by 20% and on earning growth by 25%. Consistent with the hypothesis that the local demand channel is driving these results, we find that consumption is less responsive to local labor demand shocks in counties with more generous UI. Moreover, the average wage growth of employed workers is less elastic to local labor shocks when UI is more generous. Our results show that the local fiscal multiplier of UI expenditure is approximately 2. Overall, our results suggest that UI has a beneficial effect on the economy by decreasing the sensitivity of real economic activity to shocks.

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Out of Work and Into School: Labor Market Policies and College Enrollment During the Great Recession

Andrew Barr & Sarah Turner
Journal of Public Economics, April 2015, Pages 63-73

Abstract:
The Great Recession brought large increases in unemployment and college enrollment; we examine how the combination of changing state labor market conditions and state-specific variation in Unemployment Insurance (UI) interact to affect enrollment outcomes. We identify a substantial role of the UI program in affecting post-secondary enrollment choices. We provide some of the first evidence that the duration of UI affects a displaced individual's propensity to enroll, and suggestive evidence that these effects are larger in states with more inclusive approved training laws. These findings identify a substantial overlap between UI policy and post-secondary enrollment decisions, indicating the potential importance of UI in not only providing income but also facilitating investments in skills.

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Veterans' Labor Force Participation: What Role Does the VA's Disability Compensation Program Play?

Courtney Coile, Mark Duggan & Audrey Guo
NBER Working Paper, February 2015

Abstract:
We explore trends over time in the labor force participation of veterans and non-veterans and investigate whether these patterns are consistent with a rising role for the Veterans' Affairs Disability Compensation (DC) program, which pays benefits to veterans with service-connected disabilities and has grown rapidly since 2000. Using 35 years of March CPS data, we find that veterans' labor force participation declined over time in a way that coincides closely with DC growth and that veterans have become more sensitive to economic shocks. Our findings suggest that DC program growth has contributed to recent declines in veterans' labor force participation.

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The transition from college to work during the great recession: Employment, financial, and identity challenges

Pamela Aronson, Thomas Callahan & Timothy Davis
Journal of Youth Studies, forthcoming

Abstract:
This study examines the challenges that recent college graduates face in a hard-hit US region during the Great Recession. In their poignant and sometimes heartbreaking perceptions of their 'biggest challenges,' graduates vividly illustrate the negative implications of degree completion during the recession. Based on an analysis of both closed and open-ended survey data of Michigan's 2012 graduates, we find that women and first generation college graduates fare the worst in terms of their employment status, debt and income levels, and subjective assessments of job opportunities and financial stress. In contrast, men, especially those whose parents have at least a bachelor's degree, were more likely than their counterparts to report that their 'biggest challenge' since graduation was linked with making the transition into adult roles. Taken together, these findings suggest widespread difficulty after graduating from college during the Great Recession, and the ways in which these difficulties are linked with gender and class inequalities.

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Engineering an incentive to search for work: A comparison groups approach

Oded Stark, Marcin Jakubek & Martyna Kobus
Economics Letters, July 2015, Pages 1-4

Abstract:
Social comparisons are important in the employment sphere. A "culture of unemployment" may evolve and prevail because it is optimal for an individual to remain unemployed when other unemployed individuals constitute his main reference group. We advance the idea that by making the receipt of unemployment benefits conditional on engagement in an incentive-enhancing activity (for example, work under state-sponsored employment schemes or participation in work-site-based training programs), a government can engineer a revision of the reference groups of an unemployed individual in order to induce him to seek work.

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Entrepreneurship, Information, and Growth

Devin Bunten et al.
Journal of Regional Science, forthcoming

Abstract:
We examine the contribution to economic growth of entrepreneurial marketplace information within a regional endogenous growth framework. Entrepreneurs are posited to provide an input to economic growth through the information revealed by their successes and failures. We empirically identify this information source with the regional variation in establishment births and deaths. To account for the potential endogeneity caused by forward-looking entrepreneurs, we utilize instruments based on historic mining activity. We find that the information spillover component of local establishment birth and death rates have significant positive effects on subsequent entrepreneurship and employment growth for U.S. counties and metropolitan areas.

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The stature of the self-employed and its relation with earnings and satisfaction

Cornelius Rietveld, Jolanda Hessels & Peter van der Zwan
Economics & Human Biology, April 2015, Pages 59-74

Abstract:
Taller individuals have on average a higher socio-economic status than shorter individuals. In countries where entrepreneurs have high social status, we may therefore expect that entrepreneurs are taller than wage workers. Using data from the German Socio-Economic Panel (2002-2012), we find that a 1 cm increase in an individual's height raises the probability of being self-employed (the most common proxy for entrepreneurship) versus paid employed by 0.15 percentage points. Within the self-employed, the probability of being an employer is increased by 0.10 percentage points as a result of a 1 cm increase in height, whereas this increase is 0.05 percentage points for an own-account worker. This result corroborates the higher social status of employers compared to own-account workers. We find a height premium in earnings for self-employed and paid-employed individuals: an additional 1 cm in height is associated with a 0.39% increase in hourly earnings for paid employees and a 0.52% increase for self-employed individuals. Our analysis reveals that approximately one third of the height premium in earnings is explained by differences in educational attainment. We also establish the existence of a height premium in terms of work and life satisfaction, which is more pronounced for paid employees than for self-employed individuals.

By KEVIN LEWIS | 09:00:00 AM

Sunday, April 19, 2015

A long time ago

Agricultural Transition and the Adoption of Primitive Technology

James Ang
Economic Inquiry, forthcoming

Abstract:
This paper tests Jared Diamond's influential theory that an earlier transition from a hunter-gatherer society to agricultural production induces higher levels of technology adoption. Using a proxy for the geographic diffusion barriers of Neolithic technology and an index of biogeographic endowments to isolate the exogenous component of the timing of agricultural transition, the findings indicate that countries that experienced earlier transitions to agriculture were subsequently more capable of adopting new technologies in 1000 BC, 1 AD, and 1500 AD. These results lend strong support to Diamond's hypothesis.

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Climate shocks, dynastic cycles and nomadic conquests: Evidence from historical China

Qiang Chen
Oxford Economic Papers, April 2015, Pages 185-204

Abstract:
Nomadic conquests have helped shape world history, yet we know little about why they occurred. Using a unique climate and dynastic data set from historical China dating from 221 BCE, this study finds that the likelihood of nomadic conquest increases with less rainfall proxied by drought disasters, which drove pastoral nomads to attack agrarian Chinese for survival. Moreover, consistent with the dynastic cycle hypothesis, the likelihood of China being conquered increases with the number of years earlier that a Chinese dynasty had been established (and hence was weaker, on average) relative to a rival nomadic regime. These results survive a variety of robustness checks.

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A recent bottleneck of Y chromosome diversity coincides with a global change in culture

Monika Karmin et al.
Genome Research, April 2015, Pages 459-466

Abstract:
It is commonly thought that human genetic diversity in non-African populations was shaped primarily by an out-of-Africa dispersal 50-100 thousand yr ago (kya). Here, we present a study of 456 geographically diverse high-coverage Y chromosome sequences, including 299 newly reported samples. Applying ancient DNA calibration, we date the Y-chromosomal most recent common ancestor (MRCA) in Africa at 254 (95% CI 192-307) kya and detect a cluster of major non-African founder haplogroups in a narrow time interval at 47-52 kya, consistent with a rapid initial colonization model of Eurasia and Oceania after the out-of-Africa bottleneck. In contrast to demographic reconstructions based on mtDNA, we infer a second strong bottleneck in Y-chromosome lineages dating to the last 10 ky. We hypothesize that this bottleneck is caused by cultural changes affecting variance of reproductive success among males.

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Lithic Landscapes: Early Human Impact from Stone Tool Production on the Central Saharan Environment

Robert Foley & Marta Mirazón Lahr
PLoS ONE, March 2015

Abstract:
Humans have had a major impact on the environment. This has been particularly intense in the last millennium but has been noticeable since the development of food production and the associated higher population densities in the last 10,000 years. The use of fire and over-exploitation of large mammals has also been recognized as having an effect on the world's ecology, going back perhaps 100,000 years or more. Here we report on an earlier anthropogenic environmental change. The use of stone tools, which dates back over 2.5 million years, and the subsequent evolution of a technologically-dependent lineage required the exploitation of very large quantities of rock. However, measures of the impact of hominin stone exploitation are rare and inherently difficult. The Messak Settafet, a sandstone massif in the Central Sahara (Libya), is littered with Pleistocene stone tools on an unprecedented scale and is, in effect, a man-made landscape. Surveys showed that parts of the Messak Settafet have as much as 75 lithics per square metre and that this fractured debris is a dominant element of the environment. The type of stone tools - Acheulean and Middle Stone Age - indicates that extensive stone tool manufacture occurred over the last half million years or more. The lithic-strewn pavement created by this ancient stone tool manufacture possibly represents the earliest human environmental impact at a landscape scale and is an example of anthropogenic change. The nature of the lithics and inferred age may suggest that hominins other than modern humans were capable of unintentionally modifying their environment. The scale of debris also indicates the significance of stone as a critical resource for hominins and so provides insights into a novel evolutionary ecology.

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The fine-scale genetic structure of the British population

Stephen Leslie et al.
Nature, 19 March 2015, Pages 309-314

Abstract:
Fine-scale genetic variation between human populations is interesting as a signature of historical demographic events and because of its potential for confounding disease studies. We use haplotype-based statistical methods to analyse genome-wide single nucleotide polymorphism (SNP) data from a carefully chosen geographically diverse sample of 2,039 individuals from the United Kingdom. This reveals a rich and detailed pattern of genetic differentiation with remarkable concordance between genetic clusters and geography. The regional genetic differentiation and differing patterns of shared ancestry with 6,209 individuals from across Europe carry clear signals of historical demographic events. We estimate the genetic contribution to southeastern England from Anglo-Saxon migrations to be under half, and identify the regions not carrying genetic material from these migrations. We suggest significant pre-Roman but post-Mesolithic movement into southeastern England from continental Europe, and show that in non-Saxon parts of the United Kingdom, there exist genetically differentiated subgroups rather than a general 'Celtic' population.

