Documents de travail

Private exploitation of the North-Western Sahara Aquifer System
Amine Chekireb
Julio Goncalves
Hubert Stahn
Agnes Tomini

We formulate a hydro-economic model of the NorthWestern Sahara Aquifer System (NWSAS) to assess the effects of intensive pumping on the groundwater stock and examine the subsequent consequences of aquifer depletion. This large system comprises multi-layer reservoirs with vertical exchanges, all exploited under open access properties. We first develop a theoretical model to account for relevant features of the NWSAS by introducing, in the standard Gisser-Sanchez model, a non-stationary demand and quadratic stock-dependent cost functions. In the second step, we calibrate parameters values using data from the NWSAS over 1955-2000. We finally simulate the time evolution of the aquifer system with exploitation under an open-access regime. We specifically examine time trajectories of the piezometric levels in the two reservoirs, the natural outlets, and the modification of water balances. We find that natural outlets of the two reservoirs might be totally dried before 2050.

Mots clés: hydro-economic model, private pumping, multi aquifer system, groundwater-dependant ecosystems, semi-arid region, simulation
Téléchargement Icône PDF wp_2021_-_nr_44.pdf (12.97 Mo)
Budget-neutral capital tax cuts
Frédéric Dufourt
Lisa Kerdelhué
Océane Piétri

We revisit the canonical policy of eliminating capital taxation by increasing labor taxation in a endogenous-labor, heterogeneous-agent model with income and wealth heterogeneity, when the government is subject to a strict (per-period) balancedbudget constraint. By contrast with its non-budget neutral equivalent-associated with a constant tax rate over time and a permanent increase in the level of public debt-we show that the obtained endogenous path for the labor tax rate is sharply increasing in the initial period and decreasing over time. The policy then generates a deeper recession in the short-run and a greater expansion in the long-run, as well as a smaller decline in wealth inequality associated with a reduced incentive to save for precautionary motives. Overall, the policy still generates significant losses in average welfare.

Mots clés: fiscal policy, capital tax cut, tax composition, heterogeneous agents, wealth redistribution
Téléchargement Icône PDF wp_2021_-_nr_43.pdf (678.63 Ko)
Accounting for subsistence needs in non-market valuation: A simple proposal
Victor Champonnois
Olivier Chanel

Revealed and stated preference techniques are widely used to assess willingness to pay (WTP) for non-market goods as input to public and private decision-making. However, individuals first have to satisfy subsistence needs through market good consumption, which affects their ability to pay. We provide a methodological framework and derive a simple ex post adjustment factor to account for this effect. We quantify its impacts on the WTP for non-market goods and the ranking of projects theoretically, numerically and empirically. This confirms that non-adjusted WTP tends to be plutocratic: the views of the richest-whatever they are-are more likely to impact decision-making, potentially leading to ranking reversal between projects. We also suggest that the subsistence needs-based adjustment factor we propose has a role to play in value transfer procedures. The overall goal is a better representation of the entire population's preferences with regard to non-market goods.

Mots clés: subsistence needs; adjustment factor; non-market valuation; value transfer; population's preferences
Téléchargement Icône PDF wp_2021_-_nr_42v2.pdf (1.33 Mo)
COVID-19 Acceleration and Vaccine Status in France - Summer 2021
Christelle Baunez
Michaël Degoulet
Stéphane Luchini
Patrick A. Pintus
Miriam Teschl

Objectives: This note provides an assessment of COVID-19 acceleration among groups with different vaccine status in France.

Methods: We assess viral acceleration using a novel indicator introduced in Baunez et al. (2021). The acceleration index relates the percentage change of tests that have been performed on a given day to the percentage change in the associated positive cases that same day. We compare viral acceleration among vaccinated and unvaccinated individuals in France over the period May 31st-August 29, 2021.

Results: Once the state of the epidemic within each groups is accounted for, it turns out that viral acceleration has since mid-July converged to similar levels among vaccinated and unvaccinated individuals in France, even though viral speed is larger for the latter group compared to the former.

Conclusion: Our results call for an increasing testing effort for both vaccinated and unvaccinated individuals, in view of the fact that viral circulation is currently accelerating at similar levels for both groups in France.

Mots clés: COVID-19; vaccine status; viral acceleration; acceleration index; France
Téléchargement Icône PDF wp_2021_-_nr_41.pdf (632.79 Ko)
Formal insurance and altruism networks
Tizié Bene
Yann Bramoullé
Frédéric Deroïan

We study how altruism networks affect the adoption of formal insurance. Agents have private CARA utilities and are embedded in a network of altruistic relationships. Incomes are subject to both a common shock and a large idiosyncratic shock. Agents can adopt formal insurance to cover the common shock. We show that ex-post altruistic transfers induce interdependence in ex-ante adoption decisions. We characterize the Nash equilibria of the insurance adoption game. We show that adoption decisions are substitutes and that the number of adopters is unique in equilibrium. The demand for formal insurance is lower with altruism than without at low prices, but higher at high prices. Remarkably, individual incentives are aligned with social welfare. We extend our analysis to CRRA utilities and to a fixed utility cost of adoption.

Mots clés: formal insurance, informal transfers, altruism networks
Téléchargement Icône PDF wp_2021_-_nr_40.pdf (774.67 Ko)
Gender differences in re-contesting decisions: New evidence from French municipal elections
Julieta Peveri
Marc Sangnier

This paper studies differences across genders in the re-contesting decisions of politicians following electoral wins or defeats. Using close races in mixed-gender French local elections, we show that women are less likely to persist in competition when they lose compared to male runners-up, but are equally or more prone than male winners to re-contest when they win. Differences in observable characteristics or in the expected electoral returns of running again cannot fully account for these gender gaps in persistence. In contrast, the heterogeneity of the results across political ideology, age, experience and occupation suggests that behavioural explanations are at play. Additionally, we provide evidence that a woman's victory encourages former female challengers to re-contest but does not trigger the entry of new female candidates.

