Government regulation of firms is associated with more negative externalities and unofficial activity across countries. I argue that this correlation mainly reflects causality going from concerns about market failures to demand for government intervention. Using trust in others as a proxy for such concerns, I show that differences in trust explain a great deal of variation in entry regulations. Then, controlling for trust in the regression of market failures on regulation, the latter is no longer associated with worse economic outcomes. The same result is confirmed when I exploit country population as an alternative source of variation in regulation.

Immigration enforcement has ambiguous implications for the crime rate of undocumented immigrants. On the one hand, expulsions reduce the pool of immigrants at risk of committing crimes, on the other they lower the opportunity cost of crime for those who are not expelled. We estimate the effect of expulsions on the crime rate of undocumented immigrants in Italy exploiting variation in enforcement toward immigrants of different nationality, due to the existence of bilateral agreements for the control of illegal migration. We find that stricter enforcement of migration policy reduces the crime rate of undocumented immigrants.

We study the educational choices of children of immigrants in a tracked school system. We first show that immigrants in Italy enroll disproportionately into vocational high schools, as opposed to technical and academically‐oriented ones, compared to natives of similar ability. The gap is greater for male students and it mirrors an analogous differential in grade retention. We then estimate the impact of a large‐scale, randomized intervention providing tutoring and career counseling to high‐ability immigrant students. Male treated students increase their probability of enrolling into the high track to the same level of natives, also closing the gap in grade retention. There are no significant effects on immigrant girls, who exhibit similar choices and performance as native ones in absence of the intervention. Increases in academic motivation and changes in teachers' recommendation regarding high school choice explain a sizable portion of the effect. Finally, we find positive spillovers on immigrant classmates of treated students, while there is no effect on native classmates.

We study how people change their behavior after being made aware of bias. Teachers in Italian schools give lower grades to immigrant students relative to natives of comparable ability. In two experiments, we reveal to teachers their own stereotypes, measured by an Implicit Association Test (IAT). In the first, we find that learning one’s IAT before assigning grades reduces the native-immigrant grade gap. In the second, IAT disclosure and generic debiasing have similar average effects, but there is heterogeneity: teachers with stronger negative stereotypes do not respond to generic debiasing but change their behavior when informed about their own IAT.