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1392 - Dynamic Impacts of Lockdown on Domestic Violence : Evidence from Multiple Policy Shifts in ChileSonia Bhalotra, Emilia Brito, Damian Clarke, Pilar Larroulet & Francisco Pino
We leverage staggered implementation of lockdown across Chile’s 346 municipalities, identifying dynamic impacts on domestic violence (DV). Using administrative data, we find lockdown imposition increases indicators of DV-related distress, while decreasing DV reports to the police. We identify male job loss as a mechanism driving distress, and female job loss as driving decreased reporting. Stimulus payments to poor households act on both margins, their impacts partially differentiated by lockdown status. Once lockdown is lifted, police reports surge but we see a ratchet effect in distress. Our findings accentuate the controversy around welfare impacts of lockdown mandates.
1391 - Health and Labor Market Impacts of Twin Birth : Evidence from a Swedish IVF Policy MandateSonia Bhalotra, Damian Clarke, Hanna Mühlrad and Mårten Palme
IVF allows women to delay birth and pursue careers, but IVF massively increases the risk of twin birth. There is limited evidence of how having twins influences women’s post-birth careers. We investigate this, leveraging a single embryo transfer (SET) mandate implemented in Sweden in 2003, following which the share of twin births showed a precipitous drop of 70%. Linking birth registers to hospitalization and earnings registers, we identify substantial improvements in maternal and child health and women’s earnings following IVF birth, alongside an increase in subsequent fertility. We provide the first comprehensive evaluation of SET, relevant given the secular rise in IVF births and growing concerns over twin birth risk. We contribute new estimates of the child penalty imposed by twin as opposed to singleton birth, relevant to the secular rise in the global twin birth rate.
1390 - Voice and Political Engagement : Evidence From a Natural Field ExperimentAnselm Hager, Lukas Hensel, Christopher Roth & Andreas Stegmann
We conduct a natural field experiment with a major European party to test whether giving party supporters the opportunity to voice their opinions increases their engagement in the party’s electoral campaign. In our experiment, the party asked a random subset of supporters for their opinions on the importance of different topics. Giving supporters more opportunities to voice their opinions increases their engagement in the campaign as measured using behavioral data from the party’s smartphone application. Survey data reveals that our voice treatments also increase other margins of campaign effort as well as perceived voice. Our evidence highlights that parties can increase their supporters’ investment in the democratic process by implementing policies that increase their voice.
1389 - Micromotives and macromoves : Political preferences and internal migration in England and WalesGeorgios Efthyvoulou, Vincenzo Bove & Harry Pickard
When people migrate internally, do they tend to move to locations that reflect their political preferences? To address this question, we first compile a unique panel dataset on the universe of population movements in England and Wales across 346 local authority districts over the period 2002-2015, and estimate a gravity model of internal migration. We show that proximity in partisan composition exerts an important positive effect on migration flows, which is of a similar order of magnitude as wage differentials or ethnic proximity. We then use individual survey based data over the same time period to investigate some of the micro-foundations underlying the macromoves. We find that political alignment to the district of residence contributes to individuals' sense of belonging and fitting in consistent with the existence of a political homophily mechanism and that a migrant's political ideology can predict the partisanship of the destination district.
1388 - Fertility and Labor Market Responses to Reductions in MortalitySonia Bhalotra, Atheendar Venkataramani & Selma Walther
We investigate women’s fertility, labor and marriage market responses to large declines in child mortality. We find delayed childbearing, with lower intensive and extensive margin fertility, a decline in the chances of ever having married, increased labor force participation and an improvement in occupational status. This constitutes the first evidence that improvements in child survival allow women to start fertility later and invest more in the labor market. We present a new theory of fertility that incorporates dynamic choices and reconciles our findings with existing models of behavior.
1387 - Graduate Earnings Premia in the UK: Decline and Fall?Gianna Boero, Tej Nathwani, Robin Naylor and Jeremy Smith
A long-standing puzzle in the economics of education concerns the observed constancy of the average earnings premium for a degree despite a prolonged period of substantial growth in the share of graduates in the working population in the UK. Focusing on birth cohorts between 1970 and 1990, we produce evidence of a recent decline in the earnings premium for graduates over non-graduates by age 26. For those born in 1990, we estimate an average graduate earnings premium of 10%, contrasting with an estimate of 17% for the 1970 birth cohort. We also find a substantial increase in dispersion around the average premium according to class of degree awarded. Combined with a falling average, this has left the earnings of 1990-born graduates awarded lower degree classes only 3% above that of non-graduates. Among the 1970-born cohort, the equivalent earnings premium was 14%. We suggest that this precipitous fall is consistent with a ‘double-scarring’ effect associated with the combination of increased higher education participation and a rise in the proportion of graduates awarded an upper honours degree over the span of the two cohorts.
1386 - Measuring the Epidemiological Impact of a False Negative : Evidence from a Natural ExperimentThiemo Fetzer
Reliable COVID-19 testing remains a central pillar to manage the pandemic. Yet, the accuracy and reliability of tests and test equipment has regularly been brought into question. Both false-positive and false-negative test results convey costs. Yet, false negatives are likely more problematic due to the risk of onward transmission and the failure to break infection chains as a result. This paper studies the epidemiological impact of a false negative in the context of a high vaccine uptake country. Between 2 September and 12 October an estimated 43,000 PCR tests in the UK may have produced a false negative test result with individuals infected being told that they tested negative. These instances were particularly pronounced in the South West of England. Using a synthetic control method approach concentrating on the 13 most affected regions, this paper estimates that every false negative COVID-19 case is likely to have caused between 0.6 to 1.6 additional infections in the subsequent weeks
1385 - Gravity and Heterogeneous Trade Cost ElasticitiesNatalie Chen & Dennis Novy
How do trade costs affect international trade? This paper offers a new approach. We rely on a flexible gravity equation that predicts variable trade cost elasticities, both across and within country pairs. We apply this framework to popular trade cost variables such as currency unions, trade agreements, and WTO membership. While we estimate that these variables are associated with increased bilateral trade on average, we find substantial heterogeneity. Consistent with the predictions of our framework, trade cost effects are strong for ‘thin’ bilateral relationships characterised by small import shares, and weak or even zero for ‘thick’ relationships.
