Économie - Publications // Economics - Working Papers

Permanent URI for this collectionhttps://hdl.handle.net/10393/40132

Cette collection réunit des documents de travail du Département de science économique de l’Université d’Ottawa. Ils ont été rédigés par des membres du corps professoral, des étudiantes et étudiants des cycles supérieurs, ainsi que professeures et professeurs auxiliaires, souvent en collaboration avec des chercheuses et chercheurs d’autres établissements. Les documents de travail portent sur un large éventail de sujets liés à la recherche économique, par exemple : l’économie du développement; l’économie de l’environnement et des ressources; l’économie de la santé; l’organisation industrielle; l’économie du travail; la macroéconomie; et l’économie politique. Généralement, ce sont des documents contenant des résultats de recherche préliminaires qui sont présentés à l’Université d’Ottawa, mais qui n’ont pas encore été évalués par les pairs.

This collection features working papers from the Department of Economics of the University of Ottawa (uOttawa). Contributions include research from faculty members, graduate students and adjunct members, often co-authored with researchers from other institutions. The working papers cover a broad range of topics relating to economic research, including: development economics; environmental and resource economics; health economics; industrial organization; labour economics; macroeconomics; political economy. Working papers typically represent early stages in the presentation of research findings at uOttawa and are not yet peer reviewed.

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Now showing 1 - 20 of 232

Optimal Stationary Contracts under One-Sided Enforcement and Persistent Adverse Selection
(2026-04-11) Martimort, David; Simons, Aggey
We characterize the optimal contract within the class of stationary mechanisms in a repeated buyer-seller relationship with persistent adverse selection and one-sided limited enforcement. A prepaid seller may breach after receiving the current transfer and terminate the relationship upon paying an enforceable penalty. In this stationary benchmark, the enforcement problem collapses to a bound on the transfer targeted to the most efficient type. This yields a three-regime characterization. With strong enforcement, the repeated static second-best contract is feasible. With weak (intermediate) enforcement, the top transfer is capped, inducing bunching among efficient types and additional downward distortions. With very weak enforcement, public penalties alone cannot sustain compliance, and the principal must leave strictly positive continuation rents, including for the least efficient type. We interpret the associated distortion as a virtual enforcement cost.
When Persistence Signals Exit: Identity, Legitimacy, and Indigenous Educational Persistence
(2026-03-17) Simons, Aggey
Why does scholarship aid sometimes fail to increase postsecondary persistence among Indigenous students, and in some settings even reduce it? Because schooling has historically been associated with residential schools, boarding schools, and assimilationist state projects, persistence can signal not only investment in human capital but also exit from the home community. I model persistence as a signaling game between a student and the home community in which community support feeds back into the student's payoff from schooling. The student privately knows whether the orientation type is community-oriented or exit-oriented, while the community observes persistence and decides whether to extend support. The baseline model yields four implications. First, when schooling is culturally alienating, students most attached to the community may be the most likely to leave. Second, scholarships can crowd out persistence by weakening the inference that persistence reflects community-oriented motives. Third, Indigenous institutional design raises persistence directly and by preserving legitimacy. Fourth, legitimacy thresholds generate multiple equilibria. Extensions show that scholarship crowd-out is not generic and that sponsor mission shapes the mix between cash aid and institutional legibility. I also document descriptive patterns consistent with the mechanism: large attainment gaps alongside substantial scholarship infrastructure, stronger persistence in tribally governed and culturally grounded institutions, and a strong association between support environments and educational completion. The policy implication is not that financial aid is unimportant, but that it is most effective when combined with institutional design and support structures that make persistence legible as community-serving.
Authenticity-Driven Motivations in Oligopoly: Efforts, Pricing, and Welfare
(2026-01-16) Simons, Aggey; Tondji, Jean Baptiste
We develop an oligopoly theory of brand authenticity as a belief-based credence attribute valued by only a subset of consumers. Firms choose prices and costly authenticity efforts, while managers may derive private non-pecuniary benefits from being perceived as intrinsically motivated. Heterogeneity in consumer preferences and managerial motivations jointly determines equilibrium authenticity provision, pricing, and consumer sorting. Firms led by more authenticity-driven managers invest more and, under standard complementarity conditions, charge price premia. Authenticity is privately unsustainable when the attentive audience is small, viable when it is large, and fragile at intermediate sizes. In this fragile region, laissez-faire equilibrium exhibits inefficient exit despite socially valuable participation, reflecting an extensive-margin inefficiency that can be addressed by participation support or belief-based certification.
