Abstract
					We document that states that experienced website glitches in the ACA's first year faced higher average costs that persisted into future years. These dynamics are inconsistent with the standard strategic-pricing model, which requires non-localized common knowledge about market conditions, but are consistent with price-taking. Initial conditions can have a permanent effect—including convergence to a Pareto-dominated, stable equilibrium—under conditions that we show are plausible in this setting. Changing the fine from a fixed amount to a fraction of equilibrium prices increases the likelihood of reaching a Pareto-efficient equilibrium without increasing the equilibrium fine collected.
Abstract
					Using a natural experiment, we show that temporary place-based subsidies generate persistent effects on economic density. The spatial regression discontinuity design controls for continuous local agglomeration externalities, so we attribute an important role to capital formation in explaining persistent spatial patterns of economic activity. This persistence is driven by higher local public 
investment levels, which local governments could maintain after the end of the program because of a persistently higher tax base. We also find evidence for significant local relocation of economic 
activity, which raises doubts that the net effect of the policy is positive. Finally, we show that transfers have capitalized in land rents such that pretreatment land owners have benefited from the program.
Abstract
					It is often asserted that consumers are poorly informed about and inattentive to fuel economy, causing them to buy low-fuel economy vehicles despite their own best interest. This paper presents evidence on this assertion through two experiments providing fuel economy information to new vehicle shoppers. Results show zero statistical or economic effect on average fuel economy of vehicles purchased. In the context of a simple optimal policy model, the estimates suggest that current and proposed US fuel economy standards are significantly more stringent than needed to address the classes of imperfect information and inattention addressed by our interventions.
Abstract
					This paper evaluates the incidence of a large cut in value-added taxes (VATs) for French sit-down restaurants in 2009. In contrast to previous studies, which only focus on the price effects of VAT reforms, we estimate the effects of the VAT cut on four groups: workers, firm owners, consumers, and suppliers of material goods. Using a difference-in-differences strategy on firm-level data, we find that: firm owners pocketed more than 55 percent of the VAT cut; consumers, sellers of material goods, and employees shared the remaining windfall with consumers benefiting the least; and the employment effects were limited.
Abstract
					We examine the long-term impacts of California's state-based financial aid by tracking educational and labor force outcomes for up to 14 years after high school graduation. We identify program impacts by exploiting variation in eligibility rules using GPA and family income cutoffs that are ex ante unknown to applicants. Aid eligibility increases undergraduate and graduate degree completion, and for some subgroups, raises longer-run annual earnings and the likelihood that young adults reside in California. These findings suggest that the net cost of financial aid programs may frequently be overstated, though our results are too imprecise to provide exact cost-benefit estimates.
Abstract
					We study the direct and spillover effects of state requirements that middle school youths obtain a tetanus, diphtheria, and pertussis (Tdap) booster prior to middle school entry. These mandates significantly increased Tdap vaccine take-up and reduced pertussis (whooping cough) incidence by about 32 percent. We also document cross-vaccine spillovers: the mandates significantly increased adolescent vaccination rates for meningococcal disease and human papillomavirus (HPV)—which is responsible for 98 percent of cervical cancers—by 8–34 percent, with particularly large effects for children from low SES households. We find important roles for both parents and providers in generating these spillovers.
Abstract
					This paper proposes a method for aggregating prices when retailers use periodic sales to price-discriminate amongst heterogeneous customers. In the motivating model, loyal customers buy one brand and do not strategically time purchases, while Bargain Hunters always pay the lowest price available, the "best price." In the model, the best price is part of an exact price index. Accounting for the best price also substantially improves the empirical match between conventional price aggregation strategies and actual prices paid by consumers. The methodology improves inflation measurement while imposing little burden on the data-collection agency.
Abstract
					This paper investigates whether judge political affiliation contributes to racial and gender disparities in sentencing using data on over 500,000 federal defendants linked to sentencing judge. Exploiting random case assignment, we find that Republican-appointed judges sentence black defendants to 3.0 more months than similar nonblacks and female defendants to 2.0 fewer months than similar males compared to Democratic-appointed judges, 65 percent of the baseline racial sentence gap and 17 percent of the baseline gender sentence gap, respectively. These differences cannot be explained by other judge characteristics and grow substantially larger when judges are granted more discretion.
Abstract
					There is considerable controversy about the causes of regional variations in health care expenditures. Using vignettes from patient and physician surveys linked to fee-for-service Medicare expenditures, this study asks whether patient demand-side factors or physician supply-side factors explain these variations. The results indicate that patient demand is relatively unimportant in explaining variations. Physician organizational factors matter, but the most important factor is physician beliefs about treatment. In Medicare, we estimate that 35 percent of spending for end-of-life care and 12 percent of spending for heart attack patients (and for all enrollees) is associated with physician beliefs unsupported by clinical evidence.
Abstract
					There is limited empirical evidence about the impact of for-profit health insurers on various outcomes. I study the effects of conversions to for-profit status by Blue Cross and Blue Shield (BCBS) affiliates in 11 states, spanning 28 geographic markets. I find both the BCBS affiliate and its rivals increased premiums following conversions in markets where the converting affiliate had substantial market share. Medicaid enrollment rates also increased in these markets, a pattern consistent with "crowd in" of families who were formerly privately insured. The results suggest for-profit insurers are likelier than not-for-profit insurers to exercise market power when they possess it.
Abstract
					We exploit a 2008 UK policy reform that increased the tax incentives for R&D in medium-sized enterprises relative to large ones, to overcome the endogeneity of exposure to such tax credits. We estimate a difference-in-difference design on the universe of corporation tax filings in the United Kingdom, combined with other datasets. We find a positive and significant impact of tax credits for R&D, implying a user-cost elasticity estimate of around −1.6. This magnitude implies around $1 in additional private R&D spending per dollar foregone in tax revenue.
Abstract
					This paper estimates the impact of public good spending on voting behavior in the United States, using a quasi-experimental design and the distribution of American Recovery and Reinvestment Act (ARRA) road projects in New Jersey. I find an approximate 1.5 percentage point increase in Democratic Party presidential vote share in areas close to highway and bridge expenditures. I consider two alternative mechanisms: one, a salience mechanism whereby spending and associated "funded-by" signage affect political preferences; the other, a possible political multiplier effect whereby stimulus spending improves local economic outcomes, generating incumbent votes. Evidence is inconsistent with the later explanation.
Abstract
					Public universities typically charge much higher tuition to nonresidents. We first investigate the welfare implications of this tuition gap in a simple model. While the social planner does not distinguish between residents and nonresidents, state governments set higher tuition for nonresidents. The welfare gains from reducing the tuition gap can be characterized by a sufficient statistic relating out-of-state enrollment to the tuition gap. We estimate this sufficient statistic via a border discontinuity design using data on the geographic distribution of students by institution.
Abstract
					The marginal interest rate is the price at which a household can access additional liquidity. Consumption theory posits that variation in marginal interest rates across consumers predicts differences in the propensity to spend a stimulus payment. This hypothesis is tested in the context of a Danish 2009 stimulus policy that transformed illiquid pension wealth into liquid wealth. Marginal interest rates are constructed from administrative records with account level information and merged with survey data measuring the spending response to the stimulus policy. The data reveal substantial variation in marginal interest rates across consumers, and these interest rates predict spending responses.
Abstract
					We develop a theory of cross-border income shifting in response to subnational personal taxation in a federation and examine its implications for the excess burden of personal taxes. We show how a properly chosen federal tax rate can offset the fiscal externality between states and facilitate decentralization, even in a heterogeneous federation where unitary taxation is suboptimal. Optimal taxes depend on the elasticities of national tax avoidance and of cross-state tax base shifting. We estimate these elasticities around a tax decentralization reform in Canada, finding both to be empirically relevant. We discuss the implications for optimal federalism.
Abstract
					A geographic cross-sectional fiscal spending multiplier measures the effect of an increase in spending in one region of a monetary union. Empirical studies of such multipliers have proliferated. I review this research and what the evidence implies for national multipliers. Based on an updated analysis of the ARRA and a survey of empirical studies, my preferred point estimate for a cross-sectional multiplier is 1.8. The paper also discusses conditions under which the cross-sectional multiplier provides a rough lower bound for the national, no-monetary-policy-response multiplier. Putting these elements together, the cross-sectional evidence suggests a national no-monetary-policy-response multiplier of 1.7 or above.