1384 - The Psychological Gains from COVID-19 Vaccination : Who Benefits the Most?Manuel Bagues & Velichka Dimitrova
We quantify the impact of COVID-19 vaccination on psychological well-being using information from a large-scale panel survey representative of the UK population. Exploiting exogenous variation in the timing of vaccinations, we find that vaccination increases psychological well-being by 0.12 standard deviation, compensating for around one half of the overall decrease caused by the pandemic. This effect persists for at least two months, and it is associated with a decrease in the perceived likelihood of contracting COVID-19 and higher engagement in social activities. The improvement is 1.5 times larger for mentally distressed individuals, supporting the prioritization of this group in vaccination roll-outs.
1383 - Population growth, immigration, and labour market dynamicsMichael W.L. Elsby Jennifer C. Smith Jonathan Wadsworth
This paper examines the role of population flows on labour market dynamics across immigrant and native-born populations in the United Kingdom. Population flows are large, and cyclical, driven first by the maturation of baby boom cohorts in the 1980s, and latterly by immigration in the 2000s. New measures of labour market flows by migrant status uncover both the flow origins of disparities in the levels and cyclicalities of immigrant and native labour market outcomes, as well as their more recent convergence. A novel dynamic accounting framework reveals that population flows have played a non-trivial role in the volatility of labour markets among both the UK-born and, especially, immigrants.
1382 - Racial Difference in Child PenaltyJiaqi Li
This paper documents large racial differences in the child penalty. Black women experience a significantly smaller reduction in labour supply and earnings following childbirth than white women. Furthermore, the racial difference in child penalties is driven by high-wage women, whereas black and white women with low wages have similar child penalties. In addition, household non-labour income can explain some long-run racial differences. Finally, the paper rules out economic, demographic variables, or work-related gender attitudes as the main mechanisms to drive such substantial racial differences in child penalties, leaving preference and discrimination as the main explanations.
1381 - A Field Study of Donor Behavior in the Iranian Kidney MarketAli Moghaddasi Kelishomi and Daniel Sgroi
Iran has the world’s only government-regulated kidney market, in which around 1000 individuals go through live kidney-removal surgery annually. We report the results of the first field study of donor behavior in this unique and controversial market. Those who enter the market have low income, typically entering to raise funds. They have lower risk tolerance and higher patience levels than the Iranian average. There is no difference in rationality from population averages. There is evidence of altruism among participants. This might shed light on the sort of people likely to participate if other nations were to operate such markets.
1380 - Without liberty and justice, what extremes to expect? Two contemporary perspectivesMarcus Miller & Ben Zissimos
From a wide-ranging historical survey, Acemoglu and Robinson conclude that the preservation of liberty depends on being in a ‘narrow corridor’ where there is a balance of power between the state and society. We first examine the support Binmore's game-theoretic treatment of Social Contracts provides for such a ‘narrow corridor’ of liberty and justice – and what extremes to expect without them. We also consider how the biological model of Competing Species helps to describe the dynamics of conflicting powers outside the narrow corridor– where, as in contemporary Russia and China, any Social Contracts that exist are neither free nor fair.
1379 - The taxation of capital gains : principles, practice, and directions for reformArun Advani
Capital gains are particularly complex to tax given their infrequency, the different ways in which they are generated, and worries about harming productivity. There are theoretical arguments in support of everything from zero rates to high rates of tax on capital. In this paper, I first discuss the impact of capital gains on inequality, which often motivates discussions about how gains should be taxed. I then set out the principles that determine how gains should be taxed, in particular how the tax rate should relate to income tax rates. I propose that capital gains tax rates be equalized with income tax rates, subject to provisions to allow gains to be ‘smoothed’ over time and to remove inflation from the tax base. I highlight key transitional issues in moving to such a tax structure. Finally, I discuss the specific lessons for Canada.
1378 - An Empirical Model of Quantity Discounts with Large Choice SetsAlessandro Iaria and Ao Wang
We introduce a Generalized Nested Logit model of demand for bundles that can be estimated sequentially and virtually eliminates any challenge of dimensionality related to large choice sets. We use it to investigate quantity discounts for carbonated soft drinks by simulating a counterfactual with linear pricing. The prices of quantities up to 1L decrease by −31.5% while those of larger quantities increase by +14.8%. Purchased quantities decrease by −20.4%, associated added sugar by −23.8%, and industry profit by −20.5%. Consumer surplus however reduces only moderately, suggesting that linear pricing may be effective in limiting added sugar intake.
1377 - Do workers, managers, and stations matter for effective policing? A decomposition of productivity into three dimensions of unobserved heterogeneityAmit Chaudhary
Misallocation of resources in an economy makes firms less productive. I document the roles of heterogeneity, sorting, and complementarity in a framework where workers, managers, and firms interact to shape productivity. The approach I follow uses the movement of workers and managers across firms to identify the distribution of productivity. I webscraped novel microdata of crime reports from the Indian police department and combined them with the worker-level measurement of productivity. Using this data I show that the third source of heterogeneity in the form of manager ability is an important driver of differences in firm productivity. I empirically identify complementarities between workers, managers, and firms using my estimation methodology. Counterfactual results show that reallocating workers by applying a positive assortative sorting rule can increase police department productivity by 10%.
1376 - The Right to Health and the Health Effects of DenialsSonia Bhalotra and Manuel Fernandez
We investigate supply-side barriers to medical care in Colombia, where citizens have a constitutional right to health, but insurance companies impose restrictions. We use administrative data on judicial claims for health as a proxy for unmet demand. We validate this using the health services utilization register, showing that judicial claims map into large, pervasive decreases in medical consultations, procedures, hospitalizations and emergency care. This manifests in population health outcomes. We identify increases in mortality pervasive across cause, age and sex, with larger increases for cancer, individuals over the age of fifty, women and the poor.
1375 - Religion and abortion : The role of politician identitySonia Bhalotra, Irma Clots-Figueras & Lakshmi Iyer
Debates around abortion typically invoke religion and politics but there is no causal evidence of the impact of politician religion on abortion. Leveraging quasi-random variation in politician religion generated by close elections in India and controlling for the party affiliation of politicians, we find lower rates of sex-selective abortion in districts won by Muslim state legislators, consistent with a higher reported aversion to abortion among Muslims compared to Hindus. The competing hypothesis that this reflects weaker son preference among Muslims is undermined by stated preference data and by demonstrating that fertility and girl-biased infant mortality increase in Muslim-won districts
1374 - Ingroup Bias with Multiple Identities : The Case of Religion and Attitudes towards Government SizeDaniel Sgroi, Jonathan Yeo and Shi Zhuo
Group identity is known to exert a powerful socio-psychological influence on behaviour but to date has been largely explored as a uni-dimensional phenomenon. We consider the role of multiple dimensions of identity, asking what might happen to ingroup and outgroup perceptions and the resulting implications for cooperation. Carefully selecting two politically charged identity dimensions documented to have similar strength and to be largely orthogonal (religious belief and views about government size), we find that priming individuals to consider both dimensions rather than one has a noticeable effect on behaviour. Moving from one to two dimensions can produce a significant increase in ingroup allocations at the expense of fairness to outgroup individuals, although the effect varies as we switch from primarily considering religion to government size. Evidence suggests that the heterogeneity of such effects is related to the degree of “harmony” between groups in the dimensions concerned.
