Working Papers 2019

All new research is first presented in a Working Paper (WP) where the target audience is primarily other researchers. All WP’s from recent years are written in English. Since 2006, a Swedish summary has also been included. A WP usually contains research that has progressed enough to be ready to be submitted to a scientific journal for review and potential publication.


1301. The Economics of Change and Stability in Social Trust: Evidence from (and for) Catalan Secession

Christian Bjørnskov, Miguel Ángel Borrella-Mas and Martin Rode

Consequences of social trust are comparatively well studied, while its societal determinants are often subject to debate. This paper studies both in the context of Catalan attempts to secede from Spain: First, we test if Catalonia enjoys higher levels of…


1300. Education and Health: Long-run Effects of Peers, Tracking and Years

Martin Fischer, Ulf-G Gerdtham, Gawain Heckley, Martin Karlsson, Gustav Kjellsson and Therese Nilsson

We investigate two parallel school reforms in Sweden to assess the long-run health effects of education. One reform only increased years of schooling, while the other increased years of schooling but also removed tracking leading to a more mixed…


1299. Digitization-Based Automation and Occupational Dynamics

Malin Gardberg, Fredrik Heyman, Pehr-Johan Norbäck and Lars Persson

We examine the relationship between occupational automation probabilities and employment dynamics over nearly two decades. We show that employment and wage shares of occupations with a higher automation risk have declined in Sweden over the period…


1298. Should We Worry about the Decline of the Public Corporation? A Brief Survey of the Economics and External Effects of the Stock Market

Nikita Koptyug, Lars Persson and Joacim Tåg

In recent years, the number of listed companies has been declining in many countries across the world. This paper provides a selective survey of the literature on the real economic effects of the stock market to assess the potential effects of this…


1297. State Trading Deregulation and Prairie Durum Wheat Production

Colin A. Carter and Shon Ferguson

We estimate the impact of the 2012 removal of the Canadian Wheat Board’s (CWB) single-desk on the spatial pattern of durum wheat acres in Western Canada. We analyze changes in durum seeded acres with a panel regression and Census Agricultural Region…


1296. Import Demand Elasticities Based on Quantity Data: Theory, Evidence and Implications for the Gains from Trade

Shon Ferguson and Aaron Smith

Correct estimates of import demand elasticities are essential for measuring the gains from trade and predicting the impact of trade policies. We show that estimates of import demand elasticities hinge critically on whether they are derived  using…


1295. Mothers, Peers and Gender-Role Identity

Claudia Olivetti, Eleonora Patacchini and Yves Zenou

We study whether a woman's labor supply as a young adult is shaped by the work behavior of her adolescent peers' mothers. Using detailed information on a sample of U.S. teenagers who are followed over time, we find that labor force participation…


1294. Friendship Networks and Political Opinions: A Natural Experiment among Future French Politicians

Yann Algan, Nicolò Dalvit, Quoc-Anh Do, Alexis Le Chapelain and Yves Zenou

We study how friendship shapes students' political opinions in a natural experiment. We use the indicator whether two students were exogenously assigned to a short-term \integration group", unrelated to scholar activities and dissolved before the…


1293. Are Estimates of Early Education Programs Too Pessimistic? Evidence from a Large-Scale Field Experiment that Causally Measures Neighbor Effects

John A. List, Fatemeh Momeni and Yves Zenou

We estimate the direct and spillover effects of a large-scale early childhood intervention on the educational attainment of over 2,000 disadvantaged children in the United States. We show that failing to account for spillover effects results in a severe…


1292. Capacity Mechanisms and the Technology Mix in Competitive Electricity Markets

Pär Holmberg and Robert A. Ritz

Capacity mechanisms are increasingly used in electricity market design around the world yet their role remains hotly debated. In this paper, we introduce a new benchmark model of a capacity mechanism in a competitive electricity market with many different…


1291. A Theory of Gazelle Growth: Competition, Venture Capital Finance and Policy

Mehmet Caglar Kaya and Lars Persson

This paper proposes a theory of gazelle growth in which gazelles can either grow organically or by acquisitions. In the model, there are three types of firms: incumbent, target, and gazelle. We show that the lower cost of organic growth can increase the…


1290. Local Rates of New Firm Formation: An Empirical Exploration using Swedish Data

Martin Andersson, Niclas Lavesson and Mark D. Partridge

We assess the empirical literature on the determinants of spatial variations in new-firm formation rates by undertaking a systematic empirical analysis of the relative roles of different demand- and supply-side factors. Using instrumental variables to…


1289. Multiple Births, Birth Quality and Maternal Labor Supply: Analysis of IVF Reform in Sweden

Sonia Bhalotra, Damian Clarke, Hanna Mühlrad and Mårten Palme

In this study we examine the passage of a reform to in-vitro fertilization (IVF) procedures in Sweden in 2003. Following publication of medical evidence showing that pregnancy success rates could be maintained using single rather than multiple embryo…


