Within-country Analysis Research Articles

Business is tense: new evidence on how language affects economic activity

We provide a large scale within-country analysis of the effect of language future time reference (FTR) on self-employment using individual-level data from Switzerland, a country characterized by a long-standing multilingualism and a large share of immigrant population. We test the hypothesis that speakers of languages where future tense marking is not obligatory in prediction contexts (defined as weak FTR) may have a closer perception of future rewards and be more willing to become self-employed, a choice that reflects future orientation. We perform an epidemiological analysis which consistently indicates that long-term immigrants who speak weak FTR languages are between 2 and 4 percentage points more likely to be self-employed compared to speakers of strong FTR languages, net of unobservable ancestral cultural traits, districts of destination’s characteristics, and linguistic features other than FTR. We find that the effect is largest when the main language of daily use is the mother tongue, but the effect is also significant when the main language is learnt later in life.

Electoral Systems and Geographic Representation

AbstractWho gets represented in legislatures, and how does this depend on electoral institutions? Others have asked this question from the perspective of gender, race, and class. We focus on space, asking whether MPs disproportionately come from some places rather than others and how this depends on electoral rules. Using data on over 13,000 legislators in sixty-two democracies, we developed a new measure to determine whether the spatial distribution of MP birthplaces matched the spatial distribution of the citizens they represented. Contrary to received wisdom, single-member district systems do not have more geographically representative parliaments than multi-member district systems, while mixed-member systems perform significantly better than both. We attribute the higher spatial representativeness of mixed-member systems to the contamination effects in their single-member tier. We present evidence for this explanation from a within-country analysis of elections in Italy, the UK, and Germany.

More is not always better. Effect of educational expenditures on education quality and social mobility in Switzerland

Over the past 20 years, per-student spending on compulsory education in Switzerland has risen by 52 percent in real terms. However, per-pupil expenditures vary significantly across cantons. The question quickly arises whether “more is always better”. Switzerland lends itself to this analysis because spending authority lies with the cantons and thus provides a good setting for a within-country analysis. We use a new comprehensive dataset to measure educational quality and mobility at the individual level. Our analysis shows that higher cantonal spending does not increase educational quality or mobility. The allocation of education spending seems to be more important than its mere amount. For example, our study suggests a better linguistic integration of foreign-speaking students.

COVID-19 counterfactual evidence. Estimating the effects of school closures

ABSTRACT Scholars have started to estimate the effects of non-pharmaceutical interventions to reduce the health impact of COVID-19. However, the empirical evidence is highly contested, and since it is not known exactly what would have happened without those measures, political élites are left free to give credit to the voices that they prefer the most. We argue that any sensible assessment of the effectiveness of anti-COVID policies requires methodological reflection on what is actually comparable, and how to approximate the ideal “method of difference” theorized by John Stuart Mill. By evaluating the effectiveness of school closures as an anti-COVID policy, we provide two examples in which appropriate counterfactuals are inductively discovered rather than selected a priori. In the first one, we use Coarsened Exact Matching (CEM) in a cross-country setting, while in the second one, we implement the Synthetic Control Method in a within-country analysis. The article highlights the methodological advantages of including these techniques in the toolbox of policy scholars, while both examples confirm the effectiveness of school closures.

Men are from Mars, women are from Venus: on lenders’ stereotypical views and the implications for a firm’s debt

Building on social construction theory, this paper investigates how the presence of women on the board may affect access to credit because of lenders’ gender-stereotyped views. In our view this translates into different levels of the firm's bank debt. To evaluate the impact of gender as a social construct, we designed a within-country analysis in Italy by distinguishing between egalitarian and non-egalitarian contexts. To test our hypotheses, we used a sample of 3514 Italian listed and unlisted firms. Results showed a lower level of bank debt for firms with a relevant number of women in the boardroom (i.e., critical mass) if located in a non-egalitarian context. This effect was partially mitigated in firms during a crisis situation. While extant research explains gender-based differences in a firm’s financial structure by a change in inner-board mechanism/dynamics caused by differences in men/women characteristics, we argue that the social construction of gender may also induce lenders in different contexts to view boards with women differently in relation to access to credit.

