Baltic International Centre for Economic Policy Studies

Pievienojieties mums 7. septembrī Ķīpsalas izstāžu zālē, kur uz galvenās skatuves no 12:40 līdz 13:45 notiks īpaša diskusija par mantoto kultūraugu ietekmi uz pārtikas sistēmām.

Mantots kultūraugs pārtikas izstādē "Riga Food 2024" | Mantots kultūraugs Mainies ar mantoto un loloto augu sēklām un stādiem Ķīpsalā!

No Latvijas laukiem līdz Ganas ciemiem: Mantotie kultūraugi un to nozīme klimata pārmaiņās 🌱

📣 Nāciet uz Riga Food 2024! Pievienojieties mums 7. septembrī Ķīpsalas izstāžu zālē, kur uz galvenās skatuves no 12:40 līdz 13:45 notiks īpaša diskusija par mantoto kultūraugu ietekmi uz pārtikas sistēmām.
Diskusijā piedalīsies:
• Lilija Akorfa Keledorme (Farmerline pārstāve)
• Sandra Stabinge un Ilze Mežniece (Latvijas Permakultūras biedrības eksperti)
🗣️ Diskusiju moderēs Maija Kāle.

🔗 Sīkāka informācija un programma: https://www.bt1.lv/event-program/lv/exhib/1598/event/1363

Nepalaidiet garām iespēju uzzināt, kā senās receptes un mantotie kultūraugi var palīdzēt risināt mūsdienu pārtikas sistēmu izaicinājumus! 🌾

Par projektu:
"Digitālas mantoto kultūraugu izglītības izveide Āfrikas pārtikas sistēmu noturībai klimata krīzē" ir projekts, ko vada Baltijas Starptautiskais Ekonomikas Politikas studiju centrs (BICEPS), sadarbojoties ar Latvijas Permakultūras biedrību, Ganas sociālo uzņēmumu Farmerline un Savannas Lauksaimniecības institūtu. Projekts saņēmis Latvijas Republikas Ārlietu ministrija finansējumu 2024.-2025. gadā un tā mērķis ir izveidot digitālu izglītību par mantotajiem kultūraugiem, lai palīdzētu līdz 10 000 lauksaimniekiem Ganā pielāgoties klimata pārmaiņu radītajiem izaicinājumiem.

Pasākumu programma - Paneļdiskusija ”Aizmirstie ēdieni – kultūras un ilgtspējības glābēji. Atgriešanās pie saknēm. Ekonomiskie aspekti. Ekoloģiskās iespējas.”

🌍 Projekts pārtikas drošībai un klimata noturībai Ganā 🌱

Mēs esam uzsākuši jaunu projektu sadarbībā ar Latvijas Permakultūras biedrību, Savannas Lauksaimniecības pētniecības institūtu un Farmerline: "Digitālas mantoto kultūraugu izglītības izveide Āfrikas pārtikas sistēmu noturībai klimata krīzē." 🌾

Šis projekts palīdzēs Ganai cīnīties ar klimata pārmaiņu izaicinājumiem un veidot ilgtspējīgas pārtikas sistēmas, balstoties uz Latvijas pieredzi mantoto kultūraugu saglabāšanā un zināšanu nodošanā, izmantojot jaunākās tehnoloģijas. 🎓📱

Mēs plānojam sasniegt līdz pat 10 000 lauksaimnieku, izmantojot mobilās tehnoloģijas un vietēji pielāgotus mācību moduļus. Kopā mēs varam veidot noturīgas kopienas nākotnes izaicinājumiem!



Projekts "Digitālas mantoto kultūraugu izglītības izveide Āfrikas pārtikas sistēmu noturībai klimata krīzē" ir saņēmis Latvijas Republikas Ārlietu ministrija 2024. gadā no attīstības sadarbības budžeta.