Mots clés: gender, competition, persistence, candidates, self-selection, elections
Téléchargement Icône PDF wp_2021_-_nr_39.pdf (17.16 Mo)
Linking Covid-19 epidemic and emerging market OAS: Evidence using dynamic copulas and Pareto distributions
Imdade Chitou
Gilles Dufrénot
Julien Esposito

This paper investigates the dependence of the Option-Adjusted Spread (OAS) for several ICE BofA Emerging Markets Corporate Plus Indexes to the outbreaks of the Covid-19 viral pandemics between March 1, 2020, and April 30, 2021. We investigate whether the number of new cases, the reproduction rate, death rate and stringency policies have resulted in an increase/decrease in the spreads. We study the bivariate distributions of epidemiological indicators and spreads to investigate their concordance using dynamic copula analysis and estimate the Kendall rankcorrelation coefficient. We also investigate the effect of the epidemiological variables on the extreme values of the spreads by fitting a tail index derived from a Pareto type I distribution. We highlight the existence of correlations, robust to the type of copulas used (Clayton or Gumbel). Moreover, we show that the epidemiological variables explain well the extreme values of the spreads.

Mots clés: COVID-19, corporate spreads, pandemics, emerging economies
Téléchargement Icône PDF wp_2021_-_nr_38.pdf (1.88 Mo)
Evaluating distributions of opportunities from behind a veil of ignorance: A robust approach
Francesco Andreoli
Mathieu Faure
Nicolas Gravel
Tista Kundu

This paper provides a robust criterion for evaluating the allocation of opportunities among various groups. We envisage the problem of comparing these allocations from the view point of an ethical observer placed behind a veil of ignorance with respect to the group in which he/she could end up. We give justi…cation for such an ethical observer to evaluate these allocations of opportunities on the basis of an expected valuation of the expected utility of being in a group assuming an equal probability of falling in every group. We identify a criterion for comparing societies that is agreed upon by all such ethical observers who exhibit aversion to inequality of opportunities. The criterion happens to be a conic extension of zonotope inclusion criterion. We provide various interpretations of this criterion as well as some illustrations of its possible use, notably in the Indian context where we evaluate the inequalities of educational opportunities among castes and genders o¤ered by Indian states.

Mots clés: equalizing opportunities, groups, zonotopes, gender, education
Téléchargement Icône PDF wp_2021_-_nr_37.pdf (939.49 Ko)
The rich, the poor, and the middle class: banking crises and income distribution
Mehdi El Herradi
Aurélien Leroy

How do banking crises a ect rich, middle-class and poor households? This paper quanti es the distributional implications of banking crises for a panel of 140 economies over the 1970-2017 period. We rely on di erent empirical settings, including an instrumental variable approach, that exploit the geographical di usion of banking crises across borders. Our results show that banking crises systematically reduce the income share of rich households and positively a ect middle-class households. We also nd that income inequality increases during periods preceding the triggering of a banking crisis.

Mots clés: banking crises, income distribution, Inequality
Téléchargement Icône PDF wp_2021_-_nr_36.pdf (1.41 Mo)
Profit Sharing as a Bargaining Weapon Against Unions
Vladimir Pecheu

There is no consensus among economists about the reasons why firms resort to profit sharing compensation, especially in larger firms. This paper presents evidence for France showing that firms with unions are more likely to resort to profit sharing than those without and, moreover, that strike incidence decreases with its usage. Inspired by these stylized facts, I develop a model to study the effects of profit sharing on union behavior that introduces two novel mechanisms. First, by making employee compensation depend on output, profit sharing makes unions internalize the cost of their strikes so that they are less inclined to organize collective actions. This in turn damages the credibility of their strike threats. Second, over time unions lose reputation, which further reduces their bargaining power. Lastly, I test the model using exogenous dates of elections of union representatives that give incentives for unions to organize collective actions in a competition for voters. I show that employers anticipate the effect of elections by increasing the usage of profit sharing. Its payment leads to a reduction in strike length the same year, and to a drop in wage growth by about 13 percent the year after. The effect is concentrated on lower occupations for whom wage growth is almost halved and driven by a reduction in the bargaining power of unions.

Mots clés: profit sharing, unions, bargaining, strikes, reputation, labor income inequality
Téléchargement Icône PDF wp_2021_-_nr_35.pdf (565.23 Ko)
Social Roles
Avner Seror

In this paper, I introduce a workable dynamic utility model on the interplay between economic actions and social roles. I model both how economic actions are embedded in social roles, and how social roles reciprocally feed back into preferences and affect economic outcomes. I also consider a set of policy interventions aimed at breaking social roles when they deteriorate economic outcomes.

Mots clés: social roles, identity, endogenous preferences, gender, discrimination
Téléchargement Icône PDF wp_2021_-_nr_34.pdf (518.15 Ko)
The Bayesian approach to poverty measurement
Michel Lubrano
Zhou Xun

This survey paper reviews the recent Bayesian literature on poverty measurement. After introducing Bayesian statistics, we show how Bayesian model criticism could help to revise the international poverty line. Using mixtures of lognormals to model income, we derive the posterior distribution for the FGT, Watts and Sen poverty indices, then for TIP curves (with an illustration on child poverty in Germany) and finally for Growth Incidence Curves. The relation of restricted stochastic dominance with TIP and GIC dominance is detailed with an example on UK data. Using panel data, we show how to decompose poverty into total, chronic and transient poverty, comparing child and adult poverty in East Germany when redistribution is introduced. When a panel is not available, a Gibbs sampler is used to build a pseudo panel. We illustrate poverty dynamics by examining the consequences of the Wall on poverty entry and poverty persistence in occupied West Bank.