Abstract
					We estimate the effects of receiving additional schooling before age five on cognitive and noncognitive outcomes, exploiting unique school entry rules in England that cause variation in the age at school entry and the effective length of the first school year, and combining survey data with administrative school records up to six years after exposure. We find significant effects on both cognitive and noncognitive outcomes at ages five and seven, particularly so for boys with a disadvantaged parental background. At age 11, effects on cognitive outcomes have disappeared, while there is still evidence for effects on noncognitive outcomes.
Abstract
					We study insurers' use of prescription drug formularies to screen consumers in the ACA Health Insurance exchanges. We begin by showing that exchange risk adjustment and reinsurance succeed in neutralizing selection incentives for most, but not all, consumer types. A minority of consumers, identifiable by demand for particular classes of prescription drugs, are predictably unprofitable. We then show that contract features relating to these drugs are distorted in a manner consistent with multidimensional screening. The empirical findings support a long theoretical literature examining how insurance contracts offered in equilibrium can fail to optimally trade off risk protection and moral hazard.
Abstract
					We provide the first experimental evidence on the effect of student loans on educational attainment. Loan amounts listed in financial aid award letters ("offers") do not alter students' choice sets but significantly affect borrowing. Students randomly receiving a nonzero offer were 40 percent more likely to borrow than those who received a $0 offer. Per additional borrower, loans increased by $4,000, GPA and completed credits increased by 30 percent, and transfers to four-year public colleges increased by 11 percentage points. Cost-benefit and theoretical analyses suggest nonzero offers enhance welfare, yet over five million students are not currently offered loans.
Abstract
					Data linkage studies often document, but do not remedy, severe survey errors. To improve survey estimates despite restricted linked data access, this paper develops a convenient and general estimation method that combines public use data with conditional distribution parameters estimated from linked data. Analyses using linked SNAP data show that this method sharply improves estimates and consistently outperforms corrections that mainly rely on survey data. Yet, some univariate corrections perform well when linked data do not exist. For SNAP, extrapolating from linked data across time and geography still improves upon estimates using survey data only, even after survey-based corrections.
Abstract
					This paper explores whether home buyers are attentive to energy costs. The cost-effectiveness of market-based pollution policies crucially depends on whether consumers are attentive to energy costs when purchasing energy-using durables. I exploit energy-cost variation from fuel-price changes in Massachusetts where there is significant overlap in the geographic and age distributions of oil-heated and gas-heated homes. The results strongly reject that home buyers are unresponsive to energy costs under a wide range of consumption and discount-rate assumptions. Furthermore, my preferred specification is consistent with full capitalization of fuel expenditures at discount rates similar to mortgage interest rates.
Abstract
					The identification of strategic interactions among local governments is typically plagued by endogeneity problems. I exploit the fact that local jurisdictions located close to a state border have some neighbors in another state and instrument the tax rate of neighbor jurisdictions with the state-level tax rate of the neighboring state. I use this instrument to identify strategic personal income tax setting by local jurisdictions in Switzerland and find that tax rates are strategic substitutes. I then develop a residence-based personal income tax competition model and show that tax rates are strategic substitutes if the elasticity of the marginal utility of the public good with respect to the tax rate is above one. This is notably the case in the presence of economies of scale in the public good provision.
Abstract
					In response to high-profile cases of police misconduct, reformers are calling for greater use of civilian allegations in identifying potential problem officers. This paper applies an Empirical Bayes framework to data on civilian allegations and civil rights litigation in Chicago to assess the predictive value of civilian allegations for serious future misconduct. We find a strong relationship between allegations and future civil rights litigation, especially for the very worst officers. The worst 1 percent of officers, as measured by civilian allegations, generate almost 5 times the number of payouts and over 4 times the total damage payouts in civil rights litigation. These findings suggest that intervention efforts could be fruitfully concentrated among a relatively small group.
Abstract
					Most countries reduce disability insurance (DI ) benefits for beneficiaries earning above a specified threshold. Such an earnings threshold generates a discontinuous increase in tax liability—a notch—and creates an incentive to keep earnings below the threshold. Exploiting such a notch in Austria, we provide transparent and credible identification of the effect of financial incentives on DI beneficiaries' earnings. Using rich administrative data, we document large and sharp bunching at the earnings threshold. However, the elasticity driving these responses is small. Our estimate suggests that relaxing the earnings threshold reduces fiscal cost only if program entry is very inelastic.
Abstract
					I estimate the effect of access to food stamps on criminal recidivism. In 1996, a federal welfare reform imposed a lifetime ban from food stamps on convicted drug felons. Florida modified this ban, restricting it to drug traffickers who commit their offense on or after August 23, 1996. I exploit this sharp cutoff in a regression discontinuity design and find that the ban increases recidivism among drug traffickers. The increase is driven by financially motivated crimes, suggesting that the cut in benefits causes ex-convicts to return to crime to make up for the lost transfer income.
Abstract
					Past research documents the persistence of positive impacts of early life interventions on noncognitive skills. We test the symmetry of this finding by studying the persistence of a sizeable negative shock to noncognitive outcomes arising with the introduction of universal child care in Quebec. We find that the negative effects on noncognitive outcomes persisted to school ages, and also that cohorts with increased child care access had worse health, lower life satisfaction, and higher crime rates later in life. Our results reinforce previous evidence of the central role of the early childhood environment for long-run success.
Abstract
					This paper documents significantly steeper declines in nondurable expenditures at older ages in the United Kingdom compared to the United States, in spite of income paths being similar. Several possible causes are explored, including different employment paths, housing ownership and expenses, levels and paths of health status, number of household members, and out-of-pocket medical expenditures. Among all the potential explanations considered, those relating to health care—differences in levels and age paths in medical expenses and medical expenditure risk—can fully account for the steeper declines in nondurable consumption in the United Kingdom compared to the United States.
Abstract
					The majority of firms in developing countries are informal, yet even among registered firms, tax filing rates are low. We argue that non-filing of taxes among registered firms constitutes an important intermediate form of informality, which can be tackled cost-effectively. Using a randomized experiment in Costa Rica, we show that credible enforcement emails increased the tax payment rate (amount) by 3.4 p.p. (US$15) among previously non-filing firms. Emails that highlight third-party reports of a firm's transactions further increased compliance. The effect persisted over two years, and treated firms became more likely to report transactions with other firms, facilitating future tax enforcement.
Abstract
					The welfare associated with public insurance is often difficult to quantify because the demand for coverage is unobserved and thus cannot be used to analyze welfare. However, in many settings, individuals can purchase private insurance to supplement public coverage. This paper outlines an approach to use data and variation from private complementary insurance to quantify welfare associated with counterfactuals related to compulsory public insurance. We then apply this approach using administrative data on disability insurance. Our findings suggest that public disability insurance generates substantial surplus for the sample population, and there may be gains to increasing the generosity of coverage.
Abstract
					Existing evidence from US middle class households shows that their MPCs out of tax rebates greatly exceed the PIH's prediction and are weakly related to their liquid assets. The standard precautionary-saving model predicts the first fact but counterfactually requires MPCs to decrease with liquid wealth. Evidence from the Survey of Consumer Finances indicates widespread saving in anticipation of major expenditures like home purchases and college education. Adding such savings to the standard precautionary-saving model allows it to generate realistic MPCs for households with liquid wealth: the approaching expenditure simultaneously motivates asset accumulation and raises MPCs by shortening the effective planning horizon.
Abstract
					We analyze a policy that substantially expanded the supply of primary care physicians in Brazil. The program increased doctor visits across all age groups and led to greater utilization of doctors for prenatal care. However, these physicians replaced nurse visits for prenatal care without increasing the overall number of visits women receive. We find no evidence of gains in widely used metrics of infant health, including birth weight, gestation, and infant mortality. Together, these findings provide suggestive evidence that physicians and nurses may be good substitutes in the production function of infant health.
Abstract
					We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Health System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients—active duty or not—who receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending by 5 percent with no measurable negative effect on patient outcomes.
Abstract
					In a Honduran field experiment, sequences of cash transfers to poor households varied in amount of the largest (peak) and last (end) transfers. Larger peak-end transfers increased voter turnout and the incumbent party's vote share in the 2013 presidential election, independently of cumulative transfers. A plausible explanation is that voters succumbed to a common cognitive bias by applying peak-end heuristics. Another is that voters deliberately used peak-end transfers to update beliefs about the incumbent party. In either case, the results provide experimental evidence on the classic non-experimental finding that voters are especially sensitive to recent economic activity.
