On the relationship between absolute prudence and absolute risk aversion

Abstract For a utility function , the functions and are the Arrow-Pratt coefficient of absolute risk aversion (ara) and the coefficient of absolute prudence (ap). They measure respectively an agent’s sensitivity to risk and the strength of the precautionary saving motive under income uncertainty.     

Child Labor and School Achievement in Latin America

Child labor’s effect on academic achievement is estimatedusing unique data on third and fourth graders in nine Latin-Americancountries. Cross-country variation in truancy regulations providesan exogenous shift in the ages of children normally in thesegrades, providing exogenous variation in the opportunity costof children’s time. Least squares estimates suggest thatchild labor lowers test scores, but those estimates are biasedtoward zero. Corrected estimates are still negative and statisticallysignificant. Children working 1 standard deviation above themean have average scores that are 16 percent lower on mathematicsexaminations and 11 percent lower on language examinations,consistent with the estimates of the adverse impact of childlabor on returns to schooling.     

Returns to education in professional football

After three years in college, football players face a trade-off between spending more time in college and pursuing a career in the National Football League (NFL). We analyze the salaries for rookies in the NFL and instrument the endogenous decision to enter the professional market with the month of birth (relative age effect). A player enjoys a 6 percent higher starting salary in the NFL for each additional year with the college team. The returns to education in professional sports are sizable and similar to returns to formal education.     

Small sample properties of maximum likelihood versus generalized method of moments based tests for spatially autocorrelated errors

Many applied researchers have to deal with spatially autocorrelated residuals (SAR). Available tests that identify spatial spillovers as captured by a significant SAR parameter, are either based on maximum likelihood (MLE) or generalized method of moments (GMM) estimates. This paper illustrates the properties of various tests for the null hypothesis of a zero SAR parameter in a comprehensive Monte Carlo study. The main finding is that Wald tests generally perform well regarding both size and power even in small samples. The GMM-based Wald test is correctly sized even for non-normally distributed disturbances and small samples, and it exhibits a similar power as its MLE-based counterpart. Hence, for the applied researcher the GMM Wald test can be recommended, because it is easy to implement.     

Structural Operations and Net Migration Across European Union Member Countries

This paper analyzes the effects of international transfers to finance infrastructure on net migration flows among countries within the EU. A new economic geography model is employed with common pool financed infrastructure investments to derive a set of empirically testable hypotheses about the effects of transfer payments to finance infrastructure investments on migration. A significant effect of structural fund expenditures is identified on the bilateral net migration of workers among the EU member countries. On average, a one percentage point increase in the expenditures on structural funds (in per cent of gross domestic product (GDP)) leads to a reduction in the measure of bilateral net migration by about 0.4–0.8%.     

The effects of a gamified human resource management system on job satisfaction and engagement

The pressures associated with the speed of competition, including the digitalization of workspaces, are increasing the need for modern organizations to drive employee satisfaction and engagement. Integrating gamification into the workplace has been identified as a possible strategy to promote employee participation, engagement and loyalty. Gamification is defined as the application of game design elements in a non‐game context, which, in this case, is the workplace. This article presents a 12‐month longitudinal study designed to investigate the role of gamification in fostering job satisfaction and engagement. The findings from a sample of 398 employees, including both treatment and control groups from a large multinational company that introduced a gamified human resource management (HRM) system, revealed the effects of certain gamification experiential outcomes related to driving employee satisfaction and engagement at work. Overall, our study highlights the possibilities of employing gamified HRM systems to influence employee attitudes and behavior at work.     

How do managerial successions shape corporate financial policies in family firms?

Despite recent evidence on the importance of chief executive officer (CEO) successions in family firms, we still know little about the differences in corporate strategies entailed by family and professional managers around transition. We investigate the consequences of managerial successions for the financial policies of Italian family firms. Our findings indicate that the appointment of non-family professional CEOs leads to a significant increase in the use of debt, primarily driven by short-term maturities. We document substantial heterogeneity in the impact of professional successions on debt financing: the increase in debt is particularly pronounced for young firms, firms with a high level of investment, and firms in which the controlling family maintains a dominant representation on the board of directors. Examining the importance of financial flexibility, we find that the increase in debt occurs primarily when firms are cash-poor, and when incoming CEOs can exploit spare borrowing capacity.     

Networks and geography in the economics of knowledge flows

This paper reviews the literature dealing with the economic geography of knowledge flows by summarising the most relevant problems and open questions that, according to the authors’ view, have been dealt in the past and should be dealt in the future by network analysis in order to model, understand and measure the structure and dynamics of knowledge flows. The interaction between “networks” and “geography” elements within a theoretical, methodological and empirical perspective is discussed throughout the paper by making reference to previous works by the authors and to the established literature. Thus, these references, far from being complete and exhaustive, are instrumental to the achievement of the paper’s goal: to demonstrate that “networks” and “geography” are the necessary ingredients for every study of the innovative process at any level of analysis, from individual agent to institution/organization, from the regional to the national and international level.