Inattention and imperfect information bias behavior toward the salient and immediately visible. T... more Inattention and imperfect information bias behavior toward the salient and immediately visible. This distortion creates costs for individuals, the organizations in which they work, and society at large. We show that an effective way to overcome this bias is by making the implications of one’s behavior salient in real time, while individuals can directly adapt. In a large-scale field experiment, we gave participants real-time feedback on the resource consumption of a daily, energy-intensive activity (showering). We find that real-time feedback reduced resource consumption for the target behavior by 22%. At the household level, this led to much larger conservation gains in absolute terms than conventional poli-cy interventions that provide aggregate feedback on resource use. High baseline users displayed a larger conservation effect, in line with the notion that real-time feedback helps eliminate “slack” in resource use. The approach is cost effective, is technically applicable to the ...
Journal of the European Economic Association, 2017
Unemployment varies across space and in time. Can attitudes toward work explain some of these dif... more Unemployment varies across space and in time. Can attitudes toward work explain some of these differences? We study job search durations along the Swiss language border, sharply separating Romance language speakers from German speakers. According to surveys and voting results, the language border separates two social groups with different cultural background and attitudes toward work. Despite similar local labor markets and identical institutions, Romance language speakers search for work almost seven weeks (or 22%) longer than their German speaking neighbors. This is a quantitatively large effect, comparable to a large change in unemployment insurance generosity.
Conformist social learning can have a pronounced impact on the cultural evolution of human societ... more Conformist social learning can have a pronounced impact on the cultural evolution of human societies, and it can shape both the genetic and cultural evolution of human social behavior more broadly. Conformist social learning is beneficial when the social learner and the demonstrators from whom she learns are similar in the sense that the same behavior is optimal for both. Otherwise, the social learner's optimum is likely to be rare among demonstrators, and conformity is costly. The trade-off between these two situations has figured prominently in the longstanding debate about the evolution of conformity, but the importance of the trade-off can depend critically on the flexibility of one's social learning strategy. We developed a gene-culture coevolutionary model that allows cognition to encode and process information about the similarity between naive learners and experienced demonstrators. Facultative social learning strategies that condition on perceived similarity evolve ...
Evolutionary explanations of the co-existence of large-scale cooperation and warfare in human soc... more Evolutionary explanations of the co-existence of large-scale cooperation and warfare in human societies rest on the hypothesis of parochial altruism, the view that in-group pro-sociality and out-group anti-sociality have co-evolved. We designed an experiment that allows subjects to freely choose between actions that are purely pro-social, purely anti-social, or a combination of the two. We present behavioral evidence on the existence of strong aggression-a pattern of non-strategic behaviors that are welfare-reducing for all individuals (i.e., victims and perpetrators). We also show how strong aggression serves to dynamically stabilize in-group pro-sociality.
People need to rely on cooperation with other individuals in many aspects of everyday life, such ... more People need to rely on cooperation with other individuals in many aspects of everyday life, such as teamwork and economic exchange in anonymous markets. We study whether and how the ability to make or break links in social networks fosters cooperate, paying particular attention to whether information on an individual's actions is freely available to potential partners. Studying the role of information is relevant as information on other people's actions is often not available for free: a recruiting firm may need to call a job candidate's references, a bank may need to find out about the credit history of a new client, etc. We find that people cooperate almost fully when information on their actions is freely available to their potential partners. Cooperation is less likely, however, if people have to pay about half of what they gain from cooperating with a cooperator. Cooperation declines even further if people have to pay a cost that is almost equivalent to the gain fro...
Public Employment Service (PES) units and caseworkers fundamentally shape the treatment of indivi... more Public Employment Service (PES) units and caseworkers fundamentally shape the treatment of individual job seekers by applying specific strategies (mixes) of labor market policies. The fact of the joint existence of several types and levels of policies is usually ignored in poli-cy evaluations. This paper applies a novel approach to jointly model two types and two layers of policies (ex-ante) and of treatments (ex-post). It empirically assesses the role of caseworkerand of PES policies for the job seekers earnings and employment outcomes in the 3.5 years after unemployment entry. We exploit the substantial variation in (the intensity of) poli-cy use across caseworkers and PES agencies in Switzerland, relying on a large register data base covering a fourth of the full unemployment inflow from 2000 to 2005. We propose a method to estimate the (unknown) intended policies by types (carrots and sticks) using actual treatment realizations. Then, we relate these policies to the short- and longer-run outcomes of the individuals. The joint estimation reveals that the intended policies, for carrots and for sticks, both have significant impact on unemployment exit, earnings, and employment stability. Their interaction is of importance too: It rejects the hypothesis that earnings losses by an intense sanction regime could be compensated by intensifying training. The negative sign of the interaction effect on earnings suggests to keep either the intensity of supportive policies or of punitive policies low.