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Upper Palaeolithic ritualistic cannibalism at Gough's Cave (Somerset, UK): The human remains from head to toe

Silvia Bello et al.
Journal of Human Evolution, forthcoming

Abstract:
A recurring theme of late Upper Palaeolithic Magdalenian human bone assemblages is the remarkable rarity of primary burials and the common occurrence of highly-fragmentary human remains mixed with occupation waste at many sites. One of the most extensive Magdalenian human bone assemblages comes from Gough's Cave, a sizeable limestone cave set in Cheddar Gorge (Somerset), UK. After its discovery in the 1880s, the site was developed as a show cave and largely emptied of sediment, at times with minimal archaeological supervision. Some of the last surviving remnants of sediment within the cave were excavated between 1986 and 1992. The excavations uncovered intensively-processed human bones intermingled with abundant butchered large mammal remains and a diverse range of flint, bone, antler, and ivory artefacts. New ultrafiltrated radiocarbon determinations demonstrate that the Upper Palaeolithic human remains were deposited over a very short period of time, possibly during a series of seasonal occupations, about 14,700 years BP (before present). The human remains have been the subject of several taphonomic studies, culminating in a detailed reanalysis of the cranial remains that showed they had been carefully modified to make skull-cups. Our present analysis of the postcrania has identified a far greater degree of human modification than recorded in earlier studies. We identify extensive evidence for defleshing, disarticulation, chewing, crushing of spongy bone, and the cracking of bones to extract marrow. The presence of human tooth marks on many of the postcranial bones provides incontrovertible evidence for cannibalism. In a wider context, the treatment of the human corpses and the manufacture and use of skull-cups at Gough Cave have parallels with other Magdalenian sites in central and western Europe. This suggests that cannibalism during the Magdalenian was part of a customary mortuary practice that combined intensive processing and consumption of the bodies with ritual use of skull-cups.

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Tracing the genetic origin of Europe's first farmers reveals insights into their social organization

Anna Szécsényi-Nagy et al.
Proceedings of the Royal Society: Biological Sciences, 22 April 2015

Abstract:
Farming was established in Central Europe by the Linearbandkeramik culture (LBK), a well-investigated archaeological horizon, which emerged in the Carpathian Basin, in today's Hungary. However, the genetic background of the LBK genesis is yet unclear. Here we present 9 Y chromosomal and 84 mitochondrial DNA profiles from Mesolithic, Neolithic Starčevo and LBK sites (seventh/sixth millennia BC) from the Carpathian Basin and southeastern Europe. We detect genetic continuity of both maternal and paternal elements during the initial spread of agriculture, and confirm the substantial genetic impact of early southeastern European and Carpathian Basin farming cultures on Central European populations of the sixth-fourth millennia BC. Comprehensive Y chromosomal and mitochondrial DNA population genetic analyses demonstrate a clear affinity of the early farmers to the modern Near East and Caucasus, tracing the expansion from that region through southeastern Europe and the Carpathian Basin into Central Europe. However, our results also reveal contrasting patterns for male and female genetic diversity in the European Neolithic, suggesting a system of patrilineal descent and patrilocal residential rules among the early farmers.

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Late Pleistocene horse and camel hunting at the southern margin of the ice-free corridor: Reassessing the age of Wally's Beach, Canada

Michael Waters et al.
Proceedings of the National Academy of Sciences, 7 April 2015, Pages 4263-4267

Abstract:
The only certain evidence for prehistoric human hunting of horse and camel in North America occurs at the Wally's Beach site, Canada. Here, the butchered remains of seven horses and one camel are associated with 29 nondiagnostic lithic artifacts. Twenty-seven new radiocarbon ages on the bones of these animals revise the age of these kill and butchering localities to 13,300 calibrated y B.P. The tight chronological clustering of the eight kill localities at Wally's Beach indicates these animals were killed over a short period. Human hunting of horse and camel in Canada, coupled with mammoth, mastodon, sloth, and gomphothere hunting documented at other sites from 14,800-12,700 calibrated y B.P., show that 6 of the 36 genera of megafauna that went extinct by approximately 12,700 calibrated y B.P. were hunted by humans. This study shows the importance of accurate geochronology, without which significant discoveries will go unrecognized and the empirical data used to build models explaining the peopling of the Americas and Pleistocene extinctions will be in error.

By KEVIN LEWIS | 09:00:00 AM

Saturday, April 18, 2015

The right person

A Critical Test of the Assumption That Men Prefer Conformist Women and Women Prefer Nonconformist Men

Matthew Hornsey et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
Five studies tested the common assumption that women prefer nonconformist men as romantic partners, whereas men prefer conformist women. Studies 1 and 2 showed that both men and women preferred nonconformist romantic partners, but women overestimated the extent to which men prefer conformist partners. In Study 3, participants ostensibly in a small-group interaction showed preferences for nonconformist opposite-sex targets, a pattern that was particularly evident when men evaluated women. Dating success was greater the more nonconformist the sample was (Study 4), and perceptions of nonconformity in an ex-partner were associated with greater love and attraction toward that partner (Study 5). On the minority of occasions in which effects were moderated by gender, it was in the reverse direction to the traditional wisdom: Conformity was more associated with dating success among men. The studies contradict the notion that men disproportionately prefer conformist women.

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Mate Choice Preferences in an Intergroup Context: Evidence for a Sexual Coercion Threat-Management System among Women

Melissa McDonald et al.
Evolution and Human Behavior, forthcoming

Abstract:
Given the importance of reproductive choice in female mating strategies, women may be equipped with a threat-management system that functions to protect reproductive choice by avoiding individuals and situations that have historically posed an increased threat of sexual coercion. Previous research suggests that bias against outgroup men may be one consequence of such a system, resulting from an evolutionary history of intergroup conflict in which women were often at increased risk of sexual assault from outgroup men. We provide a critical extension to this literature by demonstrating that the output of this system is not limited to attitudinal biases, but extends to behavioral decisions regarding dating, particularly among women for whom threats to reproductive choice are most costly and perceived to be most likely. Participants received an unsolicited dating request made by an ingroup or outgroup member, with group boundaries manipulated in a minimal-group paradigm. Consistent with predictions, women self-appraised as vulnerable to sexual coercion were less likely to agree to date requests from outgroup members, but not ingroup members, during the fertile period of the menstrual cycle. Our findings are consistent with the notion that women possess a psychological system that functions to protect reproductive choice by avoiding individuals that historically posed an increased threat of sexual coercion, and that this system may be calibrated to be most strongly activated among women who both appraise themselves as vulnerable and for whom threats to reproductive choice are most costly.

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Should have known better: The impact of mating experience and the desire for marriage upon attraction to the narcissistic personality

Carrie Haslam & Tamara Montrose
Personality and Individual Differences, August 2015, Pages 188-192

Abstract:
Narcissistic males do not make good romantic partners. Narcissistic males lack commitment, engage in manipulative game-playing and are unfaithful. Despite this, they are still desired by females. Females value different traits in short-term and long-term partners. Previous mate sampling experience is also important to facilitate mate assessment. This study aimed to determine whether amongst young adult heterosexual females; their mate sampling experience and desire for marriage influenced their attraction to narcissistic personality traits in a potential mate. British females aged 18-28 provided information on past mating experience, future desire for marriage and rated their agreement with 20 statements relating to the extent that they found narcissistic personality traits attractive in a potential mate. Females with greater mating experience and those desiring marriage were more attracted to the narcissistic male personality. The narcissistic personality, whilst having many negative qualities, possesses qualities associated with status and resource provision. These traits are desirable in short and long-term mating contexts. Despite future long-term mating desires which are unlikely to be achieved with a narcissistic male and possession of substantial mate sampling experience, females view the narcissistic male as a suitable partner: a testament to the success of the narcissistic personality in facilitating short-term mating.

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Physical strength and dance attractiveness: Further evidence for an association in men, but not in women

Bettina Weege et al.
American Journal of Human Biology, forthcoming

Objectives: Physical strength provides information about male quality and can be assessed from facial and body morphology. Research on perception of dance movements indicates that body movement also provides information about male physical strength. These relationships have not been investigated for women.

Methods: We investigated relationships of handgrip strength (HGS) and dance attractiveness perception in 75 men and 84 women.

Results: We identified positive relationships between HGS and opposite-sex assessments of dance attractiveness for men but not women.

Conclusions: The replication of previous research investigating relationships between dance attractiveness and physical strength in men corroborates the hypothesis that dance movements provide information about male quality. We argue that these relationships are interpretable in contexts of inter- and intra-sexual selection.

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Are sexually permissive individuals more victimized and socially isolated?

Zhana Vrangalova & Rachel Bukberg
Personal Relationships, forthcoming

Abstract:
Sexually permissive individuals are judged harshly by others, yet little research has examined whether these individuals themselves feel more victimized and socially isolated. Among 810 undergraduates (74% females; 38% non-White; ages 18-23), linear, logistic, and negative binomial regressions indicated that, after controlling for demographics, higher numbers of lifetime casual sex partners predicted (a) more relational aggression experiences and sexual behavior-based prejudice, but (b) less loneliness, greater likelihood of having a best friend, and higher numbers of close friends, acquaintances, and relatives. Controlling for extraversion rendered most isolation, but not victimization, links nonsignificant. There were few sex differences. Results suggest a complex relation between permissiveness, victimization, and isolation, indicating resiliency among permissive individuals in the face of adversity.

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Testosterone-to-Estradiol Ratio is Associated with Female Facial Attractiveness

Fabian Probst, Cora Bobst & Janek Lobmaier
Quarterly Journal of Experimental Psychology, forthcoming

Abstract:
The relationship between facial shape and attractiveness has been extensively studied, yet few studies have investigated the underlying biological factors of an attractive face. Many researchers have proposed a link between female attractiveness and sex hormones, but there is little empirical evidence in support this assumption. In the present study we investigated the relationship between circulating sex hormones and attractiveness. We created prototypes by separately averaging photographs of 15 women with high and low levels of testosterone, estradiol, and testosterone-to-estradiol ratio levels, respectively. An independent set of facial images was then shape transformed toward these prototypes. We paired the resulting images in such a way that one face depicted a female with high hormone level and the other a low hormone level. Fifty participants were asked to choose the more attractive face of each pair. We found that low testosterone-to-estradiol ratio and low testosterone were positively associated with female facial attractiveness. There was no preference for faces with high estradiol levels. In an additional experiment with 36 participants we confirmed that a low testosterone-to-estradiol ratio plays a larger role than low testosterone alone. These results provide empirical evidence that an attractive female face is shaped by interacting effects of testosterone and estradiol.

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Individual differences in dispositional mindfulness and initial romantic attraction: A speed dating experiment

Philip Janz, Christopher Pepping & Kim Halford
Personality and Individual Differences, August 2015, Pages 14-19

Abstract:
Initial romantic attraction has important implications for the development of romantic relationships. Much research demonstrates that physical attractiveness predicts initial romantic attraction. However, less is known about the influence of individual difference characteristics on initial romantic attraction. Here we examined whether dispositional mindfulness predicted initial romantic attraction beyond the effects of physical attractiveness in a speed-dating experiment. Women were more attracted to men higher in dispositional mindfulness, beyond the effects of physical attractiveness. Men were more attracted to women who were more physically attractive, but female mindfulness did not influence male initial attraction. This is the first study to examine the role of dispositional mindfulness in predicting initial romantic attraction.

