This paper examines if the labor markets in border municipalities in Sweden were affected by the COVID-19 border restrictions implemented by the Swedish and Norwegian governments. To do so, this paper uses unemployment and population data gathered from different sources to estimate results derived from using the synthetic control method. The results imply that imposing border restriction had a larger negative effect on the unemployment levels in the border municipalities, compared to non-border municipalities. Results also shows that males were more affected by this compared to females in terms of unemployment and that there is a positive trend in unemployment associated with increasing these restrictions.

Throughout the last few years, Flygskam, a norm against air travel, has grown steadily in Sweden due to its emissions. Flygskam is a Swedish word referring to the shame that follows air travel since it runs counter to the norm behavior. This thesis investigates the effect of Flygskam on demand for domestic flights in Sweden using synthetic control and panel data for 2003-2019. The results indicate that Flygskam seems to affect the domestic passengers in Sweden, estimated to be approximately 22% lower in 2019 than the counterfactual, significant on a 1% level.

With the continuously growing importance of technological development and automation, it is vital to separate the wheat from the chaff and distinguish the effective automation from the lesser. Previous economic research typically investigates automation on a sector or national level. I instead focus on the micro-level effects of a specific setting by investigating the effects of introducing Robotic Process Automation (RPA) in the financial aid operation in the Swedish municipality Ronneby, initiated in 2019. Using a Synthetic Control Method (SCM) with yearly municipal level data, I find a reduction in Ronneby’s application duration for financial aid. The application duration estimates are noisy but robust, unanimous, and economically significant. I also investigate Ronneby's financial aid effects, finding no significant results. The share of households receiving aid in Ronneby displays an initial increase, followed by an equally sized fall at the end of the observation window. I conjecture that this movement could stem from the digitalized applications and a delay caused by the pandemic.

Local governments are often willing to offer companies generous tax incentives to attract businesses to their region. In the United States, many states have tried to attract film productions and establish local film industries by offering different forms of state film tax incentives. As a prominent example of this, the state of Georgia offers a film tax credit which has no annual maximum compensation cap, creating an attractive tax environment for large film productions. The purpose of this study is to investigate if the Georgia state “Film, Television and Digital Entertainment Tax Credit” significantly affected film jobs in the state, and if any other industries were also affected through cross-industry employment spillovers. A difference in differences approach was used by way of the synthetic control case study method. This method estimates the counterfactual development of the outcome variable by creating a synthetic Georgia consisting of a weighted combination of untreated states. The results show a large and highly significant effect of the tax credit on film production jobs. However, little evidence of employment spillovers from the film industry is found, with only a select few affected industries being insurance and interior design. These results imply that tax incentives can establish a local film industry, but likely only if the annual maximum compensation is high or uncapped, making for a significantly more generous incentive than the average.

This dissertation consists of three essays in applied financial economics. The unifying theme is the use of financial regulation as quasi-experiments to understand the interrelationship between derivatives and the underlying assets. The first two essays use different quasi-experimental econometric techniques to answer the same research question: how does option listing affect the return volatility of the underlying stock? This question is difficult to answer empirically because being listed on an options exchange is not random. Volatility is one of the dimensions along which the options exchanges make their listing decisions. This selection bias confounds any causal effect that option listing may have. What is more, the options exchanges may list along unobservable dimensions. Such omitted variable bias can also confound any causal effect of option listing. My first essay overcomes these two biases by exploiting the exogenous variation in option listing that is created by the SEC-imposed option listing standards. Specifically, the SEC mandates that a stock must meet certain criteria in the underlying market before it can trade on an options exchange. For example, a stock needs to trade a total of 2.4 million shares over the previous 12 months before it can be listed. Since 2.4 million is an arbitrary number, stocks that are “just above” the 2.4 million threshold will be identical to stocks that are “just below” it, the sole difference being their probability of option listing. Accordingly, I use the 2.4 million threshold as an instrument for option listing in a fuzzy regression discontinuity design. I find that option listing causes a modest decrease in underlying volatility, a result that corroborates many previous empirical studies. My second essay attempts to estimate the effect of option listing for stocks that are “far away from” the 2.4 million threshold. I overcome the aforementioned omitted variable bias by fully exploiting the panel nature of the data. I control for the unobserved heterogeneity across stocks by implementing a two-way fixed effects model. Unlike most previous studies, I control for individual-level fixed effects at the firm level rather than at the industry level. My results show that option listing is associated with a decrease in volatility. Importantly, these results are only statistically significant in a model with firm-level fixed effects; they are insignificant with industry-level fixed effects. My third essay is a policy evaluation of the SEC’s Penny Pilot Program, a mandated decrease of the option tick size for various equity options classes. Several financial professionals claimed that this decrease would drive institutional investors out of the exchange-traded options market, channeling them into the opaque, over-the-counter (OTC) options market. I empirically test an implication of this hypothesis: if institutional investors have fled the exchange-traded options market for the OTC market, then it may take longer for information to be impounded into a stock’s price. Using the `price delay’ measure of Hou and Moskowitz (2005), I test whether stocks become less price efficient as a result of being included in the Penny Pilot Program. I perform this test using firm-level fixed effects on all classes that were included in the program. I confirm these results with synthetic control experiments for the classes included in Phase I of the Penny Pilot Program. Generally, I find no change in price efficiency of the underlying stocks, which suggests that the decrease in option tick size did not materially erode the price discovery that takes place in the exchange-traded equity options market. I also find evidence that the decrease in option tick size caused an increase in short selling for the piloted stocks. / Economics

