Michal Bauer

War’s Enduring Effects on the Development of Egalitarian Motivations and In-Group Biases

In suggesting that new nations often coalesce in the decades following war, historians have posed an important psychological question: Does the experience of war generate an enduring elevation in people’s egalitarian motivations toward their in-group? We administered social-choice tasks to more than 1,000 children and adults differentially affected by wars in the Republic of Georgia and Sierra Leone. We found that greater exposure to war created a lasting increase in people’s egalitarian motivations toward their in-group, but not their out-groups, during a developmental window starting in middle childhood (around 7 years of age) and ending in early adulthood (around 20 years of age). Outside this window, war had no measurable impact on social motivations in young children and had only muted effects on the motivations of older adults. These “war effects” are broadly consistent with predictions from evolutionary approaches that emphasize the importance of group cooperation in defending against external threats, though they also highlight key areas in need of greater theoretical development.

The Impact of Education on Subjective Discount Rate in Ugandan Villages

Heterogeneity in time discounting may reinforce the existing barriers to save and invest faced by rural populations in developing countries. We elicit a subjective discount rate for a varied sample of Ugandan villagers. In accordance with other studies, we have found the discount rate to decrease with education. We examine this correlation further by testing the causal effect of education and exploit two different sources of its variation: school frequency across villages and the number of the respondents’ school‐going years that overlap with the era of the dictator Idi Amin’s rule. For men, we find that education has a significant impact on their discount rate, similar in magnitude for both types of instruments and robust to observable characteristics. This finding highlights the importance of education in development.

Women, Children and Patience: Experimental Evidence from Indian Villages

In this paper we study the link between womens responsibility for children and their preferences. We use a large random sample of individuals living in rural India, incentive compatible measures of patience and risk aversion, and detailed survey data. We find more patient choices among women who have a higher number of children. The age of children matters: The link with patience is specific for children below 18 years old, and the highest level of patience is associated with having three children. We do not observe this link among men. Taken together, we find significant gender differences in patience that are predicted by a higher number of children. The results are robust to controlling for age, education, income constraints, and individual and location characteristics. These findings suggest an important context when the spending preferences of spouses diverge, and support the view that empowering women in developing countries should lead to more future-oriented choices of households.

Theory of the Firm Under Uncertainty: Financing, Attitude to Risk and Output Behavior

The paper examines the risk behavior of a competitive firm under price uncertainty. In the model developed in the paper we have departed from the thought-provoking approach of Greenwald and Stiglitz (1993a), which implies solely risk averse behavior of firms due to its restrictive assumptions about firm’s financing. Through the incorporation of other plausible and more general assumptions about the firm’s financing (namely the access to the equity market, possible existence of soft budget constraint) we were able to theoretically formulate the conditions, under which the firm is induced to behave in more risk averse vs. risky manner. While the firm’s attitude to risk directly influences its willingness to produce, our results indicate that in the environment of uncertainty the price and technology are not the only important determinants of the firm’s optimal output level as is the case for the neoclassical theory of firm. The results of our model have shown that additional factors like firm’s net worth position, sensitivity of managers to bankruptcy, firm’s ability to raise new equity, softness of the budget constraint and degree of uncertainty about the future prices may play an important role for firm’s optimal output considerations.

Effects of Parental Background on Other-regarding Preferences in Children

Other-regarding preferences are central for the ability to solve collective action problems and thus for society’s welfare. We study how the formation of other-regarding preferences during childhood is related to parental background. Using binary-choice dictator games to classify subjects into other-regarding types, we find that children of less educated parents are less altruistic and more spiteful. This link is robust to controlling for a range of child, family, and peer characteristics, and is attenuated for smarter children. The results suggest that less educated parents are either less efficient to instill social norms or their children less able to acquire them.

