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

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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As Instituições Fiscais Independentes (ou Conselhos Fiscais - CFs) e as Regras Fiscais (RFs) são modelos de instituições que ganharam relevância teórica e política após a constatação de que os governos raramente conseguem comportar-se como planejadores centrais. Ou seja, são incapazes de conduzir a política fiscal de modo a atender o socialmente ótimo no longo prazo. Em geral, a existência de incentivos políticos distorcidos em conjunto com racionalidade limitada dos eleitores e governantes gera déficits excessivos - o chamado viés deficitário da política fiscal - os quais reduzem gradativamente o bem-estar social. A crise fiscal europeia de 2008-2009, em especial, expôs com dramaticidade inédita a profundidade desse viés deficitário na região. Diante da insuficiência dos mecanismos usuais de mercado em corrigir problema, os organismos internacionais e formuladores de política passaram a recomendar veementemente a adoção de CFs, no intuito de reforçar a aplicabilidade das RFs e realinhar os incentivos na direção da disciplina fiscal. Alguns anos após a implementação dessas instituições, estudos quantitativos buscaram avaliar o impacto de sua atuação na trajetória do resultado primário estrutural, principal medida de ativismo fiscal do governo. Os resultados mostraram-se ambíguos e sujeitos a importantes críticas quanto ao controle da endogeneidade. A presente tese busca colaborar com a literatura de reformas institucionais ao abarcar de forma ampla o problema da endogeneidade nessa questão, tanto na investigação de suas origens como no emprego de desenvolvimentos recentes da teoria econométrica para atenuar suas distorções nas estimativas. No primeiro capítulo, definimos o conceito de CF e apresentamos um panorama geral dessas instituições no mundo. Ademais, também expomos as diversas teorias, mormente no campo da economia política, que buscam justificar a presença do viés deficitário da política fiscal, bem como algumas propostas de melhorias do quadro de incentivos através de reformas institucionais, de forma e minimizar esse viés. O segundo capítulo busca investigar avaliar as condições fiscais que antecederam a grande leva de reformas que na última década deram origem aos CFs. Encontramos evidência de que a implementação do CF é precedida por um recuo de aproximadamente 2,59 p.p. do resultado primário efetivo no segundo ano anterior ao tratamento, relativamente aos países não adotantes ou ainda sem adoção no período. No ano da adoção e no anterior, essa diferença deixa de ser significante. Tais achados apontam para uma segunda fonte de endogeneidade nas mensurações da efetividade dos CFs, na qual os países fiscalmente instáveis reagiriam com mais vigor ao advento de crises nas contas públicas, inclusive com a promoção de reformas institucionais. Na literatura institucional, o tipo de endogeneidade mais comumente assinalado é o de causalidade reversa, em que, contrariamente ao tipo anterior, são os países mais austeros que tendem a exibir maior probabilidade de realização de reformas. No terceiro capítulo, a efetividade dos CFs em alterar a trajetória do resultado estrutural é avaliada por meio da metodologia do controle sintético, numa tentativa de controle mais rigoroso da endogeneidade, de nosso conhecimento inédita até então na literatura. Os resultados encontrados indicam a inexistência de um efeito significativo dos CFs sobre aquela variável, em contraste com os obtidos em avaliações anteriores. O último capítulo da tese traça considerações a respeito da Instituição Fiscal Independente (IFI) brasileira, criada em 2016, à luz de recentes avaliações empíricas sobre o novo papel dessas instituições no contexto internacional. / The Independent Fiscal Institutions (or Fiscal Councils - FCs) and Fiscal Rules (FRs) have gained theoretical and political relevance after realizing that governments rarely manage to behave as central planners. That is, they are unable to conduct fiscal policy in order to meet the socially optimal in the long run. In general, the existence of distorted political incentives coupled with the limited rationality of voters and rulers generates excessive deficits - the so-called deficit bias of fiscal policy - which gradually reduce social welfare. The European fiscal crisis of 2008-2009, in particular, dramatically exposed the depth of this deficit bias in the region. Given the inadequacy of the usual market mechanisms to correct the problem, international organizations