Minimum wage policy and labour tax evasion

Rising income inequality has prompted policymakers in to revisit the prospect of hikes. Such reforms remain controversial because of the uncertain interaction between minimum wage policies and tax evasion. Nicolas Gavoille (Stockholm School of Economics in Riga) & Anna Zasova (Baltic International Centre for Economic Policy Studies) study the firm-level effects of a minimum wage increase in , where wage underreporting is widespread. By converting previously undeclared cash payments into legal , tax-evading firms spared themselves any real shock. Thus, although increasing the minimum wage improved enforcement, it did so at a higher cost to already compliant firms.
https://ow.ly/1R9950Qc7F3

SEMINAR. Join us on Thursday, August 24, at 17:00 at SSE Riga, room 411 for a BICEPS/SSE Riga research seminar "Kamikazes in Public Procurements" by Alminas Žaldokas (Hong Kong University of Science and Technology). No prior registration is required.

Alminas Žaldokas is an Associate Professor in Finance at the Hong Kong University of Science and Technology (HKUST). His research focuses on the interaction between firm decisions in the financial and in the product markets. In particular, he studies corporate finance decisions that relate to the firm investment in innovation, the formation of collusive arrangements between firms, and the facilitation of ESG practices. Alminas Žaldokas has published in journals such as Journal of Financial Economics, Review of Financial Studies, Journal of Accounting Research, Management Science, RAND Journal of Economics, Journal of International Economics, and Journal of Financial Intermediation.

Abstract
Using granular auction data on 15 million item purchases in Brazilian public procurements between 2005-2021, we document a widespread pattern that the lowest bidder (“kamikaze”) does not satisfy required formalities after the auction is concluded, which allows the second-lowest bid to win the auction. Such a pattern can be observed in up to 15-20% of procurement auctions and results in 15-17% higher procurement prices as compared to similar auctions procuring the same product or service items, organized by the same government institutions, and even having the same winning firm. Kamikaze firms are smaller, younger, and tend to be co-owned by the same ultimate owner as the winning firm. Using observed kamikaze behaviour as a bid rigging marker, we measure how financial constraints endogenous to collusion affect real non-market outcomes. We see more hospital deaths in the four quarters after an increased fraction of procurement auctions involving kamikazes in those hospitals. Similarly, we observe an increase in the road accidents following the road service contracts involving kamikaze firms.

Join us on Thursday, May 25, 17:00 at SSE Riga, room 507 for a BICEPS/SSE Riga research seminar "Education, Fake News and the Political Budget Cycle" by Fabio Padovano (University of Rennes 1, University of Roma III). No prior registration is required.


Fabio Padovano is Professor at the University of Rennes 1 and Professor at the University of Roma III. He has been Visiting Professor at the University of Western Ontario, University of Maryland, George Mason University, University of Fribourg and London School of Economics and Political Science. Fabio Padovano has published in journals such as Public Choice, European Journal of Political Economy, Economics of Governance, Economic Inquiry, Energy Economics, Kyklos and Constitutional Political Economy. His current research interests are in the fields of public choice, political economy, local public finance, law and economics, environmental economics, economics of religion and economics of the arts.

Abstract
This paper empirically verifies whether education, an indicator of voters’ ability to process information, constrains political budget cycles (PBC), a measure of inefficiency in the agency relationship between voters and their representatives. Over information and the spread of fake news question the previous results of conditional PBC literature on information as a factor improving such relationship. We proxy the quality of education by PISA scores and the its diffusion by the percentage of students completing secondary and tertiary education. On a sample of 46 countries over the period 2000-2019, the estimates show that higher levels of education reduce the magnitude of PBC. Adding standard proxies for information (media and internet pe*******on) does not affect the results, showing that education matters more than information. The analysis also shows that higher degrees of democracy reduce the education levels needed to control PBC. All the other findings of the literature appear confirmed.

Join us on April 13th at 17:00 in room 611 for a BICEPS/ Stockholm School of Economics in Riga research seminar "Market Transparency Through a Common Data Platform" by Chloé Le Coq! No prior registration is needed.

