Table of Contents

The Effect of Workplace vs School-Based Vocational Education on Youth Unemployment: Evidence from France

Pierre Cahuc, Ecole Polytechnique, Paris
Jérémy Hervelin, affiliation not provided to SSRN

Cognitive Endurance as Human Capital

Christina Brown, University of Chicago
Supreet Kaur, University of California, Berkeley - Department of Economics
Geeta Kingdon, University College London - UCL Institute of Education
Heather Schofield, Harvard University

Fighting Populism on its Own Turf: Experimental Evidence

Vincenzo Galasso, Centre for Economic Policy Research (CEPR), Bocconi University, University of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER), CESifo (Center for Economic Studies and Ifo Institute), Bocconi University - Baffi Carefin Centre
Massimo Morelli, Bocconi University
Tommaso Nannicini, Bocconi University - Department of Economics, IZA Institute of Labor Economics
Piero Stanig, Bocconi University - DONDENA - Carlo F. Dondena Centre for Research on Social Dynamics

Exploratory Study of Moderators for Spillover Caused by Default Nudges

Jonas Colmsjö, affiliation not provided to SSRN
Martin Hedesstrom, affiliation not provided to SSRN
Lars-Olof Johansson, University of Gothenburg - Department of Psychology

Study More Tomorrow

Todd Pugatch, Oregon State University, IZA
Elizabeth Schroeder, Oregon State University - Department of Economics
Nicholas L. Wilson, Williams College - Department of Economics

A Bright Side of Anger: A Comprehensive Exploration of Borrowers' Emotions and Credit Risk Management

Tian Lu, Heinz College, Carnegie Mellon University
Zhichen Chen, Boston University - Questrom School of Business
Yingjie Zhang, Peking University - Guanghua School of Management
Xianghua Lu, affiliation not provided to SSRN


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"The Effect of Workplace vs School-Based Vocational Education on Youth Unemployment: Evidence from France" Free Download
EEREV-D-22-00495

PIERRE CAHUC, Ecole Polytechnique, Paris
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JÉRÉMY HERVELIN, affiliation not provided to SSRN
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This article analyzes the impact of increasing workplace-based versus school-based vocational education to promote the employment of low-skilled young people. We combine a field experiment in France with the estimation of a job search and matching model which takes into account the productivity difference of the young people in these two pathways and the choice of employers.  We find a positive impact of increased workplace education on youth employment limited by the fact that it stems almost entirely from retention in the training firm without having a significant impact on youth seeking employment in other firms after graduation.

"Cognitive Endurance as Human Capital" Fee Download
NBER Working Paper No. w30133

CHRISTINA BROWN, University of Chicago
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SUPREET KAUR, University of California, Berkeley - Department of Economics
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GEETA KINGDON, University College London - UCL Institute of Education
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HEATHER SCHOFIELD, Harvard University
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Schooling may build human capital not only by teaching academic skills, but by expanding the capacity for cognition itself. We focus specifically on cognitive endurance: the ability to sustain effortful mental activity over a continuous stretch of time. As motivation, we document that globally and in the US, the poor exhibit cognitive fatigue more quickly than the rich across field settings; they also attend schools that offer fewer opportunities to practice thinking for continuous stretches. Using a field experiment with 1,600 Indian primary school students, we randomly increase the amount of time students spend in sustained cognitive activity during the school day—using either math problems (mimicking good schooling) or non-academic games (providing a pure test of our mechanism). Each approach markedly improves cognitive endurance: students show 22% less decline in performance over time when engaged in intellectual activities—listening comprehension, academic problems, or IQ tests. They also exhibit increased attentiveness in the classroom and score higher on psychological measures of sustained attention. Moreover, each treatment improves students’ school performance by 0.09 standard deviations. This indicates that the experience of effortful thinking itself—even when devoid of any subject content—increases the ability to accumulate traditional human capital. Finally, we complement these results with quasi-experimental variation indicating that an additional year of schooling improves cognitive endurance, but only in higher-quality schools. Our findings suggest that schooling disparities may further disadvantage poor children by hampering the development of a core mental capacity.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

"Fighting Populism on its Own Turf: Experimental Evidence" Free Download
CESifo Working Paper No. 9789

VINCENZO GALASSO, Centre for Economic Policy Research (CEPR), Bocconi University, University of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER), CESifo (Center for Economic Studies and Ifo Institute), Bocconi University - Baffi Carefin Centre
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MASSIMO MORELLI, Bocconi University
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TOMMASO NANNICINI, Bocconi University - Department of Economics, IZA Institute of Labor Economics
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PIERO STANIG, Bocconi University - DONDENA - Carlo F. Dondena Centre for Research on Social Dynamics
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We evaluate how traditional parties may respond to populist parties on issues that are particularly fitting for populist messages. The testing ground is the 2020 Italian referendum on the reduction of members of Parliament. We implement a large-scale field experiment, with almost one million impressions of programmatic advertising, and a survey experiment. Our treatments are an informative video on the likely costs of cutting MPs, aimed at deconstructing the populist narrative, and a reducing trust video aimed at attacking the credibility of populist politicians. Our field experiment shows that the latter video is more effective at capturing the viewers’ attention. It decreases the turnout rate and, albeit less, the “Yes” votes (in favor of cutting MPs). We present a theoretical framework based on trust in traditional parties and information acquisition to account for our findings and provide additional predictions. In the survey experiment, both (unskippable) videos reduce the “Yes” votes and increase the share of undecided. Confirming the theory, for voters of traditional parties the effects are concentrated among people with low information, while for voters of populist parties previous information plays no role. Our findings show that campaign messages should target not only demographic characteristics but also trust attitudes.