Poverty and Child Benefits in Canada Through a Child Material Deprivation Lens
(2025-11-19) Notten, Geranda; Sène, Mariam
This research develops Canada’s first child material deprivation scale, which includes 15 items and distinguishes between four levels of deprivation (none, marginal, moderate and severe). We use this scale to compare child poverty with income before taxes and various other indicators of material well-being. We find that, despite having an income above the poverty line, many households with children experience outcomes associated with material deprivation or at least considerable material challenges. We then explore the implications of this partial overlap between the material deprivation and income distributions in the context of the Canadian Child Benefit (CCB), an income-tested child benefit program that was introduced in 2016 and is widely considered successful in reducing child poverty. Our simulation of targeting performance and program spending shows how the CCB’s near universal coverage and low benefit claw back rates are successful in reaching materially deprived children with still relatively generous benefits at higher incomes while also involving considerable spending on non-deprived children. We conclude that even when income is a practical metric to target income transfers it should not be the only one by which such programs are designed and evaluated.
Crowding Out of Private Contributions by Government Funding: The Importance of Charitable Activities and Population Served
(2025-09-16) Devlin, Rose Anne; Planatscher, Michela
Existing literature on crowding out typically focuses on donations to any charity or to those providing services in specific areas, like arts or social services. We depart from this literature by focusing on all charities that serve a specific geographic/cultural population, namely Indigenous peoples. This specific population is of interest for several reasons. Firstly, charities that serve Indigenous people are much more likely to receive government funding relative to all other charities: 57% versus 35%. We wonder if government funding helps explain the large difference in average donations to Indigenous-serving as compared to non-Indigenous serving charities. Secondly, we know very little about the role of the charitable sector in serving the Indigenous population even though it is amongst the most vulnerable in Canada. We uncover several useful findings: government funding always crowds out Indigenous-serving charities; the crowding-out of Indigenous-serving charities is usually larger but never smaller than that of non-Indigenous serving ones; and the crowding-out of Indigenous-serving charities is invariant to whether the charity is located on or off reserve.
What Will We Gain from Axing the Tax?
(2025-08-07) Shiell, Leslie
In March 2015, the Canadian Prime Minister terminated the federal carbon price and rebate system, in response to widespread belief that the carbon price was a major factor in the ongoing affordability crisis. The previous autumn, the Parliamentary Budget Officer (PBO 2024) released a report indicating that, including both cash and economics effects, approximately 60% of households paid more on the carbon price than they received in the rebate, and therefore the average household across the eight affected provinces (all but BC and Quebec) was made worse off by the policy. However, there are several features of PBO (2024) which were apt to create confusion and lead to misunderstanding of the results, including: (i) vagueness about income levels, (ii) disproportionate emphasis on 2030 results, (iii) use of after-tax (disposable) income as the basis of analysis, (iv) use of average income, rather than median income, to summarize typical impact, and (v) lack of information on greenhouse gas (GHG) emissions at different income levels. We address these issues and provide a clearer picture of the distributional impacts of the carbon price and rebate system. In 2024-2025, the policy made 50% or more of households, in four of the eight affected provinces, better off financially, and all households were forecast to be better off by the final year of the policy, 2030-2031, than they were in 2024-2025, as standard growth factors were forecast to outweigh the modest costs associated with the policy. We conclude that, far from making most households worse off, the federal carbon price and rebate policy was an effective policy to counteract the affordability crisis among those who needed help the most, and of course it was forecast to result in important environmental benefits as well.
