This week from CEPR: June 24

Thursday, June 24, 2021

Highlights from some of the latest research reports published in the Centre for Economic Policy Research (CEPR) network’s long-running series of discussion papers, as well as some other recent CEPR publications.

Also, links to some of the latest columns on Vox, the Centre’s policy portal, which provides ‘research-based policy analysis and commentary from leading economists’.

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    • New Discussion Papers


    • ARTISTS SUFFERED SUBSTANTIAL AND UNEQUAL INCOME LOSSES DURING COVID: Evidence from Germany

    COVID-19 IMPACT ON ARTISTIC INCOME
    Alexander Cuntz and Matthias Sahli  
    Issue 82 Covid Economics | 23 June 2021

    Based on the latest available data released by official sources in March 2021, a new study by Alexander Cuntz and Matthias Sahli in Issue 82 of CEPR’s Covid Economics assesses the impact of the pandemic crisis on self-employed income from artistic practice and among artists located in Germany. Among the findings:

    • The pandemic crisis impacts artists in creative and cultural sectors differently, net income losses ranging between 2 to 13%. 
    • Musicians and performing artists are among the most vulnerable groups in terms of income losses in 2020, and that some losses may depend on the specific non-pharmaceutical, public intervention implemented in German states.
    • Writers such as self-employed and freelance journalists, authors or other publicists in this artistic group are exceptional with regard to their income losses, and were able to maintain or slightly increase their self-employed income in the 2020 pandemic year. Most likely due to the fact they were able to continue their work online as theatres and concert venues closed.
    • Female writers seem to outperform trends among male counterparts in 2020 - women in the sector see income growth over their 2019 levels, while men are losing some of their income over the same period. 
    • Younger writers also tend to outperform trends, possibly due to their reliance on digital sources in the first place and thus may be more resilient to the impact of the crisis.
    • Gender income differences and differences at different career stages largely prevail over the crisis and predate the 2020 outbreak. 
    • Artists in rural areas are no less affected than those in urban areas.

    • ARE CLIMATE CHANGE POLICIES POLITICALLY COSTLY?   

    Are climate change policies politically costly?
    Davide Furceri, Michael Ganslmeier, and Jonathan D. Ostry
    CEPR Discussion Paper No. 16273 | June 2021

    Are policies designed to avert climate change (Climate Change Policies, or CCPs) politically costly? Using data on governmental popular support and the OECD's Environmental Stringency Index, a new CEPR study by Davide Furceri, Michael Ganslmeier and Jonathan D. Ostry find that CCPs are not necessarily politically costly, but policy design matters

    1. First, only market-based CCPs (such as emission taxes) generate negative effects on popular support. 
    2. Second, the effects are muted in countries where non-green (dirty) energy is a relatively small input into production. 
    3. Third, political costs are not significant when CCPs are implemented during periods of low oil prices, generous social insurance and low inequality.

    • CHILD MALTREATMENT WAS SUBSTANTIALLY UNDERREPORTED DURING THE PANDEMIC: Evidence from Colorado

    UNDERREPORTING CHILD MALTREATMENT DURING THE PANDEMIC: Evidence from Colorado
    Alexa Prettyman     
    Issue 82 Covid Economics | 23 June 2021

    A new study by Alexa Prettyman, in Issue 82 of CEPR’s Covid Economics, uses real-time data from Colorado to provide an updated national estimate on the number of unreported allegations and victims of child maltreatment for the entire year. The results indicate that millions of allegations in the United States may have gone unreported, potentially impacting over 100,000 victims during the year. The study also estimates how child maltreatment incidences and reporting changed as a result of the COVID-19 pandemic, school closures, and the stay-at-home order. Three main findings emerge: 

    1. First, in Colorado, the COVID-19 pandemic and subsequent policy responses resulted in a 15% decline in reporting in 2020, compared to 2019. The biggest decline occurred between April and June as a result of the stay-at-home order and initial shift to virtual schooling; however, delayed school openings and continued spreading of the Coronavirus kept reporting below pre-pandemic averages for the remainder of 2020. Using a model that accounts for economic hardships and harmful coping strategies brought about by the pandemic, an estimated 38,800 referrals went unreported and 2,200 victims went unnoticed. Applying these numbers to the whole country while taking into account Colorado’s unusually high reporting rate, an estimated 1.38 million referrals and 112,000 victims may have gone unreported across the country during 2020.
    2. The second key finding is that the stay-at-home order, school closings, and COVID-19 national emergency all substantially reduced child maltreatment referrals and screened-in reports. However, the study finds no evidence that more severe child maltreatment took place due to the pandemic.  
    3. Thirdly, the referral rate for neglect decreased by less in counties that were more likely to comply with the stay-at-home order relative to counties that were less likely to comply. This result provides suggestive evidence of parental burnout and is supported by early research in the medical literature.

    These findings quantify another hardship brought about by the pandemic, underreporting, and underscore the role mandatory reporters play in detecting child maltreatment.



