This paper estimates the causal effect of the wage on the recruitment rate at the establishment level. During the 1990s … schools with severe recruitment problems in the past and located in one specific region. The empirical approach exploits … for teachers. In a difference-in-differences framework, I find that the wage premium increased the recruitment rate by 6 …

the findings can be related to an incumbency externality effect and to the theory of voter preferences for divided …

externalities appear along the lifecycle. In a simple model, we show that it may be efficient to subsidize innovative firms in their … early stages or to protect mature firms from competition to appropriate these externalities. However, non …-benevolent politicians may not choose efficient policies. Real-world examples indicate that politicians tend to concentrate on externalities …