Chloé Le Coq is Professor of Economics at Panthéon-Assas université, and Research Fellow at the Stockholm Institute of Transition Economics. Her research investigates topics related to antitrust policy, industrial organization, and behavioral economics, with a particular focus on energy markets and social innovation.

Title: Market Transparency Through a Common Data Platform (with E. Lazarczyk)
Time: Thursday, April 13, 17:00
Venue: SSE Riga, room 611

Abstract
This paper provides evidence of the effect of increasing market transparency on market outcomes. We focus on the introduction of the Transparency Platform operated by the European Network of Transmission System Operators for Electricity (ENTSO-E) which stores data provided by each member state on physical grid conditions and generation capacities. Using detailed hourly zonal data on Nord Pool, we find evidence that increasing information does not necessarily lead to more competitive outcomes. Specifically, during periods of congestion, the impact of transparency on competition is specific to each zone. Furthermore, the effect of transparency may depend on the varying technologies that are available in different zones.

On March 30 at 5PM, join us for a BICEPS/ Stockholm School of Economics in Riga research seminar by Andris Saulītis from the Institute of Philosophy and Sociology, Latvijas Universitāte. No prior registration is needed.

Title: Nudging or Gambling to Save? A Field Experiment on Savings Behaviour (co-authored with Lea Kroeger, Humboldt University of Berlin)
Time: Thursday, March 30, 17:00
Venue: SSE Riga, room 411

Abstract
This experimental study aims to investigate the effect of nudges and prize-linked savings (PLS) account and examine the external validity of laboratory experiments on savings behaviour. We employ a natural setting in collaboration with a professional survey company operating in Latvia and Estonia. The company recruits respondents on a daily basis to take part in commissioned surveys in return for a payment. While usually the payment to the individuals is done immediately after filling out a survey, the experimental design presented participants with a choice between immediate and delayed consumption of the money earned. The experimental design consisted of three experimental groups. In baseline offer, respondents were given the choice between receiving 10 euros immediately or depositing all or part of the amount in a virtual savings account for six months, with a maximum payout of 12 euros. In the social norm treatment, respondents were informed before the choice question that the survey focuses on household financial behaviour and that previous surveys revealed that the majority of respondents choose to save. The PLS account treatment offered individuals, who allocated all 10 euros to the savings account, to participate in a lottery with the chance to win an additional 5 euros on the top of the interest earned. The experimental results show that both social norm nudge and PLS account treatments tend to increase the number of individuals who decide to save. However, it is much lower than found in the laboratory experiments that have examined the effect of PLS accounts on savings behaviour. Both treatments resulted in approximately similar 8% points increase in the number of individuals who opted for savings. The introduction of the PLS account increased savings by 13%, while the social norm treatment increased it by 24%. At the same time, we identify several suggestive savings patterns that are in line with previous studies. First, individuals who play lotteries are more likely to invest in PLS, while non-lottery players are more responsive to social norms. Second, Estonians tend to save more often than Latvians, a trend that has been found in many empirical studies. Taken together, the results of this field experiment provide a more accurate representation of the true behaviour of individuals when it comes to savings and investment decisions. It also suggests that social norms can be as persuasive as financial incentives to increase the savings level.

Only one week to submit your paper to the 5th Baltic Economic Conference! Riga, June 19-20, 2023. Organized by Stockholm School of Economics in Riga and Latvijas Banka. Keynote: Beata Javorcik, Chief Economist of the European Bank for Reconstruction and Development (EBRD) in London.

More info: https://conf2023.balticecon.org/home

This Thursday, February 16 at 5PM, join us for a BICEPS/ Stockholm School of Economics in Riga research seminar by Ellam Kulati from CenEA - Centre for Economic Analysis and Wydział Nauk Ekonomicznych, Uniwersytet Warszawski. Don't miss out! No prior registration is needed.

