Abstract
We collect worker month-level panel data from two companies in Beijing for a two-year period before and after the opening of a nearby subway station, which significantly improved public transportation commutes for some workers. We find a significant difference-in-differences increase (12.6% of the standard deviation) in bonus pay, which is strongly correlated to worker-level performance measures, for affected workers relative to unaffected coworkers. We find no evidence that the improved performance is a result of affected workers spending extra time at the workplace. We find suggestive evidence for a relative decline in turnover, consistent with a gain in utility for affected workers. Same-Sex Marriage Recognition and Taxes: New Evidence about the Impact of Household Taxation
Abstract
The U.S. income tax code encourages marriage for some and discourages marriage for others, but same-sex couples were only recently exposed to these incentives. We estimate marriage responses by exploiting variation in the recognition of same-sex marriages for tax purposes versus earlier papers leveraging smaller changes. Using the American Community Survey, which reports cohabitation and marriage, we estimate a significant though very small marriage elasticity, with further analysis suggesting a higher (though still small) elasticity for low-earning households and in response to federal taxes specifically. Our estimates imply that the 2018 tax reform will increase marriage among high-earning cohabiting couples. Jam-Barrel Politics
Abstract
This paper studies the executive-legislative exchange of centrally allocated benefits (jam) for legislative support in Colombia using data from road building projects, legislative roll-call votes, and a leaked database which uncovered the assignment of road contracts to individual legislators. We draw hypotheses from a model in which an executive spreads jam to sway legislators. We document that assigned projects had excess costs, legislators targeted were more likely to be swing voters in congress, and legislators increased their support for the executive after their contracts were signed. The results are driven by legislators representing remote regions and constituencies with weaker political institutions. Credible School Value-Added with Undersubscribed School Lotteries
Abstract
We introduce two empirical strategies harnessing the randomness in school assignment mechanisms to measure school value-added. The first estimator controls for the probability of school assignment, treating take-up as ignorable. We test this assumption using randomness in assignments. The second approach uses assignments as instrumental variables (IVs) for low-dimensional models of value-added and forms empirical Bayes posteriors from these IV estimates. Both strategies solve the underidentification challenge arising from school undersubscription. Models controlling for assignment risk and lagged achievement in Denver and New York City yield reliable value-added estimates. Estimates from models with lower-quality achievement controls are improved by IV. Do Academically Struggling Students Benefit from Continued Student Loan Access? Evidence from University and Beyond
Abstract
We estimate the effects of student loan access on educational attainment and labor market returns in New Zealand. We exploit the introduction of a national policy mandating a 50% pass rate for student loan renewals using a regression discontinuity design. Retaining loan access increases reenrollment for students around the threshold, and a majority eventually graduate with a bachelor's degree within seven years. We find that retaining student loan access leads to large labor market returns for struggling students. The additional debt from further borrowing is small relative to the earnings returns and declines quickly due to faster repayment. Spending Response to a Predictable Increase in Mortgage Repayments: Evidence from Expiring Interest-Only Loans
Abstract
We study how homeowners' consumption responds to a negative and anticipated disposable income shock: the beginning of the amortization period on interest-only mortgages. We identify spending behavior through an event study approach, by matching loan-level data that covers the universe of Danish mortgages to detailed administrative registries on borrowers. In response to an average increase in installments worth 9% of income, consumption drops by 3% of income, when amortization begins. The reduction in expenditure is persistent. Borrowers who fail to smooth consumption are highly leveraged and likely to be denied a new interest-only loan, upon expiration. Labelling in financial reporting: An examination of “other comprehensive income” and non‐professional investors’ judgements
Abstract
Other comprehensive income (OCI) is often confusing for financial statement users and the International Accounting Standards Board has proposed new labelling to improve its presentation. Using an experimental method, we find that OCI labelling influences non-professional investors' evaluation and judgements on financial performance. Non-professional investors place greater weight on OCI information presented with explicit labels when assessing both the current and future performance of a company. Our results indicate that improving the presentation of OCI information enhances their perceived relevance in investors' decision-making. The results have practical implications for standard setters and financial statement users.
The influence of organisational learning capability on the organisational use of SMA practices: The mediating role of employee creativity and empowerment
Abstract
This study extends the strategic management accounting (SMA) and organisational learning literature by examining the role of organisational learning capability in facilitating the organisational use of SMA practices. Further, we consider the role of two employee behavioural factors – employee empowerment of SMA practices and employee creativity – in mediating this relationship. Data was collected from 332 accountants in Australian business organisations using an online survey questionnaire, with structural equation modelling applied to analyse the data. The findings highlight the direct and indirect (through employee empowerment of SMA practices and employee creativity) influence that organisational learning capability has on the organisational use of SMA practices.