Mots clés: Bayesian inference, mixture model, poverty indices, stochastic dominance, poverty dynamics
Téléchargement Icône PDF wp_2021_-_nr_33.pdf (257.49 Ko)
United, we can be stronger! French integrated general practitioners had better chronic care follow-up during lockdown
Anna Zaytseva
Pierre Verger
Bruno Ventelou

Given the importance of continuous follow-up of chronic patients, we evaluated performance of French private practice general practitioners (GPs) practicing in multi-professional group practices (MGP), compared to their peers practicing outside MGP, regarding chronic care management during rst Covid-19 lockdown in spring 2020.

The cross-sectional web questionnaire of 1,191 GPs took place in April 2020. We exploit self-reported data on: 1) frequency of consultations for chronic patients during lockdown compared to their typical week before the pandemic, along with 2) GPs proactive behaviour when contacting their chronic patients. We use probit and seemingly unrelated probit models (adjusted for endogeneity of choice of engagement in MGP) to test whether GPs in MGP had signicantly dierent responses to the Covid-19 crisis.

We nd that GPs in MGP were less likely to experience a drop in consultations related to complications of chronic diseases. They were also more proactive to contact their chronic patients.

Quick policy response is needed to alleviate diculties encountered by GP practicing outside MGPs. Results advocate for further development of integrated care in the long run.

Mots clés: general practitioners, France, provider-sponsored organizations, long-term care
Téléchargement Icône PDF wp_2021_-_nr_32.pdf (311.64 Ko)
Bayesian Inference for Parametric Growth Incidence Curves
Edwin Fourrier-Nicolai
Michel Lubrano

The growth incidence curve of Ravallion and Chen (2003) is based on the quantile function. Its distribution-free estimator behaves erratically with usual sample sizes leading to problems in the tails. We propose a series of parametric models in a Bayesian framework. A first solution consists in modelling the underlying income distribution using simple densities for which the quantile function has a closed analytical form. This solution is extended by considering a mixture model for the underlying income distribution. However in this case, the quantile function is semi-explicit and has to be evaluated numerically. The alternative solution consists in adjusting directly a functional form for the Lorenz curve and deriving its first order derivative to find the corresponding quantile function. We compare these models first by Monte Carlo simulations and second by using UK data from the Family Expenditure Survey where we devote a particular attention to the analysis of subgroups.

Mots clés: Bayesian inference, growth incidence curve, Inequality
Téléchargement Icône PDF wp_2021_-_nr_31.pdf (226.65 Ko)
The Effect of ENSO Shocks on Commodity Prices: A Multi-Time Scale Approach
Gilles Dufrénot
William Ginn
Marc Pourroy

We investigate the effect of changing ENSO patterns on global commodity prices, including energy, metals/minerals and agriculture real commodity price subsets, while controlling for global economic output and interest rate via a global factor local projections (GFALP) model. We study the responses to climate shocks using a nonlinear multivariate model to assess differential effects across ENSO climate regimes. We find that commodity inflation is reactive to El Niño and La Niña events, but that this sensitivity can occur either in the short-or long-term depending on the commodity under investigation. For commodities in agriculture, we uncover an asymmetric influence of El Niño and La Niña shocks. More central banks are questioning whether climate change is part of their mission to stabilize prices. Our results indicate the existence of a direct link between weather anomalies and commodity inflation, one that should be integrated into the central banks' inflation targeting framework.

Mots clés: ENSO, weather, commodity price, agriculture, energy
Téléchargement Icône PDF wp_2021_-_nr_30.pdf (14.67 Mo)
Repeated Games with Switching Costs: Stationary vs History-Independent Strategies
Yevgeny Tsodikovich
Xavier Venel
Anna Zseleva

We study zero-sum repeated games where the minimizing player has to pay a certain cost each time he changes his action. Our contribution is twofold. First, we show that the value of the game exists in stationary strategies, depending solely on the previous action of the minimizing player, not the entire history. We provide a full characterization of the value and the optimal strategies. The strategies exhibit a robustness property and typically do not change with a small perturbation of the switching costs. Second, we consider a case where the minimizing player is limited to playing simpler strategies that are completely history-independent. Here too, we provide a full characterization of the (minimax) value and the strategies for obtaining it. Moreover, we present several bounds on the loss due to this limitation.

Mots clés: switching costs, repeated games, stochastic games, zero-sum games
Téléchargement Icône PDF wp_2021_-_nr_29.pdf (557.24 Ko)
Environment, public debt and epidemics
Marion Davin
Mouez Fodha
Thomas Seegmuller

We study whether fiscal policies, especially public debt, can help to curb the macroeconomic and health consequences of epidemics. Our approach is based on three main features: we introduce the dynamics of epidemics in an overlapping generations model to take into account that old people are more vulnerable; people are more easily infected when pollution is high; public spending and public debt can be used to tackle the effects of epidemics. We show that fiscal policies can promote the convergence to a stable steady state with no epidemics. When public policies are not able to permanently eradicate the epidemic, public debt and income transfers could reduce the number of infected people and increase capital and GDP per capita. As a prerequisite, pollution intensity should not be too high. Finally, we define a household subsidy policy which eliminates income and welfare inequalities between healthy and infected individuals.

