This paper extends the traditional test-score value-added model of teacher quality to allow for the possibility that teachers affect a variety of student outcomes through their effects on both students' cognitive and noncognitive skill. Results show that teachers have effects on skills not measured by test-scores, but reflected in absences, suspensions, course grades, and on-time grade progression. Teacher effects on these non-test-score outcomes in 9th grade predict effects on high-school completion and predictors of college-going--above and beyond their effects on test scores. Relative to using only test-score measures of teacher quality, including both test-score and non-test-score measures more than doubles the predictable variability of teacher effects on these longer-run outcomes.
What Do Test Scores Miss? The Importance of Teacher Effects on Non-Test Score Outcomes -- by C. Kirabo Jackson
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Identifying Ambiguity Shocks in Business Cycle Models Using Survey Data -- by Anmol Bhandari, Jaroslav Borovicka, Paul Ho
We develop a framework to analyze economies with agents facing time-varying concerns for model misspecification. These concerns lead agents to interpret economic outcomes and make decisions through the lens of a pessimistically biased 'worst-case' model. We combine survey data and implied theoretical restrictions on the relative magnitudes and comovement of forecast biases across macroeconomic variables to identify ambiguity shocks as exogenous fluctuations in the worst-case model. Our solution method delivers tractable linear approximations that preserve the effects of time-varying ambiguity concerns and permit estimation using standard Bayesian techniques. Applying our framework to an estimated New-Keynesian business cycle model with frictional labor markets, we find that ambiguity shocks explain a substantial portion of the variation in labor market quantities.
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Optimal Capital Controls and Real Exchange Rate Policies: A Pecuniary Externality Perspective -- by Gianluca Benigno, Huigang Chen, Christopher Otrok, Alessandro Rebucci, Eric R. Young
A new theoretical literature studies the use of capital controls to prevent financial crises in models in which pecuniary externalities justify government intervention. Within the same theoretical framework, we show that when ex-post policies such as defending the exchange rate can contain or resolve financial crises, there is no need to intervene ex-ante with capital controls. On the other hand, if crises management policies entail some efficiency costs, then crises prevention policies become part of the optimal policy mix. In the standard model economy used in the literature with costly crisis management policies, the optimal policy mix combines capital controls in tranquil times with support for the real exchange rate to limit its depreciation during crises times. The optimal policy mix yields more borrowing and consumption, a lower probability of financial crisis, and twice as large welfare gains than in the socially planned equilibrium with capital controls alone.
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Deposit Insurance: Theories and Facts -- by Charles W. Calomiris, Matthew Jaremski
Economic theories posit that bank liability insurance is designed as serving the public interest by mitigating systemic risk in the banking system through liquidity risk reduction. Political theories see liability insurance as serving the private interests of banks, bank borrowers, and depositors, potentially at the expense of the public interest. Empirical evidence - both historical and contemporary - supports the private-interest approach as liability insurance generally has been associated with increases, rather than decreases, in systemic risk. Exceptions to this rule are rare, and reflect design features that prevent moral hazard and adverse selection. Prudential regulation of insured banks has generally not been a very effective tool in limiting the systemic risk increases associated with liability insurance. This likely reflects purposeful failures in regulation; if liability insurance is motivated by private interests, then there would be little point to removing the subsidies it creates through strict regulation. That same logic explains why more effective policies for addressing systemic risk are not employed in place of liability insurance. The politics of liability insurance also should not be construed narrowly to encompass only the vested interests of bankers. Indeed, in many countries, it has been installed as a pass-through subsidy targeted to particular classes of bank borrowers.
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The Effect of Single-Sex Education on Academic Outcomes and Crime: Fresh Evidence from Low-Performing Schools in Trinidad and Tobago -- by C. Kirabo Jackson
In 2010, the Ministry of Education in Trinidad and Tobago converted 20 low-performing pilot secondary schools from coed to single-sex. I exploit these conversions to identify the causal effect of single-sex schooling holding other school inputs (such as teacher quality and leadership quality) constant. After also accounting for student selection, both boys and girls in single-sex cohorts at pilot schools score 0.14ÃÂ higher in the academic subjects on national exams. There is no robust effect on non-academic subjects. Additionally, treated students are more likely to earn the secondary-school leaving credential, and the all-boys cohorts have fewer arrests. Survey evidence reveals that these single-sex effects reflect both direct gender peer effects due to interactions between classmates, and also indirect effects generated through changes in teacher behavior. Importantly, these benefits are achieved at zero financial cost.
