Long-run substitutability between more and less educated workers: Evidence from U.S. States 1950-1990

We estimate the aggregate long-run elasticity of substitution between more and less educatedworkers (the slope of the demand curve for more relative to less educated workers) at theUS state level. Our data come from the (five)1950-1990 decennial censuses. Our empiricalapproach allows for state and time fixed effects and relies on time and state dependentchild labor and compulsory school attendance laws as instruments for (endogenous) changesin the relative supply of more educated workers. We find the aggregate long-run elasticity ofsubstitution between more and less educated workers to be around 1.5.

Persecution perpetuated: The medieval origins of anti-semitic violence in Nazi Germany

How persistent are cultural traits? This paper uses data on anti-Semitism in Germany and finds continuity at the local level over more than half a millennium. When the Black Death hit Europe in 1348-50, killing between one third and one half of the population, its cause was unknown. Many contemporaries blamed the Jews. Cities all over Germany witnessed mass killings of their Jewish population. At the same time, numerous Jewish communities were spared these horrors. We use plague pogroms as an indicator for medieval anti-Semitism. Pogroms during the Black Death are a strong and robust predictor of violence against Jews in the 1920s, and of votes for the Nazi Party. In addition, cities that saw medieval anti-Semitic violence also had higher deportation rates for Jews after 1933, were more likely to see synagogues damaged or destroyed in the Night of Broken Glass in 1938, and their inhabitants wrote more anti-Jewish letters to the editor of the Nazi newspaper Der Stürmer.

Oil price shocks, income and democracy

We examine the effect of oil price fluctuations ondemocratic institutions over the 1960-2007 period. We also exploitthe very persistent response of income to oil price fluctuations tostudy the effect of persistent (oil price-driven) income shocks ondemocracy. Our results indicate that countries with greater net oilexports over GDP see improvements in democratic institutionsfollowing upturns in international oil prices. We estimate that a 1percentage point increase in per capita GDP growth due to apositive oil price shock increases the Polity democracy score byaround 0.2 percentage points on impact and by around 2 percentagepoints in the long run. The effect on the probability of a democratictransition is around 0.4 percentage points.

Cashing by the hour: Why large law firms prefer hourly fees over contingent fees

Large law firms seem to prefer hourly fees over contingent fees. Thispaper provides a moral hazard explanation for this pattern of behavior.Contingent legal fees align the interests of the attorney with those ofthe client, but not necessarily with those of the partnership. We showthat the choice of hourly fees is a solution to an agency problem withmultiple principals, where the interests of one principal (law firm)collide with the interests of the other principal (client).

Geometric and long run aspects of Granger causality

This paper extends multivariate Granger causality to take into account the subspacesalong which Granger causality occurs as well as long run Granger causality. The propertiesof these new notions of Granger causality, along with the requisite restrictions, are derivedand extensively studied for a wide variety of time series processes including linear invertibleprocess and VARMA. Using the proposed extensions, the paper demonstrates that: (i) meanreversion in L2 is an instance of long run Granger non-causality, (ii) cointegration is a specialcase of long run Granger non-causality along a subspace, (iii) controllability is a special caseof Granger causality, and finally (iv) linear rational expectations entail (possibly testable)Granger causality restriction along subspaces.

Structural changes in the US economy: is there a role for monetary policy?

This paper investigates the contribution of monetary policy to the changes in outputgrowth and inflation dynamics in the US. We identify a policy shock and a policy rule ina time-varying coefficients VAR using robust sign restrictions. The transmission of policyshocks has been relatively stable. The variance of the policy shock has decreased over time,but policy shocks account for a small fraction of the level and of the variations in inflationand output growth volatility and persistence. We find little evidence of a significant increasein the long run response of the interest rate to inflation. A more aggressive inflation policyin the 1970s would have produced large output growth costs.

Inequality over the business cycle: Estimating income risk using micro-data on consumption

We use CEX repeated cross-section data on consumption and income, to evaluate the nature of increased income inequality in the 1980s and 90s. We decompose unexpected changes in family income into transitory and permanent, and idiosyncratic and aggregate components, and estimate the contribution of each component to total inequality. The model we use is a linearized incomplete markets model, enriched to incorporate risk-sharing while maintaining tractability. Our estimates suggest that taking risk sharing into account is important for the model fit; that the increase in inequality in the 1980s was mainly permanent; and that inequality is driven almost entirely by idiosyncratic income risk. In addition we find no evidence for cyclical behavior of consumption risk, casting doubt on Constantinides and Duffie s (1995) explanation for the equity premium puzzle.

Voting with preferences over margins of victory

This paper analyzes a two-alternative voting model with the distinctive feature that voters have preferences over margins of victory. We study voting contests with a finite as well as an infinite number of voters, and with and without mandatory voting. The main result of the paper is the existence and characterization of a unique equilibrium outcome in all those situations. At equilibrium, voters who prefer a larger support for one of the alternatives vote for such alternative.The model also provides a formal argument for the conditional sincerity voting condition in Alesina and Rosenthal (1995) and the benefit of voting function in Llavador (2006). Finally, we offer new insights on explaining why some citizens may vote strategically for an alternative different from the one declared as the most preferred.