Abstract
					China initiated a major reform for capital taxation in 2004. Completed in 2009, it introduced permanent tax incentives for firms' investment in fixed assets. We explore a unique firm-level dataset from years 2005–2012 and utilize a quasi-experimental design to test the impacts of the reform on firms' investment and productivity. We find that, on average, the reform raised investment and productivity of the treated firms relative to the control firms by 38.4 percent and 8.9 percent, respectively. We also show that the positive effects tend to be strengthened for firms with financial constraints.
Abstract
					We analyze how exposure to teacher collective bargaining affects long-run outcomes for students, exploiting the timing of state duty-to-bargain law passage in a cross-cohort difference-in-difference framework. Among men, exposure to a duty-to-bargain law in the first 10 years after passage depresses annual earnings by $2,134 (3.93 percent), decreases weekly hours worked by 0.42, and reduces employment and labor force participation. The earnings estimate implies that current duty-to-bargain laws reduce earnings by $213.8 billion annually. Effects grow with time since law passage, are largest among nonwhites, and are not evident for women. Duty-to-bargain laws reduce male noncognitive skills, supporting the labor market findings.
Abstract
					Combining rich firm and administrative data, this paper examines the incidence and effectiveness of a prominent place-based policy in China: special economic zones. Establishing zones is found to have had a positive effect on capital investment, employment, output, productivity, and wages, and to have increased the number of firms in the designated areas. Net entry plays a larger role in generating those effects than incumbents. The special zone program's net benefits over three years are estimated to amount to about US$15.62 billion. Capital-intensive industries benefit more than labor-intensive ones from the zone programs.
Abstract
					Using UK corporation tax returns, we provide evidence on the effects of accelerated depreciation allowances on investment, exploiting exogenous changes in the qualifying thresholds for first-year depreciation allowances (FYAs) in 2004. The investment rate of qualifying companies increased by 2.1–2.5 percentage points relative to those that did not qualify. We exploit variation in the timing of tax payments to show that this effect is primarily due to the change in the cost of capital, rather than a relaxation of financial constraints. Discontinuity at notches in the cost of capital at the qualifying thresholds does not affect our results.
Abstract
					Individuals' medical spending has both necessary and discretionary components, which are not, however, separately observable. This paper studies ways to improve upon existing public health insurance policies by using a framework where both the discretionary and necessary components of medical spending are explicitly modeled. First, using a simple theoretical framework, the paper shows that the key to reducing discretionary medical spending is to introduce a trade-off between nonmedical and medical consumption. Next, using a rich quantitative life-cycle model, the paper shows that this trade-off can be successfully implemented by introducing an option to substitute public health insurance with cash transfers.
Abstract
					In this paper, I estimate the number of additional transplants generated by kidney exchanges. To do this, I analyze substitution patterns between exchange transplants and other transplant outcomes. Exploiting variation in patients' exposure to exchange activity across time and place, I find that 64 percent of exchange transplants represent new living donor transplants. Using the same approach, I find that an increase in the probability of receiving an exchange transplant reduces the probability of graft failure and reduces time spent waiting for a kidney. Back-of-the-envelope calculations suggest that each exchange transplant increases social welfare by $300,000 to $700,000.
Abstract
					We compare the adult outcomes of cohorts who were differentially exposed to policy-induced changes in Head Start and K–12 spending, depending on place and year of birth. IV and sibling-difference estimates indicate that, for poor children, these policies both increased educational attainment and earnings, and reduced poverty and incarceration. The benefits of Head Start were larger when followed by access to better-funded schools, and increases in K–12 spending were more efficacious when preceded by Head Start exposure. The findings suggest dynamic complementarities, implying that early educational investments that are sustained may break the cycle of poverty.
Abstract
					I evaluate long-run academic impacts of specialized programming for high-achieving students by analyzing Advanced Work Class (AWC), an accelerated curriculum delivered in dedicated classrooms for fourth through sixth graders in Boston Public Schools. Fuzzy regression discontinuity estimates show that AWC has positive yet imprecise impacts on test scores and improves longer-term outcomes, increasing high school graduation and college enrollment. These gains are driven by black and Latino students. An analysis of mechanisms highlights the importance of staying "on track" throughout high school, with little evidence that AWC gains result from peer effects.
Abstract
					We study the ways in which unemployment insurance (UI) benefits interact with other elements of the social safety net around job losses. We exploit a cutoff for UI eligibility, based on a workers' highest quarterly earnings in the past year, to generate quasi-experimental variation in UI receipt. We find that UI receipt cuts welfare (TANF) receipt by half among low-earning UI applicants but has no impact on SNAP or Medicaid usage. However, because welfare participation is low in this population, overall crowdout is small. In the quarter following layoff, UI increases total income by 55 percent (including labor earnings and transfers).
Abstract
					Integrated assessment models (IAMs) are economists' primary tool for analyzing the optimal carbon tax. Damage functions, which link temperature to economic impacts, have come under fire because of their assumptions that may be incorrect in significant but a priori unknowable ways. Here I develop recursive IAM frameworks to model uncertainty, learning, and concern for misspecification about damages. I decompose the carbon tax into channels capturing state uncertainty, insurance motives, and precautionary saving. Damage learning improves ex ante welfare by 750 billion USD. If damage functions are misspecified and omit the potential for catastrophic damages, robust control may be beneficial ex post.
Abstract
					We investigate the use of high-powered incentives for the Colombian military and show that this practice produced perverse side effects. Innocent civilians were killed and misrepresented as guerillas (a phenomenon known in Colombia as "false positives"). There were significantly more false positives during the period of high-powered incentives in municipalities with weaker judicial institutions and where a higher share of brigades were commanded by colonels, who have stronger career concerns than generals. In municipalities with a higher share of colonels, the high-powered incentives period also coincided with a worsening of local judicial institutions and no discernible improvement in overall security.
Abstract
					The rise of working mothers radically changed the US economy and the role of women in society. In one of the first studies of the 1975 introduction of the Earned Income Tax Credit, I find that this program increased maternal employment by 6 percent, representing 1 million mothers and an elasticity of 0.58. The EITC may help explain why the US has long had such a high fraction of working mothers despite few childcare subsidies or parental leave policies. I also find suggestive evidence that this influx of working mothers affected social attitudes and led to higher approval of working women.
Abstract
					We examine the link between the political participation of the young and fiscal policies in the United States. We generate exogenous variation in participation using the passage of preregistration laws, which allow the young to register before being eligible to vote. After documenting that preregistration promotes youth enfranchisement, we show that preregistration shifts state government spending toward higher education, the type of spending for which the young have the strongest preference. A 1 percent increase in youth voter turnout generates a 0.77 percent increase in higher education spending. The results collectively suggest political responsiveness to the needs of the newly enfranchised constituency.
Abstract
					Social interactions are widely understood to influence consumer decisions in many choice settings. This paper identifies causal peer effects in residential water conservation during the summer using variation from movers. We classify high-resolution remote sensing images to provide evidence that conversions of green landscaping to dry landscaping are a primary determinant of the reductions in water consumption. We also find suggestive evidence that without a price signal, peer effects are muted, indicating a possible complementarity between information and prices. These results inform water use policy in many areas of the world threatened by recurring drought conditions.
Abstract
					This paper conducts a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against financial risks associated with long-term care needs. Using exogenous variation in prices from the survey design and individual cost estimates, these stated-choice probabilities are used to predict market equilibrium for long-term care insurance. Our results are twofold. First, information frictions are pervasive. Second, measuring the welfare losses associated with frictions in a framework that also allows for selection, it is found that information frictions reduce equilibrium take-up and lead to large welfare losses, while selection plays little role.
Abstract
					One important motivation for creating cap-and-trade programs for carbon emissions is the expectation that they will stimulate much-needed low-carbon innovation. I construct a new panel of British firms to investigate this hypothesis, finding that the European carbon market has encouraged greater low-carbon patenting and R&D spending among regulated firms without necessarily driving short-term reductions in carbon intensity of output. This stands in contrast to past cap-and-trade programs, which have primarily spurred adoption of existing pollution control technologies, with little effect on innovation. I discuss how to reconcile these contrasting findings and implications for the future of carbon markets.