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Can Persistence Hunting Signal Male Quality? A Test Considering Digit Ratio in Endurance Athletes

Daniel Longman, Jonathan Wells & Jay Stock
PLoS ONE, April 2015

Abstract:
Various theories have been posed to explain the fitness payoffs of hunting success among hunter-gatherers. 'Having' theories refer to the acquisition of resources, and include the direct provisioning hypothesis. In contrast, 'getting' theories concern the signalling of male resourcefulness and other desirable traits, such as athleticism and intelligence, via hunting prowess. We investigated the association between androgenisation and endurance running ability as a potential signalling mechanism, whereby running prowess, vital for persistence hunting, might be used as a reliable signal of male reproductive fitness by females. Digit ratio (2D:4D) was used as a proxy for prenatal androgenisation in 439 males and 103 females, while a half marathon race (21km), representing a distance/duration comparable with that of persistence hunting, was used to assess running ability. Digit ratio was significantly and positively correlated with half-marathon time in males (right hand: r = 0.45, p<0.001; left hand: r = 0.42, p<0.001) and females (right hand: r = 0.26, p<0.01; left hand: r = 0.23, p = 0.02). Sex-interaction analysis showed that this correlation was significantly stronger in males than females, suggesting that androgenisation may have experienced stronger selective pressure from endurance running in males. As digit ratio has previously been shown to predict reproductive success, our results are consistent with the hypothesis that endurance running ability may signal reproductive potential in males, through its association with prenatal androgen exposure. However, further work is required to establish whether and how females respond to this signalling for fitness.

By KEVIN LEWIS | 09:00:00 AM

Friday, April 17, 2015

The right side

Winning the victim status can open conflicting groups to reconciliation: Evidence from the Israeli-Palestinian Conflict

Ilanit SimanTov-Nachlieli, Nurit Shnabel & Samer Halabi
European Journal of Social Psychology, March 2015, Pages 139–145

Abstract:
Members of conflicting groups often engage in ‘competitive victimhood’, that is, they are motivated to gain acknowledgment that their ingroup is the conflict's ‘true’ victim. The present study found that compared with a control group, Israeli Jews and Palestinians reassured that their ingroup had won the victim status showed increased willingness to reconcile with the outgroup and held less pessimistic, fatalistic views of the conflict. Moreover, for members of the stronger party — Israeli Jews — winning the victim status also led to increased group efficacy and consequent readiness to take action toward resolution. These findings extend previous theorizing about the positive effects of addressing group members' need for acknowledgement of their victimization.

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Running for your life, in context: Are rightists always less likely to consider fleeing their country when fearing future events?

Ruthie Pliskin, Gal Sheppes & Eran Halperin
Journal of Experimental Social Psychology, forthcoming

Abstract:
Fear is a powerful motivator for the classic fight or flight response. Under extreme social and political circumstances, fear may lead people to emigrate from their land to protect themselves and their families. While ideology is related to differences in behavioral fear reactivity, little is known about how it moderates the effect of fear on flight intentions. In a large experimental study (N = 243), we examined our hypothesis that this moderating effect is context-dependent, such that the context's relation to the ideology determines its influence. In ideologically-irrelevant contexts, because rightists (versus leftists) are assumed to be more behaviorally reactive to fear, their willingness to consider flight should be more affected. In ideologically-relevant intergroup contexts, however, rightist ideology provides clear reaction guidelines ruling out flight, and therefore fear should have a weaker effect on rightists’ (versus leftists') flight tendencies. Our findings supported these predictions, and their significance is discussed.

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Conservatives report, but liberals display, greater happiness

Sean Wojcik et al.
Science, 13 March 2015, Pages 1243-1246

Abstract:
Research suggesting that political conservatives are happier than political liberals has relied exclusively on self-report measures of subjective well-being. We show that this finding is fully mediated by conservatives’ self-enhancing style of self-report (study 1; N = 1433) and then describe three studies drawing from “big data” sources to assess liberal-conservative differences in happiness-related behavior (studies 2 to 4; N = 4936). Relative to conservatives, liberals more frequently used positive emotional language in their speech and smiled more intensely and genuinely in photographs. Our results were consistent across large samples of online survey takers, U.S. politicians, Twitter users, and LinkedIn users. Our findings illustrate the nuanced relationship between political ideology, self-enhancement, and happiness and illuminate the contradictory ways that happiness differences can manifest across behavior and self-reports.

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The politics of time: Conservatives differentially reference the past and liberals differentially reference the future

Michael Robinson et al.
Journal of Applied Social Psychology, forthcoming

Abstract:
Conservatives are thought to favor certainty and value tradition (suggesting a focus on the past), whereas liberals are thought to favor change (suggesting a focus on the future), even when it is associated with some degree of uncertainty. On this basis, two studies contrasted references to the past versus the future in language usage. Study 1 analyzed 600 texts from conservative and liberal websites. After adjusting for normative differences, a cross-over interaction was obtained: Conservative posts referenced the past to a greater extent than the future and liberal posts referenced the future more than the past. A conceptually parallel cross-over interaction was obtained in Study 2, which analyzed 145 State of the Union addresses. The temporal orientation of conservatives and liberals, then, appears qualitatively different.

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Ideological Structure and Consistency in the Age of Polarization

Caitlin Jewitt & Paul Goren
American Politics Research, forthcoming

Abstract:
Decades of research establish that political elites hold more ideologically consistent and structured policy preferences than ordinary citizens. Since the late 1970s, American politics, at the elite level, has become increasingly polarized and changes in the news media have made it easier for citizens to find news catering to their ideological tastes. We capitalize on these developments to examine whether ideologically engaged citizens – those who hold strong ideological identities, who are politically informed, and who participate actively in public affairs – match elites in ideological consistency and structure during the age of polarization. We test this hypothesis by applying correlation and measurement modeling techniques to data from multiple National Election Study and Convention Delegate Study surveys. We find that (a) ideologically engaged masses hold more tightly organized opinions than the less engaged every year, but lagged elites by a wide margin in 1980; (b) convention delegates manifest impressive levels of consistency every year; (c) by 1992 engaged citizens had caught up to political elites; and (d) ideological consistency increased substantially over time in the mass public, but only among the most ideologically engaged.

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Constituents of political cognition: Race, party politics, and the alliance detection system

David Pietraszewski et al.
Cognition, July 2015, Pages 24–39

Abstract:
Research suggests that the mind contains a set of adaptations for detecting alliances: an alliance detection system, which monitors for, encodes, and stores alliance information and then modifies the activation of stored alliance categories according to how likely they will predict behavior within a particular social interaction. Previous studies have established the activation of this system when exposed to explicit competition or cooperation between individuals. In the current studies we examine if shared political opinions produce these same effects. In particular, (1) if participants will spontaneously categorize individuals according to the parties they support, even when explicit cooperation and antagonism are absent, and (2) if party support is sufficiently powerful to decrease participants’ categorization by an orthogonal but typically-diagnostic alliance cue (in this case the target’s race). Evidence was found for both: Participants spontaneously and implicitly kept track of who supported which party, and when party cross-cut race — such that the race of targets was not predictive of party support — categorization by race was dramatically reduced. To verify that these results reflected the operation of a cognitive system for modifying the activation of alliance categories, and not just socially-relevant categories in general, an identical set of studies was also conducted with in which party was either crossed with sex or age (neither of which is predicted to be primarily an alliance category). As predicted, categorization by party occurred to the same degree, and there was no reduction in either categorization by sex or by age. All effects were replicated across two sets of between-subjects conditions. These studies provide the first direct empirical evidence that party politics engages the mind’s systems for detecting alliances and establish two important social categorization phenomena: (1) that categorization by age is, like sex, not affected by alliance information and (2) that political contexts can reduce the degree to which individuals are represented in terms of their race.

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Expressive Partisanship: Campaign Involvement, Political Emotion, and Partisan Identity

Leonie Huddy, Lilliana Mason & Lene Aarøe
American Political Science Review, February 2015, Pages 1-17

Abstract:
Party identification is central to the study of American political behavior, yet there remains disagreement over whether it is largely instrumental or expressive in nature. We draw on social identity theory to develop the expressive model and conduct four studies to compare it to an instrumental explanation of campaign involvement. We find strong support for the expressive model: a multi-item partisan identity scale better accounts for campaign activity than a strong stance on subjectively important policy issues, the strength of ideological self-placement, or a measure of ideological identity. A series of experiments underscore the power of partisan identity to generate action-oriented emotions that drive campaign activity. Strongly identified partisans feel angrier than weaker partisans when threatened with electoral loss and more positive when reassured of victory. In contrast, those who hold a strong and ideologically consistent position on issues are no more aroused emotionally than others by party threats or reassurances. In addition, threat and reassurance to the party's status arouse greater anger and enthusiasm among partisans than does a threatened loss or victory on central policy issues. Our findings underscore the power of an expressive partisan identity to drive campaign involvement and generate strong emotional reactions to ongoing campaign events.

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The Political Context of Science in the United States: Public Acceptance of Evidence-Based Policy and Science Funding

Gordon Gauchat
Social Forces, forthcoming

Abstract:
In recent years, professional science organizations in the United States, including the National Research Council, National Institutes of Health, and National Science Foundation, have expressed concern about waning policy influence, declining government funding, and the growing politicization of science. Given this background, a number of theoretical questions motivate this study. First, what is the political context of scientific authority in the contemporary United States? More specifically, how can we best understand the association between political ideology and public perceptions of science in the current polarized environment? Using data from the National Science Foundation's Survey of Public Attitudes Toward and Understanding of Science and Technology (2006–2012), this study finds that the American public is culturally and politically divided in its support for the intersection of science and the state. Various models of political and cultural polarization are tested. Overall, ideological challenges to the cultural authority of science cannot be reduced to left-right political polarization or to conservative religious beliefs. Instead, skepticism on the political right is multifold, involving distinct modes of thought and concerns about the institutional ties between science and the state.

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Seeking politically compatible neighbors? The role of neighborhood partisan composition in residential sorting

James Gimpel & Iris Hui
Political Geography, forthcoming

Abstract:
High rates of internal migration throughout the United States offer opportunities to examine the factors underlying residential selection and neighborhood choice. We devise a survey experiment where respondents are shown photographs of properties and information about the local socioeconomic environment. By providing and varying additional information about the neighborhood partisan composition, our survey experiment explores how political information affects property evaluation. We find that the same property will be evaluated more favorably by partisans when they learn that it is situated in a predominantly co-partisan neighborhood. A second experiment examines how people make judgments about neighborhood partisan composition in the absence of readily available information. We learn that correct inferences about the politics of a locale can be drawn from non-political information about it, even without exposure to direct information about its partisan balance.