Mots clés: epidemics, pollution, overlapping generations, public debt
Téléchargement Icône PDF wp_2021_-_nr_28.pdf (629.42 Ko)
The Prince and Me A model of Fiscal Credibility
Nicolas End

Government fiscal actions influence forward-looking private agents' current and future decisions, which, in turn, impact fiscal performance. This paper highlights this expectation channel with a Barro-type endogenous growth model where an impatient government finances growth-enhancing spending through income taxes and public debt. Fiscal and macroeconomic outcomes emerge from the interplay of households and policymakers' preferences for public expenditure and private consumption. I find that the government's maximizing its own utility and facing an endogenous interest spread are sufficient ingredients to yield multiple equilibria, independently of the government's policy intentions. The economy almost always heads to the high public spending equilibrium, emphasizing the importance of fiscal institutions to tame government impatience and bolster fiscal credibility.

Mots clés: fiscal policy, credibility, expectations
Téléchargement Icône PDF wp_2021_-_nr_27.pdf (1.06 Mo)
The Toll of Tariffs: Protectionism, Education and Fertility in Late 19th Century France
Vincent Bignon
Cecilia García-Peñalosa

This paper examines a novel negative impact of trade tariffs and the costs they induce by documenting how protectionism reversed the long-term improvements in education and the fertility transition that were well under way in late 19th-century France. The Méline tariff, a tariff on cereals introduced in 1892, was a major protectionist shock that shifted relative prices in favor of agriculture and away from industry. In a context in which the latter was more intensive in skills than agriculture, the tariff reduced the relative return to education, which in turn affected parents' decisions about the quantity and quality of children. We use regional differences in the importance of cereal production in the local economy to estimate the impact of the tariff. Our findings indicate that the tariff reduced enrolment in primary education and increased birth rates and fertility. The magnitude of these effects was substantial, with the tariff offsetting the increasing trend in enrolment rates and the decreasing one in birth rates by a decade.

Mots clés: education, fertility, protectionism, France
Téléchargement Icône PDF wp_2021_-_nr_26.pdf (918.79 Ko)
What Do Parents Want? Parental Spousal Preferences in China
Eva Raiber
Weiwei Ren
Jeanne Bovet
Paul Seabright
Charlotte Wang

In many societies, parents are involved in selecting a spouse for their child, and integrate this with decisions about migration and educational investment. What type of spouse do parents want for their children? We estimate parents' spousal preferences based on survey choices between random profiles. Preference data are elicited from parents or other relatives who actively search for a spouse on behalf of their adult child in Kunming, China. Economic variables (income and real estate ownership) are important for the choice of sons-in-law, but not daughters-in-law. Education is valued on both sides. We simulate marriage outcomes based on preferences for age and education and compare them with marriage patterns in the general population. Homogamy by education can be explained by parental preferences, but not by age: parents prefer younger wives, yet most couples are the same age. Additionally collected preference data from students can explain age distributions. Survey data from parents suggest that while they prefer younger wives, they also accept wives of the same age. Overall, marriage markets have a likely positive influence on education investments for both boys and girls.

Mots clés: marriage, preference estimation, China, parental matchmaking, matching
Téléchargement Icône PDF wp_2021_-_nr_25.pdf (1.59 Mo)
Legalized Same-Sex Marriage and Coming Out in America: Evidence from Catholic Seminaries
Avner Seror
Rohit Ticku

We study the effect of legalization of same-sex marriage on coming out in the United States. We overcome data limitations by inferring coming out decisions through a revealed preference mechanism. We exploit data on enrollment in seminary studies for the Catholic priesthood, hypothesizing that Catholic priests' vow of celibacy may lead gay men to self-select as a way to avoid a heterosexual lifestyle. Using a differencesin-differences design that exploits variation in the timing of legalization across states, we find that city-level enrollment in priestly studies fell by about 15% exclusively in states adopting the reform. The celibacy norm appears to be driving our results, since we find no effect on enrollment in deacon or lay ministry studies that do not require celibacy. We also find that coming out decisions, as inferred through enrollment in priestly studies, are primarily affected by the presence of gay communities and by prevailing social attitudes toward gays. We explain our findings with a stylized model of lifestyle choice.

Mots clés: homosexuality, religion, identity
Téléchargement Icône PDF wp_2021_-_nr_24.pdf (595.09 Ko)
How do inequalities affect the natural interest rate, and how do they impact monetary policy? Comparing Germany, Japan and the US
Mariam Camarero
Gilles Dufrénot
Cecilio Tamarit

In this paper we analyze how growing income/wealth inequality and the functional income distribution inequality have contributed to the sustained low potential growth observed in the industrialized economies during the last two decades, a period that includes the Great Recession (GR). Growing inequality may constitute a drawback for the recovery of these economies, especially after the Great Pandemic (GP). To this aim, we modify the semi-structural model originally proposed by Holston, Laubach and William, by considering the effects of several types of inequalities. We jointly estimate potential growth and the natural interest rates. We show that the latter can substantially modify the time path of the real interest rate that prevails when economies are at full strength and inflation is stable.

Mots clés: potential growth, Inequality, natural interest rate, G7, state-space model
Téléchargement Icône PDF wp_2021_-_nr_23.pdf (686.36 Ko)
Trade barriers in government procurement
Alen Mulabdic
Lorenzo Rotunno

This paper estimates trade barriers in government procurement, a market that accounts for 12% of world GDP. Using data from inter-country input-output tables in a gravity model, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has been shrinking over time. Results also show that trade agreements with provisions on government procurement increase cross-border flows of services, whereas the effect on goods is small and not different from that in private markets. Provisions containing transparency and procedural requirements drive the liberalizing effect of trade agreements.

