Stone Centre for the Study of Wealth Inequality

Oct 2025 - Diversity and/or Inclusion? Evidence from Disability Quota and Inclusion Laws in Brazil - Thomaz Teodorovicz, CBS

How do quota laws and nondiscrimination mandates jointly shape organizational diversity and inclusion? This question is critical for policymakers, who often design quotas to expand representation without anticipating unintended consequences for workplace equality. We address it by studying the Brazilian labor market for people with disabilities (PwD), where a 2012 reform strengthened enforcement of a long-standing quota law and a 2015 Inclusion Law expanded protections against discrimination. Using rich matched employer–employee data, we show that stricter enforcement spurred significant increases in PwD hiring, particularly among previously noncompliant firms. Yet these gains in representation came with uneven effects on inclusion: job security for incumbent PwD improved, but relative wage gaps widened and career progression slowed, especially in firms that were not previously meeting their quota targets. Newly hired PwD also entered on less favorable terms, although evidence suggests it reflects an expansion of the labor pool to hire workers with more disadvantaged profiles. Our study advances understanding of diversity policies by demonstrating how sequential institutional changes can increase representation while simultaneously entrenching inequalities, underscoring the need to evaluate diversity and inclusion as interconnected but distinct policy goals.

Jul 2025 - INSEAD Stone Centre End-of-Year Workshop

We recently brought together postdocs and researchers for an end-of-year workshop to share early-stage ideas/ongoing projects, get feedback, and support each other’s work in progress. Here are some projects we discussed:

• Linking rising income gaps between generations across countries to long-term trends in education, growth, and demographics, to show that popular measures of (labour) earning gaps underestimate the phenomenon.
• Limitations to workers’ spatial mobility reduce access to productive jobs, misallocating labour across space and firms. The effectiveness of a policy depends on which firms are more sensitive to changes in local conditions.
• Building on research on the "motherhood penalty," this project explores whether first childbirth leads to a "double penalty" for mothers by examining both impact on employment and earnings and self-reported well-being for mothers and fathers.
• Using tax and infrastructure data to study how better road access affects trade
  patterns across firms.

Jun 2025 - The Role of Property Assessment Oversight in School Finance Inequality - Erin Troland, Federal Reserve Board

Erin Troland's research explores how inaccuracies in property tax assessments contribute to funding gaps between school districts — a vital but often overlooked issue in U.S. education finance. Leveraging a natural experiment and a difference-in-differences approach, Erin and her co-authors demonstrate that state oversight of property assessments can reduce funding inequality, increase local revenues, and improve equity across districts.

Apr 2025 - Daddy Issues: The Differential Impact of Childbirth on the Well-Being of Mothers and Fathers in the UK - Daisy Pollenne and Kourtney Koebel, INSEAD Stone Centre

Numerous studies in high-income countries have documented the existence of a "motherhood penalty", where the birth of a first child is associated with significant declines in maternal employment relative to fathers. A separate stream of research also provides evidence that women's mental health decreases with the transition to parenthood, although this is typically inferred through doctor visits and medical prescriptions. In this study, we investigate whether the birth of a first child results in a "double penalty" for mothers in terms of subjective, self-reported measures of well-being. Using data from the United Kingdom’s longitudinal household survey covering the period 1991 to 2024, our paper begins by replicating the motherhood penalty in employment and earnings. We then perform an event study analysis to examine the impact of first childbirth on mothers' and fathers' subjective well-being.
Contrary to the literature on labour market outcomes and objective health measures, our results suggest that, across various measures of well-being, men suffer relatively more after the birth of their first child than women. For instance, six years post-birth, there remains a statistically significant 10 percentage point gap in depression for fathers relative to mothers. We perform several heterogeneity analyses to better understand why men experience particularly large declines in well-being after becoming fathers.

Apr 2025 - Inter-generational Congestion and Spatial Labour Market Outcomes - Gabriele Guaitoli, INSEAD Stone Centre

Productive employers, spatially concentrated, provide both high wages and high wage growth (as return to experience). However, not all workers benefit from both these features in the same way: young workers mainly benefit from human capital accumulation, while older, experienced workers mainly seek high wages. We ask whether the age composition of productive locations matters for aggregate productivity. Using a Spatial OLG model, we find that the answer is yes, and the market allocation of young and old workers to productive locations is dynamically inefficient. The reason is what we call an "inter-generational congestion externality''. By competing for the same location, high-income old individuals crowd out young individuals, who under-accumulate human capital and reduce tomorrow's productivity. Moreover, "lucky'' young generations, those that managed to outcompete the old for urban space when young, always create ``unlucky'' generations by increasing tomorrow's inter-generational congestion. We then bring the model to the data, quantify this inefficiency, and provide policy recommendations. The optimal policy ensures that enough young individuals can accumulate human capital by temporarily moving to productive areas early in life.

Feb 2025 - Capping Profits for Efficiency - Gabriele Patete, University of Zurich

In light of recent concerns over firms’ market power, I study the impact of a novel policy – a cap on firms’ profit-to-cost ratios – on economic efficiency. I show that this tool, or the equivalent excess-profits tax, mitigates the misallocation of resources across firms due to heterogeneous markups by increasing production, particularly for high-markup firms. Unlike traditional firm-specific interventions that require firm-specific information, this policy reduces markups progressively despite being uniform for all firms. In a general equilibrium model with oligopolistic competition and CES demand, I show that the optimal cap replicates the effects of firm-specific price controls, restoring allocative efficiency. In a more general framework, I show that a mix of uniform tax rates – excess-profits, profit, and sales tax – can implement the social optimum. The quantitative estimates of the optimal mix prescribe a positive excess-profits tax, a negative sales tax, and a zero (or even negative) profit tax.