1373 - The Effect of Self-Awareness and Competition on DishonestyCeren Bengu Cibik and Daniel Sgroi
We provide the first investigation of the relationship between self-awareness and dishonesty in a multi-wave pre-registered experiment with 1,260 subjects. In the first wave we vary the level of awareness of subjects' past dishonesty and explore the impact on behaviour in tasks that include the scope to lie. In the second wave we vary the degree of competitiveness in one of our core tasks to further explore the interactions between self-awareness, (dis)honesty and competition. We also test for the experimental demand effect in order to rule it out. Our results suggest that in non-interactive tasks, self-awareness helps to lower dishonesty in the future. However, in tasks that are competitive in nature becoming more aware of past dishonesty raises the likelihood of dishonesty in the future. In other words, we show when making people aware of their own past dishonesty can help to reduce dishonesty and when it might backfire. We are also careful to test for any possible demand effect, and perform text analysis to provide independent verification of the success of our treatments.
1372 - Mindfulness Reduces Information AvoidanceElliott Ash, Daniel Sgroi, Anthony Tuckwell and Shi Zhuo
Mindfulness meditation has been found to influence various important outcomes such as health, stress, depression, productivity, and altruism. We report evidence from a randomised controlled trial on a previously untested effect of mindfulness: information avoidance. We find that a relatively short mindfulness treatment (two weeks, 15 minutes a day) is able to induce a statistically significant reduction in information avoidance – that is, avoiding information that may cause worry or regret. Supplementary evidence supports mindfulness’s effects on emotion regulation as a possible mechanism for the effect.
1371 - De-escalation technology : the impact of body-worn cameras on citizen-police interactionsDaniel AC Barbosa, Thiemo Fetzer, Caterina Soto & & Pedro CL Souza
We provide experimental evidence that monitoring of the police activity through body-worn cameras reduces use-of-force, handcuffs and arrests, and enhances criminal reporting. Stronger treatment effects occur on events classified ex-ante of low seriousness. Monitoring effects are moderated by officer rank, which is consistent with a career concern motive by junior officers. Overall, results show that the use of body-worn cameras de-escalates conflicts.
1370 - What Can We Learn from the UK’s Post-1945 Economic Reforms?Nicholas Crafts
This paper reviews the claim that economic policymakers in the post-Covid UK should learn the lessons of the 1940s. Post-1945 policies relating to delivering full employment, levelling up, upgrading social security, dealing with the public debt legacy, and addressing the productivity puzzle are considered. The paper finds many reasons to criticize 1940s’ policies. Although, superficially, outcomes appear to have been good, a closer look reveals significant failings notably concerning design of the welfare state and supply-side policy for growth. The main lesson from the 1940s is not to repeat the policy errors of those days.
1369 - Revenue and distributional modelling for a UK wealth taxArun Advani, Helen Hughson & Hannah Tarrant
In this paper we model the revenue that could be raised from an annual and a one-off wealth tax of the design recommended by Advani, Chamberlain and Summers (2020b). We examine the distributional effects of the tax, both in terms of wealth and other characteristics. We also estimate the share of taxpayers who would face liquidity constraints in meeting their tax liability. We find that an annual wealth tax charging 0.17% on wealth above £500,000 could generate £10 billion in revenue, before administrative costs. Alternatively, a one-off tax charging 4.8% (effectively 0.95% per year, paid over a five-year period) on wealth above the same threshold, would generate £250 billion in revenue. To put our revenue estimates into context, we present revenue estimates and costings for some commonly-proposed reforms to the existing set of taxes on capital.
1368 - Behavioural responses to a wealth taxArun Advani & Hannah Tarrant
In this paper, we review the existing empirical evidence on how individuals respond to the incentives created by a net wealth tax. Variation in the overall magnitude of behavioural responses is substantial: estimates of the elasticity of taxable wealth vary by a factor of 800. We explore three key reasons for this variation: tax design, context, and methodology. We then discuss what is known about the importance of individual margins of response and how these interact with policy choices. Finally, we use our analysis to systematically narrow down and reconcile the range of elasticity estimates. We argue that a well-designed wealth tax would reduce the tax base by 7-17% if levied at a tax rate of 1%.
1367 - The UK’s wealth distribution and characteristics of high-wealth householdsArun Advani, George Bangham and Jack Leslie
We show that wealth inequality in the UK is high and has increased slightly over the past decade as financial asset prices increased in the wake of the financial crisis. But data deficiencies are a major barrier in understanding the true distribution, composition and size of household wealth. The most comprehensive survey of household wealth in the UK does a good job of capturing the vast majority of the wealth distribution, but that nearly £800 billion of wealth held by the very wealthiest UK households is missing. We also find tentative evidence that survey measures of high-wealth families undervalue their assets – our central estimate of the true value of wealth held by households in the UK is 5% higher than the survey data suggests.
1366 - Exploration and Exploitation in US Technological ChangeVasco M. Carvalho, Mirko Draca, and Nikolas Kuhlen
How do firms and inventors move through ‘knowledge space’ as they develop their innovations? We propose a method for tracking patterns of ‘exploration and exploitation’ in patenting behaviour in the US for the period since 1920. Our exploration measure is constructed from the text of patents and involves the use of ‘Bayesian Surprise’ to measure how different current patent-based innovations are from existing portfolios. Our results indicate that there are distinct ‘life-cycle’ patterns to firm and inventor exploration. Furthermore, exploration activity is more geographically concentrated than general patenting, but this concentration is centred outside the main hubs of patenting.