Is altruism important for understanding the long-run effects of social security?

This paper quantifies the effects of social security on capital accumulation and wealth distribution in a life cycle framework with altruistic individuals. The main findings of this paper are that the current U.S. social security system has a significant impact on capital accumulation and wealth distribution. I find that social security crowds out 8\% of the capital stock of an economy without social security. This effect is driven by the distortions of labor supply due to the taxation of labor income rather than by the intergenerational redistribution of income imposed by the social security system. In contrast to previous analysis of social security, I found that social security does not affect the savings rate of the economy. Another interesting finding is that even though the current U.S. social security system is progressive in its benefits, it may lead to a more disperse distribution of wealth.

Skill-biased technological change and the business cycle

Over the past two decades, technological progress in the United States hasbeen biased towards skilled labor. What does this imply for business cycles?We construct a quarterly skill premium from the CPS and use it to identifyskill-biased technology shocks in a VAR with long-run restrictions. Hours fallin response to skill-biased technology shocks, indicating that at least part of thetechnology-induced fall in total hours is due to a compositional shift in labordemand. Skill-biased technology shocks have no effect on the relative price ofinvestment, suggesting that capital and skill are not complementary in aggregateproduction.

Long-run selection and the work ethic

That individuals contribute in social dilemma interactions even when contributing is costly is a well-established observation in the experimental literature. Since a contributor is always strictly worse off than a non-contributor the question is raised if an intrinsic motivation to contribute can survive in an evolutionary setting. Using recent results on deterministic approximation of stochastic evolutionary dynamics we give conditions for equilibria with a positive number of contributors to be selected in the long run.

Quantifying quantitative literacy: Age heaping and the history of human capital

Age data frequently display excess frequencies at round or attractive ages, such as even numbers and multiples of five. This phenomenon of age heaping has been viewed as a problem in previous research, especially in demography and epidemiology. We see it as an opportunity and propose its use as a measure of human capital that can yield comparable estimates across a wide range of historical contexts. A simulation study yields methodological guidelines for measuring and interpreting differences in ageheaping, while analysis of contemporary and historical datasets demonstrates the existence of a robust correlation between age heaping and literacy at both the individual and aggregate level. To illustrate the method, we generate estimates of human capital in Europe over the very long run, which support the hypothesis of a major increase in human capital preceding the industrial revolution.

The long-run and intergenerational education impacts of intergovernmental transfers

This paper provides regression discontinuity evidence on long-run and intergenerational education impacts of a temporary increase in federal transfers to local governments in Brazil. Revenues and expenditures of the communities benefiting from extra transfers temporarily increased by about 20% during the 4 year period from 1982 to the end of 1985. Schooling and literacy gains for directly exposed cohorts established in previous work that used the 1991 census are attenuated but persist in the 2000 and 2010 censuses. Children and adolescents of the next generation --born after the extra funding had disappeared-- show gains of about 0.08 standard deviation across the entire score distribution of two nationwide exams at the end of the 2000s. While we find no evidence of persistent improvements in school resources, we document discontinuities in education levels, literacy rates and incomes of test takers' parents that are consistent with intergenerational human capital spillovers.

Estudi i implantació de programari lliure

RESUM Actualment la majoria de nosaltres sabem de l’existència de molts programes lliures, però hem tenir clar que lliure no vol dir sempre programa gratuït. Tot i que a vegades sí que pot ser-ho, es té en compte molt més que això: és una manera de pensar i entendre el programari i al llarg dels anys ha generat tot un moviment social. Considerem que un programa lliure és aquell que garanteix als usuaris la llibertat per executar, copiar, distribuir, estudiar, canviar i millorar el codi programat, com molt bé defineixen les seves llibertats bàsiques. El programari lliure el podem trobar funcionant en ordinadors personals, escoles, empreses diverses, administracions, etc. ja que la majoria de programes que utilitzen actualment, com hem vist, tenen el seu equivalent en lliure. El fet de si és viable que una empresa es passi a programari lliure, depèn ben bé del seu entorn, ja que en funció d’aquest li serà més o menys fàcil la migració. La finalitat d’aquest projecte és, primer de tot, fer un ampli estudi del món del programari lliure i del seu moviment social. S’ha fet una recerca de diferents aspectes dins del programari lliure per conèixer-lo a fons i després s’ha proposat una possible implantació d’aquest en un usuari domèstic i en una administració pública, tenint en compte tots els aspectes vistos en l’estudi, valorant si totes les idees que defensa i els beneficis que aporta són aplicables i viables en qualsevol persona i àmbit i el perquè. Com a conclusió principal en destacaria que tot i que el programa lliure disposa d’una ideologia que agrada i té uns programes tècnicament perfectes (sense que això sigui el seu objectiu principal), penso que encara hi ha molt camí per recórrer quant a una migració en grans entorns, ja que per exemple en un ajuntament una migració total és encara difícil (tot i que no impossible perquè n’hi ha que s’hi han migrat). A l’apartat d’annexos s’hi inclou un glossari amb un seguit de terminologies amb paraules que no tothom pot saber i s’ha cregut oportú incloure-les en aquest apartat. La primera vegada que apareix alguna d’aquestes paraules la podem trobar senyalitzada amb un *.