Three Essays in Applied Microeconomics

This thesis focuses on three vulnerable groups in Europe that have recently been highlighted both in media and in the economics literature; and that are policy priorities. Chapter 1 is a joint work with Giovanni Mastrobuoni which focuses on prisoners and peer effects in prison. Studies that estimate criminal peer effects need to define the reference group. Researchers usually use the amount of time inmates overlap in prison, sometimes in combination with nationality to define such groups. Yet, there is often little discussion about such assumptions, which could potentially have important effects on the estimates of peer effects. We show that the date of rearrest of inmates who spend time together in prison signals with some error co-offending, and can thus be used to measure reference groups. Exploiting recidivism data on inmates released after a mass pardon with a simple econometric model which adjusts the estimates for the misclassification errors, we document homophily in peer group formation with regards to age, nationality, and degrees of deterrence. There is no evidence of homophily with respect to education and employment status. Chapter 2 evaluates a policy in the English county of Essex that aims to reduce domestic abuse through informing high-risk suspects that they will be put under higher surveillance, hence increasing their probability of being caught in case of recidivism, and encouraging their victims to report. Using a Regression Discontinuity Design (RDD), it underlines that suspects that are targeted by the policy are more 9% more likely to be reported again for domestic abuse. Although increasing reporting is widely seen as essential to identify and protect victims, this paper shows that policies to increase reporting will deter crime only if they give rise to a legal response. Moreover, results highlight that increasing the reporting of events of that do not lead to criminal charges may create escalation and be more detrimental to the victim in the long run. Chapter 3 investigates how migrants in the United Kingdom respond to natural disasters in their home countries. Combining a household panel survey of migrants in the United Kingdom and natural disasters data, this paper first shows, in the UK context, that male migrants are more likely to remit in the wake of natural disasters. Then, it underlines that to fund remittances male migrants also increase labour supply, decrease monthly savings and leisure. By showing how migrants in the UK adjust their economic behaviours in response to an unexpected shocks i.e. natural disasters, this paper demonstrates both how UK migrants may fund remittances and that they have the capacity to adjust their economic behaviours to increase remittances.