Documents de travail

Like Father, Like Child: Intergenerational Mobility in the French Grandes Écoles throughout the 20 th Century
Stéphane Benveniste

While the educational expansion of the 20 th century promoted social mobility overall, the top of the social hierarchy may have remained privileged. This paper examines the evolution of intergenerational mobility in admissions to the French elite colleges-the Grandes Écoles (GE)-over more than a century. Admission to these institutions is subject to partially anonymous competitive examinations, and their degrees are the ticket to top positions in the public and private sectors. In the growing literature measuring intergenerational mobility through surnames, I design a novel method and apply it to a self-collected dataset on all 285,286 graduates from ten of the most prestigious Grandes Écoles between 1886 and 2015. Principally, I find that children of male GE graduates were highly over-represented in the top colleges throughout the 20 th century. Importantly, unlike previous studies exploiting fathers' socio-professional categories, I find a stable low level of intergenerational mobility for all cohorts born since 1916: chances of GE admission for children of GE graduates were approximately 80 times higher than for the rest of the population.

Mots clés: intergenerational mobility, higher education, elites, Grandes Ecoles, historical economics
Téléchargement Icône PDF wp_2023_-_nr_18.pdf (5.23 Mo)
Public Goods in Networks: Comparative Statics Results
Sebastian Bervoets
Kohmei Makihara

We consider public goods games played on a potentially non-symmetric network and provide comparative statics results on individual and aggregate contributions, as well as on the effect of transfers between players. We show that, contrary to the case of the complete and symmetric network, a positive shock on a player can have adverse consequences. First, it could actually decrease this player's contribution, unless the interaction matrix is a P-matrix. Second, a positive shock on a contributing player increases aggregate contributions, but a positive shock on a non-contributing player will decrease aggregate contributions, even if the player who benefited from the positive shock increases his own contribution. In each case we provide simple conditions to determine whether a positive shock will have positive or negative consequences on contributions, by looking at the unconstrained solution of an alternative, associated game. The sign of the coordinates of this solution determines the effect of a shock. With this in hand, we further show that the aggregate neutrality result of Andreoni [1990] regarding transfers between players generally does not hold on non-symmetric networks and provide conditions for it to hold. Finally, as an application of previous results, we consider introducing agents that follow Kantian moral principles and show that, depending on their position in the network, the presence of Kantian agents can, counter-intuitively, lead to a decrease in aggregate contributions.

Mots clés: public Goods, Network, comparative Statics, kantian players
Téléchargement Icône PDF wp_2023_-_nr_17.pdf (1.37 Mo)
Femicide Rates in Mexican Cities along the US-Mexico Border
Pedro H. Albuquerque
Prasad R. Vemala

Mexican cities along the US-Mexico border, especially Cd. Juarez became notorious due to high femicide rates supposedly associated with maquiladora industries and the NAFTA. Nonetheless, statistical evaluation of data from 1990 to 2012 shows that their rates are consistent with other Mexican cities’ rates and tend to fall with increased employment opportunities in maquiladoras. Femicide rates in Cd. Juarez are in most years like rates in Cd. Chihuahua and Ensenada and, as a share of overall homicide rates, are lower than in most cities evaluated. These results challenge conventional wisdom and most of the literature on the subject.

Mots clés: maquiladoras, crime, gender violence, violence against women, homicide, femicide, border, Mexico, Juarez
Téléchargement Icône PDF wp_2023_-_nr_16.pdf (566.27 Ko)
The Matching Function: A Unified Look into the Black Box
Georgios Angelis
Yann Bramoullé
In this paper, we use tools from network theory to trace the properties of the matching function to the structure of granular connections between applicants and firms. We link seemingly disparate parts of the literature and recover existing functional forms as special cases. Our overarching message is that structure counts. For rich structures, captured by non-random networks, the matching function depends on whole sets rather than just the sizes of the two sides of the market. For less rich-random network-structures it depends on the sizes of the two sides and a few structural parameters. Structures characterized by greater asymmetries reduce the matching function's efficacy, while denser structures can have ambiguous effects on it. For the special case of the Erdös-Rényi network, we show that the way the network varies with the sizes of the two sides of the market determines if the matching function exhibits constant returns to scale, or even if it is of a specific functional form, such as CES.
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Technological Innovations and Obsolescence: Leveling the Playing Field for Remanufacturing
Pedro H. Albuquerque
Kiara S. Winans
In a linear economy, manufacturing is less costly and more profitable than remanufacturing because of reduced private costs of utilization and production. However, manufacturing also involves higher resource extraction and waste as externalized costs than remanufacturing. We use a vintage capital framework to assess technological innovations in remanufacturing and their potential benefits to society and human occupations. Our study shows that replacing manufacturing with remanufacturing technologies creates positive static and dynamic circular economy externalities. These externalities can be quantified to assess improvements in social outcomes. A smartphone remanufacturing innovation case study is presented as an illustration of the article's main ideas. Future research should investigate additional specific cases to develop a comprehensive methodology for assessing the impact of remanufacturing innovations on social outcomes. This will provide valuable insights into the broader implications of remanufacturing practices.
Mots clés: manufacturing, externalities, occupational meaning, circular economy, sustainability, national accounting systems
Téléchargement Icône PDF wp_2023_-_nr_14.pdf (224.49 Ko)
Social Implications of Technological Disruptions: A Transdisciplinary Cybernetics Science and Occupational Science Perspective
Pedro H. Albuquerque
Sophie Albuquerque
In this article we argue that the disruptive social implications of skill-replacing technological innovations are determined neither by human characteristics, such as "low skills" or "low cognition," nor by task characteristics, such as "routine," as it is typically assumed in the predominant economics and management science literature, but by the cybernetic characteristics of the innovations. We also propose that the negative effects of technological disruptions on human well-being cannot be fully understood without the use of a transdisciplinary approach involving cybernetics science and occupational science, and that it is urgent that policymakers look beyond their narrow effects on productivity and on the labor force, and consider instead the complexity of the interactions between cybernetic technologies and meaningful human occupations. We offer as an example the case of the fast adoption of online food delivery services and of remote work technologies during the COVID-19 pandemic. Ethical implications are derived from the arguments.
Mots clés: technological disruptions, technological innovations, cybernetics science, occupational science, labor and nonlabor occupations
Téléchargement Icône PDF wp_2023_-_nr_13.pdf (198.85 Ko)
The Increasing Impact of Spain on the Equity Markets of Brazil, Chile and Mexico
Andres Rivas
Rahul Verma
Antonio Rodriguez
Pedro H. Albuquerque
The article examines stock index price responses in Brazil, Chile and Mexico to those in the US, Spain and four European countries during three sub-periods surrounding the neoliberal reforms of the 1990s: 1988 to 1994, 1995 to 1998, and 1999 to 2004, using VAR modeling. It finds that equity markets became more interconnected as countries opened to international trade and capital flows, and that there was an increasing impact of Spain on Latin American equity markets. Stronger economic linkages (more trade and foreign direct investment) between Spain and these countries, specially in Brazil, seem to explain increased equity markets interconnectedness.
Mots clés: Emerging markets, Latin America, Spain, Stock markets interdependence, VAR modeling
Téléchargement Icône PDF wp_2023_-_nr_12.pdf (507.13 Ko)
Parametric models of income distributions integrating misreporting and non-response mechanisms
Mathias Silva

Several representativeness issues affect the available data sources in studying populations' income distributions. High-income under-reporting and non-response issues have been evidenced to be particularly significant in the literature, due to their consequence in underestimating income growth and inequality. This paper bridges several past parametric modelling attempts to account for high-income data issues in making parametric inference on income distributions at the population level. A unified parametric framework integrating parametric income distribution models and popular data replacing and reweighting corrections is developped. To exploit this framework for empirical analysis, an Approximate Bayesian Computation approach is developped. This approach updates prior beliefs on the population income distribution and the high-income data issues pressumably affecting the available data by attempting to reproduce the observed income distribution under simulations from the parametric model. Applications on simulated and EU-SILC data illustrate the performance of the approach in studying population-level mean incomes and inequality from data potentially affected by these high-income issues.

Mots clés: 'Missing rich', GB2, Bayesian inference
Téléchargement Icône PDF wp_2023_-_nr_11.pdf (1.83 Mo)
Parametric estimation of income distributions using grouped data: an Approximate Bayesian Computation approach
Mathias Silva

Recent empirical analysis of income distributions are often limited by the exclusive availability of data in a grouped format. This data format is made particularly restrictive by a lack of information on the underlying grouping mechanism and sampling variability of the grouped-data statistics it contains. These restrictions often result in the unavailability of an analytical parametric likelihood function exploiting all information available in the grouped data. Building on recent methods for inference on parametric income distributions for this type of data, this paper explores a new Approximate Bayesian Computation (ABC) approach. ABC overcomes the restrictions posed by grouped data for Bayesian inference through a non-parametric approximation of the likelihood function exploiting simulated data from the income distribution model. Empirical applications of the proposed ABC method in both simulated and World Bank's PovCalNet data illustrate the performance and suitability of the method for the typical formats of grouped data on incomes.

Mots clés: Grouped data, Bayesian inference, Generalized Lorenz curve, GB2
Téléchargement Icône PDF wp_2023_-_nr_10.pdf (621.14 Ko)
Variational rationality: Finding the inequations of motion of a person seeking to meet his needs.
Antoine Soubeyran

As physics provides the equations of motion of a body, this paper formulates, for the first time, at the conceptual and mathematical levels, the inequations of motion of an individual seeking to meet his needs and quasi needs in an adaptive (not myopic) way. Successful (failed) dynamics perform a succession of moves, which are, at once, satisficing and worthwhile (free from too many sacrifices), or not. They approach or reach desires (fall in traps). They balance the desired speed of approach to a desired end (a distal promotion goal) with the size of the required immediate sacrifices to go fast (a proximal prevention goal). Therefore, each period, need/quasi need satisfaction success requires enough self control to be able to make, in the long run, sufficient progress in need/quasi need satisfaction without enduring, in the short run, too big sacrifices. A simple example (lose or gain weight) shows that the size of successful moves must be not too small and not too long. A second paper will solve this problem, using variational principles and inexact optimizing algorithms in mathematics. This strong multidisciplinary perspective refers to a recent mathematical model to psychology: the variational rationality theory of human life stay and change dynamics.

Mots clés: need satisfaction, speed of progress, sacrifices, dynamical system, variational rationality
Téléchargement Icône PDF wp_2023_-_nr_09.pdf (1.25 Mo)
ENSO Climate Patterns on Global Economic Conditions
Gilles Dufrénot
William Ginn
Marc Pourroy

We investigate the role of ENSO climate patterns on global economic conditions. The estimated model is based on a rich and novel monthly dataset for 20 economies, capturing 80.2% of global output (based on 2021 IMF data) over the period 1999:01 to 2022:03. The empirical evidence from an estimated global vector autoregression with local projections (GFAVLP) model links an El Niño (EN) shock with higher output and inflation, corresponding with lower global economic policy uncertainty (GEPU). While a shock to the world oil and food price is inflationary, a food price shock leads to elevated GEPU, more so during a LN shock. A main finding is that an increase of the food price can be a source of global vulnerability. The findings indicate that the weather shock impact on global economic conditions is dependent on the climate state. Our result undermines existing studies connecting climate change and economic damage via statistical approach.

Mots clés: Weather; Oil and Food Prices; Global Macroeconometric Modeling; and Economic Policy Uncertainty
Téléchargement Icône PDF wp_2023_-_nr_08.pdf (6.39 Mo)
Variational rationality. Self regulation success as a succession of worthwhile moves that make sufficient progress
Antoine Soubeyran

This paper provides a general and formalized theory of self-regulation success and failures as an application of the recent Variational rationality approach of stay and change human dynamics (Soubeyran, 2009, 2010, 2021.a,b,c,d). For concreteness purposes, it starts with an example in psychology: how to gain or to loose weight ? It ends with a general, conceptual, dynamical and computable formulation of self-regulation and goal pursuit in the context of variational principles and adaptive optimizing algorithms in mathematics.

Mots clés: variational rationality, self regulation, variational principles, adaptive optimizing algorithms
Téléchargement Icône PDF wp_2023_-_nr_07.pdf (1.32 Mo)
Does ICT access and usage reduce growth inefficiency in Sub-Saharan Africa?
Désiré Avom
Gilles Dufrénot
Sylvie Eyeffa
This paper investigates whether or not the access to and use of ICT can help African countries reduce their growth inefficiencies. Inefficiency is measured, on the one hand, by the gap between a country's growth rate and its own frontier, and on the other hand by the relative position of each country compared to the best achievers. We find that if countries were doing a better job of controlling corruption and improving citizen participation in politics, they would achieve higher growth efficiency performance by using ICT. When countries are compared with each other, considering the growth "frontier" as countries in the sample, then growth differentials are explained primarily by non-ICT factors of growth (human capital, schooling rates, capital growth rates, etc.). The role of ICT factors is secondary. But they contribute to growth to a greater extent for the best achievers (compared to the lowest and middle achievers) because they are better endowed with ICT factors than the others.
Mots clés: ICT, African countries, growth inefficiency, frontier, quantiles
Téléchargement Icône PDF wp_2023_-_nr_06.pdf (1.02 Mo)
The tragedy of the (anti-)commons: The case of prey-predator fisheries
Guillaume Bataille
Hubert Stahn
Agnes Tomini
We examine the efficiency and environmental consequences of assigning species-specific common-property rights, considering a Lotka-Volterra model in which fisheries are specialized in the harvesting of a single species. We show that the fragmentation of the ecosystem implies the tragedy of the anticommons even when fisheries compete for the resource. Indeed, contrasting the private exploitation equilibrium with the socially optimal solution, we demonstrate that the predator stock is too high while the prey stock is too low under private property rights. A puzzling result is that the "abundant" species is actually underused because of insufficient economic incentives; however, the scarce and high-priced species does not necessarily suffer from overexploitation. Biological interactions are consequently the main driver of stock depletion. Finally, we investigate how to simultaneously solve both the tragedy of the commons and that of the anticommons and analyze the economic costs of regulating only the tragedy of the commons.
Mots clés: exclusive property rights, common-pool resource, anticommons, fisheries, prey-predator relationship, optimal control
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Identity conflict, ethnocentrism and social cohesion
Matteo Sestito
This paper uses a novel dataset on ethnic warfare to shed light on how conflict affects social identification and cohesion. A large body of anecdotal studies suggests that ethnic identities become more salient at times of conflict. Using data from eighteen sub-Saharan countries, I provide econometric evidence for such a claim. The effect of ethnic conflict on various measures of social cohesion is also investigated, uncovering a positive relationship between the two. The finding is understood as a result of the ethnocentric dynamics generated by conflict: as ethnic warfare increases ethnic identification, in-group cooperation follows suit. This parochial interpretation is further strengthened by the use of remote violence and the conditionality of conflict-induced pro-social behaviour on low levels of ethnic polarisation.
Mots clés: ethnic conflict, social cohesion, identity, Africa
Téléchargement Icône PDF wp_2023_-_nr_04.pdf (3.7 Mo)
When are wages cut? The roles of incomplete contracts and employee involvement
Marco Fongoni
Daniel Schaefer
Carl Singleton

We develop a model of incomplete employment contracts such that employees have some discretion over effort, which depends on their work morale. Nominal wage cuts have a strong negative effect on morale, while employee involvement in workplace decision-making tends to increase morale. We derive predictions on how these two mechanisms affect the decisions of firms to cut nominal wages. Using matched employer-employee and manager survey data from Great Britain, we find support for our model: nominal wage cuts are only half as likely when managers think that employees have some discretion over how they perform their work, but this reduced likelihood recovers partially when employees are involved in the decision-making process at their workplace.

Mots clés: wage rigidity; reciprocity; workplace relations; employer-employee data
Téléchargement Icône PDF wp_2023_-_nr_03.pdf (547.41 Ko)
Turning worries into cognitive performance: Results from an online experiment during Covid
Timothée Demont
Daniela Horta Sáenz
Eva Raiber
Worrisome topics, such as climate change, economic crises, or the Covid-19 pandemic, are increasingly present and pervasive due to digital media and social networks. Do such worries affect cognitive performance? The effect of a distressing topic might be very different depending on whether people have the scope and means to cope with the consequences. It can also differ by how performance is rewarded, for instance, if is there a goal that people can focus on. In an online experiment during the Covid-19 pandemic, we test how the cognitive performance of university students responds to topics discussing (i) current mental health issues related to social restrictions or (ii) future labor market uncertainties linked to the economic contraction. Moreover, we study how the response is affected by a performance goal by conditioning payout on reaching a minimum level. We find that the labor market topic increases cognitive performance when performance is motivated by a goal. Conversely, there is no such effect after the mental health topic. We even find a weak negative effect among those mentally vulnerable when payout is not based on reaching a goal. The positive effect is driven by students with larger financial and social resources, pointing at an inequality-widening mechanism.
Mots clés: cognitive performance, financial worries, COVID-19, financial incentives, anxiety, coping behaviors
Téléchargement Icône PDF wp_2023_-_nr_02.pdf (2.38 Mo)
How can technology significantly contribute to climate change mitigation?
Claire Alestra
Gilbert Cette
Valérie Chouard
Rémy Lecat
This paper highlights how technology can contribute to reaching the COP21 goals of net zero CO 2 emissions and global warming below 2°C at the end of the century. It uses the ACCL model, particularly adapted to quantify the consequences of energy price shocks and technology improvements on CO 2 emissions, temperature changes, climate damage and GDP. Our simulations show that without climate policies, i.e. a 'business as usual' scenario, the warming may be +4 to +5°C in 2100, with considerable climate damage. We also find that an acceleration in 'usual technical progress'-not targeted at reducing greenhouse gas intensity-makes global warming and climate damage worse than the 'business as usual' scenario. According to our estimates, the world does not achieve climate goals in 2100 without technological changes to avoid CO 2 emissions. To hit such climatic targets, intervening only through the relative price of different energy types, e.g. via a carbon tax, requires challenging hypotheses of international coordination and price increase for polluting energies. We assess a multi-lever climate strategy, associating diverse price and technology measures. This mix combines energy efficiency gains, carbon sequestration, and a decrease of 3% per year in the relative price of non-carbon-emitting electricity with a 1 to 1.5% annual rise in the relative price of our four polluting energy sources. None of these components alone is sufficient to reach climate objectives. Our last and most important finding is that our composite scenario achieves the climate goals.
Mots clés: climate, global warming, Technology, Environmental policy, growth, long-term projections, Uncertainties, Renewable energy
Téléchargement Icône PDF wp_2023_-_nr_01.pdf (567.61 Ko)
Medium term endogenous fluctuations in three-sector optimal growth models
Kazuo Nishimura
Florian Pelgrin
Alain Venditti
Following the recent contribution of Beaudry et al. [8], we exploit a three-sector optimal growth model without frictions to provide new insights regarding the emergence of endogenous medium-term fluctuations. Notably, our 3-sector model shows that matching the empirical evidence critically depends on agents' preferences, particularly the consumption of a bundle of (at least) two final goods. Endogenous fluctuations are therefore likely to occur through both relative inter-sector differences in capital intensity and intertemporal consumption allocations based on substitution effects between the two final consumed goods. We thoroughly characterize the economy's dynamics and establish the existence of clear conditions related to (Hopf) bifurcation values, as well as closely examining the theoretical periodicity of the corresponding limit cycles. Using a calibration of the US economy, our model is able to reproduce the observed peak range of spectral density at around 8 to 10 years of the cyclical component of gross domestic product, gross private investment, personal consumption expenditures, and of the corresponding price deflator series. Furthermore, such limit cycles are generated under very plausible technological parameters and estimates of the elasticities of intertemporal substitution.
Mots clés: three-sector optimal growth models; mid-term fluctuations; Hopf bifurcation; endogenous cycle; periodicity
Téléchargement Icône PDF wp_2022_-_nr_35.pdf (2.56 Mo)
Expectations, self-fulfilling prophecies and the business cycle
Frédéric Dufourt
Kazuo Nishimura
Alain Venditti

Macroeconomic models in which exogenous, self-fulfilling changes in expectations play a significant role in output fluctuations are often discarded on two claims: they require implausible calibrations of structural parameters and they are enable to account for several empirical features associated with demand shocks. We show that these claims are only valid to the extent that they are applied to one-sector models. In contrast, we prove that two-sector models allow the existence of self-fulfilling prophecies for a large set of empirically realistic values for all the structural parameters, and that a two-sector model submitted to sunspot shocks can account not only for all the standard stylized facts associated with demand shocks, but also for other dimensions of the business cycle that standard RBC-type models cannot explain.

Mots clés: indeterminacy, one and two-sector models, endogenous labor supply, income e ect, productive externalities, permanent and transitory shocks
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Do people share opportunities?
Mohamed Belhaj
Frédéric Deroïan
Mathieu Faure

A set of agents is aware of the existence of an economic opportunity, and compete for the associated prize. We study incentives to communicate about the existence of this economic opportunity to uninformed agents when the winner of the prize shares it with others, through some exogenous sharing rule. Communicating about the opportunity has two conflicting effects: it increases competition, but it can also increase the likelihood of receiving a large share of the prize. We find that, for any sharing rule, there is a minimum equilibrium, which Pareto dominates all other equilibria. We also find that under bilaterally symmetric sharing, more sharing generates more communication. We then discuss these results along several extensions.

Mots clés: rival opportunity; sharing network; communication; investment
Téléchargement Icône PDF wp_2022_-_nr_33.pdf (815.76 Ko)
Mineral resources and the salience of ethnic identities
Nicolas Berman
Mathieu Couttenier
Victoire Girard

This paper shows how ethnic identities may become more salient due to natural resources extraction. We combine individual data on the strength of ethnic-relative to national-identities with geo-localized information on the contours of ethnic homelands and on the timing and location of mineral resources exploitation in 25 African countries, from 2005 to 2015. Our strategy takes advantage of several dimensions of exposure to resources exploitation: time, spatial proximity, and ethnic proximity. We find that the strength of an ethnic group identity increases when mineral resource exploitation in that group's historical homeland intensifies. We argue that this result is at least partly rooted in feelings of relative deprivation associated with the exploitation of the resources. We show that such exploitation has limited positive economic spillovers, especially for members of the indigenous ethnic group; and that the link between mineral resources and the salience of ethnic identities is reinforced among members of powerless ethnic groups, and groups with strong baseline identity feelings or living in poorer areas, or areas with a history of conflict. Put together, these finding suggest a new dimension of the natural resource curse: the fragmentation of identities, between ethnic groups and nations.

Mots clés: identity, ethnicity, natural resources
Téléchargement Icône PDF wp_2022_-_nr_32.pdf (1.89 Mo)
Measurement of Social Welfare and Inequality in Presence of Partially-ordered Variables
Mohammad Abu-Zaineh
Sameera Awawda
We address the question of the measurement of social welfare and inequalities in the context of partially-ordered health variables. We propose a general framework based on the assumption that the distribution of well-being states forms an m-dimensional Boolean lattice. To this end, the distribution of well-being states is constructed based on the prevalence of a finite number of illnesses where each state represents the number of illnesses an individual may suffer from. The implementation of the framework involves breaking down the Boolean lattice into a set of linear extensions where all health states become fully ordered. The linear extensions account for all possible ordering of the health states based on the depth of health problems (i.e., the severity of health conditions). Having constructed these linear extensions, we then proceed on ranking distributions in terms of welfare by applying appropriate dominance criteria and employ aggregate metrics to provide a numerical representation of the social welfare and inequality associated with each distribution. An illustrative application of the methodology is provided.
Mots clés: boolean lattice, Hammond dominance, ordinal inequality, partially-ordered variables, stochastic dominance, welfare function
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Does Pay Inequality Affect Worker Effort? An Assessment of Existing Laboratory Designs
Marco Fongoni
This paper develops a theoretical framework to think about employees' effort choices, and applies this framework to assess the ability of existing laboratory designs to identify the effect of pay inequality on worker effort. The analysis shows that failure to control for a number of confounds-such as reciprocity towards the employer in multilateral gift-exchange games (vertical fairness), or the incentive to increase effort when feeling underpaid under piece rates (income targeting)-may lead to inaccurate interpretation of evidence of treatment effects. In light of these findings, the paper provides a set of recommendations on how to improve identification in the design of laboratory experiments in the future.
Mots clés: pay inequality; effort; laboratory experiments; reference dependence; fairness
Téléchargement Icône PDF wp_2022_-_nr_30.pdf (552.21 Ko)
Education Politics, Schooling Choice and Public School Quality: The Impact of Income Polarisation
Majda Benzidia
Michel Lubrano
Paolo Melindi-Ghidi

What is the role of income polarisation for explaining differentials in public funding of education? To answer this question, we provide a
new theoretical modelling for the income distribution that can directly monitor income polarisation. It leads to a new income polarisation
index where the middle class is represented by an interval. We implement this distribution in a political economy model with endogenous
fertility and public/private educational choices. We show that when households vote on public schooling expenditures, polarisation matters
for explaining disparities in public education funding across communities. Using micro-data covering two groups of school districts, we
find that both income polarisation and income inequality affect public school funding with opposite signs whether there exist a Tax Limitation Expenditure (TLE) or not.

Mots clés: education politics, schooling choice, income polarisation, probabilistic voting, Bayesian inference
Téléchargement Icône PDF wp_2022_-_nr_29.pdf (367.6 Ko)
Preference for Redistribution, Poverty Perception among Chinese Migrants
Zhou Xun
Michel Lubrano

We analyse preference for redistribution and the perceived role of “circumstances” and “effort” in China within the framework of the belief in a just world hypothesis (BJW) using the 2006 CGSS. As this very rich data base does not include Dalbert questionnaire on GBJW and PBJW, we have completed the CGSS by a survey led during the COVID episode in Shanghai and Nanjing. Thanks to this new survey, we could identify the components of PBJW and GBJW inside the traditional opinion variables about the causes of poverty and the desire for redistribution of the CGSS. Using a tri-variate ordered probit model for explaining opinions, we show how treating the decision to migrate as an endogenous variable modifies the usual results of the literature concerning migrants and the effects of the Hukou status. The correlations found validate the distinction between personal BJW and general BJW, a distinction that has important policy implications for the status of migrants.

Mots clés: preference for redistribution, inequality perceptions, belief in a just world, Hukou and migrant workers, conditional correlations, binary endogenous, GHK simulator, marginal effects
Téléchargement Icône PDF wp_2022_-_nr_28.pdf (412.48 Ko)
Bayesian inference for non-anonymous Growth Incidence Curves using Bernstein polynomials: an application to academic wage dynamics
Edwin Fourrier-Nicolai
Michel Lubrano
This paper examines the question of non-anonymous Growth Incidence Curves (na-GIC) from a Bayesian inferential point of view. Building on the notion of conditional quantiles of Barnett (1976), we show that removing the anonymity axiom leads to a non-parametric inference problem. From a Bayesian point of view, an approach using Bernstein polynomials provides a simple solution and immediate confidence intervals, tests and a way to compare two na-GIC. The paper illustrates the approach to the question of academic wage formation and tries to shed some light on wether academic recruitment leads to a super stars phenomenon, that is a large increase of top wages, or not. Equipped with Bayesian na-GIC's, we show that wages at Michigan State University experienced a top compression leading to a shrinking of the wage scale. We finally analyse gender and ethnic questions in order to detect if the implemented pro-active policies were efficient.
Mots clés: conditional quantiles, non-anonymous GIC, Bayesian inference, wage formation, gender policy, ethnic discrimination
Téléchargement Icône PDF wp_2022_-_nr_27.pdf (673.87 Ko)
Hours Inequality
Daniele Checchi
Cecilia García-Peñalosa
Lara Vivian
The vast literature on earnings inequality has so far largely ignored the role played by hours of work. This paper argues that in order to understand earnings dispersion we need to consider not only the dispersion of hourly wages but also inequality in hours worked as well as the correlation between the two. We use data for the US, the UK, France, and Germany over the period 1991-2016 to examine the evolution of inequality in hours worked and of the correlation between individual hours and wages, assessing their contribution to recent trends in earnings inequality. We find that, other than in the US, hours inequality is an important force, and that it has increased over the period under analysis. The elasticity of hours with respect to wages has also played a key role, notably in the two continental economies. This elasticity used to be negative, thus tending to reduce inequality as those with lower hourly wages worked longer hours, but has increased over the past decades, becoming nil or positive, and hence eroding an important equalizing force. The paper examines which are the potential factors behind the change in the elasticity, notably the role of trade and labour market institutions
Mots clés: earnings inequality, working hours, hours elasticity
Téléchargement Icône PDF wp_2022_-_nr_26.pdf (835.15 Ko)
Postponement, career development and fertility rebound
Johanna Etner
Natacha Raffin
Thomas Seegmuller
We use an overlapping generations setup with two reproductive periods to explore how fertility decisions may differ in response to economic incentives in early and late adulthood. In particular, we analyze the interplay between fertility choices-related to career opportunities-and wages, and investigate the role played by late fertility. We show that young adults only postpone parenthood above a certain wage threshold and that late fertility increases with investment in human capital. The long run trend is either to a low productivity equilibrium, involving high early fertility, no investment in human capital and relatively low income, or to a high productivity equilibrium, where households postpone parenthood to invest in their human capital, with higher late fertility and higher levels of income. A convergence to the latter state would explain the postponement of parenthood and the fertility rebound observed in Europe in recent decades.
Mots clés: fertility, postponement, reproductive health, overlapping generations
Téléchargement Icône PDF wp_2022_-_nr_25.pdf (785.66 Ko)
The Priced Survey Methodology
Avner Seror

In this paper, I introduce a novel methodology to conduct surveys. The priced survey methodology. Like standard surveys, priced surveys are easy to implement, and measure invisible assets such as feelings, happiness, knowledge, views, and attitudes on numerical scales. Unlike standard surveys, priced surveys allow to leverage decades of research on revealed preference and consumer demand in the analysis of invisible assets.

Mots clés: revealed preference, invisible assets, survey, priced survey
Téléchargement Icône PDF wp_2022_-_nr_24.pdf (579.27 Ko)
Rank Dependent Weighted Average Utility Models for Decision Making under Ignorance or Objective Ambiguity
Nicolas Gravel
Thierry Marchant

The paper provides an axiomatic characterization of a family of rank dependent weighted average utility criteria applicable to decisions under ignorance or objective ambiguity. A decision under ignorance is described by the finite set of its final consequences while a decision under objective ambiguity is described by a finite set of probability distributions over a set of final consequences. The criteria characterized are those that assign to every element in a set a weight that depends upon the rank of this element if it was available for sure (or non-ambiguously) and that compare sets on the basis of their weighted utility for some utility function. A specific subfamily of these criteria that requires the weights to be proportional to each other is also characterized.

Mots clés: ignorance, ambiguity, ranking sets, axioms, ranks, weights, utility
Téléchargement Icône PDF wp_2022_-_nr_23.pdf (557.04 Ko)
Sovereign Risk, Financial Fragility and Debt Maturity
Dallal Bendjellal

This paper studies the transmission of a sovereign debt crisis in which a shift in default risk generates a recession and gives rise to a doom loop between sovereign distress and bank fragility with important amplification effects. The model is used to investigate the macroeconomic and welfare effects of altering debt maturity during the crisis. Short-term maturities alleviate the bankers' losses on long-term bonds and moderate the recession at the cost of higher levels of debt in the future. In contrast, long-term maturities are more effective to reduce the households' welfare losses as they lower default risk and distortionary taxes.

Mots clés: debt crisis, sovereign default risk, financial fragility, maturity dynamics
Téléchargement Icône PDF wp_2022_-_nr_22.pdf (850.11 Ko)
Pollution versus Inequality: Tradeoffs for Fiscal Policy
Camille Hainnaux
Thomas Seegmuller

In this paper, we investigate the impact of redistribution and polluting commodity taxation on inequality and pollution in a dynamic setting. We build a two-sector Ramsey model with a green and a polluting good. Households are heterogeneous, which allows for income inequality, and have a level of subsistence consumption for the polluting commodity, modeled by non-homothetic preferences. Increasing the tax rate has a mixed effect depend on the level of subsistence consumption. A low level allows to tackle both the pollution and inequality issues. Under a high level of it, pollution increases: if inequality can be reduced through redistribution, taxation does not allow to solve for environmental degradation. Looking at the stability properties of the economy, we find that the level of subsistence consumption and the externality matter. A high subsistence level of polluting consumption leads to instability or indeterminacy of the steady-state, while the environmental externality plays a stabilizing role in the economy. This leaves room for taxation and redistribution: increasing the tax rate and redistributing more towards workers play a key role in the occurrence of indeterminacy and instability.

Mots clés: externalities; heterogeneous agents; inequality; pollution; redistribution; taxation
Téléchargement Icône PDF wp_2022_-_nr_21.pdf (661.07 Ko)
Determinants of compliance with fiscal rules: misplaced efforts or hidden motivations?
Carolina Ulloa-Suárez

The effects of the COVID-19 pandemic led many governments to suspend their fiscal rules to gain additional fiscal space to mitigate the social and economic consequences of the health crisis. As a result, the return and subsequent compliance with fiscal rules have been compromised, and the opportunity to improve them and consider the new global macroeconomic conditions has emerged. Understanding what elements relate to increased compliance with the rules and what has worked and has not can shed light on upcoming reforms. This paper uses an empirical model to investigate Latin American countries' factors influencing numerical compliance with fiscal rules. We associate three groups of specific factors with a greater or lesser probability of compliance with the rule: the macroeconomic and political environment of the countries and the design features of the enforced rules. We find that only changes in the macroeconomic and political context are associated with higher levels of compliance. In contrast, the institutional design of the fiscal rules does not seem to play an essential role in the compliance outcome. This result suggests that adjustments in this direction are not decisive for rule compliance.

Mots clés: fiscal rules, Latin America, Compliance
Téléchargement Icône PDF wp_2022_-_nr_20.pdf (535.29 Ko)
The multiple dimensions of selection into employment
Kenza Elass

A vast literature on gender wage gaps has examined the importance of selection into employment. However, most analyses have focused only on female labour force participation and gaps at the median. The Great Recession questions this approach both because of the major shift in male employment that it implied but also because women's decisions to participate seem to have been different along the distribution, particularly due to an "added worker effect". This paper uses the methodology proposed by Arellano and Bonhomme (2017) to estimate a quantile selection model over the period 2007-2018. Using a tax and benefit microsimulation model, I compute an instrument capturing the male selection induced by the crisis as well as female decisions: the potential out-of-work income. Since my instrument is crucially determined by the welfare state, I consider three countries with notably different benefit systems-the UK, France and Finland. My results imply different selection patterns across countries and a sizeable male selection in France and the UK. Correction for selection bias lowers the gender wage gap and, in most recent years, reveals an increasing shape of gender gap distribution with a substantial glass ceiling for the three countries.

Mots clés: gender wage gap, sample selection, quantile selection model, wage inequality, quantiles, selection, glass ceilings, sticky floors
Téléchargement Icône PDF wp_2022_-_nr_19.pdf (1.86 Mo)
Mental health effects of COVID-19 lockdowns: a Twitter-based analysis
Sara Colella
Frédéric Dufourt
Vincent A. Hildebrand
Rémi Vivès

We derive a mental health indicator measuring the frequency of words expressing anger,
anxiety and sadness from a fixed population of Twitter users located in France. During
the first COVID-19 lockdown, our indicator did not reveal a statistically significant mental
health response, while the second lockdown triggered a sharp and persistent deterioration
in all three emotions. In addition, DID and event study estimates show a more severe
mental health deterioration among women and younger users during the second lockdown.
Our results suggest that successive stay-at-home orders significantly worsen mental health
across a large segment of the population.