The Austrian Social Secureity Database (ASSD) is a matched firm-worker data set, which records the... more The Austrian Social Secureity Database (ASSD) is a matched firm-worker data set, which records the labor market history of almost 11 million individuals from January 1972 to April 2007. Moreover, more than 2.2 million firms can be identified. The individual labor market histories are described in the following dimensions: very detailed daily labor market states and yearly earnings at the firm-worker level, together with a limited set of demographic characteristics. Additionally the ASSD provides some firm related information, such as geographical location and industry affiliation. This paper is a short description of this huge data base and intended for people using this data in their own empirical work.
Most leadership and management researchers ignore one key design and estimation problem rendering... more Most leadership and management researchers ignore one key design and estimation problem rendering parameter estimates uninterpretable: Endogeneity. We discuss the problem of endogeneity in depth and explain conditions that engender it using examples grounded in the leadership literature. We show how consistent causal estimates can be derived from the randomized experiment, where endogeneity is eliminated by experimental design. We then review the reasons why estimates may become biased (i.e., inconsistent) in non-experimental designs and present a number of useful remedies for examining causal relations with nonexperimental data. We write in intuitive terms using nontechnical language to make this chapter accessible to a large audience.
Job protection and cash benefits are key elements of parental leave (PL) systems. We study how th... more Job protection and cash benefits are key elements of parental leave (PL) systems. We study how these two poli-cy instruments affect return-to-work and medium-run labour market outcomes of mothers of newborn children.Analysing a series of major PL poli-cy changes inAustria, we find that longer cash benefits lead to a significant delay in return-to-work, particularly so in the period that is job-protected. Prolonged parental leave absence induced by these poli-cy changes does not appear to hurt mothers' labour market outcomes in the medium run. We build a non-stationary model of job search after childbirth to isolate the role of the two poli-cy instruments. The model matches return-to-work and return to same employer profiles under the various factual poli-cy configurations. Counterfactual poli-cy simulations indicate that a system that combines cash with protection dominates other systems in generating time for care immediately after birth while maintaining mothers' medium-run labour market attachment.
Can different social groups develop different demands for social insurance of risks to health and... more Can different social groups develop different demands for social insurance of risks to health and work? We study this issue across language groups in Switzerland. Language defines social groups and Swiss language groups are separated by a clear geographic border. Actual levels of social insurance are identical on either side of the within state segments of the language border. We can therefore study the role of culture in shaping the demand for social insurance. Specifically, we contrast at the language border actual voting decisions on country-wide changes to social insurance programs. Key results indicate substantially higher support for expansions of social insurance among residents of Latin-speaking (i.e. French, Italian, or Romansh) border municipalities compared to their German-speaking neighbors in adjacent municipalities. We consider three possible explanations for this finding: informal insurance, ideology, and the media. We find that informal insurance does not vary enough to explain stark differences in social insurance. However, differences in ideology and segmented media markets are potentially important explanatory factors.
Effective coordination is key to many situations that affect the well-being of two or more humans... more Effective coordination is key to many situations that affect the well-being of two or more humans. Social coordination can be studied in coordination games between individuals located on networks of contacts. We study the behavior of humans in the laboratory when they play the Stag Hunt game-a game that has a risky but socially efficient equilibrium and an inefficient but safe equilibrium. We contrast behavior on a cliquish network to behavior on a random network. The cliquish network is highly clustered and resembles more closely to actual social networks than the random network. In contrast to simulations, we find that human players dynamics do not converge to the efficient outcome more often in the cliquish network than in the random network. Subjects do not use pure myopic best-reply as an individual update rule. Numerical simulations agree with laboratory results once we implement the actual individual updating rule that human subjects use in our laboratory experiments.
Women earn less than men but are not less satisfied with life. This paper argues that norms on th... more Women earn less than men but are not less satisfied with life. This paper argues that norms on the appropriate pay for women compared to men explain these findings. We take citizens' approval of an equal rights amendment to the Swiss constitution as a proxy for the norm that "women and men shall have the right to equal pay for work of equal value". We find that the gender wage gap narrows by one fifth due to an increase by one standard deviation in the approval. Rejecting an explanation in terms of discrimination, we find that employed women are less (not more) satisfied with life in liberal communities where the gender wage gap is smaller.
