Economics: Research Guide

This study examines the relationship between women directors and the cost of equity (COE). Investigating the French firm's sample, we find a significant negative effect of women directors on the cost of equity. Our results also document that the effect of women directors on reducing the cost of equity is significant for firms that have a critical mass of at least four women directors. Using the difference-in-difference (DID) and propensity score matching (PSM) approach, we find that the relationship between female directors and lower equity costs is significant for the period following the Copé–Zimmermann gender quota law. The results show that women directors' presence on corporate board..

The author studies how bankruptcy law firm advertisements affect credit recovery of households in financial distress. Exploiting the border discontinuity strategy associated with the geographic unit in which local TV advertisements are sold, the author empirically uncovers bankruptcy filings and credit recovery related to exogenous variations in bankruptcy law firm advertisements. The author first documents a significant advertising effect on filing rates and shows that advertising-induced filers are similar to existing filers. The author then finds a positive effect of advertisements on credit outcomes including credit score, new homeownership, and foreclosure. The author interprets these f..

Combining longitudinal postcode-level data on charitable donations made through a UK giving portal with publicly available data on local crime and neighborhood characteristics, we study the relationship between local crime and local residents' charitable giving and we investigate the possible mechanisms underlying this relationship. An increase in local crime corresponds to a sizeable increase in the overall size of unscheduled charitable donations. This effect is mainly driven by the responses of female and gender unclassified donors. Donation responses also reflect postcode variation in socio-economic characteristics, levels of mental health, and political leanings, but mainly so for femal..

There is substantial evidence of minimum wage noncompliance in the US and the UK. In this paper, I compile new, comprehensive data on the costs minimum wage violators incur when detected. In both countries, the costs violators face upon detection are often little more than the money they saved by underpaying. To have an incentive to comply under existing penalty regimes, typical US firms would thus have to expect a 47%-83% probability of detection by the DOL, or a 25% probability of a successful FLSA suit. In the UK, typical firms would have to expect a 44%-56% probability of detection. Actual probabilities of detection are substantially lower than this for many firms, and would likely remai..

This paper addresses the relationship between a police officer's workload and the likelihood of statement withdrawal of domestic abuse victims. We focus our analysis on high-risk cases reported to Greater Manchester Police from January 2014 to March 2019. Using this unique dataset, combined with institutional knowledge, we show that adding 10 more cases to a police officer's monthly workload is associated with an increase of the probability of statement withdrawal of 3 percentage points, or 17% of the average withdrawal rate in our sample. The increased workload is likely to be the outcome of a substantial reduction in the police budget, implying that this paper provides additional indirect ..

Parliaments have a unique role in ensuring that adopted laws, regardless of who initiated them, are evidence-based and fit-for-purpose. For the executive branch, laws are vital instruments through which they deliver public policy. Governments therefore rely on parliaments to scrutinise and adopt legislation in a timely, well-planned and co-ordinated manner. Parliamentary scrutiny of government lawmaking and its role in ex post evaluation of law implementation helps the legislature hold the executive to account. Evidence-based lawmaking is especially critical to EU integration processes as they involve adoption of many new laws. This paper reviews how laws are planned, initiated, prepared, sc..

While realist approaches towards judicial decision-making have become predomi- nant, their appropriateness is much less obvious for specialized or technical fields of law, such as patent litigation, and evidence is much scarcer than for generalist courts. Addressing this scarcity, the paper assesses judge-level variation in deci- sion outcomes based on a sample of 1, 722 collegial decisions on patent validity at the German Federal Patent Court. Using a Bayesian mixed membership multilevel model, we find that after controlling for variation due to other contextual factors, there remains significant statistical variation in the propensity to nullify a patent at the level of individual judges. ..

