Academic research

Key words: immigrant population; attitudes towards immigrants, cultural distance; intergroup dynamics.

Abstract. We study attitudes towards immigrants and immigration policies among individuals with immigrant backgrounds in Europe. We leverage the key economic and cultural arguments on the origins of anti-immigrant sentiments in native-borns and apply them in the context of immigrants. Utilizing data from the European Social Survey (2004-2021), we demonstrate that immigrants, especially first-generation and those of non-European origin, are more pro-immigrant and favour more liberal immigration policies, compared to native-borns. This pattern persists after controlling for individual and contextual factors.

We apply the economic argument to demonstrate that economic insecurity factors contribute to negative attitudes among both immigrants and native-borns, yet the influence of these factors is considerably less pronounced for immigrants. While concerns like job competition and public resource allocation may unite native-born individuals and immigrants in worry, the cultural threat—concerns about weakening native culture—is less clear-cut when considering immigrants. We show that immigrants who feel a closer connection to their host country often view other immigrants more favorably, yet they favor tighter immigration policies. Furthermore, much like studies for native populations show, immigrants tend to have less favorable views towards immigrant groups from culturally distant societies, a pattern that persists after adjusting for the size of the immigrant group; this effect is particularly pronounced among immigrants of non-European origin.

The paper is work in progress and will be part of a PhD thesis. Full version available upon request.

Key words: European populism; welfare state; economic insecurity; cultural threat; voting behavior.

Abstract. Our study revisits the drivers of populism in Europe, offering theoretical and empirical evidence that the relationship between individual experiences of economic insecurity, perceived cultural threats, and populist voting is contingent on the welfare state size. We propose that a more extensive welfare state provides safety nets to those who are economically insecure (the bail-out effect), but at the same time can amplify tensions over resource allocation towards outgroups such as immigrants (anti-solidarity effect). To test our theory, we analyze individual-level data from the European Social Survey (2004-2021), combined with a panel of society-level indicators from 22 European countries. Our findings show that the positive association between economic insecurity and populist support intensifies in societies that allocate more towards social spending, while at the same time an increased welfare spending amplifies the effect of one’s negative attitudes towards immigrants on populist support. These nuanced effects for the two segments of society suggest implications for policy design.

The paper is work in progress and will be part of a PhD thesis. Full version available upon request.

Populism is experiencing a wave of resurgence all around the globe. While it has taken many different shapes and forms, it is now clear that recent European populism is a separate beast. It is more driven by a rejection of globalization and its accompanying immigration, interconnectedness of global trade and international finance. 

The literature on the drivers of populist voting in Europe suggests two hypotheses to explain the contemporary backlash: cultural shift and economic insecurity, both fueled by rapid globalization. While there is empirical evidence in support of each of the two theories, it seems that the two drivers are not orthogonal but are rather interconnected phenomena. Moreover, as European populist parties have occupied both sides of the political spectrum, there is surprisingly little evidence on ideological populist voting. 

While the two theories attempt to explain an individual's choice to support any populist party, it is not evident what drives the party choice on the right-left political spectrum. In this project, I address the literature gap and empirically explore the individual determinants of ideological populist voting among European voters. To achieve this, I employ rich individual data from the European Social Survey (9 rounds, 2002-2018, 180,000+ observations) and the PopuList 2.0 classification of populist parties. I first estimate a Heckman probit model corrected for selection into election participation to determine an individual's chances to support any populist party. Based on the obtained outcomes, I estimate a corrected multinomial probit model to determine the ideological drivers of the party's choice.

I demonstrate that: (1) both economic and cultural factors determine individual propensity to support a populist party; (2) economic insecurity acts as the least common denominator increasing the chances to vote for any populist party, however, ideological factors play a significant role when deciding which populist party to support on the left-right political spectrum. My findings may help resolve the long-standing culture versus economics debate in the political economy literature of populism.

The study is based on my Research Master in Economics dissertation (University of Glasgow, defended with distinction).

Full paper is available here.

Why do some nations constantly report higher levels of subjective well-being? This question has raised a heated debate among socials scientists over the past decades. For example, it is a known fact that Denmark and the Netherlands regularly top the table of international life satisfaction. One of the obvious explanations that might come across one's mind is that countries with higher standards of life (in other words, wealthier nations) feel happier. However, such high-GDP countries as France and Italy are surprisingly farther down in the international rankings than their European neighbours. 

The paper National Happiness and Genetic Distance: A Cautious Exploration (2016) by Eugenio Proto and Andrew Oswald explores the international pattern of human happiness through genetics. The authors rely on the known fact that there appears to be an individual genetic component to happiness and well-being. A novel element of the paper is that no previous studies attempted to establish the cross-country pattern using genetic data.  By running a set of regression equations and controlling for the potential confounding, the paper demonstrates, among other conclusions, that there is a negative relationship between nation's happiness and its genetic distance from Denmark.

In this study, I replicate one of the findings in the original paper. I then extend the paper by doing two additional tests. I first search for the link between the 'trust' gene polymorphism and mental well-being. I then explore the correlation between the 'altruism', or 'generosity', gene variations and various measures of subjective well-being. I also devote one section to the discussion on the methodology used in the original paper and my suggested extensions. I consider different pitfalls in genoeconomic research and their implications for policymaking. 

This study was produced for the course Topics in Applied Microeconomics (University of Glasgow).

Full paper is available here. I also wrote a Medium post about this research. 

Unemployment insurance programs in the majority of Western countries follow the same principle. The benefits are paid out at a constant replacement rate for a fixed period. After the period ends, lower benefits under unemployment assistance follow. In such systems, it has been estimated that the conditional probability of finding a new job declines from an initial peak, surges when unemployment benefits cease to be paid, and declines thereafter.