Effects of Education on Determinants of High Desired Fertility: Evidence from Ugandan Villages

High desired fertility is an important factor contributing to the population explosion in sub-Saharan Africa. On a broad sample of 910 respondents from the rural areas of Uganda this paper assesses the impact of health risks, economic contributions from children, traditional community institutions and unequal position of women on desired fertility levels. The paper further scrutinizes how these determinants are affected by education. The results show that fear of diseases and involvement in traditional clan institutions increase desired number of children. Interestingly, these effects can be remarkably mitigated through education that improves the individual health prevention as well as reduces the influence of clans. Economic incentives for having children seem to be less significant than other factors. In addition, a very significant difference in desired fertility between men and women emerges, nevertheless education leads both to reduction and convergence of their desired fertility levels. All these findings suggest that education stimulates a complex change in fertility preferences and underline the importance of education as efficient tool for reducing rapid population growth.

Trusting Former Rebels: An Experimental Approach to Understanding Reintegration after Civil War

The stability of many post-conflict societies rests on the successful reintegration of former soldiers. We examine social capital of former soldiers in Northern Uganda, where the Lords Resistance Army forcibly recruited tens of thousands of youth during a recent brutal conflict. We use a set of interlocked experiments to study behavior of ex-soldiers jointly with the behavior of receiving communities towards this group. Consistent with theories that highlight the importance of cooperation during war, we find that individual cooperativeness robustly increases with the length of time a person was with the LRA, especially among those who were abducted during early age. Furthermore, parents of former-soldiers are aware of the behavioral difference: they trust ex-soldiers more because they expect them to be more trustworthy. Last, we find no evidence of preference-based discrimination, suggesting that anger is attenuated when communities do not attribute responsibility for committed violence to returning soldiers. Together, the results reveal that the impact of child soldiering on social capital, in contrast to human capital, is not necessarily detrimental and, speculatively, may facilitate reintegration.

Attention Discrimination: Theory and Field Experiments

We link two important ideas: attention is scarce and a lack of information about an individual drives discrimination in selection decisions. We model how knowledge of ethnicity influences allocation of attention to available information about an applicant. When only a small share of applicants is accepted, negative stereotypes are predicted to lower attention, while the effect is opposite when most applicants are accepted. We test for such “attention discrimination” in two field experiments. We send emails responding to job offers and apartment-rental advertisements and monitor information acquisition, a new feature in this type of experiment. We vary the names of applicants to signal ethnicity and find that minority names are about half as likely to receive an invitation for an apartment viewing or a job interview. The novel finding is that minority names affect the likelihood of resumes being read on the labor market as well as an applicant’s personal website being inspected on the housing market, but the effects are opposite across the two markets. These results support the models assumption of endogenous attention, which magnifies the role of prior beliefs in discrimination. The model implies persistence of discrimination in selection decisions, even if information about individuals is available and there are no differences in preferences, lower returns to employment qualifications for negatively stereotyped groups, and for policy, the important role of the timing of when a group attribute is revealed.

Does Education Matter in Patience Formation? Evidence from Ugandan Villages

The paper aims to contribute to the understanding of why there is a lack of domestic saving and investment in rural parts of sub-Saharan Africa. It focuses on heterogeneity in inter-temporal preferences as a possible explanation of this important puzzle. The study is based on a unique experimental data set collected from 856 respondents in Ugandan villages and scrutinizes how individual patience – measured by the discount rate – is formed. The results suggest that Ugandan respondents are substantially less patient than their counterparts in similar experimental studies undertaken in developed countries and South Asia. We find a strong negative association between the level of education and the individual discount rate. Furthermore, we took advantage of the Ugandan education reform in 1996 and varying school frequency to demonstrate the causal relationship stemming from education to patience. The estimates suggest that an additional year at school decreases the discount rate on average by 35 percentage points after controlling for other characteristics (age, income group, sex, marital status and clan linkage). Our findings strongly accord with patience understood as a non-cognitive ability which needs to be taught by parents, learnt at school and promoted by social norms. The Ugandan responses, therefore, propose a new way in which education may influence development in sub-Saharan Africa – by shaping individual patience.