Discussion Paper No. 295
November 15, 2021
The Origins of Gender Differences in Competitiveness and Earnings Expectations: Causal Evidence from a Mentoring Intervention
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Abstract:
We present evidence on the role of the social environment for the development of gender differences in competitiveness and earnings expectations. First, we document that the gender gap in competitiveness and earnings expectations is more pronounced among adolescents with low socioeconomic status (SES). We further document that there is a positive association between the competitiveness of mothers and their daughters, but not between the competitiveness of mothers and their sons. Second, we show that a randomized mentoring intervention that exposes low-SES children to predominantly female role models causally affects girls' willingness to compete and narrows both the gender gap in competitiveness as well as the gender gap in earnings expectations. Together, the results highlight the importance of the social environment in shaping willingness to compete and earnings expectations at a young age.
Keywords:
competitiveness; gender; socioeconomic status; inequality; earnings expectations;
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Discussion Paper No. 294
Earnings Information and Public Preferences for University Tuition: Evidence from Representative Experiments
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Higher education finance depends on the public’s preferences for charging tuition, which may be partly based on beliefs about the university earnings premium. To test whether public support for tuition depends on earnings information, we devise survey experiments in representative samples of the German electorate (N>15,000). The electorate is divided, with a plurality opposing tuition. Providing information on the university earnings premium raises support for tuition by 7 percentage points, turning the plurality in favor. The opposition-reducing effect persists two weeks after treatment. Information on fiscal costs and unequal access does not affect public preferences. We subject the baseline result to various experimental tests of replicability, robustness, heterogeneity, and consequentiality.
Keywords:
tuition; higher education; information; earnings premium; public opinion; voting;
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Discussion Paper No. 293
November 11, 2021
Malaria and Chinese Economic Activities in Africa
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We present novel evidence for the influence of malaria exposure on the geographic loca- tion of Chinese economic activities in Africa. The hypothesis is based on the observation that many Chinese aid projects and infrastructure contractors rely on Chinese personnel. High malaria exposure might constitute an important impediment to their employment and productivity. Combining data on Chinese aid and construction projects with geo-localized information about the presence of individuals from internet posts reveals a lower density of Chinese activities and of Chinese workers in areas with a high malaria exposure. This e↵ect is mitigated partly through heterogeneity across sectors and immunity of the local population, through the selection of Chinese workers from regions in China with historically high malaria risk, and through the availability of malaria treatment.
Keywords:
infrastructure projects; malaria; disease prevalence; immunity; weibo;
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Discussion Paper No. 292
Patience and Comparative Development
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This paper studies the relationship between patience and comparative develop- ment through a combination of reduced-form analyses and model estimations. Based on a globally representative dataset on time preference in 76 countries, we document two sets of stylized facts. First, patience is strongly correlated with per capita income and the accumulation of physical capital, human capital and productivity. These correlations hold across countries, subnational regions, and individuals. Second, the magnitude of the patience elasticity strongly increases in the level of aggregation. To provide an interpretive lens for these patterns, we analyze an OLG model in which savings and education decisions are endogenous to patience, aggregate production is characterized by capital-skill complementarities, and productivity implicitly depends on patience through a human capital externality. In our model estimations, general equilibrium effects alone account for a non-trivial share of the observed amplification effects, and an extension to human capital externalities can quantitatively match the empirical evidence.
Keywords:
time preference; comparative development; factor accumulation;
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Discussion Paper No. 227
November 10, 2021
The Effect of Social Comparison on Debt Taking: Experimental Evidence
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A number of studies show that there is a link between social comparison and high levels of household debt. However, the exact mechanisms behind this link are not yet well understood. In this paper, we perform a lab experiment designed to study the eff ects of social image concerns and peer information on consumption choices that can be financed through debt taking. We find that having to announce one's consumption decision publicly leads to leaving money on the table, which is the opposite of what we expected. Being informed about other participants' choices leads to conformity in choices between participants.