Mots clés: government procurement, trade agreements, gravity equation
Téléchargement Icône PDF wp_2021_-_nr_22.pdf (2.27 Mo)
Trade Shocks, Fertility, and Marital Behavior
Osea Giuntella
Lorenzo Rotunno
Luca Stella

Using longitudinal data from the German SocioEconomic Panel, we analyze the effects of exposure to trade on the fertility and marital behavior of German workers. We find that individuals working in sectors that were more affected by import competition from Eastern Europe and suffered worse labor market outcomes were less likely to have children. In contrast, workers in sectors that benefited from increased exports had better employment prospects and higher fertility. These effects are driven by low-educated and married men, and reflect changes in the likelihood of having any child (extensive margin). While among workers exposed to import competition there is evidence of some fertility postponement, we find a significant reduction of completed fertility. There is instead little evidence of any significant effect on marital behavior.

Mots clés: international trade, labor market outcomes, fertility, marriage
Téléchargement Icône PDF wp_2021_-_nr_21.pdf (688.57 Ko)
The Wise, the Politician and the Strongman: National Leaders' Type and Quality of Governance
Julieta Peveri

There is strong evidence that national leaders matter for the performance of their nations, but little is known about what drives the direction of their effects. I assess how national leaders’ quality of governance, measured by six indicators,
varies with their career and education. Using a sample of 1,000 rulers between 1931 and 2010, I identify three types of leaders: military leaders, academics, and politicians. I find that military leaders are associated with an overall negative
performance, while politicians who have held important offices before taking power tend to perform well. Academics have on average non-significant effects. These results are partially driven by differences in policy decisions and in leadership styles. Military leaders (politicians) spend less (more) in health and education, are more (less) likely to establish a personalistic regime, to disrespect the constitution, and to move towards a non-electoral regime. Additionally, this paper highlights the weakness of using educational attainment as a proxy for politicians’ quality, and of growth as a measure of national leaders’ performance.

Mots clés: national leaders, politicians' quality, leaders' characteristics
Téléchargement Icône PDF wp_2021_-_nr_20.pdf (2.42 Mo), Icône PDF wp_2021_-_nr_20_v2.pdf (1.34 Mo)
Knowledge-Based Structural Change
Kevin Genna
Christian Ghiglino
Kazuo Nishimura
Alain Venditti

How will structural change unfold beyond the rise of services? Motivated by the observed dynamics within the service sector we propose a model of structural change in which productivity is endogenous and output is produced with two intermediate substitutable capital goods. In the progressive sector the accumulation of knowledge leads to an unbounded increase in TFP, as sector becoming asymptotically dominant. We are then able to recover the increasing shares of workers, the increasing real and nominal shares of the output observed in progressive service and IT sectors in the US. Interestingly, the economy follows a growth path converging to a particular level of wealth that depends on the initial price of capital and knowledge. As a consequence, countries with the same fundamentals but lower initial wealth will be characterized by lower asymptotic wealth.

Mots clés: two-sector model, technological knowledge, constant elasticity of substitution, non-balanced endogenous growth, structural change, Kaldor and Kuznets facts
Téléchargement Icône PDF wp_2021_-_nr_19.pdf (668.36 Ko)
The impact of Presidential appointment of judges: Montesquieu or the Federalists?
Sultan Mehmood

A central idea in the institutions and development literature is whether the executive is adequately checked by the legislature and judiciary (North, 1990; Acemoglu et al., 2001; La Porta et al., 2004). This paper provides plausibly causal evidence on how increased constraints on the executive, through removal of Presidential discretion in judicial appointments, impacts judicial decision-making. In particular, we find that when the judge selection procedure in Pakistan changed, from the President appointing judges to appointments by judge peers, rulings in favor of the government decreased significantly and the quality of judicial decisions improved. The age structure of judges at the time of the reform and the mandatory retirement age law provide us with an exogenous source of variation in the implementation of the selection reform. We test for and provide evidence against potential threats to identification and alternative explanations for our findings. The analysis of mechanisms reveals that our results are explained by rulings in politically salient cases and by “patronage” judges who hold political office prior to their appointments. According to our estimates, Presidential appointment of judges results in additional land expropriations by the government worth 0.14 percent of GDP every year.

Mots clés: president, judges, property rights, court subversion, expropriation risk
Téléchargement Icône PDF wp_2021_-_nr_18.pdf (2.61 Mo)
Formation of Children’s Cognitive and Socio-Emotional Skills: Is All Parental Time Equal?
Hélène Le Forner

Although it is recognized that parental time is a strong determinant of child development, little is known about heterogeneity across the effects of parental time. Using the Longitudinal Survey of Australian Children, I model the cognitive and socio-emotional skills production functions for children born in 1999-2000, from 4 to 11 years old, using, among others, a cumulative value-added and a generalized method of moments model. I find that the effect on children's verbal and socioemotional skills of time spent on educational activities with the father is smaller than that with the mother or both parents together. For socio-emotional skills, this difference seems to be driven by fathers who spend little time with their children.

Mots clés: child development; cognitive skills; socio-emotional skills; parental time investment
Téléchargement Icône PDF wp_2021_-_nr_17.pdf (2.74 Mo)
Beyond social determinants of health: an application of the Health Capability Model to rural Senegal
Marion Coste

This study investigated elements affecting the ability to achieve optimal health (health capability) in people living in the rural area of Niakhar, Senegal, using data from the 12356 ANRS AmBASS survey. A structural equation modelling (SEM) strategy was used to develop a multidimensional and dynamic health capability model (Ruger, 2010) that allowed the analysis of determinants of health to be extended beyond the usual one-way study between determinants and health status found in the literature. Three factors (dimensions) were identified: 1) access to local healthcare services, 2) participation in decisionmaking, and 3) current self-reported health status. The model analyzed interactions between these dimensions as well as the dimensions' relationships with other demographic, psychosocial and economic variables (household size and resources, age, gender, education, marital status, intrinsic motivation, etc.) Results reveal a much greater diversity of variables associated with shortfalls in the various dimensions of health capability than what would have appeared had a standard unidimensional model been used. This SEM-based strategy could be an attractive alternative to traditional approaches to measure determinants of health and provide valuable empirical results for policy-makers.

