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Empirically identifying the causal effect of social capital on immigrants' economic prospects is a challenging task due to the non-random residential sorting of immigrants into locations with greater opportunities for prior or co-ethnic connections. Our study addresses this selection-bias issue by using a natural-experimental dataset of refugees and other immigrants who were exogenously allocated to their first place of residence by German authorities. This unique opportunity allows us to make an important methodological contribution to the predominantly observational knowledge about immigration and co-ethnic social capital. Although a growing body of migration studies in economics and sociology stresses the importance of social networks for migrants' labor market integration, our results show little evidence of a causal effect of social networks themselves. Being part of a larger co-ethnic community per se does not accelerate immigrants' labor market success except for the migrants who use the resources embedded in their social contacts when looking for a job. We conclude that further methodological advancements can be achieved by embracing recent technological developments and by combining different methods to increase both internal and external validity of findings in migration studies. [ABSTRACT FROM AUTHOR]

Competition involves two main dimensions, a rivalry for resources and the ranking of relative performance. If socially recognized, the latter yields a ranking in terms of social status. The rivalry for resources resulting from competitive incentives has been found to negatively affect women's performance relative to that of men. However, little is known about gender differences in the performance consequences of social-status ranking. In our experiments we introduce a novel design that allows us to isolate the effects of status ranking from those caused by a rivalry for resources. Subjects do a time-limited task where they need to search for numbers and add them up. Performance is straightforwardly measured by the number of correct summations. When there is no status ranking we find no gender differences in the number of attempted summations or in performance. By contrast, when there is status ranking men significantly increase the number of attempted summations as well as the number of correct summations. Remarkably, when women are subjected to status ranking, they significantly decrease the number of attempted summations. The net result is striking. With status ranking men attempt more summations and correctly solve many more than women. These differences are markedly large and statistically highly significant. Our results suggest that increased participation in competitive environments could harm women's labor market success along a hidden channel. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between working in the formal or informal sector and self-reported individual financial satisfaction in a country in transition. It does so by allowing for individual heterogeneity in terms of perceived financial insecurity and tax morale. The empirical analysis uses a dataset for Albania, a country in transition. The method applied is the 'self-administered questionnaire', which combines personal contacts with written questionnaire. The results indicate that, for most individuals, working in the informal sector has negative effects on their self reported financial satisfaction. For some individuals, however, this effect is positive. The characteristic defining these two groups of individuals is their attitude towards the perceived financial insecurity related to not paying taxes. These findings have important implications, in particular for transition countries with large informal sectors. Given the involuntary participation in the informal sector in these countries, the majority of individuals working in this sector will remain financially dissatisfied as long as they have no other social safety net. [ABSTRACT FROM AUTHOR]

One must take country-specific institutional features into account when analyzing former communist countries’ transformation process to new political institutions. We do so for post-communist Albania, where the regional and cultural polarization that has existed for centuries has evolved to clientelism in the new democracy. We show how clientelistic parties give rise to very particular voting patterns. These reveal major differences across regions not only in party choice but also in voters’ responses to government policies. These responses depend on the party in government and on the region concerned. This is in sharp contrast with results obtained when applying the same model to a large number of more advanced democracies with similar electoral institutions. A proper evaluation of democratization in Albania thus requires looking beyond the formal institutions governing elections and taking clientelism and its effect on voter behavior into account. [ABSTRACT FROM AUTHOR]

Gathering large-scale data on tax evasion is an undisputable challenge in and of itself. Doing so in a country in transition from a communist to a democratic system is even more difficult. This paper discusses the challenges and presents a case study to show how they can be dealt with effectively. One important implication of the paper is that such a sample survey can be successful if it combines a careful sample design, research method and questionnaire design, and explicitly takes country-specific institutional and cultural features into account. [ABSTRACT FROM AUTHOR]

Provides a general overview of the contributions to the literature on the informal sector, with a special focus on the public choice approach. Comparison of the contributions across two institutionally different types of countries, developed and less developed countries; Criteria used to define the informal sector; Relationship between the formal and informal economy, tax evasion, and public choice analysis.