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Current Program

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Minority Salience and Criminal Justice Decisions

with Kyra Hanemaaijer (Erasmus University Rotterdam) and Nadine Ketel (Vrije Universiteit Amsterdam)

The criminal justice system is multi-staged and features several key agents whose decisions can significantly alter the course of individuals passing through it. These decisions could be influenced by the minority status of the suspects, affecting already under-privileged groups in the population. We use very rich data on all stages in the Dutch criminal justice system (victims, crimes and decisions of all agents involved in trial) and document significant disparities by migration background in judicial decisions across all stages. These disparities cannot be fully explained by controlling for a rich set of (legally) relevant case characteristics. We next exploit a sudden shock in salience of Moroccan migration background, to causally estimate discrimination against suspects with a Moroccan migration background. We find that after the shock, sentencing outcomes for this group significantly worsened, increasing the length of prison sentence by 79 percent.

Air Pollution and Cognition in Children: Evidence from National Tests in Denmark

with Christina M. Andersen, Timo Hener, Marianne Simonsen, Lars Skipper, Jørgen Brandt, Jesper H. Christensen, Lise M. Frohn, and Camilla Geels

This paper studies the effects of daily variation in outdoor air pollution on student test scores. We utilize Danish register data of the full population of elementary and lower secondary school students, who take mandatory national tests in math and reading. We match the home address of students to a 1x1 km grid of air pollution to obtain test date and lifetime pollution measures. We find that an increase in fine particles (PM2.5), corresponding to the change from a very clean to an average polluted day, reduces student performance in math by 1.8% and in reading by 0.9% of a standard deviation. The impacts are largest in the upper part of the test score distribution in math, suggesting that higher mental processes are most susceptible to air pollution. We do not find evidence of heterogeneity by previous health conditions, socio- economics status, or life-time pollution exposure, despite using abundant amounts of register data information.

Strategic capacity investment with overlapping ownership

with Richard R. Ruble (Ecole de Management de Lyon)

Overlapping ownership has contrasting effects on capacity investments if duopoly firms invest sequentially. The follower’s reaction is less aggressive, but the leader acts more aggressively, either by choosing larger capacities or by shifting from accommodation to deterrence. If it shifts the leader’s strategy, internalization can increase consumer surplus and welfare. To endogenize leader and follower roles, we allow demand to fluctuate over time and show that, in a preemption equilibrium with internalization, leader entry occurs earlier but at a smaller scale.

”Raising the happiness of all”: is it even possible?

with Alberto Prati (UCL and Oxford University)

We revisit the Easterlin paradox about the flatness of the happiness trend over the long run, in spite of sustained economic development. With a bounded scale that explicitly refers to “the best possible life for you” and "the worst possible life for you", is it even possible to observe a rising trend in self-declared life satisfaction? We consider the possibility of rescaling, i.e. that the interpretation of the scale changes with the context in which respondents are placed. We propose a simple model of rescaling and reconstruct an index of latent happiness on the basis of retrospective reports included in unexploited archival data from the USA that we retrieved. We show that national well-being has substantially increased from the 1950s to the mid-2000s, on par with GDP, health and education. Using Gallup data from 120 countries, we also show that the happiness index generally rises with economic growth, and that it contracted during the Covid pandemic.

Networks, Sectoral Shocks, and Targeted Taxes

with Anastasiia Antonova

Sectoral shocks cause aggregate fluctuations as they transmit through production networks, distorting relative prices within and across sectors if prices are sticky. Monetary policy is then unable to implement the efficient allocation. Against this background, we study the optimal tax response to sectoral shocks in a New-Keynesian network model. It features twice as many tax instruments as there are sectors, is budget-neutral, and not confined to the sector where the shock originates. We find a simple tax rule can approximate the optimal policy arbitrarily well and illustrate the quantitative relevance of our results for a calibrated version of the model.

Multi-establishment Firm Structure, Subsidies and Spillovers

with Elodie Andrieu (Paris School of Economics)

How do firms diffuse resources, and does this result in spillovers far from headquarters?  We show subsidies induce French firms to hire new workers, mainly in new establishments and often in new commuting zones, with little evidence of reallocation.  The most hiring responsive occupations are techies and support workers in line with R+D targeting. We estimate a subsidy employment spillover elasticity of .11 at the commuting zone level within industry, but weak effects in the commuting zone.

Retirement regulations and childbearing age in Greece

The paper examines the changes over time in the childbearing age in Greece and investigates the impact of changes in retirement regulations on this age through a difference-in-differences and a regression discontinuity approach.