Reservation Raises: The Aggregate Labour Supply Curve at the Extensive Margin
Preston Mui, Benjamin Schoefer
Review of Economic Studies,
im Erscheinen
Abstract
We measure desired labour supply at the extensive (employment) margin in two representative surveys of the U.S. and German populations. We elicit reservation raises: the percent wage change that renders a given individual indifferent between employment and nonemployment. It is equal to her reservation wage divided by her actual, or potential, wage. The reservation raise distribution is the nonparametric aggregate labour supply curve. Locally, the curve exhibits large short-run elasticities above 3, consistent with business cycle evidence. For larger upward shifts, arc elasticities shrink towards 0.5, consistent with quasi-experimental evidence from tax holidays. Existing models fail to match this nonconstant, asymmetric curve.
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The Effects of Antitrust Laws on Horizontal Mergers: International Evidence
Chune Young Chung, Iftekhar Hasan, JiHoon Hwang, Incheol Kim
Journal of Financial and Quantitative Analysis,
im Erscheinen
Abstract
This study examines how antitrust law adoptions affect horizontal merger and acquisition (M&A) outcomes. Using the staggered introduction of competition laws in 20 countries, we find antitrust regulation decreases acquirers’ five-day cumulative abnormal returns surrounding horizontal merger announcements. A decrease in deal value, target book assets, and industry peers' announcement returns are consistent with the market power hypothesis. Exploiting antitrust law adoptions addresses a downward bias to an estimated effect of antitrust enforcement (Baker (2003)). The potential bias from heterogeneous treatment effects does not nullify our results. Overall, antitrust policies seem to deter post-merger monopolistic gains, potentially improving customer welfare.
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Financial Debt Contracting and Managerial Agency Problems
Björn Imbierowicz, Daniel Streitz
Financial Management,
Nr. 1,
2024
Abstract
This paper analyzes if lenders resolve managerial agency problems in loan contracts using sweep covenants. Sweeps require a (partial) prepayment when triggered and are included in many contracts. Exploiting exogenous reductions in analyst coverage due to brokerage house mergers and closures, we find that increased borrower opacity significantly increases sweep use. The effect is strongest for borrowers with higher levels of managerial entrenchment and if lenders hold both debt and equity in the firm. Overall, our results suggest that lenders implement sweep covenants to mitigate managerial agency problems by limiting contingencies of wealth expropriation.
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The Long-term Legacy of the Liberation of the Sudetenland by the Red and US Armies
Jakub Grossmann, Štěpán Jurajda
IDEA CERGE EI Studie,
Nr. 7,
2022
Abstract
Forced migration results in trauma to the millions of people displaced from their homes, but very little is known about the fate of those who avoided expulsion and became a minority in the new society. This analysis reveals how and to what degree the manner and extent of the post-war expulsion of the German population from the Sudetenland influenced the country’s long-term social development. (This publication is written in czech language.)
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Does Information about Inequality and Discrimination in Early Child Care Affect Policy Preferences?
Henning Hermes, Philipp Lergetporer, Fabian Mierisch, Guido Schwerdt, Simon Wiederhold
IWH Discussion Papers,
Nr. 2,
2024
Abstract
We investigate public preferences for equity-enhancing policies in access to early child care, using a survey experiment with a representative sample of the German population (n ≈ 4, 800). We observe strong misperceptions about migrant-native inequalities in early child care that vary by respondents’ age and right-wing voting preferences. Randomly providing information about the actual extent of inequalities has a nuanced impact on the support for equity-enhancing policy reforms: it increases support for respondents who initially underestimated these inequalities, and tends to decrease support for those who initially overestimated them. This asymmetric effect leads to a more consensual policy view, substantially decreasing the polarization in policy support between under- and overestimators. Our results suggest that correcting misperceptions can align public policy preferences, potentially leading to less polarized debates about how to address inequalities and discrimination.