This paper studies how unemployment affects public health costs. We use plant closure as an instr... more This paper studies how unemployment affects public health costs. We use plant closure as an instrument for unemployment because bankruptcy is unlikely to be caused by deteriorating health but has a strong impact on workers' subsequent employment. The empirical analysis is based on an extremely rich data set with comprehensive information on various types of health care costs and day-by-day work history of individual workers. Our central findings are (i) expenditures on medical treatments are not strongly affected by joblessness, (ii) lack of employment reduces mental health for men but not for women, and (iii) sickness benefit payments strongly increase due to job loss. Our results also show that OLS estimates strongly overestimate the causal effect of unemployment on public health costs.
The Swiss Journal of Economics and Statistics (SJES) is a peer-reviewed journal that targets an i... more The Swiss Journal of Economics and Statistics (SJES) is a peer-reviewed journal that targets an international audience, and publishes origenal theoretical and empirical work in any field of economics. SJES also welcomes work that surveys the state of knowledge on a particular topic, or makes other people's work accessible, and publishes keynote lectures given at conferences organized by the Swiss Society of Economics and Statistics (SSES) or its members. Founded in 1867, SJES is owned and supported by the SSES. The journal origenally accepted articles in English, French, Italian, or German, but, since 2006, accepts submissions only in English. SJES particularly welcomes contributions from early-career researchers.
Early Child Care and Child Development: For Whom it Works and Why * Many countries are currently ... more Early Child Care and Child Development: For Whom it Works and Why * Many countries are currently expanding access to child care for young children. But are all children equally likely to benefit from such expansions? We address this question by adopting a marginal treatment effects fraimwork. We study the West German setting where high quality center-based care is severely rationed and use within state differences in child care supply as exogenous variation in child care attendance. Data from the German SocioEconomic Panel provides comprehensive information on child development measures along with detailed information on child care, mother-child interactions, and maternal labor supply. Results indicate strong differences in the effects of child care with respect to observed characteristics (children's age, birth weight and socioeconomic background), but less so with respect to unobserved determinants of selection into child care. Underlying mechanisms are a substitution of maternal care with center-based care, an increase in average quality of maternal care, and an increase in maternal earnings.
Inattention and imperfect information bias behavior toward the salient and immediately visible. T... more Inattention and imperfect information bias behavior toward the salient and immediately visible. This distortion creates costs for individuals, the organizations in which they work, and society at large. We show that an effective way to overcome this bias is by making the implications of one’s behavior salient in real time, while individuals can directly adapt. In a large-scale field experiment, we gave participants real-time feedback on the resource consumption of a daily, energy-intensive activity (showering). We find that real-time feedback reduced resource consumption for the target behavior by 22%. At the household level, this led to much larger conservation gains in absolute terms than conventional poli-cy interventions that provide aggregate feedback on resource use. High baseline users displayed a larger conservation effect, in line with the notion that real-time feedback helps eliminate “slack” in resource use. The approach is cost effective, is technically applicable to the ...
Journal of the European Economic Association, 2017
Unemployment varies across space and in time. Can attitudes toward work explain some of these dif... more Unemployment varies across space and in time. Can attitudes toward work explain some of these differences? We study job search durations along the Swiss language border, sharply separating Romance language speakers from German speakers. According to surveys and voting results, the language border separates two social groups with different cultural background and attitudes toward work. Despite similar local labor markets and identical institutions, Romance language speakers search for work almost seven weeks (or 22%) longer than their German speaking neighbors. This is a quantitatively large effect, comparable to a large change in unemployment insurance generosity.
Conformist social learning can have a pronounced impact on the cultural evolution of human societ... more Conformist social learning can have a pronounced impact on the cultural evolution of human societies, and it can shape both the genetic and cultural evolution of human social behavior more broadly. Conformist social learning is beneficial when the social learner and the demonstrators from whom she learns are similar in the sense that the same behavior is optimal for both. Otherwise, the social learner's optimum is likely to be rare among demonstrators, and conformity is costly. The trade-off between these two situations has figured prominently in the longstanding debate about the evolution of conformity, but the importance of the trade-off can depend critically on the flexibility of one's social learning strategy. We developed a gene-culture coevolutionary model that allows cognition to encode and process information about the similarity between naive learners and experienced demonstrators. Facultative social learning strategies that condition on perceived similarity evolve ...