Mots clés: COVID-19, lockdown, mental health, Twitter data, well-being
Téléchargement Icône PDF wp_2022_-_nr_18.pdf (2.31 Mo)
Filling the "decency gap"? Donors' reaction to the US policy on international family planning aid
Nathalie Ferrière

I study the impact of US allocation of family planning aid on other donors. Family planning provides representative insights into donor interactions. One donor, the US, dominates the sector but has changing policies on family planning due to domestic debates on abortion. Using the Mexico City Policy and exposure to this policy as an instrument, I find that other donors do not react to US policy changes in the short term, but two years later step in accordingly. This suggests that while some donors clearly intend to compensate for US policy, competition and herding behavior still operate; however, this may be mitigated in the short run.

Mots clés: Family planning, Foreign Aid, Mexico City Policy, Donor coordination
Téléchargement Icône PDF wp_2022_-_nr_17.pdf (473.39 Ko), Icône PDF wp_2022_-_nr_17_v2.pdf (510.17 Ko)
Production Networks and International Fiscal Spillovers
Michael B. Devereux
Karine Gente
Changhua Yu

This paper analyzes the impact of fiscal spending shocks in a dynamic, multi-country model with international production networks. We first derive a decomposition of the effects of a fiscal spending shock on the GDP of any country. This decomposition defines the response as the sum of a Direct, Income, and Price effect. The Direct Effect depends only on structural parameters and is independent of assumptions about monetary policy, wage setting, or capital mobility, while the Price Effect is zero in the aggregate across countries. We apply this decomposition to an analysis of fiscal spillovers in the Eurozone, using the production network structure from the World Input Output Database (WIOD). We find that fiscal spillovers from Germany and some other large Eurozone countries may be large, and within the range of empirical estimates. Without international production network linkages, spillovers would be only a third as large as predicted by the baseline model. Finally, we explore the diffusion of identified government spending shocks at the sectoral level, both within and across countries, using an empirical measure of the response, based on the theoretical decomposition. The empirical estimates are strongly consistent with the theoretical model.

Mots clés: production network, fiscal policy, spillovers, Eurozone, nominal rigidities
Téléchargement Icône PDF wp_2022_-_nr_16.pdf (1.15 Mo)
Emissions pricing instruments with intermittent renewables: second-best policy
Nandeeta Neerunjun

I analyze emissions pricing to support the integration of a renewable resource into an electricity mix composed of an emissions-intensive technology. I consider the intermittent nature of the resource such as wind energy and incremental externalities that become severe for high emissions levels. I show that an emissions tax is inefficient when consumers are on flat-rate electricity tariffs and cannot adapt their consumption to varying production. The tax is inefficient even with flexibility in the markets when consumers are on varying tariffs. The renewable resource induces variability in fossil-fueled electricity production and associated marginal damage that does not match a predetermined tax. I study an Emissions Trading Scheme that provides flexibility at the policy level. Emissions permits are traded at varying prices. Since the emissions cap must still be predetermined, I show that it leads to inefficient permits prices that do not match the marginal damages. I also find that the two emissions pricing instruments are not implemented equivalently since the tax differs from the prices of permits.

Mots clés: electricity, renewables, intermittency, emissions tax, Emissions Trading Scheme
Téléchargement Icône PDF wp_2022_-_nr_15.pdf (939.51 Ko)
Quantile Regression Analysis of Censored Data with Selection An Application to Willingness-to-Pay Data
Victor Champonnois
Olivier Chanel
Costin Protopopescu
Recurring statistical issues such as censoring, selection and heteroskedasticity often impact the analysis of observational data. We investigate the potential advantages of models based on quantile regression (QR) for addressing these issues, with a particular focus on willingness to pay-type data. We gather analytical arguments showing how QR can tackle these issues. We show by means of a Monte Carlo experiment how censored QR (CQR)-based methods perform compared to standard models. We empirically contrast four models on flood risk data. Our findings confirm that selection-censored models based on QR are useful for simultaneously tackling issues often present in observational data.
Mots clés: Censored Quantile Regression; Contingent Valuation; Flood; Monte Carlo Experiment; Quantile Regression; Selection Model; Willingness to Pay
Téléchargement Icône PDF wp_2022_-_nr_14.pdf (833.71 Ko)
Rational housing demand bubble
Lise Clain-Chamosset-Yvrard
Xavier Raurich
Thomas Seegmuller

We provide a unified framework with demand for housing over the life cycle and financial frictions to analyze the existence and macroeconomic effects of rational housing bubbles. We distinguish a housing price bubble, defined as the difference between the housing market price and its fundamental value, from a housing demand bubble, which corresponds to a situation where a pure speculative housing demand exists. In an overlapping generation exchange economy, we show that no housing price bubble occurs. However, a housing demand bubble may occur, generating a boom in housing prices and a drop in the interest rate, when households face a binding borrowing constraint. Multiplicity of steady states and endogenous fluctuations can occur when credit market imperfections are moderate. These fluctuations involve transitions between equilibria with and without a housing demand bubble that generate large fluctuations in housing prices consistent with observed patterns. We finally extend the basic framework to a production economy and we show that a housing demand bubble increases the housing price, housing price to income ratio and economic growth.

Mots clés: Bubble; Housing; Self-ful lling uctuations
Téléchargement Icône PDF wp_2022_-_nr_13.pdf (870.41 Ko)
Cross-Sector Interactions in Western Europe: Lessons From Trade Credit Data
Melina London

Large-scale analyses to map interactions between financial health at the sectoral level are still scarce. To fill the gap, in this paper, I map a network of predictive relationships across the financial health of several sectors. I provide a new advanced indicator to track propagation of financial distress across industries and countries on a monthly basis. I use defaults on trade credit as a measure of firms’ worsening financial conditions in a sector. To control for omitted-variable bias, I apply a high- dimensional VAR analysis, and isolate direct cross-sector causalities `a la Granger from common exposure to macroeconomic shocks or to third-sector shock. I show that monitoring some key sectors–among which construction, wholesale and retail, or the automotive sector–can improve the detection of financial distress in other sectors. Finally, I find that those financial predictive relationships correlates with the input-output structure in the considered economies. Such structure of financial interactions reflect the propagation of financial distress along the supply chain.

Mots clés: trade credit; network; cross-sector financial interdependencies
Téléchargement Icône PDF wp_2022_-_nr_12.pdf (1.1 Mo)
Under-Reporting of Firm Size Around Size-Dependent Regulation Thresholds: Evidence from France
Philippe Askenazy
Thomas Breda
Vladimir Pecheu

The existence of a peak at 49 employees in the firm size distribution in France, followed by a permanent decrease in the number of firms has been the starting point of political discourses and academic studies on the cost of size-dependent regulations at 50-employee. These features of the distribution are visible when firm size is declared by employers in fiscal data but not when it is reconstructed from individual-level social security data. This working paper explores these differences both from statistical and institutional viewpoints. It provides evidence showing that a large proportion of employers manipulate the firm size they declare in their fiscal documents. This manipulation generates the particular shape of the size distribution in the fiscal data. We discuss the rationale for such behavior: the key point is that the under-declaration in fiscal data is not subject to substantial sanctions and it can allow firms not to comply with the labor law. Event studies and comparisons of firms below and above the 50-employee threshold suggest that this threshold may only have limited effects on firm performance or growth potential. Consequently the welfare costs of the regulations at 50-employee might be smaller than what was found by some of the studies that assume a perfect compliance with the law.

Mots clés: regulations, firm size, firm dynamics, economic cost, non-compliance
Téléchargement Icône PDF wp_2022_-_nr_11.pdf (1.32 Mo)
Correcting the Reproduction Number for Time-Varying Tests: a Proposal and an Application to COVID-19 in France
Christelle Baunez
Michaël Degoulet
Stéphane Luchini
Matteo L. Pintus
Patrick A. Pintus
Miriam Teschl

We provide a novel way to correct the effective reproduction number for the time-varying amount of tests, using the acceleration index (Baunez et al., 2021) as a simple measure of viral spread dynamics. Not correcting results in the reproduction number being a biased estimate of viral acceleration and we provide a formal decomposition of the resulting bias, involving the useful notions of test and infectivity intensities. When applied to French data for the COVID-19 pandemic (May 13, 2020 - October 26, 2022), our decomposition shows that the reproduction number, when considered alone, characteristically underestimates the resurgence of the pandemic, compared to the acceleration index which accounts for the time-varying volume of tests. Because the acceleration index aggregates all relevant information and captures in real time the sizable time variation featured by viral circulation, it is a more parsimonious indicator to track the dynamics of an infectious disease outbreak in real time, compared to the equivalent alternative which would combine the reproduction number with the test and infectivity intensities.

Mots clés: COVID-19; reproduction number; testing; acceleration index; real-time analysis; France
Téléchargement Icône PDF wp_2022_-_nr_10.pdf (1.99 Mo), Icône PDF wp_2022_-_nr_10_v2.pdf (2.39 Mo)
The Academic Market and the Rise of Universities in Medieval and Early Modern Europe (1000-1800)
David de la Croix
Frédéric Docquier
Alice Fabre
Robert Stelter

We argue that market forces shaped the geographic distribution of upper-tail human capital across Europe during the Middle Ages, and contributed to bolstering universities at the dawn of the Humanistic and Scienti c Revolutions. We build a unique database of thousands of scholars from university sources covering all of Europe, construct an index of their ability, and map the academic market in the medieval and early modern periods. We show that scholars tended to concentrate in the best universities (agglomeration), that better scholars were more sensitive to the quality of the university (positive sorting) and migrated over greater distances (positive selection). Agglomeration, selection and sorting patterns testify to an integrated academic market, made possible by the use of a common language (Latin).

Mots clés: upper-tail human capital, universities, discrete choice model, scholars, sublications, agglomeration
Téléchargement Icône PDF wp_2022_-_nr_09.pdf (11.11 Mo)
The Inverted Leading Indicator Property and Redistribution Effect of the Interest Rate
Patrick A. Pintus
Yi Wen
Xiaochuan Xing

The interest rate at which US firms borrow funds has two features: (i) it moves in a countercyclical fashion and (ii) it is an inverted leading indicator of real economic activity: low interest rates today forecast future booms in GDP, consumption, investment, and employment. We show that a Kiyotaki-Moore model accounts for both properties when interest-rate movements are driven, in a significant way, by self-fulfilling belief shocks that redistribute income away from lenders and to borrowers during booms. The credit-based nature of such self-fulfilling equilibria is shown to be essential: the dynamic correlation between current loanable funds rate and future aggregate economic activity depends critically on the property that the interest rate is state-contingent. Bayesian estimation of our benchmark DSGE model on US data shows that the model driven by redistribution shocks results in a better fit to the data than both standard RBC models and Kiyotaki-Moore type models with unique equilibrium.

Mots clés: endogenous collateral constraints, state-contingent interest rate, redistribution shocks, multiple equilibria
Téléchargement Icône PDF wp_2022_-_nr_08.pdf (732.97 Ko)
Exit polls and voter turnout in the 2017 French elections
Alberto Grillo
Eva Raiber

Belgian and Swiss media regularly interfere during French elections by releasing exit polls before polling stations close. These foreign media profit from a law forbidding the same behavior by their French counterparts to receive large inflows of web visits from France. We exploit the unusual timing and degree of confidence with which exit polls were released in the second round of the 2017 presidential elections to investigate their effect on voter turnout. Our analysis is based on comparing turnout rates at different times on the election day, in the first and second round, and with respect to previous elections. We find a significant decrease in turnout of around 3 to 4 percentage points after the exit polls' publication which is suggestive of a causal effect, although similar trends were observed in previous elections. The effect is stronger in departments close to the Belgian border shortly after the release of the exit polls. We do not find clear evidence that either candidate benefited from the decrease in turnout, yet we cannot exclude the presence of a small underdog effect which reduced the winning margin by around 1 percentage point.

Mots clés: exit polls, voter turnout, underdog effect, bandwagon effect
Téléchargement Icône PDF wp_2022_-_nr_07.pdf (995.2 Ko)
Loss Aversion and Conspicuous Consumption in Networks
Yann Bramoullé
Christian Ghiglino

We introduce loss aversion into a model of conspicuous consumption in networks. Agents allocate their income between a standard good and a status good to maximize a Cobb-Douglas utility. Agents interact over a connected network and compare their status consumption to their neighbors' average consumption. Loss aversion has a profound impact. If loss aversion is large enough relative to income heterogeneity, a continuum of Nash equilibria appears and all agents consume the same quantity of status good. Otherwise, there is a unique Nash equilibrium and richest agents earn strict status gains while poorest agents earn strict status losses.

Mots clés: loss Aversion, conspicuous consumption, social networks
Téléchargement Icône PDF wp_2022_-_nr_06.pdf (645.36 Ko)
Residential segregation matters to racial income gaps: Evidence from South Africa
Florent Dubois
Christophe Muller

We contend that residential segregation should be an essential component of the analyses of socio-ethnic income gaps. Focusing on the contemporary White/African gap in South Africa, we complete Mincer wage equations with an Isolation index that reflects the level of segregation in the local area where individuals dwell. We decompose the income gap distribution into detailed composition and structure components. Segregation is found to be the main contributor of the structure effect, ahead of education and experience, and to make a sizable contribution to the composition effect. Moreover, segregation is found to be harmful at the bottom of the African income distribution, notably in relation to local informal job-search networks, while it is beneficial at the top of the White income distribution. Specific subpopulations are identified that suffer and benefit most from segregation, including for the former, little educated workers in agriculture and mining, often female, confined in their personal networks. Finally, minimum wage policies are found likely to attenuate most segregation’s noxious mechanisms, while a variety of policy lessons are drawn from the decomposition analysis by distinguishing not only compositional from structural effects, but also distinct group-specific social positions.

Mots clés: residential segregation, post-apartheid South Africa, distribution analysis, generalized decompositions
Téléchargement Icône PDF wp_2022_-_nr_05.pdf (554.09 Ko)
Poverty Measurement under Income and Price Dispersions
Christophe Muller

This chapter discusses facts, methods and empirical results that pertain to poverty measurement under income and price dispersions. The correlation of prices and living standards is examined, and its origins are considered, in terms of whether such origins are related to consumer preferences, economic interactions and market imperfections.

Then, the relationship of price dispersion and aggregate social indicators - including poverty measures - is analysed by combining stochastic hypotheses about prices and incomes with normative properties of social and poverty indicators.

Finally, empirical results about how dispersed heterogeneous price indices affect poverty measurement, anti-poverty targeting and poverty-alleviation price reforms are reviewed.

Mots clés: poverty, prices, living standards, price dispersion, poverty alleviation, price indices
Téléchargement Icône PDF wp_2022_-_nr_04.pdf (355.85 Ko)
Matching with Recall
Yann Bramoullé
Brian W. Rogers
Erdem Yenerdag

We study a two-period one-to-one dynamic matching environment in which agents meet randomly and decide whether to match early or defer. Crucially, agents can match with either partner in the second period. This "recall" captures situations where, e.g., a firm and worker can conduct additional interviews before contracting. Recall has a profound impact on incentives and on aggregate outcomes. We show that the likelihood to match early is nonmonotonic in type: early matches occur between the good-but-not-best agents. The option value provided by the first-period partner provides a force against unraveling, so that deferrals occur under small participation costs.

Mots clés: dynamic matching, unraveling, recall
Téléchargement Icône PDF wp_2022_-_nr_03.pdf (1.28 Mo)
Altruism Networks, Income Inequality, and Economic Relations
Yann Bramoullé
Rachel E Kranton

What patterns of economic relations arise when people are altruistic rather than strategically self-interested? This paper introduces an altruism network into a simple model of choice among partners for economic activity. With concave utility, agents effectively become inequality averse towards friends and family. Rich agents preferentially choose to work with poor friends despite productivity losses. Hence, network inequality-the divergence in incomes within sets of friends and family-is key to how altruism shapes economic relations and output. Skill homophily also plays a role; preferential contracts and productivity losses decline when rich agents have poor friends with requisite skills.

Téléchargement Icône PDF wp_2022_-_nr_02.pdf (591.96 Ko)
The (Market) Value of State Honors
Stéphane Benveniste
Renaud Coulomb
Marc Sangnier

State awards to civilians are a widespread social phenomenon across space and time. This paper quantifies the impact of State awards given to Directors on the stock value of their firms. We link a comprehensive dataset of recipients of the Légion d'honneurthe most prestigious official award in France-over the 1995-2019 period to Board positions in French listed firms. We document large abnormal returns in the stocks of recipients' firms at the date of the award, suggesting that awards signal valuable access to policy-makers. This interpretation is corroborated by the absence of any market reaction for recipients who were already identified before award receipt as being close to the Government.

Mots clés: Awards, State Honors, Symbolic Capital, Political Connections
Téléchargement Icône PDF wp_2022_-_nr_01.pdf (23.59 Mo)
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
Téléchargement Icône PDF wp_2021_-_nr_11.pdf (853.73 Ko)
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
Téléchargement Icône PDF wp_2021_-_nr_04.pdf (1.18 Mo)
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)
Téléchargement Icône PDF wp_2021_-_nr_03.pdf (713.69 Ko)
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)
Évaluation économique de la mortalité liée à la pollution atmosphérique en France
Olivier Chanel
Sylvia Medina
Mathilde Pascal

Cet article propose une discussion méthodologique à partir d’une évaluation économique des impacts sur la mortalité de l’exposition chronique aux particules fines en France continentale. Il prend comme point de départ l’évaluation quantitative d’impact sanitaire (EQIS), réalisée par Santé publique France en 2016, de 5 scénarios de réduction des concentrations par deux méthodes de mesure de la mortalité (nombre de décès prématurés évités et nombre total d’années de vie gagnées). Après une justification des valeurs monétaires utilisées – 3 millions € pour la valeur d’évitement d’un décès et 80 000 € pour celle d’une année de vie gagnée – nous les appliquons aux données sanitaires, et obtenons des résultats comparables aux études contemporaines. En particulier, dans un scénario sans pollution anthropique, l’EQIS de 2016 estime à 48 283 les décès prématurés évités, que nous évaluons à 144,85 milliards €2008. Nous questionnons ensuite les méthodes et pratiques : les sources de divergence avec la précédente étude française menée en 1998-99, le choix des valeurs monétaires et les conditions d’utilisation de ces résultats dans la décision publique. Au final, nous apportons un argument supplémentaire sur la nécessité de réduire l’exposition des populations à la pollution de l’air ambiant en France.

Mots clés: pollution atmosphérique, évaluation économique, mortalité, valeur d’évitement d’un décès
Téléchargement Icône PDF wp_2020_-_nr_49.pdf (536.53 Ko)
On the long-run fluctuations of inheritance in two-sector OLG models
Florian Pelgrin
Alain Venditti

This paper provides a long-run cycle perspective to explain the behavior of the annual flow of inheritance as identified by Piketty [51] for France and Atkinson [3] for the UK. Using a two-sector Barro-type [9] OLG model with non-separable preferences and bequests, we show that endogenous fluctuations are likely to occur through period-2 cycles or Hopf bifurcations. Two key mechanisms, which can generate independently or together quasi-periodic cycles, can be identified as long as agents are sufficiently impatient. The first mechanism relies on the elasticity of intertemporal substitution or equivalently the sign of the cross-derivative of the utility function whereas the second rests on sectoral technologies through the sign of the capital intensity difference across two sectors. Furthermore, building on the quasi-palindromic nature of the degree-4 characteristic equation, we derive some meaningful sufficient conditions associated to the occurrence of complex roots in a two-sector OLG model. Finally, we show that our theoretical results are consistent with some empirical evidence for medium- and long-run swings in the inheritance flows as a fraction of national income in France over the period 1896-2008.

Mots clés: two-sector overlapping generations model, optimal growth, endogenous fluctuations, quasi-palindromic polynomial, periodic and quasi-periodic cycles, altruism, bequest
Téléchargement Icône PDF wp_2020_-_nr_48.pdf (963.43 Ko)
Monetary policy and the top one percent: Evidence from a century of modern economic history
Mehdi El Herradi
Aurélien Leroy

This paper examines the distributional e ects of monetary policy in 12 OECD economies between 1920 and 2016. We exploit the implications of the macroeconomic policy trilemma with an external instrument approach to analyse how top income shares respond to monetary policy shocks. The results indicate that monetary tightening strongly decreases the share of national income held by the top one percent and vice versa for a monetary expansion, irrespective of the position of the economy. This e ect (i) holds for the top percentile and the ultra-rich (top 0.1% and 0.01% income shares), while (ii) it does not necessarily induce a decrease in income inequality when considering the entire income distribution. Our ndings also suggest that the e ect of monetary policy on top income shares is likely to be channeled via real asset returns.

Mots clés: monetary policy, top incomes, macroeconomic policy trilemma, external instrument
Téléchargement Icône PDF wp_2020_-_nr_47.pdf (1.72 Mo)
U.S. Churches' Response to Covid-19: Results from Facebook
Eva Raiber
Paul Seabright

This study investigates U.S. churches' response to the SARS-CoV-2 pandemic by looking at their public Facebook posts. For religious organizations, in-person gatherings are at the heart of their activities. Yet religious in-person gatherings have been identified as some of the early hot spots of the pandemic, but there has also been controversy over the legitimacy of public restrictions on such gatherings. Our sample contains information on church characteristics and Facebook posts for nearly 4000 churches that posted at least once in 2020. The share of churches that offer an online church activity on a given Sunday more than doubled within two weeks at the beginning of the pandemic (the first half of March 2020) and stayed well above baseline levels. Online church activities are positively correlated with the local pandemic situation at the beginning, but uncorrelated with most state interventions. After the peak of the first wave (mid April), we observe a slight decrease in online activities. We investigate heterogeneity in the church responses and find that church size and worship style explain differences consistent with churches facing different demand and cost structures. Local political voting behavior, on the other hand, explains little of the variation. Descriptive analysis suggests that overall online activities, and the patterns of heterogeneity, remain unchanged through end-November 2020.

Mots clés: Covid-19 pandemic, church, social media, Facebook
Téléchargement Icône PDF wp_2020_-_nr_46.pdf (1.87 Mo)
The Acceleration Index as a Test-Controlled Reproduction Number: Application to COVID-19 in France
Christelle Baunez
Mickael Degoulet
Stéphane Luchini
Matteo L. Pintus
Patrick A. Pintus
Miriam Teschl

We show that the acceleration index, a novel indicator that measures acceleration and deceleration of viral spread (Baunez et al. 2020a,b), is essentially a test-controlled version of the reproduction number. As such it is a more accurate indicator to track the dynamics of an infectious disease outbreak in real time. We indicate a discrepancy between the acceleration index and the reproduction number, based on the infectivity and test rates and we provide a formal decomposition of this difference. When applied to French data for the ongoing COVID-19 pandemic, our decomposition shows that the reproduction number consistently underestimates the resurgence of the pandemic since the summer of 2020, compared to the acceleration index which accounts for the time-varying volume of tests. Because the acceleration index aggregates all the relevant information and captures in real time the sizeable time variation featured by viral circulation, it is a sufficient statistic to track the pandemic’s propagation.

Mots clés: COVID-19; reproduction number; lock-down; acceleration index; real-time analysis; France
Téléchargement Icône PDF wp_2020_-_nr_45.pdf (1.2 Mo), Icône PDF wp_2020_-_nr_45v2.pdf (1.61 Mo)
I Want to Tell You? Maximizing Revenue in First-Price Two-Stage Auctions
Galit Ashkenazi-Golan
Yevgeny Tsodikovich
Yannick Viossat

A common practice in many auctions is to offer bidders an opportunity to improve their bids, known as a Best and Final Offer (BAFO) stage. This final bid can depend on new information provided about either the asset or the competitors. This paper examines the effects of new information regarding competitors, seeking to determine what information the auctioneer should provide assuming the set of allowable bids is discrete. The rational strategy profile that maximizes the revenue of the auctioneer is the one where each bidder makes the highest possible bid that is lower than his valuation of the item. This strategy profile is an equilibrium for a large enough number of bidders, regardless of the information released. We compare the number of bidders needed for this profile to be an equilibrium under different information settings. We find that it becomes an equilibrium with fewer bidders when no additional information is made available to the bidders compared to when information regarding the competition is available. As a result, from the auctioneer's revenue perspective, when the number of bidders is unknown, there are some advantages to not revealing information between the stages of the auction.

Mots clés: auctions, multistage auctions, BAFO, information utilization
Téléchargement Icône PDF wp_2020_-_nr_44.pdf (443.27 Ko)
How do migrations affect under-five mortality in rural areas? Evidence from Niakhar, Senegal
Ulrich Nguemdjo
Bruno Ventelou

This study analyses the relationship between a household member’s migration and child mortality within the family left behind in rural areas. Exploring the richness of the Niakhar Health and Demographic Surveillance System panel, we use high-frequency migration data to investigate the effects of migration on child mortality at the household level over 16 years. Migrations, particularly short-term migrations, are positively associated with the survival probability of under-five children in the household. Also, we find that working age women's short-term migrations impact child mortality more than working age men's short-term migrations. This observation supports hypotheses in the economic literature on the predominant role of women in rural households in obtaining welfare improvements. Moreover, we detect crossover effects between households of the same compound –in line with the idea that African rural families share part of their migration-generated gains with an extended community of neighbors. Lastly, we investigate the effect of a mother's short-term migration on the survival of her under-5 children. The aggregate effect of a mother’s migration on child survival is still positive, but much weaker. Specifically, mother migration during pregnancy seems to enhance the wellbeing of the child, considered immediately after birth. However, when the child is older (more than one year), the absence of the mother tends to decrease the probability of survival.

Mots clés: Niakhar, Senegal, short- and long-term migrations, child mortality
Téléchargement Icône PDF wp_2020_-_nr_43.pdf (943.1 Ko)
Rousseau's social contract or Machiavelli's virtue? A measure of fiscal credibility
Nicolas End

The concept of fiscal credibility is a watermark of some of the fiscal policy literature, but beyond an intuitive parallel with monetary policy, it remains not well defined, nor measured. This paper provides an explicit measure of fiscal credibility, based on the anchoring of private expectations onto official targets. I document how credibility varies among a sample of 26 European countries and evolves over 1995-2019. I find that private agents do not trust all governments uniformly. Country differences are mainly driven by past fiscal performance and institutions (fiscal rules and councils). Conversely, I find that credibility impacts sovereign financing conditions, as well as macroeconomic performance. Governments should thus strive to be (à la Rousseau) or appear (à la Machiavelli) credible.

Mots clés: fiscal policy, credibility
Téléchargement Icône PDF wp_2020_-_nr_42.pdf (3.51 Mo)
Judicial Independence and Development: Evidence from Pakistan
Sultan Mehmood

This paper provides plausibly causal evidence that Presidential appointment of judges considerably impacts judicial independence and decision quality in Pakistan. We find that when the judge selection procedure changed from Presidential appointment to appointment by peer judges, 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 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, judicial appointment by peer judges prevents land expropriations worth 0.14 percent of GDP every year.

Mots clés: president, judges, property rights, patronage
Téléchargement Icône PDF wp_2020_-_nr_41.pdf (1.65 Mo)
Celestial enlightenment: eclipses, curiosity and economic development among pre-modern ethnic groups
Anastasia Litina
Èric Roca Fernández

This paper revisits the role of human capital for economic growth among pre-modern ethnic groups. We hypothesise that exposure to rare natural events drives curiosity and prompts thinking in an attempt to comprehend and explain the phenomenon, thus raising human capital and, ultimately, pre-modern growth. We focus on solar eclipses as one particular trigger of curiosity and empirically establish a robust relationship between their number and several proxies for economic prosperity: social complexity, technological level and population density. Variation in solar eclipse exposure is exogenous as their local incidence is randomly and sparsely distributed all over the globe. Additionally, eclipses' non-destructive character makes them outperform other uncanny natural events, such as volcano eruptions or earthquakes, which have direct negative economic effects. We also offer evidence compatible with the human capital increase we postulate, finding a more intricate thinking process in ethnic groups more exposed to solar eclipses. In particular, we study the development of written language, the playing of strategy games and the accuracy of the folkloric reasoning for eclipses.

Mots clés: eclipses, human capital, development, curiosity
Téléchargement Icône PDF wp_2020_-_nr_40.pdf (4.76 Mo)
A Theory of Elite-Biased Democracies
Raouf Boucekkine
Rodolphe Desbordes
Paolo Melindi-Ghidi

Elite-biased democracies are those democracies in which former political incumbents and their allies coordinate to impose part of the autocratic institutional rules in the new political regime. We document that this type of democratic transition is much more prevalent than the emergence of pure (popular) democracies in which the majority decides the new political rules. We then develop a theoretical model explaining how an elitebiased democracy may arise in an initially autocratic country. To this end, we extend the benchmark political transition model of Acemoglu and Robinson (2006) along two essential directions. First, population is split into majority versus minority groups under the initial autocratic regime. Second, the minority is an insider as it benefits from a more favourable redistribution by the autocrat. We derive conditions under which elite-biased democracies emerge and characterise them, in particular with respect to pure democracies.

Mots clés: elite-biased democracy, institutional change, minority/majority, economicfavouritism, Inequality, revolution.
Téléchargement Icône PDF wp_2020_-_nr_39.pdf (426.17 Ko)
Binary Outcomes and Linear Interactions
Vincent Boucher
Yann Bramoullé

Heckman and MaCurdy (1985) first showed that binary outcomes are compatible with linear econometric models of interactions. This key insight was unduly discarded by the literature on the econometrics of games. We consider general models of linear interactions in binary outcomes that nest linear models of peer effects in networks and linear models of entry games. We characterize when these models are well defined. Errors must have a specific discrete structure. We then analyze the models' game-theoretic microfoundations. Under complete information and linear utilities, we characterize the preference shocks under which the linear model of interactions forms a Nash equilibrium of the game. Under incomplete information and independence, we show that the linear model of interactions forms a Bayes-Nash equilibrium if and only if preference shocks are iid and uniformly distributed. We also obtain conditions for uniqueness. Finally, we propose two simple consistent estimators. We revisit the empirical analyses of teenage smoking and peer effects of Lee, Li, and Lin (2014) and of entry into airline markets of Ciliberto and Tamer (2009). Our reanalyses showcase the main interests of the linear framework and suggest that the estimations in these two studies suffer from endogeneity problems.

Mots clés: binary outcomes, linear probability model, peer effects, econometrics of games
Téléchargement Icône PDF wp_2020_-_nr_38.pdf (785.38 Ko)
Exchange Rates, Stock Prices, and Stock Market Uncertainty
Fatemeh Salimi Namin

While the reference framework for international portfolio choice emphasizes a mean-variance framework, uncovered parity conditions only involve mean stock or bond returns. We propose to augment the empirical specification by using the relative stock market uncertainty of two countries as an extra determinant of their bilateral exchange rate returns. A rise in the relative uncertainty of one stock market will lead capital to flow to the other stock market and generate an appreciation in the currency of the latter. By focusing on the JPY/USD exchange rate returns during the most recent decade (2009-2019) and relying on a nonlinear framework, we provide evidence that the Japanese-US differential stock market uncertainty affects the JPY/USD returns both contemporaneously and with weekly lags. This finding is robust when we control for the stock returns differential and the differential changes in Japanese and US unconventional monetary policy measures.

Mots clés: exchange rate determination, implied volatility, UEP, flight to safety, flight to quality
Téléchargement Icône PDF wp_2020_-_nr_37.pdf (1.37 Mo)
An Early Assessment of Curfew and Second COVID-19 Lock-down on Virus Propagation in France
Christelle Baunez
Mickael Degoulet
Stéphane Luchini
Patrick A. Pintus
Miriam Teschl

This note provides an early assessment of the reinforced measures to curb the COVID-19 pandemic in France, which include a curfew of selected areas and culminate in a second COVID-19-related lock-down that started on October 30, 2020 and is still ongoing. We analyse the change in virus propagation across age groups and across départements using an acceleration index introduced in Baunez et al. (2020). We find that while the pandemic is still in the acceleration regime, acceleration decreased notably with curfew measures and this more rapidly so for the more vulnerable population group, that is, for people older than 60. Acceleration continued to decline under lock-down, but more so for the active population under 60 than for those above 60. For the youngest population aged 0 to 19, curfew measures did not reduce acceleration but lock-down does. This suggests that if health policies aim at protecting the elderly population generally more at risk to suffer severe consequences from COVID-19, curfew measures may be effective enough. However, looking at the departmental map of France, we find that curfews have not necessarily been imposed in départements where acceleration was the largest.

Mots clés: COVID-19; effects of curfew and lock-down; acceleration index; real-time analysis; France
Téléchargement Icône PDF wp_2020_-_nr_36.pdf (1.25 Mo)
Tracking the Dynamics and Allocating Tests for COVID-19 in Real-Time: an Acceleration Index with an Application to French Age Groups and Départements
Christelle Baunez
Mickael Degoulet
Stéphane Luchini
Patrick A. Pintus
Miriam Teschl

An acceleration index is proposed as a novel indicator to track the dynamics of the COVID-19 in real-time. Using French data on cases and tests for the period following the first lock-down-from May 13, 2020, onwards-our acceleration index shows that the ongoing pandemic resurgence can be dated to begin around July 7. It uncovers that the pandemic acceleration has been stronger than national average for the [59 − 68] and [69 − 78] age groups since early September, the latter being associated with the strongest acceleration index, as of October 25. In contrast, acceleration among the [19 − 28] age group is the lowest and is about half that of the [69 − 78], as of October 25. In addition, we propose an algorithm to allocate tests among French départements, based on both the acceleration index and the feedback effect of testing. Our acceleration-based allocation differs from the actual distribution over French territories, which is population-based. We argue that both our acceleration index and our allocation algorithm are useful tools to guide public health policies as France enters a second lock-down period with indeterminate duration.

Mots clés: COVID-19; indicator of epidemic dynamics; acceleration Index; real-time Analysis; sub-national allocation of tests; France
Téléchargement Icône PDF wp_2020_-_nr_35.pdf (2.19 Mo)
Ethical Voting in Heterogenous Groups
Alberto Grillo

Voting in large elections appears to be both ethically motivated and influenced by strategic considerations. One way to capture this interplay postulates a rule-utilitarian calculus, which abstracts away from heterogeneity in the intensity of support (Feddersen and Sandroni 2006, Coate and Conlin 2004). I argue that this approach is unsatisfactory when such heterogeneity is considered, since it implies that idiosyncratic preferences are irrelevant for participation, in contrast to the empirical evidence. A model of Kantian optimizationà la Roemer (2019), based on the maximization of individual utility under a universalization principle, predicts instead differential participation and links ethical motivation to the spatial theory of voting.

Mots clés: voting, turnout, ethical voter, rule-utilitarian, kantian optimization
Téléchargement Icône PDF wp_2020_-_nr_34.pdf (435.17 Ko), Icône PDF wp_2020_-_nr_34v2.pdf (508.95 Ko)
Growth factors in developed countries: A 1960-2019 growth accounting decomposition
Gilbert Cette
Aurélien Devillard
Vincenzo Spiezia

Using a new and original database, our paper contributes to the growth accounting literature with three original aspects: first, it covers a long period from the early 60's to 2019, just before the COVID-19 crisis; second, it analyses at the country level a large set of economies (30); finally, it singles out the growth contribution of ICTs but also of robots. The original database used in our analysis covers 30 developed countries and the Euro Area over a long period allowing to develop a growth accounting approach from 1960 to 2019. This database is built at the country level. Our growth accounting approach shows that the main drivers of labor productivity growth over the whole 1960-2019 period appear to be TFP, non-ICT and non-robot capital deepening, and education. The overall contribution of ICT capital is found to be small, although we do not estimate its effect on TFP. The contribution of robots to productivity growth through the two channels (capital deepening and TFP) appears to be significant in Germany and Japan in the sub-period 1975-1995, in France and Italy in 1995-2005, and in several Eastern European countries in 2005-2019. Our findings confirm also the slowdown in TFP in most countries from at least 1995 onwards. This slowdown is mainly explained by a decrease of the contributions of the components 'others' in the capital deepening and the TFP productivity channels.