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Compulsory Voting, Turnout, and Government Spending: Evidence from Austria -- by Mitchell Hoffman, Gianmarco Leon, Maria Lombardi
We study a unique quasi-experiment in Austria, where compulsory voting laws are changed across Austria's nine states at different times. Analyzing state and national elections from 1949-2010, we show that compulsory voting laws with weakly enforced fines increase turnout by roughly 10 percentage points. However, we find no evidence that this change in turnout affected government spending patterns (in levels or composition) or electoral outcomes. Individual-level data on turnout and political preferences suggest these results occur because individuals swayed to vote due to compulsory voting are more likely to be non-partisan, have low interest in politics, and be uninformed.
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Open Access as a Crude Solution to a Hold-up Problem in the Two-Sided Market for Academic Journals -- by Mark J. McCabe, Christopher M. Snyder
The move from traditional to open-access journals--which charge no subscription fees, only submission fees--is gaining support in academia. We analyze a two-sided-market model in which journals cannot commit to subscription fees when authors (who prefer low subscription fees because this boosts readership) make submission decisions. This leads to a hold-up problem, manifested as excessive subscription fees. Open access is a crude attempt to avoid hold up by eliminating subscription fees. We compare the efficiency and profitability of traditional versus open access under various market structures (monopoly, Bertrand competition) and extensions (non-profit journals, bundling, hybrid pricing), using our theoretical findings to understand the evolution of the market for academic journals in the Internet age.
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Communication in Vertical Markets: Experimental Evidence -- by Claudia Moellers, Hans-Theo Normann, Christopher M. Snyder
When an upstream monopolist supplies several competing downstream firms, it may fail to monopolize the market because it is unable to commit not to behave opportunistically. We build on previous experimental studies of this well-known commitment problem by introducing communication. Allowing the upstream firm to chat privately with each downstream firm reduces total offered quantity from near the Cournot level (observed in the absence of communication) halfway toward the monopoly level. Allowing all three firms to chat together openly results in complete monopolization. Downstream firms obtain such a bargaining advantage from open communication that all of the gains from monopolizing the market accrue to them. A simple structural model of Nash bargaining fits the pattern of shifting surpluses well. We conclude with a discussion of the antitrust implications of open communication in vertical markets.
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The Requirements of Jobs: Evidence from a Nationally Representative Survey -- by Maury Gittleman, Kristen Monaco, Nicole Nestoriak
The Occupational Requirements Survey (ORS) is a new survey at the Bureau of Labor Statistics which collects data on the educational, cognitive, and physical requirements of jobs, as well as the environmental conditions in which the work is performed. Using pre-production data, we provide estimates of a subset of elements by broad industry and occupation and examine the relationship between the cognitive elements and measures of education and training. We exploit the overlap between ORS and the National Compensation Survey to estimate models of the returns to different occupational requirements. Finally, we examine the relationship between occupational requirements and occupational safety measures and outline potential research uses of the Occupational Requirements Survey.
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Multifaceted Aid for Low-Income Students and College Outcomes: Evidence from North Carolina -- by Charles T. Clotfelter, Steven W. Hemelt, Helen F. Ladd
Launched in 2004, the Carolina Covenant combines grant-heavy financial aid with an array of non-financial supports for low-income students at an elite public university. We find that the program increased four-year graduation rates by about 8 percentage points for eligible students in the cohorts who experienced the fully developed program. For these cohorts, we also find suggestive effects on persistence to the fourth year of college, cumulative earned credits, and academic performance. We conclude that aid programs targeting low-income, high-ability students are most successful when they couple grant aid with strong non-financial supports.
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Newer Need Not be Better: Evaluating the Penn World Tables and the World Development Indicators Using Nighttime Lights -- by Maxim Pinkovskiy, Xavier Sala-i-Martin
Nighttime lights data are a measure of economic activity whose error is plausibly independent of the measurement errors of most conventional indicators. Therefore, we can use nighttime lights as an independent benchmark to assess existing measures of economic activity (Pinkovskiy and Sala-i-Martin (2016)). We employ this insight to find out which vintages of the Penn World Tables and of the World Development Indicators better estimate true income per capita. We find that revisions of the PWT do not necessarily dominate their predecessors in terms of explaining nighttime lights (and thus, predicting unobserved true income). In particular, we find that the PWT 7.1 chain-based GDP series substantially outperforms the constant-price series in both PWT 8.0 and PWT 8.1, the two most recent vintages of the PWT. We additionally find that the World Development Indicators are as good, and often better, measures of unobserved true income as are any recent vintages of the Penn World Tables. Furthermore, we find that each new round of the International Comparisons Programme (ICP) has improved the WDI's ability to predict log unobserved true income. We also find that vintages tend to be good or bad at predicting unobserved true income roughly equally across the sample period, and do not tend to be particularly good at predicting unobserved income in the year of their price survey. We conclude that GDP series based on unadjusted domestic growth rates alone predict growth rates of true income better than series based on PPP adjustments to growth rates.
