Mark Fallak

Starting in the summer of 2022, Botond Kőszegi will become a full-time professor at briq. He is currently University Professor at Central European University in Budapest, Hungary, after previous positions at the University of California, Berkeley, and a visiting position at the Massachusetts Institute of Technology. Holding a BA in mathematics from Harvard University in 1996, he received his PhD in economics from the MIT in 2000 as one of the first students to write a PhD thesis entirely on behavioral economics.

Having visited many times, I already know briq very well, and have experienced the intense and friendly environment that makes it a center of behavioral-economics research. I look forward to being part of it full time and helping to grow it further!

Over the past two decades he has published extensively on behavioral-economics topics – including several lead articles – in top journals such as the American Economic Review, Quarterly Journal of Economics, Review of Economic Studies, Journal of the European Economic Association, and Journal of Public Economics. He was also Managing Editor at the Review of Economic Studies.

Focusing primarily on the theoretical foundations of behavioral economics, Botond has produced research on self-control problems and the consumption and regulation of harmful products, self-image and anticipatory utility, reference-dependent preferences and loss aversion, markets for deceptive products, and misguided learning.

He has received European Research Council Grants in 2012 and 2018, and the Yrjö Jahnsson Award, a biennial award for the best economist in Europe under the age of 45, in 2015 (see video below).

“I am extremely happy, both academically and personally, that Botond will join us. This will clearly boost our behavioral economics research at briq and Bonn. Absolutely terrific!” said briq director Armin Falk.

Competitiveness is an individual trait that has been shown to be highly predictive of career choices and labor market outcomes and for which a strong gender gap is often found. Gender differences in preferences for competition might therefore provide a partial explanation for gender disparities in career choices, such as differential selection into STEM fields or finance.

A new study by Teodora Boneva, Thomas Buser, Armin Falk and Fabian Kosse provides causal evidence on the impact of socioeconomic background at a young age on preferences for competition and gender differences in these preferences. The analysis is based on the briq family panel, consisting of families living in the German cities of Bonn and Cologne with children born between 2002 and 2004.

To isolate results on the effects of a change to the social environment, around 30 percent of the children in the sample were randomly assigned to a well-established and intensive mentoring program called “Baloo and You”. For a period of about one year, children are provided with a mentor whose brief it is to act as a role model and to enrich the social environment. Volunteer mentors are predominantly university students, and all girls are assigned to a female mentor, thereby exposing girls of low socioeconomic status (SES) to a successful female role model.

Mother’s competitiveness matters for girls

A first finding indicating a potential positive effect of the mentoring program is that the mother’s competitiveness has a positive effect on girls but not on boys. Thus, female role models might be particularly important for shaping girl’s competitiveness.

The broader results confirm earlier findings of significant differences in competitiveness between girls and boys, however the gender gap registered for adolescents with low socioeconomic background stands out. Socioeconomically disadvantaged girls are 4.5 times more likely to be found at the bottom of the competitiveness distribution than boys with comparable SES. On the other hand, girls profiting from a more favorable background (high SES) are “only” twice as likely to show very low competitiveness in comparison to boys with high SES.

The mentoring intervention significantly narrows the gender difference in competitiveness by increasing girls’ willingness to compete especially among those most averse to competition. The gap between the gender differences in competitiveness of the disadvantaged and the advantaged group is closed entirely.

Mentees raise their earnings expectations

A similar pattern emerges for earnings expectations. About six years after the intervention the authors administered a questionnaire in which they elicit the adolescents believe about their earnings at age 30. While the teenagers in this sample have not entered the labor market yet, data shows that there are already large gender gaps regarding expected earnings at this age, especially among the group of low SES adolescents.

Girls with poor socioeconomic background expect 36.7% lower earnings than boys exposed to a similar social environment. The gender gap in the group with high SES is only 8.8%. The intervention reduced the gender gap in the low SES group by 23.3 percentage points to 13.4%, which is statistically indistinguishable from the gender gap in the high SES group.

Taken together, the results suggest that girls with low socioeconomic status are doubly disadvantaged, by both their socioeconomic background and their gender, but that interventions can partially mitigate this disadvantage. The results have important policy implications: Providing adolescents with an enriched social environment may not only result in better outcomes for disadvantaged children but may also lead to a significant reduction in gender inequality.

Suanna Oh, briq postdoctoral fellow since September 2021, has been selected as the winner of this year’s Distinguished CESifo Affiliate Award in the area of behavioral economics. The prize is funded by the international CESifo research network based in Munich and aims at identifying promising young researchers. Previous winners include briq research director Florian Zimmermann and briq research affiliate Matt Lowe.

Oh’s paper “Does Identity Affect Labor Supply?” investigates this question in rural India, focusing on the effect of caste identity on job-specific labor supply. In a field experiment, laborers chose whether to take up various one-day job offers, which differed in associations with specific castes. Workers were less willing to accept offers that were linked to castes other than their own, especially when those castes ranked lower in the social hierarchy. Workers forewent large payments – ten times their daily wage for half of the sample – to avoid job offers that conflicted with their caste identity, regardless of whether these decisions were made in private.

Read more about the paper in a VoxDev column.

Global survey of almost 10,000 academic economists shows: Many economists think that economic research should become more policy relevant, multidisciplinary, and disruptive, and pursue more diverse research topics.

Science and research matter. They shape how we think about ourselves, how we live together, and how we design policies. What researchers work on, which topics they choose, and how they resolve trade-offs between different research objectives is therefore of central societal importance. However, the question about what is “interesting” and “worth knowing” cannot be answered scientifically. Instead, researchers must retreat to their intuition and personal value judgments.

How do economists think about this “problem of problem choice”? Which fundamental research objectives do they think economists should pursue? Which research topics should they explore? In search for answers, briq researchers Peter Andre and Armin Falk conducted a global survey of almost 10,000 academic economists about their views on what is worth knowing in economics.

For details, download the full study or read the authors’ VoxEU column.