Institute for the Study of Labor IZA

Bonn, Germany

Institute for the Study of Labor IZA

Bonn, Germany
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Strang S.,University of Bonn | Gross J.,Maastricht University | Schuhmann T.,Maastricht University | Riedl A.,Maastricht University | And 4 more authors.
Social Cognitive and Affective Neuroscience | Year: 2014

Social norms, such as treating others fairly regardless of kin relations, are essential for the functioning of human societies. Their existence may explain why humans, among all species, show unique patterns of prosocial behaviour. The maintenance of social norms often depends on external enforcement, as in the absence of credible sanctioning mechanisms prosocial behaviour deteriorates quickly. This sanction-dependent prosocial behaviour suggests that humans strategically adapt their behaviour and act selfishly if possible but control selfish impulses if necessary. Recent studies point at the role of the dorsolateral prefrontal cortex (DLPFC) in controlling selfish impulses. We test whether the DLPFC is indeed involved in the control of selfish impulses as well as the strategic acquisition of this control mechanism. Using repetitive transcranial magnetic stimulation, we provide evidence for the causal role of the right DLPFC in strategic fairness. Because the DLPFC is phylogenetically one of the latest developed neocortical regions, this could explain why complex norm systems exist in humans but not in other social animals. © The Author (2014).

Herbst D.,Princeton University | Mas A.,Princeton University | Mas A.,National Bureau of Economic Research NBER | Mas A.,Institute for the Study of Labor IZA
Science | Year: 2015

We compare estimates of peer effects on worker output in laboratory experiments and field studies from naturally occurring environments. The mean study-level estimate of a change in a worker's productivity in response to an increase in a co-worker's productivity (γ) is γ = 0.12 (SE = 0.03, nstudies = 34), with a between-study standard deviation τ = 0.16. The mean estimated γ-values are close between laboratory and field studies (γlab - γfield = 0.04, P = 0.55, nlab = 11, nfield = 23), as are estimates of between-study variance τ2 (τ2lab - τ2field = -0:003, P = 0.89). The small mean difference between laboratory and field estimates holds even after controlling for sample characteristics such as incentive schemes and work complexity (γlab - γfield = 0.03, P = 0.62, nsamples = 46). Laboratory experiments generalize quantitatively in that they provide an accurate description of the mean and variance of productivity spillovers.

Khamis M.,Wesleyan University | Prakash N.,University of Connecticut | Siddique Z.,Institute for the Study of Labor IZA
Journal of Economic Behavior and Organization | Year: 2012

We examine spending on consumption items which have signaling value in social interactions across groups with distinctive social identities in India, where social identities are defined by caste and religious affiliations. Using nationally representative micro data on household consumption expenditures, we find that disadvantaged caste groups such as Other Backward Castes spend 8 percent more on visible consumption than Brahmin and High Caste groups while social groups such as Muslims spend 14 percent less, after controlling for differences in permanent income, household assets and household demographic composition. The differences across social groups are significant and robust and these differences persist within different sub populations. We find that the higher spending of OBC households on visible consumption is diverted from education spending, while Muslim households divert spending from visible consumption and education towards greater food spending. Additionally, we find that these consumption patterns can be partly explained as a result of the status signaling nature of the consumption items. We also discuss alternative sources of differences in consumption patterns across groups which stem from religious observance. © 2012 Elsevier B.V.

Brown J.D.,Institute for the Study of Labor IZA | Hotchkiss J.L.,Georgia State University | Quispe-Agnoli M.,Federal Reserve Bank of Atlanta
Journal of Regional Science | Year: 2013

Using administrative data from the state of Georgia, this paper finds that, on average, across all firms, employing undocumented workers reduces a firm's hazard of exit by 19 percent. The advantage to firms from employing undocumented workers increases as more firms in the industry do so, decreases with the skill level of the firm's workers, increases with the breadth of a firm's market, and increases with the labor intensity of the firm's production process. © 2012, Federal Reserve Bank of Atlanta.

