Located in Prague, CERGE-EI is dedicated to excellence and innovation in economic research and education. Chartered by the State of New York, CERGE-EI is a joint workplace of Charles University and the Czech Academy of Sciences, and is supported by numerous donors.
Corruption persists because of advantages to firms but its operating mechanism is not well understood. Using data from Central and Eastern Europe the authors establish that bribes are often financed by inflated expenses through strategies such as fake invoices, ghost employees and unnecessary consultants. These bribes increase revenue by more than the increased costs making the firm owners and managers better off. Read more
Salience, Systemic Risk And Spectral Risk Measures As Capital Requirements
Systematic risk, fire sales, and welfare losses are threats when the economy takes a downturn. Matyska suggests that overweighting worst-case and best-case outcomes can prevent fire sales, while overweighting intermediate outcomes leads to welfare improvements for the financial sector after uncertainty shocks. The paper results can guide policymakers toward better crisis resolution. Read more
Extreme Temperature and Extreme Violence: Evidence from Russia
Vladimir Otrachshenko, Olga Popova, and José Tavares
Using Russian regional panel data, authors show that extremely hot temperatures increase violent mortality, while extremely cold temperatures do not seem to have an effect on the same outcome. Their analyses also suggest that the negative impact of hot temperatures can be partially offset by better job opportunities and lower vodka consumption, outlining the directions for possible economic policies. Read more
Shortages of qualified primary and secondary teachers are common in the US and most European countries, with high-quality teachers the most likely to leave teaching. Using data from 19 European countries, Federičová examines respondents’ occupational trajectories. By identifying those who changed career, she analyses teacher turnover and how it has been affected by the economic and political transition. Read more
Wages, Minimum Wages and Price Pass-Through: The Case of McDonald´s Restaurants
Orley Ashenfelter and Štěpán Jurajda
What happens when the minimum wage rises? Based on 2016-2020 hourly wage data from almost all US McDonald's restaurants and Big Mac hamburger prices, Ashenfelter and Jurajda study the mechanisms at play. The authors find that minimum wage hikes increase wages of McDonald's workers even in restaurants that did not have to increase their wages, do not lead to faster adoption of labor-saving technology, and are reflected in higher prices of the Big Mac. Read more
Does Robots´ Reach Exceed Their Grasp? Differential Impacts of Robot Adoption and Spillover Effects on Workers in the Czech Republic
What are the impacts on Czech workers’ labor market outcomes of robotization and exposure to robots owned by foreign competitors? Using a quasi-differences-in-differences approach and employee-level data, Bělín finds that robot adoption and exposure to robots owned by foreign competitors increases demand for college-educated labor and suppresses the demand for workers with lower qualifications. Read more
Learning about Ethnic Discrimination from Different Information Sources
Who do we listen to - experts or ordinary people - when we acquire information on a controversial issue like discrimination? Using a novel experiment with random provision and endogenous acquisition of information, Korlyakova finds that, overall, people behave rationally as they update beliefs more in response to a relatively accurate source, i.e. experts, and they select this source more frequently. Read more
Family Size and Subjective Well-being in Europe: Do More Children Make Us (Un)Happy?
Barbara Pertold-Gebicka and Dominika Spolcova
Using the 2013 SILC data and relying on multiple births as the source of exogenous variation, the authors show that parents of large families experience the same or higher levels of well-being as parents of smaller families. The positive effect is mainly driven by parents of teenagers, but not of young children. With more help during their children’s early years, higher fertility rates might be reached. Read more
CERGE-EI grads continue to excel. Jiří Sýkora (MAE 2014) has been ranked among the Czech Republic’s youngest and most promising young talents, according to the Forbes 30 under 30 Czech Republic. As Investment Manager for PFF Group, he is responsible for more than 2bn euros of commercial real estate in the UK, Poland and Hungary. Read more about the exciting employment accomplishments of other CERGE-EI grads here.
Earlier this year, Prof. Randy Filer retired as President of the CERGE-EI Foundation after 24 years. He is succeeded by Tony Claudino, who joins from the Institute of International Education where he led the Fulbright Program’s communications team. Prof. Filer was instrumental in securing donor support for the Foundation’s Teaching Fellows and Distance Learning Programs. He continues to serve on the foundation board and retains responsibility for the Teaching Fellows Program.
This year marks 30 years since CERGE-EI was founded in the newly-democratic Czechoslovakia. Supported by USAID and other American foundations, CERGE-EI’s mission was to educate the young economists who would help build the market economies of the post-communist world. As part of the anniversary celebrations, we’ve been talking with some of our earliest graduates. Meet Martin Ĉihák and Libor Krkoška.