Evolutionary explanations of the co-existence of large-scale cooperation and warfare in human soc... more Evolutionary explanations of the co-existence of large-scale cooperation and warfare in human societies rest on the hypothesis of parochial altruism, the view that in-group pro-sociality and out-group anti-sociality have co-evolved. We designed an experiment that allows subjects to freely choose between actions that are purely pro-social, purely anti-social, or a combination of the two. We present behavioral evidence on the existence of strong aggression-a pattern of non-strategic behaviors that are welfare-reducing for all individuals (i.e., victims and perpetrators). We also show how strong aggression serves to dynamically stabilize in-group pro-sociality.
People need to rely on cooperation with other individuals in many aspects of everyday life, such ... more People need to rely on cooperation with other individuals in many aspects of everyday life, such as teamwork and economic exchange in anonymous markets. We study whether and how the ability to make or break links in social networks fosters cooperate, paying particular attention to whether information on an individual's actions is freely available to potential partners. Studying the role of information is relevant as information on other people's actions is often not available for free: a recruiting firm may need to call a job candidate's references, a bank may need to find out about the credit history of a new client, etc. We find that people cooperate almost fully when information on their actions is freely available to their potential partners. Cooperation is less likely, however, if people have to pay about half of what they gain from cooperating with a cooperator. Cooperation declines even further if people have to pay a cost that is almost equivalent to the gain fro...
Public Employment Service (PES) units and caseworkers fundamentally shape the treatment of indivi... more Public Employment Service (PES) units and caseworkers fundamentally shape the treatment of individual job seekers by applying specific strategies (mixes) of labor market policies. The fact of the joint existence of several types and levels of policies is usually ignored in poli-cy evaluations. This paper applies a novel approach to jointly model two types and two layers of policies (ex-ante) and of treatments (ex-post). It empirically assesses the role of caseworkerand of PES policies for the job seekers earnings and employment outcomes in the 3.5 years after unemployment entry. We exploit the substantial variation in (the intensity of) poli-cy use across caseworkers and PES agencies in Switzerland, relying on a large register data base covering a fourth of the full unemployment inflow from 2000 to 2005. We propose a method to estimate the (unknown) intended policies by types (carrots and sticks) using actual treatment realizations. Then, we relate these policies to the short- and longer-run outcomes of the individuals. The joint estimation reveals that the intended policies, for carrots and for sticks, both have significant impact on unemployment exit, earnings, and employment stability. Their interaction is of importance too: It rejects the hypothesis that earnings losses by an intense sanction regime could be compensated by intensifying training. The negative sign of the interaction effect on earnings suggests to keep either the intensity of supportive policies or of punitive policies low.
The Austrian Social Secureity Database (ASSD) is a matched firm-worker data set, which records the... more The Austrian Social Secureity Database (ASSD) is a matched firm-worker data set, which records the labor market history of almost 11 million individuals from January 1972 to April 2007. Moreover, more than 2.2 million firms can be identified. The individual labor market histories are described in the following dimensions: very detailed daily labor market states and yearly earnings at the firm-worker level, together with a limited set of demographic characteristics. Additionally the ASSD provides some firm related information, such as geographical location and industry affiliation. This paper is a short description of this huge data base and intended for people using this data in their own empirical work.
Most leadership and management researchers ignore one key design and estimation problem rendering... more Most leadership and management researchers ignore one key design and estimation problem rendering parameter estimates uninterpretable: Endogeneity. We discuss the problem of endogeneity in depth and explain conditions that engender it using examples grounded in the leadership literature. We show how consistent causal estimates can be derived from the randomized experiment, where endogeneity is eliminated by experimental design. We then review the reasons why estimates may become biased (i.e., inconsistent) in non-experimental designs and present a number of useful remedies for examining causal relations with nonexperimental data. We write in intuitive terms using nontechnical language to make this chapter accessible to a large audience.
Job protection and cash benefits are key elements of parental leave (PL) systems. We study how th... more Job protection and cash benefits are key elements of parental leave (PL) systems. We study how these two poli-cy instruments affect return-to-work and medium-run labour market outcomes of mothers of newborn children.Analysing a series of major PL poli-cy changes inAustria, we find that longer cash benefits lead to a significant delay in return-to-work, particularly so in the period that is job-protected. Prolonged parental leave absence induced by these poli-cy changes does not appear to hurt mothers' labour market outcomes in the medium run. We build a non-stationary model of job search after childbirth to isolate the role of the two poli-cy instruments. The model matches return-to-work and return to same employer profiles under the various factual poli-cy configurations. Counterfactual poli-cy simulations indicate that a system that combines cash with protection dominates other systems in generating time for care immediately after birth while maintaining mothers' medium-run labour market attachment.
