School tracking and intergenerational income mobility: Evidence from the Finnish comprehensive school reform

This paper estimates the effect of a major education reform on intergenerational income mobility. The Finnish comprehensive school reform of 1972–1977 replaced the old two-track school system with a uniform nine-year comprehensive school and shifted the selection of students to vocational and academic tracks from age 11 to age 16. We estimate the effect of this reform on the intergenerational income elasticity using a representative sample of males born between 1960 and 1966. The identification strategy relies on a differences-in-differences approach and exploits the fact that the reform was implemented gradually across the country during a six-year period. The results indicate that the reform reduced the intergenerational income elasticity by 23% from the pre-reform elasticity of 0.30 to post-reform elasticity of 0.23.     

Do the Same Models Apply to Consumers and Business Firms? Comment on the Paper by Frey

Journal of Consumer Policy -     

Beliefs affecting additional investment intentions of mutual fund clients

In this article, we aim to examine mutual fund investors’ behaviour in decision-making situations and to analyse future investment decisions via a path model approach. Investors were divided into different groups based on the risk and distribution channel used, and the differences in their investment intentions were examined. The study used empirical survey data collected from the clients of a mutual fund company owned by a Finnish banking group. Loyalty to the common banking group dominated the explanation in the whole model. The safety of the investment was important for branch office investors, whereas obtaining a good return was important for internet investors. Ultimately, explanatory power was highest for the branch office investors and lowest for the internet investors with equity funds. Most investors intended to invest more, and thus there was little variance to be explained. The results indicate that branch office investors with money market funds require more information about the investment business, although it is difficult to see who would be responsible for providing that information. This study has implications for both the theory and management of financial services.     

Preference for green packaging in consumer product choices – Do consumers care?

In this paper, consumer environmental choice is studied by analysing the relative importance of green packaging when compared with other relevant product attributes. The empirical study is based on a choice‐based conjoint analysis of preferences for functional drink products of a sample of 330 consumers using these products. Our choice‐based approach on environmental behaviour brings new insights to previous research, which predominantly relies on attitude models. Results indicate that consumers differ in their preferences for packaging, brand, price and convenience of use of daily products. In addition, various distinctive consumer segments can be identified on the market. Contrary to several previous studies, we found that the largest consumer segment, one‐third of consumers, favoured environmentally labelled packaging as the most important criteria in their choice. The findings emphasize the increasing importance of ethical and environmental dimension in product choices. We also propose that the attention in environmental consumer research should be shifted from general attitude studies towards the study of actual product choices.     

The effect of unemployment benefits on re-employment rates: Evidence from the Finnish unemployment insurance reform

In January 2003, the unemployment benefits in Finland were increased for workers with long employment histories. The average benefit increase was 15% for the first 150 days of the unemployment spell. At the same time severance pay system was abolished. In this paper we evaluate the effect of the change in the benefit structure on the duration of unemployment by comparing the changes in the re-employment hazard profiles among the unemployed who were affected by the reform to the changes in a comparison group whose benefit structure remained unchanged. We find that the change in the benefit structure reduced the re-employment hazards by on average 17%. The effect is largest at the beginning of the unemployment spell and disappears after the eligibility period for the increased benefits expires.