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. 263
November 10, 2021
Decisions and Performance Under Bounded Rationality: A Computational Benchmarking Approach
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This paper presents a novel approach to analyze human decision-making that involves comparing the behavior of professional chess players relative to a computational benchmark of cognitively bounded rationality. This benchmark is constructed using algorithms of modern chess engines and allows investigating behavior at the level of individual move-by-move observations, thus representing a natural benchmark for computationally bounded optimization. The analysis delivers novel insights by isolating deviations from this benchmark of bounded rationality as well as their causes and consequences for performance. The findings document the existence of several distinct dimensions of behavioral deviations, which are related to asymmetric positional evaluation in terms of losses and gains, time pressure, fatigue, and complexity. The results also document that deviations from the benchmark do not necessarily entail worse performance. Faster decisions are associated with more frequent deviations from the benchmark, yet they are also associated with better performance. The findings are consistent with an important influence of intuition and experience, thereby shedding new light on the recent debate about computational rationality in cognitive processes.
Keywords:
cognitively bounded rationality; benchmark computing; artificial intelligence; decision quality; decision time;
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Discussion Paper No. 262
National Identity and the Integration of Second-Generation Immigrants
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This paper studies the effect of immigrants' national identity on integration in an inter-generational context. Economic theory predicts that the origin country identity of immigrants affects their children's integration through its effects on social network choices and incentives to invest in country-specific human capital. Yet, it is difficult to identify these effects empirically due to potential endogeneity. The empirical analysis of this paper relies on a novel IV strategy inspired by the epidemiological approach, and exploits rich survey data from the U.S. Results show that children whose parents are strongly attached to their origin country have less contact to natives and develop a stronger origin country identity. Consistent with the theoretical argument, they speak English less frequently and more poorly, and perform worse in school compared to peers whose parents are less attached to their origin country. Additional results from the CPS suggest that there exist negative long-term effects on labor market outcomes.
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Discussion Paper No. 247
November 9, 2021
Mentoring and Schooling Decisions: Causal Evidence
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Inequality of opportunity strikes when two children with the same academic performance are sent to diff erent quality schools because their parents di ffer in socio-economic status. Based on a novel dataset for Germany, we demonstrate that children are signi ficantly less likely to enter the academic track if they come from low socio-economic status (SES) families, even after conditioning on prior measures of school performance. We then provide causal evidence that a low-intensity mentoring program can improve long-run education outcomes of low SES children and reduce inequality of opportunity. Low SES children, who were randomly assigned to a mentor for one year are 20 percent more likely to enter a high track program. The mentoring relationship aff ects both parents and children and has positive long-term implications for children's educational trajectories.
Keywords:
mentoring; childhood intervention programs; education; human capital investments; inequality of opportunity; socio-economic status;
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Discussion Paper No. 246
On the Causes and Consequences of Deviations from Rational Behavior
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This paper presents novel evidence for the prevalence of deviations from rational behavior in human decision making – and for the corresponding causes and consequences. The analysis is based on move-by-move data from chess tournaments and an identification strategy that compares behavior of professional chess players to a rational behavioral benchmark that is constructed using modern chess engines. The evidence documents the existence of several distinct dimensions in which human players deviate from a rational benchmark. In particular, the results show deviations related to loss aversion, time pressure, fatigue, and cognitive limitations. The results also demonstrate that deviations do not necessarily lead to worse performance. Consistent with an important influence of intuition and experience, faster decisions are associated with more frequent deviations from the rational benchmark, yet they are also associated with better performance.
Keywords:
rational strategies; artificial intelligence; behavioral bias;
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Discussion Paper No. 245
Aging, Proximity to Death, and Religiousness
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Considerable evidence has documented that the elderly are more religious and that religiousness is associated with better health and lower mortality. Yet, little is known about the reverse role of life expectancy or proximity to death, as opposed to age, for religiousness. This paper provides evidence for the distinct role of expected remaining life years for the importance of religion in individuals’ lives. We combine individual survey response data for more than 311,000 individuals from 95 countries over the period 1994-2014 with information from period life tables. Contrary to wide-held beliefs, religiousness decreases with greater expected proximity to death. The findings have important implications regarding the consequences of population aging for religiousness and associated outcomes.
Keywords:
religiousness; demographics; proximity of death; remaining life years;
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Discussion Paper No. 244
Self-Assessment: The Role of the Social Environment
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This study presents descriptive and causal evidence on the role of the social environment in shaping the accuracy of self-assessment. We introduce a novel incentivized measurement tool to measure the accuracy of self-assessment among children and use this tool to show that children from high socioeconomic status (SES) families are more accurate in their self-assessment, compared to children from low SES families. To move beyond correlational evidence, we then exploit the exogenous variation of participation in a mentoring program designed to enrich the social environment of children. We document that the mentoring program has a causal positive e ffect on the accuracy of children's self-assessment. Finally, we show that the mentoring program is most e ffective for children whose parents provide few social and interactive activities for their children.
Keywords:
self-assessment; beliefs; experiments; randomized intervention; children;
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Discussion Paper No. 224
Refugee-Specific Government Air, Institutional Embeddedness and Child Refugees' Economic Success Later in Life: Evidence from Post-WWII GDR Refugees
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We exploit a unique historical setting to investigate how refugee-specific government aid affects the medium-term outcomes of refugees who migrate as children and young adults. German Democratic Republic (GDR) refugees who escaped to West Germany between 1946 and 1961 who were acknowledged to be “political refugees” were eligible for refugee-targeted aid, but only after 1953. We combine several approaches to address identification issues resulting from the fact that refugees eligible for aid are both self-selected and screened by local authorities. We find positive effects of aid-eligibility on educational attainment, job quality and income among the refugees who migrated as young adults (aged 15-24). We do not find similar effects of aid-eligibility for refugees who migrated as children (aged 1-14). The overall results suggest that factors coming from the refugee experience per se do not impact negatively on the later-in-life socio-economic success of refugees. The often-found negative effects in various measures of integration in other refugee episodes are therefore likely driven by confounding factors that our unique historical setting allows mitigates.
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Discussion Paper No. 223
The Role of Unemployment and Job Change when Estimating the Returns to Migration
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Estimating the returns to migration from East to West Germany, this paper focuses on pre-migration employment dynamics, earnings uncertainty, and job change in the source region. Migrants are found to be negatively selected with respect to labor market outcomes, with a large drop in earnings and employment during the last few months before migration. We find sizeable positive earnings and employment gains of migration both in comparison to staying or job change. The size of the gains varies considerably with pre-migration earnings and with the counterfactual considered. Future migrants have worse expectations for their labor market prospects in the East and migrants show a greater openness to mobility.
Keywords:
migration; returns; selection; unemployment; moving costs;
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