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- The artist wage penalty in the formal sectorPublication . Bernard, Anna; Gazel, MarcoWe provide the first within-worker evidence on the artist wage penalty in the formal sector. Using administrative matched employer-employee data covering the nearuniverse of formal private-sector workers in Portugal from 2010 to 2023, we find that workers transitioning into artistic occupations earn 1.5% less in total compensation. The aggregate penalty masks two offsetting margins: artists accept a 4.1% hourly wage discount but supply 2.6% more hours, consistent with Throsby’s (1994) workpreference model. The penalty is gender-neutral but varies across occupations, with photographers, film-related artists, and painters facing the largest hourly discounts and musicians compensating through longer hours. We then evaluate the Estatuto dos Profissionais da Área da Cultura, a 2022 Portuguese reform targeting bogus selfemployment in the cultural sector. The reform increased the share of formally employed artists in covered sectors, but the hourly wage penalty widened post-reform. Formalisation reduces precarity but does not close the artist wage gap, and its cost is partly borne by workers through wage compression.
- The anatomy of conglomerate investment a dual-sensitivity model of cash flow and financial slackPublication . Santos, Mário Coutinho dos; Mendes, Victor; Mota, Jorge HumbertoThis paper proposes and tests a "dual-sensitivity" model of investment in diversified firms, integrating the traditional investment–cash flow sensitivity (ICFS) with a novel channel: investment–financial‑flexibility sensitivity (IFFS). Drawing on the strategic flexibility view of multi‑business firms, we argue that financial slack—excess cash and unused debt capacity—provides the strategic fuel to exercise the real option of internal capital reallocation. Using a strictly balanced matched panel of 17,927 internal capital market (ICM) affiliates and standalone firms in the European Union (2012–2023), we examine how ICM efficiency, asset lumpiness, and financial slack jointly shape capital allocation. The results show that ICM affiliates exhibit a distinct investment profile: lower ICFS but a higher and more strategic IFFS, particularly when funding lumpy investments in high‑growth segments. These findings are robust to alternative measures of financial slack, investment opportunities, and asset lumpiness. By unifying research on financing constraints, real adjustment costs, and corporate strategy, this study demonstrates that financial slack is a critical enabler of the strategic flexibility embedded in complex organizations, and that ICMs create value by efficiently orchestrating slack toward highreturn, lumpy investments.
- Unconventional prudential policy: when are capital controls optimal?Publication . Belchior, Daniel; Reis, CatarinaIn an open economy with downward real wage rigidity, the effects of economic fluctuations may be amplified. Furthermore, the wage rigidity creates a negative externality since the current wage floor is a function of the past wage. If it is impossible to implement a fiscal devaluation, the optimal fiscal policy response to downward wage rigidity is characterized by time-varying labor and capital income taxes and zero capital control taxes. Prudential labor income taxes decrease when the wage floor is expected to bind in the future to reduce the current wage and the future wage floor. However, if labor income taxes are unavailable, it becomes optimal to use capital controls prudentially. In this case, a higher capital control tax implements a lower equilibrium wage through its effect on labor supply. We, thus, identify a novel mechanism for the optimality of capital controls in the context of downward wage rigidity
- Determinants of citations in tourism and hospitality studiesPublication . Correia, Antónia; Rodrigues, Paulo Manuel Marques; Kozak, Metin; Raposo, PedroCitation metrics are frequently used to assess research and rank journals and researchers. Nevertheless, this is still a process with asymmetric information. Tourism and hospitality research have matured within a small community and through a multidisciplinary scientific paradigm. This paper aims to understand the determinants of tourism and hospitality research citation patterns. To this end, a total of 101,968 papers within fifteen years (2004–2018) is analysed. Our empirical results suggest that authors’ prestige, the multidisciplinary nature of research, and the impact factor of journals and bibliometric articles are likely to increase an article’s citations. This paper represents a step forward in understanding the citation formation process in tourism and hospitality research.
- Treatment-resistant depression and major depression with suicide risk – the cost of illness and burden of diseasePublication . Sousa, Rute Dinis; Gouveia, Miguel; Nunes-da-Silva, Catarina; Rodrigues, Ana; Cardoso, Graça; Antunes, Ana; Canhão, Helena; Almeida, José Miguel CaldasIntroduction: Treatment-Resistant Depression (TRD) and Major Depression with Suicide Risk (MDSR) are types of depression with relevant effects on the health of the population and a potentially significant economic impact. This study estimates the burden of disease and the costs of illness attributed to Treatment-Resistant Depression and Major Depression with Suicide Risk in Portugal. Methods: The disease burden for adults was quantified in 2017 using the Disability-Adjusted Life Years (DALYs) lost. Direct costs related to the health care system and indirect costs were estimated for 2017, with indirect costs resulting from the reduction in productivity. Estimates were based on multiple sources of information, including the National Epidemiological Study on Mental Health, the Hospital Morbidity Database, data from the Portuguese National Statistics Institute on population and causes of death, official data on wages, statistics on the pharmaceutical market, and qualified opinions of experts. Results: The estimated prevalence of TRD, MDSR, and both types of depression combined was 79.4 thousand, 52.5 thousand, and 11.3 thousand patients, respectively. The disease burden (DALY) due to the disability generated by TRD alone, MDSR alone, and the joint prevalence was 25.2 thousand, 21 thousand, and 4.5 thousand respectively, totaling 50.7 thousand DALYs. The disease burden due to premature death by suicide was 15.6 thousand DALYs. The estimated total disease burden was 66.3 thousand DALYs. In 2017, the annual direct costs with TRD and MDSR were estimated at € 30.8 million, with the most important components being medical appointments and medication. The estimated indirect costs were much higher than the direct costs. Adding work productivity losses due to reduced employment, absenteeism, presenteeism, and premature death, a total cost of € 1,1 billion was obtained. Conclusions: Although TRD and MDSR represent relatively small direct costs for the health system, they have a relevant disease burden and extremely substantial productivity costs for the Portuguese economy and society, making TRD and MDSR priority areas for achieving health gains.
