EUROPEAN PH.D. IN SOCIO-ECONOMIC AND STATISTICAL STUDIES

Seminars

The European PhD in Socio-Economic and Statistical Studies organizes three thematic seminar cycles -- in Political Economy, Economic History and Behavioral Economics -- and one seminar cycle on various topics.

In addition, two cycles of seminars are held by faculty members of our scientific board and PhD candidates. In the first one, faculty members present their most recent work to illustrate their research activities to PhD students; in the second one, PhD candidates present their job market paper.

In addition, Eur SESS PhD candidates participate in seminars jointly organized by the Department of Economics and Law and the Department of Social Sciences and Economics at Sapienza University.

Listed below are some seminars delivered (until March 2023) and planned (April to July 2023) during the current academic year:

2023

Stefano Filauro (Bocconi University) - Incorporating Housing Costs, and their variation at local level, into EU Measures of Poverty: Advantages, Disadvantages, Assumptions, and Implications
July 18, 2023, 14.00-15.00
The largest expenditure for most households is housing costs, including rents, mortages, and utility bills. The median housing cost in the EU in 2020 amounted to around 13% of the median income, although this ratio can peak at over 30% in some countries (e.g. Greece). Moreover, housing costs vary extensively across regions, especially in countries with secular territorial disparities. Within the same country, the median housing cost in the highest-cost region can be as high as 200% larger compared to the lowest-cost region (in the case of Spain, the Madrid area as opposed to Extremadura). Housing costs also vary meaningfully across regions in Germany, Italy and France. Despite this, housing costs are not usually taken into account into official poverty measurements. However, recent analyses have shown to what extent relative poverty changes when housing costs are somehow factored in a concept of income, whether imputing rents for outright owners or substracting housing costs for all households (Raitano 2022, Tormahleto and Sauli 2017). The cross-country evidence points to a different country ranking in terms of relative poverty as homeownership in widely diffused in Southern-European countries, and this practice improves the overall poverty rates of these countries vis-à-vis Northern EU countries. In this study we take a different approach: we look at the traditional poverty lines, such as the 60% of national median income, and we test their effectiveness against revised poverty thresholds that take into account the within-country variation in housing costs. We discuss advantages, disadvantages, assumptions, and implications of incorporating local housing costs into EU poverty thresholds. We then evaluate whether such adjustments ‘improve’ poverty measures by reducing their mismatch against material deprivation and subjective poverty rates. We use EU-SILC data for all countries reporting housing costs, income dimensions and material deprivation at regional level (NUTS1 or NUTS2). As some housing variables, such as housing quality and type of housing, have been recorded for a sufficient number of countries only since 2010, our analysis focuses on the last decade.

Michela Chessa (Université Côte d'Azur) - An experimental Nash program
May 19 2023, 12:30 - 13:30, Aula Marrama
Bridging the gap between the strategic and cooperative approaches is recognized as a fundamental issue of game theory. Attempted resolutions of this issue, well known as the Nash program (Nash, 1953), have provided many different strategic bargaining mechanisms that sustain the Shapley value at equilibrium. Such mechanisms fit and unify the two approaches, allowing the players who face an allocation problem to bargain in a restricted way, and to converge to a stable solution without the need for an intermediary. We experimentally implement different well-known mechanisms inducing the Shapley value as an ex-ante equilibrium outcome of a noncooperative bargaining procedure. In particular, we focus on the comparison of the demand-based Winter’s demand commitment bargaining mechanism and the offer-based Hart and Mas-Colell procedure. Our results suggest that the offer-based Hart and Mas-Colell mechanism better induces players to cooperate and to agree on an efficient outcome, whereas the demand-based Winter mechanism better implements allocations that reflect players’ effective power, provided that the grand coalition is formed.

Patrick Llerena (Université de Strasbourg) - The Creativ’lab: why and first experiments
May 5, 2023, 12.00-13-00, Aula Marrama
We will present the newly implemented experimental lab conceived to observe collective processes ( decision processes, interactions, creative …). We will show results of first experiments in creativity economics. We will try to disentangle the role of diversity surface and deep-level variables on creative performance at the individual and group levels.