Price Caps, Commitment and Innovation
(2025-04-01) Atallah, Gamal; Simons, Aggey
We analyze innovation incentives under price cap regulation by examining scenarios with endogenous price caps, both with and without regulatory commitment. In a setting without informational imperfections, our analysis reveals two principal conclusions. First, there is no trade-off between static and dynamic efficiency. Strengthening firm incentives by allowing it to charge higher prices, and thus realize greater profits, leads to less innovation because it reduces output. The optimal strategy to boost innovation and maximize welfare is to set a low price (and thus, a low profit) target, as innovation incentives are proportional to output. Second, the benefits of regulatory commitment for innovation and welfare are not unambiguously clear: commitment neither consistently outperforms nor underperforms non-commitment. Under demand uncertainty, when the firm is risk-averse, the static-dynamic efficiency trade-off reappears, and the firm may prefer non-commitment due to risk-shielding. Under asymmetric information about firm demand type, the trade-off between static and dynamic efficiency becomes inherent (due to information rents and contract distortions), and commitment becomes unambiguously crucial for fostering innovation by preventing the “ratchet effect”.
Measuring the contribution of racial stratification and social class at birth to inequality of opportunity
(2025-05-11) Makdissi, Paul; Yazbeck, Myra
This paper develops a framework for decomposing inequality of opportunity into racial stratification and social class components. We derive novel dominance conditions that enable robust rankings of joint distributions of income and birth circumstances, and develop additional dominance criteria for restricted classes of indices reflecting either pro-poor or meritocratic perspectives. Our framework includes an estimation approach and statistical tests for these stochastic dominance conditions, ensuring practical application with survey data. Using Health and Retirement Study data, we analyze inequality of opportunity in earnings among aging U.S. populations between 2010-2020. While social class-based inequality decreased for certain classes of indices, the racial stratification component increased, driving overall rising inequality of opportunity.
Optimal Contracts under General Mixed Constraints: Continuity, Structure, and Applications
(2025-04-11) Simons, Aggey
This paper characterizes optimal contract structures under adverse selection when the principal faces a general class of mixed (involving allocation and transfer) constraints. We establish conditions for the existence and the continuity of the optimal allocation. We show that under regularity conditions, the optimal continuous contract features at most three distinct regions: segments where the constraint is slack and the allocation follows a modified Baron-Myerson path, alternating with segments where the constraint binds. Assuming non-generic cases are excluded, the binding constraint forces a constant allocation (bunching) over a range of agent types. Our analysis demonstrates how bunching can arise endogenously from optimal design under smooth constraints, distinct from exogenously induced behavioural responses documented empirically.
Stationarity of the Optimal Enforcement Contract in the Complete Information Case
(2025-01-11) Simons, Aggey
This paper examines the stationarity of optimal contracts in infinitely repeated principal–agent relationships under complete information and enforcement constraints. We demonstrate that stationarity emerges as a robust feature of optimal contracts when agent types and actions are fully observable, and contract enforcement is supported by both public remedies and private termination threats. Under complete information, the trade-offs between enforcement costs and relational value become significantly simplified, resulting in stationary outcomes even when enforcement constraints are binding. These findings offer insights into contract design in environments where non-stationary profiles are either impractical or prohibitively costly.
Exploring the Environmental Impact of Monetary Policy
(2024-11-21) Abdelkader, Mamdouh; Karnizova, Lilia
As climate change risks escalate, central banks are increasingly called upon to address this global challenge. Yet, estimates of the environmental impact of monetary policy are limited, leaving a significant gap in understanding how monetary policy interacts with climate change. In this paper, we aim to fill this gap by providing new evidence based on U.S. data. We identify monetary policy shocks using the recursiveness assumption and estimate their effects on domestic carbon dioxide emissions. Three key findings emerge from our analysis. First, an unexpected monetary policy tightening produces a persistent yet transitory negative effect on total CO2 emissions. This finding holds consistently across different model specifications, periods, and monetary policy indicators, underscoring its robustness. Second, the effects of monetary policy vary significantly across major polluter types. Emissions in the industrial sector, closely tied to production activities, show the strongest response. In contrast, emissions in the residential and commercial sectors are weakly affected, likely due to the essential nature of energy services. Finally, the contribution of U.S. monetary policy shocks to explaining domestic CO2 emissions fluctuations has been modest. Since central banks have limited capacity to directly influence environmental outcomes, monetary policy should be viewed as complementary to fiscal policy and environmental regulation in addressing climate change.
