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.
What happens when the minimum wage rises? Analyzing hourly wage rates and Big Mac prices over 5 years for almost all US McDonald’s, Ashenfelter and Jurajda find that minimum wage hikes lead many restaurants to keep a constant wage premium above the rising minimum wage, that they do not lead to faster adoption of labor-saving technologies, but result in a nearly full pass-through to the price of the Big Mac. Read more
Stalin and the Origins of Mistrust
Milena Nikolova, Olga Popova, and Vladimir Otrachshenko
What are the potential sources of mistrust in society? Authors of this paper trace the origins of mistrust in former Soviet Union countries to the forced labor system (gulags) during the Stalin era. Combining survey data with geolocations of gulags, authors find that living near former gulags lowers present-day social trust and civic engagement to an extent above and beyond the impacts of experiences with war or civil conflicts. Read more
Electoral Competition with Rationally Inattentive Voters
How do expected policy and political outcomes depend on voters’ selective ignorance of information? Matějka and Tabellini show that political candidates have incentives to consider voters informed about their policies, hence empowering voters with extreme preferences and well-informed small groups. This results in deviations from the full information benchmark policies and underfunding of public goods. Read more
For God, Tsar and Fatherland? The Political Influence of Church
Does the Church have an impact on political behavior? Travova explores this question using the density of the Church network and an individual survey on approval, trust, and electoral preferences in Russia. She finds that a denser Church network increases the average local approval rating for the current president and the share of votes cast for the government candidate in presidential elections. Read more
An Equivalence Between Rational Inattention Problems and Complete-Information Conformity Games
Pavel Ilinov and Ole Jann
Ilinov and Jann connect two strands of economic research: they show that a rational inattention problem (a common model to analyze individual choice under uncertainty) is equivalent to a large-population game in which players face conformity pressures. Each participant faces identical trade-offs in both situations, and an observer would not be able to distinguish the two models from the choice data they generate. Read more
Violent Conflicts and Child Gender Preferences of Parents: Evidence from Nigeria
How does long-run exposure to violent conflicts impact the child gender preferences of parents? Sargsyan shows that conflicts with low or no civilian deaths increase parents’ preference for male children, while violence targeting civilians has the opposite effect. Parents use the stopping rule, rather than a sex-selective abortion to achieve their desired gender composition of children. Further, parents in conflict-affected districts have a positive bias towards boys in postnatal health investment. Read more
Human decision-making is complex and often does not fit standard economic theory. Appleman examines three deviations from homo economicus. First, he experimentally shows that people make fewer tax salience errors when buying more expensive goods and that rich people are more likely to make these errors. The other chapters examine gender-related behavioral phenomena, exploring gender preferences of parents in Europe, and the impact of a shift in working hours in Georgia on work-family balance. Read more
Essays on Interbank Interest Rates March 2022
The global financial crisis triggered a major change in how monetary policy is conducted. In his thesis, Kovář proposes a semi-structural time series model to analyze the link between the (newly introduced) quantitative easing, the excess reserves and the interbank interest rates. The model is also evaluated in terms of forecasting performance. The evaluation is performed using SpecEval, a newly developed package for Eviews, which is publicly available and introduced in the third chapter. Read more
Essays on the Economics of Education March 2022
Todua explores three aspects of decision making in education. First, he collects unique data on governmental support of educational mobility and develops a two-country migration model outlining the role of funding. Second, he theoretically explores the link between university rankings and tuition fees in developed countries. Todua also conducts an experiment in Georgia to study the impact of information about labor market prospects on students' college field of study choices. Read more
MA in Economic Research Application Deadline is Approaching
Conference: Education Impacts of the Covid-19 School Closures
CERGE-EI Celebrated Its 30th Anniversary in NYC
CERGE-EI’s Master’s in Economic Research is a two-year Western-style graduate program providing excellent preparation for PhD studies but also skills directly applicable in a variety of jobs. CERGE-EI is ranked among the top 5% economics institutions globally and the CERGE-EI degrees are recognized in both the U.S. and EU. Deadline for applications is August 15, details are available here. Attend a webinar on June 23 to learn more.
IDEA at CERGE-EI and the World Bank are co-organizing an international conference aimed at documenting the size and determinants of the learning loss brought about by school closures, identifying policy options to reverse these losses, and setting the bases of a more resilient education system.
The conference takes place in Prague on June 21, 2022 in hybrid mode. Read more or register here. Recording from the conference will be available after the event.
CERGE-EI’s postponed 30th anniversary celebrations brought an august crowd to Manhattan’s Bohemian National Hall in April. At a critical juncture in history, several of the world’s leading economists joined a panel discussion, live and virtual, on the theme of What Has Gone Right And Wrong Since The Fall Of The Berlin Wall? Afterward, at a gala dinner, we were also delighted to secure additional support for our Ukraine Emergency Fund. See the details and watch the debate here.