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Labor Supply in the Past, Present, and Future: a Balanced-Growth Perspective -- by Timo Boppart, Per Krusell
What explains how much people work? Going back in time, a main fact to address is the steady reduction in hours worked. The long-run data, for the U.S. as well as for other countries, show a striking pattern whereby hours worked fall steadily by a little below a half of a percent per year, accumulating to about a halving of labor supply over 150 years. In this paper, we argue that a stable utility function defined over consumption and leisure can account for this fact, jointly with the movements in the other macroeconomic aggregates, thus allowing us to view falling hours as part of a macroeconomy displaying balanced growth. The key feature of the utility function is an income effect (of higher wages) that slightly outweighs the substitution effect on hours. We also show that our proposed preference class is the only one consistent with the stated facts. The class can be viewed as an enlargement of the well-known "balanced-growth preferences" that dominate the macroeconomic literature and that demand constant (as opposed to falling) hours in the long run. The postwar U.S. experience, over which hours have shown no net decrease and which is the main argument for the use of "balanced-growth preferences", is thus a striking exception more than a representative feature of modern economies.
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Nigerian Stock Exchange Set To Implement Compliance Status Indicator Codes On Listed Companies
As part of efforts to further improve market transparency and integrity, provide timely information for investment decisions as well as enhance the protection of investors in the capital market, The Nigerian Stock Exchange ("The Exchange" or "NSE") will commence the use of enhanced Compliance Status Indicator (CSI) codes on the ticker tape for listed companies effective Monday, May 09, 2016.
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Lombard Risk Appoints Chief Technology Officer
Lombard Risk Management plc (AIM:LRM.L), a leading provider of integrated collateral management and regulatory reporting solutions for the financial services industry, is pleased to announce that Mike Payne has been appointed to the role of Chief Technology Officer, of Lombard Risk, to lead the development and delivery of software products, client application support and the internal IT infrastructure.
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Industry Collaboration Is Necessary For The Successful Application Of Blockchain In Securities Markets - New Academic Research From The SWIFT Institute Reviews The Impact And Potential For Blockchain In Securities Settlement
New research published by the SWIFT Institute investigates the practical application of blockchain (or mutual distributed ledger) technologies in securities markets.
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STOXX Monthly Index News: Commodity Price Hikes Pushed Related Sectors And Countries
In April, equity markets have been influenced by a weak US dollar. Towards the end of the month, the Fed decided to keep interest rates unchanged and did not give a hint about future decisions. As a result, the greenback decreased even more. Reversely, commodity prices hiked up and pushed the related industry sectors Basic Resources and Oil & Gas as well as stock markets in strong basic resources exporters like Norway or Canada.
Please find further information complemented by our Index of the Month – iSTOXX Europe Multi-Factor Index – within the Monthly Index News or download our research paper directly.
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Thomson Reuters 2016 Know Your Customer Surveys Reveal Escalating Costs And Complexity - Parallel Surveys Show Differing Perspectives Of Financial Institutions And Their Corporate Customers On The Effect Of Financial Firmsâ Spend Of Up To $500 Annually On KYC Globally
The lack of sufficient people resources and the volume of regulatory change are top concerns among nearly 800 financial institutions who responded to an authoritative Thomson Reuters survey on the impact of global changes in Know Your Customer (KYC) regulation, while a parallel survey of their corporate customers found that 89 percent had not had a good KYC experience, and 13 percent had changed their financial institution relationship as a result.
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IOSCO Issues Report On Impact Of Storage And Delivery Infrastructure On Commodity Derivatives Market Pricing
The Board of the International Organization of Securities Commissions today published The Impact of Storage and Delivery Infrastructure on Commodity Derivatives Market Pricing. The report sets out the findings and conclusions of the review of the impact of storage infrastructures on the integrity of the price formation process of physically-delivered commodity derivatives contracts traded on regulated exchanges.
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UK's Financial Conduct Authorityâs Regulatory Sandbox Opens To Applications
The Financial Conduct Authority (FCA), today opened its regulatory sandbox to firms. The sandbox is a ‘safe space’ in which businesses can test innovative products, services, business models and delivery mechanisms while ensuring that consumers are appropriately protected. The regulatory sandbox is part of Project Innovate, an initiative kicked off in October 2014, to help us encourage innovation in the interests of consumers and promote competition through disruptive innovation.
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Bursa Malaysia Securities Publicly Reprimands KAF-Seagroatt & Campbell Berhad For Breach Of Main Market Listing Requirements
Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded KAF-Seagroatt & Campbell Berhad (KAF) in respect of the company’s fourth quarterly report for the financial year ended 31 May 2015 (“QR 4/2015”) announced on 31 July 2015 which was in contravention of paragraph 9.16(1)(a) of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR).
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