It is a well known fact that the standard job search model (à la Mortensen (1986) or van den Berg (1990)) are unable to capture this dynamics. The model predicts an increasing hazard rate up until the point where benefits expire, with a constant exit rate thereafter. The paper Reference-Dependent Job Search: Evidence from Hungary by S. DellaVigna et al. (2017) proposes and tests an alternative explanation of the pattern by adding a behavioral component to job search. The authors make use of one of the most established facts in psychology: people's perceptions and decisions are driven by relative comparisons. The proposed model benefits from reference-dependence in workers' preferences who are also risk-averse with respect to consumption below their reference point (as in prospect theory by Kahneman and Tversky (1979)). The findings suggest that the reference-dependent model fits the hazard rate pattern much better. 

The purpose of this extended referee report is to critically evaluate the original paper and carry out an additional analysis to detect reference-dependence. In the next section, I summarize the paper's methodology and the main results. In section 3, I replicate what I believe is the empirical core of the paper. In Section 4,  I conduct the survival analysis in order to detect the reference-dependence effect among recently unemployed workers. Section 5 concludes. 

This study was produced for the course Topics in Applied Microeconomics (University of Glasgow).

Full paper is available here. 

The lack of diversity in Economics has received increasing attention from the media and academic research. The first signs of gender imbalance are observed in universities with far fewer females choosing Economics as their major. In the United States, where approximately 58\% of all undergraduate students are women, only a third of all Economics degrees earned in the past twenty years were awarded to women (Ahlstrom, 2019). In the UK and Australia, the situation looks similar: just over one-third of Economics degree-earners are females.  

Developed countries have exerted tremendous effort to bridge the gender gap in STEM and business-related subjects, and nowadays roughly a half of graduates in these areas are women. However, the figures for Economics have stagnated over the past decades. The reason for the gender gap in degree attainment does not appear to be that women display less interest in math-intensive disciplines or business-related careers. The problem arises when a student chooses a major, and Economics is selected less frequently than other related subjects by female students. Therefore, in order to understand the reason behind gender disparities in the economic profession, it is essential to study the determinants of Economics degree selection among women. 

The purpose of this extended referee report is to critically review the paper The Gender Gap Undergraduate Economics Course Persistence and Degree Selection authored by Laura J. Ahlstrom and Carlos J. Asarta and published in the AEA Papers and Proceedings in May 2019. The next section summarizes the paper and lists its main contributions to the pool of existing literature. Section 3 discusses paper's weaknesses and the ways the paper can be extended to account for them. In Section 4, I replicate the main results of the paper. In Section 5, I conduct an additional analysis to directly assess the size of the gender gap in Economics degree attainment that is not considered in the original paper. Section 6 concludes. 

This study was produced for the course Topics in Applied Microeconomics (University of Glasgow).

Full paper is available here. 

This paper studies the relationship between populism, institutional capture, and political frustration. I show that populism emerges in a politically frustrated society with weak institutions among relatively patient voters who would vote for a more competent technocrat instead were they not politically frustrated. Moreover, if only one politician captures institutions, she loses to the opponent who plays fairly in terms of the values of voter's patience due to the proximity of the opponent's policy to the voter's best choice. The paper also provides a rigorous review of the literature on the political economy of populism. 

This study is based on my Research Master summer research project (University of Glasgow).

Full paper is available here. 

There has always been a heated debate in the literature on how monetary policy impacts the real sector. When interest rates in many advanced economies approached the zero bound or even entered the negative zone, many central banks resorted to unconventional monetary policy measures in order to maintain price stability. The channels of monetary policy transmission have become even more blurred and sophisticated.

This undergraduate thesis investigates the effects of ECB's balance sheet shocks on unemployment across the Eurozone countries in the long run. I employ a set of structural vector autoregression (SVAR) models for the period 2009m1 to 2017m7 and study the obtained impulse response functions and variance decomposition. I find that the impact on aggregated euro area figures is limited, however, my analysis demonstrates that there are strict differences in single policy responses across my sample states. Our outcomes suggest that ECB's measures exert a significant pressing impact on unemployment in Germany, Spain and Italy in the long run. 

However, I find little or no evidence of the impact on jobless rates in the Netherlands, Finland and France. I attribute the heterogeneity in policy responses across my sample countries to the lack of labour market mobility within the EMU. To corroborate my findings, I employ the optimum currency area theory that suggests that labour mobility in a currency union per se may act as a significant adjustment mechanism that offsets imbalances in monetary policy responses.

This study is based on my Undergraduate thesis (with highest distinction).

Full paper is available here. 

After the recent global financial crisis, central banks in advanced and developing economies found themselves unable to stick to their mandate goal of price stability by resorting to traditional instruments of monetary policy. When key interest rates approached the zero bound, the need to develop a new toolkit of liquidity provision arose. Central banks embarked on numerous non-standard monetary policy measures aimed at ensuring financial stability and restoring economic growth. 

Communication has become an effective auxiliary instrument of economic policy, and markets started paying precise attention to the way central bankers report information regarding the future path of monetary policy. The purpose of this paper is to provide an overview of recent trends and developments in central bank communication strategies.

By reviewing the existing literature, we analyze the origins of central bank communication and the evolution of its role in time. We also study the main instruments of communication strategies of large central banks. In the final part of the study, we investigate the communication strategy of the US Federal Reserve and the way it may cause spillovers to fragile markets abroad. We outline at least three major channels of international policy transmission: through stocks, bonds and exchange rates fluctuations. 

Publication: Higher School of Economics Research Paper No. WP BRP 16/PSP/2018