Repatriation during conflict: A signaling analysis

More than 28 million refugees have repatriated to their countries of origin since 1990. The United Nations High Commissioner for Refugees (UNHCR) often organizes repatriation under Tripartite Repatriation Agreements (TRAs) and uses these agreements to raise funds to help refugees return. Human rights organizations often view these agreements as signals about forced repatriation and campaign against funding repatriation. Scholars explain these TRAs as part of a broader problem with the global focus on repatriation at the expense of refugee rights. With these arguments it is impossible to distinguish when it is time to support repatriation and when an agreement is premature and would promote unsafe return. Yet, sometimes countries do not sign repatriation agreements at all. Other times repatriation agreements occur when safety in the origin country is on the horizon. Still other times these agreements are signed, and there is little evidence that the origin country is safe from violence. Under what conditions do TRAs signal that it is safer in a country of origin? I develop a signaling model of negotiated repatriation and discuss cases studies that exemplify the equilibria. I theorize repatriation agreements arise out of a bilateral negotiation where the refugee-hosting country needs information and the refugee-sending country must signal capacity. A costly signal convinces the refugee-hosting country that the sending country can provide stability and that refugees will not flee again. Within-country quantitative analysis shows that host countries with leverage over countries of origin can elicit credible signals about violence. Host country leverage, measured by share of trade, is associated with waiting to sign repatriation agreements until violence is low. Donor countries should be skeptical of repatriation agreements signed when origin countries have leverage and forced repatriation is more likely. As the number of refugees in the world grows, pressure to repatriate refugees increases. Interstate relationships can help to distinguish among repatriation agreements, and the international community can use these differences to identify when refugee return is more likely to be safe and sustainable.

Like worker, like union? Labor market risk exposure, white-collar predominance and trade unions’ policy advocacy

AbstractThis study seeks to advance the scholarship on trade union heterogeneity. Expanding on previous research, we develop a theoretical framework that distinguishes unions along two dimensions—members’ labor market risk exposure and the predominance of white-collar workers—that help shape their labor market policy preferences and advocacy. The framework is then assessed in a within-country mixed-methods analysis. We first document how members in 35 Swedish unions map onto the two dimensions, using fine-grained survey data, and then qualitatively analyze the advocacy of seven unions with different membership characteristics. Our results confirm the relevance of isolating the two dimensions in analyses of both membership preferences and elite advocacy. These findings contrast with existing accounts of the contemporary Swedish union movement and carry implications for many other countries with fragmented union landscapes. They particularly demonstrate the importance of disaggregating union membership in micro- and macro-level research involving unions and their power resources.

Does natural capital depletion hamper sustainable development? Panel data evidence

This paper addresses growing concerns that the global decline in natural capital hurts wellbeing in the long-run. We examine empirically how natural capital depletion affects sustainable development as measured by a positive change in the United Nation's Inclusive Wealth indicator. Drawing on panel data for 140 countries between 1990 and 2010, within-country analysis reveals that many countries convert their depleted natural capital sufficiently into human- and produced capital such that the comprehensive stock of wealth grows. However, some developed economies are struggling to harness their natural wealth for sustainable development. The policy implication is that there is no universally applicable recipe for the effective management of countries' natural resources. Countries that are poorly endowed with human- and produced capital, in particular, may have a window of opportunity in which natural capital depletion is temporarily able to foster rather than hamper sustainable development.

Foreign Aid and State Legitimacy

ABSTRACTWhat are the effects of foreign aid on the perceived legitimacy of recipient states? Different donors adhere to different rules, principles, and operating procedures. The authors theorize that variation in these aid regimes may generate variation in the effects of aid on state legitimacy. To test their theory, they compare aid from the United States to aid from China, its most prominent geopolitical rival. Their research design combines within-country analysis of original surveys, survey experiments, and behavioral games in Liberia with cross-country analysis of existing administrative and Afrobarometer data from six African countries. They exploit multiple proxies for state legitimacy, but focus in particular on tax compliance and morale. Contrary to expectations, the authors find little evidence to suggest that exposure to aid diminishes the legitimacy of African states. If anything, the opposite appears to be true. Their results are consistent across multiple settings, multiple levels of analysis, and multiple measurement and identification strategies, and are unlikely to be artifacts of sample selection, statistical power, or the strength or weakness of particular experimental treatments. The authors conclude that the effects of aid on state legitimacy at the microlevel are largely benign.