- Judicial enforcement, credit frictions, and the transmission of bankruptcy through firm networksPublication . Cerqueiro, Geraldo; Nogueira, GilWe show that weak judicial enforcement and credit frictions jointly govern the transmission of corporate distress through trade-credit networks. Weak judicial enforcement increases the losses associated with defaulted trade credit, while credit frictions limit trade creditors’ ability to absorb those losses. We exploit variation in court congestion generated by a nationwide reform that reassigned pending bankruptcy cases across courts. Trade creditors are more likely to go bankrupt when their trade debtor’s case is handled by a congested court and when they face binding credit frictions. Bank relationships mitigate these frictions and insulate trade creditors from distress transmission. A counterfactual exercise shows that moving from the least to the most efficient courts would reduce bankruptcy propagation by 40% and increase aggregate sales by 2%.
- When trade compresses: the impact of liberalization on wage inequalityPublication . Martinez, Victor Hernandez; Kozeniauskas, Nicholas; Merga, RomanWe study the effects of trade liberalization on the full wage distribution, exploiting Spain’s 1993 entry into the European Single Market. Using employer-employee data, we identify the causal effects of trade across the entire wage distribution, using a novel shift-share instrument embedded in an unconditional quantile regression. We find that the liberalization reduced wage inequality, leading to wage compression through earnings gains at the bottom of the distribution and wage losses at the top. We trace this compression to two asymmetric channels: import competition disproportionately harmed high earners, while export opportunities benefited low earners. The key mechanism is an import-driven “skill-downgrading.” A multiregion multi-sector model shows that the key insight for understanding these empirical results is that trade’s distributional effects depend on the skill intensity of a country’s tradable sector, and Spain’s was relatively low-skill intensive back then.
- Regulating artificial intelligencePublication . Guerreiro, João; Rebelo, Sérgio; Teles, PedroAdvances in AI offer substantial benefits but also pose societal risks. We analyze optimal regulation under uncertainty about societal costs, differing expectations regarding risks, and opportunities to reduce uncertainty through beta testing. Pigouvian taxes fail to achieve the first-best outcome due to heterogeneous beliefs about risks and the regulator’s inability to observe developers’ expectations. We propose a two-stage optimal policy: first, deciding between immediate release or sandbox experimentation; second, using gathered information to determine whether to publicly release or withdraw the algorithm. This approach achieves the socially optimal outcome.
- Altruism, human capital and environmental preservation in a globalized economyPublication . Bouché, Stéphane; Modesto, LeonorThis paper analyzes the impact of trade openness on education and environmental preservation choices in a two country model where both countries only differ in their shares of skilled workers. Parents may invest in their children's education increasing their probability to become skilled and in maintenance investment in order to preserve present and future environmental quality. Under autarky, unskilled individuals in the skill scarce economy are unable to invest in education due to borrowing constraints. Moreover, only skilled individuals of the latter economy choose to invest in environmental preservation. Openness to trade modifies relative factor prices and increases pollution. This allows for human capital convergence between both economies and induces all skilled individuals to contribute to environmental preservation in the free trade equilibrium. However, overall environmental quality decreases, suggesting a potential trade-off between income convergence at the global level and environmental preservation. We also focus on the optimal allocation under free trade and conclude that a maintenance investment subsidy should be implemented for skilled individuals but not necessarily for unskilled ones.
- Learning in bank runsPublication . Schliephake, Eva; Shapiro, JoelWe examine a model in which depositor learning exacerbates bank runs. Informed depositors can quickly withdraw when the bank has low-quality assets. Uninformed depositors may decide to wait, which allows them to learn by observing informed depositors' actions. However, learning that the bank has low-quality assets will spark a run ex-post, which increases the incentives of uninformed depositors to run ex-ante. Moreover, when there are more informed depositors, uninformed depositors have a fear of missing out, which also makes preemptive runs more likely. Learning may, thus, increase the likelihood of panic runs and decrease surplus.
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