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Labor Market Polarization and Student Debt
Sanket Korgaonkar, Elena Loutskina, Constantine Yannelis
SSRN Working Paper,
2024
Abstract
This paper uses a new empirical design to explore how labor market polarization affects individuals’ incentive to pursue education funded on the margin by student debt. We argue that the labor market polarization–where automation replaces mid-skill and mid-education-level job–changes the marginal benefits of education and training and sharpens incentives to incur student debt. We advance a new measure of labor market polarizations that allows to capture the heterogeneity of this phenomena across geographies and time. Using this measure, we find that U.S. CBSAs that experience deeper labor market polarization see an increase in student debt balances and in the number of people pursuing student debt. On average, the decline in middle-skill jobs and wages has little effect on individuals’ ability to pay down existing student debt. The effects are most pronounced in ZIP codes with lower average credit scores, lower incomes, and higher share of the minority population.
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Does Information about Inequality and Discrimination in Early Child Care Affect Policy Preferences?
Henning Hermes, Philipp Lergetporer, Fabian Mierisch, Guido Schwerdt, Simon Wiederhold
CESifo Working Paper,
Nr. 10925,
2024
Abstract
We investigate public preferences for equity-enhancing policies in access to early child care, using a survey experiment with a representative sample of the German population (n ≈ 4, 800). We observe strong misperceptions about migrant-native inequalities in early child care that vary by respondents’ age and right-wing voting preferences. Randomly providing information about the actual extent of inequalities has a nuanced impact on the support for equity-enhancing policy reforms: it increases support for respondents who initially underestimated these inequalities, and tends to decrease support for those who initially overestimated them. This asymmetric effect leads to a more consensual policy view, substantially decreasing the polarization in policy support between under- and overestimators. Our results suggest that correcting misperceptions can align public policy preferences, potentially leading to less polarized debates about how to address inequalities and discrimination.
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Business Cycle Characteristics of Mediterranean Economies: a Secular Trend and Cycle Dynamics Perspective
Anna Solms, Bernd Süssmuth
International Economics and Economic Policy,
October
2022
Abstract
This study analyzes business cycle characteristics for all 20 major contemporaneous economies bordering the Mediterranean Sea based on annual real gross domestic product series for the period from 1960 to 2019. The region we investigate corresponds to the Mare Internum region of the Imperial Roman Empire during the Nerva-Antonine and early Severan dynasty, i.e., at the time of the maximum extent of the Roman Empire around 100 to 200 CE. The covered area encircles the Mediterranean, including economies now belonging to the European Union as well as acceding countries, Turkey, and the Middle East and North African economies. Using a components-deviation-cycle approach, we assess level trends and relative volatility of output. We also quantify the contribution of various factors to the business cycle variability within a region. We find cyclic commonalities and idiosyncrasies are related to ancient and colonial history and to contemporaneous trade relationships. Caliphate and Ottoman Empire membership as well as colonial rule in the twentieth century and contemporary Muslim share of population are the most promising predictors of business cycle commonalities in the region.
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The Gender Reveal: The Effect of Sons on Young Fathers’ Criminal Behavior and Labor Market Activities
Kabir Dasgupta, André Diegmann, Tom Kirchmaier, Alexander Plum
Labour Economics,
October
2022
Abstract
Based on New Zealand’s administrative court charges data, we document child gender-specific differences in future criminal behavior of young fathers. The deterrent impact of having a son on the future likelihood of receiving convictions persists for as long as ten years post-childbirth. Utilizing population-wide monthly tax registers and Census data, we provide key insights into the role model hypothesis. We show that young fathers with a son have (i) a higher likelihood of being in employment, (ii) higher wages and salaries, (iii) lower benefit dependency, (iv) better qualification, and (v) a higher likelihood of being in a partnered relationship.
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Commitment or Constraint? The Effect of Loan Covenants on Merger and Acquisition Activity
Gene Ambrocio, Gonul Colak, Iftekhar Hasan
Finance Research Letters,
June
2022
Abstract
We investigate how loan covenants associated with potential target firms affect takeover deals. We propose two possible channels. Under a discipline channel, the target firm becomes an attractive candidate for takeovers and merger deals are facilitated. Under a constraint channel, covenants hinder merger activity. We find support for the latter channel. Takeover likelihood is lower, deal failures are more common, the likelihood of price renegotiation is higher, and acquisition premium is lower when the target is bound by covenants. Covenant tightness exacerbates this effect.
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