Keywords:
household finance; lab experiment; social comparison; peer effects;
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Discussion Paper No. 217
On the Origins of National Identity
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What are the origins of national identity? We extend the model by Alesina et al. (2019) to analyze the incentives of elites to use specific types of identity policies in response to shocks, and the extent to which such policies should be effective. To elicit changes in identity we use data on first names given in German cities between 1800 and 1875. We show that parents in cities treated by nation building policies responded by choosing first names of German origin for their children. To control for familyspecific confounding factors, we exploit within family variation. We also show that the response can be conditional on cultural distance to the elite. Finally, Germanic first names had remarkable predictive power for behaviour. We find that individuals with Germanic first names made different marriage choices and were more likely to get actively involved and decorated during the German-French War in 1870/71 and the First World War.
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Discussion Paper No. 281
The Indirect Fiscal Benefits of Low-Skilled Immigration
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Low-skilled immigrants indirectly affect public finances through their effect on native wages & labor supply. We operationalize this indirect fiscal effect in various models of immigration and the labor market. We derive closed-form expressions for this effect in terms of estimable statistics. Empirical quantifications for the U.S. reveal that the indirect fiscal benefit of one low-skilled immigrant lies between $770 and $2,100 annually. The indirect fiscal benefit may outweigh the negative direct fiscal effect that has previously been documented. This challenges the perception of low-skilled immigration as a fiscal burden.
Keywords:
immigration; fiscal impact; general equilibrium;
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Discussion Paper No. 291
The Legacy of Covid-19 in Education
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If school closures and social-distancing experiences during the Covid-19 pandemic impeded children’s skill development, they may leave a lasting legacy in human capital. To understand the pandemic’s effects on school children, this paper combines a review of the emerging international literature with new evidence from German longitudinal time-use surveys. Based on the conceptual framework of an education production function, we cover evidence on child, parent, and school inputs and students’ cognitive and socio-emotional development. The German panel evidence shows that children’s learning time decreased severely during the first school closures, particularly for low-achieving students, and increased only slightly one year later. In a value-added model, learning time increases with daily online class instruction, but not with other school activities. The review shows substantial losses in cognitive skills on achievement tests, particularly for students from disadvantaged backgrounds. Socio-emotional wellbeing also declined in the short run. Structural models and reduced-form projections suggest that unless remediated, the school closures will persistently reduce skill development, lifetime income, and economic growth and increase inequality.
Keywords:
Covid-19; school closures; education; students; schools; educational inequality;
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Discussion Paper No. 290
Regulatory and Bailout Decisions in a Banking Union
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We model a banking union of two countries whose banking sectors differ in their average probability of failure and externalities between the two countries arise from cross-border bank ownership. The two countries face (i) a regulatory (super- visory) decision of which banks are to be shut down before they can go bankrupt, and (ii) a bailout decision of who pays for banks that have failed despite regu- latory oversight. Each of these choices can either be taken in a centralized or in a decentralized way. In our benchmark model the two countries always agree on a centralized regulation policy. In contrast, bailout policies are centralized only when international spillovers from cross-border bank ownership are strong, and banking sectors are highly profitable.
Keywords:
banking union; bank regulation; bailout policies;
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Discussion Paper No. 289
Report-Dependent Utility and Strategy-Proofness
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Despite the truthful dominant strategy, participants in strategy-proof me- chanisms submit manipulated preferences. In our model, participants dislike rejections and enjoy the confirmation from getting what they declared most desirable. Formally, the payo↵ from a match decreases in its position in the submitted ranking such that a strategic trade-o↵ between preference inten- sity and match probability arises. This trade-o↵ can trigger the commonly observed self-selection strategies. We show that misrepresentations can per- sist for arbitrarily small report-dependent components. However, honesty is guaranteed to be optimal if and only if there is no conflict between the quality and feasibility of a match.
Keywords:
market design; matching; school choice; self-regarding preferences; strategy-proof mechanism;
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