In 2008, a powerful Colombian crime lord (Don Berna) was extradited to the United States. Homicides doubled in his stronghold of Medellin immediately following the extradition. We use variation in time generated by the pre- and post-extradition periods, and variation in space generated by areas of Medellin originally controlled by Don Berna to estimate the impact of the extradition on homicides. We then use the extradition as an instrument for homicides, and show that the wave of violence had downstream effects on education outcomes in the city. Homicide exposure led to a decrease in test scores, increased student dropout (driven by males and poorer students), and increased teacher turnover ..

Abstract Literature and practice outlining the relationship between human rights and unilateral economic sanctions veer in two opposite directions. One strand of literature advocates for sanctions to redress grave human rights violations. This position has been epitomised in the legislation allowing the imposition of economic sanctions for human rights violations occurring abroad (Magnitskystyle sanctions). The opposing voice criticises unilateral economic sanctions irrespective of their objectives and forms, mainly by emphasising their negative repercussions on the enjoyment of human rights. This position is officially adopted by the Special Rapporteur on the negative impact of unilateral c..

The integration of AI for healthcare redefines medical liability, converting decisionmaking into a collaborative process involving a technological tool and its user. When a harm is caused, both users and manufacturers of AI may be responsible. The judicial system has yet to address claims of this nature. We build a model with bilateral care to study which combinations of liability rules are socially efficient. Both agents could face strict liability, be subject to negligence rules or face hybrid regimes: one agent faces a fault liability regime, while the other operates under strict liability. We highlight two crucial elements: (i) the sharing scheme of the payment of compensation between us..

This paper reviews recent efforts in social science to analyze labor enforcement in low-and-middle income countries (LMIC) and inform policy debates. Despite the existing limitations, the empirical evidence suggests that: 1) Enforcement is quite low in LMIC; there are fewer inspectors and inspections, lower penalties, and less trust in the judiciary compared to developed countries. 2) Increasing enforcement produces more compliance with little job destruction, although there is substantial debate and heterogeneity across countries. 3) Countries with more protective labor codes tend to enforce less. 4) Countries that become more open to trade also tend to enforce less. However, trade agreemen..

We examine the relationship between product liability litigation and innovation by systematically combining data on product liability lawsuits with data on new product introductions in a panel dataset of leading medical device firms. We first document a decline in the propensity to introduce new products for both defendant firms and other firms operating in litigated device categories. This decline, however, does not spill over to other device categories, and we also do not find any slowing down in firms' patenting activities. We then show that changes in two features of the regulatory environment---(1) the availability of public information regarding adverse events and (2) federal law takin..

Adam Smith alleged that employers often secretly combine to reduce labor earnings. This paper examines an important case of such behavior: illegal no-poaching agreements through which information-technology companies agreed not to compete for each other’s workers. Exploiting the plausibly exogenous timing of a U.S. Department of Justice investigation, I estimate the effects of these agreements using a difference-in-difference design. Data from Glassdoor permit the inclusion of rich employer- and job-level controls. On average the no-poaching agreements reduced salaries at colluding firms by 5.6 percent, consistent with considerable employer market power. Stock bonuses and job satisfaction ..

Formal enforcement punishing defectors can sustain cooperation by changing incentives. In this paper, we introduce a second effect of enforcement: it can also affect the capacity to learn about the group's cooperativeness. Indeed, in contexts with strong enforcement, it is difficult to tell apart those who cooperate because of the threat of fines from those who are intrinsically cooperative types. Whenever a group is intrinsically cooperative, enforcement will thus have a negative dynamic effect on cooperation because it slows down learning about prevalent values in the group that would occur under a weaker enforcement. We provide theoretical and experimental evidence in support of this mech..

We investigate the extent to which asylum policies that aim to deter individuals from migrating irregularly in fact do so. We specifically consider effects of Germany's recent and high-profile asylum policy adjustments, which include accelerated asylum decision processes, the prospect of asylum processing outside of Europe, the introduction of a payment card to replace cash benefits, and an extended waiting period for native-level benefits. In order to estimate effects of these policy measures on irregular migration intent, we implement a conjoint experiment with 989 men aged 18–40 in four cities in Senegal, a population of most-likely migrants in a country where irregular migration to Eur..