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Recession Resonance: How Evangelical Megachurch Pastors Promoted Fiscal Conservatism in the Aftermath of the 2008 Financial Crash

Stephanie Martin
Rhetoric & Public Affairs, Spring 2015, Pages 39-77

Abstract:
Jesus often spoke about the Christian obligation to provide for the poor. Yet, public opinion polls and scholarly studies consistently find that conservative Protestant voters favor economic policies of low taxes, limited state spending on welfare, and personal responsibility for financial success. This study uses evangelical sermons as a means for analyzing how conservative economic discourse, defined as a preference for limited government interference in market activities, proliferated inside American megachurches over four years following the 2008 recession. It also examines how pastors of large congregations rhetorically justified support for policies that scholars have shown work against the economic interests of middle-class and poor citizens alike. The study found that when megachurch pastors speak about economic issues, they deploy language and arguments that emphasize American economic providence and the need for individuals to take personal responsibility for financial outcomes, premises that afforded pastors the discursive space necessary for making claims about the superiority of private charity over public welfare. These findings suggest that, contrary to arguments that situate the public discourse of conservative Protestants as being mostly about social issues, there is inside evangelicalism a robust conversation about financial questions. This economic discourse is strikingly similar to that of nonreligious conservatives in the United States, a confluence that works to create a rhetorical resonance among the base constituencies inside the Republican Party and so fortify its ideological appeal and strength.

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Explaining the Appeal of Populist Right-Wing Parties in Times of Economic Prosperity

Frank Mols & Jolanda Jetten
Political Psychology, forthcoming

Abstract:
The assumption that populist right-wing parties (PRWPs) thrive when the economy slows down is remarkably pervasive. What is often neglected is evidence showing PRWPs can thrive in times of economic prosperity. To examine this, we conducted an experiment in which participants were exposed to different appraisals of the future of the national economy and were subsequently asked to evaluate an anti-immigration speech (Study 1). Results showed stronger anti-immigrant sentiments when the national economy was presented as prospering rather than contracting. We then analyzed speeches by PRWP leaders who secured electoral victories during economic prosperity (Study 2) and found that these leaders encourage a sense of injustice and victimhood by portraying ordinary citizens as the victim of an alliance between powerful groups (the elite) and less powerful groups (refugees, immigrants, minorities). More specifically, Study 2 showed that PRWP leaders are crafty identity entrepreneurs who are able to turn objective relative gratification into perceived relative deprivation. We conclude that it is hence problematic to treat PRWP support as evidence of “resonance” with public sentiments and urge PRWP scholars interested in supply-side factors to engage with the social identity literature on leadership, followership, and social influence.

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Size Matters: The Effects of Political Orientation, Majority Status, and Majority Size on Misperceptions of Public Opinion

Shira Dvir-Gvirsman
Public Opinion Quarterly, Spring 2015, Pages 1-27

Abstract:
According to cognitive research, members of a social majority are better than minority members at estimating the consensus, since the latter tend to overestimate the popularity of their opinion. These differences have been explained using the motivational reasoning model. The purpose of the current study is twofold: to verify that majority members indeed provide more accurate public consensus estimations and to test the effect of political orientation on this relation. Following the motivational reasoning model, it is suggested that proponents of right-wing ideology will overestimate support for their group, especially when in the minority, since they have a stronger reaction to political threat. The research involved three case studies. In the first, data from 33 surveys conducted over 10 years (N = 15,129) were analyzed using multilevel analysis. The results showed that (a) majority members are more accurate in gauging consensual opinions than minority members; (b) the gap in accuracy between majority and minority members increases with the size of the majority; and (c) those holding right-wing attitudes tend to overestimate their group size, more so when in the minority or when support for their opinion declines. The second case study analyzed data on four different issues, using a within-subject approach (N = 450). The findings were similar, with the exception of a nonsignificant effect for majority size. Finally, in the third case study, the causal mechanism suggested was supported by an experimental setting (N = 388). The results are discussed in light of the motivational reasoning model regarding information processing and ideology.

By KEVIN LEWIS | 09:00:00 AM

Thursday, April 16, 2015

Happily ever after

Trends in the Economic Consequences of Marital and Cohabitation Dissolution in the United States

Laura Tach & Alicia Eads
Demography, April 2015, Pages 401-432

Abstract:
Mothers in the United States use a combination of employment, public transfers, and private safety nets to cushion the economic losses of romantic union dissolution, but changes in maternal labor force participation, government transfer programs, and private social networks may have altered the economic impact of union dissolution over time. Using nationally representative panels from the Survey of Income and Program Participation (SIPP) from 1984 to 2007, we show that the economic consequences of divorce have declined since the 1980s owing to the growth in married women’s earnings and their receipt of child support and income from personal networks. In contrast, the economic consequences of cohabitation dissolution were modest in the 1980s but have worsened over time. Cohabiting mothers’ income losses associated with union dissolution now closely resemble those of divorced mothers. These trends imply that changes in marital stability have not contributed to rising income instability among families with children, but trends in the extent and economic costs of cohabitation have likely contributed to rising income instability for less-advantaged children.

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Married with children: What remains when observable biases are removed from the reported male marriage wage premium

Megan de Linde Leonard & T.D. Stanley
Labour Economics, April 2015, Pages 72–80

Abstract:
There is a substantial research literature that discusses and documents a wage premium for married men. Our meta-analysis of 59 studies and 661 estimates finds a marriage premium for US men of between 9% and 13% after misspecification and selection biases are filtered out. Results from this meta-regression analysis cast doubt upon both the ‘selection’ and the ‘specialization’ explanation for the marriage-wage premium but are consistent with the notion that marriage may cause men to become more stable and committed workers.

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Health Insurance and Risk of Divorce: Does Having Your Own Insurance Matter?

Heeju Sohn
Journal of Marriage and Family, forthcoming

Abstract:
Most American adults under 65 obtain health insurance through their employers or their spouses' employers. The absence of a universal health care system in the United States puts Americans at considerable risk for losing their coverage when transitioning out of jobs or marriages. Scholars have found evidence of reduced job mobility among individuals who are dependent on their employers for health care coverage. In this study, the author found similar relationships between insurance and divorce. She applied the hazard model to married individuals in the longitudinal Survey of Income Program Participation (N = 17,388) and found lower divorce rates among people who were insured through their partners' plans without alternative sources of their own. Furthermore, she found gender differences in the relationship between health care coverage and divorce rates: Insurance-dependent women had lower rates of divorce than men in similar situations. These findings draw attention to the importance of considering family processes when debating and evaluating health policies.

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Power and Attraction to the Counternormative Aspects of Infidelity

Joris Lammers & Jon Maner
Journal of Sex Research, forthcoming

Abstract:
Previous research shows that powerful people are more likely than those lacking power to engage in infidelity. One possible explanation holds (a) that power psychologically releases people from the inhibiting effects of social norms and thus increases their appetite for counternormative forms of sexuality. Two alternative explanations are (b) that power increases appetite for any form of sexuality, normative or counternormative, and (c) that power makes men (but not women) seem more attractive to others and thus increases their access to potential mating opportunities. The current research tested these explanations using correlational data from 610 Dutch men and women. Supporting the first explanation, power's relationship with infidelity was statistically mediated by increased attraction to the secrecy associated with infidelity. Inconsistent with the second explanation, power was linked with infidelity but not with casual sex among singles (a more normative form of sexuality). Inconsistent with the third explanation, the link between power and infidelity was observed just as strongly in women as in men. Findings suggest that power may be associated with infidelity because power draws people to the counternormative aspects of infidelity. Implications for theories of power, sexuality, and gender are discussed.

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Teenage Cohabitation, Marriage, and Childbearing

Wendy Manning & Jessica Cohen
Population Research and Policy Review, April 2015, Pages 161-177

Abstract:
Cohabitation is an integral part of family research; however, little work examines cohabitation among teenagers or links between cohabitation and teenage childbearing. Drawing on the National Survey of Family Growth (2006–10), we examine family formation activities (i.e., cohabitation, marriage, and childbearing) of 3,945 15–19 year old women from the mid 1990s through 2010. One-third (34 %) of teenagers cohabit, marry, or have a child. Teenage cohabitation and marriage are both positively associated with higher odds of having a child. The vast majority of single pregnant teenagers do not form a union before the birth of their child; only 22 % cohabit and 5 % marry. Yet most single pregnant teenagers eventually cohabit, 59 % did so by the child’s third birthday and about 9 % marry. Cohabitation is an important part of the landscape of the adolescent years, and many teenage mothers described as “single mothers” are actually in cohabiting relationships.

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Love in the Time of the Depression: The Effect of Economic Conditions on Marriage in the Great Depression

Matthew Hill
Journal of Economic History, March 2015, Pages 163-189

Abstract:
I examine the impact of the Great Depression on marriage outcomes and find that marriage rates and local economic conditions are positively correlated. Specifically, poor labor market opportunities for men negatively impact marriage. Conversely, there is some evidence that poor female labor markets actually increase marriage in the period. While the Great Depression did lower marriage rates, the effect was not long lasting: marriages were delayed, not denied. The primary long-run effect of the downturn on marriage was stability: Marriages formed in tough economic times were more likely to survive compared to matches made in more prosperous time periods.

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On the Selection Effects Under Consent and Unilateral Divorce

Mehmet Bac
American Law and Economics Review, Spring 2015, Pages 43-86

Abstract:
I develop a model of marriage and divorce with privately known spouse characteristics, producing new insights: the switch from consent to unilateral divorce raises second-marriage spouse quality, hence, short-run divorce, when “good” types are in minority. Spouse quality declines from first to second marriage under both rules, but selection into first marriage is unambiguously better under unilateral divorce, which should reduce long-run divorce. An improvement in outside options amplifies the selectivity advantage of unilateral divorce provided the majority of the population marries. If the value of outside options is projected to continue rising, marriage and divorce rates should continue to fall.

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Divorce and Health: Beyond Individual Differences

David Sbarra, Karen Hasselmo & Kyle Bourassa
Current Directions in Psychological Science, April 2015, Pages 109-113

Abstract:
In this article, we review what is known about the association between marital dissolution and health outcomes in adults. Two of the major empirical findings in the literature — that most people do well following marital separation and that this life event increases risk for poor outcomes — appear to be in contrast. We provide an individual differences framework for reconciling these competing perspectives and suggest that the bulk of the risk for poor outcomes following marital dissolution is carried by a minority of people. Research focusing on at-risk populations is beginning to shed light on the processes that explain why and how marital separation and divorce are associated with ill health. This article outlines a series of future directions that go beyond individual differences to study these mechanisms.