Mots clés: growth, productivity, ICTs, robots
Téléchargement Icône PDF wp_2020_-_nr_33.pdf (995.05 Ko)
The Environmental Unsustainability of Public Debt: Non-Renewable Resources, Public Finances Stabilization and Growth
Nicolas Clootens
Francesco Magris

This paper introduces a public debt stabilization constraint in an overlapping generation model in which non-renewable resources constitute a necessary input in the production function and belong to agents. It shows that stabilization of public debt at high level (as share of capital) may prevent the existence of a sustainable development path. Public debt thus appears as a threat to sustainable development. It also shows that higher public debt-to-capital ratios (and public expenditures-to-capital ones) are associated with lower growth. Two transmission channels are identified. As usual, public debt crowds out capital accumulation. In addition, public debt tends to increase resource use which reduces the rate of growth. We also show that the economy is characterized by saddle path stability. Finally, we show that the public debt-to-capital ratio may be calibrated to implement the social planner optimal allocation.

Mots clés: non-renewable resources; growth; public finances; overlapping generations
Téléchargement Icône PDF wp_2020_-_nr_32.pdf (635.09 Ko)
Why are Low-Skilled Workers less Mobile? The Role of Mobility Costs and Spatial Frictions
Benoît Schmutz
Modibo Sidibé
Elie Vidal-Naquet

Workers' propensity to migrate to another local labor market varies a lot by occupation. We use the model developed by ? to quantify the impact of mobility costs and search frictions on this mobility gap. We estimate the model on a matched employer-employee panel dataset describing labor market transitions within and between the 30 largest French cities for two groups at both ends of the occupational spectrum and find that: (i) mobility costs are very comparable in the two groups, so they are three times higher for blue-collar workers relative to their respective expected income; (ii) Depending on employment status, spatial frictions are between 1.5 and 3.5 times higher for blue-collar workers; (iii) Moving subsidies have little (and possibly negative) impact on the mobility gap, contrary to policies targeting spatial frictions.

Mots clés: mobility costs, spatial frictions, migration, local labor markets, occupation
Téléchargement Icône PDF wp_2020_-_nr_31.pdf (591.58 Ko)
Prudential Regulation in Financial Networks
Mohamed Belhaj
Renaud Bourlès
Frédéric Deroïan

We analyze risk-taking regulation when financial institutions are linked through shareholdings. We model regulation as an upper bound on institutions' default probability, and pin down the corresponding limits on risk-taking as a function of the shareholding network. We show that these limits depend on an original centrality measure that relies on the cross-shareholding network twice: (i) through a risk-sharing effect coming from complementarities in risk-taking and (ii) through a resource effect that creates heterogeneity among institutions. When risk is large, we find that the risk-sharing effect relies on a simple centrality measure: the ratio between Bonacich and self-loop centralities. More generally, we show that an increase in cross-shareholding increases optimal risk-taking through the risk-sharing effect, but that resource effect can be detrimental to some banks. We show how optimal risk-taking levels can be implemented through cash or capital requirements, and analyze complementary interventions through key-player analyses. We finally illustrate our model using real-world financial data and discuss extensions toward including debt-network, correlated investment portfolios and endogenous networks.

Mots clés: financial network, risk-taking, prudential regulation
Téléchargement Icône PDF wp_2020_-_nr_30.pdf (825.67 Ko)
The Contribution of Residential Segregation to Racial Income Gaps: Evidence from South Africa
Florent Dubois
Christophe Muller

In this paper, we contend that local segregation should be an essential component of the analyzes of the determination of socio-ethnic income gaps. For this, we adopt a thorough distribution decomposition approach, as a general preliminary descriptive step to prospective specific structural analyses. Focusing on the contemporary White/African gap in South Africa, we first complete Mincer wage equations with an Isolation index that reflects the level of segregation in the local area where individuals dwell. Second, we decompose the income gap distribution into detailed composition and structure components. Third, we explore the heterogeneity of segregation effects on wage gaps along three theoretical lines: racial preferences, labor market segmentation, and networks links. Segregation is found to be the main contributor of the structure effect, ahead of education and experience, and to make a sizable contribution to the composition effect. Moreover, segregation is harmful at the bottom of the African income distribution, notably in relation to local informal job-search networks, while it is beneficial at the top of the White income distribution. Only minor influences of racial preferences and labor market segmentation are found. Specific subpopulations are identified that suffer and benefit most from segregation, including for the former, little educated workers in agriculture and mining, often female, immersed in their personal networks. Finally, minimum wage policies are found likely to attenuate most segregation’s noxious mechanisms.

Mots clés: post-apartheid South Africa, generalized decompositions, income distribution, residential segregation
Téléchargement Icône PDF wp_2020_-_nr_29.pdf (570.35 Ko)
Parents’ Separation: What Is The Effect On Parents’ and Children’s Time Investments?
Hélène Le Forner

This paper investigates the effect of parental separation on children’s allocation of their time and on the time spent with their parents. Based on detailed time-use diaries from the Panel Study of Income Dynamics - Child Development Supplement, I estimate an individual fixedeffects model and find that being in a single-parent family decreases time spent with at least one parent present by 18% of a standard deviation. Time spent with both parents together and alone with the non-custodial parent is greatly affected, but the custodial parent partially compensates for this decrease. The decrease in time spent with at least one parent involved in an activity is, however, not statistically significant. Parents seem to preserve time spent with their children when the child is younger at separation. Children whose parents are more highly educated are also less affected with regard to engaged time if they are in single-mother families. Time spent with a step-parent does not act as a recovery channel ; but time spent with a grandparent increases in single-mother families.

Mots clés: Time-Use; Child’s Time Investments; Parental Time Investment; Family Structure
Téléchargement Icône PDF wp_2020_-_nr_28.pdf (1.78 Mo)
Bayesian Inference for Distributional Changes: The Effect of Western TV on Wage Inequality and Female Participation in Former East Germany
Edwin Fourrier-Nicolai
Michel Lubrano

This paper investigates the evolution of wage formation in a Mincer model with sample selection for which we develop Bayesian inference and growth incidence and poverty growth curves. We estimate the effect of an exogenous exposure to Western TV broadcasts on labour market participation and wage inequality in East Germany after the German reunification. Using the GSOEP, we find evidences that Western television had significantly increased wage inequality among males while it has significantly affected female labour participation and led the less productive females to drop out from the market, hiding thus a large increase in wage inequality among females.

Mots clés: Bayesian inference, labour market, distributional changes, sample selection, wage inequality
Téléchargement Icône PDF wp_2020_-_nr_27.pdf (439.58 Ko)
Asset bubble and endogenous labor supply: a clarification
Kathia Bahloul Zekkari
Thomas Seegmuller

This paper analyzes the link between asset bubbles, endogenous labor and capital. The question is whether endogenous labor, per se, can explain a crowding-in effect of the bubble, i.e. higher levels of capital and labor. With respect to the existing literature, our contribution is twofold. First, we explicitly and theoretically derive the conditions to have a crowding-in effect of the bubble. Second, the utility function we consider allows us to show that this result does not require an arbitrarily high elasticity of intertemporal substitution in consumption. Our result still holds for a unit value of this elascticity (Cobb-Douglas utility).

Mots clés: asset bubbles, crowding-in effect, endogenous labor, overlapping generations
Téléchargement Icône PDF wp_2020_-_nr_26.pdf (420.3 Ko)
Systemic Risk: a Network Approach
Jean-Baptiste Hasse

We propose a new measure of systemic risk based on interconnectedness, defined as the level of direct and indirect links between financial institutions in a correlation-based network. Deriving interconnectedness in terms of risk, we empirically show that within a financial network, indirect links are strengthened during systemic events. The relevance of our measure is illustrated at both local and global levels. Our framework offers policymakers a useful toolbox for exploring the real-time topology of the complex structure of dependencies in financial systems and for measuring the consequences of regulatory decisions.

Mots clés: financial networks, interconnectedness, systemic risk, spillover
Téléchargement Icône PDF wp_2020_-_nr_25.pdf (1.44 Mo)
Liberté, Egalité, Fraternité... Contaminé? Estimating the impact of French municipal elections on COVID-19 spread in France
Guilhem Cassan
Marc Sangnier

On March 15, about 20, 000, 000 voters cast their vote for the first round of the 2020 French municipal elections. We investigate the extent to which this event contributed to the COVID-19 epidemics in France. To this end, we first predict each département's own dynamics using information up to the election to calibrate a standard logistic model. We then take advantage of electoral turnout differences between départements to distinguish the impact of the election on prediction errors in hospitalizations from that of simultaneously implemented anti-contagion policies. We report a detrimental effect of the election in locations that were at relatively advanced stages of the epidemics by the time of the election. In contrast, we show that the election did not contribute to the epidemics in départements with lower infection levels by March 15. All in all, our estimates suggest that elections accounted for about 4, 000 excess hospitalizations by the end of March, which represents 15% of all hospitalizations by this time. They also suggest that holding elections in June may not be as detrimental.

Mots clés: COVID-19, hospitalizations, electoral turnout, municipal elections, prediction errors
Téléchargement Icône PDF wp_2020_-_nr_24.pdf (1.87 Mo)
How Family Transfers Crowd-out Social Assistance in Germany
Edwin Fourrier-Nicolai

The non-take-up of social assistance has been receiving increased attention among policy makers in recent years as it would apparently underpin the effectiveness of public intervention in alleviating poverty. We examine whether receipt of private transfers affects the household decision to take-up social assistance in Germany between 2009 and 2011. We exploit the follow-up of households in the SOEP to reconstruct family links and estimate a model of welfare participation with endogenous private transfers and sample selection of the instruments. We find that 20% of the non-take-up rate is due to monetary substitution of private transfers lowering the welfare program costs. However, we find that social assistance is more effective in alleviating poverty and its intensity than private transfers.

Mots clés: welfare participation, private transfers, family networks
Téléchargement Icône PDF wp_2020_-_nr_23.pdf (664.7 Ko)
Monetary Policies and Destabilizing Carry Trades under Adaptive Learning
cyril Dell'Eva
Eric Girardin
Patrick Pintus

This paper investigates how different monetary policy designs alter the effect of carry trades on a host small open economy. Capital inflows are expansionary, leading the central bank to raise the interest rate, increasing carry trades' returns, and generating further capital inflows (carry trades' vicious circle). This paper shows how monetary authorities can mitigate or suppress this vicious circle, when agents do not have full information about the central bank's objectives. The best way to deal with the destabilizing effect of carry trades is to target both inflation and capital inflows.

Mots clés: capital inflows, carry trades, interest rate differential, vicious circle, inflation targeting
Téléchargement Icône PDF wp_2020_-_nr_22.pdf (489.1 Ko)
Modeling Joint Lives within Families
Olivier Cabrignac
Arthur Charpentier
Ewen Gallic

Family history is usually seen as a significant factor insurance companies look at when applying for a life insurance policy. Where it is used, family history of cardiovascular diseases, death by cancer, or family history of high blood pressure and diabetes could result in higher premiums or no coverage at all. In this article, we use massive (historical) data to study dependencies between life length within families. If joint life contracts (between a husband and a wife) have been long studied in actuarial literature, little is known about child and parents dependencies. We illustrate those dependencies using 19th century family trees in France, and quantify implications in annuities computations. For parents and children, we observe a modest but significant positive association between life lengths. It yields different estimates for remaining life expectancy, present values of annuities, or whole life insurance guarantee, given information about the parents (such as the number of parents alive). A similar but weaker pattern is observed when using information on grandparents.

Mots clés: annuities; collaborative data; dependence; family history; genealogy; grandparents-grandchildren; information; joint life insurance; parents-children; whole life insurance
Téléchargement Icône PDF wp_2020_-_nr_21.pdf (1.5 Mo)
Minimum wage and immigrants' participation in the welfare system: evidence from France
Eva Moreno-Galbis

This study examines how minimum wage laws affect the share of immigrants receiving welfare benefits. Minimum wage increases might have larger effects among low-skilled immigrants than among low-skilled natives because, on average, immigrants are less productive. We develop an analytical framework in which a government legislated minimum wage increase promotes a decrease in labor demand and an increase in the earned wage. The net impact on the expected wage is then ambiguous and so is the impact on search effort of unemployed. However, we expect the reduction in labor demand to be more important for immigrants due to their lower productivity. Immigrants remain unemployed and eventually become welfare recipients. Using the French Labor Force Surveys 2003-2016 we exploit the 2006 and 2012 government legislated minimum wage increases and find consistent evidence that a discretionary increase in the minimum wage induces a rise in the share of immigrants receiving welfare benefits which is more important than the rise estimated for natives. This result is driven by low-skilled immigrants and no significant effect arises for high-skilled. Endogeneity issues are addressed through an IV approach.

Mots clés: minimum wage, welfare benefits, immigrants
Téléchargement Icône PDF wp_2020_-_nr_20.pdf (345.29 Ko)
The Impact of Infrastructure Investments on Income Inequality: Evidence from US States
Emma Hooper
Sanjay Peters
Patrick A. Pintus

Our analysis of US state-level data on an annual frequency, from 1976 to 2008, sheds new light on a plausible causal link between infrastructure investments, namely public spending on highways, and income inequality. This causal relationship is drawn out by using the number of seats in the US House of Representatives Committee on Appropriations (HRCA) as an instrument to identify quasi-random variations in state-level spending on highways. An exogenous pattern which emerges when a state gains an additional member to the HRCA is that it is allocated with new federal grants. This increase in federal transfers for infrastructure financing results in slashing of expenditures on highways and a crowding-out e˙ect of federal funding for state investments on highways. Spending cuts on highways produced by a new HRCA member being attained by a state can unwittingly cause income inequality to rise over a short two-year time horizon. Similar challenges with decentralized development to finance infrastructure via federal transfers to state and sub-national governments may be encountered by other industrially advanced, emerging and low-income developing economies. US data over the mentioned period reveal a strong positive correlation with state spending on highways and wages paid for construction jobs. Suggestive evidence indicates that the construction sector also plays an important role in the transmission channel from a rise in state spending on highways to lowering income inequality, albeit during specific intervals, as opposed to on a long-term basis.

Mots clés: public infrastructure, highways, income inequality, US state panel data, instrument variable
Téléchargement Icône PDF wp_2020_-_nr_19.pdf (667.6 Ko), Icône PDF wp_2020_-_nr_19v2.pdf (667.77 Ko)
A dynamic theory of spatial externalities
Raouf Boucekkine
Giorgio Fabbri
Salvatore Federico
Fausto Gozzi

In this paper, we revisit the theory of spatial externalities. In particular, we depart in several respects from the important literature studying the fundamental pollution free riding problem uncovered in the associated empirical works. First, instead of assuming ad hoc pollution diffusion schemes across space, we consider a realistic spatiotemporal law of motion for air and water pollution (diffusion and advection). Second, we tackle spatiotemporal non-cooperative (and cooperative) differential games. Precisely, we consider a circle partitioned into several states where a local authority decides autonomously about its investment, production and depollution strategies over time knowing that investment/production generates pollution, and pollution is transboundary. The time horizon is infinite. Third, we allow for a rich set of geographic heterogeneities across states while the literature assumes identical states. We solve analytically the induced non-cooperative differential game under decentralization and fully characterize the resulting long-term spatial distributions. We further provide with full exploration of the free riding problem, reflected in the so-called border effects. In particular, net pollution flows diffuse at an increasing rate as we approach the borders, with strong asymmetries under advection, and structural breaks show up at the borders. We also build a formal case in which a larger number of states goes with the exacerbation of pollution externalities. Finally, we explore how geographic discrepancies affect the shape of the border effects.

Mots clés: spatial externalities, environmental federalism, transboundary pollution, differential games in continuous time and space, infinite dimensional optimal control problems
Téléchargement Icône PDF wp_2020_-_nr_18.pdf (3.39 Mo)
Education, neopatrimonialism, and revolutions
Raouf Boucekkine
Rodolphe Desbordes
Paolo Melindi-Ghidi

The occurrence of some revolutionary episodes seems initially puzzling. For example, before the 'Arab Spring', macroeconomic conditions were improving, the political leaders had been in power for a long time, and the autocrats had shown an apparent interest in the welfare of their population by investing in human capital. We argue that such a paradox can be solved by considering that high education levels are incompatible with the features characterising strong neopatrimonial states. We develop this intuition in a simple theoretical model and we test our prediction in a sequential empirical study of regime changes and regime breakdowns in a large panel of countries. We indeed find that a regime change is more likely in countries combining high neopatrimonialism and high education levels. Moreover, when a regime change happens under these circumstances, a revolution is the most likely type of regime breakdown. These results help to understand the 'Arab Spring' but are not specific to the Arab world.

Mots clés: education, neopatrimonialism, regime breakdown, regime change, revolution
Téléchargement Icône PDF wp_2020_-_nr_17.pdf (376.31 Ko)
Coping with shocks: the impact of Self-Help Groups on migration and food security
Timothée Demont

This paper asks whether local savings and credit associations help poor rural households hit by climatic shocks. Combining data from an original field experiment with meteorological data, I investigate how Self-Help Groups (SHGs) allow households to cope with rainfall shocks in villages of East India over a sevenyear period. I show that SHGs withstand large rainfall shocks remarkably, and that credit flows are very stable in treated villages. As a result, treated households experience a higher food security during the lean season following a drought and increase seasonal migration to mitigate future income shocks. These results imply that small-scale financial institutions like SHGs help to finance temporary risk management strategies and to cope with important covariate income shocks such as droughts.

Mots clés: microfinance, weather shocks, risk management, seasonal migration, food security
Téléchargement Icône PDF wp_2020_-_nr_16.pdf (842.36 Ko)
Costly agreement-based transfers and targeting on networks with synergies
Mohamed Belhaj
Frédéric Deroïan
Shahir Safi

We consider agents organized in an undirected network of local complementarities. A principal with a limited budget offers costly bilateral contracts in order to increase the sum of agents' effort. We study excess-effort linear payment schemes, i.e. contracts rewarding effort in excess to the effort made in absence of principal. The analysis provides the following main insights. First, for all contracting costs, the optimal unit returns offered to every targeted agent are positive and generically heterogeneous. This heterogeneity is due to the presence of outsiders, who create asymmetric interaction between contracting agents. Second, when contracting costs are low, it is optimal to contract with everyone and optimal unit returns are identical for all agents. Third, when contracting costs are sufficiently high, it becomes optimal to target a subset of agents, and optimal targeting can lead to NP-hard problems. In particular, when the intensity of complementarities is sufficiently low, a correspondence is established between optimal targeting and the densest k subgraph problem. Overall, the optimal targeting problem involves a trade-off between centrality and budget spending-central agents are influential, but are also more budget-consuming. These considerations can lead the principal to not target central agents.

Mots clés: networked synergies, aggregate effort, optimal group targeting, linear contract
Téléchargement Icône PDF wp_2020_-_nr_15.pdf (687.06 Ko)
Feeling good or feeling better?
Alberto Prati
Claudia Senik

Can people remember correctly their past well-being? We study three national surveys of the British, German and French population, where more than 50,000 European citizens were asked questions about their current and past life satisfaction. We uncover systematic biases in recalled subjective well-being: on average, people tend to overstate the improvement in their well-being over time and to understate their past happiness. But this aggregate figure hides a deep asymmetry: while happy people recall the evolution of their life to be better than it was, unhappy ones tend to exaggerate its worsening. It thus seems that feeling happy today implies feeling better than yesterday. These results offer an explanation of why happy people are more optimistic, perceive risks to be lower and are more open to new experiences.

Mots clés: life satisfaction, remembered utility, memory biases, intra-personal comparisons
Téléchargement Icône PDF wp_2020_-_nr_14.pdf (748.7 Ko)
Does the Yield Curve Signal Recessions? New Evidence from an International Panel Data Analysis
Jean-Baptiste Hasse
Quentin Lajaunie

In this paper, we reexamine the predictive power of the yield spread across countries and over time. Using a dynamic panel/dichotomous model framework and a unique dataset covering 13 OECD countries over a period of 45 years, we empirically show that the yield spread signals recessions. This result is robust to different econometric specifications, controlling for recession risk factors and time sampling. Using a new cluster analysis methodology, we present empirical evidence of a partial homogeneity of the predictive power of the yield spread. Our results provide a valuable framework for monitoring economic cycles.

Mots clés: yield spread; recession; panel binary model; cluster analysis
Téléchargement Icône PDF wp_2020_-_nr_13.pdf (687.43 Ko)
Growth and instability in a small open economy with debt
Leonor Modesto
Carine Nourry
Thomas Seegmuller
Alain Venditti

The relationship between public debt, growth and volatility is investigated in a Barro-type (1990) endogenous growth model, with three main features: we consider a small open economy, international borrowing is constrained and households have taste for domestic public debt. Therefore, capital, public debt and the international asset are not perfect substitutes and the economy is characterized by an investment multiplier. Whatever the level of the debt-output ratio, the existing BGP features expectation-driven fluctuations. If the debt-output ratio is low enough, there is also a second BGP with a lower growth rate. Hence, lower debt does not stabilize the economy with credit market imperfections. However, a high enough taste for domestic public debt may rule out the BGP with lower growth. This means that if the share of public debt hold by domestic households is high enough, global indeterminacy does not occur.

Mots clés: small open economy, public debt, credit constraint, indeterminacy
Téléchargement Icône PDF wp_2020_-_nr_12.pdf (657.05 Ko)
Sub-National Allocation of COVID-19 Tests: An Efficiency Criterion with an Application to Italian Regions
Christelle Baunez
Mickael Degoulet
Stéphane Luchini
Patrick A. Pintus
Miriam Teschl

Tests are crucial to know about the number of people who have fallen ill with COVID-19 and to understand in real-time whether the dynamics of the pandemic is accelerating or decelerating. But tests are a scarce resource in many countries. The key but still open question is thus how to allocate tests across sub-national levels. We provide a data-driven and operational criterion to allocate tests efficiently across regions or provinces, with the view to maximize detection of people who have been infected. We apply our criterion to Italian regions and compute the shares of tests that should go to each region, which are shown to differ significantly from the actual distribution.

Mots clés: COVID-19; epidemic dynamics; acceleration of harm; deceleration of harm; real-time analysis; sub-national allocation of tests; efficiency criterion; Italy
Téléchargement Icône PDF wp_2020_-_nr_11.pdf (792.27 Ko)
Are the liquidity and collateral roles of asset bubbles different?
Lise Clain-Chamosset-Yvrard
Xavier Raurich
Thomas Seegmuller

Several recent papers introduce different mechanisms to explain why asset bubbles are observed in periods of larger growth. These papers share common assumptions, heterogeneity among traders and credit market imperfection , but differ in the role of the bubble, used to provide liquidities or as collateral in a borrowing constraint. In this paper, we introduce heterogeneous traders by considering an overlapping generations model with households living three periods. Young households cannot invest in capital, while adults have access to investment and face a borrowing constraint. Introducing bubbles in a quite general way, encompassing the different roles they have in the existing literature, we show that the bubble may enhance growth when the borrowing constraint is binding. More significantly, our results do not depend on the-liquidity or collateral-role attributed to the bubble. We finally extend our analysis to a stochas-tic bubble, which may burst with a positive probability. Because credit and bubble are no more perfectly substitutable assets, the liquidity and collateral roles of the bubble are not equivalent. Growth is larger when bubbles play the liquidity role, because the burst of a bubble used for liquidity is less damaging to agents who invest in capital.

Mots clés : bubble, liquidity, collateral, crowding-in effect, growth
Téléchargement Icône PDF wp_2020_-_nr_10.pdf (605.83 Ko)
Urgently Needed for Policy Guidance: An Operational Tool for Monitoring the COVID-19 Pandemic
Stéphane Luchini
Miriam Teschl
Patrick A. Pintus
Mickael Degoulet
Christelle Baunez
Jean-Paul Moatti

The radical uncertainty around the current COVID19 pandemics requires that governments around the world should be able to track in real time not only how the virus spreads but, most importantly, what policies are effective in keeping the spread of the disease under check. To improve the quality of health decision-making, we argue that it is necessary to monitor and compare acceleration/deceleration of confirmed cases over health policy responses, across countries. To do so, we provide a simple mathematical tool to estimate the convexity/concavity of trends in epidemiological surveillance data. Had it been applied at the onset of the crisis, it would have offered more opportunities to measure the impact of the policies undertaken in different Asian countries, and to allow European and North-American governments to draw quicker lessons from these Asian experiences when making policy decisions. Our tool can be especially useful as the epidemic is currently extending to lower-income African and South American countries, some of which have weaker health systems.

Mots clés: acceleration; convexity; covid-19; data dashboard; detection of infectious diseases; public health policy; sensitivity
Téléchargement Icône PDF wp_2020_-_nr_09.pdf (1.3 Mo)
Trends in intergenerational homeownership mobility in France between 1960-2015
Barbara Castillo Rico

We study intergenerational wealth mobility and its evolution in France over the period 1960-2015. More precisely, we identify the persistence of homeownership between parents and children as indicator of wealth mobility in France. We also provide evidence about different sources of heterogeneity in intergenerational homeownership associations in terms of education and geographic areas. Finally, we study the main transmission mechanism: direct financial transfers. We use all available French wealth surveys since 1986 and perform a data panelization using retrospective information. We document multiple results. First, intergenerational correlation in homeownership status has dramatically increased, particularly since the 1990s. Second, this rise is concentrated among people aged between 20 and 39 years old. Third, we observe higher wealth persistence at the top. Four, we find a strong significant effect of direct wealth transfers on the probability of becoming homeowner, which lasts 5 years. Moreover, parental support is substantially more important for households with no diploma, suggesting a crucial role of human capital on wealth formation. Finally, this phenomenon is intensified in areas with high urban concentration; highlighting the potential role of house prices as determinant of wealth social determinism.

Mots clés: intergenerational mobility, homeownership, housing, wealth transmission
Téléchargement Icône PDF wp_2020_-_nr_08.pdf (2.53 Mo)
Long-term growth impact of climate change and policies: the Advanced Climate Change Long-term (ACCL) scenario building model
Claire Alestra
Gilbert Cette
Valérie Chouard
Rémy Lecat

This paper provides a tool to build climate change scenarios to forecast Gross Domestic Product (GDP), modelling both GDP damage due to climate change and the GDP impact of mitigating measures. It adopts a supply-side, long-term view, with 2060 and 2100 horizons. It is a global projection tool (30 countries / regions), with assumptions and results both at the world and the country / regional level. Five different types of energy inputs are taken into account according to their CO2 emission factors. Full calibration is possible at each stage, with estimated or literature-based default parameters. In particular, Total Factor Productivity (TFP), which is a major source of uncertainty on future growth and hence on CO2 emissions, is endogenously determined, with a rich modeling encompassing energy prices, investment prices, education, structural reforms and decreasing return to the employment rate. We present four scenarios: Business As Usual (BAU), with stable energy prices relative to GDP price; Decrease of Renewable Energy relative Price (DREP), with the relative price of non CO2 emitting electricity decreasing by 2% a year; Low Carbon Tax (LCT) scenario with CO2 emitting energy relative prices increasing by 1% per year; High Carbon Tax (HCT) scenario with CO2 emitting energy relative prices increasing by 3% per year. At the 2100 horizon, global GDP incurs a loss of 12% in the BAU, 10% in the DREP, 8% in the Low Carbon Tax scenario and 7% in the High Carbon Tax scenario. This scenario exercise illustrates both the "tragedy of the horizon", as gains from avoided climate change damage net of damage from mitigating policies are negative in the medium-term and positive in the long-term, and the "tragedy of the commons", as climate change damage is widely dispersed and particularly severe in developing economies, while mitigating policies should be implemented in all countries, especially in advanced countries modestly affected by climate change but with large CO2 emission contributions.

Mots clés: climate, global warming, energy prices, government policy, growth, productivity, long-term projections
Téléchargement Icône PDF wp_2020_-_nr_07.pdf (1.75 Mo)
Children's socio-emotional skills: Is there a quantity-quality trade-off?
Simon Briole
Hélène Le Forner
Anthony Lepinteur

Although it is widely acknowledged that non-cognitive skills matter for adult outcomes, little is known about the role played by family environment in the formation of these skills. We use a longitudinal survey of children born in the UK in 2000-2001, the Millennium Cohort Study by the Centre for Longitudinal Studies, to estimate the effect of family size on socio-emotional skills, measured by the Strengths and Difficulties Questionnaire. To account for the endogeneity of fertility decisions, we use a well-known instrumental approach that exploits parents' preference for children's gender diversity. We show that the birth of a third child negatively affects the socio-emotional skills of the first two children in a persistent manner. However, we show that this negative effect is entirely driven by girls. We provide evidence that this gender effect is partly driven by an unequal response of parents' time investment in favour of boys and, to a lesser extent, by an unequal demand for household chores.

Mots clés: non-cognitive skills; family size; birth order; child development
Téléchargement Icône PDF wp_2020_-_nr_06.pdf (841.76 Ko)
Sweet child of mine: Parental income, child health and inequality
Nicolas Berman
Lorenzo Rotunno
Roberta Ziparo

How to allocate limited resources among children is a crucial household decision, especially in developing countries where it might have strong implications for children and family survival. We provide the first systematic study linking variations in parental income in the early life of children to subsequent child health and parental investments across siblings in developing countries, using data from multiple waves of the Demographic and Health Surveys spanning 54 countries. Variations in the world prices of locally produced crops are used as measures of local income. We find that children born in periods of higher income receive better human capital (health and education) investments and durably enjoy better health than their siblings. Children whose siblings were born during favourable income periods receive less investment and exhibit worse health. We also provide evidence that other investments (education, fertility) react to sibling rivalry, and show that these within-households adjustments matter at the aggregate level.

Mots clés: health, income, parental investments, intra-household allocations
Téléchargement Icône PDF wp_2020_-_nr_05_v2.pdf (1.73 Mo)
Religion, Politics, and Judicial Independence: Theory and Evidence
Sultan Mehmood
Avner Seror

Most enlightenment philosophers argued that the separation between Church and State would prevent capture of resources by one state religion. We formalize and test a theory that addresses a different danger. We demonstrate that a reduction in the separation between Church and State can be corrosive to political institutions, especially the Judiciary. We show that religious leaders use their high legitimacy to gain political office, and become particularly abusive politicians, misusing their political authority to undermine the independence of the Judiciary. We provide a theoretical framework and estimate the structural equations of our theory using data from Pakistan. Our empirical strategy exploits the plausibly exogenous timing of a military coup to provide causal evidence for the key predictions of our theory.

Mots clés: religion, judicial independence, elections, economic development
Téléchargement Icône PDF wp_2020_-_nr_04.pdf (6.3 Mo)
Optimal location of economic activity and population density: The role of the social welfare function
Raouf Boucekkine
Giorgio Fabbri
Salvatore Federico
Fausto Gozzi

In this paper, we consider a spatiotemporal growth model where a social planner chooses the optimal location of economic activity across space by maximization of a spatiotemporal utilitarian social welfare function. Space and time are continuous, and capital law of motion is a parabolic partial differential diffusion equation. The production function is AK. We generalize previous work by considering a continuum of social welfare functions ranging from Benthamite to Millian functions. Using a dynamic programming method in infinite dimension, we can identify a closed-form solution to the induced HJB equation in infinite dimension and recover the optimal control for the original spatiotemporal optimal control problem. Optimal stationary spatial distributions are also obtained analytically. We prove that the Benthamite case is the unique case for which the optimal stationary detrended consumption spatial distribution is uniform. Interestingly enough, we also find that as the social welfare function gets closer to the Millian case, the optimal spatiotemporal dynamics amplify the typical neoclassical dilution population size effect, even in the long-run.

Mots clés: spatiotemporal growth models, Benthamite vs Millian social welfare functions, imperfect altruism, diffusion, dynamic programming in infinite dimension
Téléchargement Icône PDF wp_2020_-_nr_03.pdf (1.29 Mo)
A theory of heterogeneous city growth
Christian Ghiglino
Kazuo Nishimura
Alain Venditti

We consider an economy with three cities producing different outputs. Two cities produce intermediate goods, a type 1 producing an intermediate "agricultural" good with capital and labor only, and a type 2 producing an intermediate "industrial" good with capital, labor and human capital, and the last type 3 city produces the final good which is obtained from the two intermediate goods and labor. The asymmetric introduction of human capital allows us to prove that the three cities experience at the equilibrium heterogeneous endogenous growth rates which are proportional to the growth rate of human capital. We show that the "industrial" type 2 city is characterized by the larger growth rate while the "agricultural" type 1 city experiences the lower growth rate, and thus the type 3 city is characterized by a growth rate which is a convex combination of the two formers. This implies that the relative size in terms of output of the "agricultural" city decreases over time. This property allows to recover the empirical fact that most nonagricultural production occurs in growing metropolitan areas. But, simultaneously, as we prove that total labor employed in each city is proportional to the total population, the relative population size distribution of cities is constant over time as shown in empirical studies.

Mots clés: urban dynamics, human capital, endogenous growth, heterogeneous growth rates, city inequalities
Téléchargement Icône PDF wp_2020_-_nr_02.pdf (255.13 Ko)
Lie of the Weak: Inconsistent Corporate Social Responsibility Activities of Chinese Zombie Firms
Shaozhen Han
Guoming Li
Michel Lubrano
Zhou Xun

This study investigates the differences between zombie firms and non-zombie firms in corporate social responsibility activities such as reporting, disclosure and fulfillment. Using Chinese listing company data collected from 2009 to 2016, we apply a three stage model with a double Heckman correction to deal with potential self-selection/endogeneity bias and to measure the differences consistently. We found that zombie firms are less willing to release standalone corporate social responsibility reports than non-zombie firms. Among companies that release standalone corporate social responsibility reports, the corporate social responsibility disclosure of zombie firms is at least not worse than non-zombie firms, but the corporate social responsibility fulfillment is significantly lower. We conclude from this gap between disclosure and fulfillment to the hypocritical behavior of zombie firms, due to the absence of control in corporate social responsibility. We suggest that government should enhance supervision over zombie firms’ corporate social responsibility activities and subsidies towards them in order to lower their economic damage. Supplementary analyses provide some clues concerning the heterogeneity of inconsistence in term of external support characteristics, ownership and censorship which require further studies.

Mots clés: corporate social responsibility; zombie firms; reports; disclosure; fulfillment; hypocrisy
Téléchargement Icône PDF wp_2020_-_nr_01.pdf (734.48 Ko)
Investment Sensitivity to Inter-enterprises Payment Deadlines
Aissata Boubacar Moumouni

This paper investigates the determinants of firms investment financing constraints. Using an endogenous switching regression model on French Provence-Alpes Côte d'Azur region firms data collected between 2005-2014, we provide a novel evidence of the role of inter-enterprises payment deadlines which are days receivable outstanding and days payable outstanding, as factors determining rms investment nancing constraints. We also show that there is a non-negligible number of firms switching each year either from constrained regime to unconstrained regime or unconstrained regime to constrained one. By developing a model, we highlight the factors determining firms regime change.

