Abstract This paper examines whether general skills and universal access to higher education shape vocational students' school‐to‐work transitions during recessions. We study how increased unemployment affects post‐completion outcomes across institutional regimes that differ in curricular emphasis on general skills and access to higher education – allowing us to identify effects of general skills alone and combined with access to higher education. Relative to a setting with limited general skills and no universal access to higher education, combining general skills with universal access to higher education more than halves labour‐market scarring on earnings over the first six years after completion. General skills alone do not meaningfully affect labour‐market scarring.
Excise taxes on goods with negative health outcomes (so-called "sin taxes") effectively reduce demand but are less effective when consumers can purchase similar goods in tax-exempt markets. We investigate how cross-border shopping affects the effectiveness of sin taxes by exploiting the de facto ban on cross-border shopping during the COVID-19 pandemic. Using a difference-in-differences design and Danish household panel data, we find that households living within 150 kilometers of the Danish-German border increased their spending on domestic sin goods by 21 percent relative to more distant households when the borders closed. Based on these findings, we show that cross-border shopping weakens the revenue and health benefits of sin taxes mainly for the relatively few households living closest to the border, so its aggregate impact is smaller than commonly assumed.
We present a model of optimal regulation in the presence of spillover effects and asymmetric countries, and we use it to study strategic interaction among countries in pharmaceutical price regulation, where the spillovers result from innovation in drug development. Regulators' pricing decisions affect welfare both directly and indirectly, via firms' R&D policies. We characterize two types of equilibrium, depending on whether countries price at, or above, the minimum level the industry is willing to accept to serve the market. The combination of these two equilibria may imply a U-shaped relationship between countries' pharmaceutical prices and relative market size. Using data for 83 cancer drugs across 23 OECD countries, our empirical analysis supports this hypothesis, with results being robust to correcting for the impact of confidential price discounts and a range of different model specifications. Our findings contribute to the academic debate about the relationship between prices and market size, as well as the policy debate about using supranational procurement policies to lower prices. In particular, we show that joint procurement can lower or raise prices according to the sizes of the domestic markets that join to create a single purchasing authority.
This study estimates the effects of an employment programme for disadvantaged unemployed individuals. The programme emphasized on-the-job training and contracting the unemployed for a few paid weekly work hours as a stepping stone into the labour market. Evaluated through a randomized controlled trial with 3,727 participants, the programme was found to accelerate transitions into part-time work. Contrary to its intention, it permanently increased the share of participants receiving disability pensions among most disadvantaged groups. To explain this finding, we suggest that training, while enhancing productivity for some, simultaneously provided information of employability used in the assessment of disability pension eligibility.
We evaluate the impact of the disclosure of artificial intelligence (AI) involvement in a charitable fundraising experiment, where participants received either AI-generated or human-written fundraising letters, with or without the disclosure of their origin. We find that both AI-generated letters (whether edited by humans or not) and human-written letters (whether edited by AI or not) significantly increase donations, producing similar positive effects. Importantly, these effects disappear when AI involvement is disclosed, regardless of whether the letters are generated or edited by AI. These findings suggest that, while AI improves the effectiveness of charitable fundraising, disclosing its use offsets this benefit.
