Productivity Shocks and Labour Market Outcomes for Top Earners: Evidence from Italian Serie A

How are top earners affected by productivity shocks? We address this question using a unique longitudinal data set on the universe of professional football players in the Italian Serie A, representing 20% of top earners in Italy. We use traumatic injuries and adopt an IV strategy to provide causal estimates of the impact of productivity shocks on several labour market outcomes. We find that a 30-day injury substantially affects the probability of contract renegotiation and reduces net wages by around 12%. We show that this large penalty is due to employer's precautionary motives rather than to shock-induced reduction in current player's performance.     

Innovation and knowledge sharing in crowdfunding: how social dynamics affect project success

The aim of this study is to contribute to the existing literature on innovation and knowledge sharing in crowdfunding, by exploring the importance of internal social capital, and how the previous failure of a campaign may lead to the success of a second one from the same project creator. Thus, the research question of the study is: how do social dynamics affect project success in a crowdfunding context? The paper reports an illustrative case study which has been promoted on the Kickstarter platform. The authors analysed data, documentation and physical artefacts, especially regarding the network size during the funding period. The results show that the self-learning which project creators gain from previous failure supports them in relaunching their crowdfunding campaign. However, various revisions take place during the second campaign (e.g. social capital size, product redesign and knowledge sharing) to achieve success.     

Migration outflows and optimal migration policy: rules versus discretion

We study the effects of more open borders on return migration and show that migrants are more likely to return to the origin country when migration rules are softened, because this implies that they could more easily re-migrate if return migration is unsuccessful. As a result, softening migration rules leads to lower net inflows than is generally acknowledged. We show that if government follows rules to shape the optimal migration policy, it will choose more open “borders” than were its behaviour to be discretionary. However, this requires an appropriate commitment technology. We show that electoral accountability may be a solution to the commitment problem. As a matter of fact, observed softer immigration rules in western countries suggest the effectiveness of such a mechanism.     

Small Enterprise Default Prediction Modeling through Artificial Neural Networks: An Empirical Analysis of Italian Small Enterprises

Having accurate company default prediction models is vital for both banks and enterprises, especially small enterprises (SEs). These firms represent a vital part in the economy of every country but are also typically more informationally opaque than large corporations. Therefore, these models should be precise but also easily adaptable to suit SE characteristics. Our study applies artificial neural networks (ANNs) to a sample of over 7,000 Italian SEs. Results show that (1) when compared with traditional methods, ANNs can make a better contribution to SE credit‐risk evaluation; and (2) when the model is separately calculated according to size, geographical area, and business sector, ANNs prediction accuracy is markedly higher for the smallest sized firms and for firms operating in Central Italy.     

THE PERSISTENCE OF INCOME POVERTY AND LIFESTYLE DEPRIVATION: EVIDENCE FROM ITALY

This article estimates poverty persistence over an individual's lifetime, using two definitions: income poverty and a multidimensional index of lifestyle deprivation. We stress the ability of the two definitions to provide a generally consistent characterization of poverty persistence risks faced by various population subgroups, but also the additional insights to be gained by analysing the two definitions in parallel in a longitudinal context. The results of multiple‐spell hazard rate models highlight the weaknesses of the Italian labour market, the insufficiencies of the existing social security system, and the deep territorial dualism in generating persistent poverty for certain groups of the population.     

Modelling Deposit Insurance Scheme Losses in a Basel 2 Framework

This paper extends the existing literature on deposit insurance by proposing a new approach for the estimation of the loss distribution of a Deposit Insurance Scheme (DIS) that is based on the Basel 2 regulatory framework. In particular, we generate the distribution of banks’ losses following the Basel 2 theoretical approach and focus on the part of this distribution that is not covered by capital (tail risk). We also refine our approach by considering two major sources of systemic risks: the correlation between banks’ assets and interbank lending contagion. The application of our model to 2007 data for a sample of Italian banks shows that the target size of the Italian deposit insurance system covers up to 98.96% of its potential losses. Furthermore, it emerges that the introduction of bank contagion via the interbank lending market could lead to the collapse of the entire Italian banking system. Our analysis points out that the existing Italian deposit insurance system can be assessed as adequate only in normal times and not in bad market conditions with substantial contagion between banks. Overall, we argue that policy makers should explicitly consider the following when estimating DIS loss distributions: first, the regulatory framework within which banks operate such as (Basel 2) capital requirements; and, second, potential sources of systemic risk such as the correlation between banks’ assets and the risk of interbank contagion.     

Error cascades in observational learning: An experiment on the Chinos game

The paper reports an experimental study based on a variant of the popular Chinos game, which is used as a simple but paradigmatic instance of observational learning. There are three players, arranged in sequence,each of which wins a fixed price if she manages to guess the total number of coins lying in everybody?s hands. Our evidence shows that, despite the remarkable frequency of equilibrium outcomes, deviations from optimal play are also significant. And when such deviations occur, we find that, for any given player position, the probability of a mistake is increasing in the probability of a mistake of her predecessors. This is what we call an error cascade, which we measure by evaluating the (heterogeneous) Quantal Response Equilibrium which better suits our data. We also check the robustness of our findings when we allow for belief heterogeneity by applying Kübler and Weizsäcker?s (2004) cognitive frame of limited depth of reasoning.     

Promise and shortcomings of a green turn in recent policy responses to the “double crisis”

The paper analyses six international-scale responses to the financial and climate change ‘double crisis’ in order to: review how they define problems and solutions, analyse what underpins the policy choices revealed in these responses (the ‘green turn’), reflect on the implications of the proposed solutions in terms of sustainability and global environmental justice, and to suggest three elements for a paradigm shift towards an ‘alternative’ turn embedded in ecological economics theory. The analysis reveals that responses by leading international organisations continue to appeal to the precepts of neoclassical economy. We argue that from an ecological economics perspective, policy responses under the various labels of green economy, green growth, sustainable growth, green new deal, fall well short of what is needed to fight the environmental crisis and rising inequality across and within countries. The idea of justice and equity that underpins the mainstream approach seems inadequate in terms of sustaining our environmental base and global environmental justice. Based on this critical review, we propose an ‘alternative turn’, centred on three elements of a paradigm shift leading to a new economy where the environmental base and global environmental justice are at the centre of the discourse.     

A case-control study on risk factors of domestic accidents in an elderly population

The aim of this study was to evaluate the combined influence of several lifestyle, health and housing factors in the occurrence of home injuries (HIs) among the elderly. The subjects were recruited from 10 hospitals in Rome, Italy. This study is a paired case-control study. Cases included subjects, aged 65-85 years, who visited the Emergency Department for an HI and were subsequently hospitalised (15 September 2004-30 June 2005). Controls were the subjects of the same gender, age (±3 years) and area of residence of cases. A conditional logistic regression model was used for analysing the variables obtained. In this study, we enrolled 107 hospitalised cases. It was found that the living room was the place where 33% of the accidents occurred. Eighty-seven per cent of the accidents were falls, and 33% of the accidents were the immediate consequence of sudden malaise. One-half of the cases reported one or more leg fractures. The variables that were independently associated with HI were poor household illumination, poor emotional status, regular physical activities and housekeeping activities. We conclude that this study shows the areas of intervention to target HI prevention activities.