Abstract
					Numerous cities have enacted electronic monitoring programs at traffic intersections in an effort to reduce the high number of vehicle accidents. The rationale is that the higher expected fines for running a red light will induce drivers to stop and lead to fewer cross-road collisions. However, the cameras also incentivize drivers to accept a greater accident risk from stopping. We evaluate the termination of a monitoring program via a voter referendum using 12 years of geocoded police accident data. We find that the cameras changed the composition of accidents but no evidence of a reduction in total accidents or injuries.
Abstract
					This paper estimates the price elasticity of healthcare utilization in early childhood. We employ a regression discontinuity design by exploiting a subsidy that reduces patient cost-sharing for children under age 3 in Taiwan. Using longitudinal medical claims of over 410,000 children, we find a modest price elasticity of outpatient expenditure (e.g., −0.10 for regular outpatient care). Furthermore, increased cost-sharing at age 3 largely decreases the chance of visiting high-intensity healthcare providers (e.g., teaching hospitals) for minor illnesses. In contrast, children's utilization of inpatient care is price insensitive, providing a rationale for full inpatient care coverage to children.
Abstract
					Policymakers subsidizing health insurance often face uncertainty about future market prices. We study the implications of one policy response: linking subsidies to prices to target a given postsubsidy premium. We show that these price-linked subsidies weaken competition, raising prices for the government and/or consumers. However, price-linking also ties subsidies to health care cost shocks, which may be desirable. Evaluating this tradeoff empirically, using a model estimated with Massachusetts insurance exchange data, we find that price-linking increases prices 1–6 percent, and much more in less competitive markets. For cost uncertainty reasonable in a mature market, these losses outweigh the benefits of price-linking.
Abstract
					In 2008, the IRS initiated efforts to curb the use of offshore accounts to evade taxes. This paper uses administrative microdata to examine the impact of enforcement efforts on taxpayers' reporting of offshore accounts and income. We find that enforcement caused approximately 50,000 individuals to disclose offshore accounts with a combined value of about $100 billion. Most disclosures happened outside offshore voluntary disclosure programs by individuals who never admitted prior noncompliance. Disclosed accounts were concentrated in countries often characterized as tax havens. Enforcement-driven disclosures increased annual reported capital income by $2–$4 billion, corresponding to $0.6–$1.2 billion in additional tax revenue.
Abstract
					Occupational licensure may limit the interstate movement of workers because it adds to the cost of moving between states. We analyze the interstate migration of 22 licensed occupations, proxying for the difficulty of the regulations by comparing state-specific licensed occupations to those with national licensing exams. Our empirical strategy also uses individuals who move a long distance, removing the influence of occupation characteristics and self-selection of migration-averse individuals into licensed occupations. Our estimates show that occupational licensing reduces interstate migration, but the magnitude of the effect can only account for a small part of the overall decline in recent decades.
Abstract
					This paper documents how regulatory uncertainty may undermine public service when different levels of government share a mandate on public service provision. I examine the Brazilian water and sanitation sector, which presents a natural experiment of shared provision between state and municipal companies. Using a difference-in-differences framework, I study a legal reform that clarified the relationship between municipal and state providers and eliminated any takeover threat by state companies. I find that after the reform, municipal companies almost doubled their total system investment, leading to significant increases in system access and decreases in child mortality.
Abstract
					We explore bunching at US income tax kinks using a panel of 258 million tax returns from 1996 to 2014. We find bunching at seven kinks, with nearly all bunching occurring at kinks maximizing tax credits. In our sample period, the total number of bunchers increased at an 11 percent annualized growth rate, from 134,300 in 1996 to 866,600 in 2014. Approximately two-thirds of these bunchers locate at the unique point that maximizes refunds. Some taxpayers repeatedly bunch at this point, even in consecutive years when different tax kinks are refund maximizing.
Abstract
					This paper examines how consumers respond to nonlinear prices. Exploiting a natural experiment with electricity consumers in British Columbia, I find evidence that some households severely misunderstand nonlinear prices—incorrectly perceiving that the marginal price applies to all consumption, not simply the last unit. While small in number, the exaggerated responses by these households have a large effect in aggregate, masking an otherwise predominant response to average price. Largely unexplored in the literature, this type of misunderstanding has important economic, policy, and methodological implications beyond electricity markets. I estimate the welfare loss for these households to be the equivalent of 10 percent of annual electricity expenditure.
Abstract
					We study child care subsidies in a Mirrleesian optimal tax framework where parents choose both the quantity and quality of child care. Child care services not only enable parents to work, but also contribute to children's human capital. We examine the conditions under which child care expenditures should be encouraged or discouraged by the tax system under different assumptions regarding the available policy instruments. Using a quantitative model calibrated to the US economy, we illustrate the possibility that child care expenditures should be taxed rather than subsidized, and we discuss the merits of public provision schemes for child care.
Abstract
					This paper uses a quasi-experimental design to estimate the cost of filing taxes. Using US tax returns, I observe how taxpayers choose between itemizing deductions and claiming the standard deduction. Taxpayers forgo large tax savings to avoid compliance costs, which provides a revealed preference estimate of such costs. I show that costs increase with income, consistent with an opportunity cost of time explanation. These estimates suggest substantial costs of filing federal income taxes, significantly larger than previously estimated using surveys.
Abstract
					We examine the impact of a January 2012 enforcement action by the US Department of Transportation that required US air carriers and online travel agents to modify their web interfaces to incorporate all ticket taxes in up-front, advertised fares. We show that the more prominent display of tax-inclusive prices is associated with significant reductions in consumer tax incidence, demand, and ticket revenues along more heavily taxed itineraries. In particular, the fraction of unit taxes that airlines passed onto consumers fell by roughly 75 cents for every dollar of tax. These results present evidence of consumer inattention in a novel institutional setting featuring quasi-experimental variation in tax salience, economically significant tax amounts, and endogenous price responses.
Abstract
					Conditional cash transfers provide income and promote human capital investments. Yet evaluating their longitudinal impacts is hard, as most experimental evaluations treat control locations after a few years. We examine such impacts in Indonesia after six years, where the program rollout left the experiment largely intact. We find static effects on many targeted indicators: childbirth using trained professionals increased dramatically, and under-15 children not in school fell by half. We observe impacts requiring cumulative investments: stunting fell by 23 percent. While human capital accumulation increased, the transfers did not lead to transformative economic change for recipient households.
Abstract
					This paper uses UPC-level data to examine the relationship between excise taxes, retail prices, and consumer welfare in the distilled spirits market. We document a nominal rigidity in retail prices that arises because firms largely choose prices that end in 99 cents and change prices in whole-dollar increments. A correctly specified model, like an ordered logit, takes this discreteness into account when predicting the effects of alternative taxes. Explicitly accounting for price points substantially impacts estimates of tax incidence and the excess burden cost of tax revenue. Meaningful nonmonotonicities in these quantities expand the potential considerations in setting excise taxes.
Abstract
					In many developing countries, households can purchase limited quantities of goods at a fixed subsidized price through ration shops. This paper asks whether the characteristics of developing countries explain why governments use such systems. I find an equity-efficiency trade-off: an efficiency-maximizing government will never use ration shops, but a welfare-maximizing one might to redistribute and provide insurance. Welfare gains of ration shops will be highest for necessity goods and goods with high price risk. I calibrate the model for India and find that ration shops are welfare improving for three of the four goods sold through the system today.
Abstract
					This paper evaluates the Car Allowance Rebate System (CARS) by comparing the vehicle purchases and disposals of households with eligible "clunkers" to those of households with similar but ineligible vehicles. CARS caused roughly 500,000 purchases during the program period. The provision of liquidity, through a rebate usable as a down payment, was critical in generating this large response. Participation was rare among households that owned clunkers with outstanding loans, which required loan repayment. This decline in participation is attributed to households' preference for lower down payments and distinguished from the effects of income, other indebtedness, and the program subsidy.
Abstract
					Assessing the state of American entrepreneurship requires not simply counting the quantity but also the initial quality of new ventures. Combining comprehensive business registries and predictive analytics, we present estimates of entrepreneurial quantity and quality from 1988 to 2014. Rather than a secular pattern of declining business dynamism, our quality-adjusted measures follow a cyclical pattern sensitive to economic and capital market conditions. Consistent with the role of investment cycles as a driver of high-growth entrepreneurship, our results highlight the role of economic and institutional conditions as a driver of both initial entrepreneurial quality and the scaling of new ventures over time.