We document a sharp rise in gunshots coupled with declining 911 call volume across thirteen major US cities in the aftermath of the murder of George Floyd. National survey data also indicate that victims of crime became less likely to report their victimization to law enforcement due to mistrust of police. Our results suggest that high-profile acts of police violence may erode community engagement with law enforcement and highlight the call-to-shot ratio as a natural measure of attitudes towards the police.

Ban-the-box (BTB) laws are a widely used public policy rooted in employment law related to unnecessarily exclusionary hiring practices. BTB laws are intended to improve the employment opportunities of those with criminal backgrounds by giving them a fair chance during the hiring process. Prior research on the effectiveness of these laws in meeting their objective is limited and inconclusive. In this article, we extend the prior literature in two ways: we expand the years of analysis to a period of rapid expansion of BTB laws and we examine different types of BTB laws depending on the employers affected (e.g., public sector). Results indicate that BTB laws, any type of BTB law or BTB laws cov..

This chapter examines the impact of COVID-19 shutdowns on domestic violence (DV) in the United States. Despite widespread concerns that pandemic shutdowns could increase DV, initial studies found mixed evidence that varied across data sources and locations. We review the evolving literature on the effects of the pandemic and highlight results from studies that examine multiple measures of DV across a common set of large cities. These studies show that the conflicting early results are due to opposite effects of pandemic shutdowns on two measures of DV in police data: an increase in domestic violence 911 calls and a decrease in DV crime reports. In theory, this divergence can come from either..

We study the impact of losing health insurance on criminal activity by leveraging one of the most substantial Medicaid disenrollments in U.S. history, which occurred in Tennessee in 2005 and lead to 190, 000 non–elderly and non–disabled adults without dependents unexpectedly losing coverage. Using police agency–level data and a difference–in–differences approach, we find that this mass insurance loss increased total crime rates with particularly strong effects for non–violent crime. We test for several potential mechanisms and find that our results may be explained by economic stability and access to healthcare, in particular mental healthcare.

When faced with the choice of behaving corruptly, are people more willing to accept a bribe or to embezzle money? Situations of bribery and embezzlement usually differ in their decision-making dynamics, with bribery requiring coordination between decision-makers (i.e., briber and bribee) while embezzlement does not require such coordination for a decision of corruption. This study makes use of outcome-equivalent games to examine participants’ willingness to engage in these two types of corruption. The results show people are more likely to undertake bribery than embezzlement, and this is attributed to the joint decision-making dynamic of bribery, which shapes the responsibility for the out..

A longstanding and influential view in U.S. correctional policy is that “nothing works” when it comes to rehabilitating incarcerated individuals. We revisit this hypothesis by studying an innovative law-enforcement-led program launched in the county jail of Flint, Michigan: Inmate Growth Naturally and Intentionally Through Education (IGNITE). We develop an instrumental variable approach to estimate the effects of IGNITE exposure, which leverages quasi-random court delays that cause individuals to spend more time in jail both before and after the program’s launch. Holding time in jail fixed, we find that one additional month of IGNITE exposure reduces within-jail misconduct by 49% and r..

Electronic monitoring (EM) has emerged as a popular tool for curbing the growth of large prison populations. Evidence on the causal effects of EM on criminal recidivism is, however, limited and it is unclear how this alternative to incarceration affects the labor supply of offenders and the outcomes of their family members. We study the countrywide expansion of EM in Sweden in 1997 wherein offenders sentenced to up to three months in prison were granted the option to substitute incarceration with EM. Our difference-in-differences estimates, which compare the change in the prison inflow rate of treated offenders to that of non-treated offenders with slightly longer sentences, show that the re..