Mots clés: determinants of health, capability approach, simultaneous equation model, sub-Saharan Africa
Téléchargement Icône PDF wp_2021_-_nr_16.pdf (624.96 Ko)
The Transmission Channels of Government Spending Uncertainty
Anna Belianska
Aurélien Eyquem
Céline Poilly

Higher uncertainty about government spending generates a persistent decline in the economic activity in the Euro Area. This paper emphasizes the transmission channels explaining this empirical fact. First, a Stochastic Volatility model is estimated on European government consumption to build a measure of government spending uncertainty. Plugging this measure into a SVAR model, we stress that government spending uncertainty shocks have recessionary, persistent and humped-shaped effects. Second, we develop a New Keynesian model with financial frictions applying to a portfolio of equity and long-term government bonds. We argue that a portfolio effect-resulting from the imperfect substitutability among both assets-acts as a critical amplifier of the usual transmission channels.

Mots clés: government spending uncertainty, stochastic volatility, portfolio adjustment cost
Téléchargement Icône PDF wp_2021_-_nr_15.pdf (1 Mo)
Managing intermittency in the electricity market
Jean-Henry Ferrasse
Nandeeta Neerunjun
Hubert Stahn

We analyze the integration of intermittent renewables-based technologies into an electricity mix comprising of conventional energy. Intermittency is modeled by a contingent electricity market and we introduce demand-side flexibility through the retailing structure. Retailers propose diversified electricity contracts at different prices allowing consumers to choose their optimal electricity consumption. These contracts are modeled by a set of state-contingent electricity delivery contracts. We show existence and uniqueness of a competitive equilibrium of the contingent wholesale and retail markets. We provide a welfare analysis and only obtain constraint efficiency due to a limited number of delivery contracts. Finally, we discuss the conditions under which changing the set of delivery contracts improves penetration of renewables and increases welfare. This provides useful policy insights for managing intermittency and achieving renewable capacity objectives.

Mots clés: electricity market, renewables, intermittency, demand exibility
Téléchargement Icône PDF wp_2021_-_nr_14.pdf (584.71 Ko)
Fertility Regulation and Family Influence in Tunisia
Olfa Frini
Christophe Muller


We revisit fertility regulation in Tunisia by examining the role of the extended family. As marriage is the exclusive acknowledged childbearing context, we examine fertility analysis in Tunisia through the sequence: woman’s marriage age, post-marriage delay in the first use of contraception, and past and current contraceptive use. We trace the family socio-economic influences that operate through these decisions.



Using data from the 2001 PAP-FAM Tunisian survey, we estimate the duration and probability models of these birth control decisions.


In Tunisia, family ties and socio-cultural environment appear to hamper fertility regulation that operates through the above decisions. This is notably the case for couples whose marriages are arranged by the extended family or who benefit from financial support from both parental families.


This calls for family planning policies that address more the extended families.

Keywords: Fertility regulation; Age at marriage; Birth control; Family influence; Contraception; Tunisia

Mots clés: fertility regulation, age at marriage, birth control, family interference, contraception, Tunisia
Téléchargement Icône PDF wp_2021_-_nr_13.pdf (1.05 Mo), Icône PDF wp_2021_-_nr_13v2.pdf (496.23 Ko), Icône PDF wp_2021_-_nr_13_v3.pdf (712.95 Ko)
Are epidemiological indicators misleading under uncertainty? An evaluation and a remedy from an economic perspective
Christelle Baunez
Michaël Degoulet
Stéphane Luchini
Patrick A. Pintus
Miriam Teschl

Even though much has been learned about the new pathogen SARS-CoV-2 since the beginning of the COVID-19 pandemic, a lot of uncertainty remains. In this paper we argue that what is important to know under uncertainty is whether harm accelerates and whether health policies achieve deceleration of harm. For this, we need to see cases in relation to diagnostic effort and not to look at indicators based on cases only, such as a number of widely used epidemiological indicators, including the reproduction number, do. To do so overlooks a crucial dimension, namely the fact that the best we can know about cases will depend on some welldefined strategy of diagnostic effort, such as testing in the case of COVID-19. We will present a newly developed indicator to observe harm, the acceleration index, which is essentially an elasticity of cases in relation to tests. We will discuss what efficiency of testing means and propose that the corresponding health policy goal should be to find ever fewer cases with an ever-greater diagnostic effort. Easy and low-threshold testing will also be a means to give back people’s sovereignty to lead their life in an “open” as opposed to “locked-down” society.

Mots clés: uncertainty, acceleration index, anti-fragility, reproduction factor, test strategy, sovereignty
Téléchargement Icône PDF wp_2021_-_nr_12.pdf (464.78 Ko)
Optimal lockdowns: Analysing the efficiency of sanitary policies in Europe during the first wave
Ewen Gallic
Michel Lubrano
Pierre Michel

Uprising in China, the global COVID-19 epidemic soon started to spread out in Europe. As no medical treatment was available, it became urgent to design optimal non-pharmaceutical policies. With the help of a SIR model, we contrast two policies, one based on herd immunity (adopted by Sweden and the Netherlands), the other based on ICU capacity shortage. Both policies led to the danger of a second wave. Policy efficiency corresponds to the absence or limitation of a second wave. The aim of the paper is to measure the efficiency of these policies using statistical models and data. As a measure of efficiency, we propose the ratio of the size of two observed waves using a double sigmoid model coming from the biological growth literature. The Oxford data set provides a policy severity index together with observed number of cases and deaths. This severity index is used to illustrate the key features of national policies for ten European countries and to help for statistical inference. We estimate basic reproduction numbers, identify key moments of the epidemic and provide an instrument for comparing the two reported waves between January and October 2020. We reached the following conclusions. With a soft but long lasting policy, Sweden managed to master the first wave for cases thanks to a low R 0 , but at the cost of a large number of deaths compared to other Nordic countries and Denmark is taken as an example. We predict the failure of herd immunity policy for the Netherlands. We could not identify a clear sanitary policy for large European countries. What we observed was a lack of control for observed cases, but not for deaths.

