Torsten Santavirta

When Do R&D Subsidies Boost Innovation? Revisiting the Inverted U-Shape

We show theoretically that a proportional R&D subsidy accelerates innovation activity at all degrees of competition in the modern Schumpeterian growth model, but less so at high degrees of competition. We then use company-level data on patenting activity, product market competition and R&D subsidies of Finnish firms during 1990 2001 to test the theoretical prediction. The empirical findings can be summarized as follows. Firstly, we find relatively strong evidence in favour of the inverted U-shape between competition and innovation. Secondly, we find some evidence that a direct R&D subsidy increases innovative activity at all but very high degrees of competition. This can be interpreted so mean that the R&D subsidy reinforces the Schumpeterian effect due to the negative cross-effect of R&D subsidy and competition. This is evident from the finding that an increase in the R&D subsidy steepens the inverted U relationship when competition is fierce. Keywords: competition, innovation, R&D subsidies, patents

Long term mental health outcomes of Finnish children evacuated to Swedish families during the second world war and their non-evacuated siblings: cohort study

Objectives To compare the risks of admission to hospital for any type of psychiatric disorder and for four specific psychiatric disorders among adults who as children were evacuated to Swedish foster families during the second world war and their non-evacuated siblings, and to evaluate whether these risks differ between the sexes. Design Cohort study. Setting National child evacuation scheme in Finland during the second world war. Participants Children born in Finland between 1933 and 1944 who were later included in a 10% sample of the 1950 Finnish census ascertained in 1997 (n=45 463; women: n=22 021; men: n=23 442). Evacuees in the sample were identified from war time government records. Main outcome measure Adults admitted to hospital for psychiatric disorders recorded between 1971 and 2011 in the Finnish hospital discharge register. Methods We used Cox proportional hazards models to estimate the association between evacuation to temporary foster care in Sweden during the second world war and admission to hospital for a psychiatric disorder between ages 38 and 78 years. Fixed effects methods were employed to control for all unobserved social and genetic characteristics shared among siblings. Results Among men and women combined, the risk of admission to hospital for a psychiatric disorder did not differ between Finnish adults evacuated to Swedish foster families and their non-evacuated siblings (hazard ratio 0.89, 95% confidence interval 0.64 to 1.26). Evidence suggested a lower risk of admission for any mental disorder (0.67, 0.44 to 1.03) among evacuated men, whereas for women there was no association between evacuation and the overall risk of admission for a psychiatric disorder (1.21, 0.80 to 1.83). When admissions for individual psychiatric disorders were analyzed, evacuated girls were significantly more likely than their non-evacuated sisters to be admitted to hospital for a mood disorder as an adult (2.19, 1.10 to 4.33). Conclusions The Finnish evacuation policy was not associated with an increased overall risk of admission to hospital for a psychiatric disorder in adulthood among former evacuees. In fact, evacuation was associated with a marginally reduced risk of admission for any psychiatric disorder among men. Among women who had been evacuated, however, the risk of being admitted to hospital for a mood disorder was increased.

CHILD PROTECTION AND ADULT DEPRESSION: EVALUATING THE LONG-TERM CONSEQUENCES OF EVACUATING CHILDREN TO FOSTER CARE DURING WORLD WAR II

This paper combined data collected from war time government records with survey data including background characteristics, such as factors that affected eligibility, to examine the adult depression outcomes of individuals who were evacuated from Finland to temporary foster care in Sweden during World War II. Using war time government records and survey data for a random sample of 723 exposed individuals and 1321 matched unexposed individuals, the authors conducted least squares adjusted means comparison to examine the association between evacuation and adult depression (Beck Depression Inventory). The random sample was representative for the whole population of evacuees who returned to their biological families after World War II. The authors found no statistically significant difference in depressive symptoms during late adulthood between the two groups; for example, the exposed group had a 0.41 percentage points lower average Beck Depression Inventory score than the unexposed group (p = 0.907). This study provides no support for family disruption during early childhood because of the onset of sudden shocks elevating depressive symptoms during late adulthood.

New Evidence on Implicit Contracts from Linked Employer/Employee Data

We improve the precision of the test of the implicit contract model that Beaudry and DiNardo proposed twenty years ago. Our data set allows us to define the precise industry and plant of a particular employment relationship, link local labour market characteristics and company characteristics to the individual level of wages, and control for composition effects. We find evidence in favour of the spot market model of wage setting in the whole sample, but there is significant variation across industries and educational levels. In particular, the spot market matters most for low-skill workers, while the implicit contract model with one-sided limited commitment applies better to high-skill workers.

Association of the World War II Finnish Evacuation of Children With Psychiatric Hospitalization in the Next Generation

Importance Although there is evidence that adverse childhood experiences are associated with worse mental health in adulthood, scarce evidence is available regarding an emerging concern that the next generation might also be affected. Objective To compare the risk of psychiatric hospitalization in cousins whose parents were vs were not exposed to the Finnish evacuation policy that involved a mean 2-year stay with a Swedish foster family. Design, Setting, and Participants This multigenerational, population-based cohort study of Finnish individuals and their siblings born between January 1, 1933, and December 31, 1944, analyzed the association of evacuee status as a child during World War II in the first generation with the risk of psychiatric hospitalization among offspring in the second generation. Evacuee status during World War II was determined using the Finnish National Archive’s registry of participants in the Finnish evacuation. Data on evacuee status were linked to the psychiatric diagnoses in the Finnish Hospital Discharge Register from January 1, 1971, through December 31, 2012, for offspring (n = 93 391) born between January 1, 1950, and December 31, 2010. Sex-specific Cox proportional hazards regression models were used to estimate hazard ratios for risk of psychiatric hospitalization during the follow-up period. Because offspring of evacuees and their nonevacuated siblings are cousins, the Cox proportional hazards regression models included fixed effects to adjust for confounding factors in families. Data analysis was performed from June 15, 2016, to August 26, 2017. Exposures Parental participation in the evacuation during World War II (coded 1 for parents who were evacuated and placed in foster care and 0 for those not evacuated). Main Outcomes and Measures Offspring’s initial admission to the hospital for a psychiatric disorder, obtained from the Finnish Hospital Discharge Register from January 1, 1971, through December 31, 2012. Results Of the 93 391 study persons, 45 955 (49.2%) were women and 47 436 (50.8) were men; mean (SD) age in 2012 among survivors was 45.4 (6.58) years. Female offspring of mothers evacuated to Sweden during childhood had an elevated risk of psychiatric hospitalization (hazard ratio for any type of psychiatric disorder: 2.04 [95% CI, 1.04-4.01]; hazard ratio for mood disorder: 4.68 [95% CI, 1.92-11.42]). There was no excess risk of being hospitalized for a psychiatric disorder among women whose fathers were exposed to the Finnish evacuation policy during World War II or among men whose mothers or fathers were exposed. Conclusions and Relevance In a prior follow-up study of the Finnish evacuees, girls evacuated to Swedish foster families during World War II were more likely to be hospitalized for a psychiatric disorder—in particular, a mood disorder—in adulthood than their nonevacuated sisters. The present study found that the offspring of these individuals were also at risk for mental health problems that required hospitalization and suggests that early-life adversities, including war-related exposures, may be associated with mental health disorders that persist across generations.