Fehrler S.,University of Zürich | Fehrler S.,Institute for the Study of Labor IZA | Przepiorka W.,University of Oxford | Przepiorka W.,ETH Zurich
Evolution and Human Behavior | Year: 2013

It has been shown that psychological predispositions to benefit others can motivate human cooperation and the evolution of such social preferences can be explained with kin or multi-level selection models. It has also been shown that cooperation can evolve as a costly signal of an unobservable quality that makes a person more attractive with regard to other types of social interactions. Here we show that if a proportion of individuals with social preferences is maintained in the population through kin or multi-level selection, cooperative acts that are truly altruistic can be a costly signal of social preferences and make altruistic individuals more trustworthy interaction partners in social exchange. In a computerized laboratory experiment, we test whether altruistic behavior in the form of charitable giving is indeed correlated with trustworthiness and whether a charitable donation increases the observing agents' trust in the donor. Our results support these hypotheses and show that, apart from trust, responses to altruistic acts can have a rewarding or outcome-equalizing purpose. Our findings corroborate that the signaling benefits of altruistic acts that accrue in social exchange can ease the conditions for the evolution of social preferences. © 2013 Elsevier Inc.

Kammer A.,University of Cologne | Niehues J.,Cologne Institute for Economic Research IW | Peichl A.,Institute for the Study of Labor IZA
Journal of European Social Policy | Year: 2012

Welfare state typologies are generally based on the institutional design of welfare policies. In this paper we analyse whether such typologies also persist when they are applied to effective redistributive outcomes of welfare states' tax and transfer policies. In contrast to the widespread use of macro indicators, our empirical analysis relies on internationally comparable microdata in order to account for the distribution of resources across households. We perform a hierarchical cluster analysis and check whether the classical typology for Western European welfare states reproduces the typical patterns when it comes to effective economic outcomes. We find that the established welfare regimes not only differ in their welfare state institutions as is known, but also in their economic outcomes. In particular, we identify the social-democratic, conservative, liberal and southern welfare regimes. Belgium and the Netherlands emerge as hybrid cases lying between the social-democratic and conservative model. © The Author(s) 2012.

Lacetera N.,University of Toronto | Macis M.,Johns Hopkins University | Macis M.,Institute for the Study of Labor IZA | Slonim R.,Institute for the Study of Labor IZA | Slonim R.,University of Sydney
Science | Year: 2013

Field-based evidence suggests that guidelines against economic rewards to motivate blood donors should be reconsidered.

Hammond G.W.,West Virginia University | Tosun M.S.,University of Nevada, Reno | Tosun M.S.,Institute for the Study of Labor IZA
Journal of Regional Science | Year: 2011

We analyze the impact of fiscal decentralization on U.S. county population, employment, and real income growth. Our findings suggest that government organization matters for local economic growth, but that the impacts vary by government unit and by economic indicator. We find that single-purpose governments per square mile have a positive impact on metropolitan population and employment growth, but no significant impact on nonmetropolitan counties. In contrast, the fragmentation of general-purpose governments per capita has a negative impact on employment and population growth in nonmetropolitan counties. Our results suggest that local government decentralization matters differently for metropolitan and nonmetropolitan counties. © 2010, Wiley Periodicals, Inc.

Eichhorst W.,Institute for the Study of Labor IZA | Marx P.,Institute for the Study of Labor IZA
Journal of European Social Policy | Year: 2011

Dualization is a recurrent concept in analysing the political economy of labour market reforms in European countries. While it helps to make sense of changes at the margin of labour markets, so far, it remains unclear whether there are repercussions for standard employees. The paper examines this question by assessing changes in the German labour market. We argue that the growing availability of non-standard work increases pressure on core workers to accept more flexibility. The study yields two results. First, labour market reforms were, indeed, targeted at outsiders and continued in small and sometimes contradictory steps. The direction of change was determined by the socio-economic problem pressure of the respective period, but independent of government composition. Second, while insiders objected to such marginal flexibilization in principle - once the reforms were in place - they reacted with wage moderation and other instruments, thus strengthening their competitiveness relative to flexible workers. © The Author(s), 2011.

Hanel B.,University of Melbourne | Kalb G.,University of Melbourne | Kalb G.,Institute for the Study of Labor IZA | Scott A.,University of Melbourne
Journal of Health Economics | Year: 2014

We estimate a multi-sector model of nursing qualification holders' labour supply in different occupations. A structural approach allows us to model the labour force participation decision, the occupational and shift-type choice, and the decision about hours worked as a joint outcome following from maximising a utility function. Disutility from work is allowed to vary by occupation and also by shift type in the utility function. Our results suggest that average wage elasticities might be higher than previous research has found. This is mainly due to the effect of wages on the decision to enter or exit the profession, which was not included in the previous literature, rather than from its effect on increased working hours for those who already work in the profession. © 2013 Elsevier B.V.

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