Long-run Patterns of Labour Market Polarisation: Evidence from German Micro Data

The past four decades have witnessed dramatic changes in the structure of employment. In particular, the rapid increase in computational power has led to large-scale reductions in employment in jobs that can be described as intensive in routine tasks. These jobs have been shown to be concentrated in middle skill occupations. A large literature on labour market polarisation characterises and measures these processes at an aggregate level. How- ever to date there is little information regarding the individual worker adjustment processes related to routine- biased technological change. Using an administrative panel data set for Germany, we follow workers over an ex- tended period of time and provide evidence of both the short-term adjustment process and medium-run effects of routine task intensive job loss at an individual level. We initially demonstrate a marked, and steady, shift in em- ployment away from routine, middle-skill, occupations. In subsequent analysis, we demonstrate how exposure to jobs with higher routine task content is associated with a reduced likelihood of being in employment in both the short term (after one year) and medium term (five years). This employment penalty to routineness of work has increased over the past four decades. More generally, we demonstrate that routine task work is associated with reduced job stability and more likelihood of experiencing periods of unemployment. However, these negative ef- fects of routine work appear to be concentrated in increased employment to employment, and employment to unemployment transitions rather than longer periods of unemployment

Functional and structural brain differences associated with mirror-touch synaesthesia

Observing touch is known to activate regions of the somatosensory cortex but the interpretation of this finding is controversial (e.g. does it reflect the simulated action of touching or the simulated reception of touch?). For most people, observing touch is not linked to reported experiences of feeling touch but in some people it is (mirror-touch synaesthetes). We conducted an fMRI study in which participants (mirror-touch synaesthetes, controls) watched movies of stimuli (face, dummy, object) being touched or approached. In addition we examined whether mirror touch synaesthesia is associated with local changes of grey and white matter volume in the brain using VBM (voxel-based morphometry). Both synaesthetes and controls activated the somatosensory system (primary and secondary somatosensory cortices, SI and SII) when viewing touch, and the same regions were activated (by a separate localiser) when feeling touch — i.e. there is a mirror system for touch. However, when comparing the two groups, we found evidence that SII seems to play a particular important role in mirror-touch synaesthesia: in synaesthetes, but not in controls, posterior SII was active for watching touch to a face (in addition to SI and posterior temporal lobe); activity in SII correlated with subjective intensity measures of mirror-touch synaesthesia (taken outside the scanner), and we observed an increase in grey matter volume within the SII of the synaesthetes' brains. In addition, the synaesthetes showed hypo-activity when watching touch to a dummy in posterior SII. We conclude that the secondary somatosensory cortex has a key role in this form of synaesthesia

Education, Information, and Improved Health: Evidence from Breast Cancer Screening

While it is well known that education strongly predicts health, less is known as to why. One reason might be that education improves health-care decision making. In this paper we attempt to disentangle improved decision making from other effects of education, and to quantify how large an impact it has on both a patient’s demand for health services, and that demand’s sensitivity to objective risk factors. We do this by estimating a simple structural model of information acquisition and health decisions for data on women’s self-reported breast-cancer risk and screening behavior. This allows us to separately identify differences in the ability to process health information and differences in overall demand for health. Our results suggest that the observed education gradient in screening stems from a higher willingness-to-pay for health among the educated, but that the main reason why the educated respond more to risk factors in their screening decision is because they are much better informed about the risk factors they face.education, allocative efficiency, health

The Sovereign-Debt Listing Puzzle

The claim that stock exchanges perform certification and monitoring roles in securities offerings is pervasive in the legal and financial literatures. This article tests the validity of this “bonding hypothesis” in the sovereign-bond market—one of the oldest and largest securities markets in the world. Using data on sovereign-bond listings for the entire post-World War II period, we provide the first comprehensive report on sovereigns’ historical listing patterns. We then test whether a sovereign bond issue’s listing jurisdiction affects its yield at issuance, as the bonding hypothesis would predict. We find little evidence of bonding in today’s sovereign-debt market. Instead, we hypothesize that sovereign-bond listings are primarily a form of regulatory arbitrage. Because certain investors may be restricted to investing abroad only in listed securities, sovereigns are incentivized to list their bonds, but to seek out the least restrictive exchange that qualifies

How group identification distorts beliefs

This paper investigates how group identification distorts people’s beliefs about the ability of their peers in social groups. We find that experimentally manipulated identification with a randomly composed group leads to overconfident beliefs about fellow group members’ performance on an intelligence test. This result cannot be explained by individual overconfidence, i.e., participants overconfident in their own skill believing that their group performed better because of them, as this was ruled out by experimental design. Moreover, we find that participants with stronger group identification put more weight on positive signals about their group when updating their beliefs. These in-group biases in beliefs can have important economic consequences when group membership is used to make inference about an individual’s characteristics as, for instance, in hiring decisions

Do Lending Relationships Matter? Evidence from Bank Survey Data in Germany

Strong lending relationships between banks and small and medium-sized enterprises (SMEs) play a key role in the bank-based financial system of Germany. So far, they have been mainly described by the notion of a housebank and transactional features of long-term bank-customer relationships. In contrast, the present paper also considers interactional variables which try to measure social relations between loan officer and firm manager. Using bank survey data, the relationship and interaction variables prove to affect loan prices, collateral requirements and credit availability.

Status in the Workplace: Evidence from M&A

Using mergers and acquisitions as a natural experiment, this paper analyzes how changes in workers?status in the workplace affect their turnover decisions. The evidence suggests that workers have different preferences for status depending on reference group. When compared with co-workers in the same occupation, workers positively value their status. However, when compared with workers in other occupations in the same firm, workers negatively value their status. Workers seem to give up absolute wage increase for higher status within occupation, which suggests that preference for status stems from status?social value, not from its instrumental value for future income.

Evaluating innovation policy: a structural treatment effect model of R&D subsidies

This paper studies the welfare effects of R&D subsidies. We develop a model of continuous optimal treatment with outcome heterogeneity where the treatment outcome depends on applicant investment. The model takes into account heterogeneous application costs and identifies the treatment effect on the public agency running the programme. Under the assumption of a welfare-maximizing agency, we identify general equilibrium treatment effects. Applyiing our model to R&D project-level data we find substantial treatment effect heterogeneity. Agency-specific treatment effects are smaller than private treatment effects. We find that the rate of return on subsidies for the agency is 30–50%.applications; effort; investment; R&D; selection; subsidies; treatment programme; treatment effects; welfare

SME Loan Pricing and Lending Relationships in Germany: A New Look

Strong lending relationships between banks and small and medium-sized enterprises (SMEs) play a key role in the bank-based financial system of Germany. So far, they have been mainly described by the notion of an housebank and transactional features of long-term bank-customer relationships. The present paper takes a new look by considering also interactional variables which try to measure social relations between loan officer and firm manager. We find that these variables do affect loan pricing, but that their influence varies according to firm age and housebank status.Banking, Relationship Lending, Small Business Finance