Papers


Human Barriers to international Trade

Irene Fensore, Stefan Legge, LUKAS SCHMID

This paper investigates whether the relatedness of populations across the world shapes
international trade flows. Using data on common ancestry for 172 countries covering more
than 99% of global trade, we document that country pairs with a larger ancestral distance
are less likely to trade with each other (extensive margin) and, if they do trade, they trade
fewer goods and smaller volumes (intensive margin). The results are robust to including a
vast array of control variables capturing other sources of heterogeneity, including microgeographic, political, linguistic, and religious differences. We discuss the role of several determinants of trade that lead to this negative relationship, namely differences in trust, values, consumption structures, political institutions, technology, as well as recent migration networks. Exploring the robustness of our findings, we use detailed census information on ancestry and show that U.S. states trade significantly more with ancestrally close countries.

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Does Tracking Matter For Short- and Long-Term Educational Outcomes? Evidence from School Entry Tests

Stefan Boes, Dominik Hangartner, LUKAS SCHMID

We use administrative records on secondary school entry tests linked with survey data containing detailed information about educational paths to evaluate the effect of early educational tracking on schooling achievements. Regression discontinuity estimates suggest that sorting pupils into upper and lower level tracks does not matter for secondary or tertiary school degrees as long as the school system is horizontally permeable. We find evidence for lock-in effects in non-permeable systems indicating long-term impacts of tracking on educational achievements. Students who barely passed the entry exam are 17 percentage points more likely to achieve a university degree which translates into one additional year of schooling. These selection effects are most concentrated among female pupils which we explain by different family attitudes and socio-economic background.

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Direct Democracy, Postal Voting, and the Composition of Turnout

Michael Bechtel and Lukas Schmid

Electoral reforms that decrease the costs of political participation promise to reduce class biases in civic engagement. However, this could lower the quality of democracy as the less politically interested, knowledgeable, and educated may also vote more frequently. We exploit the sequential introduction of postal voting in Swiss cantons to analyze in detail how an exogenous decrease in voting costs affects the political and socio-demographic composition of turnout in direct legislation. We find that while postal voting mobilizes equally along many dimensions including individuals' political knowledge, employment status, and religious denomination, it more strongly activates partisans of left and centrist parties, less politically interested individuals, and high earners. However, these changes have only limited effects on the overall turnout composition and are unlikely to affect referendum outcomes. Our results alleviate concerns about the negative side effects of postal voting on the quality of collective choice in large electorates.

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Concurrent Elections, the Calculus of Voting, and Political Decisions

Lukas Schmid

This paper explores the consequences of concurrent referendums on turnout, information acquisition, and individual voting decisions. I exploit a natural experiment in which all voters decide on the exact same federal direct-democratic propositions but only a fraction of voters also votes in high-salience subnational elections that change the calculus of voting for federal propositions. The analysis of survey and administrative voting data for Switzerland between 1981 and 2010 reveals that concurrent elections increase voter turnout for federal propositions, make vote decisions more difficult, decrease proposition knowledge, and increase the share of individuals who cast a blank ballot.

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COMPULSORY VOTING, HABIT FORMATION, AND POLITICAL PARTICIPATION

MICHAEL M. BECHTEL, DOMINIK HANGARTNER, LUKAS SCHMID

review of economics and statistics, forthcoming. 

Can compulsory voting induce lasting changes in citizens' voting habits? We study the long-term and spillover effects of a severely sanctioned and long-standing compulsory voting law in the Swiss canton of Vaud (1900-1970). Our findings suggest that compulsory voting strongly increases turnout in federal referendums by about 30 percentage points. However, this effect returns to zero quickly after voting is no longer compulsory. Moreover, we find only minor spillover effects on related forms of political participation. These spillover effects are limited to referendums that were concurrent with referendums for which voting was compulsory. These results question habit formation arguments in the context of compulsory voting laws. Instead, our findings are consistent with a rationalist model of political participation in which individuals quickly adapt to changes in the costs of non-voting.

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Does Compulsory Voting Increase Support for Leftist Policy in Referendums?

Michael M. Bechtel, Dominik Hangartner, Lukas Schmid

American Journal of Political Science, 60(3): 752-767. 

Citizens unequally participate in referendums and this may systematically bias policy in favor of those who vote. Some view compulsory voting as an important tool to alleviate this problem while others worry about its detrimental effects on the legitimacy and quality of democratic decision-making. So far, however, we lack systematic knowledge about the causal effect of compulsory voting on public policy. We argue that sanctioned compulsory voting mobilizes citizens at the bottom of the income distribution and that this translates into an increase in support for left policies. We empirically explore the effects of a sanctioned compulsory voting law on direct-democratic decision-making in Switzerland. We find that compulsory voting significantly increases electoral support for left policy positions in referendums by up to 20 percentage points. We discuss the implications of these results for our understanding of the policy consequences of electoral institutions.

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Do Professionals Get It Right? Limited Attention and Risk-Taking Behaviour

Reto Föllmi, Stefan Legge, Lukas Schmid

Economic Journal, 126 (592): 724-755. 

Does information processing affect individual risk-taking behaviour? This article provides evidence that professional athletes suffer from a left-digit bias when dealing with signals about differences in performance. Using data from the highly competitive field of World Cup alpine skiing for the period of 1992–2014, we show that athletes misinterpret actual differences in race times by focusing on the leftmost digit, which results in increased risk-taking behaviour. For the estimation of causal effects, we exploit the fact that tiny time differences can be attributed to random shocks. We find no evidence that high-stakes situations or individual experience reduce the left-digit bias.

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MEDIA ATTENTION AND BETTING MARKETS

STEFAN LEGGE AND LUKAS SCHMID

European Economic Review, 87: 304-333. 

This paper investigates whether biased media attention affects perceptions about future events. We use data on World Cup tournaments in alpine skiing for the period of 1992-2014 and exploit close races as a source of randomness for ranking positions. Our results document that ranking positions generate sharp discontinuities in media attention even in close races. However, both regression discontinuity and instrumental variables estimates reveal that biased media attention neither affects prices nor quantities in the betting market. We conduct a series of robustness tests to explore the sensitivity of our results.

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