In most countries, childbirth has a negative impact on the labour market outcomes of mothers, especially for those with lower socioeconomic status. This column presents findings from a field experiment in Germany demonstrating that access to universal early childcare increases full-time employment and household income of mothers with lower socioeconomic status. To improve the labour market outcomes of these mothers, policymakers must provide easier access to early childcare and expand early childcare slots. 

Understanding human behavior in its entire complexity is an ambitious if not impossible challenge. It is however possible to study particular aspects of human behavior through experiments that allow us to isolate specific facets in the decision-making process, ultimately leading to a better understanding of human behavior as a whole. This thesis covers three experimental articles on unethical economic behavior and sheds light on the motives and circumstances that lead individuals to engage in these activities. Clearly, unethical behavior in all its different manifestations can pose great risk to society – both at the large (e.g. corporate tax evasion) and small (e.g. shoplifting) scale – making it a relevant topic to be studied in economic research. Trying to understand unethical behavior through the lenses of traditional economic theory is problematic.

We conducted a field experiment in the natural setting of blood donations to test how oxytocin relates to empathy and altruism. We randomly assigned blood donors in the Croatian Institute for Transfusion Medicine to three groups with the aim to induce different levels of empathy by showing a neutral video to the donors from the control group and an emotional to the donors from the first and second treatment groups. In addition to watching the emotional video, donors from the second treatment group are given a gift which relates to the emotional story from the video. We find no effect of our treatment on induced levels of oxytocin. Null effects of our treatments could be explained by the above average baseline levels of oxytocin and inability of our treatments to provoke emotional stimuli in blood donors. Nonetheless, for our empathy measures we find the effect of gift exchange on empathic concerns, but not on perspective taking. After our experimental treatments, we followed the return of our blood donors for a whole year. We find that only variable which consistently predicts return for blood donation in stated period is the number of previous donations. From policy perspective it is an important finding. Especially for hospitals and other blood providers when faced with time and resource constraints.

Wie bedeutend ist das menschliche Element für die Genauigkeit empirischer Erkenntnisse in den Wirtschaftswissenschaften? Die Unsicherheit empirischer Schätzungen wird üblicherweise als ein statistisches Phänomen betrachtet. Unbekannte Parameter einer Grundgesamtheit werden anhand einer Stichprobe geschätzt, deren Erzeugung zu so genannten Standardfehlern führt. Forschende treffen jedoch viele unbeobachtete Entscheidungen, die nicht per se richtig oder falsch sind, sich aber auf das Ergebnis der Schätzung auswirken. Beispiele hierfür sind die Wahl der Software, die Art der Datenbereinigung oder die Spezifikation der Kontrollvariablen, um nur einige zu nennen. Wir haben an einem großen crowd-basierten Feldexperiment teilgenommen, bei dem sich herausstellte, dass dieser evidenzgenerierende Prozess von Forscher zu Forscher stark variiert, wodurch eine neue Art von Unsicherheit entsteht: so genannte Nicht-Standardfehler (NSE). 164 Teams von Finanzökonominnen und Finanzökonomen testeten sechs Hypothesen an einer identischen Stichprobe von Finanzmarktdaten. Das wichtigste Ergebnis ist, dass die Nicht-Standardfehler beträchtlich sind und die gleiche Größenordnung haben wie die Standardfehler, dass sie aber nach einem anonymen Begutachtungsprozess deutlich abnehmen. Wer sich von Wirtschaftsforschern beraten lässt, sollte sich daher darüber im Klaren sein, dass die Entscheidungen der einzelnen Forschenden die empirische Evidenz mit einer nicht unerheblichen Unsicherheit behaften. Gleichzeitig scheint eine der Veröffentlichung vorausgehende Begutachtung der Ergebnisse durch wissenschaftliche Kollegen (peer-review) die Anfälligkeit für diese Art von Unsicherheit zu verringern.

We conduct a discrete choice experiment to investigate how the location of a firm in a rural or urban region affects job attractiveness and contributes to the spatial sorting of university students and graduates. We characterize the attractiveness of a location based on several dimensions (social life, public infrastructure, connectivity) and combine this information with an urban or rural attribution. We also vary job design as well as contractual characteristics of the job. We find that job offers from companies in rural areas are generally considered less attractive. This is true regardless of the attractiveness of the region. The negative perception is particularly pronounced among persons with urban origin and singles. These persons rate job offers from rural regions significantly worse. In contrast, high-skilled individuals who originate from rural areas as well as individuals with partners and kids have no specific preference for jobs in urban or rural areas.

Despite widespread criticism, credit ratings continue to be commissioned and paid for by the firms they ought to scrutinize, raising concerns about the reliability of these issuer-paid ratings. We use an experiment to evaluate whether financial reputation concerns can effectively alleviate rating inflation and find that they are only partially sufficient to discipline rating agencies. However, introducing accountability mechanisms into the rating process effectively reduces rating inflation and almost extinguishes it in our model. Our results emphasize that financial reputation and accountability are important but different factors, which combined can effectively alleviate rating inflation and therefore provide a powerful mechanism of control over rating agencies.

This chapter investigates whether core competence of managers and their expansive (vs. specialized) managerial style affects firms' innovative ability, capacity, and efficiency. Using exogenous CEO departures as a natural experiment, it establishes a causal link between managerial capability and innovation. Importantly, it reveals that firms with talented managers receive significantly more nonself citations; make significantly lower self-citations and lesser citations to the others, indicating novel and explorative innovation achievements. Also, managers with higher general (specialized) ability are cited more (less) by patents from a wider range of fields. Lastly, career concern is identified as a mechanism linking higher ability and innovation.

We present causal evidence on the effect of boardroom networks on firm value and compensation policies. We exploit a ban on interlocking directorates of Italian financial and insurance companies as exogenous variation and show that firms that lose centrality in the network experience negative abnormal returns around the announcement date. The key driver of our results is the role of boardroom connections in reducing asymmetric information. The complementarities with the input-output and cross-ownership networks are consistent with this channel. Using hand-collected data, we also show that network centrality has a positive effect on directors’ compensation, providing evidence of rent sharing.

The mission of a job affects the type of worker attracted to an organization but may also provide incentives to an existing workforce. We conducted a natural field experiment with 246 short-term workers. We randomly allocated some of these workers to either a prosocial or a commercial job. Our data suggest that the mission of a job has a performance-enhancing motivational impact on particular individuals only, those with a prosocial attitude. However, the mission is very important if it has been actively selected. Those workers who have chosen to contribute to a social cause outperform the ones randomly assigned to the same job by about half a standard deviation. This effect seems to be a universal phenomenon that is not driven by information about the alternative job, the choice itself, or a particular subgroup.

Ein Kernpunkt des geplanten Basel-III-Regelwerks sind die gestiegenen Eigenkapitalanforderungen. Umsetzungsprobleme könnten die gewünschten Effekte der Reformen jedoch konterkarieren. Zum einen könnten Banken ihre Eigenkapitalquote erhöhen, indem sie weniger Kredite an risikoreiche Kreditnehmer vergeben, statt ihr Eigenkapital
aufzustocken. Hiervon wären vor allem mittelständische Unternehmen ohne Kreditrating betroffen. Zum anderen lassen auch die neuen, strengeren Regeln den nationalen Bankenaufsehern Bewertungsspielräume, die von den Banken – politisch geduldet – zu einer Inflationierung ihres Eigenkapitals genutzt werden könnten.