2023/06: Issue brief: college students’ social capital and their perceptions of local and national cohesion
Using Queens College (a four-year college in NYC public system) students’ survey data from 2022/23, we find that vulnerable students have less social capital in terms of physical order and social support in their neighborhoods. While social capital is directly related to self-reported neighborhood and national cohesion, resilience, and better mental health, different components of social capital matter for specific demographics.
Physical order is more salient for less vulnerable students while social support is more salient for vulnerable students. Our findings underscore the need for policy action to be tailored to specific groups, rather than following a one-size-fits-all approach.
2023/05: Real estate prices and land use regulations: Evidence from the law of heights in Bogotá
Between 2015 and 2017, the Law of Heights (Policy-562) regulated areas of urban renewal in specific locations of Bogotá (Colombia). Using a novel dataset based on detailed information at the block level between 2008 and 2017, we study whether this policy affected real estate prices. Our empirical strategy compares the price per square meter before and after Policy-562 in treated blocks and in control blocks with similar pre-treatment traits. Results show that prices increased more in treated blocks than in the rest of the city. We also provide evidence that results are heterogeneous from a temporal, land use and strata point of view.
2023/04: Job competition in civil servant public examinations and sick leave behavior
In several countries the entry system to access public service positions is the traditional public examination procedure. In this setting, candidates have to take passing exams that require a huge load of material to study, and therefore time. Candidates who are working while preparing the public exam may find it difficult to devote enough time to both tasks. Thus, they might experience increased stress/anxiety related to high stakes civil service recruitment testing. In this paper, we investigate the impact of new openings of civil servant positions on sickness absences. Using a unique administrative dataset on the universe of sickness absences and civil servant positions offered in Spain from 2009 to 2015, we find a significant increase in health-related absences several months before the examination date. In particular, this effect is stronger for individuals working in the educational sector as well as for calls offering a large number of positions. This effect is mostly driven by stress related absences. Finally, using data on medical visits (GP and specialist) we find evidence consistent with a deterioration in public sector workers’ health. Our results are important from a policy perspective as they highlight the existence of important negative consequences of the civil service recruitment process that have been previously overlooked.
2023/03: Optimal tax administration responses to fake mobility and underreporting
In a two-country model, the citizens of a ‘big home country’ can either fictitiously move residence to a ‘small foreign country’ where residence-based taxes are lower (external tax avoidance), or under-report the tax base at home (internal tax avoidance). Tax setting is the result of Cournot-Nash competition between revenue maximizing governments, with the home government also setting two types of administration policies, one for each form of tax avoidance. We show that although it is optimal to employ both types of administration policies, which in themselves are both effective at tackling the targeted form of tax avoidance, the optimum is characterized by a tradeoff in terms of policy outcomes: either internal avoidance increases and external avoidance decreases, or the opposite, depending on the characteristics of the fiscal environment.
2023/02: Fiscal knowledge and its impact on revealed MWTP in Covid times: Evidence from survey data
Individual preferences over public policies should ideally be based on the possession of correct information about their reality. To test whether this holds, we conducted four waves of a survey, every six months since May 2020 (still under the COVID-19-lockdown), asking basic macro questions regarding the level of tax burden, of public debt, and of the underground economy in Spain. The percentage of correct responses (defined within broad ranges) never reaches 35%, and it is by far lowest for public debt. For the tax burden, left-wing individuals (with respect to right-wing) make more errors, and highly educated people (with respect to the rest of society) make fewer. No clear deterministic patterns arise for public debt and for the underground economy. Independently of the percentage of errors, we infer the existence of relative biases across different social characteristics: highly educated people tend to undervalue the level of the tax burden and of the underground economy and overvalue the level of public debt; leftist individuals undervalue the level of the tax burden and of the public debt but overvalue the level of the underground economy. There are also significant gender biases: with respect to men, women overvalue the tax burden and the importance of the underground economy, and undervalue the level of public debt. This misinformation and biases correlate with the marginal willingness to pay taxes (MWTP). MWTP is 10% higher under the presence of misinformation. This is particularly so for those individuals who undervalue the real level of the tax burden. Although COVID-19 generates greater interest to collect information, including about fiscal issues, there is a decrease in knowledge. The pandemic seems to have produced an excess of information up to causing misinformation. We also observe a general tendency to undervalue the level of public debt provoked by the exposure to COVID-19, which might be caused by the lax fiscal policy carried out during the pandemic.
2023/01: Place-based policies: Opportunity for deprived schools or zone-and-shame effect?
Even though place-based policies involve large transfers toward low-income neighborhoods, they may also produce territorial stigmatization. This paper appeals to the quasi-experimental discontinuity in a French reform that redrew the zoning map of subsidized neighborhoods on the basis of a sharp poverty cut-off to assess the effect of place-based policies on school enrollment into lower secondary education. Using a difference-in-differences approach, we find strong evidence of stigma from policy designation, as public middle schools in neighbourhoods below the policy cut-off, which qualified for place-based subsidies, saw a significant 3.5pp post-reform drop in pupil enrollment, compared to their counterfactual analogues in unlabeled areas lying just above the poverty threshold. This «zone-and-shame» effect is immediate but does not persist, as it is only found for the first pupil-entry cohort in middle schools immediately after the reform. We show that it was triggered by the behavioral reactions of parents from all socioeconomic backgrounds, who avoided public schools in policy areas and shifted to those in other areas or, only for richer parents, to private schools. We uncover, on the contrary, only weak evidence of stigma reversion after an area loses its designation, suggesting hysteresis in bad reputations.