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In Sickness and in Health? Physical Illness as a Risk Factor for Marital Dissolution in Later Life

Amelia Karraker & Kenzie Latham
Journal of Health and Social Behavior, March 2015, Pages 59-73

Abstract:
The health consequences of marital dissolution are well known, but little work has examined the impact of health on the risk of marital dissolution. In this study we use a sample of 2,701 marriages from the Health and Retirement Study (1992–2010) to examine the role of serious physical illness onset (i.e., cancer, heart problems, lung disease, and/or stroke) in subsequent marital dissolution due to either divorce or widowhood. We use a series of discrete-time event history models with competing risks to estimate the impact of husband’s and wife’s physical illness onset on risk of divorce and widowhood. We find that only wife’s illness onset is associated with elevated risk of divorce, while either husband’s or wife’s illness onset is associated with elevated risk of widowhood. These findings suggest the importance of health as a determinant of marital dissolution in later life via both biological and gendered social pathways.

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Women in Very Low Quality Marriages Gain Life Satisfaction Following Divorce

Kyle Bourassa, David Sbarra & Mark Whisman
Journal of Family Psychology, forthcoming

Abstract:
Although marital dissolution is associated with increased risk for poor mental and physical health outcomes, many people report improvements in functioning after divorce. To study the hypothesis that women in lower quality marriages would report the best outcomes upon separation/divorce, we investigated the combined effects of marital quality, gender, and marital status for predicting changes in life satisfaction (LS). Participants (N = 1,639; 50.3% men) were drawn from a nationally representative sample (Midlife in the United States Study), which included assessments of marital quality, marital status, and LS, at 2 time points (T1 and T2), roughly 10 years apart. Hierarchical linear regression analyses revealed an interaction between marital quality, marital status, and gender when predicting residual change in LS. Divorced women evidenced a negative association between marital quality and later LS, whereas continuously married women had a positive association between marital quality and later LS. In addition, women in higher quality marriages that become divorced showed the lowest LS, and women in lowest quality marriages show the highest LS among women with similar levels of marital quality. There was no association between marital quality and later LS for divorced or continuously married men. This work extends prior findings regarding gender differences in marital quality to postdivorce well-being, and suggests women in the lowest quality marriages may gain LS following divorce.

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Women who are married or living as married have higher salivary estradiol and progesterone than unmarried women

Emily Barrett et al.
American Journal of Human Biology, forthcoming

Objectives: Extensive research has demonstrated that marriage and parenting are associated with lower testosterone levels in men, however, very little is known about associations with hormone concentrations in women. Two studies have found lower testosterone in relation to pair-bonding and motherhood in women, with several others suggesting that estradiol levels are lower among parous women than nulliparous women. Here, we examine estradiol and progesterone concentrations in relation to marriage and motherhood in naturally cycling, reproductive age women.

Methods: In 185 Norwegian women, estradiol and progesterone concentrations were assayed from waking saliva samples collected daily over the course of a menstrual cycle. Cycles were aligned on day 0, the day of ovulation. Mean periovulatory estradiol (days −7 to +6) and luteal progesterone (day +2 to +10) indices were calculated. Marital status and motherhood (including age of youngest child) were reported in baseline questionnaires. Multivariable linear regression models were used to examine associations between ovarian hormones, marital status, and motherhood.

Results: Women who were married or living as married had higher estradiol than unmarried women (β = 0.19; 95% CI: 0.02, 0.36) and higher luteal progesterone as well (β = 0.19; 95% CI: −0.01, 0.39). There were no notable differences in hormone levels in relationship to motherhood status.

Conclusions: Our results indicate that ovarian steroid hormones may be higher among women who are married or living as married, and suggest several possible explanations, however, additional research is needed to elucidate any causal relationships.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, April 15, 2015

Work for it

Turning Their Pain to Gain: Charismatic Leader Influence on Follower Stress Appraisal and Job Performance

Marcie LePine et al.
Academy of Management Journal, forthcoming

Abstract:
We develop and test a theoretical model that explores how individuals appraise different types of stressful job demands and how these cognitive appraisals impact job performance. The model also explores how charismatic leaders influence such appraisal and reaction processes, and by virtue of these effects, how leaders can influence the impact of stressful demands on their followers' job performance. In Study 1 (n = 74 U.S. Marines), our model was largely supported in hierarchical linear modeling analyses. Marines whose leaders were judged by superiors to exhibit charismatic leader behaviors appraised challenge stressors as being more challenging, and were more likely to respond to this appraisal with higher performance. Although charismatic leader behaviors did not influence how hindrance stressors were appraised, they negated the strong negative effect of hindrance appraisals on job performance. In Study 2 (n = 270 U.S. Marines) charismatic leader behaviors were measured through the eyes of the focal Marines, and the interactions found in Study 1 were replicated. Results from multilevel structural equation modeling analyses also indicate that charismatic leader behaviors moderate both the mediating role of challenge appraisals in transmitting the effect of challenge stressors to job performance, and the mediating role of hindrance appraisals in transmitting the effect of hindrance stressors to job performance. Implications of our results to theory and practice are discussed.

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Corporate Prediction Markets: Evidence from Google, Ford, and Firm X

Bo Cowgill & Eric Zitzewitz
Review of Economic Studies, forthcoming

Abstract:
Despite the popularity of prediction markets among economists, businesses and policymakers have been slow to adopt them in decision making. Most studies of prediction markets outside the lab are from public markets with large trading populations. Corporate prediction markets face additional issues, such as thinness, weak incentives, limited entry and the potential for traders with biases or ulterior motives – raising questions about how well these markets will perform. We examine data from prediction markets run by Google, Ford Motor Company and an anonymous basic materials conglomerate (Firm X). Despite theoretically adverse conditions, we find these markets are relatively efficient, and improve upon the forecasts of experts at all three firms by as much as a 25% reduction in mean squared error. The most notable inefficiency is an optimism bias in the markets at Google. The inefficiencies that do exist generally become smaller over time. More experienced traders and those with higher past performance trade against the identified inefficiencies, suggesting that the markets' efficiency improves because traders gain experience and less skilled traders exit the market.

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The Value of Hiring through Employee Referrals

Stephen Burks et al.
Quarterly Journal of Economics, forthcoming

Abstract:
Using personnel data from nine large firms in three industries (call-centers, trucking, and high-tech), we empirically assess the benefit to firms of hiring through employee referrals. Compared to non-referred applicants, referred applicants are more likely to be hired and more likely to accept offers, even though referrals and non-referrals have similar skill characteristics. Referred workers tend to have similar productivity compared to non-referred workers on most measures, but referred workers have lower accident rates in trucking and produce more patents in high-tech. Referred workers are substantially less likely to quit and earn slightly higher wages than non-referred workers. In call-centers and trucking, the two industries for which we can calculate worker-level profits, referred workers yield substantially higher profits per worker than non-referred workers. These profit differences are driven by lower turnover and lower recruiting costs for referrals.

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Are Winners Promoted Too Often? Evidence from the NFL Draft 1999–2012

Carl Kitchens
Economic Inquiry, April 2015, Pages 1317–1330

Abstract:
Firms engaging in hiring face recruitment costs. To reduce these costs, firms concentrate their efforts in locations that are perceived as talent rich or have produced successful employees in the past. Such recruitment mechanisms may lead to statistical discrimination if they reduce uncertainty for a subset of candidates or if firms relate current employee attributes with the institution. In this article, I test for statistical discrimination associated with an individual's institutional affiliation that results from targeted hiring practices by using a unique individual-level data set of National Football League (NFL) draft prospects. I find that conditional on individual ability, individuals from highly ranked college teams are drafted earlier than individuals from lower ranked institutions. Over the length of a player's professional career, a player's college institution has no effect on career success, indicating that certain players are damaged by this recruitment mechanism. Even though players can suffer substantial financial damages as a result of being drafted later in the draft, NFL team performance is not sufficiently affected for teams to exploit this bias.

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Spilling Outside the Box: The Effects of Individuals' Creative Behaviors at Work on Time Spent with their Spouses at Home

Spencer Harrison & David Wagner
Academy of Management Journal, forthcoming

Abstract:
Most research on creativity describes it as a net positive: producing new products for the organization and satisfaction and positive affect for creative workers. However, a host of anecdotal and historical evidence suggests that creative work can have deleterious consequences for relationships. This raises the question: how does creativity at work impact relationships at home? Relying on work-family conflict and resource allocation theory as conceptual frameworks, we test a model of creative behaviors during the day at work and the extent to which employees spend time with their spouses at home in the evening, using 685 daily matched responses from 108 worker-spouse pairings. Our results reveal that variance-focused creative behaviors (problem identification, information searching, idea generation) lead to a decline in time spent with spouse at home. In contrast, selection-focused creative behaviors (idea validation) lead to an increase in time spent with spouse. Further, openness to experience moderates these relationships. Overall, the results raise questions about the possible relational costs of creative behaviors at work on life at home.

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Linking Shifts in the National Economy with Changes in Job Satisfaction, Employee Engagement and Work-Life Balance

Kevin Cahill et al.
Journal of Behavioral and Experimental Economics, June 2015, Pages 40–54

Abstract:
This paper examines the extent to which job satisfaction, employee engagement, and satisfaction with work-life balance are influenced by changes in the macroeconomy. Data on employee attitudes are obtained from the Age and Generations dataset, a survey of more than 2,000 employees from nine large organizations that took place just prior to and immediately following the onset of the 2007-2009 recession. We find that the state of the macroeconomy impacts job satisfaction, employee engagement, and satisfaction with work-life balance, suggesting that employees’ job- and family-related attitudes are influenced by factors beyond the immediate job and family domains.

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Job Assignment with Multivariate Skills and the Peter Principle

Stefanie Brilon
Labour Economics, January 2015, Pages 112–121

Abstract:
This paper analyzes the job assignment problem faced by a firm when workers’ skills are distributed along several dimensions and jobs require different skills to varying extent. I derive optimal assignment rules with and without slot constraints, and show that under certain circumstances workers may get promoted although they are expected to be less productive in their new job than in their old job. This can be interpreted as a version of the Peter Principle which states that workers get promoted up to their level of incompetence.

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Bad News: An Experimental Study on the Informational Effects Of Rewards

Andrei Bremzen et al.
Review of Economics and Statistics, March 2015, Pages 55-70

Abstract:
Psychologists and economists have argued that rewards often have hidden costs. One possible reason is that the principal may have incentives to offer higher rewards when she knows the task is difficult. Our experiment tests if high rewards embody such bad news and if this is correctly perceived by their recipients. Our design allows us to decompose the overall effect of rewards on effort into a direct incentive and an informational effect. The results show that participants correctly interpret high rewards as bad news. In accordance with theory, the negative informational effect coexists with the direct positive effect.

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Hidden benefits of reward: A field experiment on motivation and monetary incentives

Ola Kvaløy, Petra Nieken & Anja Schöttner
European Economic Review, May 2015, Pages 188–199

Abstract:
We conducted a field experiment in a controlled work environment to investigate the effect of motivational talk and its interaction with monetary incentives. We find that motivational talk improves performance only when accompanied by performance pay. Moreover, performance pay reduces performance unless it is accompanied by motivational talk. These effects also carry over to the quality of work. Performance pay alone leads to more mistakes. Adding motivational talk makes the difference. In treatments with performance pay, motivational talk increases output by about 20 percent and reduces the ratio of mistakes by more than 40 percent.