Mots clés: SIR models, phenomenological models, double sigmoid models, sanitary policies, herd immunity, ICU capacity constraint
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The impact of paternity leave on mothers' employment in Europe
Johanne Bacheron

In this paper, I use a pseudo-panel approach with data from the European Union Labour Force Survey to study the impact of paternity leave policies on mothers' employment in ten countries. Using a dynamic Difference-inDifference strategy, I show that paternity leave increased mothers' employment rate by up to 17% in the long run, and average hours worked by 2 to 4%. There is substantial heterogeneity across countries in the effect of paternity leave policies. The impact on employment rates is positive and significant in eight of the ten countries of the sample, while the impact on hours worked can be either positive or negative. I find no evidence that the reforms had any impact on Greece or Portugal.

Mots clés: paternity leave, labour supply, gender equality
Téléchargement Icône PDF wp_2021_-_nr_10.pdf (640.57 Ko)
Shutdown policies and conflict worldwide
Nicolas Berman
Mathieu Couttenier
Nathalie Monnet
Rohit Ticku

We provide evidence on the impact of Covid-19 restriction policies on conflicts worldwide. We combine daily information on conflict events and government policy responses to limit the spread of coronavirus to study how demonstrations and violent events vary following shutdown policies. We use the staggered implementation of restriction policies across countries to identify the dynamic effects in an event study framework. Our results show that imposing a nationwide shutdown reduces the number of demonstrations, which suggests that public demonstrations are hampered by the rising cost of participation. However, the reduction is short-lived, as the number of demonstrations are back to their pre-restriction levels in two months. In contrast, we observe that the purported increase in mobilization or coordination costs, following the imposition of Covid-19 restrictions, has no impact on violent events that involve organized armed groups. Instead, we find that the number of events, on average, increase slightly following the implementation of the restriction policies. The rise in violent events is most prominent in poorer countries, with higher levels of polarization, and in authoritarian countries. We discuss the potential channels that can explain this heterogeneity.

Mots clés: COVID-19, coronavirus, conflict, violence
Téléchargement Icône PDF wp_2021_-_nr_09.pdf (873.66 Ko)
The benefits of being misinformed
Marcus Roel
Manuel Staab

In the spirit of Blackwell (1951), we analyze how two fundamental mistakes in information processing-incorrect beliefs about the world and misperception of information-affect the expected utility ranking of information experiments. We explore their individual and combined influence on welfare and provide necessary and sufficient conditions when mistakes alter and possibly reverse the ranking of information experiments. Both mistakes by themselves reduce welfare in a model where payoff relevant actions also generate informative signals. This is true for naive decisionmakers, unaware of any errors, as well as for sophisticated decision-makers, who account for the possibility of mistakes. However, mistakes can interact in non-obvious ways and an agent might be better off suffering from both, rather than just one. We provide a characterization when such positive interactions are possible. Surprisingly, this holds true only for naive decision-makers and thus naivete can be beneficial. We discuss implications for information acquisition and avoidance, welfare-improving belief manipulation, and policy interventions in general.

Mots clés: ranking of experiments, information acquisition, misperception, confirmation bias, overconfidence, underconfidence
Téléchargement Icône PDF wp_2021_-_nr_08.pdf (385.09 Ko)
Valuation of Ecosystem Services and Social Choice: The Impact of Deliberation in the context of two different Aggregation Rules
Mariam Maki Sy
Charles C. Figuières
Helene Rey-Valette
Richard B Howarth
Rutger de Wit

This paper describes an empiric study of aggregation and deliberation used during citizens' workshops for the preference elicitation of 20 different ecosystem services (ESs) delivered by the Palavas coastal lagoons located on the shore of the Mediterranean Sea close to Montpellier (S. France). The impact of deliberation for the preference elicitation of 20 different ecosystem services (ESs) was studied by gathering and aggregating individual preferences before deliberation that were compared to the collective aggregation after deliberation. The same aggregation rules were used before and after deliberation and we compared two different aggregation methods, i.e. Rapid Ecosystem Services Participatory Appraisal (RESPA) and Majority Judgement (MJ). RESPA had been specifically tested for ESs, while MJ evaluates the merit of each item, an ES in our case, in a predefined ordinal scale of judgment. The impact of deliberation was strongest for the RESPA method. This new information acquired from application of social choice theory is particularly useful for ecological economics studying ES, and more practically for the development of deliberative approaches for public policies.

Mots clés: ecosystem services, preference elicitation, non-monetary methods, deliberation, social choice theory, coastal lagoons
Téléchargement Icône PDF wp_2021_-_nr_07.pdf (611.22 Ko)
Entrepreneurship, growth and productivity with bubbles
Lise Clain-Chamosset-Yvrard
Xavier Raurich
Thomas Seegmuller

Entrepreneurship, growth and total factor productivity are larger when there is a financial bubble. We explain these facts using a growth model with financial bubbles in which individuals face heterogeneous wages and returns on productive investment. The heterogeneity in the return of in- vestment separates individuals between savers and entrepreneurs. Savers buy financial assets, which are deposits or a financial bubble. Entrepreneurs incur in a start-up cost and borrow to invest in productive capital. The bubble provides liquidities to credit-constrained entrepreneurs. These liquidities increase investment and entrepreneurship when the start- up cost is large enough, which explains that growth and entrepreneurship can be larger with bubbles. Finally, productivity can be larger when the bubble further increases the investment of more productive entrepreneurs. This can occur when the return of investment is correlated with wages.