Mots clés: firms investment, inter-enterprises payment deadlines, endogenous switching regression model
Téléchargement Icône PDF wp_2019_-_nr_38.pdf (499.84 Ko)
Gender, information and the efficiency of household production decisions: An experiment in rural Togo
Marie Christine Apedo-Amah
Habiba Djebbari
Roberta Ziparo

Why do farm households inefficiently allocate resources across the plots they cultivate? We explore how these production inefficiencies relate to consumption decisions and information sharing within the household. In a lab-in-the-field experiment, male producers allocate too few inputs to their wife's plot, failing to maximize household aggregate profits. They do transfer more inputs when the returns from that plot are higher. Experimental manipulation of information on these returns triggers heterogeneous responses across households. We provide a theoretical framework that rationalizes these findings and further leads to sharp predictions. Joint contribution to a household public good compels spouses to make efficient production decisions. Only households who are in a separate-sphere regime experience inefficiency in farm production and are unable to effectively communicate on returns to avoid extra losses. Consistent with this framework, when we experimentally offer an ex post information verification mechanism, additional losses due to information asymmetries are prevented.

Mots clés: farm households, household production and intra-household allocation, non-cooperative game theory, asymmetric and private information, lab-in-the-field experiment
Téléchargement Icône PDF wp_2019_-_nr_37.pdf (655.27 Ko)
Peer Effects in Networks: a Survey
Yann Bramoullé
Habiba Djebbari
Bernard Fortin

We survey the recent, fast-growing literature on peer effects in networks. An important recurring theme is that the causal identification of peer effects depends on the structure of the network itself. In the absence of correlated effects, the reflection problem is generally solved by network interactions even in non-linear, heterogeneous models. By contrast, microfounda-tions are generally not identified. We discuss and assess the various approaches developed by economists to account for correlated effects and network endogeneity in particular. We classify these approaches in four broad categories: random peers, random shocks, structural endogeneity and panel data. We review an emerging literature relaxing the assumption that the network is perfectly known. Throughout, we provide a critical reading of the existing literature and identify important gaps and directions for future research.

Mots clés: social networks, peer effects, identification, causal effects, randomization, measurement errors
Téléchargement Icône PDF wp_2019_-_nr_36.pdf (344.29 Ko)
Managing a common-pool resource with no stock externality: The case of artesian aquifers
Hubert Stahn
Agnes Tomini

This paper studies a specific class of common-pool resources whereby rivalry is not characterized by competition for the resource stock. Artesian aquifers have been identified as a typical example, since the stock is never depleted, even when part of the resource is extracted. We first propose a dynamic model to account for relevant features of such aquifers-like water pressure, or well yield-and to characterize the corresponding dynamics. We then compare the social optimum and the private exploitation of an open-access aquifer. The comparison of these two equilibria allows us to highlight the existence of a new source of inefficiency. We refer to this as pressure externality. This externality results in the long run in an additional number of wells for the same water consumption, and hence additional costs. Finally, we characterize a specific stock-depend tax to neutralize the pressure externality.

Mots clés: common-pool resource, externality, optimal management, public regulation, dynamic optimization
Téléchargement Icône PDF wp_2019_-_nr_35.pdf (570.13 Ko)
Looking for the "Best and Brightest": Hiring difficulties and high-skilled foreign workers
Morgan Raux

                                      This paper shows that firms' demand for high-skilled foreign workers partly results from their hiring difficulties. Relying on a within-firm identification strategy, I compare recruitment decisions made by a given employer for similar jobs differing in recruitment difficulties. I quantify how the time to fill a vacancy affects the employer's probability to look for recruiting a foreign worker. To identify this relationship, I have collected and assembled a new and original dataset at the job level. It matches online job postings to administrative data on H-1B visas applications in the US. I find that a standard deviation increase in job posting duration increases employers' probability to look for a foreign worker by 1.5 percentage points. This effect is mainly driven by firms sending only a few visa applications. It increases to 3 to 4 percentage points for architects, engineers and computer scientists.

Mots clés: H-1B work permit, hiring difficulties, web scraping
Téléchargement Icône PDF wp_2019_-_nr_34.pdf (1.17 Mo)
Instruments of Debtstruction: Public Debt Management and Networks during the Interwar Period
Nicolas End
Marina Marinkov
Fedor Miryugin

We construct a new, comprehensive instrument-level database of sovereign debt for 18 advanced and emerging countries during 1913–46, an eventful period characterized by notoriously high debt levels. This database is thus the first to provide public debt time series with such a high degree of comparability across countries and time. Documentation of qualitative instrument characteristics offers unique insights about the debt management policies that were implemented and the broader policies they helped finance. We document how interwar governments rolled over debts that were largely unsustainable and how the external public debt network contributed to the collapse of the international financial system in the early 1930s.

Mots clés: economic history, debt policy, public finance, macroeconomics
Téléchargement Icône PDF wp_2019_-_nr_33.pdf (7.7 Mo)
Quantitative Easing and the Term Premium as a Monetary Policy Instrument
Etienne Vaccaro-Grange

The transmission of Quantitative Easing to aggregate macroeconomic variables through the yield curve is disentangled in two yield channels: the term premium channel, captured by a term premium series, and the signaling channel, that corresponds to the interest rate expectations counterpart. Both yield components are extracted from a term structure model and plugged into a Structural VAR with Euro Area macroeconomic variables in which shocks are identified using sign restrictions. With this set-up, I show how the central bank can use the term premium as a single monetary policy instrument to foster output and prices. However, I also show that there has been a cost channel in the transmission of QE to inflation between 2015 and 2017. This cost channel provides a new explanation as to why inflation has been so muted during this period, despite the easing monetary environment. Finally, a policy rule for the term premium is estimated.

Mots clés: quantitative easing, shadow-rate term structure model, BVAR, sign restrictions
Téléchargement Icône PDF wp_2019_-_nr_32.pdf (3.68 Mo)
A Theory of Cultural Revivals
Murat Iyigun
Jared Rubin
Avner Seror

Why do some societies fail to adopt more efficient institutions? And why do such failures often coincide with cultural movements that glorify the past? We propose a model highlighting the interplay—or lack thereof—between institutional change and cultural beliefs. The main insight is that institutional change by itself will not lead to a more efficient economy unless culture evolves in tandem. This is because institutional change can be countered by changes in cultural values complementary to a more "traditional" economy. In our model, forward-looking elites, who benefit from a traditional, inefficient economy, may over-provide public goods that are complementary to the production of traditional goods. This encourages individuals to transmit cultural beliefs complementary to the provision of traditional goods. A horse race results between institutions, which evolve towards a more efficient (less traditional) economy, and cultural norms, which are pulled towards "tradition" by the elites. When culture wins the horse race, institutions respond by giving more political power to traditional elites—even if in doing so more efficient institutions are left behind. We call the interaction between these cultural and institutional dynamics a cultural revival.

Mots clés: institutions, cultural beliefs, cultural transmission, institutional change
Téléchargement Icône PDF wp_2019_-_nr_31.pdf (587.52 Ko)
Bread and Social Justice: Measurement of Social Welfare and Inequalities Using Anthropometrics
Mohammad Abu-Zaineh
Ramses H. Abul Naga

We address the question of the measurement of pure health inequalities and achievement in the context of welfare decreasing variables. We adopt a general framework whereby the health variable is reported on an interval, from an optimum level to a critical survival threshold. There are two problems that require some departures from the usual framework used to measure inequality and social welfare. Firstly, we show that for welfare decreasing variables, the equally distributed equivalent value is decreasing in progressive transfers (instead of being increasing). Accordingly, appropriate achievement and inequality indices for welfare decreasing variables are introduced. Secondly, because the Lorenz curve and the associated inequality indices are not robust to alternative values of the survival threshold, we argue that the family of translation invariant social welfare functions and related absolute Lorenz curve allow us to undertake inequality comparisons between distributions that are robust to the chosen level of the survival threshold. An illustrative application of the methodology is provided.

Mots clés: health achievement and inequality; welfare decreasing variables; survival thresholds; relative and absolute Lorenz curves.
Téléchargement Icône PDF wp_2019_-_nr_30.pdf (1.06 Mo)
Public finance sustainability in Europe: a behavioral model
Gilles Dufrénot
Carolina Ulloa Suarez

This paper investigates the sustainability of public finances in the European countries since 2002. We provide evidence of heterogenous behaviors among the EU countries and show that, even if they had been forced to focus their fiscal efforts on correcting the deviations of debt from their ceiling -through a correcting mechanism such as the recent TSCG rule-, this would not necessarily have changed the likelihood that debt and deficits become more sustainable. Sources of deviations from stable debt and deficits are related to the macroeconomic environment: the interest-growth differential, momentum dynamics in the sovereign bond markets, how markets react to rising debt.

Mots clés: fiscal rules, euro area, quantile regression, stability
Téléchargement Icône PDF wp_2019_-_nr_29.pdf (1011.45 Ko)
Age At Parents' Separation And Children Achievement: Evidence From France Using A Sibling Approach
Hélène Le Forner

This paper investigates the link between parental separation and children's achievement in their adulthood. Using a French dataset "Education-Training-Employment", the differences in age of the children at divorce, within a family, are examined in order to control for divorced families selection. The main interest of the paper lies in three particular outcomes : the number of years of schooling, earnings-weighted education, and social position. The results show that individuals whose parents separated have about one semester of schooling less than the children of non-divorced families, they also have lower quality of education and lower social position associated with wages from 4% to 9% lower than individuals who grew up with their two parents. All these estimated effects remain negative and significant within the family. Parental separation is more harmful for boys, or for individuals whose mother is less highly educated.

Mots clés: education, divorce, family economics, family structure, marital dissolution
Téléchargement Icône PDF wp_2019_-_nr_28.pdf (1.24 Mo)
Particularism, dominant minorities and institutional change
Raouf Boucekkine
Rodolphe Desbordes
Paolo Melindi-Ghidi

We develop a theory of institutional transition from dictatorship to minority dominant-based regimes. We depart from the standard political transition framework à la Acemoglu-Robinson in four essential ways: (i) population is heterogeneous, there is a minority/majority split, heterogeneity being generic, simply reflecting subgroup size; (ii) there is no median voter in the post-dictatorship period, political and economic competition is favorable to the minority (fiscal particularism); (iii) (windfall) resources are introduced, and (iv) we distinguish between labor income and resources, and labor supply is endogenous. We first document empirically fiscal particularism, its connection with resource endowment, and the impact of both on revolutionary bursts. Second, we construct a full-fledged model incorporating the four characteristics outlined above. We show, among others, that polarization is a sufficient condition for revolutions, while resource rents are not: they do matter though when polarization is low. In agreement with our empirical facts, countries engaging in revolutions tend to be slightly less resource-rich than other countries. We also outline the interplay between resource rents, polarization and labor market conditions at the dawn of institutional change. Our theory is appropriate to understand the institutional dynamics in highly homogeneous resource-rich countries, which after post-independence autocratic regimes, turn to be dominated by minorities, Algeria being the paradigmatic case.

Mots clés: political transition, minority/majority, fiscal particularism, dominant minority, resources, labor market
Téléchargement Icône PDF wp_2019_-_nr_27.pdf (773.76 Ko)
A spatiotemporal framework for the analytical study of optimal growth under transboundary pollution
Raouf Boucekkine
Giorgio Fabbri
Salvatore Federico
Fausto Gozzi

We construct a spatiotemporal frame for the study of optimal growth under transboundary pollution. Space is continuous and polluting emissions originate in the intensity of use of the production input. Pollution flows across locations following a diffusion process. The objective functional of the economy is to set the optimal production policy over time and space to maximize welfare from consumption, taking into account a negative local pollution externality and the diffusive nature of pollution. Our framework allows for space and time dependent preferences and productivity, and does not restrict diffusion speed to be space-independent. This provides a comprehensive setting to analyze pollution diffusion with a close account of geographic heterogeneity. The involved optimization problem is infinite-dimensional. We propose an alternative method for an analytical characterization of the optimal paths and the asymptotic spatial distributions. The method builds on a deep economic concept of pollution spatiotemporal welfare effect, which makes it definitely useful for economic analysis.

Mots clés: optimal growth, spatiotemporal modelling, transboundary pollution, infinite dimensional optimal control
Téléchargement Icône PDF wp_2019_-_nr_26.pdf (539.88 Ko)
Pollution in a globalized world: Are debt transfers among countries a solution?
Marion Davin
Mouez Fodha
Thomas Seegmuller

 This article analyzes the impacts of debt relief on production and pollution. We develop at wo-country overlapping generations model with environmental externalities, public debts and perfect mobility of assets. Pollutant emissions arise from production, but agents may invest in pollution mitigation. Could debt relief be an efficient tool to encourage less developed countries to engage in the fight against climate change? We consider a decrease of the debt of the poor country balanced by an increase of the richer country’s debt. We show that debt relief makes it possible to engage poor countries in the process of pollution abatement. Capital, environmental quality and welfare can increase in both countries. This result relies on the environmental sensitivity and the discount factor in the poor country relative to the rich one: the greater they are the more beneficial the debt relief is.

Mots clés: pollution; abatement; overlapping generations; public debt; capital market integration
Téléchargement Icône PDF wp_2019_-_nr_25.pdf (1.32 Mo)
Human Development, Social Interactions, and Identity Formation
Avner Seror

This paper presents a general theory of child development that incorporates interactive learning and identity formation in social interactions with caregivers. The model sheds light on many puzzling aspects of child development. Child learning responds nonmonotonically to caregivers' attention and approval in social interactions. I highlight key parental characteristics associated with child learning, and identity formation. The theory also explains why media devices widen human inequality. Lessons are finally drawn for the design of policies that alleviate human inequality.

Mots clés: human development, human inequality, social interactions, identity, parenting, learning, intergenerational transmission, media
Téléchargement Icône PDF wp_2019_-_nr_24.pdf (677.44 Ko)
Contribution to a Public Good under Subjective Uncertainty
Anwesha Banerjee
Nicolas Gravel

This paper examines how voluntary contributions to a public good are affected by the contributors' heterogeneity in beliefs about the uncertain impact of their contributions. It assumes that contributors have Savagian preferences that are represented by a two-state-dependent expected utility function and different beliefs about the benefit that will result from the sum of their contributions. We establish general comparative statics results regarding the effect of specific changes in the distribution of beliefs on the (unique) Nash equilibrium provision of the public good, under certain conditions imposed on the preferences. We specifically show that the equilibrium public good provision is increasing with respect to both first and second order stochastic dominance changes in the distribution of beliefs. Hence, increasing the contributors' optimism about the uncertain benefit of their contributions increases aggregate public good provision provision, as does any homogenization of these beliefs around their mean.

Mots clés: voluntary provision, public good, uncertainty, beliefs, optimism, consensus
Téléchargement Icône PDF wp_2019_-_nr_23.pdf (646.8 Ko)
Evaluating Education Systems
Nicolas Gravel
Edward Levavasseur
Patrick Moyes

This paper proposes two dominance criteria for evaluating education systems described as joint distributions of the pupils' cognitive skill achievements and family backgrounds. The first criterion is shown to be the smallest transitive ranking of education systems compatible with three elementary principles. The first principle requires any improvement in the cog-nitive skill of a child with a given family background to be recorded favorably. The second principle demands that any child's cognitive skill be all the more favorably appraised as the child is coming from an unfavorable background. The third principle states that when two different skills and family backgrounds are allocated between two children, it is preferable that the high skill be given to the low background child than the other way around. The criterion considers system A to be better than system B when, for every pair of reference background and skill, the fraction of children with both a lower background and a better skill than the reference is larger in A than in B. Our second criterion completes the first by adding to the three principles the elitist requirement that a mean-preserving spread in the skills of two children with the same background be recorded favorably. We apply our criteria to the ranking of education systems of 43 countries, taking the PISA score in mathematics as the measure of cognitive skills and the largest of the two parents International Socio Economic Index as the indicator of background. We show that, albeit incomplete, our criteria enables conclusive comparisons of about 19% of all the possible pairs of countries. Education systems of fast-growing Asian economies-in particular Vietnam-appear at the top of our rankings while those of relatively wealthy arabic countries such as Lebanon, United Arab Emirates and Jordan are at the bottom. The fraction of countries that can be ranked successfully happens to be only mildly increased as a result of adding elitism to the three other principles.

Mots clés: education, Inequality, family background, opportunities, dominance, math scores, international comparisons
Téléchargement Icône PDF wp_2019_-_nr_22.pdf (1.17 Mo)
Is the preference of the majority representative?
Mihir Bhattacharya
Nicolas Gravel

Given a profile of preferences on a set of alternatives, a majoritarian relation is a complete binary relation that agrees with the strict preference of a strict majority of these preferences whenever such strict strict majority is observed. We show that a majoritarian relation is, among all conceivable binary relations, the most representative of the profile of preferences from which it emanates. We define "the most representative" to mean "the closest in the aggregate". This requires a definition of what it means for a pair of preferences to be closer to each other then another. We assume that this definition takes the form of a distance function defined over the set of all conceivable preferences. We identify a necessary and sufficient condition for such a distance to be minimized by a majoritarian relation. This condition requires the distance to be additive with respect to a plausible notion of compromise between preferences. The well-known Kemeny distance between preferences does satisfy this property. We also provide a characterization of the class of distances satisfying this property as numerical representations of a primitive qualitative proximity relation between preferences.

Mots clés: preferences, majority, dissimilarity, distance, aggregation
Téléchargement Icône PDF wp_2019_-_nr_21.pdf (446.02 Ko)
Linear Quantile Regression and Endogeneity Correction
Christophe Muller

The main two methods of endogeneity correction for linear quantile regressions with their advantages and drawbacks are reviewed and compared. Then, we discuss opportunities of alleviating the constant effect restriction of the fitted-value approach by relaxing identification conditions.

Mots clés : two-stage estimation, quantile regression, fitted-value approach, endogeneity
Téléchargement Icône PDF wp_2019_-_nr_20.pdf (297.3 Ko)
Production Network and International Fiscal Spillovers
Michael B. Devereux
Karine Gente
Changhua Yu

This paper analyzes the impact of fiscal spending shocks in a multi-country model with international production networks. In contrast to standard results suggesting that production network linkages are unimportant for the aggregate response to macro shocks in a closed economy, we show that network structures may place a central role in the international propagation of fiscal shocks, particularly when wages are slow to adjust. The paper first develops a simple general equilibrium multi-country model and derives some analytical results on the response to fiscal spending shocks. We then apply the model to an analysis of fiscal spillovers in the Eurozone, using the calibrated sectoral network structure from the World Input Output Database (WIOD). In a version of the model with sticky wages, we find that fiscal spillovers from Germany and some other large Eurozone countries may be large, and within the range of empirical estimates. More importantly, we find that the Eurozone production network is very important for the international spillovers. In the absence of international production network linkages, spillovers would be only a third as large as predicted by the baseline model. Finally, we explore the diffusion of identified German government spending at the sectoral level, both within and across countries. We find that government expenditures have both significant upstream and downstream effects when these links are measured by the direction of sectoral production linkages.

Mots clés: production network, fiscal policy, spillovers, Eurozone, terms of trade, nominal rigidities
Téléchargement Icône PDF wp_2019_-_nr_19.pdf (2.95 Mo)
Transitory and Permanent Shocks in the Global Market for Crude Oil
Nooman Rebei
Rashid Sbia

This paper documents the determinants of real oil price in the global market based on SVAR model embedding transitory and permanent shocks on oil demand and supply as well as speculative disturbances. We find evidence of significant differences in the propagation mechanisms of transitory versus permanent shocks, pointing to the importance of disentangling their distinct effects. Permanent supply disruptions turn out to be a bigger factor in historical oil price movements during the most recent decades, while speculative shocks became less influential.

Mots clés: oil market, vector autoregressions, narrative analysis, Bayesian estimation, Kalman filtering
Téléchargement Icône PDF wp_2019_-_nr_18.pdf (1.8 Mo)
How Do Agro-Pastoral Policies Affect the Dietary Intake of Agro-Pastoralists? Evidence from Niger
Christophe Muller
Nouréini Sayouti

Agricultural policies in poor rural developing countries typically aim at improving household nutrition by raising households’ agricultural profit and presumably their dietary intake as a consequence. However, it is not clear how much of the impact of these policies goes through profit in practice. If the proportion is large, this would confirm the policy orientation and direct the attention of policy makers toward the different financial incentives. Even full activity substitution may occur, which may transform households’ lifestyles and access to nutrient sources and thereby affect their nutrition. If, in contrast, the policy impact does not go through profit, then the policy perspective should be adjusted, and a thorough examination and monitoring of its other channels of influence should be undertaken.
Using statistical mediation analysis, we investigate the mechanisms underlying the effect of agricultural policies directed toward pastoralist households on their dietary intake in terms of these direct and indirect (through profit) effects. Based on an agro-pastoral survey conducted in Niger in 2016, the effects of extension services associated with better access to markets are found to be channeled mostly through pastoral profits, while this is not the case for private veterinary services and low-cost livestock feed programs. Extension services may foster specialization in cattle and sheep raising, which incentivizes households to switch toward a nomadic lifestyle and limits their access to cereals, a valuable source of calories. As a result, extension services are found to damage their calorie intake.

Mots clés: agropastoral policies, mediation analysis, agricultural household models, Niger
Téléchargement Icône PDF wp_2019_-_nr_17.pdf (1.11 Mo), Icône PDF wp_2019_-_nr_17v2.pdf (1.14 Mo)
Étude de la démographie française du XIXe siècle à partir de données collaboratives de généalogie
Arthur Charpentier
Ewen Gallic

A l'ère du numérique, les données peuvent être collectées massivement, de manière collaborative et à moindre coût. Les sites de généalogie fleurissent sur Internet pour proposer à leurs utilisateurs de reconstituer en ligne leur arbre généalogique. Le travail de collecte et de saisie effectué par ces utilisateurs peut potentiellement être réutilisé en démographie historique pour compléter la connaissance du passé de nos ancêtres. Dans notre étude, utilisons les enregistrements concernant 2 457 450 individus français ou d'origine française ayant vécu au XIX e siècle. Dans un premier temps, nous étudions la qualité de ces données. Nous mettons en évidence la présence de biais importants, notamment concernant le genre des individus. Les femmes sont sous-représentées dans les données comparativement aux hommes. Des biais relatifs à la fécondité sont également observés. En dépit de ces limites dont souffrent les données collaboratives de généalogie, nous montrons dans un deuxième temps qu'il est possible de retrouver des résultats connus dans la littérature en démographie historique. Plus particulièrement, nous exploitons les dates de naissance et de décès afin d'examiner la mortalité des individus présents dans la base de données. Nous exploitons également la richesse des caractéristiques spatiales contenues dans les arbres généalogiques pour analyser les migrations internes en France.

Mots clés: généalogie, données collaboratives, longévité, migration, XIXe siècle, R
Téléchargement Icône PDF wp_2019_-_nr_16.pdf (1.85 Mo)
Weather Shocks
Ewen Gallic
Gauthier Vermandel

How much do weather shocks matter? The literature addresses this question in two isolated ways: either by looking at long-term effects through the prism of theoretical models, or by focusing on short-term effects using empirical analysis. We propose a framework to bring together both the short and long-term effects through the lens of an estimated DSGE model with a weather-dependent agricultural sector. The model is estimated using Bayesian methods and quarterly data for New Zealand using the weather as an observable variable. In the short-run, our analysis underlines the key role of weather as a driver of business cycles over the sample period. An adverse weather shock generates a recession, boosts the non-agricultural sector and entails a domestic currency depreciation. Taking a long-term perspective, a welfare analysis reveals that weather shocks are not a free lunch: the welfare cost of weather is currently estimated at 0.19% of permanent consumption. Climate change critically increases the variability of key macroeconomic variables (such as GDP, agricultural output or the real exchange rate) resulting in a higher welfare cost peaking to 0.29% in the worst case scenario.

Mots clés: agriculture, business cycles, climate change, weather shocks
Téléchargement Icône PDF wp_2019_-_nr_15.pdf (2.21 Mo)
The Effect of Aspirations on Inequality: Evidence from the German Reunification using Bayesian Growth Incidence Curves
Edwin Fourrier-Nicolai
Michel Lubrano

A long-standing literature has investigated the formation of aspirations and how they shape human behaviours but a recent interest has been devoted on the interplay between aspirations and inequality. Because aspirations are socially determined, household investment decisions tend to be reproduced according to the social context which fosters inequality to persist. We empirically examine the role of aspirations on inequality using a natural experiment. We exploit an exogenous variation of social aspirations determined by the exposure to Western German TV broadcasts in the GDR before the reunification. We measure the treatment effect on wage inequality by comparing inequality changes between the treatment and the control regions after reunification. We use an heteroskedastic parametric model for income with a treatment effect and sample selection into the labour market. We derive analytical formulae for the growth incidence curve of Ravallion and Chen (2003) and poverty growth curve of Son (2004) for the log-normal distribution. Based on those curves, we provide Bayesian inference and a set of tests related to stochastic dominance criteria. We find evidences that aspirations-through exposure to Western German broadcasts-have significantly affected inequality. We find that this effect was detrimental in terms of inequality and poverty. However, we cannot conclude about the persistence of the effect after 1995.

Mots clés: Inequality, social aspirations, Bayesian inference, treatment effect
Téléchargement Icône PDF wp_2019_-_nr_14.pdf (777.05 Ko)
Does International Financial Integration Increase the Standard of Living in Africa? A Frontier Approach
Gilles Dufrénot
Kimiko Sugimoto

We investigate whether a higher financial integration with the rest of the world can help the African countries reduce their production inefficiency and/or push up their efficient frontier of production. We use two alternative empirical approaches based, respectively, on a stochastic frontier analysis and quantile regressions. We provide evidence of heterogeneous situations across countries and time. This paper proposes a new approach for defining, at the aggregate level, a link between financial openness and production efficiency. We show that one size does not fit all: international financial integration can increase or decrease African countries' standard of living.

Mots clés: African countries, financial openness, stochastic frontier, quantile regression
Téléchargement Icône PDF wp_2019_-_nr_13.pdf (1.56 Mo)
Potential Growth and Natural Yield Curve in Japan
Gilles Dufrénot
Meryem Rhouzlane
Etienne Vaccaro-Grange

We estimate the yield curve gap in Japan and examine whether it has contributed to the sustained low growth and low inflation rates observed since the beginning 2000s. We use a semi-structural empirical model that generalizes Laubach and Williams’ approach, considering the entire range of maturities of the interest rates and dealing with the issue of mixed frequency sampling. We consider global factors exerting downward pressures on inflation and examine how the neutral yield curve has affected the snowball effect in the dynamics of the Japanese public debt ratio.

Mots clés: yield curve, potential growth, state-space model, Japan
Téléchargement Icône PDF wp_2019_-_nr_12.pdf (3.09 Mo)
Age Discontinuity and Nonemployment Benefit Policy Evaluation through the Lens of Job Search Theory
Bruno Decreuse
Guillaume Wilemme

A recent strand of papers use sharp regression discontinuity designs (RDD) based on age discontinuity to study the impacts of minimum income and unemployment insurance benefit extension policies. This design challenges job search theory, which predicts that such RDD estimates are biased. Owing to market frictions, people below the age threshold account for future eligibility to the policy. This progressively affects their search outcomes as they get closer to entitlement. Comparing them to eligible people leads to biased estimates because both groups of workers are actually treated. We provide a nonstationary job search model and quantify the theoretical biases on the datasets used in the literature. Our results suggest that the employment impact of minimum income policies are (significantly) under-estimated, whereas the impacts of benefit extensions on nonemployment duration are (not significantly) over-estimated.

Mots clés: RDD, age discontinuity, nonstationary job search theory
Téléchargement Icône PDF wp_2019_-_nr_11.pdf (1.75 Mo)
French GPs’ Willingness to Delegate Tasks: May Financial Incentives Balance Risk Aversion?
Jean-Baptiste Simon Combes
Alain Paraponaris
Yann Videau

Delegating tasks to paramedics is a fairly recent development in France. So far it has essentially been developed in hospitals and is incipient in general practice. This paper focuses on the willingness of general practitioner to do so. A 2012 survey of 2,000 GPs might help anticipate GPs’ willingness to delegate. This paper tests whether a more favourable funding system might help increase GP willingness. We implement a quasi-experimental design wherein GPs are randomly selected to form three groups of equal size, each of them being exposed to a different funding scheme when declaring their willingness to delegate tasks to nurses: Fully Funded (FF) by the social security administration, self-funded by GPs’ revenues (Self-Funded, SF) and half-funded by both the social security administration and GPs (Half-Funded, HF). GPs’ likelihood to favour task delegation is estimated with a probit model that especially considers a GP’s attitude towards risk (aversion or tolerance) among a set of covariates, such as age, gender, rural/urban area, GP density and funding scheme. This article shows that, first, GPs are more likely to favour delegation, when they share a lower proportion of the cost. Second, the effect of risk aversion on the likelihood of favouring delegation is not altered by the funding scheme.

Mots clés: skill mix, task shifting, risk aversion, financial incentives
Téléchargement Icône PDF wp_2019_-_nr_10.pdf (680.37 Ko)
Haggling on Values: Towards Consensus or Trouble
Victorien Barbet
Noé Guiraud
Vincent Laperrière
Juliette Rouchier

We present a model showing the evolution of an organization of agents who discuss democratically about good practices. This model feeds on a field study we did for a few years in France where we followed Non Profit Organizations, called AMAP (a french short food chain), and observed their construction through time at the regional and national level. Most of the hypothesis we make are here either based on the literature on opinion diffusion or on the results of our field study. By defining dynamics where agents influence each other, make collective decision at the group level, and decide to stay in or leave their respective groups, we analyse the effect of different parameters, like size of organizations, on the stability and representativeness of these organizations. The models proves to be robust and we believe is easy to adapt to other context than AMAP. Moreover the article highlights the tension that exists between stability and representativeness in democratic organizations, along with the negative effect of increasing the number of topics to discuss and the positive effect of having openminded members.

Mots clés: democracy, organizations, opinion dynamics, agent based modeling
Téléchargement Icône PDF wp_2019_-_nr_09.pdf (769.06 Ko)
Risky Working Conditions: An Immigrant Trap or an Income Effect?
Eva Moreno-Galbis

Immigrants’ income has been proved to converge to the average native income level with years of residence in the host country. This income assimilation effect is surprisingly not associated with a health improvement. Some emerging studies point towards the role of working conditions as a driver of the counterfactual relation between immigrants’ health and income. Using French data, we first show that, consistently with Viscusi (1978), working conditions are a normal good. An increase in 10% in non-earned income is associated with a decrease by 0.85% in professional injuries and by more than 3.2% in disabilities induced by professional illnesses. Second, we find that while immigrants bear in average worse working conditions than natives, this divergence results from an income divergence effect since for an equivalent non-earned income level there are no significant differences in working conditions between natives and immigrants. Income assimilation of immigrants is associated with an assimilation in working conditions. We conclude then that bad working conditions cannot be blamed for the degradation of immigrants’ health with years of residence in the host country.

Mots clés: immigrants, working conditions, income
Téléchargement Icône PDF wp_2019_-_nr_08.pdf (701.55 Ko)
“Whatever it Takes” to Change Belief: Evidence from Twitter
Michael Stiefel
Rémi Vivès

The sovereign debt literature emphasizes the possibility of avoiding a self-fulfilling default crisis if markets anticipate the central bank to act as lender of last resort. This paper investigates the extent to which changes in belief about an intervention of the European Central Bank (ECB) explain the sudden reduction of government bond spreads for the distressed countries in summer 2012. We study Twitter data and extract belief using machine learning techniques. We find evidence of strong increases in the perceived likelihood of ECB intervention and show that those increases explain subsequent decreases in the bond spreads of the distressed countries.

Mots clés: self-fulfilling default crisis, unconventional monetary policy, Twitter data
Téléchargement Icône PDF wp_2019_-_nr_07.pdf (839.43 Ko)
Social Divisiveness and Conflicts: Grievances Matter!
Raouf Boucekkine
Rodolphe Desbordes
Paolo Melindi-Ghidi

Somehow paradoxically, it is common for research on the determinants of civil wars to conclude that social factors matter much less, if at all, than economic factors. We contribute to this debate by conducting an original empirical analysis in which we investigate whether the deliberate unequal treatment of groups of people by a government can give rise to movements opposing the current political system. In doing so, we significantly innovate on the existing literature exploring the links between grievances and civil war. We look at all forms of social conflict, violent and non-violent, high and low intensity. Our index of social divisiveness captures multiple dimensions of observed unequal group treatments and is not restricted to latent ethnic divisions. We control for time-invariant factors in a large sample of countries over a long period of time. We take into account measurement uncertainty, dynamics, cross-region heterogeneity, localised spatial effects, non-linearity of effects, and a potential endogeneity bias. Our results show that social divisiveness has a large, positive, and statistically significant robust effect on anti-system opposition. It also appears to be the main channel through which long-lasting ethnic polarisation influences the onset of civil wars.

Mots clés: civil resistance, civil war, grievances, social conflict, social divisiveness
Téléchargement Icône PDF wp_2019_-_nr_06.pdf (1.3 Mo)
“If You Were Me”: Proxy Respondents’ Biases in Population Health Surveys
Bérengère Davin
Xavier Joutard
Alain Paraponaris

Proxy respondents are widely used in population health surveys to maximize response rates. When surveys target frail elderly, the measurement error is expected to be smaller than selection or participation biases. However, in the literature on elderly needs for care, proxy use is most often considered with a dummy variable in which endogeneity with subjects’ health status is rarely scrutinised in a robust way. Pitfalls of this choice extend beyond methodological issues. Indeed, the mismeasurement of needs for care with daily activities might lead to irrelevant social policies or to private initiatives that try to address those needs. This paper proposes a comprehensive and tractable strategy supported by various robustness checks to cope with the suspected endogeneity of proxy use to the unobserved health status of subjects in reports of needs for care with activities of daily living. Proxy respondents’ subjectivity is found to inflate the needs of the elderly who are replaced or assisted in answering the questionnaire and to deflate the probability of unmet or undermet needs.

Mots clés: proxy respondent, measurement bias, endogeneity, selection, Copula, needs for care, ADLs, IADLs
Téléchargement Icône PDF wp_2019_-_nr_05.pdf (760.58 Ko)
An Operationalizing Theoretical Framework for the Analysis of Universal Health Coverage Reforms: First Test on an Archetype Developing Economy
Sameera Awawda
Mohammad Abu-Zaineh

This paper presents an operationalizing theoretical framework to analyze the potential effects of universal health coverage (UHC) using dynamic stochastic general equilibrium (DSGE) model. The DSGE encapsulates a set of heterogeneous households that optimize their intertemporal utility of consumption, health capital, and leisure. The model is calibrated to capture the salient features of an archetype developing economy. The model is, then, used to simulate alternative UHC-financing policies. The theoretical framework we propose can be easily adapted to assess the implementation of UHC in a particular developing country setting. When applied to a hypothetical country, results show that the implementation of UHC can indeed improve access to healthcare for the population while offering households financial protection against future uncertainty. However, the degree of financial risk protection appears to vary across heterogeneous households and UHC-financing policies, depending on the associated benefits and the additional burden borne by each group.