Speaker: Ellam Kulati (Centre for Economic Analysis (CenEA), University of Warsaw, Quantitative Psychology and Economics (QPE))
Title: Ageing and Urban Demand for Existing Homes
Time: Thursday, February 16, 17:00
Venue: SSE Riga, room 411


Abstract
How does demographic ageing translate into the housing market? Despite the popularity of hedonic models in housing demand studies, situations where quantity changes better reflect demand adjustments have previously been identified. Using uniquely compiled data on 65 Polish city districts, spanning from 2010 to 2020, this paper interrogates price and turnover as measures of demand while empirically determining the demand adjustment patterns rendered by an ageing population. Results from the implemented spatial panel models reveal an inverse relationship of ageing to the demand for homeownership, predominantly reflected in price relative to quantity responses. The findings are robust to non-spatial model specifications.

In a new FREE policy brief, Nicolas Gavoille from Stockholm School of Economics in Riga and BICEPS and Anna Zasova from BICEPS show that in Latvia, minimum wage earners often receive part of their salary 'in an envelope'. This makes the minimum wage a powerful fiscal instrument: a higher minimum wage pushes non-compliant firms to disclose a larger share of their employees’ true earnings. Additionally, wage underreporting among minimum wage earners can act as a buffer against negative employment effects of a minimum wage hike.

These upsides, however, come at a cost. The results presented in this brief do not imply that all minimum wage earners are tax evaders; a notable share of employees receiving the minimum wage on paper do honestly earn only the minimum wage. Therefore, a hike in the minimum wage can lead to job losses and closures of compliant firms.

🔎 How prevalent is tax evasion among minimum wage earners?

⭕️ Nicolas Gavoille from SSE Riga and Anna Zasova from BICEPS research institute present a body of suggestive evidence showing that tax evaders are overrepresented among minimum wage earners in Latvia.

➡️ Read more: https://freepolicybriefs.org/2023/01/16/minimum-wage-tax-evasion/

Par minimālās algas celšanas sekām lasiet BICEPS pētnieka Dr. Andra Saulīša rakstā 'Minimālā alga – kam un kā to noteikt, lai mazinātu ēnu ekonomiku?' - LV portāls
https://lvportals.lv/viedokli/347636-minimala-alga-kam-un-ka-to-noteikt-lai-mazinatu-enu-ekonomiku-2022

Minimālā alga – kam un kā to noteikt, lai mazinātu ēnu ekonomiku? - LV portāls Latvijā regulāri tiek paaugstināta minimālā alga, to motivējot ne vien ar labākiem materiālajiem apstākļiem mazkvalificētajiem nodarbinātajiem, bet arī kā efektīvu veidu cīņā pret ēnu ekonomiku. Latvijā minimālo algu vai pat mazāku atlīdzību 2022. gada augustā saņēma ...

As 2022 comes to a close, we can look back on a successful 2nd year for the project. Participation in conference, data work resulting in database for Latvia, and many more activities. We look forward to continuing our work and bringing the project to a successful conclusion in 2023. Thank you to all our colleagues whom we have cooperated with along the way! Vilniaus universitetas / Vilnius University TalTech - Tallinn University of Technology BI Norwegian Business School University of Tartu and Hong Kong University of Science and Technology More info: https://biceps.org/2022/12/12/global2micro-project-in-2022/

This is a reminder about the BICEPS/SSE Riga research seminar taking place today, December 15, at 17:00 at SSE Riga, room 611. No registration needed.

We are delighted to welcome Jose Garcia-Louzao as the speaker. Jose is a Principal Research Economist at the Bank of Lithuania, a Research Fellow at Vilnius University and a Research Affiliate of the CESifo Research Network. His research interest is in Applied Microeconometrics with a focus on Labor Economics.