Angela Sutan (Burgundy School of Business) - The man who saw the (end of) the world: is AR a credible tool to enhance pro-environmental behavior?
April 13, 2023, 14.00-15.00, Aula Marrama
We run an experiment on recyclying and incineration decisions based on a public good game design, in which administrators in change of the incinerator can give feedback to participants on their provisional choices. To do so, they have access to AR or static technologies that allow them to visualize group decisions.

Silvia Coretti (Sapienza University of Rome) - Hardening subnational budget constraints via administrative subordination: The Italian experience of recovery plans in regional health services

Since 2007, Italian regions running large deficits underwent recovery plans (Piani di Rientro) imposed by the central government. The goal was twofold: regions were asked (i) to restore a balanced budget and (ii) to continue supply the set of services defined by the constitution. We investigate whether recovery plans have reached their objectives. Our evidence suggests that recovery plans have proved to be an effective mechanism to eliminate subnational governments deficits. We also do not find any significant effects on health care utilization and on citizens' health. Overall, spending efficiency has likely improved.

Vito Peragine (University of Bari) - International migration and income inequality

In this paper we explore the links between international migration and income inequality. After presenting a simple model which considers the role of income distribution in individual decisions to migrate, we estimate a set of models on the determinants of yearly bilateral migration from a very large pool of countries in the period 1960–2019. The empirical results confirm that inequality—in both origin and destination countries—significantly shapes individual choices about where, and whether, to migrate. We find that the effect of inequality at both ends of migration corridors is heterogeneous across countries at different levels of development, most likely due to differences in migration barriers and in the patterns of migrants’ self-selection. In the second part of the study, we explore the direct effect of international migration on global inequality, by assessing how the current level of migration in the world has likely affected income inequality between and within nations. By adopting a counterfactual methodology, we find that migration flows lead to lower between-country inequality and higher within-country inequality, compared with a scenario with no migration. The overall impact is a negligible reduction in global inequality. The impact of migration on inequality, although small, tends to increase over time.

Vincenzo Prete (University of Palermo) - Preschool duration, family background and child outcomes: Evidence from the expansion of Ecole Maternelle in France

This paper analyzes the long-term effects of preschool education in France. We focus on the effect of preschool duration on educational attainment and labor market earnings in adulthood. Building on a old tradition of free, universal pre-primary education, France implemented in the late 1960s a large scale expansion of facilities, leading to a massive increase in the supply of preschool. We rely on exogenous variations across counties and cohorts in preschool supply, induced by this policy, to assess the effect of preschool duration on long-term outcomes, using a Two-Samples Two-Stages Least Squares estimation. While the preschool expansion significantly raised attendance and duration, we do not find, on average, significant long-term effects on education and earnings. We also investigate heterogeneous effects by parental socio-economic status and find that children from advantaged family background significantly gained in terms of both education and earnings, compared to lower background children.

Ana Suarez Alvarez (University of Oviedo) - Going “beyond the GDP” in the digital economy: Exploring the effect of digital inequalities on well-being

In recent years, as Internet use has become more widespread, the use of “beyond-GDP” measures have become increasingly important, bringing well-being analysis into a more prominent position within scientific research topics. At the same time, our society is going through a deep process of digital transformation, which is characterized by important digital inequalities, mainly rooted in traditional socio-economic divides between and within population groups. The aim of this paper is to explore the effects of these digital inequalities and individuals’ perceived levels of well-being. Five dimensions of well-being are studied: happiness, life satisfaction, social meetings, personal connections and social life participation.

Nikolaos Georgantzís (Burgundy School of Business) - Risk aversion and the value of risky assets. The role of knowledge

We report results on an experiment with incentive-compatible valuations of old wines aging under suboptimal conditions. We confirm that subjects' risk aversion has a negative impact on "risky wine" valuations. However, accounting for individual self-reported and objective (WSET level) knowledge shows that the link between risk aversion and risky wine valuations is only present in the absence of knowledge. Conclusions about the value of knowledge for buyers and sellers have interesting entrepreneurial implications.

