The B.E. Journal of Economic Analysis & Policy

Published by De Gruyter

Volume 20 Issue 3

July 2020

Issue of The B.E. Journal of Economic Analysis & Policy

Contents
Journal Overview

Research Articles

May 6, 2020

The Gender-bias Effect of Test Scoring and Framing: A Concern for Personnel Selection and College Admission

Maria Paz Espinosa, Javier Gardeazabal

Article number: 20190316

Abstract

This paper analyzes gender differences in student performance in Multiple-Choice Tests (MCT). We report evidence from a field experiment suggesting that, when MCT use a correction for guessing formula to obtain test scores, on average women tend to omit more items, get less correct answers and lower grades than men. We find that the gender difference in average test scores is concentrated at the upper tail of the distribution of scores. In addition, gender differences strongly depend on the framing of the scoring rule.

April 10, 2020

Gender and Educational Variations in the Earnings Premiums of Occupational Credentials

Jeounghee Kim, Sangeeta Chatterji

Article number: 20190187

Abstract

Occupational credentials such as professional licenses and certifications are known to generate significant earnings premiums. Based on this, the federal workforce development policy focuses on industry-recognized occupational credentials for less-educated adults to help them obtain family-supporting jobs without having to invest in a postsecondary degree. This study used data from the 2016–2019 Current Population Survey (CPS) outgoing rotation group samples to examine differences in the earnings premiums associated with occupational credentials by gender and education. Our analyses revealed that the earnings premium of job-required credential holding was greater for women than men. For women, estimates of the earnings premiums do not vary much by education level, while for men, those without a Bachelor's degree tend to have high premiums than those without.

April 24, 2020

Microfinance and Moneylenders: Long-run Effects of MFIs on Informal Credit Market in Bangladesh

Claudia Berg, Shahe Emran, Forhad Shilpi

Article number: 20190298

Abstract

This paper provides evidence on the effects of microfinance competition on moneylender interest rates and households' dependence on informal credit. The views among practitioners diverge sharply: proponents claim that the MFI competition reduces both the moneylender interest rate and households' reliance on informal credit, while critics argue the opposite. Taking advantage of recent econometric approaches to address selection on unobservables without imposing standard exclusion restrictions, we find that the MFI competition does not reduce moneylender interest rates, partially repudiating the proponents. There is no perceptible effect at low levels of the MFI coverage, but when the MFI coverage is high enough, the moneylender interest rate increases significantly. In contrast, a household's dependence on informal credit goes down after becoming an MFI member, which contradicts part of the critic's argument. The evidence is consistent with models where either the MFIs or the moneylenders engage in cream skimming, and fixed costs are important in informal lending.

May 13, 2020

Movie Variety and the City

In Kyung Kim

Article number: 20190398

Abstract

In this article, I study the effect of entry and ownership structure on product variety within a city. Using longitudinal data on theaters in Korea, I find that the positive effect of entry on city-wide movie variety is limited only to the first few entrants. This finding, together with the observation that movie variety in a theater does not respond to entry, suggests that a theater's incentive to soften price competition by screening less popular movies not otherwise available in the city decreases as more theaters enter. I also find evidence that movie variety is greater in more concentrated cities, implying that a chain that owns multiple theaters in a city may differentiate the movie lineup offered in each theater more than when the theaters are individually owned in order to avoid cannibalization or to preempt entry.

May 20, 2020

Hi-tech Sexism? Evidence from Bangladesh

Nazmul Hoque, Bryan L. Boulier

Article number: 20190269

Abstract

With the advent of modern technology for fetal sex determination, selective abortion is found to be responsible for a significant number of “missing women” in countries like China and India. Using a competing risk hazard model, we investigate whether son preference translates into selective abortion and accounts for any of the “missing women” in Bangladesh. Data suggest that son preference leads to shorter birth intervals if previous births are girls. For example, if the first birth is a girl, the odds of having another child each quarter is about 15% higher and the birth interval is about 2 months shorter for more educated urban women in recent years (1990–2011). However, there is no evidence that selective abortion contributes to missing women in Bangladesh.