1288. The Impact of Banning Mobile Phones in Swedish Secondary Schools

Dany Kessel, Hulda Lif Hardardottir and Björn Tyrefors

Recently, policy makers worldwide have suggested and passed legislation to ban mobile phone use in schools. The influential and only quantitative evaluation by Beland and Murphy (2016), suggests that this is a very low-cost but effective policy to improve…


1287. Retail and Place Attractiveness: The Effects of Big-box Entry on Property Values

Sven-Olov Daunfeldt, Oana Mihaescu, Özge Öner and Niklas Rudholm

Opponents of big-box entry argue that large retail establishments generate noise and other types of pollution and a variety of negative externalities associated with traffic. Big-box advocates, on the other hand, argue that access to a large retail market…


1286. Can Social Spending Cushion the Inequality Effect of Globalization?

Andreas Bergh, Irina Mirkina and Therese Nilsson

This paper examines whether social spending cushions the effect of globalization on within-country inequality. Using information on disposable and market income inequality and data on overall social spending, and health and education spending from the ILO…


1285. The Collaborative Innovation Bloc: A Reply to our Commentators

Niklas Elert and Magnus Henrekson

We are grateful for the comments to our article, and for the opportunity to respond to them. In our original contribution, we argued that the application of the EOE perspective could help make Austrian economics more concrete, relevant and persuasive,…


1284. When Dad Can Stay Home: Fathers’ Workplace Flexibility and Maternal Health

Petra Persson and Maya Rossin-Slater

While workplace flexibility is perceived to be a key determinant of maternal labor supply, less is known about fathers’demand for flexibility or about intra-household spillover effects of flexibility initiatives. This paper examines these issues in the…


1283. Economic Incentives, Home Production and Gender Identity Norms

Andrea Ichino, Martin Olsson, Barbara Petrongolo and Peter Skogman Thoursie

We infer the role of gender identity norms from the reallocation of childcare across parents, following changes in their relative wages. By exploiting variation from a Swedish tax reform, we estimate the elasticity of substitution in parental childcare…


1282. Roots of Tolerance among Second-generation Immigrants

Niclas Berggren, Martin Ljunge and Therese Nilsson

Tolerance – respecting individual choice and differences among people – is a prominent feature of modern European culture. That immigrants embrace this kind of liberal value is arguably important for integration, a central policy goal. We…


1281. Coups, Regime Transitions, and Institutional Change

Daniel L. Bennett, Christian Bjørnskov and Stephan F. Gohmann

Coups and regime transitions are events that typically are intended to change the basic institutional framework of a country. Which specific policies change and the consequences of these changes nevertheless remains largely unknown. Change after a coup or…


1280. Intrapreneurship and Trust

Niklas Elert, Erik Stam and Mikael Stenkula

Trust and entrepreneurship are seen as key ingredients of long-term prosperity. However, it is not clear how these two are related. Part of the confusion can be traced back to the measurement of entrepreneurship, biased towards independent…


1279. The Rise and Decline of Industrial Foundations as Controlling Owners of Swedish Listed Firms: The Role of Tax Incentives

Magnus Henrekson, Dan Johansson and Mikael Stenkula

Private foundations became a vehicle for the corporate control of large listed firms in Sweden during the post-war era, but in the 1990s, they were replaced by wealthy individuals who either directly own controlling blocks or who own them through holding…


1278. Redispatch in Zonal Pricing Electricity Markets

Mario Blázquez de Paz

Zonal pricing electricity markets operate sequentially. First, the suppliers compete in a spot market. Second, to alleviate the congestion in the transmission line, in a redispatch market, the suppliers in the importing node are called into operation to…


1277. A Meritocratic Origin of Egalitarian Behavior

Alexander W. Cappelen, Johanna Möllerström, Bjørn-Atle Reme and Bertil Tungodden

The meritocratic fairness ideal implies that inequalities in earnings are regarded as fair only when they reflect differences in performance. Consequently, implementation of the meritocratic fairness ideal requires complete information about individual…


1276. Does Economic Freedom Boost Growth for Everyone?

Andreas Bergh and Christian Bjørnskov

While the association between economic freedom and long-run economic growth is well documented, the parallel research literature on the distributional consequences of economic freedom is full of conflicting findings. In this paper, we take a step…


1275. Gender Differences in Optimism

Carl Magnus Bjuggren and Niklas Elert

This paper examines gender differences in optimism about the economy. We measure optimism using Swedish survey data in which respondents stated their beliefs about the country’s future economic situation. We argue that this measure of optimism is…


1274. Samuelson's Approach to Revealed Preference Theory: Some Recent Advances

Thomas Demuynck and Per Hjertstrand

Since Paul Samuelson introduced the theory of revealed preference, it has become one of the most important concepts in economics. This chapter surveys some recent contributions in the revealed preference literature. We depart from Afriat's theorem,…


