Unless all tournaments are admissible as individual preferences, we show that, structure diversity of the range of a Pareto-optimal, neutral, non-dictatorial, and independent of irrelevant alternatives preference rules is greater than the structure diversity in the individual preferences upon which these preference rules are based.
Motivated by some recent examples, this paper employs a model of public law enforcement to explain why it may not be in society’s interest to send criminals to prison. We establish two main findings. First, independent of the lawbreaker’s societal position, imprisonment is suboptimal when the harm from the illegal activity is sufficiently small. Second, for a given level of harm, imprisonment is suboptimal when the lawbreaker is sufficiently important. This latter result thus provides a rationale for why some parties are taken to be “too big to jail”.
We study bankruptcy problems in financial networks in the presence of general bankruptcy laws. The set of clearing payment matrices is shown to be a lattice, which guarantees the existence of a greatest clearing payment and a least clearing payment. Multiplicity of clearing payment matrices is both a theoretical and a practical concern. We present a new condition for uniqueness that generalizes all the existing conditions proposed in the literature. Our condition depends on the decomposition of the financial network into strongly connected components. A strongly connected component that contains more than one agent is called a cycle, and the involved agents are called cyclical agents. If there is a cycle without successors, then one of the agents in such a cycle should have a strictly positive endowment. The division rule used by a cyclical agent with a strictly positive endowment should be positive monotonic, and the rule used by a cyclical agent with a zero endowment should be strictly monotonic. Because division rules involving priorities are not positive monotonic, uniqueness of the clearing payment matrix is a much bigger concern for such division rules than for proportional ones. As a final contribution of the paper, we exhibit the relationship between the uniqueness of clearing payment matrices and the continuity of bankruptcy rules, a property that is very much desired for stability of financial systems. Funding: This research was supported by the Higher Education Institutional Excellence Program 2020 of the Ministry of Innovation and Technology in the framework of the “Financial and Public Services” research project [Grant TKP2020-IKA-02] at Corvinus University of Budapest. P. Csóka received funding from the National Research, Development and Innovation Office [Grants K-120035 and K-138826].
Hiring subsidies are widely used to create (stable) employment for the long-term unemployed. This paper exploits the abolition of a hiring subsidy targeted at long-term unemployed jobseekers over 45 years of age in Belgium to evaluate its effectiveness in the short and medium run. Based on a triple difference methodology the hiring subsidy is shown to increase the job finding rate by 13% without any evidence of spill-over effects. This effect is driven by a positive effect on individuals with at least a bachelor’s degree. However, the hiring subsidy mainly created temporary short-lived employment: eligible jobseekers were not more likely to find employment that lasted at least twelve consecutive months than ineligible jobseekers.
In many countries, high-stakes tests play an important role in the allocation of pupils to prestigious tracks or schools in secondary education or students to prestigious programs or colleges in tertiary education. It is not clear what would happen if the standards for these tests were systematically raised or lowered. Would that affect the subsequent educational career? This paper exploits a unique natural experiment in the Netherlands using the market entrance of two new suppliers of high-stakes tests in primary education. In the first year of introduction, these new tests were not yet properly calibrated: For one test the standards were too low, while for the other test they were too high, compared to the standards of the traditional test that continued to be the main supplier. We use high-quality register data and a within-schools-across-cohorts design to model the short- and long-term outcomes (i.e., change in teacher advice and actual track three years later) for the students that were affected by the new tests. We find evidence for short-term effects, but no evidence for long-term effects. This implies that the Dutch educational system is sufficiently flexible to allocate pupils to the appropriate track, even if a high-stakes test advice does not recommend the right track. At the same time, it also implies that lowering the bar is not a simple way to increase the share of students going to prestigious tracks.