Title: Employee-Owned Firms, First Work Experience, and Young Workers’ Careers (co-authored with Gabriel Burdin)

Abstract
Employee ownership (EO) attracts considerable attention in academic and policy circles. While most studies assess the impact of EO by focusing on contemporaneous worker-firm relationships, surprisingly little is known about its dynamic effects on young workers’ career paths. Using detailed administrative data from Spain, we investigate the impact of having an initial work experience in a worker cooperative versus a conventional firm on subsequent earnings. We find that young workers’ exposure to cooperatives at the time of labour market entry reduces earnings by about 8% during the first 15 years in the labour market. The selection of individuals with low initial ability in cooperatives does not appear to be a relevant channel. Our results rather seem to be related to differences in the wage returns to experience and job mobility. On the one hand, we document lower wage returns to experience acquired in worker cooperatives, but no differences in subsequent career progression in terms of promotions. On the other hand, we find that workers who had their first job in a worker cooperative show a strong attachment to the cooperative sector and are less likely to voluntarily leave their employers. Taken together, our findings suggest the existence of cooperative-specific non-pecuniary job attributes that might compensate for lower lifetime earnings.

We kindly invite you to a BICEPS/ Stockholm School of Economics in Riga research seminar by Jose Garcia-Louzao (Bank of Lithuania, Vilnius University, CESifo). The seminar will take place on Thursday, December 15, at 17:00 at SSE Riga, room 611. No registration needed.

Jose Garcia-Louzao is a Principal Research Economist at the Bank of Lithuania, a Research Fellow at Vilnius University and a Research Afilliate of the CESifo Research Network. His research interest is in Applied Microeconometrics with a focus on Labor Economics.

Title
Employee-Owned Firms, First Work Experience, and Young Workers’ Careers (co-authored with Gabriel Burdin)

Abstract
Employee ownership (EO) attracts considerable attention in academic and policy circles. While most studies assess the impact of EO by focusing on contemporaneous worker-firm relationships, surprisingly little is known about its dynamic effects on young workers’ career paths. Using detailed administrative data from Spain, we investigate the impact of having an initial work experience in a worker cooperative versus a conventional firm on subsequent earnings. We find that young workers’ exposure to cooperatives at the time of labour market entry reduces earnings by about 8% during the first 15 years in the labour market. The selection of individuals with low initial ability in cooperatives does not appear to be a relevant channel. Our results rather seem to be related to differences in the wage returns to experience and job mobility. On the one hand, we document lower wage returns to experience acquired in worker cooperatives, but no differences in subsequent career progression in terms of promotions. On the other hand, we find that workers who had their first job in a worker cooperative show a strong attachment to the cooperative sector and are less likely to voluntarily leave their employers. Taken together, our findings suggest the existence of cooperative-specific non-pecuniary job attributes that might compensate for lower lifetime earnings.

Join us for a BICEPS/SSE Riga seminar TODAY, December 5, at 12:00 in room 411. We are delighted to welcome Hamza Bennani as the speaker. Hamza is a Professor of economics in the Institute of Economics and Management at Nantes University, and a scientific advisor in the French Council of Economic Analysis (office of the Prime Minister). His research focuses on central bank communication, central bank decision-making process and media economics. His work has been published in journals such as the Journal of International Money and Finance, Economic Modelling and European Journal of Political Economy. Read more about the speaker: https://sites.google.com/site/hamzabennani01/home?authuser=0


Speaker: Hamza Bennani (Nantes University, French Council of Economic Analysis)
Title: Too Complex to Digest? Federal Tax Bills and Their Processing in US Financial Markets (co-authored with Matthias Neuenkirch)
Time: Monday, December 5, 12:00
Venue: SSE Riga, room 411

No registration for the seminar is necessary.

Abstract
In this paper, we analyze whether the complexity of tax bills affects financial markets. Based on the Flesch-Kincaid grade level of the 32 tax bills identified by Romer and Romer (2010) in the period 1962–2003, we assess the relationship between tax bills’ complexity and financial markets using an event study approach. Our results show a negative (positive) and significant relationship between the present value of tax bills and changes in the 10-year government bond yields (S&P 500 returns). The magnitude of this relationship increases over time, suggesting that market participants underreact at first and need a couple of days to digest the information contained in the tax bills. This delay can be explained by the textual characteristics of the bills in the case of the 10-year yields as a lower readability partly offsets the negative relationship for up to three days after the signing of a tax bill, but not thereafter. In the case of the stock market, we find similar offsetting evidence, but only for a part of the readability measures employed in this paper.