Infant pertussis and maternal immunity: The curious case of Canada

BackgroundThe United Kingdom (UK) and Canada use the same acellular pertussis vaccine and both experienced large pertussis outbreaks in the past, occurring in the 1980s in the UK and 1990s in Canada, yet current epidemiology differs. A national outbreak with infant deaths occurred in the UK in 2012, yet outbreaks remain localized and death from pertussis rare in Canada. AimWe explored whether past outbreaks in children may influence future risk when those children become parents. MethodsWe conducted an ecological within-country birth cohort analysis in women of childbearing age of the relative risk of ever having pertussis infection by two points in time, 2002 and 2012, comparing with 1992 as the baseline. We used notified cases of pertussis in England and Wales and Canada to compare trends in relative risk. We projected forward to 2022 in Canada assuming incidence remained stable. ResultsIn Canada, the cumulative risk of previous pertussis was similar in 2002 and 2012 and, in both periods, was higher than in 1992. In England and Wales, the cumulative risk of pertussis fell stepwise from 1992 to 2012. Projecting forwards, the pattern of risk in Canada becomes similar to England and Wales in 2022. ConclusionsWidespread pertussis outbreaks in children may reduce the risk of pertussis in infants when those children become parents. Further research is needed to determine the mechanism. As birth cohorts that experienced outbreaks grow past childbearing age, pertussis burden in infants in Canada may increase, following trends observed in England and Wales.

Urban-Rural Disparities for COVID-19: Evidence from 10 Countries and Areas in the Western Pacific.

Limited evidence on the effectiveness of various types of social distancing measures, from voluntary physical distancing to a community-wide quarantine, exists for the Western Pacific Region (WPR) which has large urban and rural populations. We estimated the time-varying reproduction number (R t ) in a Bayesian framework using district-level mobility data provided by Facebook (i) to assess how various social distancing policies have contributed to the reduction in transmissibility of SARS-COV-2 and (ii) to examine within-country variations in behavioural responses, quantified by reductions in mobility, for urban and rural areas. Social distancing measures were largely effective in reducing transmissibility, with R t estimates decreased to around the threshold of 1. Within-country analysis showed substantial variation in public compliance across regions. Reductions in mobility were significantly lower in rural and remote areas than in urban areas and metropolitan cities (p < 0.001) which had the same scale of social distancing orders in place. Our findings provide empirical evidence that public compliance and consequent intervention effectiveness differ between urban and rural areas in the WPR. Further work is required to ascertain the factors affecting these differing behavioural responses, which can assist in policy-making efforts and increase public compliance in rural areas where populations are older and have poorer access to healthcare.

Disability Incidence Rates for Men and Women in 23 Countries: Evidence on Health Effects of Gender Inequality.

BackgroundInequality in gender varies across social contexts, which may influence the health of both men and women. Based on theories of gender as a social system, we examine whether systematic gender inequality at the macro-level influences health of men and women.MethodUsing harmonized panel data from the Gateway to Global Aging Data in 23 high- and middle-income countries (N = 168 873), we estimate disability prevalence and incidence for men and women ages 55–89 (2000–2016). Within each country or geographic region, we also investigate gender differences in age gradients of the probability of disability onset. We, then, pool data from all countries and test the hypothesis that gender inequality increases the probability of disability onset.ResultsWe found substantial cross-country variation in disability incidence rates, and this variation is greater for women than for men. Among ages 65–69, disability incidence rates ranged from 0.4 to 5.0 for men and from 0.5 to 9.4 for women. Our within-country analysis showed significant gender differences in age gradients of the probability of disability onset in the United States, Korea, Southern Europe, Mexico, and China, but not in Northern, Central, and Eastern Europe, England, and Israel. Testing hypothesized effects of gender inequality, we find that gender inequality is significantly associated with the probability of disability onset for women, but not for men.ConclusionsMacro-level societal gender inequality is significantly associated with the probability of disability onset for women. Reducing and eliminating gender inequality is crucial to achieving good health for women.

