Young Economist Award
2024 Award Recipients (in alphabetical order of author):
Paper: Sources of Regional Variation in Intergenerational Mobility
Author: Lieke Beekers
Motivation: To what extent do children's fortunes depend on those of their parents and what does this depend on? The study of intergenerational mobility is an important and perennial topic in the economics literature and recent research has argued that the regions in which children grow up may play an important role ("place effects"). An important econometric challenge in this literature is to distinguish between place effects and different families sorting into different locations. This paper provides a new perspective on this important issue using high-quality Dutch administrative data and well-executed econometric analyses.
While previous research has found evidence for place effects in the United States, this paper does not find such evidence for the Netherlands except in the very short run. While there are short-term effects on educational outcomes, these become smaller by age 19 and disappear by age 28. There are no long-term effects of the place where a child grows up on the intergenerational transmission of income and educational attainment. The paper argues that, to obtain these findings, it is important to appropriately control for families sorting into different locations. For both long-term income and education in the Netherlands controlling for family fixed effects makes the place effect go away, implying sorting. A possible reason for the different results relative to the previous literature is that the previous literature did not appropriately control for sorting because such sorting may be age-dependent. Another possibility is that the empirical setting is different, i.e. that place effects are less important in the Netherlands than the United States. In summary, this is a well-done paper that addresses an important question in a nuanced and innovative way.
Paper: Symbols of Oppression: The Role of Confederate Monuments in the Great Migration
Author: Francesco Ferlenga
Motivation: Political monuments, often constructed by dominant groups to assert their power, are extremely common throughout the world, but might sometimes reflect ideological divisions and become a polarising phenomenon. How do these divisive symbols affect the oppressed groups in society?
This paper studies the construction of Confederate monuments in the US South during the early 20th century. These monuments were supported by southern whites and opposed by African Americans because of their connection to slavery. Using a variety of very well-executed empirical exercises, the paper shows that the time of construction of a monument marked a breaking point for African American out-migration patterns — leading to a decline in the African American share of the population in counties where a monument was constructed. Interestingly, these monuments continue to influence migration preferences today. The paper sheds light on the mechanism and suggests that public symbols serve as signals amplifying the salience of otherwise-hard-to-measure aspects of a location, such as the level of discrimination.
The research question is extremely interesting and the results have key political implications as they suggests that publicly displayed divisive symbols can become important drivers of segregation.
Paper: The Clean Transition in a Network Economy
Authors: Shane Mahen
Motivation: The pursuit of net-zero emissions has led major economies to adopt measures encouraging clean technologies that minimize fossil fuel use. However, fiscal constraints due to high debt and weak growth pose challenges for targeting clean technology policies across sectors.
This paper adopts a novel endogenous network approach to explore how sector-specific technology subsidies influence technology adoption, emissions levels, and aggregate output through production networks. It develops a model that includes multiple sectors, heterogeneous firms, endogenous technology choice, and climate damages. The model allows decomposition of the aggregate subsidy effects into damage-related effects (direct emissions' impact on productivity) and efficiency-related effects (indirect effects on technical and allocative efficiency).
The findings of the paper highlight the importance of considering production networks in designing effective clean technology subsidies to optimize welfare outcomes. The complex interplay between the production network, technology inputs, and firm behaviors can mean that well-intentioned clean technology subsidies sometimes inadvertently raise emissions and lower output in the aggregate. Conversely, a good understanding of the network effects of a subsidy can help in designing it to maximize its overall welfare effect.
In terms of policy implications, the paper proposes that policymakers should use the productive network structure to find interventions that offer the largest improvement in aggregate output, taking into account the changes in damage and non-damage efficiency.
Award Committee: Ghazala Azmat, Ben Moll and Mara Squicciarini