We are happy to invite you to a BICEPS/Stockholm School of Economics in Riga research seminar by Hamza Bennani (Nantes University, French Council of Economic Analysis). The seminar will take place on Monday, December 5, at 12:00 at SSE Riga, room 411. No registration needed.
Hamza Bennani is a Professor of economics in the Institute of Economics and Management at Nantes University, and a scientific advisor in the French Council of Economic Analysis (office of the Prime Minister). His research focuses on central bank communication, central bank decision-making process and media economics.

Speaker: Hamza Bennani (Nantes University, French Council of Economic Analysis)
Title: Too Complex to Digest? Federal Tax Bills and Their Processing in US Financial Markets (co-authored with Matthias Neuenkirch)
Time: Monday, December 5, 12:00
Venue: SSE Riga, room 411

Abstract
In this paper, we analyze whether the complexity of tax bills affects financial markets. Based on the Flesch-Kincaid grade level of the 32 tax bills identified by Romer and Romer (2010) in the period 1962–2003, we assess the relationship between tax bills’ complexity and financial markets using an event study approach. Our results show a negative (positive) and significant relationship between the present value of tax bills and changes in the 10-year government bond yields (S&P 500 returns). The magnitude of this relationship increases over time, suggesting that market participants underreact at first and need a couple of days to digest the information contained in the tax bills. This delay can be explained by the textual characteristics of the bills in the case of the 10-year yields as a lower readability partly offsets the negative relationship for up to three days after the signing of a tax bill, but not thereafter. In the case of the stock market, we find similar offsetting evidence, but only for a part of the readability measures employed in this paper.

A reminder about today's BICEPS/SSE Riga research seminar. Looking forward to it!

We are happy to invite you to a BICEPS/SSE Riga research seminar by Anikó Bíró (Institute of Economics, Centre for Economic and Regional Studies in Budapest, Hungary). The seminar will take place on Thursday, November 24, at 17:00 at SSE Riga, room 411 (please note a room change). No registration needed.

Anikó Bíró holds a PhD from Central European University. Anikó does empirical research in the fields of Labour Economics, Health Economics, and the Economics of Ageing. Her work has been published in journals such as the Journal of Public Economics, Labour Economics and Health Economics. More about the speaker: https://sites.google.com/site/aniko17biro/

Title: Firm Heterogeneity and the Impact of Payroll Taxes (co-authored with Réka Branyiczki, Attila Lindner, Lili Márk and Dániel Prinz)

Abstract
We study the impact of a large payroll tax cut for older workers in Hungary. Motivated by the predictions of a standard equilibrium job search model, we examine the heterogeneous impact of the policy. Employment increases most at low-productivity firms offering lower-wage jobs, which tend to hire from unemployment, while the effects are more muted for high-productivity firms offering high-wage jobs. At the same time, wages only increase at high-productivity firms. These results point to important heterogeneity in the incidence of payroll tax cuts across firms and highlight that payroll taxes have a significant impact on the composition of jobs in the labor market.

We are happy to invite you to a BICEPS/SSE Riga research seminar by Anikó Bíró (Institute of Economics, Centre for Economic and Regional Studies in Budapest, Hungary). The seminar will take place on Thursday, November 24, at 17:00 at SSE Riga, room 411 (please note a room change). No registration needed.