Abstract
					Using integrated assessment models, we calculate the economic value of the extraordinary decline in emissions from US power plants. Annual local and global air pollution damages fell from 245 to 133 billion USD over 2010–2017. Decomposition shows changes in emission rates and generation shares among coal and gas plants account for more of this decline than changes in renewable generation, electricity consumption, and damage valuations. Econometrically estimated marginal damages declined in the East from 8.6 to 6 cents per kWh. Marginal damages increased slightly in the West and Texas. These estimates indicate electric vehicles are now cleaner on average than gasoline vehicles.
Abstract
					Panel data on reported marginal propensity to consume in the 2010 and 2016 Italian Survey of Household Income and Wealth uncover a strong negative relationship between cash on hand and MPC. Even though the relationship is attenuated when using regression methods that control for unobserved heterogeneity, the amount of bias is moderate. MPC estimates are used to evaluate the effectiveness of revenue-neutral fiscal policies targeting different parts of the distribution of household resources.
Abstract
					Work often entails up-front effort costs in exchange for delayed benefits, and mounting evidence documents present bias over effort in the face of such delays. This paper studies the implications for the optimal income tax. Optimal tax rates are computed for present-biased workers who choose multiple dimensions of labor effort, some of which occur prior to compensation. Present bias reduces optimal tax rates, with a larger effect when the elasticity of taxable income is high. Optimal marginal tax rates may be negative at low incomes, providing an alternative, corrective rationale for work subsidies like the Earned Income Tax Credit.
Abstract
					Is compulsory licensing an effective antitrust remedy to increase innovation? To answer this question, we analyze the 1956 consent decree that settled an antitrust lawsuit against Bell, a vertically integrated monopolist charged with foreclosing the telecommunications equipment market. Bell was forced to license all its existing patents royalty-free, including those not related to telecommunications. We identify the effect of the consent decree on follow-on innovations building on Bell patents by using exactly matched non-Bell patents as control group. We show that the consent decree led to a lasting increase in innovation but only in markets outside the telecommunications sector.
Abstract
					This paper examines how subsistence farmers respond to extreme heat. Using microdata from Peruvian households, we find that high temperatures reduce agricultural productivity, increase area planted, and change crop mix. These findings are consistent with farmers using input adjustments as a short-term mechanism to attenuate the effect of extreme heat on output. This response seems to complement other coping strategies, such as selling livestock, but exacerbates the drop in yields, a standard measure of agricultural productivity. Using our estimates, we show that accounting for land adjustments is important to quantify damages associated with climate change.
Abstract
					Management matters for firms, but what practices are optimal in hierarchical government organizations? And can skilled managers identify them? A large-scale randomized trial conducted with the police of Rajasthan, India, tested four interventions recommended by senior police officers: limitations of transfers, rotation of duties and days off, increased community involvement, and on-duty training. Field experience motivated a fifth intervention: "decoy" visits by enumerators to register cases, incentivizing staff to improve service. Only training and decoy visits had robust impacts; others were poorly implemented and ineffective. Management reforms can improve policing, but even skilled leaders struggle to identify the optimal interventions.
Abstract
					We examine the impact of the introduction of paid maternity leave in Norway in 1977 on maternal health in the medium and long term. Using administrative data combined with survey data on the health of women around age 40, we find the reform improved a range of maternal health outcomes, including BMI, blood pressure, pain, and mental health. The reform also increased health-promoting behaviors, such as exercise and not smoking. The effects were larger for first-time and low-resource mothers and women who would have taken little unpaid leave in the absence of the reform.
Abstract
					I study team decisions among physician trainees. Exploiting a discontinuity in team roles across trainee tenure, I find evidence that teams alter decision-making, concentrating influence in the hands of senior trainees. I also demonstrate little convergence in variation of trainee effects despite intensive training. This general pattern of trainee effects on team decision-making exists in all types of decisions and settings that I examine. In analyses evaluating mechanisms behind this pattern, I find support for the idea that significant experiential learning occurs during training and that teams place more weight on judgments of senior trainees in order to aggregate information.
Abstract
					Can schools that boost student outcomes reproduce their success at new campuses? We study a policy reform that allowed effective charter schools in Boston, Massachusetts to replicate their school models at new locations. Estimates based on randomized admission lotteries show that replication charter schools generate large achievement gains on par with those produced by their parent campuses. The average effectiveness of Boston's charter middle school sector increased after the reform despite a doubling of charter market share. An exploration of mechanisms shows that Boston charter schools compress the distribution of teacher effectiveness and may reduce the returns to teacher experience, suggesting the highly standardized practices in place at charter schools may facilitate replicability.
Abstract
					Climate change not only impacts production and market consumption but also the relative scarcity of nonmarket goods, such as environmental amenities. We study fundamental drivers of the resulting relative price changes, their potential magnitude, and their implications for climate policy in Nordhaus's Dynamic Integrated Climate-Economy (DICE) model, thereby addressing one of its key criticisms. We propose plausible ranges for these relative prices changes based on best available evidence. Our central calibration reveals that accounting for relative prices is equivalent to decreasing pure time preference by 0.6 percentage points and leads to a more than 50 percent higher social cost of carbon.
Abstract
					This paper documents an increasing intergenerational income persistence in China since economic reforms were introduced in 1979. The intergenerational income elasticity increases from 0.390 for the 1970–1980 birth cohort to 0.442 for the 1981–1988 birth cohort; this increase is more evident among urban and coastal residents than rural and inland residents. We also explore how changes in intergenerational income persistence is correlated with market reforms, economic development, and policy changes.
Abstract
					Measuring the sensitivity of housing demand to mortgage rates and available leverage is challenging because there is generally no exogenous variation in these variables. This paper circumvents this issue by designing a strategic survey in which respondents report their willingness to pay (WTP) for a home under different financing scenarios. Relaxation of down payment constraints or an exogenous increase in nonhousing wealth has large effects on WTP, especially for poorer and more credit-constrained households. However, changing the mortgage rate has only moderate effects on WTP. These findings have implications for theoretical models of house price determination and for policy.
Abstract
					We study the long-run effects of Russia's anti-alcohol campaign, which dramatically altered the relative supply of hard and light alcohol in the late 1980s. We find that this policy shifted young 
men's long-run preferences from hard to light alcohol decades later, and we estimate the age at which consumers form their tastes. We show that the large beer market expansion in the late 
1990s had similar effects on young consumers' tastes, while older consumers' tastes remained largely unchanged. We then link these long-run changes in alcohol consumption patterns to 
changes in male mortality. The shift from hard to light alcohol reduced incidences of binge drinking substantially, leading to fewer alcohol-related deaths. We conclude that the resulting large 
cohort differences in current alcohol consumption shares explain a significant part of the recent decrease in male mortality. Simulations suggest that mortality will continue to decrease by 
another 23 percent over the next 20 years due to persistent changes in consumer tastes. Program impact evaluations that focus only on contemporaneous effects can therefore severely 
underestimate the total effect of such public policies that change preferences for goods.
Abstract
					Firms sometimes comply with externality-correcting policies by gaming the measure that determines policy. This harms buyers by eroding information, but it benefits them when cost savings are passed through into prices. We develop a model that highlights this tension and use it to analyze gaming of automobile carbon emission ratings in the EU. We document startling increases in gaming using novel data. We then analyze the effects of gaming in calibrated simulations. Over a wide range of parameters, we find that pass-through substantially outweighs information distortions; on net, buyers benefit from gaming, even when they are fooled by it.
Abstract
					Using a large, representative sample of credit and debit card transactions in Singapore, this paper studies the consumption response of individuals whose same-building neighbors experienced personal bankruptcy. The unique bankruptcy rules in Singapore suggest liquidity shocks drive personal bankruptcy decisions, leading to a substantial drop in consumption for the bankrupt. Peers' monthly card consumption decreases by 3.4 percent over the 1-year postbankruptcy period. There exists no consumption decrease among individuals in immediately adjacent buildings nor for consumers with diminished postevent social ties with the bankrupt. The findings imply a significant social multiplier effect of 2.8 times the original consumption shock.