1365 - Paradox of Monetary Profit, Shortage of Money in Circulation & FinancialisationFarzad Javidanrad
Over the last four decades, the term “financialisation” has entered economics terminologies to explain the development of capitalist economies in which: a) the rate of profit in the production sector is falling or narrowing relative to that in the financial sector b) profit seeking through financial speculation has grown rapidly among the household and the production sectors; c) public and private debt is rapidly accelerating and its ratio to GDP is increasing swiftly; d) there is an independent and accelerated growth of the financial sector compared to that of the real sector. This paper is a theoretical attempt to shed light on these features through the lens of the paradox of monetary profit and its manifestation in the capitalist economy, i.e. the shortage of money in circulation. The aim of this paper is to show how the paradox of monetary profit provides a theoretical framework to analyse the mechanism by which the capitalist economies move towards financialisation. This theoretical argument shows the connection between the shortage of money in circulation and financialisation. The core idea proposed in this paper is that financialisation is the direct result of the shortage of money in circulation, and that this shortage can be explained through the paradox of monetary profit.
1364 - Missing Incomes in the UK : Evidence and Policy ImplicationsArun Advani, Tahnee Ooms and Andy Summers
Policymakers tend to ‘treasure what is measured’ and overlook phenomena that are not. In an era of increased reliance on administrative data, existing policies also often determine what is measured in the first place. We analyse this two-way interaction between measurement and policy in the context of the investment incomes and capital gains that are missing from the UK’s official income statistics. We show that these ‘missing incomes’ change the picture of economic inequality over the past decade, revealing rising top income shares during the period of austerity. The underestimation of these forms of income in official statistics has diverted attention from tax policies that disproportionately benefit the wealthiest. We urge a renewed focus on how policy affects and is affected by measurement.
1363 - Job Displacement, Unemployment Benefits and Domestic ViolenceSonia Bhalotra, Diogo G. C. Britto, Paolo Pinotti and Breno Sampaio
We estimate impacts of male job loss, female job loss, and male unemployment benefits on domestic violence in Brazil. We merge employer-employee and social welfare registers with administrative data on domestic violence cases brought to criminal courts, use of public shelters by victims and mandatory notifications of domestic violence by health providers. Leveraging mass layoffs for identification, we find that both male and female job loss, independently, lead to large and pervasive increases in domestic violence. Exploiting a discontinuity in unemployment insurance eligibility, we find that eligible men are not less likely to commit domestic violence while benefits are being paid, and more likely to commit it once benefits expire. Our findings are consistent with job loss increasing domestic violence on account of a negative income shock and an increase in exposure of victims to perpetrators, with unemployment benefits partially offsetting the income shock while reinforcing the exposure shock.
1362 - Reversal of Fortune for Political Incumbents : Evidence from Oil ShocksRabah Arezki, Simeon Djankov, Ha Nguyen & Ivan Yotzov
Using a new dataset of 198 national elections across 48 democracies, this paper is the first to systematically examine the effects of oil price shocks on incumbents’ political fortunes in developed oil-importing countries. We find that oil price increases systematically lower the odds of re election for incumbents and increase the likelihood of changes in the ideology of the incoming government. These shocks are found to operate through lowering consumption growth
1361 - Can information about jobs improve the effectiveness of vocational training? Experimental evidence from IndiaBhaskar Chakravorty, Wiji Arulampalam, Clement Imbert & Roland Rathelot
Using a randomised experiment, we show that providing better information about prospective jobs to vocational trainees can improve their placement outcomes. The study setting is the vocational training programme DDU-GKY in India. We find that including in the training two information sessions about placement opportunities make trainees 17% more likely to stay in the jobs in which they are placed. We argue that this effect is likely driven by improved selection into training. As a result of the intervention, trainees that are over-optimistic about placement jobs are more likely to drop out before placement.
1360 - The 15-Hour Week: Keynes’s Prediction RevisitedNicholas Crafts
In 1930 Keynes opined that by 2030 people would work only 15 hours per week. As such, this prediction will not be realised. However, expected lifetime hours of leisure and non-market work in the UK rose by 60 per cent between 1931 and 2011, considerably more than Keynes would have expected. This reflects increases in life expectancy at older ages and much longer expected periods of retirement. Leisure in retirement contributes to high life satisfaction for the elderly but building up savings to pay for it is a barrier to working only 15 hours per week.
1359 - Infrastructure Upgrades and Lead Exposure : Do Cities Face Trade-Offs When Replacing Water Mains?Ludovica Gazze & Jennifer Heissel
Concerns about drinking water contamination through lead service lines, which connect street water mains to homes in many cities in the United States, might hinder resource-constrained municipalities from performing important infrastructure upgrades. Construction on water mains might disturb the service lines and increase lead levels in drinking water. We estimate the effects of water main maintenance on drinking water and children's blood levels by exploiting unique geocoded data and over 2,200 water main replacements in Chicago, a city with almost 400,000 known lead service lines. By comparing water and blood samples in homes at different distances from replaced mains before and after replacement, we find no evidence that water main replacement affects water or children's lead levels.
1358 - Race-related research in economics and other social sciencesArun Advani, Elliot Ash, David Cai & Imran Rasul
How does economics compare to other social sciences in its study of issues related to race and ethnicity? We assess this using a corpus of 500,000 academic publications in economics, political science, and sociology. Using an algorithmic approach to classify race-related publications, we document that economics lags far behind the other disciplines in the volume and share of race-related research, despite having higher absolute volumes of research output. Since 1960, there have been 13,000 race-related publications in sociology, 4,000 in political science, and 3,000 in economics. Since around 1970, the share of economics publications that are race-related has hovered just below 2% (although the share is higher in top-5 journals); in political science the share has been around 4% since the mid-1990s, while in sociology it has been above 6% since the 1960s and risen to over 12% in the last decade. Finally, using survey data collected from the Social Science Prediction Platform, we find economists tend to overestimate the amount of race-related research in all disciplines, but especially so in economics.
1357 - The Demand for Fact-CheckingFelix Chopra, Ingar Haaland & Christopher Roth
Using a large-scale online experiment with more than 8,000 U.S. respondents, we examine how the demand for a politics newsletter changes when the newsletter content is fact-checked. We first document an overall muted demand for factchecking when the newsletter features stories from an ideologically aligned source, even though fact-checking increases the perceived accuracy of the newsletter. The average impact of fact-checking masks substantial heterogeneity by ideology: factchecking reduces demand among respondents with strong ideological views and increases demand among ideologically moderate respondents. Furthermore, factchecking increases demand among all respondents when the newsletter features stories from an ideologically non-aligned source.
