Political Economy

November 4
Alberto F. Alesina of Harvard University, Organizer

Claudia Olivetti, Boston College and NBER; M. Daniele Paserman, Boston University and NBER; and Laura Salisbury, York University and NBER

Three-generation Mobility in the United States, 1850-1940: The Role of Maternal and Paternal Grandparents (NBER Working Paper No. 22094)

This paper estimates intergenerational elasticities across three generations in the United States in the late 19th and early 20th centuries, exploring the role of maternal and paternal grandfathers in the transmission of economic status to grandsons and granddaughters. Olivetti, Paserman, and Salisbury document that the relative importance of maternal and paternal grandfathers differs by gender. The socioeconomic status of grandsons is influenced more strongly by paternal grandfathers than by maternal grandfathers. Maternal grandfathers are more important for granddaughters than for grandsons, while the opposite is true for paternal grandfathers. The reseachers discuss a model of multi-trait matching and inheritance that can rationalize these findings.

David N. Figlio, Northwestern University and NBER; Paola Giuliano, University of California at Los Angeles and NBER; Umut Özek, American Institutes for Research; and Paola Sapienza, Northwestern University and NBER

Long-Term Orientation and Educational Performance (NBER Working Paper No. 22541)

Figlio, Giuliano, Özek, and Sapienza use remarkable population-level administrative education and birth records from Florida to study the role of Long-Term Orientation on the educational attainment of immigrant students living in the US. Controlling for the quality of schools and individual characteristics, students from countries with long term oriented attitudes perform better than students from cultures that do not emphasize the importance of delayed gratification. These students perform better in third grade reading and math tests, have larger test score gains over time, have fewer absences and disciplinary incidents, are less likely to repeat grades, and are more likely to graduate from high school in four years. Also, they are more likely to enroll in advanced high school courses, especially in scientific subjects. Parents from long term oriented cultures are more likely to secure better educational opportunities for their children. A larger fraction of immigrants speaking the same language in the school amplifies the effect of Long-Term Orientation on educational performance. Authors validate these results using a sample of immigrant students living in 37 different countries.

Murat Iyigun, University of Colorado; Nathan Nunn, Harvard University and NBER; and Nancy Qian, Yale University and NBER

Winter Is Coming: The Long-run Effects of Climate Change on Conflict

This paper investigates the long-run effects of climate change on conflict by examining cooling from 1400-1900CE, a period that includes most of the Little Ice Age. Iyigun, Nunn, and Qian construct a geo-referenced and digitized database of conflicts in Europe, North Africa, and the Near East from 1400-1900, which they merge with historical temperature data. Authors first show that during this time cooling is associated with increased conflicts. Then, turning to the dynamics of cooling, they test for the presence of intensification and adaptation effects. Researches do this by allowing the effects of cooling over a fifty-year period on the change in conflict during the same period to depend on the extent of cooling during the previous fifty-year period. This paper finds that, consistent with the dominance of intensification effects over adaptation effects, the effects of cooling on conflict were greater when there was more cooling in the previous period.

Eward L. Glaeser and Andrei Shleifer, Harvard University and NBER, and Giacomo A.M. Ponzetto, CREI, Universitat Pompeu Fabra

Securing Property Rights

A central challenge in securing property rights is the subversion of justice through legal skill, bribery, or physical force by the strong — the state or its powerful citizens — against the weak. Glaeser, Ponzetto, and Shleifer present evidence that the less educated and poorer citizens in many countries feel their property rights are least secure. The researchers then present a model of a farmer and a mine which can pollute his farm in a jurisdiction where the mine can subvert law enforcement. They show that, in this model, injunctions or other forms of property rules work better than compensation for damage or liability rules. The equivalences of the Coase Theorem break down in realistic ways. The case for injunctions is even stronger when parties can invest in power. This approach sheds light on several controversies in law and economics, but also applies to practical problems in developing countries, such as low demand for formality, law enforcement under uncertain property rights, and unresolved conflicts between environmental damage and development.

Jonathan Schulz, Yale University

The Church's Ban on Consanguineous Marriages, Extended Kin-groups and Democracy

This paper highlights the role of extended kin-groups for the functioning of modern societies: in countries with strong extended families, characterized by a high level of cousin marriages, the rule of law is weak and they are more likely autocratic. To assess causality, Schulz uses a historic event as a source of exogenous variation. In the early medieval ages the Church started to prohibit kin-marriages. Using the variation in the duration and extent of the Eastern and Western Churches' ban on consanguineous marriages as an instrument, reveals a large effect of the percentage of cousin marriage on an index of democracy. An additional novel instrument, kin-terms, strengthens this point: the effects are very similar and do not rest on the European experience alone. Within country evidence based on individual survey responses supports these results. These findings point to a causal effect of marriage patterns on the proper functioning of formal institutions and democracy. The Church's marriage rules most likely impacted social closure, gave rise to an individualist western culture and paved the way for well-functioning formal institutions and the unique economic success of Europe.

Julia Cage, Sciences Po, and Nicolas Hervé and Marie-Luce Viaud, Institut National de l'Audiovisuel

The Production of Information in an Online World

The modern media industry is in a state of crisis. Legacy media outlets point to new digital distribution mechanisms that relay instantaneously their news stories without compensating them for their newsgathering efforts as a source of the crisis. One central issue is whether greater intellectual property protection could address some of these difficulties and raise the incentives for original information production. In this paper, Cage, Hervé, and Viaud build a unique dataset including all online content produced by the universe of news media (newspapers, television, radio, pure online media, and a news agency) in France during year 2013. The researchers develop a topic detection algorithm that identifies each news story, trace the timeline of each story and study news propagation. They show that in 25% of the cases, once a news is broken by a media outlet, it is covered online by another outlet in less than four minutes. High reactivity comes with verbatim copying, however. The researchers find that only 36% of the online content is original and that more than half of the copying actually lies outside the bounds of copyright law. Moreover, using daily-level variations, the researchers show that breaking news outlets only capture a tiny share of total online audience. This evidence shades new light on the current debate on property in news.

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