Abstract
					How do governors' reelection motives affect policy experimentation? We develop a theoretical model of this situation, and then test the predictions in data on US state-level welfare reforms from 1978 to 2007. This period marked the most dramatic shift in social policy since the New Deal. Our findings indicate that governors with strong electoral support are less likely to experiment than governors with little support. Yet, governors who cannot be reelected actually experiment more than governors striving for reelection. These findings are robust to controlling for ideology, preferences for redistribution, the state legislature, and cross-state learning.
Abstract
					This paper examines the impact of unemployment insurance (UI ) on aggregate employment by exploiting cross-state variation in the maximum benefit duration during the Great Recession. Comparing adjacent counties located in neighboring states, there is no statistically significant impact of increasing UI generosity on aggregate employment. Point estimates are uniformly small in magnitude, and the most precise estimates rule out employment-to-population ratio reductions in excess of 0.35 percentage points from the UI extension. The results contrast with the negative effects implied by most micro-level labor supply studies and are consistent with both job rationing and aggregate demand channels.
Abstract
					We study the geographic incidence and efficiency of an income tax by estimating a spatial equilibrium model with heterogeneous workers. The US income tax shifts households out of high-productivity cities, leading to locational inefficiency of 0.25 percent of output. Removing spatial tax distortions increases inequality because more educated households are more mobile and own larger shares of land. Flattening the tax schedule, or introducing cost-of-living adjustments or local wage adjustments leads to efficiency gains but causes substantial increases in inequality. Differences in mobility and land ownership across skill groups create an equity-efficiency trade-off that is unique to spatial settings.
Abstract
					This article introduces a new dataset of official financing from China to 138 developing countries between 2000 and 2014. It investigates whether Chinese development finance affects economic growth in recipient countries. The results demonstrate that Chinese development finance boosts short-term economic growth. An additional project increases growth by between 0.41 and 1.49 percentage points 2 years after commitment, on average. While this study does not find that significant financial support from China impairs the overall effectiveness of aid from Western donors, aid from the United States tends to be more effective in countries that receive no substantial support from China.
Abstract
					This study examines grocery price differentials across neighborhoods in a large metropolitan area (the city of Jerusalem, Israel). Important variation in access to affordable grocery shopping is 
documented using CPI data on prices and neighborhood-level credit card expenditure data. Residents of peripheral, nonaffluent neighborhoods are charged some of the highest prices in the 
city and yet display a low tendency to shop outside their neighborhood. In contrast, residents of affluent, centrally located neighborhoods often benefit from lower grocery prices charged in 
their own neighborhood while also displaying a high propensity to shop at the hard discount grocers located in the city's commercial districts. The role of spatial frictions in shaping these 
patterns is studied within a structural model where households determine their shopping destination and retailers choose prices. The estimated model implies strong spatial segmentation in 
households' demand. Counterfactual analyses reveal that alleviating spatial frictions results in considerable benefits to the average resident of the peripheral neighborhoods. At the same time, 
it barely affects the equilibrium prices charged across the city, and so it does little to benefit households with limited mobility (e.g., the elderly).
Abstract
					The US criminal justice system is exceptionally punitive. We test whether racial heterogeneity is one cause, exploiting cross-jurisdiction variation in punishment severity in four Southern states. We estimate the causal effect of jurisdiction on arrest outcomes using a fixed effects model that incorporates extensive charge and defendant controls. We validate our estimates using defendants charged in multiple jurisdictions. Consistent with a model of ingroup bias in electorate preferences, the relationship between local severity and Black population share follows an inverted U-shape. Within states, defendants are 27–54 percent more likely to be incarcerated in "peak" heterogeneous jurisdictions than in homogeneous jurisdictions. We estimate that confinement rates and race-based confinement rate gaps would fall by 15 percent if all jurisdictions adopted the severity of homogeneous jurisdictions within their state.
Abstract
					We examine how transmission congestion alters the environmental benefits provided by renewable generation. Using hourly data from the Texas and midcontinent electricity markets, we find that relaxing transmission constraints between the wind-rich areas and the demand centers of the respective markets conservatively increases the nonmarket value of wind by 30 percent for Texas and 17 percent for midcontinent markets. Much of this increase in the nonmarket value arises from a redistribution in where air quality improvements occur—when transmission is not constrained, wind offsets much more pollution from fossil fuel units located near highly populated demand centers.
Abstract
					Using a major reform that scaled back the mortgage interest deduction for middle- and high-income households in Denmark, we study how tax subsidies affect housing decisions. We present four main findings. First, the mortgage deduction has a precisely estimated zero effect on homeownership for high- and middle-income households. Second, the mortgage deduction has a clear effect on housing demand at the intensive margin, inducing homeowners to buy larger and more expensive houses. Third, the deduction has sizeable effects on household financial decisions, inducing them to increase indebtedness. Finally, the reduction of the tax subsidy lowered equilibrium house prices.
Abstract
					During the Great Recession, national public school per-pupil spending fell by roughly 7 percent and persisted beyond the recovery. The impact of such large and sustained education funding cuts 
is not well understood. To examine this, first, we document that the recessionary drop in spending coincided with the end of decades-long national growth in both test scores and college-going. 
Next, we show that this stalled educational progress was particularly pronounced in states that experienced larger recessionary budget cuts for plausibly exogenous reasons. To isolate budget cuts 
that were unrelated to (i) other ill-effects of the recession or (ii) endogenous state policies, we use states' historical reliance on state-appropriated funds (which are more sensitive to the business 
cycle) to fund public schools interacted with the timing of the recession as instruments for reductions in school spending. Cohorts exposed to these spending cuts had lower test scores and lower 
college-going rates. The spending cuts led to larger test score gaps by income and race.
Abstract
					This paper estimates the long-term impact of growing up in better neighborhoods and attending better schools on educational attainment. First, I use a spatial regression-discontinuity design to estimate school effects. Second, I study students who move across neighborhoods in Montreal during childhood to estimate the causal effect of growing up in a better area (total exposure effects). I find large effects for both dimensions. Combining both research designs in a decomposition framework, and under key assumptions, I estimate that 50–70 percent of the benefits of moving to a better area on educational attainment are due to access to better schools.
Abstract
					We estimate the effect of the ACA's individual mandate on insurance coverage using regression discontinuity and regression kink designs with tax return data. We have four key results. First, the actual penalty paid per uninsured month is less than half the statutory amount. Second, nonetheless, we find visually clear and statistically significant responses to both extensive margin exposure to the mandate and to marginal increases in the mandate penalty. Third, we find substantial heterogeneity in who responds; men are especially responsive. Fourth, our estimates imply fairly small quantitative responses to the individual mandate, especially in the Health Insurance Exchanges.
Abstract
					This paper examines the impact of private prison contracting by exploiting staggered prison capacity shocks in Mississippi. Motivated by a model based on the typical private prison contract that pays a per diem for each occupied bed, the empirical analysis shows that private prison inmates serve 90 additional days. This is alternatively estimated as 4.8 percent of the average sentence. The delayed release erodes half of the cost savings offered by private contracting and is linked to the greater likelihood of conduct violations in private prisons. The additional days served do not lead to apparent changes in inmate recidivism.
Abstract
					This paper estimates the effects of exogenous changes in income and consumption taxes. The tax shocks are proxied with a narrative account of tax liability changes in the United Kingdom. Income tax cuts have large effects on GDP, private consumption, and investment. The effects of consumption tax cuts are modest and not statistically significant on GDP and its components. Shifting the burden of taxation from income to consumption is expansionary. Consistent with conventional public finance theories, these results indicate that it is crucial to distinguish between direct and indirect taxation when studying the transmission mechanism of fiscal policy.
Abstract
					Does tax code complexity alter corporate behavior? We investigate this question by studying the decision to claim refunds for tax losses. In a sample of 1.2 million observations from the population of corporate tax returns, only 37 percent of eligible firms claim their refund. A simple cost-benefit analysis of the tax loss choice cannot explain low take-up, motivating an exploration of how complexity alters this calculation. Research designs exploiting tax preparer switches, deaths, and relocations show that sophisticated preparers increase claim rates for small firms. Imperfect take-up has implications for measuring marginal tax rates and for the design of fiscal policy.
