The Income of Transsexuals and the Gender Wage Gap
Lydia Geijtenbeek (UvA)
12:00
We study the labor participation and earnings of transsexuals using an administrative data set of the entire Dutch labor force. First we compare transsexuals to other men and women, and find that both types of transsexuals participate less, while those who do participate earn less than men but more than women. Next we compare transsexuals before and after transition, under the assumption that their outcomes develop similarly to those of man, women or transsexuals of the same age. We find that gross yearly income increases for women who become men, with a contrasting decrease for men who become women. This could be interpreted as a 7-10 percent income penalty for being female and a 3-5 percent penalty for changing gender.

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Airlines Route Structure Competition and Network Policy
Hugo Silva Montalva (VU University)
12:45
In this paper, we study the sufficient policy instruments that induce a duopoly of airlines to choose the socially optimal output as well as the optimal route structure in a fixed network. We show that the first-best can always be enforced by using an airline- and market-specific per-passenger toll together with an airline- and link-specific per-flight toll. However, the rationale for the charges is not always the same: they may be required only to correct output setting, to correct simultaneously output and route structure choice, and to change the market structure on top correcting the other two distortions.

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In Search of the Angry Button
Boris van Leeuwen (University of Amsterdam)
13:30
Anger at another individual can be viewed as a means of creating credibility of a threat to punish, when other commitment devices are absent. For example, in an ultimatum game, angrier responders are relatively likely to reject low offers, and thus can win better terms if they can communicate to proposers that they anger easily. Moreover, proposers can gain an advantage if they can distinguish whether a responder is likely to anger at a low offer. We report an experiment to explore the extent to which individuals have this potentially valuable skill of detecting an “angry button”. Participants view photographs and videos of other individuals in various emotional states, including anger and neutrality. They then must identify which individuals reject and which accept low offers when they subsequently play an ultimatum game. (Joint work with Charles Noussair, Theo Offerman, Sigrid Suetens, Matthijs van Veelen and Jeroen van de Ven)

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Do reduced tuition fees affect academic achievement?
Nadine Ketel (University of Amsterdam and VU University Amsterdam)
14:00
Education subsidies may affect student effort through a selection effect (attracting less motivated students) and through a sunk cost effect (lower private contributions reduce commitment). This paper reports about a field experiment designed to test the presence of a sunk cost effect in an education setting. Students who signed up for extra-curricular tutorial sessions were randomly given different discounts on the tuition fees. The sunk cost effect predicts that students who received larger discounts are less likely to attend the tutorial sessions and therefore also less likely to pass the course or have a high grade. We indeed find that students who received larger discounts are less likely to attend the first tutorial session, but this effect is short-lived. From the second session onwards there is no effect of the discount on attendance. In line with this, we also don’t find effects of the discount on study outcomes. The short-livedness of the effect is consistent with other studies that find that financial incentives fade out quickly

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Government spending shocks, sovereign risk and the exchange rate regime
Jasper Lukkezen (Utrecht University)
14:30
We analyse the effects of government spending shocks under different monetary regimes and in the presence of sovereign default risk using a New Keynesian DSGE model for a small open economy. We find that output rises upon an increase in government spending. In contrast to the NK model without sovereign risk however, we find that the effects are stronger under flexible than fixed exchange rates. Intuitively, a fiscal expansion, which raises debt and sovereign risk, causes the exchange rate to depreciate which in turn supports the trade balance and output. Under fixed exchange rates, however, this positive effect is eliminated, while adverse effects of sovereign risk on private demand remain. In fact, for high levels of sovereign risk, we find output responses under fixed exchange rates are even negative. Our results highlight the importance of sovereign risk in the propagation of fiscal shocks and for the evaluation of macroeconomic stabilisation policy across monetary regimes.
Joint with Dennis Bonam (VU University Amsterdam)

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The Impact of Shocks on Poor Households – Evidence from Health Financial Diaries in Rural Nigeria
Łukasz Marć (VU University Amsterdam)
15:00
Substantial risks such as floods or pests are a permanent feature of environments in developing countries while formal insurance is mostly inaccessible to low-income households. To decrease the probability of being exposed to a shock or to reduce its consequences, an extensive range of risk-management and risk-coping strategies is used. These necessary actions can have severe consequences for the household: e.g. less-risky but lower paid jobs, but are rarely studied in combination. Studies mostly focus on a few strategies in isolation due to data limitations. This paper uses a unique, rich dataset from a financial diary survey to investigate the impact of shocks on assets, financial holdings and expenditures and on types of risk-coping mechanisms and to compare risk management strategies of households with and without insurance.This paper makes three main contributions. First, thanks to the high frequency of the data, the impact is analyzed beyond the scope of only large shocks, taking into account minor shocks that might be missed in larger surveys and less frequent panels (recall bias). Second, we are able to analyze both short and long term effects. Third, it is possible to not only look at the stock values of financial holdings, but also on detailed financial flows. The findings will be especially relevant for microfinance institutions operating in developing countries, e.g. health insurance companies, rural banks or microcredit organizations.

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The Causal Effect of Retirement on Mortality: Evidence from Targeted Incentives to Retire Early
Jochem Zweerink (VU University Amsterdam)
15:30
This paper identifies and estimates the impact of early retirement on the probability to die, using administrative micro panel data at the population level from the Netherlands. Among the older workers we focus on, a group of civil servants became earlier than expected eligible for retirement during a short time window. This exogenous policy change is used to instrument the retirement choice in a model that explains the probability to die within five years. Exploiting the panel structure of our data, we allow for individual fixed effects in modeling the retirement choice and the probability to die. We find for men that early retirement, induced by the temporary decrease in the age of eligibility for retirement benefits, decreased the probability to die within five years by 2.5 percentage points. This is a strong effect. We find that our results are robust to specification changes. (with Hans Bloemen [VU, IZA] and Stefan Hochguertel [VU, UCFS]).

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Title and abstract to be announced
Ben Loerakker (University of Amsterdam)
16:00

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On the Engineering of Socially Destructive Behavior
Max Hoyer (University of Amsterdam)
16:30
Socially destructive behavior in a public good environment – like damaging public goods – is an underexplored phenomenon in economics. In this study we investigate whether such behavior can be engineered or modulated by the very nature of a game setting that allows for both the voluntary construction or destruction of a public good, where the former is beneficial to others but the latter is costly to all. For convenience, we call this game a Fragile Public Good game (FPG-game). Our baseline two-player FPG-game allows the players to contribute to or to damage a public good at increasing marginal costs that are perfectly symmetric in the two domains. This setup allows prosocial as well as antisocial behavior with a single decision. The main research question is whether, in a repeated context, this design will induce destructive behavior and, if so, whether this may even lead to behavioral equilibria characterized by “sour relationships”, implying that the two players get locked into a situation where they both repeatedly show destructive behavior. Such an equilibrium is theoretically predicted to be possible as the result of a build-up of negative affective responses over the course of an ongoing interaction. In addition to our baseline game setting, we also analyze the role of framing in this context, and the impact of an asymmetric design, where next to contributing or damaging an opportunity exists to benefit oneself while hurting the other player by negatively affecting the public good. We find that between 7 and 21 percent of all decisions made are destructive and that framing has highly significant effects in the early rounds of a game. (Joint work with Nadège Bault, Ben Loerakker, and Frans van Winden)

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Simplifying Correlation Analyses
Erkki Silde (VU University Amsterdam)
17:00
Stationarity and ergodicity of nonlinear correlation models.