Working papers results

In this paper we set up a simple two-type optimal nonlinear income tax model where the single-crossing condition is violated, and we characterize the properties of a second-best optimum by considering the entire second-best Pareto frontier. The violation of single-crossing is generated by the assumption that agents dier both in terms of market abilities and in terms of their needs for a work-related good. Our analysis highlights several non-standard features of a second-best optimum. In particular, we show that a nonlinear income tax may allow the government to convert a pooling laissez-faire equilibrium into a separating equilibrium, that the second-best Pareto frontier may be discontinuous, and that a second-best optimum may not preserve the income ranking prevailing under laissez-faire. Finally, we also show that at a second-best optimum the labor supply of some agents might be distorted even though no self-selection constraint is (locally) binding in equilibrium.

Background: In recent years, we witnessed a resurgence of measles even in countries where, according to WHO guidelines, elimination should have already been achieved. In high-income countries, the raise of anti-vaccination movements and parental vaccine hesitancy are posing major challenges for the achievement and maintenance of high coverage during routine programmes. Italy and France approved new regulations, respectively in 2017 and 2018, aimed at raising immunisation rates among children by introducing mandatory vaccination at school entry. Methods: We simulated the evolution of measles immunity profiles in seven distinct countries for the period 2018–2050 and evaluated the effect of possible adjustments of immunisation strategies adopted in the past on the overall fraction and age distribution of susceptible individuals in different high-income demographic settings. The proposed model accounts for country-specific demographic components, current immunity gaps and immunisation activities in 2018. Vaccination strategies considered include the enhancement of coverage for routine programmes already in place and the introduction of a compulsory vaccination at primary school entry in countries where universal school enrolment is likely achieved. Results: Our model shows that, under current vaccination policies, the susceptible fraction of the population would remain below measles elimination threshold only in Singapore and South Korea. In the UK, Ireland, the USA and Australia either the increase of coverage of routine programmes above 95% or the introduction of a compulsory vaccination at school entry with coverage above 40% are needed to maintain susceptible individuals below 7.5% up to 2050. Although the implementation of mandatory vaccination at school entry would be surely beneficial in Italy, strategies targeting adults would also be required to avoid future outbreaks in this country. Conclusions: Current vaccination policies are not sufficient to achieve and maintain measles elimination in most countries. Strategies targeting unvaccinated children before they enter primary school can remarkably enhance the fulfilment of WHO targets.

The north-south gap in Italian social capital has been considered by international scholars as an example of how cultural diversity within a country can generate dierent developmental outcomes. Most studies, however, suer from limited external validity and measurement-error problems. This paper exploits a new and representative online lab-experiment to assess social capital patterns in Italy. Our study only partially conrms previous ndings: northerners perform better in trustworthiness, but they are statistically similar to southerners in many other economic preferences such as cooperation, trust, expected trustworthiness, altruism, and risk tolerance. A novelty of this study is that the gap in trustworthiness stems from the lower reciprocity of southerners in response to large transfers from trustors, and it is characterized by the intergenerational transmission of norms. Eective convergence policies should target, within social capital, reciprocity, while looking to other, and perhaps more compelling gaps.

Proportional electoral rules favour the election of women with respect to majoritarian ones. This is consistent with the fact that in majoritarian systems personal exposure of the candidate is more relevant than in proportional systems and that women tend to be averse to such exposure. To test the effects of electoral rules on women’s representation and the quality of politicians, we collect panel data on the universe of Italian politicians from all levels of government over the period 1987-2013 and analyse an Italian reform which, in 2005, changed the electoral rule for national elections from (mostly) majoritarian to proportional, but did not affect subnational level elections. We find that this reform increased the number of women elected, while not decreasing the quality of politicians. We provide evidence of a negative selection effect under proportional rules: the elected women are not the best candidates and the quality of elected politicians could have increased (rather than remain constant) if the best female candidates had been elected. Our results are stronger in gender traditional regions, suggesting that culture matters in terms of how electoral rules affect female political representation.