Paolo Di Caro (MEF) - Size, heterogeneity and distributional effects of self-employment income tax evasion in Italy

We measure tax evasion in Italy by estimating a food expenditure equation that disentangles households with prevalent income from self-employment, which is self-declared, from those with mostly third-party reported income. By using a novel dataset that links the 2013 Italian Household Budget Survey with individual tax records over a period of 7 years, we reduce measurement error by a great extent. We also depart from the usual constant share of underreporting, showing that underreporting heterogeneity among self-employed is significant, and is larger for singles and for college-educated households. We show that self-employed workers in Italy exhibit a similar attitude to tax evasion as those in other developed countries. Therefore, we point to the structure of the economy for an explanation of why aggregate tax evasion in Italy is larger than in other developed countries. The estimated heterogeneity of underreporting behavior of households combined with the use of a tax-benefit microsimulation model have allowed us to shed light on the distributional effects of income tax evasion, showing that almost 73% of the missing revenue is attributable to tax-payers at the top of the income distribution.

2022

Giorgia Menta (LISER, Luxembourg) - Depression and Early-Retirement Age: Causal Evidence from a Gene - Environment Setup

Differences in genetic endowments can make individuals more or less reactive to changes in their environment (such as policy interventions and living conditions). We here estimate the role of the individual genetic propensity to be depressed as a moderating factor of the association between the exposure to a pension reform in the UK and health outcomes. Using data from the Understanding Society longitudinal study in the UK and exogenous variations in early retirement age from the 1995 to 2011 Pensions Acts, we first show that women who are exposed to an increase in pension age are more likely to stay in employment and less likely to retire. We then show that the reform has a detrimental effect on their mental and physical health. While the labour-market effect is orthogonal to the genetic predisposition for depression, we find that the adverse health effects of the reform are only found for women with a higher genetic propensity to be depressed. We additionally provide evidence that the health effects of the reform are driven by women whose labour market status is affected by the reform. Our results suggest that labour market reforms can have unexpected effects on individuals’ health that enhance genetic health inequalities.

Alberto Bacchiega (European Commission) - Competition Enforcement - a European perspective

The seminar shed light on how to make markets deliver more benefits to consumers, businesses and the society as a whole, by protecting competition on the market and fostering a competition culture in the EU and worldwide. To this aim Competition policy is an indispensable element of a functioning internal market ensuring that all companies compete equally and fairly on their merits.

Domenico Moramarco (Université Libre de Bruxelles) - Inter-temporal Inequality of Opportunity

We propose an axiomatic approach to characterize normative criteria for the evaluation of lifetime income distributions according to the opportunity egalitarian perspective (Roemer, 1998). In a setting in which both individual incomes and predetermined circumstances are variable over time, we adopt a norm-based approach to the measurement of inequality, and propose two different benchmark distributions, referring respectively to the ex ante and the ex post versions of equality of opportunity. We first aggregate over time, thereby characterizing measures of inter-temporal individual inequality of opportunity, and then aggregate the individual measures into a societal measure. Our individual measure results to be a weighted average of individuals’ opportunity gap experienced in each period. Our aggregate measure is an average of a concave transformation of the individual inter-temporal opportunity gap and can be interpreted as an inter-temporal inequality of opportunity index. We apply our framework to evaluate the Korean distribution of income from an inter-temporal and opportunity egalitarian perspective.

Stepan Mikula (Masaryk University) - Air Pollution and Migration: Exploiting a Natural Experiment from the Czech Republic

This paper examines the causal effects of air pollution on migration by exploiting a natural experiment in which desulfurization technologies were rapidly implemented in coal-burning power plants in the Czech Republic without per se affecting economic activity. The results based on a difference-in-differences estimator imply that improvements in air quality reduced emigration from previously heavily polluted municipalities by 24%. We find that the effect of air pollution on emigration tended to be larger in municipalities with weaker social capital and fewer man-made amenities.

