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Serie 2006 06-01. Martinelli, C. "Elections as Targeting Contests " Abstract: This paper develops a model of electoral turnout where parties compensate voters for showing up to the polls. Existence and uniqueness conditions are shown to impose substantial restrictions on the uncertainty about partisan support faced by the parties, and on the distribution of voting costs among citizens. The model predicts that voters in the minority will be more likely to vote, and that turnout increases with the importance of the election. The model can generate the observed correlation between election closeness and electoral turnout, lthough the cause of this correlation may depend on the distribution of voting costs. 06-02. Martinelli, C., and S. W. Parker "Deception and Misreporting in a Social Program" Abstract: We investigate empirically the extent of misreporting in a poverty-alleviation program in which self-reported information, followed by a household visit, is used to determine eligibility. Underreporting may be due to a deception motive, and overreporting to an embarrassment motive. We find that underreporting of goods and desirable home characteristics is widespread, and that overreporting is common with respect to goods linked to social status. Larger program benefits encourage underreporting and discourage overreporting. The effect of benefits on underreporting is significant under a variety of specifications. We also investigate the effects of education and gender on misreporting. 06-03. Rendón, S. "Does Wealth Explain Black-White Differences in Early Employment Careers?" Abstract: In this paper I inquire about the effects initial wealth has on black-white differences in early employment careers. I set up a dynamic model in which individuals simultaneously search for a job and accumulate wealth, and fit it to data from the National Longitudinal Survey (1979-cohort). The estimates show that borrowing constraints are tight for both race groups. Regime changes reveal that differences in initial wealth account almost fully for the racial gap in wealth and wages at the beginning of employment careers, but their effect tapers off and completely dissapears several years after graduation. In contrast, differences in the labor market environment and in preferences are shown to account fully for both racial gaps, in wealth and in wages, persisting several years after High School graduation. 06-04. Rendón, S . "The Catalan Premium: Language and Employment in Catalonia" Abstract: In this paper I measure the contribution of knowing Catalan to finding a job in fCatalonia. In the early eighties a drastic language policy change (normalització) promoted the learning and use of Catalan in Catalonia and managed to reverse the falling trend of its relative use versus Castilian (Spanish). Using census data for 1991 and 1996, I estimate a significant positive Catalan premium: the probability of being employed increases between 3 and 5 percentage points if individuals know how to read and speak Catalan; it increases between 2 and 6 percentage points for writing Catalan. 06-05. Andrianova, S., and N. Melissas, "Corruption, Extortion, and the Boundaries of the Law" Abstract: We consider a set-up in which a principal must decide whether or not to legalise a socially undesirable activity. The law is enforced by a monitor who may be bribed to conceal evidence of the offence and who may also engage in extortionary practices. The principal only declares the activity illegal if the activity if "very harmful" and if the private benefit (received by the agent if she breaks the law) is "high". We present comparative static results and highlight policy implications. 06-06. Kaplan, D ., Sadka, J., and J. L. Silva-Mendez, "Litigation and Settlement: New Evidence from Labor Courts in Mexico" Abstract: Using a newly assembled data set on procedures filed in Mexican labor tribunals, we study the determinants of final awards to workers. On average, workers recover less than 30% of their claim. Our strongest result is that workers receive higher percentages of their claims in settlements than in trial judgments. We also find that cases with multiple claimants against a single firm are less likely to be settled, which partially explains why workers involved in these procedures receive lower percentages of their claims. Finally, we find evidence that a worker who exaggerates her claim is less likely to settle. 06-07. Blázquez, M., and S. Rendón, "Over-Education in Multilingual Economies: Evidence from Catalonia" Abstract: Individuals with deficient language skills may compensate for this disadvantage in the labor market by acquiring more formal skills. Catalonia's economy is characterized by linguistic diversity and provides thereby a unique opportunity to measure the incidence of language proficiency on over-education. Catalan language, formerly confined to informal uses, became co-official with Spanish and the language of instruction in the early eighties. This change, however, did not undermine the intensive use of Castilian in most spheres of communication. Descriptive evidence seems to suggest that individuals with better language knowledge are more likely to be over-educated. This can lead us to think, as is usually the case in the public discussions, that individuals who are no fluent in the language of instruction tend to under-educate, since they are discouraged to attend school. However, once we estimate a model that controls for individuals' socio-demographic characteristics, the opposite emerges: language knowledge is shown to have in fact a negative effect on over-education. This effect, although robust to accounting for endogeneity of language knowledge and significant at the individual level, is mostly non-significant on average.

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