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Research Papers

Research Papers

  • Do entry wages increase when severance pay drops? Not in recessions

    Severance pay may generate employment effects if wages are rigid. We study this by analysing a reform introduced during a recession that reduced severance pay for new hires while leaving it unchanged for previously-hired employees. We exploit this grandfathering dimension using a regression-discontinuity approach and long monthly data.

  • What drives social returns to education? A meta-analysis

    Education can generate important externalities that contribute towards economic growth and convergence. In this paper, we study such externalities and their drivers by conducting the first meta-analysis of the social returns to education literature. We analyse over 1,000 estimates from 32 journal articles published since 1993, covering 15 countries of different levels of development.

  • Multivariate fractional integration tests allowing for conditional heteroskedasticity with an application to return volatility and trading volume

    We introduce a new joint test for the order of fractional integration of a multivariate fractionally integrated vector autoregressive (FIVAR) time series based on applying the Lagrange multiplier principle to a feasible generalised least squares estimate of the FIVAR model obtained under the null hypothesis. A key feature of the test we propose is that it is constructed using a heteroskedasticity‐robust estimate of the variance matrix.

  • Fire takes no Vacation: Impact of Fires on tourism

    Many Mediterranean-type climates around the world will face increased risks of wildfires as a consequence of climate change. In this study we consider the case of Portugal and estimate the impact of the increasing risk of forest fires on tourism. Using data for 278 municipalities for the 2000-2016 period, we find a considerable negative impact of burned areas on the number of tourist arrivals, both domestic and inbound.

  • Fiscal consolidation programs and income inequality

    We document a strong empirical relationship between higher income inequality and stronger recessive impacts of fiscal consolidation episodes across time and space. To explain this finding, we develop a life-cycle economy with uninsurable income risk. We calibrate our model to match key characteristics of several European economies, including inequality and fiscal structures, and study the effects of fiscal consolidation programs.

  • Extreme Temperature and Extreme Violence: Evidence from Russia

    We study the relationship between extreme temperatures and violent mortality, employing novel regional panel data from Russia. We find that extremely hot temperatures increase violent mortality, while extremely cold temperatures have no effect. The impact of hot temperature on violence is unequal across gender and age groups, rises noticeably during weekends, and leads to considerable social costs.

  • Fiscal Discipline and Exchange Rates: does Politics Matter?

    We look at the effect of exchange rate regimes on fiscal discipline, taking into account the effect of underlying political conditions. We present a model where strong politics (defined as policymakers facing longer political horizon and higher cohesion) are associated with better fiscal performance, but fixed exchange rates may revert this result and lead to less fiscal discipline.

  • Student Selection and Performance in Higher Education: Admission Exams vs. High School Scores

    In many countries, students are selected into higher education institutions based on their achievement at high school, measured by scores given by their teachers and obtained on final national exams. This paper compares these two measures in terms of their ability to predict students’ success in higher education.

  • The Effect of a Specialized versus a General Upper-Secondary School Curriculum on Students’ Performance and Inequality: A difference-in-differences Cross-Country Analysis

    Countries differ in their academic upper-secondary school systems whereby some require their students to choose a specialization track from a set of areas–typically natural sciences, economic sciences, or humanities–and follow that specialization for the course of their upper secondary education years whereas, by contrast, others follow a general curriculum in which students are not required to follow a single specialization and thus, may receive a more general education.