May 20, 2020

Microfinance and Vulnerability to Seasonal Famine in a Rural Economy: Evidence from Monga in Bangladesh

Claudia Berg, M. Shahe Emran

Article number: 20202001

Abstract

This paper uses a unique data set on 143,000 poor households from Northern Bangladesh to analyze the effects of microfinance membership on a household's ability to cope with seasonal famine known as Monga. We develop an identification and estimation strategy that exploits a jump and a kink at the 10 decimal land ownership-threshold driven by the Microfinance Institution (MFI) screening process to ensure repayment by excluding the ultra-poor. Evidence shows that microfinance membership improves food security during Monga, especially for the poorest households who survive at the margin of one and two meals a day. The positive effects on food security are, however, not driven by higher income, as microcredit does not improve the ability to migrate for work, nor does it reduce dependence on distress sale of labor. The evidence is consistent with consumption smoothing being the primary mechanism behind the gains in food security of MFI households during the season of starvation.

July 8, 2020

Immigration Relief and Insurance Coverage: Evidence from Deferred Action for Childhood Arrivals

Jung Bae

Article number: 20190305

Abstract

I find that the 2012 Deferred Action for Childhood Arrivals (DACA) program, which conferred protection from deportation and work authorization to undocumented immigrants who had been brought to the U.S. as children, increased eligible immigrants’ likelihood of having health insurance coverage. Exploiting a cutoff rule in the eligibility criteria of DACA, I implement a difference-in-regression-discontinuities design. The insured rate increased by up to 4.3 percentage points more for DACA-eligible immigrants than for ineligible immigrants following DACA. Two-thirds of this increase is accounted for by upticks in employer-sponsored and privately purchased insurance. The findings are also consistent with immigrants becoming less averse to approach health institutions, and taking up medical financial assistance at a higher rate.

Open Access July 8, 2020

Complementarities between Labour Market Institutions and their Causal Impact on Youth Labour Market Outcomes

Niall O’Higgins, Giovanni Pica

Article number: 20180165

More Download PDF

Abstract

We analyse theoretically and empirically the effects on young people’s labour market outcomes of two specific labour market institutions and their interaction: employment protection legislation and active labour market policy. The paper examines recent policy reforms in Italy focussing on the impact of the 2012 Fornero reforms of employment protection legislation as well as the initial impact of the EU-wide Youth Guarantee scheme introduced in Italy in March 2014. The paper then examines how these two policy reforms interacted. The analysis first confirms the finding that the Fornero reform increased permanent hires particularly amongst the very youngest workers; it then goes on to find that the YG was indeed successful in increasing the hires of young people, although this operated through a statistically significant increase in female hires on temporary contracts. Third, it finds some evidence of a dampening effect of the YG on EPL reforms as predicted by theory.

July 6, 2020

Corporate Social Responsibility and Wage Inequality

Jiancai Pi, Runzhi Zhao

Article number: 20190235

Abstract

This paper analyzes how corporate social responsibility (CSR) generates an impact on wage inequality. We find that wage inequality decreases (resp. increases) with the degree of CSR when the substitution elasticity between unskilled labor and capital in the production of the urban sector is sufficiently small (resp. large).

Letter

July 6, 2020

The Optimal Earned Income Tax Credit (EITC) Schedule: A Trapezoid or a Triangle?

Eitan Regev, Michel Strawczynski

Article number: 20190421

Abstract

In this paper we ask the following question: Is the optimal Earned Income Tax Credit (EITC) schedule a trapezoid, as widely used by policy-makers, or is it a triangle? We show that a trapezoid is optimal only when the wage distribution among the working poor is even with a discrete jump for higher wage groups. Since this pattern is not in line with the observed wage distributions of countries, we conclude that the optimal schedule is a triangle. Our simulations show that the use of a trapezoid implies a substantial loss in terms of Social Welfare.

About this journal

Objective
The B.E. Journal of Economic Analysis & Policy (BEJEAP) welcomes submissions that employ microeconomics to analyze issues in organizational economics, consumer behavior, and public policy. Articles submitted to BEJEAP can come in two formats: research papers and letters. Authors should bring to their analysis whatever microeconomic theoretical, experimental or econometric tools are helpful. We publish both empirical work and applied theory (though not more abstract forms of applied theory), and our aim is to disseminate papers that have practical implications for public policy, organizational or individual decision making.

Topics

Design of organizations and institutions
Industrial organization
Health economics
Public finance
Labour Economics
Economics of education, family, development, law, or the environment
Effects of domestic and international policy

Article formats
Research Papers, Letters

> Information on submission process