Mots clés: bubble, entrepreneurship, growth, productivity
Téléchargement Icône PDF wp_2021_-_nr_06.pdf (411.94 Ko)
Terrorism, Insurgency, State Repression, and Cycles of Violence
Christophe Muller
Pierre Pecher

Over the last half century, violent conflicts between ethno-religious organizations and states have shaped the political and economic development context in developing countries. However, global empirical evidence on the dynamic and strategic underpinnings of these phenomena is lacking. Here, we investigate the dynamic violent relationships between the organizations that represent minorities at risk and the governments in Middle-Eastern and North African countries. Our estimates of dynamic panel data models of discrete strategic responses reveal dampened cycles of violence between states and insurgent politico-ethnic organizations due to violent mutual responses. However, such cycles are absent when the organizations target civilians instead, which is more likely after an insurgency spell. Finally, we provide an original game-theoretical interpretative framework for our results, which allows us to identify, on average and under sensible restrictions, the Stag Hunt game as an appropriate representation of the (possibly reduced-form) general strategic situations that link states and minority organizations in MENA.This is at odds with the frequent use of the prisoner's dilemma setting in the literature, or of other ad hoc strategic hypotheses, to analyze conflicts.

Mots clés: terrorism, insurgency, cycles of violence, conflict theory
Téléchargement Icône PDF wp_2021_-_nr_05.pdf (6.63 Mo)
Long-run stability of money demand and monetary policy: the case of Algeria
Raouf Boucekkine
Mohammed Laksaci
Mohamed Touati-Tliba

We estimate the demand for money for monetary aggregates M1 and M2, and cash in Algeria over the period 1979-2019, and study its long-run stability. We show that the transaction motive is significant for all three aggregates, especially for the demand for cash, reflecting the weight of informal economy “practices”. The elasticity of the scale variable is very close to unity for M2 and M1, and even equal to unity for cash demand (1.006). The elasticity of inflation is also significant for all three aggregates, although its level is higher in the case of cash demand (-6.474). Despite the persistence of certain financial repression mechanisms, interest rate elasticity is significant for all three aggregates, but higher for M1 and cash. The same observation is made for elasticity of the exchange rate, reflecting the effect of monetary substitution, especially for M1 and cash. Finally, our study concludes that the demand for money in terms of M1 remains stable, the same observation being confirmed for the M2 aggregate. However, the demand for fiat currency proves not to be stable. The consequences for the optimal design of monetary policy in Algeria are clearly stated.

Mots clés: monetary policy, money demand, long-run stability, resource-rich countries, Algeria, co-integration
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Kirzner and Rothbard on an Austrian theory of entrepreneurship: the heirs of both Menger and Mises discuss action and the role of institutions.
Gilles Campagnolo
Christel Vivel

This paper is the last part of a trilogy on the theory and history of entrepreneurship in Austrian school of economics. The triptych ends with contemporary members by comparing Israel Kirzner and Murray Rothbard. The migration of the Austrian school induced a new assessment of Austrian traits in a new setting. While we do not focus on the history of the Austrian school in America as such, we will stress how Kirzner focused his view of entrepreneurship on the concepts of alertness, discovery by opportunity and the equilibrating action of the entrepreneur – while Rothbard’s contribution was more ideologically engaged.

Mots clés: Austrian School of Economics, entrepreneurship, institutions, Kirzner (Israel), methodology, Rothbard (Murray)
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How does information on minimum and maximum food prices affect measured monetary poverty? Evidence from Niger
Christophe Muller
Nouréini Sayouti

Do households facing different realizations of prices rather than a simple price alter the results of poverty analyses? To address this question, we exploit a unique dataset from Niger in which agropastoral households provide the observed minimum and maximum prices they paid for each consumed product in each season. We estimate poverty measures based on this price information using several absolute poverty line methodologies. Prices are used for valuing household consumption bundles, estimating household-specific price indices, valuing minimal calorie requirements, and extrapolating the link between food poverty and consumption.
The results for Niger show statistically significant differences in the estimated chronic and dynamic poverties for these approaches, especially for international poverty comparisons and seasonal transient poverty monitoring. Specifically, using minimum and maximum prices generates gaps in the estimated poverty rates for Nigerien agropastoral households that exceed regional poverty disparities, which implies that regional targeting priorities in poverty alleviation policy would be reversed if these alternative prices are utilized.
This result suggests that typically estimated poverty statistics, which assume that each household, or even cluster, faces a unique price for each product in a given period, may be less accurate for policy monitoring than generally believed.

Mots clés: poverty, prices, Niger, social policies
Téléchargement Icône PDF wp_2021_-_nr_02.pdf (759.08 Ko), Icône PDF wp_2021_-_nr_02v2.pdf (525.11 Ko)
Urbanisation and the onset of modern economic growth
Liam Brunt
Cecilia García-Peñalosa

A large literature characterizes urbanisation as the result of productivity growth attracting rural workers to cities. We incorporate economic geography elements into a growth model and suggest that causation runs the other way: when rural workers move to cities, the resulting urbanisation produces technological change and productivity growth. Urban density leads to knowledge exchange and innovation, thus creating a positive feedback loop between city size and productivity that sets off sustained economic growth. The model is consistent with the fact that urbanisation rates in Western Europe, and notably in England, reached unprecedented levels by the mid-18 th century, the eve of the Industrial Revolution.

Mots clés: industrialization, urbanisation, innovation, long-run growth
Téléchargement Icône PDF wp_2021_-_nr_01.pdf (782.32 Ko)