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Be Careful What You Ask for: The Negative Consequences of Unethical Requests on Job Performance and Citizenship Behaviors

Isaac Smith, Maryam Kouchaki & Justin Wareham
Cornell University Working Paper, March 2015

Abstract:
Does receiving requests to engage in morally questionable behavior at work decrease one’s job performance? We draw on moral psychology and a psychological theory of meaning-making to explain the negative performance consequences of being the recipient of unethical requests. Specifically, participants of a laboratory experiment who received an unethical request from an experimenter performed worse on a cognitive task than those in a neutral-request condition (Study 1). Moreover, paired survey responses from a sample of U.S. working adults and their supervisors showed negative relationships between receiving unethical requests at work and both job performance and citizenship behaviors directed at the organization. These effects were mediated by a decrease in intrinsic job motivation, and moderated by moral disengagement (Study 2). Taken together, our studies suggest that receiving unethical requests can fundamentally change the meaning of one’s work and have negative performance consequences.

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The mortality of companies

Madeleine Daepp et al.
Journal of the Royal Society Interface, May 2015

Abstract:
The firm is a fundamental economic unit of contemporary human societies. Studies on the general quantitative and statistical character of firms have produced mixed results regarding their lifespans and mortality. We examine a comprehensive database of more than 25 000 publicly traded North American companies, from 1950 to 2009, to derive the statistics of firm lifespans. Based on detailed survival analysis, we show that the mortality of publicly traded companies manifests an approximately constant hazard rate over long periods of observation. This regularity indicates that mortality rates are independent of a company's age. We show that the typical half-life of a publicly traded company is about a decade, regardless of business sector. Our results shed new light on the dynamics of births and deaths of publicly traded companies and identify some of the necessary ingredients of a general theory of firms.

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Micro-Foundations of Firm-Specific Human Capital: When Do Employees Perceive Their Skills to be Firm-Specific?

Joseph Raffiee & Russell Coff
Academy of Management Journal, forthcoming

Abstract:
Drawing on human capital theory, strategy scholars have emphasized firm-specific human capital as a source of sustained competitive advantage. In this study, we begin to unpack the micro-foundations of firm-specific human capital by theoretically and empirically exploring when employees perceive their skills to be firm-specific. We first develop theoretical arguments and hypotheses based on the extant strategy literature, which implicitly assumes information efficiency and unbiased perceptions of firm-specificity. We then relax these assumptions and develop alternative hypotheses rooted in the cognitive psychology literature, which highlights biases in human judgment. We test our hypotheses using two data sources from Korea and the United States. Surprisingly, our results support the hypotheses based on cognitive bias - a stark contrast to the expectations embedded within the strategy literature. Specifically, we find organizational commitment and, to some extent, tenure are negatively related to employee perceptions of the firm-specificity. We also find that employer provided on-the-job training was unrelated to perceived firm-specificity. These findings suggest that firm-specific human capital, as perceived by employees, may drive behavior in ways not anticipated by existing theory - for example, with respect to investments in skills or turnover decisions. This, in turn, may challenge the assumed relationship between firm-specific human capital and sustained competitive advantage. More broadly, our findings may suggest a need to reconsider other theories, such as transaction cost economics, that draw heavily on the notion of firm-specificity and implicitly assume widely shared and unbiased perceptions.

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Entrepreneurial Adaptation and Social Networks: Evidence from a Randomized Experiment on a MOOC Platform

Charles Eesley & Lynn Wu
Stanford Working Paper, February 2015

Abstract:
We examine the performance of early-stage entrepreneurs before and after randomly showing them different approaches to finding an advisory social network tie, and we find important interactions between the type of social tie and the entrepreneur’s strategic process. To our knowledge, this is the first randomized, controlled field trial of both social networks and strategic process in the literature. In particular, the results show that adding a diverse network tie alone is less effective than combining a diverse tie with a specific strategic approach. In isolation, a planning strategic process is more effective than just adding a diverse mentor tie. Contrary to the finding that entrepreneurs often change their business model and strategic direction frequently, we find that instructing entrepreneurs to have a strong, persistent vision for their startup often results in better performance in the early stages. In contrast to prior work that shows that entrepreneurs often begin their ventures with a cohesive, closed network high in trust then transition later to a more diverse network, we find that early stage ventures appear to be better off with more diverse social ties in the beginning, particularly if a more adaptive approach is adopted for the venture’s strategy. The results suggest that social networks should not be altered for entrepreneurs and managers (as many recent policies attempt to do) without also taking the strategy formulation process into consideration.

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Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough

Brice Corgnet, Joaquín Gómez-Miñambres & Roberto Hernán-González
Management Science, forthcoming

Abstract:
The aim of this paper is to test the effectiveness of wage-irrelevant goal-setting policies in a laboratory environment. In our design, managers can assign a goal to their workers by setting a certain level of performance on the work task. We establish our theoretical conjectures by developing a model in which assigned goals act as reference points to workers’ intrinsic motivation. Consistent with our model, we find that managers set goals that are challenging but attainable for a worker of average ability. Workers respond to these goals by increasing effort and performance and by decreasing on-the-job leisure activities with respect to the no-goal-setting baseline. Finally, we study the interaction between goal setting and monetary rewards and find, in line with our theoretical model, that goal setting is most effective when monetary incentives are strong. These results suggest that goal setting may produce intrinsic motivation and increase workers’ performance beyond what is achieved by using solely monetary incentives.

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The Bright Side of Corporate Diversification: Evidence from Internal Labor Markets

Geoffrey Tate & Liu Yang
Review of Financial Studies, forthcoming

Abstract:
We document differences in human-capital deployment between diversified and focused firms. We find that diversified firms have higher labor productivity and that they redeploy labor to industries with better prospects in response to changing opportunities. The opportunities and incentives provided in internal labor markets in turn affect the development of workers' human capital. We find that workers more frequently transition to other industries in which their diversified firms operate and with smaller wage losses compared with workers in the open market, even when they leave their original firms. Overall, internal labor markets provide a bright side to corporate diversification.

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Going Public: How Stock Market Listing Changes Firm Innovation Behavior

Simone Wies & Christine Moorman
Journal of Marketing Research, forthcoming

Abstract:
While going public allows firms access to more financial capital that can fuel innovation, it also exposes firms to a set of myopic incentives and disclosure requirements that constrain innovation. This tension is expected to produce a unique pattern of innovation strategies among firms going public with firms increasing their innovation levels but reducing their innovation riskiness. Specifically, the authors predict that after going public, firms innovate at higher levels and introduce higher levels of variety with each innovation while also introducing less risky innovation, characterized by fewer breakthrough innovations and fewer innovations into new-to-the-firm categories. Examining 40,000 product introductions from 1980–2011 in a sample of consumer packaged goods' firms that go public compared to a benchmark sample of firms that remain private, results support these predictions. Utilizing tests to resolve questions about endogeneity, including self-selection, reverse causality, and competing explanations, the authors demonstrate that IPO selection and IPO dynamics are not driving this going-public effect. The authors also uncover a set of industry factors that mitigate the drop in breakthrough innovation by offering product-market incentives that counterbalance the documented effect of stock market incentives.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, April 14, 2015

Birth marks

The Baby Boom and World War II: A Macroeconomic Analysis

Matthias Doepke, Moshe Hazan & Yishay Maoz
Review of Economic Studies, forthcoming

Abstract:
We argue that one major cause of the U.S. postwar baby boom was the rise in female labor supply during World War II. We develop a quantitative dynamic general equilibrium model with endogenous fertility and female labor force participation decisions. We use the model to assess the impact of the war on female labor supply and fertility in the decades following the war. For the war generation of women, the high demand for female labor brought about by mobilization leads to an increase in labor supply that persists after the war. As a result, younger women who reach adulthood in the 1950s face increased labor market competition, which impels them to exit the labor market and start having children earlier. The effect is amplified by the rise in taxes necessary to pay down wartime government debt. In our calibrated model, the war generates a substantial baby boom followed by a baby bust.

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Access to Emergency Contraception and its Impact on Fertility and Sexual Behavior

Karen Mulligan
Health Economics, forthcoming

Abstract:
Half of all pregnancies in the USA are unintended, suggesting a high incidence of either improper or nonuse of contraceptives. Emergency birth control (EBC) provides individuals with additional insurance against unplanned pregnancy in the presence of contraception failure. This study is the first to estimate the impact of switching EBC from prescription to nonprescription status in the USA on abortions and risky sexual behavior as measured by STD rates. Utilizing state-level variation in access to EBC, we find that providing individuals with over-the-counter access to EBC leads to increase STD rates and has no effect on abortion rates. Moreover, individual-level analysis using the National Longitudinal Survey of Youth indicates that risky sexual behavior such as engaging in unprotected sex and number of sexual encounters increases as a result of over-the-counter access to EBC, which is consistent with the state-level STD findings.

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Reproductive Justice and the Pace of Change: Socioeconomic Trends in US Infant Death Rates by Legal Status of Abortion, 1960–1980

Nancy Krieger et al.
American Journal of Public Health, April 2015, Pages 680-682

Abstract:
US infant death rates for 1960 to 1980 declined most quickly in (1) 1970 to 1973 in states that legalized abortion in 1970, especially for infants in the lowest 3 income quintiles (annual percentage change = −11.6; 95% confidence interval = −18.7, −3.8), and (2) the mid-to-late 1960s, also in low-income quintiles, for both Black and White infants, albeit unrelated to abortion laws. These results imply that research is warranted on whether currently rising restrictions on abortions may be affecting infant mortality.

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Gender Roles and Medical Progress

Stefania Albanesi & Claudia Olivetti
Federal Reserve Working Paper, March 2015

Abstract:
Maternal mortality was the second-leading cause of death for women in childbearing years up until the mid-1930s in the United States. For each death, twenty times as many mothers were estimated to suffer pregnancy-related conditions, often leading to severe and prolonged disablement. Poor maternal health made it particularly hard for mothers to engage in market work. Between 1930 and 1960, there was a remarkable reduction in maternal mortality and morbidity, thanks to medical advances. We argue that these medical advances, by enabling women to reconcile work and motherhood, were essential for the joint rise in married women’s labor force participation and fertility over this period. We also show that the diffusion of infant formula played an important auxiliary role.