Mots clés: universal health coverage, financial risk protection, dynamic stochastic general equilibrium model, developing countries
Social Shock Sharing and Stochastic Dominance
Christophe Muller

Since the seminal paper of Atkinson and Bourguignon (1982), little decisive progress has been achieved in developing empirically efficient stochastic dominance criteria for multidimensional social welfare analysis. By proposing new axioms of 'Social Shock Sharing', this paper provides new intuitive justifications to imposing sign restrictions on partial derivatives of individual von Neumann-Morgenstern utility functions. These new breakthrough findings are exploited to derive necessary and sufficient stochastic dominance criteria for multidimensional social welfare comparisons, up to the sixth order, at least. Equivalent results are derived in terms of multidimensional poverty conditions. Empirically powerful discriminatory criteria are obtained by combining all social shock sharing axioms up to some high order and by deriving a dimension reduction property. An application to Egypt at the beginning of the XXIst century demonstrates the practical substantial gain in discriminating power of the approach by revealing a unambiguous continual improvement in bivariate income-education social welfare over the studied period.

Mots clés: multidimensional welfare, stochastic dominance, temperance, risk sharing
Téléchargement Icône PDF wp_2019_-_nr_03.pdf (1.48 Mo)
Distributed Optimal Control Models in Environmental Economics: A Review
Emmanuelle Augeraud-Véron
Raouf Boucekkine
Vladimir Veliov

We review the most recent advances in distributed optimal control applied to environmental economics, covering in particular problems where the state dynamics are governed by partial differential equations (PDEs). This is a quite fresh application area of distributed optimal control, which has already suggested several new mathematical research lines due to the specificities of the environmental economics problems involved. We enhance the latter through a survey of the variety of themes and associated mathematical structures beared by this literature. We also provide a quick tour of the existing tools in the theory of distributed optimal control that have been applied so far in environmental economics

Mots clés: environmental economics, distributed systems, optimal control, partial differential equations
Téléchargement Icône PDF wp_2019_-_nr_02.pdf (649.67 Ko)
Top Income Tax Evasion and Redistribution Preferences: Evidence from the Panama Papers
Laila Ait Bihi Ouali

This paper provides empirical evidence that, after fiscal scandals, individuals substantially revise their views on redistribution. I exploit as a quasi-natural experiment the 2016 Panama Papers scandal which revealed top-income tax evasion behaviour simultaneously worldwide. The empirical investigation relies on two original sources of data: a longitudinal dataset on United Kingdom households and a survey conducted in twenty-two European countries. Using a difference-in-differences strategy, I find an increase in pro-redistribution statements post-scandal ranging between 2% and 3.3%. Responses are heterogeneous on income levels and on political affiliations, with larger responses from right-wing individuals. The change in redistribution preferences is moderately translated into votes: I find an increase in voting intentions for the left and negative for the right-wing parties. Complementary estimations at the European-level indicate that pro-redistribution responses increase with media coverage and shock intensity (i.e., number of individuals involved).

Mots clés: Panama Papers, Tax evasion, tax avoidance, Redistribution, tax morale, Inequality, mass media
Téléchargement Icône PDF wp_2019_-_nr_01.pdf (1.72 Mo)
Child Labor and Schooling Decisions among Self-Help Groups Members in Rural India
Jean-Marie Baland
Timothée Demont
Rohini Somanathan

This paper investigates the consequences of the participation in informal microfinance groups, known as Self-Help Groups (SHGs), on children’s education and work in rural India. We analyze first-hand data collected from a panel of households in areas where new groups were formed in 2002. We observe these households three times over a five year period, which allows us to examine medium-term effects of SHG participation. We find a robust and strong increase in treated children’s secondary school enrollment rate over time, by about 20 percentage points, to be compared with a baseline rate of 45%. This effect stems from a quicker grade progression, leading to lower drop-out rates between primary and secondary school. We find no decrease in overall child labor (but a reorientation towards part-time domestic work), indicating that there is no clear substitution between labor and education for children of secondary-school age in rural India. Contrary to what is usually believed, we show that credit does not play any direct role in the increased schooling. However, we find evidence that it partly follows from social interactions within SHGs, under the form of peer effects. Our findings indicate that microfinance groups can have large effects on the human capital of participants and their families, though such effects can take time to materialize and happen through unintended channels.

Mots clés: microfinance, self-help groups, education, child labor, peer effects, India
Téléchargement Icône PDF wp_2018_-_nr_58.pdf (637.55 Ko)
A community based program promotes sanitation
María Laura Alzúa
Habiba Djebbari
Amy J. Pickering

Basic sanitation facilities are still lacking in large parts of the developing world, engendering serious environmental health risks. Interventions commonly deliver in-kind or cash subsidies to promote private toilet ownership. In this paper, we assess an intervention that provides information and behavioral incentives to encourage villagers in rural Mali to build and use basic latrines. Using an experimental research design and carefully measured indicators of use, we find a sizeable impact from this intervention: latrine ownership and use almost doubled in intervention villages, and open defecation was reduced by half. Our results partially attribute these effects to increased knowledge about cheap and locally available sanitation solutions. They are also associated with shifts in the social norm governing sanitation. Taken together, our findings, unlike previous evidence from other contexts, suggest that a progressive approach that starts with ending open defecation and targets whole communities at a time can help meet the new Sustainable Development Goal of ending open defecation.

Mots clés: sanitation, behavioral change, community-based intervention, social norm
Téléchargement Icône PDF wp_2018_-_nr_57.pdf (1.23 Mo)
Communication and Commitment with Constraints
Raghul S Venkatesh

An informed and an uninformed agent both contribute to a joint coordination game such that their actions are substitutable and constrained. When agents are allowed to share information prior to the coordination stage, in the absence of commitment , there is full information revelation as long as constraints are not binding. The presence of binding constraints results in only partial revelation of information in equilibrium. The most informative equilibrium is strictly pareto dominant. Allowing for limited commitment strictly increases (ex ante) welfare of both agents. I completely characterize the optimal commitment mechanism for the uninformed agent. Finally, I apply the theoretical results to the problem of information sharing and binding agreements in international alliances.

Mots clés : asymmetric information, cheap talk, commitment, strategic substitutes
Téléchargement Icône PDF wp_2018_-_nr_56.pdf (887.38 Ko)
On Information Aggregation in International Alliances
Raghul S Venkatesh

I develop a model of strategic communication to study information aggregation in an alliance between multiple players. An alliance exhibits four features: i) imperfect private information among players; ii) substitutability in actions; iii) constraints on the action set; and iv) preference heterogeneity (biases). The main result of the paper derives conditions for full information aggregation within the alliance under a public communication protocol. Full information aggregation ensues as long as players' biases are sufficiently cohesive with respect to the constraints on the action set. When players can (costlessly) choose an action set ex ante, I derive the precise conditions on the minimal action set such that there is full information aggregation. Comparative statics uncovers two sources for the differences in the size of the minimal action set between players: bias over outcomes (preference effect) and degree of interdependency (interdependency effect). The results are discussed in the context of burden sharing incentives during military interventions within NATO.

Téléchargement Icône PDF wp_2018_-_nr_55.pdf (686.21 Ko)
Accounting for Protest Attitudes in Willingness to Pay for Universal Health Coverage
Mohammad Abu-Zaineh, Olivier Chanel, Khaled Makhloufi

In their attempts to implement universal health coverage (UHC), different developing countries encounter different types of obstacles. In Tunisia, major challenges include a widespread informal sector and protestors’ general discontent with rising economic insecurity and inequality, the rollback of the state and public welfare. We apply a contingent valuation survey to a non-healthcare-covered Tunisian sample vis-à-vis joining and paying for a health insurance scheme. We pay attention to the nature of the willingness- to-pay (WTP) values obtained, distinguishing genuine null from protest values. The latter may reflect not only protesters’ beliefs regarding the survey, but also their lack of trust in government’s commitment to ensuring the provision of quality healthcare. We use alternative econometric modeling strategies to account and correct for selection issues arising from protest answers. Our results support the presence of self- selection and, by predicting protesters’ WTP, allow the “true” sample mean WTP to be computed. This appears to be about 14% higher than the elicited mean WTP. The WTP of the poorest non-covered respondents represents about one and a half times the current contributions of the poorest formal sector enrollees, suggesting that voluntary affiliation to the formal health insurance scheme could be a step towards achieving UHC. Overall, we highlight the importance of taking into account protest positions for the evaluation of progress towards UHC.

Mots clés : willingness-to-pay, contingent valuation, universal health coverage, self-selection, protest attitude
Téléchargement Icône PDF wp_2018_-_nr_54.pdf (1020.54 Ko)
Local Linear Dependence Measure for Functionally Correlated Variables
Loann D. Desboulets, Costin Protopopescu

We propose a new correlation measure for functionally correlated variables based on local linear dependence. It is able to detect non-linear, non-monotonic and even implicit relationships. Applying the classical linear correlation in a local framework combined with tools from Principal Components Analysis the statistic is capable of detecting very complex dependences among the data. In a first part we prove that it meets the properties of independence, similarity invariance and dependence and the axiom of continuity. In a second part we run a numerical simulation over a variety of dependences and compare it to other dependence measures in the literature. The results indicate that we outperform existing coefficients. We also show better stability and robustness to noise.

Mots clés : local correlation, Pearson coefficient, PCA, non-parametric statistic, implicit dependence, non-monotonic, non-linear
Téléchargement Icône PDF wp_2018_-_nr_53.pdf (1.72 Mo)
A Review on Variable Selection in Regression Analysis
Loann D. Desboulets

In this paper, we investigate on 39 Variable Selection procedures to give an overview of the existing literature for practitioners. "Let the data speak for themselves" has become the motto of many applied researchers since the amount of data has significantly grew. Automatic model selection have been raised by the search for data-driven theories for quite a long time now. However while great extensions have been made on the theoretical side still basic procedures are used in most empirical work, eg. Stepwise Regression. Some reviews are already available in the literature for variable selection, but always focus on a specific topic like linear regression, groups of variables or smoothly varying coefficients. Here we provide a review of main methods and state-of-the art extensions as well as a topology of them over a wide range of model structures (linear, grouped, additive, partially linear and non-parametric). We provide explanations for which methods to use for different model purposes and what are key differences among them. We also review two methods for improving variable selection in the general sense.

Mots clés : variable selection, automatic modelling, sparse models
Téléchargement Icône PDF wp_2018_-_nr_52.pdf (1.18 Mo)
Co-movements in Market Prices and Fundamentals: A Semiparametric Multivariate GARCH Approach
Loann D. Desboulets

In this paper we investigate on Multivariate GARCH models to assess the co-movements between stock prices of american firms listed on main markets and fundamentals. Co-movements can be seen as correlations. The latter are usually estimated via standard GARCH models such as the Dynamic Conditional Correlation (Engle, 2002) or the Baba-Engle-Kraft-Kroner (Baba et al., 1990). Nevertheless more flexible models such as the Orthogonal GARCH of Alexander (2001) can be used as well. We also introduce a new Semi-parametric Orthogonal GARCH as a natural non-linear extension of the Orthogonal GARCH. A Montecarlo simulation is conducted to evaluate finite sample performance of each model before applying them to the data. Empirical results show evidence that during crises, prices are less correlated with fundamentals that in normal periods.

Mots clés : non-parametric, Multivariate GARCH, dynamic correlation, PCA
Téléchargement Icône PDF wp_2018_-_nr_51.pdf (776.53 Ko)
Federal Minimum Wage Hikes Do Reduce Teenage Employment
Stephen Bazen, Vêlayoudom Marimoutou

In 2002 we published a paper in which we used state space time series methods to analyse the teenage employment-federal minimum wage relationship in the US (Bazen and Marimoutou, 2002). The study used quarterly data for the 46 year period running from 1954 to 1999. We detected a small, negative but statistically significant effect of the federal minimum wage on teenage employment, at a time when some studies were casting doubt on the existence of such an effect. In this note we re-estimate the original model with a further 16 years of data (up to 2015). We find that the model satisfactorily tracks the path of the teenage employment-population ratio over this 60 year period, and yields a consistently negative and statistically significant effect of minimum wages on teenage employment. The conclusion reached is the same as in the original paper, and the elasticity estimates very similar: federal minimum wage hikes lead to a reduction in teenage employment with a short run elasticity of around -0.13. The estimated long run elasticity of between -0.37 and -0.47 is less stable, but is nevertheless negative and statistically significant.

Mots clés : minimum wage, teenage employment, state space methods, unobserved components model
Téléchargement Icône PDF wp_2018_-_nr_50.pdf (826.38 Ko)
Ricœur, Rawls and the Aporia of the Just
Feriel Kandil

The article conducts a comparative study between Ricœur’s and Rawls’ thought on justice. Whereas Ricoeur focuses on the dialectic between the just and the good, Rawls is concerned with the ideal conditions under which a universal consensus on the principles of justice may be reached. Ricœur gives much importance to reading Rawls. He offers many commentaries, especially on Rawls’s major contribution, A Theory of Justice. This chapter focuses on such comments and on the relating paradoxical interpretation of Rawls’s approach to justice Ricœur provides. First, this chapter suggests that, with his interpretation of Rawls’s major contribution, Ricœur contributes to put the light on the conflicts between the just and the good. These conflicts are the key elements of what may be referred to as the aporia of the just, which consists in the contradictory requirements coming from the just considered as a virtue of either institutions or individuals. Second, this chapter shows that whereas the aporia is a major problem in Rawls’ approach to justice, it is at the core of the dialectic dynamic Ricœur sees within moral life. In his work, the aporia leads to what we call the three paradoxes of justice, which are the paradoxes with legal, distributive and political justice. Considering such paradoxes, Ricœur takes the ethics of practical wisdom as a necessary recourse. The latter provides fair decision makers with the resources needed for the aporia to be, if not resolved, at least eased.

Mots clés : social justice, distributive justice, legal justice, political justice, the just, the good, principles of justice, Kant, Aristotle, Ricœur, Rawls, political paradox, sense of justice
Téléchargement Icône PDF wp_2018_-_nr_49.pdf (745.06 Ko)
Trade Policy and Market Power: Firm-level Evidence
Alan Asprilla, Nicolas Berman, Olivier Cadot, Melise Jaud

This paper identifies the effect of trade policy on market power through new data and a new identification strategy. We use a large dataset containing export values and quantities by product and destination for all exporting firms in 12 developing and emerging countries over several years, merged with destination-product specific information on tariffs and non-tariff barriers. We identify market power by observing how exporting firms price discriminate across markets in reaction to variations in bilateral exchange rates. Pricing-to-market is prevalent in all regions of our sample, even among small firms, although it is increasing in firm size, in accordance with theory. More importantly, we find that the effect of non-tariff measures is not isomorphic to that of tariffs: the pricing-to-market behavior we observe suggests that, while tariffs reduce the market power of foreign firms through classic rent-shifting effects, non-tariff measures alter market structure and reinforce the market power of non-exiting firms, domestic and foreign ones alike.

Mots clés : trade policy, non-tariff measures, tariffs, exchange rate, price discrimination
Téléchargement Icône PDF wp_2018_-_nr_48.pdf (787.53 Ko)
Financial Constraints, Institutions, and Foreign Ownership
Ron Alquist, Nicolas Berman, Rahul Mukherjee, Linda L. Tesar

We develop a model of cross-border acquisitions in which the foreign acquirer's ownership choice reflects a trade-off between easing the target's credit constraints and the costs of operating in an environment with weak institutions. Data on domestic and foreign acquisitions in emerging markets over the period 1990-2007 support the model predictions. The share of full foreign acquisitions is higher in sectors more reliant on external finance, in countries with lower financial development, and in countries with higher institutional quality. Sectoral external finance dependence accentuates the effect of country-level financial development and institutional quality. By contrast, the level of foreign ownership in partial acquisitions is insensitive to institutional factors and depends weakly on financial factors.

Mots clés : foreign direct investment, foreign ownership, mergers and acquisitions, financial development, institutional quality
Téléchargement Icône PDF wp_2018_-_nr_47.pdf (1.52 Mo)
Demand Learning and Firm Dynamics: Evidence from Exporters
Nicolas Berman, Vincent Rebeyrol, Vincent Vicard

This paper provides direct evidence that learning about demand is an important driver of firms' dynamics. We present a model of Bayesian learning in which firms are uncertain about their idiosyncratic demand in each of the markets they serve, and update their beliefs as noisy information arrives. Firms are predicted to update more their beliefs to a given demand shock, the younger they are. We test and empirically confirm this prediction, using the structure of the model together with exporter-level data to identify idiosyncratic demand shocks and the firms’ beliefs about future demand. Consistent with the theory, we also find that the learning process is weaker in more uncertain environments.

Mots clés : firm growth, belief updating, demand, exports, uncertainty
Téléchargement Icône PDF wp_2018_-_nr_46.pdf (873.97 Ko)
Asymptotics of Cholesky GARCH Models and Time-Varying Conditional Betas
Serge Darolles, Christian Francq, Sébastien Laurent

This paper proposes a new model with time-varying slope coefficients. Our model, called CHAR, is a Cholesky-GARCH model, based on the Cholesky decomposition of the conditional variance matrix introduced by Pourahmadi (1999) in the context of longitudinal data. We derive stationarity and invertibility conditions and prove consistency and asymptotic normality of the Full and equation-by-equation QML estimators of this model. We then show that this class of models is useful to estimate conditional betas and compare it to the approach proposed by Engle (2016). Finally, we use real data in a portfolio and risk management exercise. We find that the CHAR model outperforms a model with constant betas as well as the dynamic conditional beta model of Engle (2016).

Mots clés : multivariate-GARCH, conditional betas, covariance
Téléchargement Icône PDF wp_2018_-_nr_45.pdf (1.79 Mo)
Generating Univariate Fractional Integration within a Large VAR(1)
Guillaume Chevillon, Alain Hecq, Sébastien Laurent

This paper shows that a large dimensional vector autoregressive model (VAR) of finite order can generate fractional integration in the marginalized univariate series. We derive high-level assumptions under which the final equation representation of a VAR(1) leads to univariate fractional white noises and verify the validity of these assumptions for two specific models.

Mots clés : long memory, vector autoregressive model, marginalization, final equation representation
Téléchargement Icône PDF wp_2018_-_nr_44.pdf (883.16 Ko)
Volatility Estimation and Jump Detection for drift-diffusion Processes
Sébastien Laurent, Shuping Shi

Logarithms of prices of financial assets are conventionally assumed to follow drift-diffusion processes. While the drift term is typically ignored in the infill asymptotic theory and applications, the presence of nonzero drifts is an undeniable fact. The finite sample theory and extensive simulations provided in this paper reveal that the drift component has a nonnegligible impact on the estimation accuracy of volatility and leads to a dramatic power loss of a class of jump identification procedures. We propose an alternative construction of volatility estimators and jump tests and observe significant improvement of both in the presence of nonnegligible drift. As an illustration, we apply the new volatility estimators and jump tests, along with their original versions, to 21 years of 5-minute log-returns of the NASDAQ stock price index.

Mots clés : diffusion process, nonzero drift, finite sample theory, volatility estimation, jumps
Téléchargement Icône PDF wp_2018_-_nr_43.pdf (1.76 Mo)
Complementary Monopolies with Asymmetric Information
Didier Laussel, Joana Resende

We investigate how asymmetric information on final demand affects strategic interaction between a downstream monopolist and a set of up-stream monopolists, who independently produce complementary inputs. We study an intrinsic private common agency game in which each supplier i independently proposes a pricing schedule contract to the assembler, specifying the supplier's payment as a function of the assembler's purchase of input i. We provide a necessary and sufficient equilibrium condition. A lot of equilibria satisfy this condition but there is a unique Pareto-undominated Nash equilibrium from the suppliers' point of view. In this equilibrium there are unavoidable efficiency losses due to excessively low sales of the good. However, suppliers may be able to limit these distortions by implicitly coordinating on an equilibrium with a rigid (positive) output in bad demand circumstances.

Mots clés : complementary inputs, asymmetric information, private common agency games
Téléchargement Icône PDF wp_2018_-_nr_42.pdf (779.97 Ko)
Threshold Regressions for the Resource Curse
Nicolas Clootens, Djamel Kirat

This paper analyzes the behavior of cross-country growth rates with respect to resource abundance and dependence. We reject the linear model that is commonly-used in growth regressions in favor of a multiple-regime alternative. Using a formal sample-splitting method, we find that countries exhibit different behaviors with respect to natural resources depending on their initial level of development. In high-income countries, natural resources play only a minor role in explaining the differences in national growth rates. On the contrary, in low-income countries abundance seems to be a blessing but dependence restricts growth.

Mots clés : natural resources, growth, resource curse, threshold regressions
Téléchargement Icône PDF wp_2018_-_nr_41.pdf (1.13 Mo), Icône PDF wp_2018_-_nr_41v2.pdf (271.43 Ko)
Is the Output Growth Rate in NIPA a Welfare Measure?
Jorge Duran, Omar Licandro

Bridging modern macroeconomics and the economic theory of index numbers, this paper shows that real output growth as measured by National Income and Product Accounts (NIPA) is a welfare based measure. In a two-sector dynamic general equilibrium model of heterogeneous households, recursive preferences and quasi-concave technology, individual welfare depends on present and future consumption. In this context, the Bellman equation provides a representation of preferences over current consumption and investment. Applying standard index number theory to this representation of preferences, it is shown that the Fisher-Shell true quantity index is equal to the Divisia index in turn well approximated by the Fisher ideal chain index used in NIPA.

Mots clés : growth measurement, quantity indexes, equivalent variation, NIPA, Fisher-Shell index, Divisia index, embodied technical change
Téléchargement Icône PDF wp_2018_-_nr_40.pdf (756.24 Ko)
Technology, Market Structure and the Gains from Trade
Giammario Impullitti, Omar Licandro, Pontus Rendahl

We study the gains from trade in a new model with oligopolistic competition, firm heterogeneity, and innovation. Lowering trade costs reduces markups on domestic sales but increases markups on export sales, as firms do not pass the entire reduction in trade costs onto foreign consumers. Trade liberalisation can also reduce the number of firms competing in each market, thereby increasing markups on both domestic and export sales. For the majority of exporters, however, the pro- competitive effect prevails and their average markups decline. The incomplete pass-though and the reduction in the number of competitors instead dominate for top-exporters – the top 0.1% of firms – which end up increasing their markup. In a quantitative exercise we find that the aggregate effect of trade-induced markup changes is pro-competitive and accounts for the majority of the welfare gains from trade. Trade-induced changes in competition affect survival on domestic and export markets and firms’ decision to innovate. All exporters, and especially the top exporters, increase their market size after liberalisation which, in turn, encourages them to innovate more. Hence, top exporters contribute negatively to welfare gains by increasing their markups but positively by increasing innovation and productivity. Firms’ innovation response accounts for a small but non-negligible share of the welfare gains while the contribution of selection is U-shaped, being negative for small liberalisations and positive otherwise. A more globalised economy is therefore populated by larger, fewer and more innovative firms, each feature representing an important source of the gains from trade.

Mots clés : gains from trade, heterogeneous firms, oligopoly, innovation, endogenous markups, endogenous market structure
Téléchargement Icône PDF wp_2018_-_nr_39.pdf (845.83 Ko)
Altruism and Risk Sharing in Networks
Renaud Bourlès, Yann Bramoullé, Eduardo Perez-Richet

We provide the first analysis of the risk-sharing implications of altruism networks. Agents are embedded in a fixed network and care about each other. We study whether altruistic transfers help smooth consumption and how this depends on the shape of the network. We identify two benchmarks where altruism networks generate efficient insurance: for any shock when the network of perfect altruism is strongly connected and for any small shock when the network of transfers is weakly connected. We show that the extent of informal insurance depends on the average path length of the altruism network and that small shocks are partially insured by endogenous risk-sharing communities. We uncover complex structural effects. Under iid incomes, central agents tend to be better insured, the consumption correlation between two agents is positive and tends to decrease with network distance, and a new link can decrease or increase the consumption variance of indirect neighbors. Overall, we show that altruism in networks has a first-order impact on risk and generates specific patterns of consumption smoothing.

Mots clés : altruism, networks, risk sharing, Informal Insurance
Téléchargement Icône PDF wp_2018_-_nr_38.pdf (1009.6 Ko)
Diffusion Centrality: Foundations and Extensions
Yann Bramoullé, Garance Genicot

We first clarify the precise theoretical foundations behind the notion of diffusion centrality. This allows us to address a minor inconsistency in the model description of Banerjee et al. (2013). We then identify unnatural implicit assumptions in the model of political intermediation proposed by Cruz, Labonne & Querubfn (2017). We introduce two extensions of diffusion centrality, targeting centrality and reachability, which we believe better capture features of contexts with targeted requests. We derive general explicit formulas to compute these new measures.

Mots clés : diffusion centrality, Katz-Bonacich centrality, political intermediation, targeting
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The Wall’s Impact in the Occupied West Bank: A Bayesian Approach to Poverty Dynamics Using Repeated Cross-Sections
Tareq Sadeq, Michel Lubrano

In 2002, the Israeli government decided to build a wall inside the occupied West Bank. The wall had a marked effect on the access to land and water resources as well as to the Israeli labour market. It is difficult to include the effect of the wall in an econometric model ex- plaining poverty dynamics as the wall was built in the richer region of the West Bank. So a diff-in-diff strategy is needed. Using a Bayesian approach, we treat our two-period repeated cross-section data set as an incomplete data problem, explaining the income-to-needs ratio as a function of time invariant exogenous variables. This allows us to provide inference results on poverty dynamics. We then build a conditional regression model including a wall variable and state dependence to see how the wall modified the initial results on poverty dynamics. We find that the wall has increased the probability of poverty persistence by 58 percentage points and the probability of poverty entry by 18 percentage points.

Mots clés : Bayesian inference, pseudo panels, data augmentation, walls, poverty dynamics
Téléchargement Icône PDF wp_2018_-_nr_36.pdf (774.02 Ko)
GCC Sovereign Wealth Funds: Why do they Take Control?
Jeanne Amar, Jean-François Carpantier, Christelle Lecourt

In this paper we examine the investment strategy of sovereign wealth funds (SWFs) of the Gulf Cooperation Council (GCC) countries. GCC SWFs are considered as relatively opaque investors and strongly politicized, raising some concerns for perceived political and security risks. We investigate what are the drivers of majority cross- border equity acquisitions made by these institutional investors over the period 2006-2015. Using both Logit and ordered Logit models, we test if the usual determinants of SWFs investments still stand when we look at influential (> 10%) or majority (> 50%) acquisitions made by GCC SWFs. We find that GCC SWFs do not consider financial characteristics of the targeted firms when they acquire large cross-border stakes but rather the characteristics of the country (countries in the European union and/or countries with a high level of shareholders protection), suggesting that their motives may go beyond pure profit maximization. We also find that transparent funds are more likely to take influential or majority stakes and that they do so predominantly in non-strategic sectors. Overall, our results indicate that even if GCC SWFs do not seek only for financial returns, acquiring majority stakes is not a lever for GCC governments to get strategic interests in the target countries.

Mots clés : sovereign wealth funds, cross-border majority acquisitions, ordered logit model, GCC
Téléchargement Icône PDF wp_2018_-_nr_35.pdf (805.1 Ko)
Reforms and the Real Exchange Rate: The Role of Pricing-to-Market
Lise Patureau, Céline Poilly

The paper investigates how endogenous markups affect the extent to which policy reforms can influence international competitiveness. In a two-country model where trade costs allow for international market segmentation, we show that endogenous pricing-to-market behavior of firms acts as an important transmission channel of the policies. By strengthening the degree of competition between firms, product market deregulation at home leads to a reduction in domestic markups, which generally leads to an improvement in the international competitiveness of the Home country. Conversely, the power of competitive tax policy to depreciate the real exchange rate is dampened, as domestic firms take the opportunity of the labor tax cut to increase their markups. The variability of markups also affects the normative implications of the reforms. This indicates the importance of taking into account endogenous pricing-to-market behavior when intending to correctly evaluate the overall effects of the reforms.

Mots clés : exchange rate, product market deregulation, fiscal reform, endogenous firm entry, pricing-to-market, endogenous markups
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Immigrants' Wage Performance in a Routine Biased Technological Change Era: France 1994-2012
Catherine Laffineur, Eva Moreno Galbis, Jeremy Tanguy, Ahmed Tritah,

Over the period 1994-2012, immigrants’ wage growth in France has outperformed that of natives on average by more than 14 percentage points. This striking wage growth performance occurs despite similar changes in employment shares along the occupational wage ladder. In this paper we investigate the sources of immigrants’ relative wage performance focusing on the role of occupational tasks. We first show that immigrants’ higher wage growth is not driven by more favorable changes in general skills (measured by age, education and residence duration), and then investigate to what extent changes in task-specific returns to skills have contributed to the differential wage dynamics through two different channels: different changes in the valuation of skills (“price effect”) and different occupational sorting (“quantity effect”). We find that the wage growth premium of immigrants is not explained by different changes in returns to skills across occupational tasks but rather by the progressive reallocation of immigrants towards tasks whose returns have increased over time. Immigrants seem to have taken advantage of ongoing labor demand restructuring driven by globalization and technological change. In addition im- migrants’ wages have been relatively more affected by minimum wage increases, due to their higher concentration in this part of the wage distribution.

Mots clés : wage dynamics, tasks, immigrants, skills
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Network Matching Efficiency along the Economic Cycle: Direct and Indirect Ties
Arnaud Herault, Eva Moreno Galbis, Francois-Charles Wolff

There is a large consensus in the literature on the major role of social networks as a helpful instrument to find a job. In this paper, we study the social network matching rate along the economic cycle both from a theoretical and empirical perspective. Using the French Labor Force Survey for the period 2003-2012, we find that the relationship between the network matching rate based on direct ties and the job finding rate is decreasing and convex as predicted by our theoretical setup. Results are completely modified when we consider a measure of the network matching rate based on indirect ties related to the share of peers in a job. In this case, we find a linearly increasing relation between the network matching rate and the job finding rate. This underlines not only the heterogeneous ways through which network membership may influence the individuals’ performance on the labor market, but also the different behaviors of these driving factors along the economic cycle.

Mots clés : employment, network matching rate, direct and indirect ties, job finding rate, immigrants
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Non-Balanced Endogenous Growth and Structural Change: When Romer Meets Kaldor and Kuznets
Christian Ghiglino, Kazuo Nishimura, Alain Venditti

We propose a model of non-balanced endogenous growth in which the final good, which can be either consumed or used as capital, is produced using two intermediate inputs, one being “knowledge-intensive”. Agents working in the knowledge-intensive sector need to accumulate technological knowledge and thus have to decide how to split their individual unit of time between accumulation of technological knowledge (research) and work. Agents working in the second sector do not need to accumulate knowledge and thus devote all their individual unit of time to work. Individual knowledge therefore becomes a labor-augmenting factor, and knowledge accumulation leads to an unbounded increase in TFP in the knowledge-intensive sector, and thus to endogenous capital deepening. The asymmetry in the growth rates of TFP leads to non-balanced growth. Labor (number of workers) reallocations across sectors occur, leading to a greater increase in output for the knowledge-intensive sector. We show that non-balanced growth is consistent with Kaldor facts, as the asymptotic equilibrium is above all characterized by a constant interest rate and capital share in national income. However, 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. We therefore extend the Lucas [19] finding and prove the existence of non-convergence across countries in a framework with structural change.

Mots clés : two-sector model, technological knowledge, non-balanced endogenous growth, structural change, Kaldor and Kuznets facts
Téléchargement Icône PDF wp_2018_-_nr_31.pdf (749.01 Ko)
Competitive Equilibrium Cycles for Small Discounting in Discrete-Time Two-Sector Optimal Growth Models
Alain Venditti

We study the existence of endogenous competitive equilibrium cycles under small discounting in a two-sector discrete-time optimal growth model. We provide precise concavity conditions on the indirect utility function leading to the existence of period-two cycles with a critical value for the discount factor that can be arbitrarily close to one. Contrary to the continuous-time case where the existence of periodic-cycles is obtained if the degree of concavity is close to zero, we show that in a discrete-time setting the driving condition does not require a close to zero degree of concavity but a symmetry of the indirect utility function’s concavity properties with respect to its two arguments.

Mots clés : two-sector optimal growth model, small discounting, period-two cycles, strong and weak concavity
Téléchargement Icône PDF wp_2018_-_nr_30.pdf (839.95 Ko)
Time-varying Consumption Tax, Productive Government Spending, and Aggregate Instability
Mauro Bambi, Alain Venditti

In this paper we investigate if government balanced-budget rules together with endogenous taxation may lead to aggregate instability in an endogenous growth framework. After highlighting the differences with the exogenous growth framework, we prove that under counter-cyclical consumption taxes, while there exists a unique balanced growth path, sunspot equilibria based on self-fulfilling expectations occur through a form of global indeterminacy. In addition, we argue that this result is empirically plausible for a large set of OECD countries and that it may also emerge with endogenous income taxes.

Mots clés : endogenous growth, time-varying consumption tax, global indeterminacy, self-fulfilling expectations, sunspot equilibria
Téléchargement Icône PDF wp_2018_-_nr_29.pdf (1.05 Mo)
A Note on Balanced-Budget Income Taxes and Aggregate (In)Stability in Multi-Sector Economies
Nicolas Abad, Alain Venditti

We examine the impact of balanced-budget labor income taxes on the existence of expectation- driven business cycles in a two-sector version of the Schmitt-Grohé and Uribe (SGU) [18] model with constant government expenditures and counter-cyclical taxes. Our results show that the destabilizing impact of labor income taxes strongly depends on the capital intensity difference across sectors. Local indeterminacy is indeed more likely when the consumption good sector is capital intensive, as the minimal tax rate decreases, and less likely when the investment good sector is capital intensive, as the minimal tax rate increases. The implication of this result can be quantitatively significant. Indeed, when compared to SGU, local indeterminacy can be either completely ruled out for all OECD countries when the investment good is sufficiently capital intensive, or drastically improved, delivering indeterminacy for a larger set of OECD countries, if the consumption good is sufficiently capital intensive. Focusing however on recent estimates of the sectoral capital shares corresponding to the empirically plausible case of a capital intensive consumption good, we find that there is a significant increase of the range of economically relevant labor tax rates (from a minimum tax rate of 30% to 24.7%) for which local indeterminacy arises with respect to the aggregate formulation of SGU.

Mots clés : aggregate (in)stability, local indeterminacy, expectations-driven fluctuations, labor income taxes, balanced-budget rule, infinite-horizon two-sector model, capital intensity difference
Téléchargement Icône PDF wp_2018_-_nr_28.pdf (609.74 Ko)
On Sunspot Fluctuations in Variable Capacity Utilization Models
Frédéric Dufourt, Alain Venditti, Rémi Vives

We investigate the extent to which standard one sector RBC models with positive externalities and variable capacity utilization can account for the large hump- shaped response of output when the model is submitted to a pure sunspot shock. We refine the Benhabib and Wen (2004) model considering a general type of additive separable preferences and a general production function. We provide a detailed theoretical analysis of local stabilities and local bifurcations as a function of various structural parameters. We show that, when labor is infinitely elastic, local indeterminacy occurs through Flip and Hopf bifurcations for a large set of values for the elasticity of intertemporal substitution in consumption, the degree of increasing returns to scale and the elasticity of capital- labor substitution. Finally, we provide a detailed quantitative assessment of the model and conclude with mixed results. We show that although the model is able theoretically to generate a hump-shaped dynamics of output following an i.i.d. sunspot shock under realistic parameter values, the hump is too persistent for the model to be considered fully satisfactory from an empirical point of view.

Mots clés : Indeterminacy, real business cycles, sunspot shock, capacity utilization, externalities
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Non-Separable Preferences do not Rule Out Aggregate Instability under Balanced-Budget Rules: A Note
Nicolas Abad, Thomas Seegmuller, Alain Venditti

We investigate the role of non-separable preferences on the occurrence of macroeconomic instability under a balanced-budget rule where government spending is financed by a tax on labor income. Considering a one-sector neoclassical growth model with a large class of non-separable utility functions, we find that expectations-driven fluctuations easily occur when consumption and labor are Edgeworth substitutes or weak Edgeworth complements. Under these properties, an intermediate range of tax rates and a sufficiently low elasticity of intertemporal substitution in consumption lead to instability.