    POLLUTION REDUCTIONS DURING COVID LOCKDOWNS ARE MORE COMPLEX AND UNEQUAL THAN PREVIOUSLY THOUGHT

    Jean-Philippe Bonardi, Quentin Gallea, Dimitrija Kalanoski, Rafael Lalive, Raahil Madhok, Frederik Noac, Dominic Rohner, Tommaso Sonno           
    21 June 2021

    A belief that the environment rebounded during Covid-19 lockdowns is widespread. However, a new study by Rafael Lalive and colleagues uncovers a more complex reality:

    • Though domestic and international lockdowns prompted a 35–45% reduction in pollution, air quality effects across the world were unequal. 
    • When restrictions were placed on some economic activities (transport and industry), people shifted to others (domestic energy). 
    • Reductions in economic activities degrade the environment in countries where domestic energy is the largest source of pollution, and policies aimed at combatting climate change must account for such diverse outcomes.
     

    FREE NUTRITIOUS SCHOOL LUNCHES INCREASE LIFETIME INCOME: Evidence from Sweden 

    Petter Lundborg, Dan-Olof Rooth

    13 June 2021

    There are substantial long term economic benefits to free school lunch programmes, finds a study by Petter Lundborg and Dan-Olof Rooth, which analyses a programme that introduced free nutritious school lunches for all pupils in Swedish primary schools between 1959-1969.

    The programme changed the nutritional content of the lunch meals and made pupils switch from less nutritious packed lunches or lunches at home. The results show that children who participated during their entire primary school period went on to have higher lifetime incomes. 


    SHOULD WE TRUST REVIEWS IN THE FOOD-SERVICE INDUSTRY?

    Ben Vollaard, Jan van Ours                         
    24 June 2021

    Many expert product reviews are non-blind and influenced by cosy relationships between reviewers and producers that consumers are not aware of. Based on unique data for a long-running expert product review in the food-service industry, a new study by Ben Vollaard and Jan van Ours finds that a conflict of interests for reviewers led to a sizeable bias in ratings. This casts doubt on the value of non-blind expert product reviews that are not bound by very strict rules.


    REMEMBERING PETER NEARY (1950-2021)

    Patrick Honohan, Cormac Ó Gráda                         
    22 June 2021

    Peter Neary, former president of both the European Economic Association and the Royal Economic Society, passed away on 16 June 2021. Writing at Vox, Patrick Honohan and Cormac Ó Gráda pay tribute to one of the profession’s European leaders, both in terms of the depth and range of his research and his role as a wizard of organisational development.


    THE ECONOMICS OF DEEP TRADE AGREEMENTS: A new eBook

    Ana Fernandes, Nadia Rocha, Michele Ruta                             
    23 June 2021

    While multilateral trade negotiations have stagnated and tensions between major players have surged, bilateral and regional agreements seem to have run away with the trade agenda. There are over 300 agreements today, up from 50 in 1990. Most importantly, many of these agreements have extended their reach well beyond tariffs, aiming to achieve integration beyond trade, or ‘deep’ integration. 

    Writing at Vox, editors Ana Fernandes, Nadia Rocha and Michele Ruta introduce a new eBook from CEPR and the World Bank that focuses on the determinants of deep trade agreements, how they affect trade and non-trade outcomes, and how they might shape trade relations in a post-COVID-19 world.


    COVID-19 AND THE CORPORATE SECTOR: Insights from the OECD Economic Outlook

    Damien Puy, Lukasz Rawdanowicz                       
    22 June 2021


     

    The covid-19 crisis has had a largely negative effect on firms, harming corporate profitability and leverage around the world. Writing at Vox, Damien Puy and Lukasz Rawdanowicz present findings from the recent OECD Economic Outlook, highlighting how these negative effects have in fact varied across firms. In maintaining the buffer against corporate bankruptcies, the authors identify three clear policy challenges: debt overhang, financial instability, and the rise of ‘zombie’ firms. 


    US FIRMS' MARKET POWER HAS DECLINED DUE TO IMPORT COMPETITION

    Mary Amiti, Sebastian Heise                       
    22 June 2021

    A study by Mary Amiti and Sebastian Heise shows that tougher import competition contributed to the rise in the dominance of large US firms over the last few decades, but also reduced US firms’ market share (as a share of all sales inclusive of foreign firms) in the US market. These findings suggest that US firms’ market power in manufacturing industries has in fact declined as foreign firms’ market share has grown.


    REDUCING THE COMPLIANCE COSTS OF REGULATION

    Simeon Djankov, Eva (Yiwen) Zhang                            
    21 June 2021

    In much of the world, property sales are highly regulated and expensive. Using World Bank data, a study by Simeon Djankov and Eva (Yiwen) Zhang shows that while regulators and administrators still pose barriers to transferring property, countries have actually seen tremendous progress in reducing compliance costs in the area of registering property over the past 15 years. 

    In the wake of the Covid-19 pandemic, moving public services online has provided opportunity to reduce compliance costs further by holding the level of regulation constant and easing the way in which it is administered. 



    PRIVACY AND ANTITRUST: 'Integration', not just 'intersection'

    Gregory Crawford, Cristina Caffarra  interviewed by Tim Phillips, 17 June 2021

    The newly launched CEPR Competition Policy RPN is organizing a discussion between senior antitrust regulators, privacy experts, and economists. In the first panel, privacy and data protection experts will discuss some key insights for antitrust enforcers. The second panel will discuss with antitrust leaders how these ideas are progressing in practice.

    Cristina Caffarra & Greg Crawford tell Tim Phillips about the launch event of the CEPR Competition Policy RPN, which was held on June 17 2021

    You can see a recording of the event here.