If individuals become aware of their stereotypes, do they change their behavior? We study this question in the context of teachers’ bias in grading immigrants and native children in middle schools. Teachers give lower grades to immigrant students compared to natives who have the same performance on standardized, blindly-graded tests. We then relate differences in grading to teachers’ stereotypes, elicited through an Implicit Association Test (IAT). We find that math teachers with stronger stereotypes give lower grades to immigrants compared to natives with the same performance. Literature teachers do not differentially grade immigrants based on their own stereotypes. Finally, we share teachers’ own IAT score with them, randomizing the timing of disclosure around the date on which they assign term grades. All teachers informed of their stereotypes before term grading increase grades assigned to immigrants. Revealing stereotypes may be a powerful intervention to decrease discrimination, but it may also induce a reaction from individuals who were not acting in a biased way.

Are public good games really capturing individuals’ willingness to contribute to real-life public goods? To answer this question, we conducted a lab-in-the-field experiment with communities who own collective goods. In our experiment, subjects voluntarily contribute to a common pool, which can either be subdivided in individual vouchers, as in standard public good games, or used to acquire collective goods, as it happens for real-life public goods. We show that participants’ contributions are larger when the voucher is paid individually, suggesting that individuals’ willingness to contribute to public goods may be overestimated when based on results from laboratory experiments.

The stock market influences some of the most fundamental economic decisions of investors, such as consumption, saving, and labor supply, through the financial wealth channel. This paper provides evidence that daily fluctuations in the stock market have important–and hitherto neglected–spillover effects in another, unrelated domain, namely driving. Using the universe of fatal road car accidents in the United States from 1990 to 2015, we find that a one standard deviation reduction in daily stock market returns is associated with a 0.5% increase in the number of fatal accidents. A battery of falsification tests support a causal interpretation of this finding. Our results are consistent with immediate emotions stirred by a negative stock market performance influencing the number of fatal accidents, in particular among inexperienced investors, thus highlighting the broader economic and social consequences of stock market fluctuations.

How does pay-for-performance (P4P) impact productivity, multitasking, and the composition of workers in mission-oriented jobs? These are central issues in sectors like education or healthcare. We conduct a laboratory experiment, manipulating compensation and mission, to answer these questions. We find that P4P has positive effects on productivity on the incentivized dimension of effort and negative effects on the non-incentivized dimension for workers in non-mission-oriented treatments. In mission-oriented treatments, P4P generates minimal change on either dimension. Participants in the non-mission sector – but not in the mission-oriented treatments – sort on ability, with lower ability workers opting out of the P4P scheme.

Public procurement outcomes depend on the ability of the procuring agency to select well-performing suppliers. Should public administrations be granted more or less discretion in their decision making? Using Italian data on municipal public works tendered in the period 2009-2013, we study how a reform extending the scope of bureaucrat discretion affects supplier selection. We find that the share of contracts awarded to politically connected firms increases while the (ex-ante) labor productivity of the winning firm decreases, thus suggesting a potential misallocation of the public funds. These effects are concentrated among lower quality procuring agencies.

The vast majority of studies looking into the relationship between childbearing and subjective well-being uses overall measures where respondents either report their general level of happiness or their life satisfaction, leaving substantial doubt about the underlying mechanisms. However, life satisfaction and happiness are intuitively multidimensional concepts, simply because there cannot be only one aspect that affects individuals' well-being. In this study, by considering seventeen specific life satisfaction domains, these features come out very clearly. Whereas all the domains considered matter for the overall life satisfaction, only three of them, namely satisfaction with leisure, health and satisfaction with the partnership, change dramatically surrounding childbearing events. Even though we cannot generalize (since these results stems from one particular panel survey, i.e. Household Income and Labour Dynamics in Australia data), it appears that the typical anticipation and post-child decrease of life satisfaction, so often found in existing studies, stem from changes in these three domains.