Gianluca Grimalda (Kiel Institute for the World Economy) - Social image concerns promote cooperation more than altruistic punishment

Human cooperation is enigmatic, as organisms are expected, by evolutionary and economic theory, to act principally in their own interests. However, cooperation requires individuals to sacrifice resources for each other’s benefit. We conducted a series of novel experiments in a foraging society where social institutions make the study of social image and punishment particularly salient. Participants played simple cooperation games where they could punish non-cooperators, promote a positive social image or do so in combination with one another. We show that although all these mechanisms raise cooperation above baseline levels, only when social image alone is at stake do average economic gains rise significantly above baseline. Punishment, either alone or combined with social image building, yields lower gains. Individuals’ desire to establish a positive social image thus emerges as a more decisive factor than punishment in promoting human cooperation.

Emma Tominey (University of York) - Mental Health around Pregnancy and Child Development from Early Childhood to Adolescence

We identify the causal effect of mothers' mental health during early - and soon after pregnancy on a range of child psychological, socio-emotional and cognitive outcomes measured between ages 4-16. Results suggest a negative effect on children's psychological and socio-emotional skills in early childhood, but these effects fade-out between the ages of 11-13. We find no significant effect on cognitive outcomes. The fade-out of effects may be partly explained by compensatory behaviour of parents, as we find that mental health during or soon after pregnancy raises breastfeeding and improves measures of interaction between mother and child.

Gianluca Mazzarella (JRC) - Two Generations of Siblings and Cousins Correlations Across the Ancestors’ Wealth Distribution

We reconstruct the genealogical tree of all individuals ever appearing in Dutch municipalities records starting in 1995. Using microdata from tax authorities, we compute a measure of their permanent earnings and assess the degree to which pairs of cousins and siblings correlate across two cohorts, those born around the 50s and those born around the 80s. We find that cousins and siblings correlations in earnings vary substantially across ancestors' wealth quantiles. In particular, those having ancestors in the bottom decile, show a much higher correlation in earnings. Further, the intergenerational transmission parameter, estimated through a latent factor model without assuming a steady state process, is much stronger for those families whose ancestors left no inheritance. Even in the relatively equal and wealthy Netherlands, misfortunes are transmitted across generations.

Mattia Nardotto (KU Leuven) - Internet and Politics: Evidence from U.K. Local Elections and Local Government Policies

We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the U.K. Our analysis shows that the internet has displaced other media with greater news content (i.e. radio and newspapers), thereby decreasing voter turnout, most notably among less-educated and younger individuals. In turn, we find suggestive evidence that local government expenditures and taxes are lower in areas with greater broadband diffusion, particularly expenditures targeted at less-educated voters. Our findings are consistent with the idea that voters’ information plays a key role in determining electoral participation, government policies, and government size.

François Velde (FED Chicago) - A Model of Economic Activity in San Francisco During the 1918 Influenza Epidemic

I jointly use daily data on deaths and public transportation ridership in San Francisco in 1918–19 to estimate a model in which agents choose their level of economic activity based on perceived infection risk, modeled as a function of current and lagged infections or deaths. Agents’ choices in turn affect the dynamics of the epidemic by reducing contacts in an otherwise standard SEIR model. Non-pharmaceutical interventions restrict agents’ activity either as a tax or a bound. I estimate the parameters by maximum likelihood and use the best-fitting model to compute counterfactuals. San Francisco’s intervention reduced deaths by a few percent only, and it was away from the Pareto frontier: an earlier and milder intervention would have done better. The behavioral feedback narrows the room for intervention compared to a model with unresponsive agents, and ill-timed interventions can worsen outcomes. Masks also had an effect on transmission rates.

Nuno Palma (University of Manchester and CEPR) - The real effects of monetary expansions: evidence from a large-scale historical experiment

The discovery of massive deposits of precious metals in America during the early modern period caused an exogenous monetary injection to Europe’s money supply. I use this episode to identify the causal effects of money. Using a panel of six European countries, I find that monetary expansions had a material impact on real economic activity. The magnitudes are substantial and persist for a long time: an exogenous 10% increase in the production of precious metals in America measured relative to the European stock leads to a front-loaded response of output and, to a lesser extent, inflation. There was a positive hump-shaped response of real GDP, with a cumulative increase up to 0.9% six to nine years later. The evidence suggests that this is because prices responded to monetary injections with considerable lags.