Giulio Zanella

Crime in Europe and the United States: Dissecting the ‘Reversal of Misfortunes’

Contrary to common perceptions, today both property and violent crimes (with the exception of homicides) are more widespread in Europe than in the United States, while the opposite was true thirty years ago. We label this fact as the ‘reversal of misfortunes’. We investigate what accounts for the reversal by studying the causal impact of demographic changes, incarceration, abortion, unemployment and immigration on crime. For this we use time series data (1970-2008) from seven European countries and the United States. We find that the demographic structure of the population and the incarceration rate are important determinants of crime. Our results suggest that a tougher incarceration policy may be an effective way to contrast crime in Europe. Our analysis does not provide information on how incarceration policy should be made tougher nor does it provide an answer to the question whether such a policy would also be efficient from a cost‐benefit point of view. We leave this to future research.

Labor Supply Elasticities: Can Micro Be Misleading for Macro?

In this paper we compare in a consistent way micro and macro labor supply elasticities. The individual elasticity is obtained from the Panel Study of Income Dynamics (PSID). The aggregate, time-series, elasticity is estimated from the exact aggregation of the individual units in the PSID, each year. Our aggregation procedure is legitimate since it relies on exact aggregation of first-order conditions in a simple life-cycle labor supply model with home production. We find that the individual elasticity is about 0.1, a low value that agrees with standard micro estimates, but that the aggregate elasticity is 1.5, a much larger value that incidentally agrees with the pioneering estimate of Lucas and Rapping (1969). This result derives from a pure aggregation effect: not surpisingly, most of the difference is due to the extensive margin, i.e. participation/employment decisions. An implication of our result is that micro evidence is not always a reliable guidance for calibrating aggregate macroeconomic parameters.

Unpacking Social Interactions

As empirical work in identifying social effects becomes more prevalent, researchers are beginning to struggle with identifying the composition of social interactions within any given reference group. In this paper, we present a simple econometric methodology for the separate identification of multiple social interactions. The setting under which we achieve separation is special, but is likely to be appropriate in many applications.

Bequest taxes, donations, and house prices

Abstract This paper is an empirical investigation into the effect of bequest taxes (estate or inheritance tax, in the US) and inter vivos real estate donations taxes (gift tax, in the US) on (i) house prices, (ii) house donations, and (iii) market transactions. In a simple model with intergenerational altruism, a lower tax rate unambiguously increases (i) and has an ambiguous effect on (ii) and (iii). We test these predictions using an original and unique data set containing information on sales, donations and real estate prices in 13 large Italian cities between 1993 and 2004. This period spans a major reform that first decreased and then abolished the inter vivos real estate donations tax and bequest tax in Italy. We find that the reform is associated with cumulative real appreciation of about 5% between 2001 and 2004, an increase in donations, and a decrease in market transactions over the same period.

Experiencing Breast Cancer at the Workplace

We study unique data from a dynamic natural experiment involving more than 7,000 American women to understand how a woman’s propensity to perform an annual mammography changes over time after a co-worker is diagnosed with breast cancer. We find that in the year this event occurs the probability that a woman performs a mammography drops by about 8 percentage points, off a base level of about 70%. This impact effect is persistent during at least the following 2 years, is driven by cases of breast cancer diagnosed at non-early stages, and by the behavior of individuals who are less knowledgeable about health issues. This negative effect is confirmed when we allow for serial correlation in screening behavior and when we estimate the effect of the treatment on the hazard of not screening, at the daily frequency. However, the effect vanishes in placebo experiments.