1356 - Freedom of the Press? Catholic censorship during the Counter ReformationSascha O. Becker, Francisco J. Pino & Jordi Vidal-Robert
The Protestant Reformation in the early 16th century challenged the monopoly of the Catholic Church. The printing press helped the new movement spread its ideas well beyond the cradle of the Reformation in Luther’s city of Wittenberg. The Catholic Church reacted by issuing indexes of forbidden books which blacklisted not only Protestant authors but all authors whose ideas were considered to be in conflict with Catholic doctrine. We use newly digitized data on the universe of books censored by the Catholic Church during the Counter-Reformation, containing information on titles, authors, printers and printing locations. We classify censored books by topic (religion, sciences, social sciences and arts) and language and record when and where books were indexed. Our results show that Catholic censorship did reduce printing of forbidden authors, as intended, but also negatively impacted on the diffusion of knowledge, and city growth.
1355 - Borders within EuropeMarta Santamaría, Jaume Ventura and Uğur Yeşilbayraktar
Are country borders still an impediment to trade flows within Europe? Using a microlevel survey with 3 million annual shipments of goods, we construct a matrix of bilateral trade for 269 European regions. Take two similar region pairs, one containing regions in different countries and the other containing regions in the same country. The market share of the origin region in the destination region for the international pair is 17.5 percent that of the intranational pair. Across industries, this estimate ranges from 12.3 to 38.9 percent. For post-1910 borders, this estimate is 28.8 percent. The implication is clear: Europe is far from having a single market.
1354 - Women Legislators and Economic PerformanceThushyanthan Baskaran, Sonia Bhalotra, Brian Min & Yogesh Uppal
There has been a phenomenal global increase in the proportion of women in politics in the last two decades, but there is no evidence of how this influences economic performance. We investigate this using data on competitive elections to India’s state assemblies, leveraging close elections to isolate causal effects. We find significantly higher growth in economic activity in constituencies that elect women and no evidence of negative spillovers to neighbouring male-led constituencies, consistent with net growth. Probing mechanisms, we find evidence consistent with women legislators being more efficacious, less corrupt and less vulnerable to political opportunism.
1353 - Maternal Mortality and Women’s Political PowerSonia Bhalotra, Damian Clarke, Joseph F. Gomes & Atheendar Venkataramani
Millions of women continue to die during and soon after childbirth, even where the knowledge and resources to avoid this are available. We posit that raising the share of women in parliament can trigger action. Leveraging the timing of gender quota legislation across developing countries, we identify sharp sustained reductions of 8–10 percent in maternal mortality. Investigating mechanisms, we find that gender quotas lead to increases in percentage points of 5–8 in skilled birth attendance and 4–8 in prenatal care utilization, alongside a decline in fertility of 6–7 percent and an increase in the schooling of young women of about 0.5 years. The results are robust to numerous robustness checks. They suggest a new policy tool for tackling maternal mortality.
1352 - The Long-Run Spillover Effects of Pollution : How Exposure to Lead Affects Everyone in the ClassroomLudovica Gazze, Claudia Persico & Sandra Spirovska
Children exposed to pollutants like lead are more disruptive and have lower achievement. However, little is known about whether lead-exposed children affect the long-run outcomes of their peers. We estimate these spillover effects using new data on preschool blood lead levels (BLLs) matched to education data for all students in North Carolina public schools. We compare siblings whose school-grade cohorts differ in the proportion of children with elevated BLLs, holding constant school and peers’ demographics. Having more lead-exposed peers is associated with lower high-school graduation and SAT-taking rates and increased suspensions and absences. Peer effects are larger for same-gendered students.
1351 - A BLP Demand Model of Product-Level Market Shares with ComplementarityAo Wang
Applied researchers most often estimate the demand for differentiated products assuming that at most one item can be purchased. Yet simultaneous multiple purchases are pervasive. Ignoring the interdependence among multiple purchases can lead to erroneous counterfactuals, in particular, because complementarities are ruled out. I consider the identification and estimation of a random coefficient discrete choice model of bundles, namely sets of products, when only product-level market shares are available. This last feature arises when only aggregate purchases of products, as opposed to individual purchases of bundles, are available, a very common phenomenon in practice. Following the classical approach with aggregate data, I consider a two-step method. First, using a novel inversion result in which demand can exhibit Hicksian complementarity, I recover the mean utilities of products from product-level market shares. Second, to infer the structural parameters from the mean utilities while dealing with price endogeneity, I use instrumental variables. I propose a practically useful GMM estimator whose implementation is straightforward, essentially as a standard BLP estimator. Finally, I estimate the demand for Ready-To-Eat (RTE) cereals and milk in the US. The demand estimates suggest that RTE cereals and milk are overall complementary and the synergy in consumption crucially depends on their characteristics. Ignoring such complementarities results in misleading counterfactuals.
1350 - Leader Identity and CoordinationSonia Bhalotra, Irma Clots-Figueras, Lakshmi Iyer & Joseph Vecci
This paper examines policy effectiveness as a function of leader identity. We experimentally vary leader religious identity in a coordination game implemented in India, and focus upon citizen reactions to leader identity, controlling for leader actions. We find that minority leaders improve coordination, while majority leaders do not. Alternative treatment arms reveal that affirmative action for minorities reverses this result, while intergroup contact improves the effectiveness of leaders of both identities. We also find that minority leaders are less effective in towns with a history of intergroup conflict. Our results demonstrate that leader and policy effectiveness depend upon citizen reactions, conditioned by social identity and past conflict.
1349 - Railways and cities in IndiaJames Fenske, Namrata Kala & Jinlin Wei
Using a new dataset on city populations in colonial India, we show that the railroad network increased city size in the period 1881 to 1931. Our baseline estimation approach includes fixed effects for city and year, and we construct instrumental variables for railroad proximity based on distance from a least cost path spanning cities that existed prior to the start of railroad construction. Cities that increased market access due to the railroad grew, particularly those cities that were initially small and isolated.
1348 - Bayesian Local ProjectionsSilvia Miranda-Agrippino & Giovanni Ricco
We propose a Bayesian approach to Local Projections that optimally addresses the empirical bias-variance tradeoff inherent in the choice between VARs and LPs. Bayesian Local Projections (BLP) regularise the LP regression models by using informative priors, thus estimating impulse response functions potentially better able to capture the properties of the data as compared to iterative VARs. In doing so, BLP preserve the flexibility of LPs to empirical model misspecifications while retaining a degree of estimation uncertainty comparable to a Bayesian VAR with standard macroeconomic priors. As a regularised direct forecast, this framework is also a valuable alternative to BVARs for multivariate out-of-sample projections.