Disability Incidence Rates for Men and Women in 23 Countries: Evidence on Health Effects of Gender Inequality

Background: Inequality in gender varies across social contexts, which may influence the health of both men and women. Based on theories of gender as a social system, we examine whether systematic gender inequality at the macro level influences health of men and women in 23 countries. Methods: Using harmonized panel data from the Gateway to Global Aging Data in 23 high and middle income countries (N=168,873), we estimate disability incidence over a 16 year time period for men and women (2000–2016). We first investigate gender differences in age gradients of disability onset within each country or geographic region. We then pool data from all countries and test the hypothesis that gender inequality increases the risk of disability incidence for men and women. Results: We found substantial cross-country variation in disability incidence rates, and this variation is greater for women than for men. Among ages 65-69, disability incidence rates ranged from 0.4 to 5.0 for men and from 0.5 to 9.4 for women. Our within-country analysis showed significant gender differences in age gradients of disability incidence in the U.S., Korea, Southern Europe, Mexico, and China, but not in Northern, Central, and Eastern Europe, England and Israel. Testing hypothesized effects of gender inequality, we find that gender inequality is significantly associated with disability incidence for women, but not for men. Conclusions: Macro-level societal gender inequality is significantly associated with risk of disability onset for women. Reducing and eliminating gender inequality is crucial to achieving good health for women.

Does social trust affect international contracting? Evidence from foreign bond covenants

Building on rational choice institutionalism theory and Williamson’s (J Econ Lit 38(3): 595–613, 2000) four-level social analysis framework, we investigate the influence of the informal institution of social trust on debt contract design in an international setting. Using a sample of non-U.S. firms that issue bonds in the U.S. debt market, we find that Yankee bond creditors impose fewer covenants on bond issuers domiciled in countries with a high degree of social trust. We further show that the inverse relationship between debt covenants and the informal institution of social trust is more pronounced for firms from countries with weak formal institutions, as well as for firms with poor corporate governance and greater information opacity. These findings are robust to endogeneity tests, within-country analysis, various empirical models and measures of trust, and alternative hypotheses. We also show that, while a lower level of informal social trust is associated with higher borrowing costs, this relationship weakens when formal covenants are added to the debt contract (i.e., a substitution effect). Our paper contributes to the international business literature by providing new insights into the role of informal institutions (social trust) in cross-border debt contracting.

Time Encoding in Languages and Investment Efficiency

Linguistics research shows that languages differ as to how they differentiate future from present events. Economics research finds that when the grammatical structure of a language disassociates the future from the present, speakers of the language also disassociate the future from the present in their behaviors. This study examines how linguistically induced time perception relates to cross-country variation in investment efficiency. We find that underinvestment is less prevalent in countries where there is a weaker time disassociation in the language. The results from both a within-country analysis based on firms headquartered in different regions of Switzerland and an analysis based on the birthplace information of U.S. firms’ chief executive officers confirm the relation between languages and investment efficiency. Collectively, the results suggest that time encoding in languages influences speakers’ cognition and their investment decisions. This paper was accepted by Shivaram Rajgopal, accounting.

Talking Business: New Evidence on How Language Shapes Economic Behaviour

We provide a large scale within-country analysis of the effect of language future time reference (FTR) on the choice of being an entrepreneur using individual-level data from Switzerland, a country characterized by a unique long-standing multilingualism and a large share of immigrant population. We test the hypothesis that speakers of weak FTR languages may have a closer perception of future rewards and be more willing to become entrepreneurs, a choice that reflects future orientation. Our analysis consistently indicates that immigrants who speak weak FTR languages are around 2 percent more likely to be entrepreneurs compared to speakers of strong FTR languages, net of unobservable ancestral cultural traits, districts of destination's characteristics, linguistic features other than FTR, and whether individuals maintain their native language or switch to one of the four Swiss languages.