Mots clés : Indeterminacy, expectations-driven business cycles, labor income taxes, balanced-budget rule, non-separable preferences
Téléchargement Icône PDF wp_2018_-_nr_26.pdf (733.59 Ko)
Introduction to Financial Frictions and Debt Constraints
Raouf Boucekkine, Kazuo Nishimura, Alain Venditti

This is an introduction to the special section on financial frictions and debt constraints.

Mots clés : rational bubbles, credit and borrowing constraints, public debt constraints, (in)complete markets, heterogeneous agents, sunspot fluctuations
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Introduction to International Financial Markets and Banking Systems Crises
Raouf Boucekkine, Kazuo Nishimura, Alain Venditti

This note introduces to the literature streams explored in the special section on international financial markets and banking systems crises. All topics tackled are related to the Great Recession. A brief overview of the research questions and related literatures is provided.

Mots clés : financial frictions, financial instability, international transmission, credit crunch, banking and sovereign debt crisis
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Physicians’ Incentives to Adopt Personalized Medicine: Experimental Evidence
David Bardey, Samuel Kembou Nzale, Bruno Ventelou

We study physicians’ incentives to use personalized medicine techniques, replicating the physician’s trade-offs under the option of personalized medicine information. In a laboratory experiment where prospective physicians play a dual-agent real-effort game, we vary both the information structure (free access versus paid access to personalized medicine information) and the payment scheme (pay-for-performance (P4P), capitation (CAP) and fee-for-service (FFS)) by applying a within-subject design. Our results are threefold. i) Compared to FFS and CAP, the P4P payment scheme strongly impacts the decision to adopt personalized medicine. ii) Although expected to dominate the other schemes, P4P is not always efficient in transforming free access to personalized medicine into higher quality patient care. iii) When it has to be paid for, personalized medicine is positively associated with quality, suggesting that subjects tend to make better use of information that comes at a cost. We conclude that this last result can be considered a “commitment device”. However, quantification of our results suggests that the positive impact of the commitment device observed is not strong enough to justify generalizing paid access to personalized medicine.

Mots clés : personalized medicine, fee-for-service, capitation, pay-for-performance, physician altruism, laboratory experiment
Téléchargement Icône PDF wp_2018_-_nr_23.pdf (820.6 Ko)
Wage Satisfaction and Wage History: How the Present Shapes the Past
Alberto Prati

Although satisfaction measures strongly depend on personal history, the relationship between memory and current well-being is still unclear. This article is dedicated to empirically investigating if current wage satisfaction affects the ability to date past wage changes. We match answers from a French national survey with administrative records, to compare the recalled and actual wage history. Our data support and extend some previous findings from the psychology literature: relatively remote events are recalled as closer in time, while relatively recent events are recalled as further in time. An instrumental variable strategy shows that these effects – respectively known as “forward” and “backward telescoping” – are partially caused by current satisfaction, so that, ceteris paribus, people who are satisfied with their wage tend to date wage cuts as more remote than they actually are. We suggest that this pattern of imperfect recall, which we denote as hedonic telescoping, opens a new perspective in the understanding of the well-known phenomenon of hedonic adaptation.

Mots clés : recall bias, wage satisfaction, wage history, hedonic adaptation, hedonic telescoping
Téléchargement Icône PDF wp_2018_-_nr_22.pdf (934.6 Ko)
Bubble on Real Estate: The Role of Altruism and Fiscal Policy
Lise Clain-Chamosset-Yvrard, Thomas Seegmuller

In this paper, we are interested in the interplay between real estate bubble, aggregate capital accumulation and taxation in an overlapping generations economy with altruistic households. We consider a three-period overlapping generations model with three key elements: altruism, portfolio choice, and financial market imperfections. Households realise different investment decisions in terms of asset at different periods of life, face a binding borrowing constraint and leave bequests to their children. We show that altruism plays a key role on the existence of a productive real estate bubble, i.e. a bubble in real estate raising physical capital stock and aggregate output. The key mechanism relies on the fact that a real estate bubble raises income of retired households. Because of higher bequests, there children are able to invest more in productive capital. Introducing fiscal policy, we show that raising real estate taxation dampens capital accumulation.

Mots clés : bubble, altruism, real estate, credit, overlapping generations
Téléchargement Icône PDF wp_2018_-_nr_21.pdf (736.81 Ko)
Managing Competition on a Two-Sided Platform
Paul Belleflamme, Martin Peitz

On many two-sided platforms, users on one side not only care about user participation and usage levels on the other side, but they also care about participation and usage of fellow users on the same side. Most prominent is the degree of seller competition on a platform catering to buyers and sellers. In this paper, we address how seller competition affects platform pricing, product variety, and the number of platforms that carry trade.

Mots clés : network effects, two-sided markets, platform competition, intermediation, pricing, Imperfect Competition
Téléchargement Icône PDF wp_2018_-_nr_20.pdf (582.88 Ko)
Inclusive Cognitive Hierarchy in Collective Decisions
Yukio Koriyama, Ali Ozkes

We study the implications of structural models of non-equilibrium thinking, in which players best respond while holding heterogeneous beliefs on the cognitive levels of others. We introduce an inclusive cognitive hierarchy model, in which players are capable of projecting the self to others in regard to their cognitive level. The model is tested in a laboratory experiment of collective decision-making, which supports inclusiveness. Our theoretical results show that inclusiveness is a key factor for asymptotic properties of deviations from equilibrium behavior. Asymptotic behavior can be categorized into three distinct types: naïve, Savage rational with inconsistent beliefs, and sophisticated.

Mots clés : collective decision-making, bounded rationality, cognitive hierarchy, information aggregation
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Secular Stagnation: New Challenges for the Industrialized Countries in the 21st Century
Gilles Dufrenot, Meryem Rhouzlane

This paper attempts to provide an overview of the main challenges facing industrialized in a context of secular stagnation. There is no consensus on the meaning of this concept and various alternative views coexist. We present the key issues in the debates today, accounting for phenomena like the slowdown in factor productivity, liquidity and safety traps, the decline of natural interest rates, the historical downward trend of potential growths and low inflation rates. We provide a bird’s eye survey of the available literature on the causes of secular stagnation from a historical perspective, the symptoms, the main causes as well as some policies proposed to overcome it. We give some illustrations for the United Kingdom, the United States, the euro area and Japan.

Mots clés : secular stagnation, natural interest rates, history, industrialized countries
Téléchargement Icône PDF wp_2018_-_nr_18.pdf (1.12 Mo)
Transborder Ethnic Kin and Local Prosperity: Evidence from Night-Time Light Intensity in Africa
Christophe Muller, Pierre Pecher

Ethnicity often occupies a core role in integrated social, economic, and political development processes, which have mostly been studied within specific countries. Across countries, social and economic development may be supported by political capabilities achieved by ethnic kin abroad, although there is little hard evidence on politico-economic interactions through ethnic networks. We fill this gap by providing the first robust empirical evidence of the substantial effects of political predominance of transborder ethnic kin on local economic development in Africa. This is achieved by specifying and estimating dynamic spatial models of geolocalised luminosity and matching these data with other geolocalised information on geographic, political, and ethnic characteristics. Spatial and ethnic network effects are separately identified and jointly analysed. Not only distinct spatial effects and transborder ethnic effects are exhibited, but also are their complex dynamics and spatial distribution features in terms of local development. The results draw attention to the relevance of a broader international perspective on policies affecting ethnic politics within countries.

Mots clés : local development, ethnic networks, institutions
Téléchargement Icône PDF wp_2018_-_nr_17.pdf (1.45 Mo)
Male Reproductive Health, Fairness and Optimal Policies
Johanna Etner, Natacha Raffin, Thomas Seegmuller

Based on epidemiological evidence, we consider an economy where agents differ through their ability to procreate. Households with impaired fertility may incur health expenditures to increase their chances of parenthood. This health heterogeneity generates welfare inequalities that deserve to be ruled out. We explore three different criteria of social evaluation in the long-run: the utilitarian approach, which considers the well- being of all households, the ex-ante egalitarian criterion, which considers the expected well-being of the worst-off social group, and the ex-post egalitarian one, which only considers the realized well-being of the worst- off. In an overlapping generations model, we propose a set of economic instruments to decentralize each solution. To correct for the externality and inequalities, both a preventive (a taxation of capital) and a redistributive policy are required.

Mots clés : reproductive health, fairness, egalitarianism, optimal policy, OLG model
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Pollution and Growth: The Role of Pension on the Efficiency of Health and Environmental Policies
Armel Ngami, Thomas Seegmuller

This paper analyses the effect of a pay-as-you-go pension system on the evolution of capital and pollution, and on the efficiency of an environmental versus health policy. In an overlapping generations model (OLG), we introduce endogenous longevity that depends on pollution and health expenditures. Global dynamics may display multiple balanced growth paths (BGP). We show that by discouraging savings, a policy that promotes the pension system enlarges the environmental poverty trap. More surprisingly, the environmental policy has contrasted effects according to the significance of the pension system. If it has a low size, a raise of the environmental policy enlarges the environmental poverty trap and leads to a rise in capital over pollution at the highest stationary equilibrium. In contrast, in economies where intergenerational solidarity is well developed, capital over pollution decreases at the highest BGP. In such a case, the environmental policy does not necessarily lead to a better longevity and growth.

Mots clés : longevity, environment, Health, pension system, growth, Pollution
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International Credit Markets and Global Business Cycles
Patrick A. Pintus, Yi Wen, Xiaochuan Xing

This paper stresses a new channel through which global financial linkages contribute to the co-movement in economic activity across countries. We show in a two-country setting with borrowing constraints that international credit markets are subject to self-fulfilling variations in the world real interest rate. Those expectation-driven changes in the borrowing cost in turn act as global shocks that induce strong cross-country co-movements in both financial and real variables (such as asset prices, GDP, consumption, investment and employment). When firms around the world benefit from unexpectedly low debt repayments, they borrow and invest more, which leads to excessive supply of collateral and of loanable funds at a low interest rate, thus fueling a boom in both home and abroad. As a consequence, business cycles are synchronized internationally. Such a stylized model thus offers one way to rationalize both the existence of a world business-cycle component, documented by recent empirical studies through dynamic factor analysis, and the factor’s intimate link to global financial markets.

Mots clés : world interest rate, international co-movement, self-fulfilling equilibria
Téléchargement Icône PDF wp_2018_-_nr_14.pdf (1010.06 Ko)
Geographic Environmental Kuznets Curves: The Optimal Growth Linear-Quadratic Case
Raouf Boucekkine, Giorgio Fabbri, Salvatore Federico, Fausto Gozzi

We solve a linear-quadratic model of a spatio-temporal economy using a polluting one-input technology. Space is continuous and heterogenous: locations differ in productivity, nature self-cleaning technology and environmental awareness. The unique link between locations is transboundary pollution which is modelled as a PDE diffusion equation. The spatio-temporal functional is quadratic in local consumption and linear in pollution. Using a dynamic programming method adapted to our infinite dimensional setting, we solve the associated optimal control problem in closed-form and identify the asymptotic (optimal) spatial distribution of pollution. We show that optimal emissions will decrease at given location if and only if local productivity is larger than a threshold which depends both on the local pollution absorption capacity and environmental awareness. Furthermore, we numerically explore the relationship between the spatial optimal distributions of production and (asymptotic) pollution in order to uncover possible (geographic) Environmental Kuznets Curve cases.

Mots clés : growth, geography, transboundary pollution, infinite dimensional optimal control problems
Téléchargement Icône PDF wp_2018_-_nr_13.pdf (8.08 Mo)
Group Targeting under Networked Synergies
Mohamed Belhaj, Frédéric Deroïan

A principal targets agents organized in a network of local complementarities, in order to increase the sum of agents' effort. We consider bilateral public contracts à la Segal (1999). The paper shows that the synergies between contracting and non-contracting agents deeply impact optimal contracts: they can lead the principal to contract with a subset of the agents, and to refrain from contracting with central agents.

Mots clés : multi-agent contracting, Network, synergies, aggregate effort, optimal group targeting
Téléchargement Icône PDF wp_2018_-_nr_12.pdf (832.88 Ko)
Business Training and Loan Repayment: Theory and Evidence from Microcredit in France
Renaud Bourlès, Anastasia Cozarenco, Dominique Henriet, Xavier Joutard

Although most Microfinance Institutions (MFIs) invest in non-financial services such as business training, empirical evidence on the impact of training on microborrowers’ performance is at best mixed. We address this issue by accounting for business training allocation and its possible effects on borrowers’ behavior. We first show empirically (using data from a French MFI) that the relationship between business training allocation and borrowers’ risk is complex and non- linear. By taking this into account, we establish a positive effect of business training on the survival time of loans. These results are robust to controlling for the MFI’s selection process. We moreover propose a theoretical explanation for the non-linear relationship between borrowers’ risk and training allocation based on reverse asymmetric information, showing that it can lead to increased MFI outreach.

Mots clés : microcredit, business training, reverse asymmetric information
Téléchargement Icône PDF wp_2018_-_nr_11.pdf (995.99 Ko)
Stochastic Petropolitics: The Dynamics of Institutions in Resource-Dependent Economies
Raouf Boucekkine, Fabien Prieur, Chrysovalantis Vasilakis, Benteng Zou

We provide an analysis of institutional dynamics under uncertainty by means of a stochastic differential game of lobbying with two players (conservatives vs liberals) and three main ingredients. The first one is uncertainty inherent in the institutional process itself. The second considers resource windfalls volatility impact on economic and institutional outcomes. Last but not least, the resource windfall level matters in the relative bargaining power of the players. We compute a unique closed-loop equilibrium with linear feedbacks. We show that the legislative state converges to an invariant distribution. Even more importantly, we demonstrate that the most likely asymptotic legislative state is favorable to the liberals. However, the more volatile resource windfalls, the less liberal is the most likely asymptotic state. Finally, we assess the latter prediction on a database covering 91 countries over the period 1973-2005. We focus on financial liberalization policies. We find that as the resources revenues volatility increases, the financial liberalization index goes down. We also find that this property remains robust across different specifications and sample distinctions.

Mots clés : institutional dynamics, petropolitics, lobbying games, revenue-dependent lobbying power, stochastic dynamic games, stochastic stability
Téléchargement Icône PDF wp_2018_-_nr_10.pdf (717.4 Ko)
Exchange Rate Policy and External Vulnerabilities in Sub-Saharan Africa: Nominal, Real or Mixed Targeting?
Fadia Al Hajj, Gilles Dufrenot, Benjamin Keddad

This paper discusses the theoretical choice of exchange rate anchors in Sub-Saharan African countries that are facing external vulnerabilities. To reduce instability, policymakers choose among promoting external competitiveness using a real anchor, lowering the burden of external debt using a nominal anchor or using a policy mix of both anchors. We observe that these countries tend to adopt mixed anchor policies. We solve a state space model to explain the determinants of and the strategy behind this policy. We find that the choice of policy mix is a two-step strategy: First, authorities choose the degree of nominal exchange rate flexibility according to the velocity of money, trade openness, foreign debt, degree of exchange rate pass-through and exchange rate target zone. Second, authorities seek to stabilize the real exchange rate depending on the degree of trade integration with the rest of world and the degree of foreign exchange interventions. We conclude with regime-switching estimations to provide empirical evidence of how these economic fundamentals influence exchange rate policy in Sub-Saharan Africa.

Mots clés : African countries, exchange rate policy, external vulnerabilities, regime-switching model
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Household Fuel Use in Rural China
Christophe Muller, Huijie Yan

The household transition from dirty to clean fuels is important because of its economic, health and environment consequences, locally, nationally and globally. In order to study fuel choices, a non-separated farm household model for fuel demands is developed. Then, discrete choice equations of fuel uses, consistent with this theoretical model, are estimated using microeconomic household panel data from rural China.The estimation results support the theoretical approach that implies that the fuel demands depend not only on income, fuel prices, and demand-side socioeconomic factors, as would occur in the standard fuel demand models in the literature, but also on food prices, agricultural assets, and original household and community characteristics that shape the household responses to market failures. Finally, we present a few policy simulations that reveal the complex substitution impact of energy price policies in China.We provide the first evidence on: price sensitivity of fuel stacking, that food prices exert some pressure on the fuel transition, the role of farm work and activity specialization in fuel choices. Policies should incorporate some of the complexity of the non-separated decisions of rural households in this context of market failures. The complex cross-price effects imply that the policy pricing mechanisms should account for all energy types and food prices. Finally, market-based policies should be coupled with policy interventions aimed at increasing the opportunity cost of dirty fuels.

Mots clés : fuel use, China, consumption demand, energy
Téléchargement Icône PDF wp_2018_-_nr_08.pdf (819.15 Ko)
Proximités et Solidarités : de l’État-Providence aux Communs Sociaux
Jacques Garnier, Jean-Benoît Zimmermann

Dans cet article, nous nous intéressons à la coévolution des inégalités sociales, des dispositifs de solidarité et du système économique à travers trois grandes phases durant lesquelles les dispositifs de solidarité ont combiné de manière différenciée deux grandes formes de solidarité, par les proximités (par en bas) vs par l’attribution de droits (par en haut). Avec la globalisation de l'économie et la crise des années 2008 et suivantes, les inégalités sociales se sont accentuées et ont revêtu un aspect spatial marqué, jusqu’à une échelle micro-locale. En nous appuyant sur une approche théorique en termes de proximité et en nous référant aux situations largement évoquées aujourd’hui dans la littérature, nous analysons l’incapacité des politiques publiques à répondre efficacement à cette accentuation par la seule prise en compte de la proximité géographique. De nouvelles solidarités « par le bas » tendent en revanche à apporter des réponses hors de la dualité Etat-marché; elles s’apparentent à de nouvelles formes de communs que nous désignons comme « communs sociaux ». Nous montrons en quoi ces communs se distinguent des modalités anciennes de solidarité communautaire. Nous soulignons enfin à quelles conditions ces communs sont susceptibles de constituer des réponses justes et durables à l’accentuation actuelle des inégalités sociales.

Mots clés : France, inégalités, solidarité, proximité, communs territoriaux, communs sociaux
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Inside the Engine Room of Digital Platforms: Reviews, Ratings, and Recommendations
Paul Belleflamme, Martin Peitz

The rise and success of digital platforms (such as Airbnb, Amazon, Booking, Expedia, Ebay, and Uber) rely, to a large extent, on their ability to address two major issues. First, to effectively facilitate transactions, platforms need to resolve the problem of trust in the implicit or explicit promises made by the counterparties; they post reviews and ratings to pursue this objective. Second, as platforms operate in marketplaces where information is abundant, they may guide their users towards the transactions that these users may have an interest in; recommender systems are meant to play this role. In this article, we elaborate on review, rating, and recommender systems. In particular, we examine how these systems generate network effects on platforms.

Mots clés : platforms, network effects, ratings, recommender systems, digital economics
Téléchargement Icône PDF wp_2018_-_nr_06.pdf (668.05 Ko)
Mean Growth and Stochastic Stability in Endogenous Growth Models
Raouf Boucekkine, Patrick A. Pintus, Benteng Zou

Under uncertainty, mean growth of, say, wealth is often defined as the growth rate of average wealth, but it can alternatively be defined as the average growth rate of wealth. We argue that stochastic stability points to the latter notion of mean growth as the theoretically relevant one. Our discussion is cast within the class of continuous-time AK-type models subject to geometric Brownian motions. First, stability concepts related to stochastic linear homogenous differential equations are introduced and applied to the canonical AK model. It is readily shown that exponential balanced-growth paths are not robust to uncertainty. In a second application, we evaluate the quantitative implications of adopting the stochastic-stability-related concept of mean growth for the comparative statics of global diversification in the seminal model due to Obstfeld (1994).

Mots clés : endogenous stochastic growth, mean growth, stochastic stability, AK model, global diversification
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Targeting the Key Player: An Incentive-Based Approach
Mohamed Belhaj, Frédéric Deroïan

We consider a network game with local complementarities. A policymaker, aiming at minimizing or maximizing aggregate effort, contracts with a single agent on the network to trade effort change against transfer. The policymaker has to find the best agent and the optimal contract to offer. Our study shows that for all utilities with linear best-responses, it only takes two statistics about the position of each agent on the network to identify the key player: the Bonacich centrality and a weighted measure of the number of closed walks originating from the agent. We also characterize key players under linear quadratic utilities for various contractual arrangements.

Mots clés : key player, Network, Linear Interaction, incentives, contract, limited budget
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Tying the Politicians’ Hands: The Optimal Limits to Representative Democracy
Didier Laussel

We study the optimal delegation problem which arises between the median voter (writer of the constitution) and the (future) incumbent politician when not only the state of the world and but also the politician’s type (preferred policy) are the policy-maker’s private information. We show that it is optimal to tie the hands of the politician by imposing him/her both a policy floor and a policy cap and delegating him/her the policy choice only in between. The delegation interval is shown to be the smaller the greater is the uncertainty about the politician’s type. These results apply outside the specific problem to which our model is applied here.

Mots clés : representative democracy, optimal delegation, political uncertainty
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Optimal Cash Transfers with Distribution Regressions: An Application to Egypt at the Dawn of the XXIst Century
Christophe Muller

Social programmes for poverty alleviation involve eligibility rules and transfer rules that often proxy-means tests. We propose to specify the estimator in connection with the poverty alleviation problem. Three distinct stages emerge from the optimization analysis: the identification of the poor, the ranking of their priorities and the calculus of the optimal transfer amount. These stages are implemented simultaneous by using diverse distribution regression methods to generate fitted-values of living standards plugged into the poverty minimization programme to obtain the transfer amounts. We apply these methods to Egypt in 2013. Recentered Influence Function (RIF) regressions focusing on the poor correspond to the most efficient transfer scheme. Most of the efficiency gain is obtained by making transfer amounts varying across beneficiaries rather than by varying estimation methods. Using RIF regressions instead of quantile regressions delivers only marginal poverty alleviation, although it allows for substantial reduction of the exclusion of the poor.

Mots clés : targeting, poverty, optimizing estimator
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The Causal Effect of Infrastructure Investments on Income Inequality: Evidence from US States
Emma Hooper, Sanjay Peters, Patrick A. Pintus

Through utilizing US state-level data at annual frequency from 1976 to 2008, this paper documents a causal effect of infrastructure investments, specifically public spending on highways, on income inequality. The number of seats in the US House of Representatives Committee On Appropriations serves as a valid instrument to identify quasi-random variations in state-level spending on highways. When a given state gains an additional committee member, which is rather exogenous, new federal grants are allocated to that state, resulting in the state government slashing its investment expenditures on highways. In other words, a crowding-out effect of federal funding for state investment in highways is at play. The main contribution of this paper is to show that such committee-driven cuts in spending on highways cause an increase in income inequality within a two-year horizon. In addition, we show that wages paid for construction jobs correlate positively and strongly with spending on highways at the state level. This further provides suggestive evidence that the construction sector plays an important role in the transmission channel from a rise in state spending on highways to a reduction in income inequality.

Mots clés : public infrastructure, highways, income inequality, US state panel data, instrument variable
Téléchargement Icône PDF wp_2018_-_nr_01.pdf (866.38 Ko)
Why Are Inflation Forecasts Sticky? Theory and Application to France and Germany
Frédérique Bec, Raouf Boucekkine, Caroline Jardet

This paper proposes a theoretical model of forecasts formation which implies that in presence of information observation and forecasts communication costs, rational professional forecasters might find it optimal not to revise their forecasts continuously, or at any time. The threshold time- and state-dependence of the observation review and forecasts revisions implied by this model are then tested using inflation forecast updates of professional forecasters from recent Consensus Economics panel data for France and Germany. Our empirical results support the presence of both kinds of dependence, as well as their threshold-type shape. They also imply an upper bound of the optimal time between two information observations of about six months and the co-existence of both types of costs, the observation cost being about 1.5 times larger than the communication cost.

Mots clés : forecast revision, binary choice models, information and communication costs
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Measuring Influence in Science: Standing on the Shoulders of Which Giants?
Antonin Macé

I study the measurement of the influence of scientists based on bibliographic data. I propose a new measure that accounts for indirect influence and allows to compare scientists across different fields of science. By contrast, common measures of influence that “count citations”, such as the h-index, are unable to satisfy either of these two properties. I use the axiomatic method in two opposite ways: to highlight the two limitations of citation- counting schemes and their independence, and to carefully justify the assumptions made in the construction of the proposed measure.

Mots clés : intellectual influence, networks, comparability across fields, axiomatic method
Téléchargement Icône PDF wp_2017_-_nr_43.pdf (725.76 Ko)
Optimal Voting Rules under Participation Constraints
Antonin Macé, Rafael Treibich

We study the design of voting rules for international unions when countries’ participation is voluntary. While efficiency recommends weighting countries proportionally to their stakes, we show that accounting for participation constraints entails overweighting some countries, those for which the incentive to participate is the lowest. When decisions are not enforceable, cooperation requires the satisfaction of more stringent constraints, that may be mitigated by granting a veto power to some countries. The model has important implications for the problem of apportionment, the allocation of voting weights to countries of differing populations, where it provides a rationale for setting a minimum representation for small countries.

Mots clés : international unions, constitutional design, veto, participation constraints
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Biodiversity, Shapely Value and Phylogenetic Trees: Some Remarks
Hubert Stahn

This paper explores the main differences between the Shapley Values of a set of taxa introduced by Haake et al. [4] and Fuchs and Jin [3], the latter having been found identical to the Fair Proportion Index (Redding and Mooers [10]). In line with Shapley [13], we identify the cooperative game basis for each of these two classes of phylogenetic games and use them (i) to construct simple formulas for these two Shapley values and (ii) to compare these different approaches. Using the set of weights of a phylogenetic tree as a parameter space, we then discuss the conditions under which these two values coincide and, if they are not the same, revisit Hartman's [5] convergence result. Finally, we compare the species ranking induced by these two values. Considering the Kendal and the Spearman rank correlation coefficient, simulations show that these rankings are strongly correlated.

Mots clés : biodiversity, phylogenetic trees, Shapley value, Fair Proportion index
Téléchargement Icône PDF wp_2017_-_nr_41.pdf (550.36 Ko)
Income Distribution by Age Group and Productive Bubbles
Xavier Raurich, Thomas Seegmuller

The aim of this paper is to study the role of the distribution of income by age group on the existence of speculative bubbles. A crucial question is whether this distribution may promote a bubble associated to a larger level of capital, i.e. a productive bubble. We address these issues in a three period overlapping generations (OC) model, where productive investment done in the first period of life is a long term investment whose return occurs in the following two periods. A bubble is a short term speculative investment that facilitates intertemporal consumption smoothing. We show that the distribution of income by age group determines both the existence and the effect of bubbles on aggregate production. We also show that fiscal policy, by changing the distribution of income, may facilitate or prevent the existence of bubbles and may also modify the effect that bubbles have on aggregate production.

Mots clés : bubble, efficiency, income distribution, overlapping generations
Téléchargement Icône PDF wp_2017_-_nr_40.pdf (646.59 Ko)
Fertility Regulation Behavior: Sequential Decisions in Tunisia
Olfa Frini
Christophe Muller

We revisit fertility analysis in Tunisia by focusing on a sequence of fertility regulation instruments, analogous to Bongaarts’ factor approach, and systematically examining family interference with these decisions. In Muslim societies, in which marriage is the exclusive socially tolerated childbearing context, the postponement of a woman’s marriage may prompt her to regulate her fertility. Regarding the other examined birth control decisions (post-marriage delay in the first use of contraception, past and current contraceptive use, choice of birth control method), the husband and the wife’s families may interfere with this decision. These successive decisions may correspond to consecutive phases in a woman’s lifecycle, such as enrolment in higher education, labor market participation, attainment of some fertility objective, and middle- and old-age health problems. In all these phases, the families may play essential roles.Using data from the 2001 PAP-FAM Tunisian survey, we estimate equations that include covariates capturing the above consecutive decisions and provide a coherent picture of the fertility regulation processes in Tunisia, including rarely observed variables on family interactions. Consistent with this setting, we find that the significant effects of covariates arise and vanish across stage-specific equations as women progress in their lifecycle. Our findings show that in Tunisia, family links and sociocultural environments greatly shape fertility regulation decisions. This calls for more intensive involvement of husbands and extended families in family planning policies. This broader perspective suggests that the resurgence of traditionalist politico-religious movements, sometimes associated with youth radicalization, may affect future fertility regulation.

Mots clés: fertility regulation, age at marriage, birth control, contraception, Tunisia
Téléchargement Icône PDF wp_2017_-_nr_39.pdf (971.63 Ko)
Application of the Ecosystem Service Concept to a Local-Scale: The Cases of Coralligenous Habitats in the North-Western Mediterranean Sea
Laure Thierry de Ville d'Avray, Dominique Ami, Anne Chenuil, Romain David, Jean-Pierre Féral

In an era when we witness the erosion of biodiversity it is essential to understand the benefits provided by ecosystems and find ways to maintain them. The concept of ecosystem service has been applied in this perspective, but mainly in large-scale surveys and on terrestrial ecosystems. The primary objective of this project is to validate the inclusion of the concept of ecosystem service as a useful input to local (small-scale) community decision making in the marine environment. A second objective is to define the beneficial services provided to local areas by the coralligenous habitats. The application of the concept of ecosystem service at a local scale is more appropriate to local regulatory and management issues. This research was focused on the complex and threatened coralligenous habitats, about which the benefits and services provided are relatively little understood. To address these issues and get around the paucity of prior research, we collected the opinions of 43 experts for two marine sites (Bay of Marseille and Port-Cros National Park) on 15 services using interviews, an online questionnaire and workshops. This work validated 10 services: the most evident were "food", "diving sites", "research" and "inspiration". We also showed that even in very close-by sites, slight differences in the bundle of services may occur, and we highlighted knowledge gaps especially concerning those services (so-called regulating services) that help to regulate environmental impacts of other phenomena. This work concluded that there is a strong need to employ a referential frame to identify and then estimate services based on local criteria such as: geographical and temporal scale, size of the population of beneficiaries, value of the benefits, and state of ecosystem well-being. These results are a basis for further evaluation of these ecosystem services and can indicate their positive contribution to local decision-making concerning the regulation and management of coralligenous habitats.

Mots clés : experts knowledge, Marseille, Port-Cros, appraisals, interviews, workshops, questionnaire, coralligenous habitats, ecosystem services, local-scale, concept application
Téléchargement Icône PDF wp_2017_-_nr_38.pdf (1.68 Mo)
Regulation and Altruism
Izabela Jelovac, Samuel Kembou Nzale

We study optimal contracts in a regulator-agent setting with joint production, altruistic and selfish agents, and uneasy outcome measurement. Such a setting represents sectors of activities such as education and health care provision. The agents and the regulator jointly produce an outcome for which they all care to some extent that is varying from agent to agent. Some agents, the altruistic ones, care more than the regulator does while others, the selfish agents, care less. Moral hazard is present due to the agent’s effort that is not contractible. Adverse selection is present too since the regulator cannot a priori distinguish between altruistic and selfish agents. Contracts consist of a simple transfer from the regulator to the agents together with the regulator’s input in the joint production. We show that a screening contract is not optimal when we face both moral hazard and adverse selection.

Mots clés : altruism, Moral Hazard, adverse selection, regulator-agent joint production
Téléchargement Icône PDF wp_2017_-_nr_37.pdf (597 Ko)
Procedural versus Opportunity-Wise Equal Treatment of Alternatives: Neutrality Revisited
Ali Ihsan Ozkes, M. Remzi Sanver

We revisit the neutrality requirement in social choice theory. We propose a weakening of the standard neutrality condition, by allowing for different procedural treatment for different alternatives while entailing that alternatives enjoy same ex-ante possibility to be chosen. We compare these two conditions theoretically and computationally. Furthermore, we explore social choice problems in which this weakening resolves impossibilities that stem from a fundamental tension between neutrality and anonymity. Finally, we show that in certain social choice problems, this weakening provides an immediate refinement of anonymous, neutral, and Pareto optimal social choice rules towards retaining resoluteness.

Mots clés : anonymity, neutrality, Pareto optimality, social choice functions
Téléchargement Icône PDF wp_2017_-_nr_36.pdf (712.5 Ko)
The Corridor’s Width as a Monetary Policy Tool
Guillaume A. Khayat

Credit institutions borrow liquidity from the central bank’s lending facility and deposit (excess) reserves at its deposit facility. The central bank directly controls the corridor: the non-market interest rates of its lending and deposit facilities. Modifying the corridor changes the conditions on the interbank market and allows the central bank to set the short-term interest rate in the economy. This paper assesses the use of the corridor’s width as an additional tool for monetary policy. Results indicate that a symmetric widening of the corridor boosts output and welfare while addressing the central bank’s concerns over higher risk-taking in the economy.

Mots clés : Monetary policy, interbank market, heterogeneous interbank frictions, the corridor, excess reserves, financial intermediation
Téléchargement Icône PDF wp_2017_-_nr_35.pdf (622.14 Ko)
Generalized Measures of Polarization in Preferences
Burak Can, Ali Ihsan Ozkes, Ton Storcken

We provide axiomatic characterizations for measures of polarization in profiles of preferences that are represented as rankings of alternatives. Polarization is seen as the extent to which opinions are opposed. We provide characterizations for an extension of this simple intuition on the pairs of alternatives to the cases with more than two alternatives. Our primary generalization allows for different treatment among issues, i.e., pairs of alternatives. Secondly, we show that the characterization result continues to hold when preferences are allowed to attain indifferences. Finally, we show that we can also impose a domain restriction that only allows for single-peaked preferences and retain our characterization. Our results point to a fundamental feature of measures on profile of preferences that are based on pairwise comparisons of alternatives.

Mots clés : polarization, measurement, Social Choice, single-peaked preferences
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A Cost-Benefit Approach for Prioritizing Invasive Species
Pierre Courtois, Charles Figuières, Chloe Mulier, Joakim Weill

Biological invasions entail massive biodiversity losses and tremendous economic impacts that justify significant management efforts. Because the funds available to control biological invasions are limited, there is a need to identify priority species. This paper first review current invasive species prioritization methods and explicitly highlights their pitfalls. We then construct a cost-benefit optimization framework that incorporates species utility, ecological value, distinctiveness, and species interactions. This framework offers the theoretical foundations of a simple and operational method for the management of invasive species under a limited budget constraint. It takes the form of an algorithm for the prioritization of multiple biological invasions.

Mots clés : prioritization, biological invasions, cost/benefit, optimization, diversity
Téléchargement Icône PDF wp_2017_-_nr_33.pdf (938.44 Ko)
The Impact of a Rise in the Real Estate Transfer Taxes on the French Housing Market
Guillaume Bérard, Alain Trannoy

This paper estimates the effects of an increase in the real estate transfer taxes (RETT) rate from 3.80% to 4.50%, following an optional reform implemented in March 2014 by French départements. Not all the départements implemented the RETT increase, which is the starting point for a natural experiment: using a difference-in-differences design, we estimate two main effects. (1) An anticipation effect a month before the implementation of the reform in order to avoid the RETT increase (timing response). The total tax base increased by 28% just the month before. (2) The classic depressing effect of a tax on the equilibrium quantity (extensive margin response) is estimated to be 7% on average from March 2014 to October 2015. All in all, the average net effect corresponds to a drop of the transactions of 4.6% over a period of ten months following the implementation date. Furthermore, we estimate that the elasticity of the tax revenue to the tax increase is about 0.65, meaning that départements’ tax revenues are still on the increasing side of the Laffer curve.