"Exploratory Study of Moderators for Spillover Caused by Default Nudges" Free Download
JBEE-D-22-00334

JONAS COLMSJÖ, affiliation not provided to SSRN
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MARTIN HEDESSTROM, affiliation not provided to SSRN
LARS-OLOF JOHANSSON, University of Gothenburg - Department of Psychology
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Default nudges have been shown to be effective in many situations but the net effect is unclear since subsequent choices sometimes are affected positively and sometimes negatively. Moderators of positive and negative spillovers would explain these varying results and have therefore been investigated in this study. In a two-step, online experiment were 1.200 participants nudged to donate to charity and then given the opportunity to work for charity. Personality traits were investigated between two and four weeks before the spillover experiment. Spillover here constitutes the difference in work for charity between the nudge and control condition for participants that donated the same amount. This study shows that participants that adhered highly to descriptive norms more often made a non-zero donation but worked less (or not at all) for charity when nudged, i.e. negative spillover was shown. Donations and work for charity on the other hand correlated for participants that did not adhere highly to descriptive norms and the nudge affected both the donation and the amount worked for a charity in the intended direction, i.e. positive spillover was shown. Aggregated spillover was slightly positive since the positive spillover outweighs the negative spillover. p { line-height: 115%; margin-bottom: 0.25cm; background: trans

"Study More Tomorrow" Free Download
EL54676

TODD PUGATCH, Oregon State University, IZA
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ELIZABETH SCHROEDER, Oregon State University - Department of Economics
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NICHOLAS L. WILSON, Williams College - Department of Economics
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We design a commitment contract for college students, ``Study More Tomorrow,'' and conduct a randomized control trial testing a model of its demand. The contract commits students to attend peer tutoring if their midterm grade falls below a pre-specified threshold. The contract carries a financial penalty for noncompliance, in contrast to other commitment devices for studying tested in the literature. We find demand for the contract, with take-up of 10% among students randomly assigned a contract offer. Contract demand is not higher among students randomly assigned to a lower contract price, plausibly because a lower contract price also means a lower commitment benefit of the contract. Students with the highest perceived utility for peer tutoring have greater demand for commitment, consistent with our model. Contrary to the model's predictions, we fail to find evidence of increased demand among present-biased students or among those with higher self-reported tendency to procrastinate. Our results show that college students are willing to pay for study commitment devices. The sources of this demand do not align fully with behavioral theories, however.

"A Bright Side of Anger: A Comprehensive Exploration of Borrowers' Emotions and Credit Risk Management" Free Download

TIAN LU, Heinz College, Carnegie Mellon University
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ZHICHEN CHEN, Boston University - Questrom School of Business
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YINGJIE ZHANG, Peking University - Guanghua School of Management
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XIANGHUA LU, affiliation not provided to SSRN

Money has tremendous power; being under financial pressure such as from debt, for example, can be accompanied by emotional responses in people. Hence, the human emotional spectrum is a potential source of insight into, and also a means of monitoring, borrowers’ financial behavior. In fact, financial default is a deviant behavior that is more likely to be driven by individual subjective status than by other, more traditionally considered objective (e.g., demographic or socioeconomic) factors. Although existing studies have paid great attention to the relationship between emotions and well-being or to leveraging of alternative sources (such as public social media usage) to account for credit risk evaluation, little is known about the value of emotions in credit risk management, and there is no theoretical or practical guidance for connecting the two. In the current study, collaborating with a leading Asian microloan company, we aim to bridge that gap. We are able to improve the understanding of the link between emotions and credit risk evaluation from at least two perspectives. First, we focus on happiness and anger by means of two measurements: immediate emotions near the focal time point, and average emotion tendency over a relatively long term. Moreover, we comprehensively explore the role of emotions both for a financial company’s loan-approval decisions at the loan pre-approval stage and repayment interventions at the loan pre-maturity stage. This paper presents three interesting findings. First, anger at the pre-approval stage has a pronounced U-shaped relationship with borrowers’ default probability. This may go against the intuition that higher intensity of anger leads to less frequent moral behavior; and in fact, we reveal what we call “a bright side of anger” with respect to curbing of financial credit risk: moderated intensity of anger at the pre-approval stage suggests a lower loan default probability. The second finding presented herein is that average happiness tendency at the pre-maturity stage becomes informative and valuable, as it shows a U-shaped relationship with loan default; as for anger, it does not work therein. Third, our field experiment with two well-recognized repayment-reminder strategies indicates that their effectiveness hinges on delinquent borrowers’ emotions. In general, a positive-expectation reminder is useful for prompting repayment when delinquent borrowers are in strong emotional intens