Why don't firms hire young workers during recessions? A replication of Forsythe (The Economic Journal, 2022)
(2024-09-13) Créchet, Jonathan; Cui, Jing; Sadaba, Barbara; Sawyer, Antoine
We replicate results of Forsythe (2022) studying the cyclicality of individuals' labor market transitions conditional on their experience. Using Current Population Survey (CPS) data and state-level variations in the unemployment rate, this paper shows that the hiring probability of youths is more sensitive to business-cycle conditions than for experienced individuals. We replicate the main results in this paper by reconstructing the dataset using data from the IPUMS-CPS database (Flood et al. (2020)) and recoding the paper's main regressions from scratch. We also conduct a robustness replicability analysis and show that the paper's main results are robust in terms of statistical significance to (i) extending the sample period from 1994-2014 to 1994-2019 and (ii) using MSA-level unemployment variation instead of state-level variation. These extensions reduce the magnitude of the main effects of interest, but the paper's key conclusions are unaffected.
Land Conflicts in the Wake of Gold Mining Expansion in Colombia
(2024-07-12) Jaimes, Paola
This paper provides quantitative evidence on the relationship between gold mining expansion and violent conflict in Colombia. Utilizing a two-stage least squares (2SLS) regression model, the study examines the effects of gold mining on violence using three different measures of gold mining activity across two distinct periods: the Gold Rush (2004-2014) and the post-Gold Rush (2014-2022). The exogeneity of international gold prices and geochemical anomalies is exploited to identify causal effects. During the Gold Rush period, strong effects of gold mining on violence are observed using machine learning and gold mining deforestation measures. In the post-Gold Rush period, mixed results were found, with significant effects primarily observed using the deforestation measure. The presence of armed groups and ethnic mining communities exacerbates the effects of gold mining on violence. However, using two different measures for institutions, such as judicial inefficiency and electoral risk, no significant influence on the impact of gold mining on violence was found. The findings highlight the role of armed groups and the targeting of ethnic communities in the expansion of gold mining areas, underscoring the need for policy interventions to address land disputes and the involvement of armed groups in the mining sector. The robustness of the results is confirmed through various measures of the dependent variables and different clustering methods for standard errors.
A modeling approach to decomposing changes in health concentration curves
(2024-05-15) Bchi, Khadija; Makdissi, Paul; Yazbeck, Myra
This paper proposes a decomposition approach for health concentration curves. Decomposing changes in health concentration curves gives additional insight compared to decomposing a single index such as the health concentration index. First, the results would be valid for a comprehensive set of indices. Second, and more importantly, it allows for identifying heterogeneous effects along socioeconomic ranks. We use inverse propensity weighting for the overall decomposition. We use multiple recentered influence function regressions on a grid of points to identify the impact of specific covariates. We weight these regressions by the inverse propensity score of the observations to correct for errors due to departure from linearity. The paper also derives the expressions of the recentered influence functions of the relative and absolute health concentration curves since the literature does not offer the expression of these recentered influence functions. We offer an empirical illustration using information on cigarette consumption from the National Health Interview Survey of 2000 and 2020.
Charitable Giving and NPOs Investment Decision in a Stochastic Dynamic Economy
(2024-04-19) Han, Jiang; Simons, Aggey
We study the dynamic interaction between donors’ contributions and the investment strategies of a non-profit organization (NPO) amid fluctuating donor income and varying financial market conditions. The analysis reveals a consistent pattern in the NPO’s allocation strategy, directing a fixed proportion of its endowment toward higher-risk assets. Notably, increased donor support often correlates with the NPO’s heightened activity in financial markets, which can occasionally reduce the provision of charitable goods. A significant finding is the NPO’s preference for environments with lower returns on risk-free assets. Additionally, the study delineates the contrasting impacts of financial market uncertainties and donor income variations on the decision-making processes of both donors and the NPO; while market volatility significantly shapes strategies for both groups, fluctuations in donor income have minimal impact on their strategic decisions.