1347 - Closing Time : The Local Equilibrium Effects of ProhibitionGreg Howard & Arianna Ornaghi
How do different local policies in a federal system affect local land values, production, and sorting? We study the question exploiting a large historical policy change : U.S. Alcohol Prohibition in the early twentieth century. Comparing same-state early and late adopters of county dry laws in a difference-in-differences design, we find that early Prohibition adoption increased population and farm real estate values. Moreover, we find strong effects on farm productivity consistent with increased investment due to a land price channel. In equilibrium, the policy change disproportionately attracted immigrants and African-Americans.
1346 - On the Quantity and Quality of Girls : Fertility, Parental Investments, and MortalityS Anukriti, Sonia Bhalotra & Eddy H. F. Tam
Access to prenatal sex-detection technology in India has led to a phenomenal increase in abortion of girls. We find that it has also narrowed the gender gap in under-5 mortality, consistent with surviving girls being more wanted than aborted girls. For every three aborted girls, one additional girl survived to age five. Mechanisms include moderation of son-biased fertility stopping and narrowing of gender gaps in parental investments. However, surviving girls are more likely to be born in lower status families. Our findings have implications not only for counts of missing girls but also for the later life outcomes of girls.
1345 - Infant Health, Cognitive Performance and Earnings : Evidence from Inception of the Welfare State in SwedenSonia Bhalotra, Martin Karlsson, Therese Nilsson & Nina Schwarz
We identify earnings impacts of exposure to an infant health intervention in Sweden, using individual linked administrative data to trace potential mechanisms. Leveraging quasi-random variation in eligibility, we estimate that exposure was associated with higher test scores in primary school for boys and girls. However only girls were more likely to score in the top quintile. Subsequent gains, in secondary schooling, employment, and earnings, are restricted to girls. We show that the differential gains for women accrued from both skills and opportunities, expansion of the welfare state having created unprecedented employment opportunities for women.
1344 - Predicting Inflation with Neural NetworksLivia Paranhos
This paper applies neural network models to forecast inflation. The use of a particular recurrent neural network, the long-short term memory model, or LSTM, that summarizes macroeconomic information into common components is a major contribution of the paper. Results from an exercise with US data indicate that the estimated neural nets usually present better forecasting performance than standard benchmarks, especially at long horizons. The LSTM in particular is found to outperform the traditional feed-forward network at long horizons, suggesting an advantage of the recurrent model in capturing the long-term trend of inflation. This finding can be rationalized by the so called long memory of the LSTM that incorporates relatively old information in the forecast as long as accuracy is improved, while economizing in the number of estimated parameters. Interestingly, the neural nets containing macroeconomic information capture well the features of inflation during and after the Great Recession, possibly indicating a role for nonlinearities and macro information in this episode. The estimated common components used in the forecast seem able to capture the business cycle dynamics, as well as information on prices.
1343 - Turnout in Concurrent Elections : Evidence from Two Quasi-Experiments in ItalyEnrico Cantoni, Ludovica Gazzè, and Jerome Schafer
We study the effects of different types of concurrent elections using individual-level administrative and survey data from Italy. Exploiting different voting ages for the two Houses of Parliament in a voter-level Regression Discontinuity Design, we find no effect of Senate voting eligibility on voter turnout or information acquisition. We also estimate city-level Differences-in-Differences showing that concurrent high-salience municipal elections increase turnout in lower-salience provincial and European elections, but not vice-versa. These concurrency effects are concentrated in municipalities in the South of Italy, possibly due to weaker political parties and lower levels of social capital.
1342 - Subjective Models of the Macroeconomy : Evidence from Experts and a Representative SamplePeter Andre, Carlo Pizzinelli, Christopher Roth & Johannes Wohlfart
Using a sample of 2,200 households representative of the US population and a sample of more than 1,000 experts, we measure beliefs about how aggregate unemployment and inflation respond to different macroeconomic shocks. Expert predictions are quantitatively close to standard DSGE models and VAR evidence. While households' beliefs are directionally aligned with those of experts in the case of oil supply shocks and government spending shocks, they predict an opposite reaction of inflation to monetary policy and income tax shocks. A substantial fraction of deviations of household predictions can be explained by the use of a simple affective heuristic
1341 - Information Frictions among Firms and HouseholdsSebastian Link, Andreas Peichl, Christopher Roth & Johannes Wohlfart
We leverage survey data from Germany, Italy, and the US to document several novel stylized facts about the extent of information frictions among firms and households. First, firms’ expectations about the central bank policy rate, inflation, and aggregate unemployment are more aligned with expert forecasts and less dispersed than households’ . Second, there is substantially more heterogeneity in information frictions within households than within firms. Third, consistent with firms having stronger priors, they update their policy rate expectations significantly less compared to households when provided with an expert forecast. Our results have important implications for modelling heterogeneity in macroeconomic models.
1340 - Disguising prejudice : Popular rationales as excuses for intolerant expressionLeonardo Bursztyn, Ingar Haaland, Aakaash Rao & Chris Roth
We study how popular rationales enable public anti-minority actions. Rationales to oppose minorities genuinely persuade some people. But they also provide “excuses” that may reduce the stigma associated with anti-minority expression, thereby increasing anti-minority behavior. In a first experiment, participants learn that a previous respondent authorized a donation to an anti-immigrant organization and then make an inference about the respondent’s underlying motivations. Participants informed that their matched respondent learned about a study claiming that immigrants increase crime rates before authorizing the donation see the respondent as less intolerant. In a second experiment, participants learn about that same study and then choose whether to authorize a public donation to the anti-immigrant organization. Participants informed that their exposure to the rationale will be publicly observable are substantially more likely to make the donation than participants who are informed that their exposure will remain private. A final experiment shows that people are more willing to post anti-immigrant content on social media when they can use an anti-immigrant video clip from Fox News as an excuse. Our findings suggest that prominent public figures can lower the social cost of intolerant expression by popularizing rationales, increasing anti-minority expression.
1339 - Beliefs about racial discrimination and support for pro-black policiesIngar Haaland & Chris Roth
This paper provides representative evidence on beliefs about racial discrimination and examines whether information causally affects support for pro-black policies. Eliciting quantitative beliefs about the extent of hiring discrimination against blacks, we uncover large disagreement about the extent of racial discrimination with particularly pronounced partisan differences. An information treatment leads to a convergence in beliefs about racial discrimination but does not lead to a similar convergence in support of pro-black policies. The results demonstrate that while providing information can substantially reduce disagreement about the extent of racial discrimination, it is not sufficient to reduce disagreement about pro-black policies.