The Politics of State-level COVID-19 Responses in India: Evidence from the First Wave in 2020
The Indian Economic Journal, Volume 72, Issue 2, Page 243-258, March 2024.
We examine if policy interventions to curb the spread of COVID-19 were driven by political factors. We focus on the period between 1 June and 31 August 2020 when lockdowns and testing were the only responses available with governments and policymakers across the world. These instruments are costly. Stringent lockdowns post challenges to livelihoods while only testing without any lockdown accentuates health risks. This choice between life and livelihood becomes all the more pertinent in a developing country like India. We find that state governments in India that had upcoming elections, faced close margin victory in the last election, were non-incumbents and were aligned with the party at the centre adhered to aggressive testing as a strategy and did not impose strict lockdowns to avert losses in economic activity. Such policy responses indicate an attempt to avert possible losses in future elections. These findings confirm the strong role of political factors in policy decisions.JEL Codes: P52, P16, P36
We examine if policy interventions to curb the spread of COVID-19 were driven by political factors. We focus on the period between 1 June and 31 August 2020 when lockdowns and testing were the only responses available with governments and policymakers across the world. These instruments are costly. Stringent lockdowns post challenges to livelihoods while only testing without any lockdown accentuates health risks. This choice between life and livelihood becomes all the more pertinent in a developing country like India. We find that state governments in India that had upcoming elections, faced close margin victory in the last election, were non-incumbents and were aligned with the party at the centre adhered to aggressive testing as a strategy and did not impose strict lockdowns to avert losses in economic activity. Such policy responses indicate an attempt to avert possible losses in future elections. These findings confirm the strong role of political factors in policy decisions.JEL Codes: P52, P16, P36
Revisiting Earnings Differentials across Socio-religious Groups in the Regular Salaried Employment in India
The Indian Economic Journal, Ahead of Print.
In India, the differences in a range of development indicators, including wages and earnings, along the spatial, caste, religious and ethnicity lines have been a serious concern. This article revisits the wage disparities and discrimination among regular salaried male workers across five categories of socio-religious groups. Using nationally representative Periodic Labour Force Survey (2018–2019) data, we examine the pattern of disparity and the associated endowment and institutional factors leading to unequal labour market outcomes. Our findings suggest that all the groups—Scheduled Tribes (STs), Scheduled Castes (SCs), Other Backward Classes (OBCs) and Muslims continue to earn significantly lower wages than ‘Others’—the non-ST/SC/OBC/Muslim group. On decomposing the wage gap using the Blinder–Oaxaca decomposition method, we observe that the share of unexplained components reflecting discriminatory treatment continues to be significant. While the wage gap is highest for Muslims and SCs, discrimination is high against SCs and OBCs and lowest against Muslims. Higher education and institutional factors explain a significant proportion of the wage gap for these groups. For STs, urban location and higher education explain most of the differences. In addition, quantile regression results indicate a wider gap at the bottom and a narrower gap at the top of the wage distribution, signalling a ‘sticky-floor’ phenomenon for ST, SC and OBC workers.JEL Codes: E24, J71, J49
In India, the differences in a range of development indicators, including wages and earnings, along the spatial, caste, religious and ethnicity lines have been a serious concern. This article revisits the wage disparities and discrimination among regular salaried male workers across five categories of socio-religious groups. Using nationally representative Periodic Labour Force Survey (2018–2019) data, we examine the pattern of disparity and the associated endowment and institutional factors leading to unequal labour market outcomes. Our findings suggest that all the groups—Scheduled Tribes (STs), Scheduled Castes (SCs), Other Backward Classes (OBCs) and Muslims continue to earn significantly lower wages than ‘Others’—the non-ST/SC/OBC/Muslim group. On decomposing the wage gap using the Blinder–Oaxaca decomposition method, we observe that the share of unexplained components reflecting discriminatory treatment continues to be significant. While the wage gap is highest for Muslims and SCs, discrimination is high against SCs and OBCs and lowest against Muslims. Higher education and institutional factors explain a significant proportion of the wage gap for these groups. For STs, urban location and higher education explain most of the differences. In addition, quantile regression results indicate a wider gap at the bottom and a narrower gap at the top of the wage distribution, signalling a ‘sticky-floor’ phenomenon for ST, SC and OBC workers.JEL Codes: E24, J71, J49