Andrea Moro Webpage

This paper presents and estimates a search model of the labor market where jobs are characterized by wages and work-hours exibility. Flexibility is valued by workers, and is costly to provide for employers. The model generates observed wage distributions directly related to the preference for exibility parameters: the higher the preference for exibility, the wider is the support of the wage distribution at exible jobs and the larger is the discontinuity between the wage distribution at exible and non- exible jobs. Results show that more than one third of women place positive value to exibility, and that reducing the cost of exibility may considerably reduce the gender wage gap.

This chapter surveys the theoretical literature on statistical discrimination and affirmative action. This literature suggests dierent explanations for the existence and persistence of group inequality. This survey highlights such dierences and describes in these contexts the effects of color-sighted and color-blind armative action policies, and the efficiency implications of discriminatory outcomes

Statistical discrimination is a theory of inequality between demographic groups based on stereotypes that do not arise from prejudice or racial and gender bias.When rational, information-seeking decision makers use aggregate group characteristics, such as group averages, to evaluate individual personal characteristics, individuals belonging to different groups may be treated differently even if they share identical observable characteristics in every other aspect. Discrimination can be the agents’ efficient response to asymmetric beliefs, or discriminatory outcomes may display an element of inefficiency: the disadvantaged group could perform better if beliefs were not asymmetric across groups (but beliefs are asymmetric because the disadvantaged are not performing as well as the dominant group)

How well does the pivotal-voter model explain voter participation in small scale elections? This paper explores this question using data from Texas liquor referenda. It first structurally estimates the parameters of a pivotal-voter model using Texas liquor referendum data. It then uses the estimates to evaluate both the within and out-of-sample performance of the model. Results show that the model is capable of predicting turnout in the data fairly well, but tends, on average, to predict electoral outcomes that are closer to what we observe in the data. A comparison with the results obtained from an alternative model with non strategic voters based on expressive voting shows that the alternative model performs better in predicting electoral outcomes.

Slides most recent talk

Since 1914, the U.S. Senate has been elected and incumbent senators allowed to run for reelection without limit. This differs from several other elected offices in the U.S., which impose term limits on incumbents. Term limits may harm the electorate if tenure is beneficial or if they force high quality candidates to retire but may also benefit the electorate if they cause higher quality candidates to run. We investigate how changes in electoral design affect voter utility by specifying and structurally estimating a dynamic model of voter decisions. We find that tenure effects for the U.S. Senate are negative or small and that incumbents face weaker challengers than candidates running for open seats. Because of this, term limits can significantly increase voter welfare.

Why are distortionary policies used when seemingly Pareto improvements exist? According to a standard textbook argument, a Pareto improvement can be obtained by eliminating the distortions, compensating the losers with a lump sum transfer and redistributing the gains that are left over. We relax the assumption that winners know the losses suffered by the losers and show that the informationally efficient method of compensating losers may involve the use of seemingly inefficient (but informationally efficient) distortionary policies. The risk of over-compensating losers may make distortions informationally efficient.

We study a general equilibrium model with endogenous human capital formation in which ex ante identical groups may be treated asymmetrically in equilibrium. The interaction between an informational externality and general equilibrium effects creates incentives for groups to specialize, and discrimination may arise even if the corresponding model with a single group has a unique equilibrium. The dominant group gains from discrimination, rationalizing why a majority may be reluctant to eliminate discrimination. The model is also consistent with "reverse discrimination'' as a remedy against discrimination since it may be necessary to decrease the welfare of the dominant group to achieve parity.

External appendix : Figures and example mathematica notebook available upon request :
Note: you need permission from the Journal of Economic Theory to download this paper

This paper investigates how lack of information may bias the investigator's assessment of the presence of statistical discrimination. We show that the nature of the bias is such that statistical discrimination may be rejected in a Mincerian regression even when the data is generated from an equilibrium with statistical discrimination. This may occur even when the investigator has a more informative signal of productivity the employers have.

Slides of most recent talk

This paper presents the structural estimation of a statistical discrimination model. Although the model is capable of displaying multiple equilibria, an estimation strategy that identifies both the parameters of the model and the equilibrium chosen by the economic agents is developed and empirically implemented. A comparison between the equilibria that were selected in the economy over time and the other potential equilibria reveals that the decline in wage inequality experienced in the U.S. economy in the last thirty years cannot be attributed to changes in the equilibrium selection.

Omitted computations

We consider a model of endogenous human capital formation with competitively determined wages. In the presence of two distinguishable, but ex ante identical groups of workers, we show that discrimination is sustainable in equilibrium, even if the corresponding model with a single group of workers has a unique equilibrium. An affirmative action policy consisting of a quota may ``fail'' in the sense that there still may be equilibria where groups are treated differently. However, the incentives to invest for agents in the discriminated group are improved by affirmative action if the initial equilibrium is the most discriminatory equilibrium in the model without the policy. The welfare effects are ambiguous. We demonstrate that it is possible that the policy makes the intended beneficiaries worse off: even if the starting point is the most discriminatory equilibrium the expected payoff may decrease for all agents in the target group.

Note: you need permission from the Journal of Public Economics to download this paper