Abstract
					During the 2008 to 2012 period, the US Border Patrol enacted new sanctions on migrants apprehended while attempting to enter the United States illegally. Using 
administrative records on apprehensions of Mexican nationals that include fingerprint-based IDs and other details, we detect if an apprehended migrant is subject to 
penalties and if he is later reapprehended. Exploiting plausibly random variation in the rollout of sanctions, we estimate econometrically that exposure to penalties 
reduced the 18-month reapprehension rate for males by 4.6 to 6.1 percentage points off of a baseline rate of 24.2 percent. These magnitudes imply that sanctions can 
account for 28 to 44 percent of the observed decline in recidivism in apprehensions. Further results suggest that the drop in recidivism was associated with a reduction in 
attempted illegal entry.
Abstract
					Using a general labor supply model in which individuals choose how much to work conditional on productivities and preferences for consumption relative to leisure, we show that the mapping from earnings and hours worked to productivities and preferences can be expressed entirely in terms of reduced-form labor supply elasticities. We investigate the roles that productivities and preferences play in driving income inequality in the United States. Benchmark labor supply elasticity estimates from the literature imply that productivities drive most income inequality. Preferences become increasingly important relative to benchmark, with larger income effects or larger differences between earnings and hours-worked elasticities.
Abstract
					Compensation of most US public school teachers is rigid and solely based on seniority. This paper studies the effects of a reform that gave school districts in Wisconsin full autonomy to redesign teacher pay schemes. Following the reform some districts switched to flexible compensation. Using the expiration of preexisting collective bargaining agreements as a source of exogenous variation in the timing of changes in pay, I show that the introduction of flexible pay raised salaries of high-quality teachers, increased teacher quality (due to the arrival of high-quality teachers from other districts and increased effort), and improved student achievement.
Abstract
					We study the effects of consumption tax changes on prices and unit sales of durables utilizing micro-level product data. The results show that tax rate changes are fully shifted into prices. An anticipated tax rate change causes a temporary shift in unit sales shortly before implementation, which is more than offset by adjustments upon and after implementation. If the tax rate increases by 1 percentage point, unit sales rise by 2.5 percent on average in the last month before implementation. The permanent effect is a drop in sales by 2 percent below their original level, implying relatively strong intertemporal substitution effects.
Abstract
					We ask whether attitudes toward government play a causal role in the evasion of US personal income taxes. As turnover elections move voters in partisan counties into and out of alignment with the party of the president, we find with alignment (i) taxpayers report more easily evaded forms of income; (ii) suspect EITC claims decrease; and (iii) audits triggered and audits found to owe additional tax decrease. Coupled with evidence that alignment leads to more favorable views on taxation and spending, our results provide real world evidence that a positive outlook on government lowers tax evasion.
Abstract
					It is widely believed that the presence of a large informal sector increases the efficiency cost of social programs in developing countries. We evaluate such claims for the case 
of unemployment insurance (UI) by combining an optimal UI framework with comprehensive data from Brazil. Using quasi-experimental variation in potential UI duration, 
we find clear evidence for the usual moral hazard problem that UI reduces incentives to return to a formal job. Yet, the associated efficiency cost is lower than it is in the 
United States, and it is lower in labor markets with higher informality within Brazil. This is because formal reemployment rates are lower to begin with where informality is 
higher, so that a larger share of workers would draw UI benefits absent any moral hazard. In sum, efficiency concerns may actually become more relevant as an economy 
formalizes.
Abstract
					A central question in the analysis of fuel economy policy is whether consumers are myopic with regards to future fuel costs. We provide the first evidence on the consumer valuation of fuel economy from a natural experiment that provides exogenous variation in fuel economy ratings. We examine the short-run equilibrium effects of a restatement of fuel economy ratings that affected 1.6 million vehicles. Using the implied changes in willingness to pay, we find that consumers act myopically: consumers are indifferent between $1.00 in discounted fuel costs and $0.16–0.39 in the purchase price when discounting at 4 percent. This undervaluation persists under a wide range of assumptions.
Abstract
					While school choice may enhance competition, incentives for public schools to raise productivity may be muted if public education is imperfectly substitutable with alternatives. This paper estimates the aggregate effect of charter school expansion on education quality while accounting for the horizontal differentiation of charter programs. Our research design leverages variation following the removal of North Carolina's statewide cap to compare test score changes for students who lived near entering charters to those farther away. We find learning gains that are driven by public schools responding to increased competition from non-horizontally differentiated charter schools, even before those charters actually open.
Abstract
					We use detailed data from a large retail panel to study the effect of participation in the Supplemental Nutrition Assistance Program (SNAP) on the composition and nutrient content of foods purchased for at-home consumption. We find that the effect of SNAP participation is small relative to the cross-sectional variation in most of the outcomes we consider. Estimates from a model relating the composition of a household's food purchases to the household's current level of food spending imply that closing the gap in food spending between high- and low-SES households would not close the gap in summary measures of food healthfulness.
Abstract
					Electric vehicles have a unique potential to transform personal transportation. We analyze this transition with a dynamic model capturing falling costs of electric vehicles, decreasing pollution from electricity, and increasing vehicle substitutability. Our calibration to the US market shows a transition from gasoline vehicles is not optimal at current substitutability: a gasoline vehicle production ban would have large deadweight loss. At higher substitutability, a ban can reduce deadweight loss from vehicle mix and adoption timing inefficiencies. A cumulative gasoline vehicle production quota has smaller deadweight loss, and an electric vehicle purchase subsidy is more robust to regulator misperceptions about substitutability.
Abstract
					Leaded gasoline is still used globally for aviation and automotive racing. Exploiting regulatory exemptions and a novel quasi-experiment, we find that leaded gasoline use in racing increases ambient lead, elevated blood lead rates, and elderly mortality. The mortality estimates indicate that each gram of lead added to gasoline exceeds $1,100 in damages. Our setting allows us to rule out potential confounders, such as correlated pollutants or socioeconomic status. We provide the first causal estimates linking adult mortality to leaded gasoline, highlight the value of banning on-road leaded gasoline, and present policy-relevant cost estimates at the lowest ambient levels to date.
Abstract
					While a growing literature shows that women, relative to men, prefer greater investment in children, it is unclear whether empowering women produces better economic outcomes. Exploiting plausibly exogenous variation in US suffrage laws, we show that exposure to suffrage during childhood led to large increases in educational attainment for children from disadvantaged backgrounds, especially Blacks and Southern Whites. We also find that suffrage led to higher earnings alongside education gains, although not for Southern Blacks. Using newly digitized data, we show that education increases are primarily explained by suffrage-induced growth in education spending, although early-life health improvements may have also contributed.
Abstract
					Selective contracting is an increasingly popular tool for reducing health care costs, but any savings must be weighed against consumer surplus losses from restricted access. Recently, many prescription drug plans (PDPs) utilize preferred pharmacy networks to reduce drug prices. Our results suggest that Medicare Part D plans with preferred pharmacy networks pay lower retail drug prices, while subsidized enrollees' insensitivity to preferred pharmacy cost-sharing discounts reduces these savings. We then estimate pharmacy demand models to quantify the costs and benefits of preferred pharmacy networks, finding that the average enrollee benefits from preferred pharmacy contracting due to reduced out-of-pocket (OOP) costs at preferred pharmacies.
Abstract
					I present evidence on the relationship between broadband pricing and labor market outcomes for low-income individuals. Specifically, I estimate the effects of a Comcast service providing discounted broadband to qualifying low-income families. I use a triple differences strategy exploiting geographic variation in Comcast coverage, individual variation in eligibility, and temporal variation pre- and postlaunch. Local program availability increased employment rates and earnings of eligible individuals, driven by greater labor force participation and decreased probability of unemployment. Internet use increased substantially where the program was available.
Abstract
					If online transactions are tax free, increased online shopping may lower tax rates as jurisdictions seek to reduce tax avoidance; but, if online firms remit taxes, online sales may put upward pressure on tax rates because internet sales help enforce destination-based taxes. I find that higher internet penetration generally results in lower municipal tax rates but raises tax rates in some jurisdictions. The latter effect emerges in states where many online vendors remit taxes. A 1 standard deviation increase in internet penetration lowers local sales taxes in large municipalities by 0.15 percentage points, or 16 percent of the average rate.
Abstract
					How should developing countries tax corporate income? We study this question in Costa Rica, where firms face higher average tax rates on profits when revenues marginally increase. We combine discontinuity and bunching designs to estimate the elasticity of taxable profit and separate it into revenue and cost elasticities. We find that firms faced with a higher tax rate slightly reduce revenues but considerably increase costs, thus producing a large elasticity of taxable profit of 3–5. In this context, the revenue-maximizing rate for a corporate tax on profit is below 25 percent, and we show that a tax policy that broadens the base while lowering the rate can almost double the tax revenue collected from these firms.