and policy makers began to strongly recommend the adoption of FCs in order to strengthen the applicability of FRs and realign incentives in the direction of fiscal discipline. Some years after the implementation of these institutions, quantitative studies sought to evaluate the impact of their performance on the trajectory of the primary structural result, the main measure of government fiscal activism. The results were ambiguous and subject to important criticisms regarding the control of endogeneity. The present thesis seeks to collaborate with the literature on institutional reforms by comprehensively covering the problem of endogeneity in this question, both in the investigation of its origins and in the use of recent developments in econometric theory to attenuate its distortions in the estimates. In the first chapter, we define the concept of CF and present an overview of these institutions in the world. In addition, we also present the various theories, especially in the field of political economy, which seek to justify the presence of the deficit bias of fiscal policy, as well as some proposals for improvements in the incentives framework through institutional reforms, in order to minimize this bias. The second chapter seeks to investigate the fiscal conditions that preceded the great series of reforms that in the last decade gave rise to the FCs. We found evidence that the implementation of FCs is preceded by a decrease of approximately 2.59 p.p. in the primary balance in the second year prior to treatment, in relation to non adoption or non-adopters in the period. In the year of adoption and in the previous year, this difference is no longer significant. These findings point to a second source of endogeneity in the measurement of CF effectiveness, in which fiscally unstable countries would react more vigorously to the advent of public account crises, including the promotion of institutional reforms. In the institutional literature, the type of endogeneity most commonly reported is that of reverse causality, in which, contrary to the previous type, the more austere countries tend to be more likely to carry out reforms. In the third chapter, the effectiveness of CFs in altering the trajectory of the structural balance is evaluated through the methodology of the synthetic control, in an attempt to control more strictly the endogeneity problem, of our knowledge a novelty in the literature. The results indicate that there is no significant effect of FCs on that variable, in contrast to those obtained in previous evaluations. The last chapter of the thesis outlines considerations regarding the Brazilian Independent Fiscal Institution (IFI), created in 2016, in the light of recent empirical assessments of the new role of these institutions in the international context.

nÃo hà / Este trabalho avalia o impacto da interiorizaÃÃo do Instituto Federal de EducaÃÃo, CiÃncia e Tecnologia do MaranhÃo (IFMA) no desempenho escolar do Ensino Fundamental nos municÃpios contemplados com a implantaÃÃo. SÃo escassos os estudos que abordam a influÃncia da presenÃa dos Institutos Federais como incentivos à melhoria do Ensino Fundamental, especialmente em regiÃes pobres como o estado do MaranhÃo. Os dados utilizados foram as notas do Ãndice de Desenvolvimento da EducaÃÃo BÃsica (IDEB), extraÃdas do portal do Instituto Nacional de Estudos e Pesquisas Educacionais AnÃsio Teixeira (INEP) nos anos de 2005 a 2013. Utilizamos o mÃtodo de Controle SintÃtico desenvolvido por Abadie, Dimond e Hainmuller (2010), obtendo um contrafactual na construÃÃo da trajetÃria das notas do IDEB tendo os referidos municÃpios com IFMA. As evidÃncias empÃricas apontam que a expansÃo teve um efeito positivo nas notas do IDEB. / This study evaluates the impact of internalization of the Federal Institute of Education, Science and Technology of MaranhÃo (IFMA) in academic achievement of elementary school in the municipalities covered with deployment. There are few studies on the influence of the presence of the Federal Institutes as incentives for improvement of primary education, especially in poor regions such as the state of MaranhÃo. The data used were the notes of the Basic Education Development Index (IDEB), extracted from the National Institute of Educational Studies Teixeira portal (INEP) in 2005 to 2013. We use the Synthetic Control method developed by Abadie, Dimond and Hainmuller (2010), getting a counterfactual in the construction of the trajectory of IDEB notes since those municipalities with IFMA. Empirical evidence suggests that the expansion had a positive effect on IDEB notes.