Anikó Bíró holds a PhD from Central European University. Anikó does empirical research in the fields of Labour Economics, Health Economics, and the Economics of Ageing. Her work has been published in journals such as the Journal of Public Economics, Labour Economics and Health Economics. More about the speaker: https://sites.google.com/site/aniko17biro/

Title: Firm Heterogeneity and the Impact of Payroll Taxes (co-authored with Réka Branyiczki, Attila Lindner, Lili Márk and Dániel Prinz)

Abstract
We study the impact of a large payroll tax cut for older workers in Hungary. Motivated by the predictions of a standard equilibrium job search model, we examine the heterogeneous impact of the policy. Employment increases most at low-productivity firms offering lower-wage jobs, which tend to hire from unemployment, while the effects are more muted for high-productivity firms offering high-wage jobs. At the same time, wages only increase at high-productivity firms. These results point to important heterogeneity in the incidence of payroll tax cuts across firms and highlight that payroll taxes have a significant impact on the composition of jobs in the labor market.

What is the link between personality traits and workers’ productivity when working from home? Nicolas Gavoille (Stockholm School of Economics in Riga and BICEPS) and Mihails Hazans (Latvijas Universitātes Biznesa,vadības un ekonomikas fakultāte and IZA Bonn) show that personality matters a lot: https://freepolicybriefs.org/2022/10/24/personality-traits-remote-work-productivity/

A reminder about BICEPS/ Stockholm School of Economics in Riga seminar by Konstantins Benkovskis (Latvijas Banka, Stockholm School of Economics in Riga) that will take place today at 17:00. Looking forward to seeing you!

We invite you to a BICEPS/SSE Riga research seminar by Konstantins Benkovskis (Bank of Latvia, SSE Riga). The seminar will take place on Thursday, October 27, at 17:00 at SSE Riga, room 611. No prior registration for the seminar is necessary.

Title: Did Job Retention Schemes Save Jobs during the COVID-19 Pandemic? Firm-level Evidence from Latvia (co-authored with Olegs Tkacevs and Karlis Vilerts, Bank of Latvia)

Abstract
The study examines the impact of participation of Latvia’s firms in the Job retention scheme (JRS) on firm employment during the covid-19 pandemics. It focuses on the idle-time allowances paid out during the first wave of the pandemics (in Spring 2020) and their employment effects until the beginning of the second wave (in Autumn 2020). It uses novel firm-level dataset at monthly frequency and applies difference-in-difference estimation to track employment dynamics over time in firms that participated in JRS versus firms that did not participate. The estimation results indicate that the employment effect of JRS participation was positive and statistically significant, i.e. participating firms managed to keep their employees and resume their economic activity faster than similar non-participating firms. The effect comes both from reducing the probability of becoming inactive, as well as from higher growth of the number of employees for firms that remained active. The effect appears particularly strong in sectors with a higher share of highly skilled employees and sectors with relatively low level of interpersonal contact. The allocation effect of JRS is ambiguous and is subject to further investigation.

We invite you to a BICEPS/SSE Riga research seminar by Konstantins Benkovskis (Bank of Latvia, SSE Riga). The seminar will take place on Thursday, October 27, at 17:00 at SSE Riga, room 611. No prior registration for the seminar is necessary.

Title: Did Job Retention Schemes Save Jobs during the COVID-19 Pandemic? Firm-level Evidence from Latvia (co-authored with Olegs Tkacevs and Karlis Vilerts, Bank of Latvia)

Abstract
The study examines the impact of participation of Latvia’s firms in the Job retention scheme (JRS) on firm employment during the covid-19 pandemics. It focuses on the idle-time allowances paid out during the first wave of the pandemics (in Spring 2020) and their employment effects until the beginning of the second wave (in Autumn 2020). It uses novel firm-level dataset at monthly frequency and applies difference-in-difference estimation to track employment dynamics over time in firms that participated in JRS versus firms that did not participate. The estimation results indicate that the employment effect of JRS participation was positive and statistically significant, i.e. participating firms managed to keep their employees and resume their economic activity faster than similar non-participating firms. The effect comes both from reducing the probability of becoming inactive, as well as from higher growth of the number of employees for firms that remained active. The effect appears particularly strong in sectors with a higher share of highly skilled employees and sectors with relatively low level of interpersonal contact. The allocation effect of JRS is ambiguous and is subject to further investigation.