1338 - Attack and Interception in NetworksFrancis Bloch, Kalyan Chatterjee and Bhaskar Dutta
This paper studies a game of attack and interception in a network, where a single attacker chooses a target and a path, and each node chooses a level of protection. We show that the Nash equilibrium of the game exists and is unique. It involves a mixed strategy of the attacker except when one target has a very high value relative to others. We characterize equilibrium attack paths and attack distributions as a function of the underlying network and target values. We also show that adding a link or increasing the value of a target may harm the attacker - a comparative statics effect which is reminiscent of Braess's paradox in transportation economics. Finally, we contrast the Nash equilibrium with the equilibria of two variations of the model : one where nodes make sequential protection decisions upon observing the arrival of a suspicious object, and one where all nodes cooperate in defense.
1337 - Approximate Maximum Likelihood for Complex Structural ModelsVeronika Czellar, David T. Frazier and Eric Renault
Indirect Inference (I-I) is a popular technique for estimating complex parametric models whose likelihood function is intractable, however, the statistical efficiency of I-I estimation is questionable. While the efficient method of moments, Gallant and Tauchen (1996), promises efficiency, the price to pay for this efficiency is a loss of parsimony and thereby a potential lack of robustness to model misspecification. This stands in contrast to simpler I-I estimation strategies, which are known to display less sensitivity to model misspecification due in large part to their focus on specific elements of the underlying structural model. In this research, we propose a new simulation-based approach that maintains the parsimony of I-I estimation, which is often critical in empirical applications, but can also deliver estimators that are nearly as efficient as maximum likelihood. This new approach is based on using a constrained approximation to the structural model, which ensures identification and can deliver estimators that are consistent and nearly efficient. We demonstrate this approach through several examples, and show that this approach can deliver estimators that are nearly as efficient as maximum likelihood, when feasible, but can be employed in many situations where maximum likelihood is infeasible.
1336 - Weak Identification in Discrete Choice ModelsDavid T. Frazier, Eric Renault, Lina Zhang & Xueyan Zhao
We study the impact of weak identification in discrete choice models, and provide insights into the determinants of identification strength in these models. Using these insights, we propose a novel test that can consistently detect weak identification in commonly applied discrete choice models, such as probit, logit, and many of their extensions. Furthermore, we demonstrate that when the null hypothesis of weak identification is rejected, Wald-based inference can be carried out using standard formulas and critical values. A Monte Carlo study compares our proposed testing approach against commonly applied weak identification tests. The results simultaneously demonstrate the good performance of our approach and the fundamental failure of using conventional weak identification tests for linear models in the discrete choice model context. Furthermore, we compare our approach against those commonly applied in the literature in two empirical examples: married women labor force participation, and US food aid and civil conflicts.
1335 - An Adaptive Targeted Field Experiment : Job Search Assistance for Refugees in JordanStefano Caria, Grant Gordon, Maximilian Kasy, Simon Quinn, Soha Shami & Alexander Teytelboym
We introduce an adaptive targeted treatment assignment methodology for field experiments. Our Tempered Thompson Algorithm balances the goals of maximizing the precision of treatment effect estimates and maximizing the welfare of experimental participants. A hierarchical Bayesian model allows us to adaptively target treatments. We implement our methodology in Jordan, testing policies to help Syrian refugees and local jobseekers to find work. The immediate employment impacts of a small cash grant, information and psychological support are small, but targeting raises employment by 1 percentage-point (20%). After four months, cash has a sizable effect on employment and earnings of Syrians.
1334 - Measuring UK top incomesArun Advani, Andy Summers & Hannah Tarrant
We compare two approaches to measuring UK top income shares - the share of income going to particular subgroups, such as the top 1%. We set out four criteria that an ideal top share series should satisfy: (i) comparability between numerator and denominator ; (ii) comparability over time ; (iii) international comparability; and (iv) practical sustainability. Our preferred approach meets three of these; by contrast the approach currently used to produce UK fiscal income series meets none of them. Changing to our preferred approach matters quantitatively : the share of income going to the top 1% is 2 percentage points higher, but rising more slowly, than under the alternative.
1333 - Can Conditional Cash Transfer Defer Child Marriage? Impact of Kanyashree Prakalpa in West Bengal, IndiaSubhasish Dey & Tanisha Ghosal
This paper studies the impact of a conditional cash transfer program called Kanyashree Prakalpa (KP) in the Indian state of West Bengal that aimed to improve the status and well-being of girls by reducing incidence of child marriage and increasing the secondary or higher education of girls till at least 18 years of age. Using the data from multiple rounds of National Family Health Survey (NFHS), difference-in-differences and triple-difference are employed considering the younger cohort (exposed to the program) as the treated group, the older cohort (not exposed to the program) as the control group, and the neighbouring state of Jharkhand as a comparison state. The analysis suggests that the KP program has reduced the probability of child marriage by 6.7 percent and increased the probability of secondary or higher educational attainment by 6 percent. The study contributes to the scarce literature of the significant long-term impact of the KP program towards women’s well-being and empowerment.
1332 - In Vaccines We Trust? The Effects of the CIA's Vaccine Ruse on Immunization in PakistanMonica Martinez-Bravo & Andreas Stegmann
In July 2011, the Pakistani public learnt that the CIA had used a vaccination campaign as cover to capture Osama Bin Laden. The Taliban leveraged on this information and launched an anti-vaccine propaganda campaign to discredit vaccines and vaccination workers. We evaluate the effects of these events on immunization by implementing a Difference-in-Differences strategy across cohorts and districts. We find that vaccination rates declined 12 to 20% per standard deviation in support for Islamist parties. These results suggest that information discrediting vaccination campaigns can negatively affect trust in health services and demand for immunization
1331 - Risk Exposure and Acquisition of Macroeconomic InformationChristopher Roth, Sonja Settele & Johannes Wohlfart
We conduct an experiment with a representative sample from the US to study households’ demand for macroeconomic information. Respondents who learn of a higher personal exposure to unemployment risk during recessions increase their demand for an expert forecast about the likelihood of a recession. This finding is consistent with macroeconomic models of endogenous information acquisition, according to which the demand for information depends on its expected benefits. Moreover, respondents’ updating about their personal unemployment risk suggests that households are imperfectly informed about their exposure to aggregate fluctuations, which may distort their beliefs about the benefits of acquiring macroeconomic information.
