How Should We Design Parental Leave Policies? Evidence from Two Reforms in Italy JMP
Selected project for VisitINPS Fellowship on gender inequalities. Recipient of the Policy Impacts Early-Career Scholars Grant. Winner of the "Carlo Dell'Aringa Young Labor Economists Award 2021".
This paper studies the role of different policy instruments in the design of parental leave policies. Using Italian administrative data on the universe of working mothers, I implement a difference-in-differences design around two unemployment insurance reforms that increased, respectively, the level of benefits and the duration of benefits without offering job protection. I provide novel insights on the trade-offs that mothers face in making leave decisions, the relative value of benefits and job protection, and the incentive costs associated with parental leave policies. Both reforms increased separations from the pre-birth employer and delayed mothers’ return to work. I estimate the costs of changing the generosity of unprotected benefits in terms of earnings, labor force participation, and benefits from other social programs. Taking up unprotected benefits has an enormous cost in terms of foregone earnings for mothers, suggesting that the insurance value of short-term benefits is much higher than the value of job protection. I explore the role of informational frictions and childcare availability in shaping mothers’ leave decisions. I develop a conceptual framework to evaluate the welfare effects of parental leave policies. The analysis demonstrates job protection’s key role in reducing the incentive costs of parental leave policies while showing that mothers highly value insurance in the short term. Increasing the duration of benefits while at the same time extending job protection is welfare improving for mothers.
Firm Responses to Earned Income Tax Credits: Evidence from Italy [Submitted]
In this paper, I present new evidence on the incidence of Earned Income Tax Credits by analyzing the introduction of a large EITC program in Italy, the so-called 80 Euros Bonus. I evaluate the effects of the introduction of the program using matched employer-employee administrative data. I find that, contrary to the prediction of the standard competitive model, the annual earnings of the recipients of the tax credit do not decrease after the introduction of the program. However, earnings of eligible workers grow at a slower rate relative to similar non-eligible workers. This finding is not driven by labor supply responses and suggests that firms might respond to the introduction of the program by adjusting earnings growth. This type of response is plausible in a setting where institutional or norm-based wage rigidity prevents firms to directly adjust the level of wages and highlights the possibility that incidence may be shifted from workers to firms in a dynamic way. Exploiting pre-reform, firm-level variation in exposure to the policy, I explore the role of firm-level mechanisms as potential determinants of tax incidence. I find that average earnings of eligible employees in high-exposure firms decrease by 240 EUR after the introduction of the program compared to less exposed firms.
Welcome to the Neighborhood? Evidence from the Refugees' Reception System in Italy (with Giulia Buccione)
Between 2014 and 2017, Europe experienced massive refugee inflows. Local reception systems had to adapt, opening new emergency reception centers to host refugees. This phenomenon has prompted an ongoing debate on the impact of forced displacement on host countries’ economic and social outcomes. In this paper, we exploit the unique setting provided by the Italian refugee reception system to study: (i) the effect of refugee inflows on housing prices, arguing that they reflect changes in natives’ perceptions toward refugees; (ii) local public spending. Using administrative data on the exact location of reception centers and a dynamic event study design, we find that, after the opening of a reception center, areas close to the center experience a relative fall in housing prices of about 1%. The effect is mainly driven by larger cities and is decreasing with the size of the center and the center offering services to facilitate integration. Finally, having assessed that natives’ perceptions react to the arrival of refugees, we test whether local public spending is affected since refugees represent a shock to the homogeneity of the community of reference. We find that after the opening of a reception center, areas close to the center experience a relative fall in expenditure per capita of about 20 EUR, largely driven by a reduction in welfare spending.
Breastfeeding, 1950 to 2015: Trends, Selection and Duration (with Martha Bailey and Emily Oster)
We study patterns in maternal breastfeeding in the United States from 1950 to 2015. Our primary innovation is the aggregation of six datasets to provide long-term, nationally representative trends in breastfeeding initiation and persistence over 60 years. These new data show that breastfeeding rates declined from 1950 to the mid-1970s and then increased sharply. Today breastfeeding initiation rates in the U.S. are at a 50-year high. Breastfeeding through 6 months parallels trends in initiation until around the beginning of the 2000s, when initiation rates continued to rise while continuation has plateaued at around 35%. We also explore changes in selection into breastfeeding by socio-economic class and race. Higher socioeconomic status groups increased breastfeeding more quickly in the 1970s, with other groups catching up in the 1980s to the present. However, these groups have not shown the same catch-up in breastfeeding continuation and, as a result, selection in breastfeeding persists.
The Effect of Physician Migration on Health Outcomes (with Diego Verdugo)
Physician shortages have become a severe problem in many countries, especially in rural areas. Chile has historically suffered from shortages that are reflected in high waiting times and significant costs in terms of lives. In this paper, we ask whether foreign migration can help addressing these shortages by exploiting a sudden and arguably exogenous wave of physician migration from Venezuela to Chile. We build a novel dataset on the universe of physicians working in the public sector in Chile to study the effect of this physician supply shock on health outcomes, health care access and crowd-out of Chilean physicians from the public to the private sector. Using an event study design and an instrumental variable strategy we find that, in hospitals and areas most affected, overall mortality decreases right around the time of the inflow of new physicians by around 0.2 percentage points. We discuss and test different explanations for this result: decreases in waiting times, increases in the availability of specialists and faster diagnoses.
Program Interactions and Welfare Analysis: A Bayesian Adaptive Choice Experiment (with Marshall Drake, Neil Thakral, Linh T. Tô)