Mots clés : local government, real estate market, transfer taxes, Natural experiment, anticipation
Téléchargement Icône PDF wp_2017_-_nr_32.pdf (1.8 Mo)
Optimal Population Growth as an Endogenous Discounting Problem: The Ramsey Case
Raouf Boucekkine, Blanca Martínez, José Ramón Ruiz-Tamarit

This paper revisits the optimal population size problem in a continuous time Ramsey setting with costly child rearing and both intergenerational and intertemporal altruism. The social welfare functions considered range from the Millian to the Benthamite. When population growth is endogenized, the associated optimal control problem involves an endogenous effective discount rate depending on past and current population growth rates, which makes preferences intertemporally dependent. We tackle this problem by using an appropriate maximum principle. Then we study the stationary solutions (balanced growth paths) and show the existence of two admissible solutions except in the Millian case. We prove that only one is optimal. Comparative statics and transitional dynamics are numerically derived in the general case.

Mots clés : Optimal population size, population ethics, optimal growth, endogenous discounting, optimal demographic transitions
Téléchargement Icône PDF wp_2017_-_nr_31.pdf (792.8 Ko)
A Note on Risk Sharing versus Instability in International Financial Integration: When Obstfeld Meets Stiglitz
Raouf Boucekkine, Benteng Zou

International risk sharing is one of the main arguments in favor of financial liberalization. The pure risk sharing mechanism highlighted by Obstfeld (1994) implies that liberalization is growth enhancing for all countries as it allows the world portfolio to shift from safe low-yield capital to riskier high yield capital. This result is obtained under the assumption that the volatility figures for risky assets prevailing under autarky are not altered after liberalization. This note relaxes this assumption within the standard two-country model with intertemporal portfolio choices, formally incorporating the instability effect invoked by Stiglitz (2000). We show that putting together the pure risk sharing and instability effects in the latter set-up enriches the analysis and delivers predictions more consistent with the contrasted related empirical literature.

Mots clés : optimal growth, financial liberalization, risk sharing, volatility
Téléchargement Icône PDF wp_2017_-_nr_30.pdf (662.04 Ko)
Choice with Time
João V. Ferreira, Nicolas Gravel

We propose a framework for the analysis of choice behavior when the later explicitly depends upon time. We relate this framework to the traditional setting from which time is absent. We illustrate the usefulness of the introduction of time by proposing three possible models of choice behavior in such a framework: (i) changing preferences, (ii) preference formation by trial and error, and (iii) choice with endogenous status-quo bias. We provide a full characterization of each of these three choice models by means of revealed preference-like axioms that could not be formulated in a timeless setting.

Mots clés : choice behavior, time, revealed preferences, changing preferences, learning by trial-and-error, inertia bias
Téléchargement Icône PDF wp_2017_-_nr_29.pdf (593.63 Ko)
Promotion through Connections: Favors or Information?
Yann Bramoullé, Kenan Huremovic

Connections appear to be helpful in many contexts such as obtaining a job, a promotion, a grant, a loan or publishing a paper. This may be due to favoritism or to information conveyed by connections. Attempts at identifying both effects have relied on measures of true quality, generally built from data collected long after promotion. This empirical strategy faces important limitations. Building on earlier work on discrimination, we propose a new method to identify favors and information from classical data collected at time of promotion. Under natural assumptions, we show that promotion decisions look more random for connected candidates, due to the information channel. We obtain new identification results and show how probit models with heteroscedasticity can be used to estimate the strength of the two effects. We apply our method to the data on academic promotions in Spain studied in Zinovyeva & Bagues (2015). We find evidence of both favors and information effects at work. Empirical results are consistent with evidence obtained from quality measures collected five years after promotion.

Mots clés : promotion, connections, social networks, favoritism, Information
Téléchargement Icône PDF wp_2017_-_nr_28.pdf (813.49 Ko)
Generalized Glass Ceilings in the United States – A Stochastic Metafrontier Approach
Khalid Maman Waziri

This paper highlights the limitations inherent to the stochastic earnings frontier methodology to analyzing wage discrimination and introduces the use of the metafrontier approach as an important improvement. Using US data from the Current Population Survey, we find that white women’s and black men’s maximum attainable hourly earnings represent respectively 80% and 76% of those of white men on average. Furthermore, the metafrontier approach shows that male-female and white-black differences in maximum attainable earnings are observed at all levels of human capital. This innovative methodology permits the identification of a “generalized” glass ceilings against females and blacks in the US.

Mots clés : wage differentials, discrimination, glass ceiling, stochastic frontier, stochastic metafrontier approach, sample selection correction
Téléchargement Icône PDF wp_2017_-_nr_27.pdf (1.55 Mo)
Growth and Bubbles: The Interplay between Productive Investment and the Cost of Rearing Children
Xavier Raurich, Thomas Seegmuller

As it is documented, investment of households in human capital is negatively related to the number of children individuals will have and requires some loans to be financed. We show that this negative relationship contributes to explain episodes of bubbles that are associated to higher growth rates. This conclusion is obtained in an overlapping generations model where agents choose to invest in a productive asset, that can be interpreted as human capital, and decide their number of children. A bubble allows to smooth consumption and expenses over the life-cycle, and can therefore be used to finance either productive investment or the cost of rearing children. The time cost of rearing children plays a key role in the analysis. If the time cost per child is sufficiently large, households have only a small number of children. The bubble then has a crowding-in effect because it is used to finance productive investment. On the contrary, if the time cost per child is low enough, households have a large number of children. Then, the bubble is mainly used to finance the total cost of rearing children and has a crowding-out effect on investment. Therefore, the new mechanism we highlight shows that a bubble enhances growth only if the economy is characterized by a high rearing time cost per child.

Mots clés : bubble, sustained growth, fertility
Téléchargement Icône PDF wp_2017_-_nr_26.pdf (573.86 Ko)
Trade Integration and the Polarisation of Eco-Labelling Strategies
Vera Danilina

Growing ecological concerns give rise to salient discussions of green policy impact within different social sciences domains. This research studies the outcomes of voluntary environmental labelling in autarky and upon trade integration in the presence of two types of heterogeneity, across countries and across producers. It investigates the impact of the two main types of eco-labels - multiple-criteria-based programmes (ISO Type I) and self-declared environmental claims (ISO Type II), both of which are simultaneously introduced due to the environmental concerns of consumers. The model illustrates the polarisation of eco-labels when the least productive firms tend to avoid green strategies, lower-middle productive and the most efficient firms are incentivized to greenwash, and the upper-middle productive firms choose trustful programmes. It also shows that voluntary green restrictions lead to substantial productivity effects in the market upon opening to international trade, conditionally, depending on the type of the labelling and the relative degree of environmental awareness across trading countries. The model predicts average market productivity losses and within segments productivity gains for the relatively more eco-concerned country, while the effects for the relatively less eco-concerned country are the opposite.

Mots clés : eco-labelling, Firm heterogeneity, trade integration, voluntary environmental regulation, firms productivity
Téléchargement Icône PDF wp_2017_-_nr_25.pdf (1.51 Mo)
Arranged Marriages under Transferable Utilities
Pauline Morault

In many societies, marriage is a decision taken at the familial level. Arranged marriages are documented from Renaissance Europe to contemporary rural Kenya, and are still prevalent in many parts of the developing world. However, this family dimension has essentially been neglected by the existing matching literature on marriages. The objective of this paper is to introduce family considerations into the assignment game. We explore how shifting decision-making to the family level affects matching on the marriage market. We introduce a new concept of familial stability and find that it is weaker than individual stability. The introduction of families into the marriage market generates coordination problems, so the central result of the transferable utility framework no longer holds: a matching can be family-stable even if it does not maximize the sum of total marital surpluses. Interestingly, even when the stable matching is efficient, family decision-making drastically modifies how the surplus is shared-out. These results may have fundamental implications for pre-marital investments. We find that stable matchings depend on the type of family partitioning. Notably, when each family contains one son and one daughter, familial and individual stability are equivalent.

Mots clés : marriage, family, matching, transferable utility
Téléchargement Icône PDF wp_2017_-_nr_24.pdf (739.33 Ko)
Optimal Taxation to Correct Job Mismatching
Guillaume Wilemme

This paper presents a new efficiency argument for an accommodating taxation policy on high incomes. Job seekers, applying to different segments of a frictional labor market, do not internalize the consequences of mismatch on the entry decision of firms. Workers are not selective enough, resulting in a lower average job productivity and suboptimal job creation. The output-maximizing policy is anti-redistributive to improve the quality of the jobs prospected. As an income tax affects the sharing of the match surplus, a tax on production (or profits) is required to redress the slope of the wage curve. Neither a minimum wage nor unemployment benefits can fully decentralize optimal search behaviors.

Mots clés : anti-redistributive taxation, composition externality, job quality, mismatch, search strategy
Téléchargement Icône PDF wp_2017_-_nr_23.pdf (812.98 Ko)
Working and Women’s Empowerment in the Egyptian Household: The Type of Work and Location Matter
Clémentine Sadania

This paper explores the impact of women’s work on empowerment in Egypt. Existing evidence suffers from several limitations, which I attempt to address. First, I develop an instrumental variable strategy to account for the endogeneity of work. Second, I allow for a heterogeneous impact of work, distinguishing between working in the public sector, outside work in the private sector and home-based work. Third, women’s empowerment is directly measured as their participation in household decisions. Outside work has the greatest impact. Interestingly, home-based work enhances joint decision-making. Distinguishing between urban and rural residence reveals distinct patterns of impact on decision-making.

Mots clés : women’s empowerment, employment, household decision-making
Téléchargement Icône PDF wp_2017_-_nr_22.pdf (1.13 Mo)
The Role of Inbound Tourist Flows in Promoting Exports
Zouheir El-Sahli

While it is established that tourism benefits growth through increased employment and investments, it is not well understood whether tourism has an effect on exports. This paper explores exports as an additional channel through which tourism affects domestic economic activity. Using bilateral tourist and trade flows, I explore the causal effect of tourist flows on exports. To deal with endogeneity, I construct two instruments that I use on two different sets of exporters. The evidence points in the same direction. I find that tourism affects mainly the exports of differentiated products. Specifically, I find that tourism benefits the exports from non-OECD exporters of processed food products and this effect is only estimated for South-North trade with an elasticity close to 1. For European countries, the findings point in the same direction; tourism affects differentiated consumer products and processed food with elasticity close to 1, which adds plausibility to the earlier results. I also find a lagged effect for tourism mainly on the export of consumer goods (for the two samples) and processed food products (for European countries). The results suggest that exports is an additional channel through which tourism can stimulate domestic economic activity in the tourist destination.

Mots clés : tourism, globalization, trade, gravity, terrorism
Téléchargement Icône PDF wp_2017_-_nr_21.pdf (635.99 Ko)
The Sources of Segregation
Florent Dubois

Few studies tried to quantify the relative importance of each determinants of residential segregation. This mainly comes from a reverse causality problem which hampers the identification of the quantity of interest. In this paper, we decompose the whole change in segregation between 2001 and 2011 in South Africa by using segregation curves. We show that, even without an experimental setting (which might be impossible to obtain), identification of the causal effects can still be achieved by using the dynamics of the phenomenon. The provision of basic public services appears to be one of the main explanation of the gap observed, while differences in sociodemographic characteristics play a minor role only for the least segregated neighborhoods. Housing market is responsible for an important part only among neighborhoods intermediately integrated, while past segregation and income influence moderately segregation throughout more than half of the South African neighborhoods.

Mots clés : post-apartheid South Africa, generalized decompositions, residential segregation, causal inference
Téléchargement Icône PDF wp_2017_-_nr_20.pdf (1.01 Mo)
Decomposing Well-being Measures in South Africa: The Contribution of Residential Segregation to Income Distribution
Florent Dubois, Christophe Muller

Despite the influential work of Cutler and Glaeser [13], whether ghettos are good or bad is still an open and debatable question. In this paper, we provide evidence that, in South Africa, ghettos can be good or bad for income depending on the studied quantile of the income distribution. Segregation tends to be beneficial for rich Whites while it is detrimental for poor Blacks. Even when we find it to be also detrimental for Whites, it is still more detrimental for Blacks. We further show that the multitude of results fuelling this debate can come from misspecification issues and selecting the appropriate sample for the analysis. Finally, we quantify the importance of segregation in the income gap between Blacks and Whites in the post-Apartheid South Africa. We find that segregation can account for up to 40 percent of the income gap at the median. It is even often a larger contribution than education all across the income distribution.

Mots clés : post-apartheid South Africa, generalized decompositions, income distribution, residential segregation
Téléchargement Icône PDF wp_2017_-_nr_19.pdf (3.05 Mo)
Segregation and the Perception of the Minority
Florent Dubois, Christophe Muller

In his seminal work, Schelling (1971) shows that even individual preferences for integration across groups may generate high levels of segregation. However, this theoretical prediction does not match the decreasing levels of segregation observed since the 1970s. We construct a general equilibrium model in which preferences depends on the number of peers and unlike individuals, but also on the benefit (or loss) they attribute to the economic and social life that a minority member brings with him, which we call their “perception of the minority”. In this framework, there always exists a structure of the preferences for which integrated equilibria emerge and are stable. Even when individuals are all prejudiced against other groups, there is still a level of the perception of the minority for which integration is a stable outcome. We then propose an econometric specification in which the structural preference parameters can be identified. In the case of South Africa, our estimates of preferences provide evidence for a dynamics toward increasing integration as the effect of the perception of the minority is found positive and significant, and overcome both racism and homophily by between roughly one and four times.

Mots clés : post-apartheid South Africa, residential segregation, racial preferences, structural estimation
Téléchargement Icône PDF wp_2017_-_nr_18.pdf (4.19 Mo)
Do Misperceptions about Demand Matter? Theory and Evidence
Kenza Benhima, Céline Poilly

We assess theoretically and empirically the consequences of demand misperceptions. In a New Keynesian model with dispersed information, agents receive noisy signals about both supply and demand. Firms and consumers have an asymmetric access to information, so aggregate misperceptions of demand by the supply side can drive economic fluctuations. The model’s predictions are used to identify empirically fundamental and noise shocks on supply and demand. We exploit survey nowcast errors on both GDP growth and inflation, fundamental and noise shocks affecting the errors with opposite signs. We show that demand-related noise shocks have a negative effect on output and contribute substantially to business cycles. Additionally, monetary policy plays a key role in the transmission of demand noise.

Mots clés : Business cycles, information frictions, noise shocks, SVARs with sign restrictions
Téléchargement Icône PDF wp_2017_-_nr_17.pdf (1018.53 Ko)
A Robust Test of Exogeneity Based on Quantile Regressions
Tae-Hwan Kim, Christophe Muller

In this paper, we propose a robust test of exogeneity. The test statistics is constructed from quantile regression estimators, which are robust to heavy tails of errors. We derive the asymptotic distribution of the test statistic under the null hypothesis of exogeneity at a given quantile. Then, the finite sample properties of the test are investigated through Monte Carlo simulations that exhibit not only good size and power properties, but also good robustness to outliers.

Mots clés : regression quantile, endogeneity, Two-Stage Estimation, Hausman test
Téléchargement Icône PDF wp_2017_-_nr_16.pdf (588.03 Ko)
Ethnic Horizontal Inequity in Indonesia
Christophe Muller

For the first time in Indonesia, we jointly analyse several economic statistics and ethnic diversity indicators at national and local levels. Nationally, we find very high levels of economic inequality, measured from household asset values or consumption expenditure. In contrast, the levels of ethnic diversity, while non-negligible, are much lower, whether they reflect fractionalization, polarization, or horizontal inequity based on individual living standards. All horizontal inequity indicators surged after the Asian economic crisis. Horizontal inequity based on education is much lower and decreasing. Finally, we provide tentative explanations of local horizontal inequity in regressions that show a mixed pattern of socioeconomic influences.

Mots clés : community activities, ethnic diversity, Inequality, Indonesia
Téléchargement Icône PDF wp_2017_-_nr_15.pdf (964.46 Ko)
Sun, Regulation and Local Social Networks
Antoine Bonleu

The aim of this paper is to explain over-regulation and local social capital as barriers to immigration. The interest of social networks is that conflict resolution is independent of the law. Hence, if local individuals develop local social capital and regulation, foreigners without social networks are disadvantaged and can less easily migrate. We develop a two-country search-theoretic model where we endogenize the choice of procedural formalism (PF) and the network size. This model features two different equilibria: a Mediterranean equilibrium with PF and dense local social network and a Scandinavian and Anglo-Saxon equilibrium without PF and local social networks.

Mots clés : housing market regulation, local social capital, mobility, climate amenities, social networks
Téléchargement Icône PDF wp_2017_-_nr_14.pdf (569.71 Ko)
Price Discrimination and Dispersion under Asymmetric Profiling of Consumers
Paul Belleflamme, Wing Man Wynne Lam, Wouter Vergote

Two duopolists compete in price on the market for a homogeneous product. They can use a 'profiling technology' that allows them to identify the willingness-to-pay of their consumers with some probability. If both firms have profiling technologies of the exact same precision, or if one firm cannot use any profiling technology, then the Bertrand paradox continues to prevail. Yet, if firms have technologies of different precisions, then the price equilibrium exhibits both price discrimination and price dispersion, with positive expected profits. Increasing the precision of both firms’ technologies does not necessarily harm consumers.

Mots clés : price discrimination, price dispersion, Bertrand competition
Téléchargement Icône PDF wp_2017_-_nr_13.pdf (956.87 Ko)
Voluntary Management of Fisheries under an Uncertain Background Legislative Threat
Anne-Sarah Chiambretto, Hubert Stahn

We investigate the possibility for governance authorities to avoid a large part of regulatory costs, by simply backing up social norms with a threat of collective punishment. Specifically, we consider the case of fisheries in which the regulatory cap is to sustain an optimal conservation level. We identify a mandatory regulation such that, when it is used as a threat, it ensures that the cap is voluntarily implemented. The mandatory scheme is based on a incentive mechanism which secures the returns of the harvester, and a tax on potential capacity. From the status of mere threat, this mandatory regulation takes time to be enforced though. We show that such a tax scheme, even if it is applied randomly after the first occurrence of a deviation from the optimal conservation level, ensures voluntary compliance, provided a suitable choice of the capacity tax. We study the properties of this tax scheme and build an example using data on the scallop fishery in the Saint-Brieuc Bay (France) to illustrate our point.

Mots clés : voluntary agreements, fisheries, conservation policies
Téléchargement Icône PDF wp_2017_-_nr_12.pdf (689.08 Ko)
The Love for Children Hypothesis and the Multiplicity of Fertility Rates
Paolo Melindi Ghidi, Thomas Seegmuller

As illustrated by some French departments, how can we explain the existence of equilibria with different fertility and growth rates in economies with the same fundamentals, preferences, technologies and initial conditions? To answer this question we develop an endogenous growth model with altruism and love for children. We show that independently from the type of altruism, a multiplicity of equilibria might emerge if the degree of love for children is high enough. We refer to this condition as the love for children hypothesis. Then, the fertility rate is determined by expectations on the future growth rate and the dynamics are not path-dependent. Our model is able to reproduce different fertility behaviours in a context of completed demographic transition independently from fundamentals, preferences, technologies and initial conditions.

Mots clés : fertility, love for children, expectations, endogenous growth, balanced growth path
Téléchargement Icône PDF wp_2017_-_nr_11.pdf (1.05 Mo)
Bayesian Inference for TIP curves: An Application to Child Poverty in Germany
Edwin Fourrier-Nicolai, Michel Lubrano

TIP curves are cumulative poverty gap curves used for representing the three different aspects of poverty: incidence, intensity and inequality. The paper provides Bayesian inference for TIP curves, linking their expression to a parametric representation of the income distribution using a mixture of lognormal densities. We treat specifically the question of zero-inflated income data and survey weights, which are two important issues in survey analysis. The advantage of the Bayesian approach is that it takes into account all the information contained in the sample and that it provides small sample confidence intervals and tests for TIP dominance. We apply our methodology to evaluate the evolution of child poverty in Germany after 2002, providing thus an update the portrait of child poverty in Germany given in Corak et al. 2008.

Mots clés : Bayesian inference, mixture model, survey weights, zero-inflated model, poverty, Inequality
Téléchargement Icône PDF wp_2017_-_nr_10.pdf (636.04 Ko)
The Value of Biodiversity as an Insurance Device
Emmanuelle Augeraud-Véron, Giorgio Fabbri, Katheline Schubert

This paper presents a benchmark endogenous growth model including biodiversity preservation dynamics. Producing food requires land, and increasing the share of total land devoted to farming mechanically reduces the share of land devoted to biodiversity conservation. However, the safeguarding of a greater number of species is associated to better ecosystem services – pollination, flood control, pest control, etc., which in turn ensure a lower volatility of agricultural productivity. The optimal conversion/preservation rule is explicitly characterized, as well as the value of biological diversity, in terms of the welfare gain of biodiversity conservation. The Epstein-Zin-Weil specification of the utility function allows us to disentangle the effects of risk aversion and aversion to fluctuations. A two-player game extension of the model highlights the effect of volatility externalities and the Paretian sub-optimality of the decentralized choice.

Mots clés : biodiversity, stochastic endogenous growth, insurance value, recursive preferences
Téléchargement Icône PDF wp_2017_-_nr_09.pdf (1011.81 Ko)
Condorcet Jury Theorem and Cognitive Hierarchies: Theory and Experiments
Yukio Koriyama, Ali Ihsan Ozkes

An information aggregation problem of the Condorcet Jury Theorem is considered with cognitive hierarchy models in which players would best respond holding heterogeneous beliefs on cognitive level of the other players. Whether the players are aware of the presence of opponents at their own cognitive level turns out to be a key factor for asymptotic properties of the deviation from the Nash behavior, and thence for asymptotic efficiency of the group decision. Our laboratory experiments provide evidence for the self-awareness condition. We obtain an analytical result showing that the difference from the standard cognitive hierarchy models arises when the best-reply functions are asymptotically expanding.

Mots clés : collective decision-making, bounded rationality, cognitive hierarchy, Condorcet Jury Theorem
Téléchargement Icône PDF wp_2017_-_nr_08.pdf (808.36 Ko)
Directed Search with Phantom Vacancies
James Albrecht, Bruno Decreuse, Susan Vroman

When vacancies are filled, the ads that were posted are generally not withdrawn, creating phantom vacancies. The existence of phantoms implies that older job listings are less likely to represent true vacancies than are younger ones. We assume that job seekers direct their search based on the listing age for otherwise identical listings and so equalize the probability of matching across listing age. Forming a match with a vacancy of age a creates a phantom of age a and thus creates a negative informational externality that affects all vacancies of age a or older. The magnitude of this externality decreases with a. The directed search behavior of job seekers leads them to over-apply to younger listings. We calibrate the model using US labor market data. The contribution of phantoms to overall frictions is large, but, conditional on the existence of phantoms, the social planner cannot improve much on the directed search allocation.

Mots clés : directed search, information persistence, vacancy age
Téléchargement Icône PDF wp_2017_-_nr_07.pdf (726.36 Ko)
Informal Risk-Sharing Cooperatives: The Effect of Learning and Other-Regarding Preferences
Victorien Barbet, Renaud Bourlès, Juliette Rouchier

We study the dynamics of risk-sharing cooperatives among heterogeneous agents. Based of their knowledge on their risk exposure and the performance of the cooperatives, agents choose whether or not to remain in the risk-sharing agreement. We highlight the key role of other-regarding preferences, both altruism and inequality aversion, in stabilizing less segregated (and smaller) cooperatives. Limited knowledge and learning of own risk exposure also contributes to reducing segregation. Our finding shed light on the mechanisms behind risk-sharing agreements between agents heterogeneous in their risk exposure.

Mots clés : Agent-based, cooperative, risk-sharing, Learning, altruism, other-regarding preferences
Téléchargement Icône PDF wp_2017_-_nr_06.pdf (941.94 Ko)
What Motivates French Pork: Political Career Concerns or Private Connections?
Brice Fabre, Marc Sangnier

This paper uses the detailed curricula of French ministers and the detailed accounts of French municipalities to identify governmental investment grants targeted to specific jurisdictions. We distinguish between municipalities in which a politician held office before being appointed as a government’s member and those in which current ministers lived during their childhood. We provide evidence that municipalities in which a minister held office during her career experience a 45% increase in the amount of discretionary investment subsidies they receive during the time the politician they are linked to serves as minister. In contrast, we do not find any evidence that subsidies flow to municipalities from which ministers originate. Additional evidence advocate in favour of a key role of network and knowledge accumulated through connections, illustrated by a persistence of the impact of intergovernmental ties.

Mots clés : pork-barrel economics, distributive politics, political connections, private connections
Téléchargement Icône PDF wp_2017_-_nr_05.pdf (983.89 Ko)
HJB Equations in Infinite Dimension and Optimal Control of Stochastic Evolution Equations via Generalized Fukushima Decomposition
Giorgio Fabbri, Francesco Russo

A stochastic optimal control problem driven by an abstract evolution equation in a separable Hilbert space is considered. Thanks to the identification of the mild solution of the state equation as v-weak Dirichlet process, the value processes is proved to be a real weak Dirichlet process. The uniqueness of the corresponding decomposition is used to prove a verification theorem. Through that technique several of the required assumptions are milder than those employed in previous contributions about non-regular solutions of Hamilton-Jacobi-Bellman equations.

Mots clés : weak Dirichlet processes in infinite dimensions, stochastic evolution equations, generalized Fukushima decomposition, stochastic optimal control in Hilbert spaces
Téléchargement Icône PDF wp_2017_-_nr_04.pdf (881.83 Ko)
Hammond’s Equity Principle and the Measurement of Ordinal Inequalities
Nicolas Gravel, Brice Magdalou, Patrick Moyes

What would be the analogue of the Lorenz quasi-ordering when the variable of interest is of a purely ordinal nature? We argue that it is possible to derive such a criterion by substituting for the Pigou-Dalton transfer used in the standard inequality literature what we refer to as a Hammond progressive transfer. According to this criterion, one distribution of utilities is considered to be less unequal than another if it is judged better by both the lexicographic extensions of the maximin and the minimax, henceforth referred to as the leximin and the antileximax, respectively. If one imposes in addition that an increase in someone’s utility makes the society better off, then one is left with the leximin, while the requirement that society welfare increases as the result of a decrease of one person’s utility gives the antileximax criterion. Incidently, the paper provides an alternative and simple characterisation of the leximin principle widely used in the social choice and welfare literature.

Mots clés : ordinal inequality, Hammond equity axiom, leximin, antileximax
Téléchargement Icône PDF wp_2017_-_nr_03.pdf (1.09 Mo)
Equality among Unequals
Mathieu Faure, Nicolas Gravel

This paper establishes an equivalence between three incomplete rankings of distributions of income among agents that are vertically differentiated with respect to some other non-income characteristic (health, household size, etc.). The first ranking is that associated with the possibility of going from one distribution to the other by a finite sequence of income transfers from richer and more highly ranked agents to poorer and less highly ranked ones. The second ranking is the unanimity of all comparisons of two distributions made by a utilitarian planer who assumes that agents convert income into utility by the same function exhibiting a marginal utility of income that is decreasing with respect to both income and the source of vertical differentiation. The third ranking is the Bourguignon (1989) ordered poverty gap dominance criterion.

Mots clés : equalization, transfers, heterogenous agents, poverty gap, Dominance, utilitarianism
Téléchargement Icône PDF wp_2017_-_nr_02.pdf (945.55 Ko)
Entrepreneurial Motivation and Business Performance: Evidence from a French Microfinance Institution
Renaud Bourlès, Anastasia Cozarenco

This article examines the link between entrepreneurial motivation and business performance in the French microfinance context. Using hand-collected data on business microcredits from a Microfinance Institution (MFI), we provide an indirect measure of entrepreneurial success through loan repayment performance. Controlling for the endogeneity of entrepreneurial motivation in a bivariate probit model, we find that "necessity entrepreneurs" are more likely to have difficulty repaying their microcredits than "opportunity entrepreneurs". However, type of motivation does not appear to make a difference to business survival. We build a stylized model to develop formal arguments supporting this outcome. We test for the robustness of our results using parametric duration models, and show that necessity entrepreneurs experience difficulties in loan repayment earlier than their opportunity counterparts, corroborating our initial findings.

Mots clés : opportunity and necessity entrepreneurs, business microcredit, loan repayment, business survival
Téléchargement Icône PDF wp_2017_-_nr_01.pdf (807.32 Ko)
Scrambled Questions Penalty in Multiple Choice Tests: New Evidence from French Undergraduate Students
Morgan Raux, Marc Sangnier, Tanguy Van Ypersele

This note evaluates the scrambled questions penalty using multiple choice tests taken by first-year undergraduate students who follow a microeconomics introductory course. We provide new evidence that students perform worse at scrambled questionnaires than at logically ordered ones. We improve on previous studies by explicitly modeling students individual skills thanks to a fixed effects regression. We further show that the scrambled questions penalty does not differ along gender but varies along the distribution of students’ skills and mostly affects students with lower-intermediate skills.

Mots clés : multiple choice tests, scrambled questions, student performance
Téléchargement Icône PDF wp_2016_-_nr_44.pdf (598.26 Ko)
Absolute Qualified Majoritarianism: How Does the Threshold Matter?
Ali Ihsan Ozkes, M. Remzi Sanver

We study absolute qualified majority rules in a setting with more than two alternatives. We show that given two qualified majority rules, if transitivity is desired for the societal outcome and if the thresholds of one of these rules are at least as high as the other's for any pair of alternatives, then at each preference profile the rule with higher thresholds results in a coarser social ranking. Hence all absolute qualified majority rules can be expressed as specific coarsenings of the simple majority rule.

Mots clés : simple majority rule, qualified majority rules
Téléchargement Icône PDF wp_2016_-_nr_43.pdf (580.56 Ko)
Education Politics, Schooling Choice and Public School Quality: The Impact of Income Polarisation
Majda Benzidia, Michel Lubrano, Paolo Melindi-Ghidi

Do communities with the same level of inequality but a different level of income polarisation perform differently in terms of public schooling? To answer this question, we extend the theoretical model of schooling choice and voting developed by de la Croix and Doepke (2009), introducing a more general income distribution characterised by a three-member mixture instead of a single uniform distribution. We show that not only income inequality, but also income polarisation, matters in explaining disparities in public education quality across communities. Public schooling is an important issue for the middle class, which is more inclined to pay higher taxes in return for better public schools. Contrastingly, poorer households may be less concerned about public education, while rich parents are more willing to opt-out of the public system, sending their children to private schools. Using micro-data covering 724 school districts of California and introducing a new measure of income polarisation, we find that school quality in low-income districts depends mainly on income polarisation, while in richer districts it depends mainly on income inequality.

Mots clés : schooling choice, income polarisation, probabilistic voting, education politics, Bayesian inference
Téléchargement Icône PDF wp_2016_-_nr_42.pdf (986.64 Ko)
Growth and Agglomeration in the Heterogeneous Space: A Generalized AK Approach
Raouf Boucekkine, Giorgio Fabbri, Salvatore Federico, Fausto Gozzi

We provide with an optimal growth spatio-temporal setting with capital accumulation and diffusion across space in order to study the link between economic growth triggered by capital spatio-temporal dynamics and agglomeration across space. We choose the simplest production function generating growth endogenously, the AK technology but in sharp contrast to the related literature which considers homogeneous space, we derive optimal location outcomes for any given space distributions for technology (through the productivity parameter A) and population. Beside the mathematical tour de force, we ultimately show that agglomeration may show up in our optimal growth with linear technology, its exact shape depending on the interaction of two main effects, a population dilution effect versus a technology space discrepancy effect.

Mots clés : growth, agglomeration, heterogeneous and continuous space, capital mobility, infinite dimensional optimal control problems
Téléchargement Icône PDF wp_2016_-_nr_41.pdf (3.75 Mo)
Is it Better to Work When We Are Older? An Empirical Comparison Between France and Great Britain
Kadija Charni

Classical literature uses the cross-sectional age-earnings profile to describe how the earnings evolve over the life cycle. Using a cohort analysis, I argue that this interpretation of age-earnings profile is not correct. I show that the cohort effects largely explain the decline observed at older ages. I illustrate this point by using a rotating panel data from France and a British longitudinal panel dataset for the period 1991 to 2007. I find no clear evidence that the earnings decline at older age, although the profiles are different between countries. Earnings for French workers rise linearly with age, with a further increase at the end of career, while it becomes flat for older workers in Great Britain. Overlapping cohorts provide an explanation of the observed decline of earnings for older workers in cross-sectional data. This suggests that cross-section age-earnings profile fails to represent the individual age-earnings profile.

Mots clés : age-earnings profile, older workers, cohort analysis
Téléchargement Icône PDF wp_2016_-_nr_40.pdf (2.28 Mo)
The Tree that Hides the Forest: A Note on Revealed Preference
João V. Ferreira

The common interpretation given to choice behavior that satisfies the traditional revealed preference axioms is that it results from the maximization of a single preference. We show that choice data alone does not enable one to rule out the possibility that the choice behavior that satisfies the revealed preference axioms is instead the result of the aggregation of a collection of distinct preferences. In particular, we show that any ordering is observationally equivalent to a majoritarian aggregation of a collection of distinct dichotomous orderings. We also show that any ordering is observationally equivalent to a Borda’s aggregation of a collection of distinct linear orderings.

Mots clés : revealed preference theory, rationalization, dichotomous preferences, aggregation rules, choice data
Téléchargement Icône PDF wp_2016_-_nr_39.pdf (553.99 Ko)
Israel's Open-Secret Trade
Lorenzo Rotunno, Pierre-Louis Vézina

This paper uncovers and quantifies Israel’s exports to countries that ban trade with Israel. Israel exported a total of $6.4 billion worth of merchandise to boycott countries between 1962 and 2012, and most of this trade is illicit, i.e. not recorded by the importers. We find that electronic exports to Malaysia account for the lion’s share of this trade but it also includes a wide array of products from footwear to fruit and vegetables. Our estimates suggest Israel’s exports to these countries would be 10 times larger without the boycott. On top of providing further evidence on the unintended consequences of unilateral trade bans, this paper provides a case study on the role of politics in international trade.

Mots clés : trade policy, Israel, illegal trade
Téléchargement Icône PDF wp_2016_-_nr_38.pdf (609.55 Ko)
Implementation of the Lindahl Correspondance via Simple Indirect Mechanisms
Hassan Benchekroun, Charles Figuières, Mabel Tidball

Our paper proposes an original angle to study the free-rider problem in the provision of public goods when the regulator has no information about agents' preferences. For a given outcome - specifically a Lindahl allocation - we ask what assumptions have to be imposed on simple mechanisms (in a precisely defined sense) that have the ability to Nash-implement it. Our answer lies in two main results: i) transfers necessarily belongs to a class of mechanisms that are linear in individual contributions to the public good, ii) there exists a subset of this class that fully implement Lindahl allocations. This subset encompasses, but does not reduce to, Walker (1981).

Mots clés : Lindahl allocations, mechanism design
Téléchargement Icône PDF wp_2016_-_nr_37.pdf (520.75 Ko)
Job Protection, Housing Market Regulation and the Youth
Antoine Bonleu, Bruno Decreuse, Tanguy Van Ypersele

Young Europeans experience high unemployment rates, job instability and late emancipation. Meanwhile they do not support reforms weakening protection on long-term contracts. In this paper, we suggest a possible rationale for such reform distaste. When the rental market is very regulated, landlords screen applicants with regard to their ability to pay the rent. Protecting regular jobs offers a second-best technology to sort workers, thereby increasing the rental market size. We provide a model where non-employed workers demand protected jobs despite unemployment and the share of short-term jobs increase, whereas rents, wages and the individual risk of dismissal are unaffected.