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Women's schooling and fertility under low female labor force participation: Evidence from mobility restrictions in Israel

Victor Lavy & Alexander Zablotsky
Journal of Public Economics, April 2015, Pages 105–121

Abstract:
This paper studies the effect of mothers' education on fertility in a mostly Muslim population with very low female labor force participation. We first show that a removal of travel restrictions on Israeli Arabs had raised female education and had almost no effect on male education. Next, we show that it lowered fertility rates among exposed women, which we interpret as an effect of female education on fertility. We rule out labor-force participation, age at marriage, marriage and divorce rates and spousal labor-force participation and earnings as confounding factors or as mechanisms but find that spousal education and children quality play a role in the fertility decline. We provide a variety of robustness tests that rule out other channels by which the removal of the travel restrictions could have affected fertility directly. These results are particularly interesting and important for the context of many Muslim countries with low rates of female labor force participation.

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Prenatal Sex Selection And Girls’ Well-Being: Evidence From India

Luojia Hu & Analía Schlosser
Economic Journal, forthcoming

Abstract:
We study the impacts of prenatal sex selection on girls’ well-being in India. We show that high sex ratios at birth reflect the practice of prenatal sex selection and apply a triple difference strategy to examine whether changes in health outcomes of girls relative to boys within states and over time are systematically associated with changes in sex-ratios at birth. We find that an increase in prenatal sex selection leads to a reduction in girls’ malnutrition, in particular, underweight and wasting. We further explore various underlying channels linking between prenatal sex selection and girls’ outcomes.

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The human sex ratio from conception to birth

Steven Hecht Orzack et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
We describe the trajectory of the human sex ratio from conception to birth by analyzing data from (i) 3- to 6-d-old embryos, (ii) induced abortions, (iii) chorionic villus sampling, (iv) amniocentesis, and (v) fetal deaths and live births. Our dataset is the most comprehensive and largest ever assembled to estimate the sex ratio at conception and the sex ratio trajectory and is the first, to our knowledge, to include all of these types of data. Our estimate of the sex ratio at conception is 0.5 (proportion male), which contradicts the common claim that the sex ratio at conception is male-biased. The sex ratio among abnormal embryos is male-biased, and the sex ratio among normal embryos is female-biased. These biases are associated with the abnormal/normal state of the sex chromosomes and of chromosomes 15 and 17. The sex ratio may decrease in the first week or so after conception (due to excess male mortality); it then increases for at least 10–15 wk (due to excess female mortality), levels off after ∼20 wk, and declines slowly from 28 to 35 wk (due to excess male mortality). Total female mortality during pregnancy exceeds total male mortality. The unbiased sex ratio at conception, the increase in the sex ratio during the first trimester, and total mortality during pregnancy being greater for females are fundamental insights into early human development.

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Is education the best contraception: The case of teenage pregnancy in England?

Sourafel Girma & David Paton
Social Science & Medicine, April 2015, Pages 1–9

Abstract:
This paper examines potential explanations for recent declines in teenage pregnancy in England. We estimate panel data models of teenage conception, birth and abortion rates from regions in England. Although point estimates are consistent with the promotion of long acting reversible contraception (LARC) having a negative impact on teenage pregnancy rates, the effects are generally small and statistically insignificant. In contrast, improvements in educational achievement and, to a lesser extent, increases in the non-white proportion of the population are associated with large and statistically significant reductions in teenage pregnancy.

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Raising Dragons

John Nye & Melanie Meng Xue
George Mason University Working Paper, December 2014

Abstract:
We study why China suddenly exhibited a large surge in births -- a 50% increase in 2000 relative to 1999 -- in the 2000 Year of the Dragon by disaggregating birth rates at the city level. We define the dragon effect as a relative jump in birth rates compared to the trend. Prior to 2000, Asian nations with large numbers of ethnic Chinese -- but not China -- exhibited strong dragon year effects. We exploit the uneven economic growth of regions in China to understand the emergence of the dragon effect. We find that the dragon effect was most pronounced in rapidly developing cities having higher incomes, higher average education, and greater employment prospects as proxied by the share of non-local residents. Our main findings at the city level are supported by our micro-level analysis, where we show the dragon effect to be strongly correlated with educational attainment of family members and membership in a multi-generational household.

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Apolipoprotein E (ApoE) polymorphism is related to differences in potential fertility in women: A case of antagonistic pleiotropy?

Grazyna Jasienska et al.
Proceedings of the Royal Society: Biological Sciences, 22 March 2015

Abstract:
The alleles that are detrimental to health, especially in older age, are thought to persist in populations because they also confer some benefits for individuals (through antagonistic pleiotropy). The ApoE4 allele at the ApoE locus, encoding apolipoprotein E (ApoE), significantly increases risk of poor health, and yet it is present in many populations at relatively high frequencies. Why has it not been replaced by natural selection with the health-beneficial ApoE3 allele? ApoE is a major supplier of cholesterol precursor for the production of ovarian oestrogen and progesterone, thus ApoE has been suggested as the potential candidate gene that may cause variation in reproductive performance. Our results support this hypothesis showing that in 117 regularly menstruating women those with genotypes with at least one ApoE4 allele had significantly higher levels of mean luteal progesterone (144.21 pmol l−1) than women with genotypes without ApoE4 (120.49 pmol l−1), which indicates higher potential fertility. The hormonal profiles were based on daily data for entire menstrual cycles. We suggest that the finding of higher progesterone in women with ApoE4 allele could provide first strong evidence for an evolutionary mechanism of maintaining the ancestral and health-worsening ApoE4 allele in human populations.

By KEVIN LEWIS | 09:00:00 AM

Monday, April 13, 2015

Trade off

French Roast: Consumer Response to International Conflict - Evidence from Supermarket Scanner Data

Sonal Pandya & Rajkumar Venkatesan
Review of Economics and Statistics, forthcoming

Abstract:
Do consumers boycott in response to international conflict? We show that during the 2003 US-France dispute over the Iraq War the market share of French-sounding, US supermarket brands declined. The dispute was a negative shock to US consumers' associations with France. French-sounding brands, which consumers perceive to be French imports but are not, allow us to isolate the dispute's effect on economic behavior, as these brands' only link to France is through consumers' associations. Our estimates, derived from a nationwide sample of weekly supermarket sales for over 8,000 brands, are robust to a variety of alternate explanations. Additionally, we show that supermarkets with a higher proportion of customers who are US citizens (i.e. who more strongly identify with the US national identity) exhibited sharper boycotts.

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Trade Exposure and the Polarization of Government Spending in the American States

Brian Krueger & Ping Xu
American Politics Research, forthcoming

Abstract:
Studies of economic globalization and government spending often view the United States as an outlier case. Surprisingly, ours is the first empirical study to take advantage of the variation in U.S. states' exposure to global markets, ideological orientations of the governments, and the relative size of the public sector, to assess the role of trade exposure on government spending in the American states. Using state-level data from the past three decades, we use error correction models (ECMs) to test three competing globalization theories. We find that the effect of trade exposure on government spending varies across states. Our results suggest that when conservatives control state governments, high levels of trade exposure negatively relate to changes in public expenditures such as welfare and infrastructure. With liberal governments in power, trade exposure does not accelerate state spending growth in welfare and infrastructure, which diverges from the pattern found in European social democracies.

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Constituency, Ideology, and Economic Interests in U.S. Congressional Voting: The Case of the U.S.-Korea Free Trade Agreement

Youngmi Choi
Political Research Quarterly, forthcoming

Abstract:
Scholarly studies of U.S. legislators' voting behavior have concluded that constituent interests exercise only limited influence, but these conclusions may result from inadequate measurement. I develop new measures of economic interests that emphasize import/export (sectoral) cleavages in addition to business/labor (factoral) cleavages and, in the process, transcend geographic boundaries. Results of logistic regression analysis suggest that the interests of economic and nongeographic constituencies, as reflected in campaign contributions, were highly significant predictors of voting in the U.S. Congress on the U.S.-Korea Free Trade Agreement and that the import/export cleavage was more salient than the business/labor cleavage. In addition, legislators' ideological positions with respect to national security were more significant than their partisan affiliations and more significant than their positions on other dimensions of ideology.

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The Impact of the U.S. Sugar Program Redux

John Beghin & Amani Elobeid
Applied Economic Perspectives and Policy, March 2015, Pages 1-33

Abstract:
We analyze the various welfare costs, transfers, trade, and employment consequences of the current U.S. sugar program for U.S. consumers, other sugar users, sugar refiners, cane and beet growing and processing industries, other associated agricultural sectors, and world markets. The removal of the sugar program would increase U.S. consumers' welfare by 2.9 to 3.5 billion each year and generate a modest job creation of 17,000 to 20,000 new jobs in food manufacturing and related industries. Imports of sugar containing products would fall dramatically, especially confectioneries substituting for domestic inputs under the sugar program. Sugar imports would rise substantially to 5-6 million short tons raw sugar equivalent. World sugar price increases would be minor, equivalent to about 1 cent per pound.

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Preferential Trade Agreements and Trade Expectations Theory

Timothy Peterson & Peter Rudloff
International Interactions, Winter 2015, Pages 61-83

Abstract:
Studies find that members of preferential trade agreements (PTAs) are less likely to be involved in militarized conflict. An expectation of continuing amicable trade relations is among the factors linking PTAs to peace. However, this role of PTAs is difficult to test due to the problem of observational equivalence; PTAs correlate with trade levels and liberalization, factors also linked to peace. In this article, we isolate the impact of PTAs on trade expectations by distinguishing between signed agreements and those in force. A focus on signed but not-yet-in-force PTAs allows us to assess the correlation between agreements and peace before other pacifying, and therefore potentially confounding, elements emerge. Statistical tests spanning 1957 to 2000 demonstrate that signed PTAs are pacifying, while in-force agreements have no statistically significant impact when controlling for other factors linked to peace.

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IV Quantile Regression for Group-level Treatments, with an Application to the Distributional Effects of Trade

Denis Chetverikov, Bradley Larsen & Christopher Palmer
NBER Working Paper, March 2015

Abstract:
We present a methodology for estimating the distributional effects of an endogenous treatment that varies at the group level when there are group-level unobservables, a quantile extension of Hausman and Taylor (1981). Because of the presence of group-level unobservables, standard quantile regression techniques are inconsistent in our setting even if the treatment is independent of unobservables. In contrast, our estimation technique is consistent as well as computationally simple, consisting of group-by-group quantile regression followed by two-stage least squares. Using the Bahadur representation of quantile estimators, we derive weak conditions on the growth of the number of observations per group that are sufficient for consistency and asymptotic zero-mean normality of our estimator. As in Hausman and Taylor (1981), micro-level covariates can be used as internal instruments for the endogenous group-level treatment if they satisfy relevance and exogeneity conditions. An empirical application indicates that low-wage earners in the US from 1990-2007 were significantly more affected by increased Chinese import competition than high-wage earners. Our approach applies to a broad range of settings in labor, industrial organization, trade, public finance, and other applied fields.

