Postdoc grants for three young researchers

The Danish Council for Independent Research | Social Sciences has awarded postdoc grants of more than 5.2 million to three young researchers from the Department of Economics and Business.

PhD student Sashka Dimova and research assistant Niels Strange Hansen have bright and exciting futures ahead of them in their respective research fields. The same goes for Ritwik Banerjee, who recently earned his PhD from the department.

The three researchers are working on three very diverse projects: the well-being of children and how children are influenced by their parents’ unemployment; how general financial conditions affect the performance of mutual funds; as well as discrimination and social exclusion in developing countries. What the researchers have in common, however, is that all three of them have just been awarded postdoc grants by the Danish Council for Independent Research | Social Sciences: one grant of DKK 1.6 million and two grants of 1.8 DKK million.

Descriptions of the research projects:

Project title: Parental job loss and child well-being. Causal inference and risk mechanisms
Grant recipient: Sashka Dimova
Institution: Aarhus University
Amount granted: DKK 1.8 million

Project description: The main goal of the project is to study the detrimental consequences of parental unemployment on the health status of children in the given household as well as their schooling outcomes. The project also seeks to uncover if and how much active labour market policies aimed at unemployed parents might do for a child’s health and learning outcomes. Various sources of exogenous variation in unemployment are being used to identify the impacts of unemployment and active labour market policies, including firm closures and variation induced by random experiments. The research project can open new paths in our understanding of intergenerational mobility and contribute to the literature on factors that improve children’s resilience to adverse events. Moreover, the work can contribute to a literature that can guide policymakers in understanding the full long-term benefits of interventions for the unemployed and their families.

Project title: Forecasting Mutual Fund Performance: Time-Varying Skills and Market Conditions
Grant recipient: Niels Strange Hansen
Institution: Aarhus University
Amount granted: DKK 1.65 million

Project description: Mutual funds play a key role in the world’s financial markets, and they are very important for both private and professional investors. The purpose of this research project is to understand and be able to forecast mutual fund performance and the mutual funds’ ability to generate high returns. A particular point of focus is to understand how changes in the general financial conditions can impact mutual fund performance. There is an extensive amount of literature, primarily articles, that try to model mutual fund performance. This research project sets out to develop a new and general model, which merges all existing strands of the literature. The research is based on a unique set of data containing returns and actual stock holdings for more than 3,000 mutual funds. Together with this unique dataset, the new model is employed to achieve an understanding of and to forecast future mutual fund performance. This is particularly interesting for investors, who will benefit greatly from being able to come up with qualified predictions of the performance of mutual funds in different states of the economy, for instance in financial crises.

Project title: Behavioral Antecedents of Caste-Based Exclusion and Discrimination

Grant recipient: Ritwik Banerjee
Institution: Aarhus University
Amount granted: DKK 1.8 million

Project description: In many developing countries all over the world, social identities are a cause for exclusion and discrimination. Often, these social identities are grounded in ethnic differences, for instance in Africa; other times they follow from sectarian differences, which is evident in the Islamic countries between the Sunni and Shia Muslims; and at other times they arise due to the logics of a caste system, as is the case in India. This project aims to understand the behavioural make-up of such identity-driven social exclusion and discrimination in the context of caste in India, where deep-rooted, caste-induced social segmentation has a long history. In order to examine this I will apply tools derived from behavioural economics. Caste is an age-old system of rigid, hierarchical social and economic stratification among the Hindus in India. It is perpetuated by endogamous occupational segregation and has led to complete exclusion of certain groups of low caste denominations from achieving equal opportunities. In this project, the overarching research question is: what are the behavioural antecedents of caste-based social segmentation and discrimination in India? By precisely locating the psychological responses during people’s interaction with those of the “other” caste, I aim to examine mechanisms through which traditional instruments of empowerment like affirmative action work and I will propose novel policy interventions for diminishing discriminatory biases.