Mots clés : labor market dualism, rent default, screening
Téléchargement Icône PDF wp_2016_-_nr_36.pdf (1.11 Mo)
Political Connections and Insider Trading
Thomas Bourveau, Renaud Coulomb, Marc Sangnier

This paper investigates whether political connections affect individuals’ propensity to engage in illegal activities in financial markets. We use the 2007 French presidential election as marker of change in the value of political connections, in a difference-in-differences research design. We examine the behavior of directors of publicly listed companies who are connected to the future president through campaign donations or direct friendships, relative to that of other non-connected directors, before and after the election. We uncover indirect evidence that connected directors do more illegal insider trading after the election. More precisely, we find that purchases by connected directors trigger larger abnormal returns, and that connected directors are more likely not to comply with trading disclosure requirements and to trade closer to major corporate events.

Mots clés : political connections, white-collar crime, insider trading
Téléchargement Icône PDF wp_2016_-_nr_35.pdf (799.3 Ko)
Wage Inequality and Skill Supplies in a Globalised World
Lorenzo Rotunno, Adrian Wood

We investigate empirically, and explain theoretically, how the relative wages of skilled and unskilled workers vary with their relative supplies in open economies. Our results resolve a conflict between the predictions of standard trade theory and experience of how labour markets work. We show that relative wages respond to variation in relative skill supplies in countries that trade, as intuition and much other evidence suggest, but also that the wage response decreases as trade barriers fall and that, as trade theory suggests, is weak in very open economies.

Mots clés : Heckscher-Ohlin, trade and wages, wage inequality, labour markets
Téléchargement Icône PDF wp_2016_-_nr_34.pdf (968.45 Ko)
Production Networks
Kenan Huremovic, Fernando Vega-Redondo

In this paper, we model the economy as a production network of competitive firms that interact in a general-equilibrium setup. First, we find that, at the unique Walrasian equilibrium, the profit of each active firm is proportional to (a suitable generalization of) its Bonacich centrality. We also determine consumer welfare at equilibrium and characterize efficient networks. Then we proceed to conduct a broad range of comparative-static analyses. These include the effect on profits and welfare of: (a) distortions (e.g. tax/subsidies) imposed on the whole economy or specific firms; (b) structural changes such as the addition of links and the elimination of nodes; (c) productivity and preference changes. We discover that the induced effects are in general nonmonotone, depend on global network features, and impinge on each sector depending on the pattern of incentralities displayed by its input providers and output users. Furthermore, the inter-sector “linkages” underlying these effects can usually be decomposed – following the heuristic dichotomy proposed by Hirschman (1958) – into a forward (push) component and a backward (pull) one. Finally, we undertake some preliminary analysis of firm dynamics and illustrate that, when evaluating policies of support and shock mitigation from a dynamic viewpoint, the reliance on strict market-based criteria can be quite misleading in terms of social welfare.

Mots clés : production, networks, distortions, centrality, profit
Téléchargement Icône PDF wp_2016_-_nr_33.pdf (1.02 Mo)
Employment, Hours and the Welfare Effects of Intra-Firm Bargaining
Maarten Dossche, Vivien Lewis, Céline Poilly

Intra-firm bargaining between a multiple-worker firm and an individual employee leads to overhiring. Taking advantage of the decreasing returns to scale in employment, the firm can reduce the marginal product by hiring an additional worker, thereby reducing the bargaining wage paid to all existing employees. We show that this externality is amplified when firms can adjust hours per worker as well as employment. Hours are too low at the steady state. This misallocation of labor leads to sizeable welfare losses. Our finding is important for economies in which hours adjustment play an important role as it does in many Euro Area countries.

Mots clés : intra-firm bargaining, distortions, optimal monetary policy
Téléchargement Icône PDF wp_2016_-_nr_32.pdf (750.5 Ko)
La Visibilité comme Ressource dans la Gouvernance des Circuits Courts : Une Approche Institutionnaliste de l'Évaluation pour l'Observatoire des Circuits Courts de PACA
Noé Guiraud, Juliette Rouchier

Les circuits courts semblent à l'heure actuelle dans une phase d’institutionnalisation avérée, en particulier du fait du positionnement croissant des politiques publiques et des mises en réseau multi-scalaires et inter-sectorielles des acteurs. Les observatoires se multiplient : nous étudions celui mis en place par le Conseil Régional PACA. À travers une approche inspirée du cadre d'analyse d'Elinor Ostrom, nous identifions l'impact de cet observatoire sur la capacité des acteurs et participants à faire émerger des règles qui résolvent les dilemmes sociaux liés à la ressource clef du système : la visibilité, à la fois produite et consommée au sein de l'observatoire.

Mots clés : observatoire, Institutional Analysis and Developement, visibilité, circuits courts
Téléchargement Icône PDF wp_2016_-_nr_31.pdf (8.6 Mo)
Non-Existence of Optimal Programs in Continuous Time
Giorgio Fabbri, Silvia Faggian, Giuseppe Freni

We report an example of a two-dimensional undiscounted convex optimal growth model in continuous time in which, although there is a unique "golden rule", no overtaking optimal solutions exists in a full neighborhood of the steady state. The example proves, for optimal growth models, a conjecture advanced in 1976 by Brock and Haurie that the minimum dimension for non-existence of overtaking optimal programs in continuous time is 2.

Mots clés : optimal growth, overtaking, continuous time models
Téléchargement Icône PDF wp_2016_-_nr_30.pdf (654.66 Ko)
Inequality, Educational Choice and Public School Quality in Income Mixing Communities
Paolo Melindi-Ghidi

Why, in some urban communities, do rich and poor households cohabit while, in others, we observe sorting by income? To answer this question I develop a two-community general equilibrium framework of school quality, residential choice and tax decision with probabilistic voting. The model predicts that in highly unequal societies in which households segregate by schooling, low- and high-income households choose to live in the same community. When there is less inequality, we observe the typical sorting by income across communities. The theoretical model suggests that the effect of inequality on the quality of public schooling is ambiguous and depends on the relative endowments of housing in the two communities. When inequality increases, if housing in the community where rich and poor households cohabit is affordable, then an inflow of high-income middle class households towards this community emerges. As a consequence, inequality negatively impacts the quality of public schooling due to an ends-against-the-middle coalition that pushes tax rates down.

Mots clés : Inequality, probabilistic voting, segregation, income mixing equilibrium
Téléchargement Icône PDF wp_2016_-_nr_29.pdf (1.41 Mo)
A Bayesian Look at American Academic Wages: The Case of Michigan State University
Majda Benzidia, Michel Lubrano

The paper investigates academic wage formation inside Michigan State University and develops tools in order to detect the presence of possible superstars. We model wage distributions using a hybrid mixture formed by a lognormal distribution for regular wages and a Pareto distributions for higher wages, using a Bayesian approach, particularly well adapted for inference in hybrid mixtures. The presence of superstars is detected by studying the shape of the Pareto tail. Contrary to usual expectations, we did found some evidence of superstars, but only when recruiting Assistant Professors. When climbing up the wage ladder, superstars disappear. For full professors, we found a phenomenon of wage compression as if there were a higher bound, which is just the contrary of a superstar phenomenon. Moreover, a dynamic analysis shows that many recruited superstars did not fulfill the university expectations as either they were not promoted or left for lower ranked universities.

Mots clés : academic market, wage formation, superstars, tournaments theory, Bayesian inference, hybrid mixtures
Téléchargement Icône PDF wp_2016_-_nr_28.pdf (692.59 Ko)
Power-Law Distribution in the External Debt-to-Fiscal Revenue Ratios: Empirical Evidence and a Theoretical Model. Appendices
Gilles Dufrenot, Anne-Charlotte Paret-Onorato

This paper provides evidence that the external debt-to-fiscal revenue ratio in the emerging countries follows a power-law distribution. Such a distribution reflects the fact that external debt distress or debt crises correspond to extreme events that have been found to happen fairly often. We formally test the hypothesis of a power-law, going further than the usual visual inspection of the distribution of the variable of interest on a doubly logarithmic scale. We further show that such a distribution can be derived from a theoretical model in which uncertainty comes from tax evasion and corruption. Using the framework of an optimal stochastic growth model, we model the external debt-to-fiscal revenue ratio as a diffusion process for which the stochastic steady state distribution is derived using the properties of Itô diffusion processes.

Mots clés : power-law, stochastic growth, external debt, emerging countries
Téléchargement Icône PDF wp_2016_-_nr_27.pdf (644.37 Ko)
Violence against Rich Ethnic Minorities: A Theory of Instrumental Scapegoating
Yann Bramoullé, Pauline Morault

In many parts of the developing world, ethnic minorities play a central role in the economy. Examples include Chinese throughout Southeast Asia, Indians in East Africa and Lebanese in West Africa. These rich minorities are often subject to popular violence and extortion, and are treated ambiguously by local politicians. We analyze the impact of the presence of a rich ethnic minority on violence and on interactions between a rent-seeking local elite and a poor majority. We find that the local elite can always make use of the rich minority to maintain its hold on power. When the threat of violence is high, the government may change its economic policies strategically to sacrifice the minority to popular resentment. We investigate the conditions under which such instrumental scapegoating emerges, and the forms it takes. We then consider some social integration capturing, for instance, mixed marriages and shared education. Social integration reduces violence and yields qualitative changes in economic policies. Overall, our results help explain documented patterns of violence and segregation.

Mots clés : elites, popular violence, ethnic minority, scapegoat
Téléchargement Icône PDF wp_2016_-_nr_26.pdf (724.66 Ko)
"The Falling Sperm Counts Story": A Limit to Growth?
Johanna Etner, Natacha Raffin, Thomas Seegmuller

We develop an overlapping generations model of growth, in which agents differ through their ability to procreate. Based on epidemiological evidence, we assume that pollution is a cause of this health heterogeneity, affecting sperm quality. Nevertheless, agents with impaired fertility may incur health treatments in order to increase their chances of parenthood. In this set-up, we analyse the dynamic behaviour of the economy and characterise the situation reached in the long run. Then, we determine the optimal solution that prevails when a social planner maximises a Millian utilitarian criterion and propose a set of available economic instruments to decentralise the optimal solution. We underscore that to correct for both the externalities of pollution and the induced-health inefficiency, it is necessary to tax physical capital while it requires to overall subsidy mostly harmed agents within the economy. Hence, we argue that fighting against the sources of an altered reproductive health is more relevant than directly inciting agents to incur health treatments.

Mots clés : Pollution, growth, fertility, Health
Téléchargement Icône PDF wp_2016_-_nr_25.pdf (901.61 Ko)
Viable Nash Equilibria in the Problem of Common Pollution
Noël Bonneuil, Raouf Boucekkine

Two countries produce goods and are penalized by the common pollution they generate. Each country maximizes an inter-temporal utility criterion, taking account of the pollution stock to which both contribute. The dynamic is in continuous time with possible sudden switches to less polluting technologies. The set of Nash equilibria, for which solutions also remain in the set of constraints, is the intersection of two manifolds in a certain state space. At the Nash equilibrium, the choices of the two countries are interdependent: different productivity levels after switching lead the more productive country to hasten and the less productive to delay the switch. In the absence of cooperation, efforts by one country to pollute less motivate the other to pollute more, or encourage the country that will be cleaner or less productive country after switching to delay its transition.

Mots clés : Pollution, dynamic game, Nash, viability theory
Téléchargement Icône PDF wp_2016_-_nr_24.pdf (1011.88 Ko)
On the Number of Social Reforms in MENA Economies
Christophe Muller, Klarizze Anne Martin Puzon

By constructing a novel measure on the frequency of changes in social protection policies, we provide preliminary, yet new evidence on the determinants of social security reforms in Middle East and North Africa (MENA) countries. This fills a gap in literature where analyses of MENA social policies have been lacking due to limited data. Using panel data for seventeen countries from 1961 to 2015, we estimate RE Poisson regression models. Our results indicate that growth in national income and the frequency of social reform in MENA countries are related, first positively for low growth rates, then negatively for high growth rates. This finding is completed by the negative effects of oil production and of the population size on the number of social reforms. Among the avenues of interpretation we examined - investment model, social objectives pursued by the government, and socio-political equilibrium - this is the first one which seems to be better able to fit our results, accompanied by political disturbances.

Mots clés : social protection, welfare programs, Middle-East and North-Africa
Téléchargement Icône PDF wp_2016_-_nr_23.pdf (494.93 Ko)
Heterogeneous Entrepreneurs, Government Quality and Optimal Industrial Policy
Michele Di Maio, Giorgio Fabbri, Vincenzo Lombardo

This paper presents a theoretical model exploring the effects of industrial policy (IP) when entrepreneurs are characterized by different ability levels and sectors are heterogeneous as for their profitability and social externalities generated. The optimal structure of IP in terms of monetary transfers is shown to crucially depend on the distribution of entrepreneurs abilities. Moreover, we find that IP increases aggregate welfare under very general conditions, also in the presence of Government failures. In an extension of the model, we consider the case in which the Government can use also the provision of business training to entrepreneurs as an additional instrument of IP. Based on these results, policy implication for industrial policy in developing countries are discussed.

Mots clés : industrial policy, entrepreneurs, heterogeneous abilities, training
Téléchargement Icône PDF wp_2016_-_nr_22.pdf (1.23 Mo)
Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US
Bruno Decreuse, Linas Tarasonis

In the US, black workers spend more time in unemployment, lose their jobs more rapidly, and earn lower wages than white workers. This paper quantifies the contributions of statistical discrimination, as portrayed by negative stereotyping and screening discrimination, to such employment and wage dis- parities. We develop an equilibrium search model of statistical discrimination with learning based on Moscarini (2005) and estimate it by indirect inference. We show that statistical discrimination alone cannot simultaneously explain the observed differences in residual wages and monthly job loss probabilities between black and white workers. However, a model with negative stereotyping, larger unemployment valuation and faster learning about the quality of matches for black workers can account for these facts. One implication of our findings is that black workers have larger returns to tenure.

Mots clés : Learning, screening discrimination, job search, indirect inference
Téléchargement Icône PDF wp_2016_-_nr_21.pdf (773.75 Ko)
The Changing Nature of Gender Selection into Employment: Europe over the Great Recession
Juan J. Dolado, Cecilia Garcia-Peñalosa, Linas Tarasonis

The aim of this paper is to evaluate the role played by selectivity issues induced by nonemployment in explaining gender wage gap patterns in the EU since the onset of the Great Recession. We show that male selection into the labour market, traditionally disregarded, has increased. This is particularly the case in peripheral European countries, where dramatic drops in male unskilled jobs have taken place during the crisis. As regards female selection, traditionally positive, we document mixed findings. While it has declined in some countries, as a result of increasing female LFP due to an added-worker effect, it has become even more positive in other countries. This is due to adverse labour demand shifts in industries which are intensive in temporary work where women are over-represented. These adverse shifts may have more than offset the rise in unskilled female labour supply.

Mots clés : sample selection, Gender Wage Gap
Téléchargement Icône PDF wp_2016_-_nr_20.pdf (701.61 Ko)
Is the Distribution of Cardiovascular Risks Really Improving ? A Robust Analysis for France.
Fatiha Bennia, Nicolas Gravel

In this paper, we appraise the recent evolution of the distribution of individuals’ risk of cardiovascular diseases (CVD) in France among both men and women using new normative criteria. An individual risk of CVD is described by a probability of getting such a disease. Building on the framework of Gravel and Tarroux (2015), we assume that individuals, who differ by their income, have Von Neuman-Morgenstern (VNM) preferences over such risks. We appeal to Harsanyi’s aggregation theorem to provide empirically implementable dominance criteria that coincide with the unanimity, taken over a large class of such individual preferences, of anonymous and Pareto-inclusive VNM social rankings of distributions of individuals’ risk of CVD. The implementable criteria that we obtain are Sequential headcount poverty dominance and Sequential headcount affluence dominance. We apply these criteria to the distribution of cardiovascular risks among French men and women on the 2006-2010 period. Probabilities of CVD are assigned to individuals on the basis of a logit model estimated on both the men and the women samples for each of the two years. Our main empirical result is that men and women were differently affected by evolution in the distribution of CVD risks between 2006 and 2010. Specifically, the distribution improved for women but did not improve for men.

Mots clés : Risk, Dominance, ex ante social welfare, state-dependent expected utility, poverty, Health, cardiovascular diseases
Téléchargement Icône PDF wp_2016_-_nr_19.pdf (905.98 Ko)
The Value of Network Information: Assortative Mixing Makes the Difference
Mohamed Belhaj, Frédéric Deroïan

We study the value of network information in a context of monopoly pricing in the presence of local network externalities. We compare a setting in which all players, i.e. the monopoly and consumers, know the network structure and consumers' private preferences with a setting in which players only know the joint distribution of preferences, in-degrees and out-degrees. We give conditions under which network information increases profit or/and consumer surplus. The analysis reveals the crucial role played by four properties: degree assortativity, homophily (in preferences), preference-degree assortativity and preference-Bonacich centrality assortativity.

Mots clés : monopoly, network effects, price discrimination, Bonacich Centrality, network information, degree assortativity, homophily, preference-degree assortativity, preference-Bonacich centrality assortativity
Téléchargement Icône PDF wp_2016_-_nr_18.pdf (870.16 Ko)
Liquidity Trap and Stability of Taylor Rules
Antoine Le Riche, Francesco Magris, Antoine Parent

We study a productive economy with fractional cash-in-advance constraint on consumption expenditures. Government issues safe bonds and levies taxes to finance public expenditures, while the Central Bank follows a feedback Taylor rules by pegging the nominal interest rate. We show that when the nominal interest rate is bound to be non-negative, under active policy rules a Liquidity Trap steady state does emerge besides the Leeper (1991) equilibrium. The stability of the two steady states depends, in turn, upon the amplitude of the liquidity constraint. When the share of consumption to be paid cash is set lower than one half, the Liquidity Trap equilibrium is indeterminate. The stability of the Leeper equilibrium too depends dramatically upon the amplitude of the liquidity constraint: for low amplitudes of the latter, the Leeper equilibrium, can be indeed stable. Policy and Taylor rules are thus theoretically rehabilitated since their targets, by contrast with a vast literature, may be reached for infinitely many agents’ beliefs. We also show that a relaxation of the liquidity constraint is Pareto-improving and that the Liquidity Trap equilibrium Pareto-dominates the Leeper one, in view of the zero cost of money.

Mots clés : cash-in-advance, liquidity trap, Monetary policy, Multiple equilibria
Téléchargement Icône PDF wp_2016_-_nr_17.pdf (515.98 Ko)
Infinite Dimensional Weak Dirichlet Processes and Convolution Type Processes
Giorgio Fabbri, Francesco Russo

The present paper continues the study of infinite dimensional calculus via regularization, started by C. Di Girolami and the second named author, introducing the notion of weak Dirichlet process in this context. Such a process X, taking values in a Banach space H, is the sum of a local martingale and a suitable orthogonal process. The concept of weak Dirichlet process fits the notion of convolution type processes, a class including mild solutions for stochastic evolution equations on infinite dimensional Hilbert spaces and in particular of several classes of stochastic partial differential equations (SPDEs). In particular the mentioned decomposition appears to be a substitute of an Itô’s type formula applied to to f(t, X(t)) where f : [0, T ] × H → R is a C0,1 function and X a convolution type processes.

Mots clés : covariation and quadratic variation, calculus via regularization, infinite dimensional analysis, tensor analysis, Dirichlet processes, generalized Fukushima decomposition, convolution type processes, stochastic partial differential equations
Téléchargement Icône PDF wp_2016_-_nr_16.pdf (1.04 Mo)
Inefficient Lock-in with Sophisticated and Myopic Players
Aidas Masiliunas

Path-dependence in coordination games may lead to lock-in on inefficient outcomes, such as adoption of inferior technologies (Arthur, 1989) or inefficient economic institutions (North, 1990). We aim to find conditions under which lock-in is overcome by developing a solution concept that makes ex-ante predictions about the adaptation process following lock-in. We assume that some players are myopic, forming beliefs according to fictitious play, while others are sophisticated, anticipating the learning process of the myopic players. We propose a solution concept based on a Nash equilibrium of the strategies chosen by sophisticated players. Our model predicts that no players would switch from the efficient to the inefficient action, but deviations in the other direction are possible. Three types of equilibria may exist: in the first type lock-in is sustained, while in the other two types lock-in is overcome. We determine the existence conditions for each of these equilibria and show that the equilibria in which lock-in is overcome are more likely and the transition is faster when sophisticated players have a longer planning horizon, or when the history of inefficient coordination is shorter.

Mots clés : game theory, Learning, lock-in, farsightedness, coordination
Téléchargement Icône PDF wp_2016_-_nr_15.pdf (839.82 Ko)
Conditional Expected Utility Criteria for Decision Making under Ignorance or Objective Ambiguity
Nicolas Gravel, Thierry Marchant, Arunava Sen

We provide an axiomatic characterization of a family of criteria for ranking completely uncertain and/or ambiguous decisions. A completely uncertain decision is described by the set of all its consequences (assumed to be finite). An ambiguous decision is described as a finite set of possible probability distributions over a finite set of prices. Every criterion in the family compares sets on the basis of their conditional expected utility, for some probability function taking strictly positive values and some utility function both having the universe of alternatives as their domain.

Mots clés : Ignorance, Ambiguity, conditional probabilities, expected utility, Ranking Sets, axioms
Téléchargement Icône PDF wp_2016_-_nr_14.pdf (790.54 Ko)
Household Fuel Use in Developing Countries: Review of Theory and Evidence
Christophe Muller, Huijie Yan

Because of recent concerns about the negative externalities of traditional fuel use on the environment and health, the issue of the household fuel transition in developing countries, from dirty fuels towards clean fuels, has received growing research attention. This paper provides an up-to-date survey of the economic literature on household fuel use in these countries. First, we present the conceptual and theoretical frameworks. Then, we discuss the empirical results that show how a wide range of factors drive the household fuel transition. Finally, we suggest priorities for policy initiatives and highlight areas of future research.

Mots clés : household decisions, fuel transition, energy consumption
Téléchargement Icône PDF wp_2016_-_nr_13.pdf (707.1 Ko)
Democracy for Polarized Committees: The Tale of Blotto's Lieutenants
Alessandra Casella, Jean-François Laslier, Antonin Macé

In a polarized committee, majority voting disenfranchises the minority. By allowing voters to spend freely a fixed budget of votes over multiple issues, Storable Votes restores some minority power. We study a model of Storable Votes that highlights the hide-and-seek nature of the strategic game. With communication, the game replicates a classic Colonel Blotto game with asymmetric forces. We call the game without communication a decentralized Blotto game. We characterize theoretical results for this case and test both versions of the game in the laboratory. We find that, despite subjects deviating from equilibrium strategies, the minority wins as frequently as theory predicts. Because subjects understand the logic of the game – minority voters must concentrate votes unpredictably – the exact choices are of secondary importance. The result is an endorsement of the robustness of the voting rule.

Mots clés : Storable Votes, polarization, Colonel Blotto, tyranny of the majority, committees
Téléchargement Icône PDF wp_2016_-_nr_12.pdf (1.36 Mo)
Currency Diversification of Banks: A Spontaneous Buffer Against Financial Losses
Justine Pedrono

The Basel Committee on Banking Supervision has introduced in December 2010 a Basel III framework for more resilient banks and banking system. We posit in this paper that, in addition to the current regulatory instruments currently under the review of authorities, the currency diversification of banks’ balance sheets can be a source of banking stability considering both assets and liabilities simultaneously. Our conclusions are based on a simplified definition of a globalized bank’s balance sheet. As banks’ balance sheets are expressed in domestic currency, our model implies an exchange rate conversion of each foreign component. Risks are introduced with stochastic processes in assets, liabilities and exchange rate. In accordance with the Basel III framework and the Basel III Leverage ratio, the bank’s leverage ratio is limited. Our model provides detailed information in each risk faced by global banks including foreign exchange risk. Although our conclusions depend on the variance covariance matrix of assets, liabilities and foreign exchange rate, our main results confirm the positive impact of currency diversification on banking stability considering the current banking system.

Mots clés : Basel III, bank, financial integration, financial stability, currency diversification, financial volatility
Téléchargement Icône PDF wp_2016_-_nr_11.pdf (3.2 Mo)
Banks' Capital Structure and US Dollar Diversification of Assets: Does Reduction in Systemic Risk Offset Agency Costs?
Justine Pedrono, Aurélien Violon

Multinational Corporation (MNCs) should gain advantage from international diversification by lowering their systemic risk and reducing their bankruptcy cost. Hence, internationalization should induce larger leverage. However, it may imply additional agency costs due to wider informal gaps and higher cost of investigation induced by the multiplication of markets. To examine how currency diversification of asset may change the bank’s systemic risk, we provide a theoretical framework based on relative CAPM by introducing explicitly the exchange rate risk. Due to exchange rate dynamics asset diversification may reduce systemic risk even through the two assets are perfectly correlated. Using innovative micro data on credit institutions located in France between 1999 and 2014 we expand our analysis to the net effect of US dollar diversification of assets. Contrary to past studies, this measure of financial internationalization take into consideration the exchange rate risk. Although our results highlight the two opposite effects of diversification, they posit the importance of international agency costs in the capital structure decision.

Mots clés : bank, capital structure, leverage, currency, diversification, internationalization
Téléchargement Icône PDF wp_2016_-_nr_10.pdf (642.49 Ko)
Overcoming Coordination Failure in a Critical Mass Game: Strategic Motives and Action Disclosure
Aidas Masiliunas

We study whether coordination failure is more often overcome if players can easily disclose their actions. In an experiment subjects first choose their action and then choose whether to disclose this action to other group members, and disclosure costs are varied between treatments. We find that no group overcomes coordination failure when action disclosure costs are high, but half of the groups do so when the costs are low. Simulations with a belief learning model can predict which groups will overcome coordination failure, but only if it is assumed that players are either farsighted, risk-seeking or pro-social. To distinguish between these explanations we collected additional data on individual preferences and the degree of farsightedness. We find that in the low cost treatment players classified as more farsighted more often deviate from an inefficient convention and disclose this action, while the effect of risk and social preferences is not significant.

Mots clés : lock-in, coordination failure, Learning, strategic teaching, Information, collective action, critical mass
Téléchargement Icône PDF wp_2016_-_nr_09.pdf (1.61 Mo)
Variable Markups in the Long-Run: A Generalization of Preferences in Growth Models
Raouf Boucekkine, Hélène Latzer, Mathieu Parenti

This paper introduces variable mark-ups in a horizontal-differentiation growth model by considering a larger class of preferences that nests the classic “CES” specification usually present in the workhorse love-for-variety models. Our first result is to obtain a generalized characterization of the Euler condition for this broader class of utility functions: in our model, the Euler rule features a supplementary term aiming at compensating the consumer for variations in the preference for variety along the consumption level. We are then also able to demonstrate that in our generalized framework, the economy’s balanced growth path displays both endogenous markups and a strictly positive growth rate of the number of available varieties (being the engine of growth). Finally, we show that under endogenous markups, the economy’s growth rate and firms’ market power can display a negative correlation, as opposed to the standard result obtained in the CES framework.

Mots clés : endogenous growth, variable markups, indirectly additive preferences
Téléchargement Icône PDF wp_2016_-_nr_08.pdf (827.18 Ko)
Sunspot Fluctuations in Two-Sector Models with Variable Income Effects
Frédéric Dufourt, Kazuo Nishimura, Carine Nourry, Alain Venditti

We analyze a version of the Benhabib and Farmer [3] two-sector model with sector-specific externalities in which we consider a class of utility functions inspired from the one considered in Jaimovich and Rebelo [14] which is flexible enough to encompass varying degrees of income effect. First, we show that local indeterminacy and sunspot fluctuations occur in 2-sector models under plausible configurations regarding all structural parameters – in particular regarding the intensity of income effects. Second, we prove that there even exist some configurations for which local indeterminacy arises under any degree of income effect. More precisely, for any given size of income effect, we show that there is a non-empty range of values for the Frisch elasticity of labor and the elasticity of intertemporal substitution in consumption such that indeterminacy occurs. This contrasts with the results obtained in one-sector models in both Nishimura et al. [19], in which it is shown that indeterminacy cannot occur under either GHH and KPR preferences, and in Jaimovich [13] in which local indeterminacy only arises for intermediary income effects.

Mots clés : Indeterminacy, sunspots, income and substitution effects, sector-specific externalities, infinite-horizon two-sector model
Téléchargement Icône PDF wp_2016_-_nr_07.pdf (1.3 Mo)
Growth and Public Debt: What Are the Relevant Tradeoffs?
Kazuo Nishimura, Carine Nourry, Thomas Seegmuller, Alain Venditti

The interplay between growth and public debt is addressed considering a Barro-type [1] endogenous growth model where public spending is financed through taxes on income and public debt. Debt is assumed to be a fixed proportion of GDP which is used as a policy parameter by the government. We first show that when debt is a large enough proportion of GDP, two distinct BGPs may co-exist, one being indeterminate. Therefore, local and global indeterminacy may arise and self-fulfilling expectations appear as a crucial ingredient to understand the impact of debt on growth and on macroeconomic fluctuations. We then exhibit two types of important trade-off associated with self-fulfilling expectations. First, we show that the lowest BGP is always decreasing with respect to the ratio of debt/GDP while the highest one is increasing. As a result, depending on the BGP selected by agents’ expectations, the relationship between debt and growth is not always negative. Second, we show that the highest BGP, which provides the highest welfare, is always locally indeterminate while the lowest is always locally determinate. Therefore, depending on the expectations of agents, when debt is increasing, large fluctuations associated to self-fulfilling believes may occur and be associated at the same time with welfare losses if there is a coordination on the low steady-state. Finally, a simple calibration exercise allows to provide an understanding of the recent experiences of many OECD countries.

Mots clés : endogenous growth, public spending, public debt, sunspot fluctuations
Téléchargement Icône PDF wp_2016_-_nr_06.pdf (663.26 Ko)
The Wild West is Wild: The Homicide Resource Curse
Mathieu Couttenier, Pauline Grosjean, Marc Sangnier

We document interpersonal violence as a dimension of the resource curse. We rely on a historical natural experiment in the United States, where mineral discoveries occurred sometimes before, sometimes after formal institutions were established in the county of discovery. In places where mineral discoveries occurred before formal institutions were established, there were more homicides per capita historically and the effect has persisted to this day. Today, the share of homicides and assaults explained by the historical circumstances of mineral discoveries is comparable to the effect of education or income. Our results imply that short-term and quasi-exogenous variations in the institutional environment can lead to large and persistent differences in cultural and institutional development.

Mots clés : homicide, resource curse, mineral discoveries, US
Téléchargement Icône PDF wp_2016_-_nr_05.pdf (752.59 Ko)
Protectionism and the Education-Fertility Trade-off in Late 19th Century France
Vincent Bignon, Cecilia Garcia-Peñalosa

The assumption that education and fertility are endogenous decisions that react to economic circumstances is a cornerstone of the unified growth theory that explains the transition to modern economic growth, yet evidence that such a mechanism was in operation before the 20th century is limited. This paper provides evidence of how protectionism reversed the education and fertility trends that were well under way in late 19th-century France. The Méline tariff, a tariff on cereals introduced in 1892, led to a substantial increase in agricultural wages, thus reducing the relative return to education. Since the importance of cereal production varied across regions, we use these differences to estimate the impact of the tariff. Our findings indicate that the tariff reduced education and increased fertility. The magnitude of these effects was substantial, and in regions with large shares of employment in cereal production the tariff offset the time trend in education for up to 15 years. Our results thus indicate that even in the 19th century, policies that changed the economic prospects of their offspring affected parents’ decisions about the quantity and quality of children.

Mots clés : Education, fertility, unified growth theory, protectionism, France
Téléchargement Icône PDF wp_2016_-_nr_04.pdf (588.56 Ko)
L’Observatoire Régional des Circuits Courts : Un Dispositif de Coordination pour une Gouvernance Alimentaire Régionale
Noé Guiraud, Juliette Rouchier

La région Provence-Alpes-Côte-d'Azur (PACA) a décidé d'initier, suite à des rencontres qui ont débuté en 2010, un observatoire régional des circuits courts. Son but affiché est de coordonner les acteurs et de mutualiser les moyens des différents circuits courts déjà existants dans la région dans la perspective du développement de nouvelles initiatives. Cet article présente une évaluation préliminaire de l'« Observatoire régional des circuits courts » décrit comme un dispositif institutionnel, en considérant son objectif affiché d’initier un processus de gouvernance. L'analyse de la participation à l'observatoire et de ce qui a été produit dans son cadre (références, données, modes d'organisation) a été mené de 2010 à 2014. Cette étude identifie ainsi l’activation d'une proximité organisée et permet de définir l'observatoire comme un dispositif de coordination des acteurs opérationnel. Le processus de gouvernance initié demeure néanmoins fragile.

Mots clés : observatoire, proximité organisée, dispositif de coordination, circuits courts
Téléchargement Icône PDF wp_2016_-_nr_03.pdf (4.53 Mo)
The French Pension Reforms and their Impact on Unemployed Older Workers
Kadija Charni

This paper analyzes labour market position of unemployed older individuals after the implementation of two major pension reforms in France. We use the French Force Labour Survey for the period 2003-2011 to assess the effects of the 2003 and the 2010 pension reforms on the exit rate from unemployment of individuals aged over 54. Using a difference-in-differences approach, we look at the effects of these reforms on the exit from unemployment to employment, and into inactivity. We find that the 2003 pension reform reduces significantly the exit to employment, while there is no significant impact of the pension reform on the exit to inactivity. For the 2010 reform, we show that the reform leads to an increase of the probability to go back to work. At the same time, the transition out of labour force through inactivity exit also rises. Unemployment and other social schemes are used as a bridge to retire early.

Mots clés : pension reforms, unemployed older workers, difference-in-differences estimation
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Multidimensional Poverty in Seychelles
Christophe Muller, Asha Kannan, Roland Alcindor

The typically used multidimensional poverty indicators in the literature do not appear to be relevant for middle-income countries like Seychelles and can yield unrealistic estimates of poverty. In particular, the deprivations typically considered in such measures little occurs in middle-income economies. In this paper, we propose a new approach to measuring multidimensional poverty in Seychelles based on a mix of objective and subjective information about households living conditions, and on how these households view their spending priorities. The empirical results based on our new approach show that a small but non-negligible minority of Seychellois can be considered as multidimensionally poor, mostly as not being able to satisfy their shelter and food basic needs. Finally, the Seychelles social aid programs run by the Agency for Social Protection is poorly targeted whether evaluated in terms of multidimensional poverty or in terms of one-dimensional monetary poverty.

Mots clés : poverty, multidimensional wellbeing, destitution, Seychelles
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Contracting on Networks
Mohamed Belhaj, Frédéric Deroïan

A principal offers bilateral contracts to a set of agents organized in a network conveying synergies, in a context where agents' efforts are observable and where the principal's objective increases with the sum of efforts. We characterize optimal contracts as a function of agents' positions on the network. The analysis shows that contract enforceability is key to understand optimality. We also examine linear contracting and we analyze the situation where the principal is constrained to contract with a single agent on the network. Last, we extend this setting to network entry.

Mots clés : optimal contracting, multi-agency, Network, Strategic Complementarity, enforceability
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