Relocation from China (with Chinese Characteristics)
(2024-03-04) Garred, Jason; Yuan, Song
The share of Chinese goods in US imports has fallen sharply since 2018, as production for the US market has shifted from China to other countries. Does this trend represent US-China ‘decoupling’, or are other US trade partners playing growing roles as intermediaries in ongoing US-China economic relations? Using firm-level and product-level data, we find that Chinese manufacturing investment and Chinese-produced parts have increasingly flowed to third-country ‘winners’ who have simultaneously increased their US market share. We present evidence that our findings capture expanding indirect relationships linking China and the US rather than broader economic trends within the ‘winners’ themselves.
Risk Sharing in a Dual Labor Market
(2023) Créchet, Jonathan
In OECD countries, the labor market features a coexistence of open-ended, permanent jobs subject to strict employment protection and fixed-term, temporary contracts. This paper introduces a search-and-matching model of a dual labor market - divided between permanent and temporary jobs - with risk aversion and dynamic employment contracts. Optimal contracting entails a trade-off between commitment and the flexibility of separation, a novel rationale for the coexistence of permanent and temporary jobs. The paper shows that this coexistence emerges when (i) firms find it optimal to provide insurance to workers, (ii) the firms' commitment ability is limited, and (iii) the match-quality distribution has enough dispersion. In this setup, firing costs are potentially associated with welfare gains for both employed and unemployed workers.
Life-Cycle Worker Flows and Cross-country Differences in Aggregate Employment
(2023) Créchet, Jonathan; Lalé, Étienne; Tarasonis, Linas
We propose new data moments to measure the role of life-cycle worker flows between employment, unemployment and out of the labor force in shaping cross-country differences in aggregate employment. We then show that a suitably extended version of the Diamond-Mortensen-Pissarides model can capture well these data moments. Two features of the model are crucial for this result: heterogeneity in match quality and endogenous search intensity. We examine the implications of this model for the sources of employment dispersion across Europe's largest countries, assessing the contribution of factors related to (i) the production technology, (ii) search, and (iii) policies. The sources of cross-country employment dispersion differ substantially across ages. Technology factors account for most of the employment variance of youths and prime-age workers, whereas search and policies are the main drivers of employment differences for older individuals.
Quantifying turbulence: Introducing a multi-crises impact index for Lebanon
(2023) Abi Younes, Oussama; Dagher, Leila; Jamali, Ibrahim; Makdissi, Paul
This paper provides an in-depth analysis of Lebanon's severe economic crisis, a situation aggravated by the collapse of Banque du Liban's financial strategies, delayed reforms by the government, the COVID-19 pandemic, and the devastating Beirut Port explosion. These events have precipitated a sharp decline in disposable income, soaring inflation rates, and an alarming increase in unemployment and multidimensional poverty. Central to this study is a comprehensive field survey that examines eighteen coping mechanisms adopted by workers in various economic sectors of Lebanon. From this survey, we introduce a new index designed to systematically categorize and evaluate these coping strategies across four critical dimensions: nutrition, healthcare, education, and financial issues. We use this index to quantify and understand the extent to which workers have relied on these coping mechanisms, offering novel insights into the socio-economic repercussions of the crisis.
A Unidimensional Representation of Multidimensional Inequality: An Econometric Analysis of Inequalities in the Arab Region
(2023) Khaled, Mohamad; Makdissi, Paul; Rao, Prasada; Yazbeck, Myra
This paper introduces a novel approach for analyzing multidimensional inequality. We use a counting-based approach and a transformed survival function to capture the impact of inequality at the individual level. We then define indices of multidimensional inequality as aggregations of these individual impacts and introduce two new graphical tools. These graphical tools leverage the unidimensional representation to provide an intuitive representation of multidimensional inequality. Through this representation we derive dominance conditions that allow for the identification of robust rankings of multidimensional inequality. This paper also pushes boundaries in stochastic dominance estimation and inference showcasing new estimation and statistical methods related to our new graphical tools and dominance conditions. As a practical demonstration, we apply our method to analyze data from the Harmonized Household Income and Expenditure Surveys for three Arab countries and the Arab Barometer survey for ten Arab countries.

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