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Quid Pro Quo: Technology Capital Transfers for Market Access in China

Thomas Holmes, Ellen McGrattan & Edward Prescott
Review of Economic Studies, forthcoming

Abstract:
By the 1970s, quid pro quo policy, which requires multinational firms to transfer technology in return for market access, had become a common practice in many developing countries. While many countries have subsequently liberalized quid pro quo requirements, China continues to follow the policy. In this paper, we incorporate quid pro quo policy into a multicountry dynamic general equilibrium model, using microevidence from Chinese patents to motivate key assumptions about the terms of the technology transfer deals and macroevidence on China's inward foreign direct investment (FDI) to estimate key model parameters. We then use the model to quantify the impact of China's quid pro quo policy and show that it has had a significant impact on global innovation and welfare.

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A Positive Analysis of Fairtrade Certification

Andrea Podhorsky
Journal of Development Economics, forthcoming

Abstract:
The Fairtrade program transfers income to farmers by establishing a price floor and an alternate distribution channel that bypasses intermediaries between the raw commodity and world markets. I develop a model of the international commodity supply chain, with monopolistically competitive final goods producers and consumers who value the ethical quality of goods. A small number of oligopsonistic intermediaries purchase the raw commodity from farmers in a given country and then sell to final goods producers in the world market. I consider the effects of a Fairtrade program that is too small to have an effect on the world price of the commodity. I show that the Fairtrade program decreases the intermediaries' market power and consequently, even farmers that are not selected into the program receive a higher wage than in the absence of the program. I establish the Pareto optimal Fairtrade price and assess the overall efficiency of the program. The program is a more efficient way to transfer income to farmers than a direct transfer equal to the premium commanded by certified products if the Fairtrade price is not set too high above the efficient wage for farmers. If the number of intermediaries were large, however, then the direct transfer would be more efficient than the program for all binding Fairtrade prices.

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Protecting Infant Industries: Canadian Manufacturing and the National Policy, 1870-1913

Richard Harris, Ian Keay & Frank Lewis
Explorations in Economic History, forthcoming

Abstract:
Infant industry protection has been the cornerstone of a debate on tariff policy that extends at least from the eighteenth century to the current day. In contrast to traditional neo-classical models of international trade that imply net negative effects, industrial organization and learning-by-doing trade models describe how protective tariffs can encourage output expansion, productivity improvement, and price reductions. Taking Canada's 1879 National Policy as a natural experiment, we explore the effect of a policy that substantially increased tariff protection to some, but not all, Canadian manufacturing industries. Using treatment intensity and difference-in-differences approaches, we find strong support for the predictions of the new trade models. After 1879, industries that received greater protection experienced faster growth in output and productivity, as well as larger price reductions. The industries targeted by the National Policy also exhibited greater returns to scale and faster learning rates. These results have important implications for the infant-industry debate in addition to addressing a central theme in Canadian economic history.

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Compensating the Losers: An Examination of Congressional Votes on Trade Adjustment Assistance

Stephanie Rickard
International Interactions, Winter 2015, Pages 46-60

Abstract:
Globalization intensifies political conflict between citizens whose circumstances improve from foreign trade and those whose lives deteriorate as a result of trade. To pacify these rival interests, governments may assist citizens who become unemployed due to trade. When and under what conditions will legislators fund such assistance programs? The current study addresses this question by examining Congressional roll call votes in the United States during a period of rapid economic integration (1980-2004). The analysis reveals that protrade legislators who represent relatively more exporters are more likely to vote for increased spending on Trade Adjustment Assistance (TAA) programs. Exporters and their elected representatives arguably support such expenditures to broaden the protrade coalition.

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The Politics of the United States' Bilateral Investment Treaty Program

Adam Chilton
University of Chicago Working Paper, March 2015

Abstract:
Scholars consistently argue that the United States has signed Bilateral Investment Treaties (BITs) with developing countries to promote the development of international investment law and to protect American capital invested abroad. I challenge this view of the United States' BITs program. I argue that the United States has used BITs as a foreign policy tool to improve relationships with strategically important countries in the developing world, and, as a result, the program should in part be evaluated based on whether it has produced political benefits. I empirically test this theory in two ways. First, I test whether investment or political considerations are better at explaining U.S. BIT signings. This analysis shows that investment considerations do not help to explain the pattern of U.S. BIT formation, but that political considerations do. Second, I estimate the political benefits the United States has received from signing BITs with developing states. This analysis suggests that having signed a BIT makes countries likely to vote similarly to the United States at the United Nations. This project thus provides the first empirical evidence that the U.S. BITs program has been motivated by political considerations, and that the program may have produced modest foreign policy dividends.

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Income Differences and Prices of Tradables: Insights from an Online Retailer

Ina Simonovska
Review of Economic Studies, forthcoming

Abstract:
I study the positive relationship between prices of tradable goods and per-capita income. I develop a highly tractable general equilibrium model of international trade with heterogeneous firms and non-homothetic consumer preferences that positively links prices of tradables to consumer income. Guided by the model's testable prediction, I estimate the elasticity of price with respect to per-capita income from a unique dataset that I construct, which features prices of 245 identical goods sold in 29 European, Asian, and North American markets via the Internet by Spain's second largest apparel manufacturer - Mango. I find that doubling a destination's per-capita income results in an 18% increase in the price of identical items sold there. Per-capita income differences account for a third, while shipping cost differences can explain up to a third of the cross-country price variations of identical items purchased via the Internet by consumers who do not take advantage of quantity discounts. The price elasticity estimates compare favorably to estimates that I obtain from a standard dataset that features prices across retail locations around the world, suggesting that variable mark-ups play a key role in accounting for observed cross-country differences in prices of tradables.

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The Repercussions of Realignment: United States-China Interdependence and Exchange Rate Politics

Robert Galantucci
International Studies Quarterly, forthcoming

Abstract:
Analysts generally believe that a weaker currency primarily benefits a country's manufacturing and primary goods sectors. However, many of these industries - and the elected officials who represent them - frequently oppose legislation designed to combat the dollar's overvaluation relative to the Chinese yuan. I argue that legislators hesitate to take aggressive action on the exchange rate issue because doing so could lead to a disruption of the broader United States-China economic relationship. The threat of an economic conflict emerges as a particularly important consideration in the context of currency bills, where proposed legislation is linked to trade policy and other areas of international economic regulation. A Bayesian statistical analysis of legislative behavior on two recent exchange rate bills in the US Congress provides overall support for my hypotheses. Legislators with ties to business interests that rely heavily on the Chinese economy were more likely to oppose the bills, while the strongest support came from legislators representing import-competing domestic producers. The results highlight the ways that economic interdependence shapes bilateral exchange rate politics in particular, and United States-China interactions more generally.

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Compulsory Licensing Often Did Not Produce Lower Prices For Antiretrovirals Compared To International Procurement

Reed Beall, Randall Kuhn & Amir Attaran
Health Affairs, March 2015, Pages 493-501

Abstract:
Compulsory licensing has been widely suggested as a legal mechanism for bypassing patents to introduce lower-cost generic antiretrovirals for HIV/AIDS in developing countries. Previous studies found that compulsory licensing can reduce procurement prices for drugs, but it is unknown how the resulting prices compare to procurements through the Global Fund to Fight AIDS, Tuberculosis, and Malaria; UNICEF; and other international channels. For this study we systematically constructed a case-study database of compulsory licensing activity for antiretrovirals and compared compulsory license prices to those in the World Health Organization's (WHO's) Global Price Reporting Mechanism and the Global Fund's Price and Quality Reporting Tool. Thirty compulsory license cases were analyzed with 673 comparable procurements from WHO and Global Fund data. Compulsory license prices exceeded the median international procurement prices in nineteen of the thirty case studies, often with a price gap of more than 25 percent. Compulsory licensing often delivered suboptimal value when compared to the alternative of international procurement, especially when used by low-income countries to manufacture medicines locally. There is an ongoing need for multilateral and charitable actors to work collectively with governments and medicine suppliers on policy options.

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Once an Enemy, Forever an Enemy? The Long-run Impact of the Japanese Invasion of China from 1937 to 1945 on Trade and Investment

Yi Che et al.
Journal of International Economics, forthcoming

Abstract:
In this study, we exploit one of the most important conflicts of the 20th century between what are currently the world's second and third largest economies, that is, the Japanese invasion of China from 1937 to 1945, to investigate the long-term impact of conflicts between countries on cross-border trade and investment. We find that Japanese multinationals are less likely to invest in Chinese regions that suffered greater civilian casualties during the Japanese invasion, and these regions also trade less with Japan. Our study shows that historical animosity still influences international trade and investment, despite the trend toward an increasingly globalized world.

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Are Preferential Agreements Significant for the World Trade Structure? A Network Community Analysis

Carlo Piccardi & Lucia Tajoli
Kyklos, May 2015, Pages 220-239

Abstract:
We assess the impact of preferential trade agreements (PTAs) on the structure of world trade by looking for communities in the world trade network (WTN), and allowing the presence of preferential trade patterns to emerge endogenously. The finding of significant communities (as defined in the topology of the networks) would imply that trading countries are organized in groups of preferential partners. We use different approaches to analyze communities in the WTN between 1962 and 2008, but all methods agree in finding no evidence of a significant partition, supporting the view that the existing PTAs are not strongly distorting the geography of trade patterns, at least at the aggregate level.

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Assessing the evolving fragility of the global food system

Michael Puma et al.
Environmental Research Letters, February 2015

Abstract:
The world food crisis in 2008 highlighted the susceptibility of the global food system to price shocks. Here we use annual staple food production and trade data from 1992-2009 to analyse the changing properties of the global food system. Over the 18 year study period, we show that the global food system is relatively homogeneous (85% of countries have low or marginal food self-sufficiency) and increases in complexity, with the number of global wheat and rice trade connections doubling and trade flows increasing by 42 and 90%, respectively. The increased connectivity and flows within these global trade networks suggest that the global food system is vulnerable to systemic disruptions, especially considering the tendency for exporting countries to switch to non-exporting states during times of food scarcity in the global markets. To test this hypothesis, we superimpose continental-scale disruptions on the wheat and rice trade networks. We find greater absolute reductions in global wheat and rice exports along with larger losses in network connectivity as the networks evolve due to disruptions in European wheat and Asian rice production. Importantly, our findings indicate that least developed countries suffer greater import losses in more connected networks through their increased dependence on imports for staple foods (due to these large-scale disturbances): mean (median) wheat losses as percentages of staple food supply are 8.9% (3.8%) for 1992-1996, increasing to 11% (5.7%) for 2005-2009. Over the same intervals, rice losses increase from 8.2% (2.2%) to 14% (5.2%). Our work indicates that policy efforts should focus on balancing the efficiency of international trade (and its associated specialization) with increased resilience of domestic production and global demand diversity.

By KEVIN LEWIS | 09:00:00 AM


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