A key ingredient of many popular asset pricing models is that investors exhibit countercyclical risk aversion, which helps explain major economic puzzles such as the strong and systematic variation in risk premiums over time and the high volatility of asset prices. There is, however,...

A pervasive, yet little acknowledged feature of international migration to developed countries is that newly arriving immigrants are increasingly highly skilled. This paper analyses the factors affecting the change in the skill composition of immigrants in Switzerland between 1980 and 2010 using...

We estimate productivities at the sector level for 72 countries and 5 decades, and examine how they evolve over time in both developed and developing countries. In both country groups, comparative advantage has become weaker: productivity grew systematically faster in sectors that were initially...

We analyze the effects of the unprecedented rise in trade between Germany and “the East” – China and Eastern Europe – in the period 1988 – 2008 on German local labor markets. Using detailed administrative data, we exploit the cross-regional variation in initial industry structures and...

This paper studies the stability of socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs entirely mitigates the externality. Our data...

Social capital is often associated with desirable political and economic outcomes. This paper connects a growing literature on the “dark side” of social capital with institutional change. We examine the downfall of democracy in interwar Germany. Using new data on Nazi Party entry in a...

We study the impact of the integration of women in US policing between the late 1970s and early 1990s on violent crime reporting and domestic violence escalation. Along these two key dimensions, we find that female officers improved police quality. Using crime victimization data, we find that as...

We develop a theory of intergenerational transmission of preferences that rationalizes the choice between alternative parenting styles (as set out in Baumrind 1967). Parents maximize an objective function that combines Beckerian altruism and paternalism towards children. They can affect their...

This paper studies the effects of the apprenticeship system on innovation and labor market polarization. A stylized model with two key features is developed: (1) apprentices are more productive due to industry-specific training, but (2) from the firm’s perspective, when training apprentices,...

The process of economic reforms launched in 1978, and gradually extended until current days, has catapulted China into a stellar growth trajectory that has proven highly resilient. In this paper, we estimate the effect on economic development of China’s industrial policy, in particular, the...