European institutional integration, trade unions and income inequality

Abstract What are the distributional implications of European institutional integration? This article argues that European institutional integration exerts a moderating effect on the relationship between trade union strength and income inequality—particularly inequality at the top—within countries of the European Union (EU). I contend that European institutional integration reduces the bargaining power of trade unions due to rising market competition and decreasing union control over the supply of labor. Thus, the effectiveness of trade unions in reducing inequality should decline with progressing European institutional integration. On the basis of a long-term within-country analysis of the EU15, I will show that the effect of trade unions on inequality varies strongly with European institutional integration. Consistent with the theoretical argument, the inequality-reducing effect of trade unions becomes substantially lower the more a country integrates in the EU.

Support for conditional unemployment benefit in European countries: The role of income inequality

This article investigates attitudes towards the conditionality of benefits targeted to a specific needy group, the unemployed, and analyses their relationship with the structure of income inequality. The focus is on the deservingness of welfare recipients. The public seems to use five criteria to define deservingness and, consequently, the conditionality to which public support is subjected: need, attitude (i.e. gratefulness), control (over neediness), reciprocity (of giving and receiving) and identity, that is the similarity or proximity between the providers of public support (the taxpayers) and the people who should receive it. People’s willingness to help depends on how close they consider benefit recipients to be to themselves (i.e. the extent to which they belong to the same in-group). The identity criterion is the main object of our investigation. We argue that the operation of this criterion at the micro-level can be affected by macro-level variables. Specifically, we focus on different measures of the structure of income inequality which are indicators of the social distance between welfare recipients and taxpayers. Based on data from three waves of the European Values Study (1990–2008) collected in 30 countries, the study offers a comparative and longitudinal analysis. The picture emerging from the within-country analysis – which removed much of the between-country heterogeneity − shows that when the social distance grows, it is more difficult for the majority of citizens (upper and middle classes) to identify with the unemployed.

Armed Conflict and Schooling in Rwanda: Digging Deeper

Abstract We study how armed violence affected educational outcomes in Rwanda during the nineties, relying on two waves of population census data and on a difference-in-differences identification strategy. Results indicate that the violence caused a drop of about 1 year of education for the individuals exposed to the violence at schooling age. The drop was slightly larger for girls than for boys. While increased dropouts and school delays explain the drop in primary schooling, secondary schooling was mainly affected by a drop in enrolments. Finally, in a within-country analysis, we find no robust link between subnational variations in the drop in schooling and the intensity of the 1994 genocide – the most intense conflict event that took place in the country over the studied period. We present possible explanations for the observed patterns and provide related policy implications.

Absolute income is a better predictor of coverage by skilled birth attendance than relative wealth quintiles in a multicountry analysis: comparison of 100 low- and middle-income countries

BackgroundHaving high-quality data available by 2020, disaggregated by income, is one of the Sustainable Development Goals (SGD). We explored how well coverage with skilled birth attendance (SBA) is predicted by asset-based wealth quintiles and by absolute income.MethodsWe used data from 293 national surveys conducted in 100 low and middle-income countries (LMICs) from 1991 to 2014. Data on household income were computed using national income levels and income inequality data available from the World Bank and the Standardized World Income Inequality Database. Multivariate regression was used to explore the predictive capacity of absolute income compared to the traditional measure of quintiles of wealth index.ResultsThe mean SBA coverage was 68.9% (SD: 24.2), compared to 64.7% (SD: 26.6) for institutional delivery coverage. Median daily family income in the same period was US$ 6.4 (IQR: 3.5–14.0). In cross-country analyses, log absolute income predicts 51.5% of the variability in SBA coverage compared to 22.0% predicted by the wealth index. For within-country analysis, use of absolute income improved the understanding of the gap in SBA coverage among the richest and poorest families. Information on income allowed identification of countries – such as Burkina Faso, Cambodia, Egypt, Nepal and Rwanda – which were well above what would be expected solely from changes in income.ConclusionAbsolute income is a better predictor of SBA and institutional delivery coverage than the relative measure of quintiles of wealth index and may help identify countries where increased coverage is likely due to interventions other than increased income.