Monitoring programs—by creating expected costs to regulatory violations—promote compliance through general deterrence, and are essential for regulating firms with potentially hazardous products and imperfectly observable compliance. Yet, evidence on how monitoring deployment affects perceived detection probabilities and—by extension—compliance, is sparse. Beginning in May 2020, pandemic-related protocols in Maricopa County, Arizona, required routine health inspections to occur by video-conference at food establishments with vulnerable populations (e.g., hospitals and nursing homes). Unlike conventional on-site inspections—which continued at most food establishments—these "virtual..

As illicit substances move into the legal product space, substitution patterns with legal products become more salient. In particular, marijuana legalization may have implications for the use of other legal “sin” goods. We estimate a structural model of multi-product use of illegal and legal substances considering joint use, limited access to illicit products, and persistence in use. We focus on a young person’s choice to consume marijuana, alcohol or cigarettes (and possible combinations), and we find that sin goods are complements. Furthermore, our findings emphasize the necessity of accounting for joint consumption and access to obtain correct price sensitivity estimates. Post-legal..

We characterize the socially optimal liability sharing rule in a situation where a manufacturer develops an artificial intelligence (AI) system that is then used by a human operator (or user). First, the manufacturer invests to increase the autonomy of the AI (i.e., the set of situations that the AI can handle without human intervention) and sets a selling price. The user then decides whether or not to buy the AI. Since the autonomy of the AI remains limited, the human operator must sometimes intervene even when the AI is in use. Our main assumption is that users are subject to behavioral inattention. Behavioral inattention reduces the effectiveness of user intervention and increases the exp..

The German Constitutional Court has powers that are no weaker than the powers of the US Supreme Court. Justices are openly selected by the political parties. Nonetheless, public and professional perception are strikingly different. Justices at the German court are not believed to be guided by the policy preferences of the nominating party. This paper uses the complete publicly available data to investigate whether this perception is well-founded. It exploits two independent sources of quasi-random variation to generate causal evidence. There is no smoking gun of ideological influence. Some specifications show, however, that justices nominated by the FDP and the SPD are more activist, even in..

How does immigration enforcement affect public safety? Heightened enforcement could reduce crime by deterring and incapacitating immigrant offenders or, alternatively, increase crime by discouraging victims from reporting offenses. We study the U.S. Secure Communities program, which expanded interior enforcement against unauthorized immigrants. Using national survey data, we find that the program reduced the likelihood that Hispanic victims reported crimes to police and increased the victimization of Hispanics. Total reported crimes are unchanged, masking these opposing effects. We provide evidence that reduced Hispanic reporting is the key driver of increased victimization. Our findings und..

We study the opposing deterrent and enabling effects of guns carried by law-abiding citizens on violent crime, using the location of shooting ranges as an instrument. Our incident-level data based on admittedly imperfect data from the Gun Violence Archive suggests that defensive gun use (DGU) by crime victims may decrease the probability of their injury or death, while increasing the risk of death or injury by the criminal suspects. However, in the aggregate, higher numbers of defensive gun uses—which proxies for more gun carrying and use—are associated with higher numbers of violent crimes, injuries, and fatalities among victims and suspects alike. We hypothesize that this equilibrium e..

Did anti-Asian violence rise after the onset of the COVID-19 pandemic? Efforts to answer this question are compromised by the inherent difficulty of measuring racially-motivated crimes as well as concerns that reporting of racially-motivated hate crimes may have changed due to their increased salience during the pandemic. We pursue an alternative approach to studying whether anti-Asian violence rose after March 2020 that addresses each of these concerns. Using data from the FBI’s National Incident-Based Reporting System, we study inter-race violence occurring in public spaces. While public violence declined among all Americans after March 2020, the share of public violence directed at Asia..

This chapter, forthcoming in the Research Handbook on Law and Time (F. Fagan & S. Levmore eds., Edward Elgar 2024), offers a contribution to the economics of legal transition. It argues that the lawmaker should mitigate the burden generated by the risk of legal change by avoiding “extreme” decisions. The chapter puts the attenuation policy in perspective and compares it to other transition tools.