In November 2022, the Swedish government decided to abolish the electric vehicle (EV) policyincentive “Klimatbonus”. We create a synthetic control group based on other countries withsimilar continuous policies to gauge the outcome of EV registration in Sweden had theabolishment not occurred. The purpose of this study was to estimate whether this decision hasgenerated a significant post-abolishment impact on the demand for EVs in the Swedish carmarket. Our findings show that even though the demand has decreased, the result is statisticallyinsignificant. We conclude the policymakers have correctly estimated that the effects ondemand will be small. With this study, we contribute to evaluating the treatment effects ofabolished EV policies.

Declining fertility rates are an increasingly important topic in today’s Europe. Fertility rates play a significant role in sustaining a stable population and ensuring economic growth and innovation. The purpose of this thesis is to evaluate the effectiveness of CSOK, a Hungarian housing policy specifically aimed at increasing fertility rates. The research relies on theories such as Becker’s new home economics theory, Quantity-quality trade-off theory, and Willis’s economic theory of family. The study of housing prices and fertility is also provided to understand the relationship between housing and fertility better. The benchmark country for this thesis is Hungary. Using the Synthetic Control Method (SCM), we construct a synthetic Hungary to match pretreatment outcomes closely. The findings of this thesis show that the policy has no positive effect on fertility rates and is inefficient in spending government resources. The study highlights the significance of governmental trust, emphasizing the importance of stable economic conditions and a family-friendly environment to effectively increase fertility rates.

States merge local governments to achieve economies of scale. Little is known to which extent mergers of county-sized local governments reduce expenditures, and influence political outcomes. I use the synthetic control method to identify the effect of mergers of large local governments in Germany (districts) on public expenditures. In 2008, the German state of Saxony reduced the number of districts from 22 to 10. Average district population increased substantially from 113,000 to 290,000 inhabitants. I construct a synthetic counterfactual from states that did not merge districts for years. The results do neither show reductions in total expenditures, nor in expenditures for administration, education, and social care. There seems to be no scale effects in jurisdictions of more than 100,000 inhabitants. By contrast, I find evidence that mergers decreased the number of candidates and voter turnout in district elections while vote shares for populist right-wing parties increased.

Compuesta por tres capítulos: El primero es un estudio sobre la implementación the Sparse Grid métodos para es el estudio de modelos económicos con muchas dimensiones. Llevado a cabo mediante aplicaciones noveles del método de Smolyak con el objetivo de favorecer la tratabilidad y obtener resultados preciso. Los resultados muestran mejoras en la eficiencia de la implementación de modelos con múltiples agentes. El segundo capítulo introduce una nueva metodología para la evaluación de políticas económicas, llamada Synthetic Control with Statistical Learning, todo ello aplicado a políticas particulares: a) reducción del número de horas laborales en Portugal en 1996 y b) reducción del coste del despido en España en 2010. La metodología funciona y se erige como alternativa a previos métodos. En términos empíricos se muestra que tras la implementación de la política se produjo una reducción efectiva del desempleo y en el caso de España un incremento del mismo. El tercer capítulo utiliza la metodología utiliza en el segundo capítulo y la aplica para evaluar la implementación del Tercer Programa Europeo para la Seguridad Vial (Third European Road Safety Action Program) entre otras metodologías. Los resultados muestran que la coordinación a nivel europeo de la seguridad vial a supuesto una ayuda complementaria. En el año 2010 se estima una reducción de víctimas mortales de entre 13900 y 19400 personal en toda Europa.

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