1273. The Compensation Hypothesis Revisited and Reversed

Andreas Bergh

This note describes how research on the link between globalization and openness has changed over time. Early contributions assumed that countries develop welfare states to compensate for volatility caused by economic openness (the compensation…


1272. Foreign Investors and Domestic Company Growth: Evidence from US Venture Capital Investments in Sweden

Thomas Hellmann, Alexander Montag and Joacim Tåg

Do foreign venture capitalists help the domestic economy, or hamper it by slowing down growth, potentially moving economic activity away? This paper addresses this long-standing policy question by examining the differential effects of US venture capital…


1271. Ethnic Discrimination in Contacts with Public Authorities: A Correspondence Test Among Swedish Municipalities

Ali Ahmed and Mats Hammarstedt

We present a field experiment conducted in order to explore the existence of ethnic discrimination in contact with public authorities. Two fictitious parents, one with a Swedish-sounding name and one with an Arabic-sounding name, sent email inquiries to…


1270. Measuring Entrepreneurship: Do Established Metrics Capture High-Impact Schumpeterian Entrepreneurship?

Magnus Henrekson and Tino Sanandaji

Are quantitative measures driven by small business activity also valid proxies for high-impact Schumpeterian entrepreneurship? We compile four hand-collected measures of high-impact Schumpeterian entrepreneurship (VC-funded IPOs, self-made billionaire…


1269. Securing Personal Freedom through Institutions – the Role of Electoral Democracy and Judicial Independence

Niclas Berggren and Jerg Gutmann

Personal freedom is highly valued by many and a central element of liberal political philosophy. Although personal freedom is frequently associated with electoral democracy, developments in countries such as Hungary, Poland, Turkey and Russia, where…


1268. Globalization, Job Tasks and the Demand for Different Occupations

Fredrik Heyman and Fredrik Sjöholm

Globalization has increased in recent decades, resulting in structural changes of production and labor demand. This paper examines how the increased global engagement of firms affects the structure of the workforce. We find that the aggregate distribution…


1267. Stock Market Impact of Cross-Border Acquisitions in Emerging Markets

Pehr-Johan Norbäck and Lars Persson

Entry by multinational enterprises (MNEs) into emerging markets has increased substantially over the last decades. Many of these MNE entries have taken place in concentrated markets. To capture these features, we construct a strategic interaction model of…


1266. Political Hedgehogs: The Geographical Sorting of Refugees in Sweden

Johan Wennström and Özge Öner

This study shows that in Sweden, contrary to other European countries, refugees have been disproportionately placed in peripheral and rural areas with high unemployment and rapid native depopulation where the prospects for integration, both socially and…


1265. The Refugee Crisis and the Reinvigoration of the Nation State: Does the European Union Have a Common Asylum Policy?

Magnus Henrekson, Özge Öner and Tino Sanandaji

The European Union officially proclaims to have a common asylum policy. However, the common treaties leave a great deal of discretion to the individual member countries, which allow them to regulate refugee migration while still upholding international…


1264. Production Efficiency of Nodal and Zonal Pricing in Imperfectly Competitive Electricity Markets

Mahir Sarfati, Mohammad Reza Hesamzadeh and Pär Holmberg

Electricity markets employ different congestion management methods to handle the limited transmission capacity of the power system. This paper compares production efficiency and other aspects of nodal and zonal pricing. We consider two types of zonal…


1263. Gender Grading Bias in Junior High School Mathematics

Petter Berg, Ola Palmgren and Björn Tyrefors

Admission to high school in Sweden is based on the final grades from junior high. This paper compares students’ final mathematics grade with new data from a high school introductory test score in mathematics. Both the grades and the test are based…


1262. The Housing Wealth Effect: Quasi-Experimental Evidence

Dany Kessel, Björn Tyrefors and Roine Vestman

We exploit a quasi-experiment to provide new evidence on the magnitude of the housing wealth effect. We estimate an immediate shock of approximately ‒15% to house prices close to one of Stockholm's airports after its operations were unexpectedly…


1261. Determinants of International Consumption Risk Sharing in Developing Countries

Malin Gardberg

Complete financial markets allow countries to share their consumption risks internationally, thereby creating welfare gains through lower volatility of aggregate consumption. This paper empirically looks at international consumption risk sharing and its…


1260. Salience of Inherited Wealth and the Support for Inheritance Taxation

Spencer Bastani and Daniel Waldenström

We study how attitudes to inheritance taxation are influenced by information about the role of inherited wealth in society. Using a randomized experiment in a register-linked Swedish survey, we find that informing individuals about the large aggregate…

Interdisciplinary European Studies

The European Union in a Changing World Order

Pages-from-2019-Oxelheim-m.gif

This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

About the book

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To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

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