Working Papers 2022
1-2022 "ההשפעה של תוכנית תעסוקה עבור אנשים מבוגרים – ממצאים מניסוי מבוקר"
איתי ספורטא אקשטין ואנליה שלוסר
מאמר זה בוחן את ההשפעה של מתן הכשרה בחיפוש עבודה בקרב פרטים מבוגרים ישראלים, תוך התמקדות באוכלוסייה בעלת היסטוריה תעסוקתית במקצועות עם רמה של מיומנות גבוהה באמצעות ניסוי מבוקר רחב היקף. בעזרת ניתוח אקונומטרי המשוא בין הפרטים אשר הוגרלו לקבל הצעה להשתתף בתוכנית לבין פרטים אשר הוגרלו לקבוצת ביקורת, אנו בוחנים את השפעת התוכנית על תעסוקה והכנסה של משתתפיה במהלך 12 החודשים הראשוניים לאחר הקצאתם לקבוצת הטיפול. הממצאים מלמדים כי לתוכנית היתה השפעה חיובית על תעסוקה ועל הכנסות מעבודה של משתתפיה, בעיקר בקרב גברים בעלי השכלה גבוהה.
2-2022 "On the Optimal Scheduling of Attention"
Kfir Eliaz, Daniel Fershtman, Alexander Frug
We consider a decision-maker sequentially choosing which task to attend to when payoffs depend on both the chosen and unchosen tasks. We show that when tasks are substitutes (complements) such that the flow payoffs are a sum (product) of the tasks’ outputs, the optimal policy is an index policy, generalizing the independence of irrelevant alternatives (IIA) property known in the classic multi-armed bandit problem. We illustrate the usefulness of our model through several applications, including repeated bargaining, dynamic occupational choice, on-the-job training, R&D, and dynamic supervision.
3-2022 "Bayesian privacy"
Ran Eilat, Kfir Eliaz, Xiaosheng Mu
Modern information technologies make it possible to store, analyze, and trade unprecedented amounts of detailed information about individuals. This has led to public discussions on whether individuals’ privacy should be better protected by restricting the amount or the precision of information that is collected by commercial institutions on their participants. We contribute to this discussion by proposing a Bayesian approach to measure loss of privacy in a mechanism. Specifically, we define the loss of privacy associated with a mechanism as the difference between the designer’s prior and posterior beliefs about an agent’s type, where this difference is calculated using Kullback–Leibler divergence, and where the change in beliefs is triggered by actions taken by the agent in the mechanism. We consider both ex post (for every realized type, the maximal difference in beliefs cannot exceed some threshold κ) and ex ante (the expected difference in beliefs over all type realizations cannot exceed some threshold κ) measures of privacy loss. Applying these notions to the monopolistic screening environment ofMussa and Rosen (1978), we study the properties of optimal privacy-constrained mechanisms and the relation between welfare/profits and privacy levels.
4-2022 "Outside Options in the Labor Market"
Sydnee Caldwell, Oren Danieli
This paper develops a method to estimate workers’ outside employment opportunities. We outline a matching model with two-sided heterogeneity, from which we derive a sufficient statistic, the “outside options index” (OOI), for the effect of outside options on wages, holding worker productivity constant. The OOI uses the cross-sectional concentration of similar workers across job types to quantify workers’ outside options as a function of workers’ commuting costs, preferences, and skills. Using German micro-data, we find that differences in
options explain 20% of the gender wage gap, and that gender gaps in options are mostly due to differences in the implicit costs of commuting and moving.
5-2022 "The importance of hiring frictions in business cycles"
Renato Faccini, Eran Yashiv
Hiring is a costly activity reflecting firms’ investment in their workers. Microdata show that hiring costs involve production disruption. Thus, cyclical fluctuations
in the value of output, induced by price frictions, have consequences for the optimal allocation of hiring activities. We outline a mechanism based on cyclical
markup fluctuations, placing emphasis on hiring frictions interacting with price frictions. This mechanism generates strong propagation and amplification of all
key macroeconomic variables in response to technology shocks and mutes the traditional transmission of monetary policy shocks. A local projection analysis of
aggregate U.S. data shows that the empirical results, including the cyclicality of markups, are consistent with the model’s impulse response functions.
6-2022 "Universal Basic Income: Inspecting the Mechanisms"
Nir Jaimovich, Itay Saporta-Eksten, Ofer Setty, Yaniv Yedid-Levi
We consider the aggregate and distributional impact of Universal Basic Income (UBI). We develop a model to study a wide range of UBI programs and financing schemes and to highlight the key mechanisms behind their impact. The most crucial channel is the rise in distortionary taxation (required to fund UBI) on labor force participation. Second in importance is the decline in self-insurance due to the insurance UBI provides, resulting in lower aggregate capital. Third, UBI creates a positive income effect lowering labor force participation. Alternative tax-transfer schemes mitigate the impact on labor force participation and the cost of UBI.
7-2022 “Short and Long-Term Effects of Universal Preschool: Evidence from the Arab Population in Israel"
Elad Demalach, Analia Schlosser, Tatiana Baron
We estimate the short and long-term effects of universal preschool education by analyzing the impact of the Israeli Preschool Law, which mandated the provision of public preschool for ages 3 and 4 since 2000. We focus on the Arab population, who were the main beneficiaries of the first phase of the implementation of the Law, and exploit exogenous variation in universal preschool provision across localities due to the Law’s gradual implementation. Our difference-in-differences research design compares between cohorts of children in treated localities before and after the Law introduction relative to equivalent cohorts in comparison localities. We find that individuals benefitted from the provision of universal preschool along various dimensions: their academic performance in elementary, middle school, and high school improved significantly, and their post-secondary enrollment rates increased substantially. We also find beneficial effects of universal preschool on additional outcomes, such as a reduction in juvenile delinquency among boys and a decline in early marriage among women. These findings highlight the benefits of providing universal preschool education for disadvantaged communities.
8-2022 "Representative Sampling Equilibrium"
Tuval Danenberg and Ran Spiegler
We present an equilibrium concept based on the idea that agents evaluate actions using sample data drawn from the equilibrium distribution, where the number of observations about an alternative is proportional to its usage in a relevant population. Agents naively extrapolate from their data, using the sample mean payoff from each alternative as a predictor of their payoff from choosing it. The endogeneity of sample sizes gives rise to a novel equilibrium effect: Players’ assessment of less frequently played actions is noisier. We study the implications of this effect in a single-agent, binary-choice model, as well as in various examples of games.