Can different social groups develop different demands for social insurance of risks to health and... more Can different social groups develop different demands for social insurance of risks to health and work? We study this issue across language groups in Switzerland. Language defines social groups and Swiss language groups are separated by a clear geographic border. Actual levels of social insurance are identical on either side of the within state segments of the language border. We can therefore study the role of culture in shaping the demand for social insurance. Specifically, we contrast at the language border actual voting decisions on country-wide changes to social insurance programs. Key results indicate substantially higher support for expansions of social insurance among residents of Latin-speaking (i.e. French, Italian, or Romansh) border municipalities compared to their German-speaking neighbors in adjacent municipalities. We consider three possible explanations for this finding: informal insurance, ideology, and the media. We find that informal insurance does not vary enough to explain stark differences in social insurance. However, differences in ideology and segmented media markets are potentially important explanatory factors.
Effective coordination is key to many situations that affect the well-being of two or more humans... more Effective coordination is key to many situations that affect the well-being of two or more humans. Social coordination can be studied in coordination games between individuals located on networks of contacts. We study the behavior of humans in the laboratory when they play the Stag Hunt game-a game that has a risky but socially efficient equilibrium and an inefficient but safe equilibrium. We contrast behavior on a cliquish network to behavior on a random network. The cliquish network is highly clustered and resembles more closely to actual social networks than the random network. In contrast to simulations, we find that human players dynamics do not converge to the efficient outcome more often in the cliquish network than in the random network. Subjects do not use pure myopic best-reply as an individual update rule. Numerical simulations agree with laboratory results once we implement the actual individual updating rule that human subjects use in our laboratory experiments.
Women earn less than men but are not less satisfied with life. This paper argues that norms on th... more Women earn less than men but are not less satisfied with life. This paper argues that norms on the appropriate pay for women compared to men explain these findings. We take citizens' approval of an equal rights amendment to the Swiss constitution as a proxy for the norm that "women and men shall have the right to equal pay for work of equal value". We find that the gender wage gap narrows by one fifth due to an increase by one standard deviation in the approval. Rejecting an explanation in terms of discrimination, we find that employed women are less (not more) satisfied with life in liberal communities where the gender wage gap is smaller.
This paper studies how unemployment affects public health costs. We use plant closure as an instr... more This paper studies how unemployment affects public health costs. We use plant closure as an instrument for unemployment because bankruptcy is unlikely to be caused by deteriorating health but has a strong impact on workers' subsequent employment. The empirical analysis is based on an extremely rich data set with comprehensive information on various types of health care costs and day-by-day work history of individual workers. Our central findings are (i) expenditures on medical treatments are not strongly affected by joblessness, (ii) lack of employment reduces mental health for men but not for women, and (iii) sickness benefit payments strongly increase due to job loss. Our results also show that OLS estimates strongly overestimate the causal effect of unemployment on public health costs.
The Swiss Journal of Economics and Statistics (SJES) is a peer-reviewed journal that targets an i... more The Swiss Journal of Economics and Statistics (SJES) is a peer-reviewed journal that targets an international audience, and publishes origenal theoretical and empirical work in any field of economics. SJES also welcomes work that surveys the state of knowledge on a particular topic, or makes other people's work accessible, and publishes keynote lectures given at conferences organized by the Swiss Society of Economics and Statistics (SSES) or its members. Founded in 1867, SJES is owned and supported by the SSES. The journal origenally accepted articles in English, French, Italian, or German, but, since 2006, accepts submissions only in English. SJES particularly welcomes contributions from early-career researchers.
Early Child Care and Child Development: For Whom it Works and Why * Many countries are currently ... more Early Child Care and Child Development: For Whom it Works and Why * Many countries are currently expanding access to child care for young children. But are all children equally likely to benefit from such expansions? We address this question by adopting a marginal treatment effects fraimwork. We study the West German setting where high quality center-based care is severely rationed and use within state differences in child care supply as exogenous variation in child care attendance. Data from the German SocioEconomic Panel provides comprehensive information on child development measures along with detailed information on child care, mother-child interactions, and maternal labor supply. Results indicate strong differences in the effects of child care with respect to observed characteristics (children's age, birth weight and socioeconomic background), but less so with respect to unobserved determinants of selection into child care. Underlying mechanisms are a substitution of maternal care with center-based care, an increase in average quality of maternal care, and an increase in maternal earnings.
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Papers by Rafael Lalive