1330 -Scholars at Risk : Academic Networks and High-Skilled Emigration from Nazi GermanySascha O Becker, Volker Lindenthal, Sharun Mukand & Fabian Waldinger
We study the role of professional networks in facilitating emigration of Jewish academics dismissed from their jobs by the Nazi government. We use individual-level exogenous variation in the timing of dismissals to estimate the causal effect of networks. Academics with more ties to early émigrés (emigrated 1933-1934) were more likely to emigrate. Early émigrés functioned as “bridging nodes” that facilitated emigration to their own destination. We also distinguish between three kinds of social networks – family, community, or professional networks and study their relative importance. Lastly, we provide some of the first empirical evidence of decay in social ties over time.
1329 - Separating equilibria, under-pricing and security designDan Bernhardt, Kostas Koufopoulos and Giulio Trigilia
Classical security design papers equate competitive capital markets to securities being fairly priced in expectation. We revisit Nachman and Noe (1994)'s adverse selection setting, modeling capital-market competition as free entry of investors, and allowing firms to propose prices of securities, as happens in private securities placements and bank lending. We show that separating equilibria exist in which high types issue under-priced debt, while low types issue more informationally-sensitive securities (e.g., equity). We also uncover pooling equilibria in which firms issue under-priced debt. These results provide foundations for the pecking-order theory of external finance, and positive profits for uninformed lenders.
1328 - Profiting from the poor in competitive lending markets with adverse selectionDan Bernhardt, Kostas Koufopoulos and Giulio Trigilia
We provide theoretical foundations for positive lender profits in competitive credit markets with asymmetric information, where potential borrowers have scarce collateralizable assets. Strikingly, when some borrowers have negative net present value projects, an equilibrium always exists in which lenders make positive profits, despite their lack of `soft' information and free entry of competitors. We then establish that greater access to collateral for borrowers reduces lender profits, and we relate our findings to the empirical evidence on micro-credit, payday lending, and, more broadly, retail and small business financing.
1327 - The pitfalls of pledgeable cash flows : soft budget constraints, zombie lending and under-investmentDan Bernhardt , Kostas Koufopoulos and Giulio Trigilia
We show that when borrowers are privately informed about their creditworthiness and lenders have a soft budget constraint, efficient investment requires a limit on the fraction of a firm's cash flows that can be pledged to outsiders. That is, pledgeability should neither be too low nor too high. An increase in pledgeability, or, more broadly, creditor rights, can either promote re-investment in zombie firms, which increases other firms' cost of capital, or it can lead to insufficient underinvestment, depending on the composition of equilibrium credit demand. Thus, greater pledgeability can reduce net social surplus, and even trigger a Pareto loss.
1326 - Measuring national happiness with musicEmmanouil Benetos, Alessandro Ragano, Daniel Sgroi & Anthony Tuckwell
We propose a new measure for national happiness based on the emotional content of a country’s most popular songs. Using machine learning to detect the valence of the UK’s chart-topping song of each year since the 1970s, we find that it reliably predicts the leading survey-based measure of life satisfaction. Moreover, we find that music valence is better able to predict life satisfaction than a recently-proposed measure of happiness based on the valence of words in books (Hills et al., 2019). Our results have implications for the role of music in society, and at the same time validate a new use of music as a measure of public sentiment.
1325 - Online Salience and Charitable Giving : Evidence from SMS DonationsCarlo Perroni, Kimberley Scharf, Oleksandr Talavera & Linh Vi
We explore the link between online attention and charitable donations. Using a unique dataset on phone text donations that includes detailed information on the timing of cash gifts to charities, we link donations to time variation online searches for words that appear in those charities’ mission statements. The results suggest that an increase in the online salience to donors of the activities pursued by different charities affects the number and volume of donations made to those charities and to charities that pursue different goals. We uncover evidence of positive own salience effects and negative cross salience effects on donations.
1324 - Choosing the narrative : the shadow banking crisis in the light of CovidMarcus Miller
Could experiencing a health pandemic aid in understanding the nature of financial crisis? It might, for example, help to discriminate between different narratives that claim to do so. In this spirit, two influential accounts of the near-collapse of shadow banking in the US financial crisis of 2008 are analysed: one developed by Mark Gertler and Nobuhiro Kiyotaki and the other presented by the Financial Crisis Inquiry Commission of the US Congress. Using a common two-sector framework, key features of these contrasting accounts of the market for banking services are presented, along with their corresponding diagnoses of what precipitated financial crisis. To see what the experience of Covid might imply about their relative credibility, four aspects of the current pandemic are considered: how it began from a small biological shock; how it gets spread by contagion; the significance of externalities; and how it may end with a vaccine. But the reader is left to form his or her own judgement
1323 - Supply shocks in China hit the world economy via global supply chainsQianxue Zhang
Global supply chains have become increasingly important in international trade over the past decade. Nevertheless, it remains di cult to quantify the role of supply-chain trade in transmitting and amplifying shocks, given the challenge of identifying and tracing the exogenous shocks across economies. This paper argues that the lockdown of Hubei province in China due to the Coronavirus (COVID-19) outbreak provides a natural experiment to study the importance of China's role in global value chains. Since the lockdown started during the Lunar New Year, Hubei's migrant workers who went home could not return to workplaces in other provinces, resulting in a massive labor supply shock. I feed the supply shock through a Ricardian model with intermediate goods and sectoral linkages to study trade and welfare effects across several economies. While welfare in China is the most strongly affected, the shock also has sizeable implications for the US and the UK. However, close neighbours such as South Korea and Japan gain from the shock. There are large variations regarding the sectoral contributions to the aggregate welfare changes. The model also performs well in predicting bilateral export changes.
1322 - Jesus speaks Korean : Christianity and literacy in colonial KoreaSascha O. Becker & Cheongyeon Won
In the mid 19th century, pre-colonial Korea under the Joseon dynasty was increasingly isolated and lagging behind in its economic development. Joseon Korea was forced to sign unequal treaties with foreign powers as a result of which Christian missionaries entered the country and contributed to the establishment of private schools. We show that areas with a larger presence of Christians have higher literacy rates in 1930, during the Japanese colonial period. We also show that a higher number of Protestants is associated with higher female literacy, consistent with a stronger emphasis on female education in Protestant denominations.