Feb 2025 - Raising Take-up of Welfare Programs: Evidence from a Large French Reform - Claire Leroy, Ecole Polytechnique

Imperfect take-up of social transfer programs has been a growing policy concern leading many governments to seek interventions that could encourage take-up. This paper examines the effect of two types of intervention: an increase in benefit generosity and an information shock. Using a nationwide reform of France’s in-work transfer scheme and exhaustive social security admin data, I provide the first at-scale causal evidence of the role of money and untargeted information provision in shaping take-up behaviors of welfare programs. Using a difference-in-differences strategy, I estimate small and non-significant take-up responses to changes in monetary incentives, with an implied take-up elasticity of less than 0.1. In contrast, and exploiting additional data sources, I show that the media coverage of the reform acted as an information supply shock, that improved awareness and knowledge of the program, causing an 18% permanent surge in take-up in the month following the reform. This specific type of information provision intervention was successful even among populations traditionally perceived as harder to reach (e.g. those with no past contact with the welfare administration). Finally, I develop a theoretical framework to estimate the welfare effects of these interventions and draw broader policy implications. The model highlights that, in the case of in-work transfers, broad information provision might be socially desirable not only for equity motives but also for efficiency ones by encouraging joint take-up and labor supply responses.

Feb 2025 - Modern Manufacturing Capital, Labor Demand, and Product Market Dynamics: Evidence from France - Simon Bunel, Paris School of Economics

This paper estimates the labor and product market effects of a fall in the cost of investments in modern manufacturing capital, including modern automation technologies. Causal effects are estimated with a shift-share IV design leveraging pre-determined supply linkages and productivity shocks. At both the firm and industry levels, we find that capital investments lead to higher labor demand, higher sales, higher exports, and lower labor shares, while wage inequality remains unchanged. The industry-level labor demand response is positive only in industries that are exposed to import competition, due to business-stealing across countries.

Feb 2025 - The College Melting Pot: Peers, Culture and Women’s Job Search - Federica Meluzzi, Ecole Polytechnique

Gender norms are widely recognized as key determinants of persistent gender gaps in the labor market, yet our understanding of their drivers remains limited. This paper addresses this gap by examining how cultural assimilation from college peers influences women’s early-career labor market decisions. I leverage idiosyncratic cross-cohort variation in peers’ geographical origins within Master’s programs, combined with unique administrative and survey data covering the universe of students in Italy. The main finding is that exposure to female classmates born in areas with a more egalitarian gender culture significantly increases women’s labor supply, primarily through increased uptake of fulltime jobs. Specifically, socialization with peers from areas with a one standard deviation higher female labor force participation offsets much of the negative impact of limited female role models in childhood, resulting in a 21-40% decrease in early-career gender gaps. Using original data on students’ beliefs that I collected, I find that decreases in women’s valuation of work hours flexibility, coupled with learning about the job offer distribution primarily drive the observed effects. Since peer effects are highly asymmetric, with benefits concentrated among women from less egalitarian backgrounds, education policies that promote diversity could play a crucial role in shifting gender norms and advancing gender equality in the labor market.

Dec 2024 - CEPR and INSEAD-UCL Stone Centre: Workshop on Inequality and the Role of Firms

The second workshop in this series brought together academic and business experts to explore critical issues such as employee wellbeing, diversity and gender balance, equal access to opportunities, inclusive customer experiences, and workforce training for the future.

The event, jointly hosted by the James M. and Cathleen D. Stone Centres at INSEAD and UCL, in partnership with the CEPR - Centre for Economic Policy Research, aims to foster meaningful dialogue and collaboration in addressing challenges of inequality and employee wellbeing. 

Nov 2024 - Wealthier and Healthier? The Impact of Wealth on Health Outcomes - Sehyun Hong, Paris School of Economics

This paper presents health-wealth gradients and the causal impact of wealth on health measures, using the novel administrative health exams data in Korea. Exploiting Korean national health exam data matched with income and wealth tax micro-files, I discover that health-wealth gradients vary by gender and health condition in prime age population. Morbidity-wealth gradients are bigger among women than men, but mortality-wealth gradient exhibits the opposite. Besides, health-wealth gradients are flattening by age, exclusively for women. Using the inherited wealth as an exogenous wealth shock, I find no significant causal effect of wealth on health measures - mortality, onset of health conditions, and progress of diseases. It implies that steep health-wealth gradients perhaps are the results of wealth gaps between heathy and unhealthy people.

Jul 2023 - Joint CEPR/INSEAD and University College London Stone Centres Workshop on Inequality and the Role of Firms

A joint INSEAD and University College London (UCL) Stone Centres workshop was held in Paris with a focus on understanding issues related to inequality within firms. The workshop brought together leading academics and representatives of major firms including Mars, AXA, Caixabank, Decathlon, Ikea, and Costco. 

Topics covered included firm policies to upskill workers in a digital age, corporate social responsibility and worker motivation, family-friendly policies in firms, and evidence on profit sharing schemes, wages, and worker productivity. The workshop marks the launch of the CEPR Research Policy Network on Firms and Inequality, and we are planning for similar events in the future.

Jan 2023 - Achieving the Goal of Universal Health Coverage by 2030: Successes and Challenges from Emerging Mrarket Countries

A panel discussion on the topic of universal health coverage at the SDG Tent in Davos focused was on successes and challenges of achieving universal health by 2030 in emerging market countries, and speakers included senior experts from government and ministries of health from Indonesia, India, and Kenya along with a senior executive from the sustainability division at Philips.