Disability has always been an important social welfare program in developed countries and Spain is not an exception. The program represented an average of 1.5 percent of the gross national product (GDP) in the 1995 to 2010 period, slightly below the European Union (EU) average of 2.2 percent of the GDP. The relative importance of the program with respect to the pension program has varied in the last twenty to twenty-fi ve years. In 1977 the ratio of disability to retirement benefi ts was 0.44, in 1985, by the end of the crisis of the early 1980s, it reached a maximum of 0.58 and it has slowly decreased since then. By 1997 the ratio was again down to 0.45. Figures from 1998 are difficult to compare as all disability pensions from age 65-plus were, since that year, converted to retirement benefi ts, but back-of-the-envelope calculations suggest that the ratio decreased in the early 2000s and increased from 2008 onward because of the recent crisis. 1

We analyze the employment effect of a law that provides for a 36 percent increase in the generosity of disability insurance (DI) for claimants who are, as a result of their lack of skills and of the labour market conditions they face, deemed unlikely to find a job. The selection process for treatment is therefore conditional on having a low probability of employment, making evaluation of its effect intrinsically difficult. We exploit the fact that the benefit increase is only available to individuals aged 55 or older, estimating its impact using a regression discontinuity approach. Our first results indicate a large drop in employment for disabled individuals who receive the increase in the benefit. Testing for the linearity of covariates around the eligibility age threshold reveals that the age at which individuals start claiming DI is not continuous: the benefit increase appears to accelerate the entry rate of individuals aged 55 or over. We obtain new estimates excluding this group of claimants, and find that the policy decreases the employment probability by 8 percent. We conclude that the observed DI generosity elasticity of 0.22 on labour market participation is mostly due to income effects since benefit receipt is not work contingent in the system studied.

One of the most important recent innovations in financial markets has been the development of credit derivative products that allow banks to more actively manage their credit portfolios than ever before. We analyse the effect that access to these markets has had on the lending behaviour of a sample of banks, using a sample of banks that have not accessed these markets as a control group. We find that banks that adopt advanced credit risk management techniques (proxied by the issuance of at least one collateralized loan obligation) experience a permanent increase in their target loan levels of around 50%. Partial adjustment to this target, however, means that the impact on actual loan levels is spread over several years. Our findings confirm the general efficiency-enhancing implications of new risk management techniques in a world with frictions suggested in the theoretical literature.

In this paper, we analyze a tax on sugar-sweetened beverages (SSB) that was introduced in Catalonia on May 1, 2017. The Bill established the requirement of a 100% passthrough of the tax to the final consumer and two levels of the tax: 0.08 euro/liter for products with 5-less than 8 grams of sugar and 0.12 euro/liter for products with 8 grams of sugar or more. Previous literature focusing on the impact of SSB taxes finds that pass-though is only complete in the long-term. Our paper provides new evidence that, when the tax increases prices substantially and immediately, the sales response is also significant. In particular, we estimate that the new SSB tax in Catalonia reduced SSB purchases by 7.7%. We document that part of this reduction is substituted by an increase in sales of zero/light drinks (substitution effect). Importantly, the reduction in purchases is stronger in areas with a higher incidence of obesity, in areas with higher household incomes and for products with higher sugar content.