Abstract
					Over 13 percent of US students participate in special education (SE) programs annually, at a cost of $40 billion. However, due to selection issues the effect of SE placements remains unclear. This paper uses administrative data from Texas to examine the long-run effect of reducing SE access. Our research design exploits variation in SE placement driven by a unique state policy that required school districts to reduce SE caseloads to 8.5 percent. This policy led to sharp reductions in SE enrollment. These reductions generated significant reductions in educational attainment, suggesting that marginal participants experience long-run benefits from SE services.
Abstract
					This study documents the presence of local protectionism and quantifies its impacts on market competition and social welfare in the context of China's automobile market. A salient feature of 
China's auto market is that vehicle models by joint ventures and state-owned enterprises command much higher market shares in their headquarter provinces than at the national level. Through 
county border analysis, falsification tests, and a consumer survey, we uncover protectionist policies such as subsidies to local brands as the primary contributing factor to the observed home bias. 
We then set up and estimate a market equilibrium model to quantify the impact of local protection, controlling for other demand and supply factors. Counterfactual analysis shows that local 
protection leads to significant consumer choice distortions and results in 21.9 billion yuan of consumer welfare loss, amounting to 41 percent of total subsidy. Provincial governments face a 
prisoner's dilemma: local protection reduces aggregate social welfare, but provincial governments have no incentive to unilaterally remove local protection.
Abstract
					This paper examines the response of vehicle purchase behavior to China's largest national subsidy program for fuel-efficient vehicles during 2010 and 2011. Using variation from the program's eligibility cutoffs and the rollout of the subsidy program, the program is found to boost sales for subsidized vehicle models, but also to create a substitution effect within highly fuel-efficient vehicles. Estimates imply that ignoring the substitution effect would lead one to conclude that the program is welfare enhancing, whereas in fact the marginal cost of the program exceeds the marginal benefit by as much as 300 percent.
Abstract
					We conduct a field experiment with sellers of home improvement services on two German online markets. We take the role of consumers and vary whether we request an invoice for the delivery of the service. In a market that allows anyone to sell anonymously, a willingness to evade is prevalent. In a market that keeps track of credentials, sellers are only willing to evade when a willingness to collude is signaled. The evasion discount is in most estimates not larger than the tax subsidy for legal demand. Evasion is unlikely to be beneficial for many consumers in our setting.
Abstract
					Almost half of the world's states provide bilateral development assistance. While previous research takes the set of donor countries as exogenous, this article introduces a new dataset on aid giving that covers all countries in the world, both rich and poor, and explores the determinants of aid donorship. It argues and shows empirically that democratic institutions support the setup of an aid program in richer countries but undermine its establishment in poorer countries. The findings hold in instrumental-variable regressions and the pattern is similar for the amount of aid.
Abstract
					How important is access to patent documents for subsequent innovation? We examine the expansion of the USPTO Patent Library system after 1975. Patent libraries provided access to patents before the Internet. We find that after patent library opening, local patenting increases by 8–20 percent relative to similar regions. Additional analyses suggest that disclosure of technical information drives this effect: inventors increasingly take up ideas from outside their region, and the effect is strongest in technologies where patents are more informative. We thus provide evidence that disclosure plays an important role in cumulative innovation.
Abstract
					Participants in means-tested programs must periodically document eligibility through a recertification process. If all cases that fail recertification are ineligible, the exact timing of this process should be irrelevant. We find that later recertification interview assignments for the Supplemental Nutrition Assistance Program (SNAP), which leave less time to reschedule missed interviews, decrease recertification success by 22 percent. The consequences of not recertifying due to later interviews are highly skewed: most cases quickly reenroll, while one-quarter remain off SNAP for over a year. The marginal disenrolled case is as needy as the average participant, suggesting inefficient screening from late interviews.
Abstract
					We test a key assumption underlying seminal theories about preferences for redistribution, which is that relatively poor people should be the most in favor of redistribution. We conduct a randomized survey experiment with over 30,000 participants across 10 countries, half of whom are informed of their position in the national income distribution. Contrary to prevailing wisdom, people who are told they are relatively poorer than they thought are less concerned about inequality and are not more supportive of redistribution. This finding is consistent with people using their own living standard as a "benchmark" for what they consider acceptable for others.
Abstract
					This study uses a boundary design and propensity score methods to study the effects of the 1930s-era Home Owners Loan Corporation (HOLC) "redlining" maps on the long-run trajectories of urban neighborhoods. The maps led to reduced home ownership rates, house values, and rents and increased racial segregation in later decades. A comparison on either side of a city-level population cutoff that determined whether maps were drawn finds broadly similar conclusions. These results suggest the HOLC maps had meaningful and lasting effects on the development of urban neighborhoods through reduced credit access and subsequent disinvestment.
Abstract
					This paper uses new, large-scale vehicle registry data from Norway and a two-sided market framework to show nonneutrality of different subsidies and estimate their impact on electric vehicle adoption when network externalities are present. Estimates suggest a strong positive connection between electric vehicle purchases and both consumer price and charging station subsidies. Counterfactual analyses suggest that between 2010 and 2015, every dollar spent on station subsidies resulted in more than twice as many additional electric vehicle purchases than the same amount spent on price subsidies. However, this relation inverts with increased spending, as station subsidies' impact tapers off faster.
Abstract
					Many countries shift substantial public resources across jurisdictions to mitigate spatial economic disparities. We use a general equilibrium model with multiple asymmetric regions, labor mobility, and costly trade to carve out the aggregate implications of fiscal transfers. Calibrating the model for Germany, we find that transfers indeed deliver smaller disparities across regions. This comes at the cost of lower national output, however, because economic activity is diverted away from core cities and toward remote areas with low productivity. But despite this loss in output per capita by about 2 percent in our baseline specification, welfare still increases by 0.07 percent because the transfer scheme countervails overcongestion in large cities. If the optimal transfer regime was implemented, welfare would increase by 0.06 percent.
Abstract
					This paper uses all value-added tax (VAT) changes across EU Member States from 1988 to 2016 to estimate the effect of VATs on trade flows. We find small elasticities of trade flows with respect to VATs, even when VAT changes are large. These elasticities are substantially smaller than the elasticities of trade flows with respect to tariffs estimated in the trade literature. This finding holds across different time periods, countries, and types of reforms. Our results imply that VATs are unlikely to distort trade flows.
Abstract
					Historically, improvements in municipal water quality led to substantial mortality decline in today's wealthy countries. However, water disinfection has not consistently produced large benefits in lower-income countries. We study this issue by analyzing a large-scale municipal water disinfection program in Mexico that increased water chlorination coverage in urban areas from 58 percent to over 90 percent within 18 months. We estimate that the program reduced childhood diarrheal disease mortality rates by 45 to 67 percent. However, inadequate sanitation infrastructure and age (degradation) of water pipes may have attenuated these benefits substantially.
Abstract
					This study examines the impacts of two distinct types of school spending on student outcomes. State-imposed revenue limits cap the total amount of revenue that a school district in Wisconsin can raise unless the district holds a referendum asking voters to exceed the cap. Importantly, Wisconsin law requires districts to hold separate referenda for operational and capital expenditures, which allows for estimating their independent effects. Leveraging close elections in a dynamic regression discontinuity framework, I find that increases in operational spending have substantial positive effects on test scores, dropout rates, and postsecondary enrollment, but additional capital expenditures have little impact.
Abstract
					There exists a long-standing debate in higher education on which academic calendar is optimal. Using panel data on the near universe of four-year nonprofit institutions and leveraging quasi-experimental variation in calendars across institutions and years, we show that switching from quarters to semesters negatively impacts on-time graduation rates. Event study analyses show that the negative effects persist beyond the transition. Using transcript data, we replicate this analysis at the student level and investigate possible mechanisms. Shifting to a semester: (i) lowers first-year grades, (ii) decreases the probability of enrolling in a full course load, and (iii) delays the timing of major choice.
Abstract
					Using a representative survey, we find that after the Yellow Vests movement, French people would largely reject a tax and dividend policy, i.e., a carbon tax whose revenues are redistributed uniformly to each adult. They overestimate their net monetary losses, wrongly think that the policy is regressive, and do not perceive it as environmentally effective. We show that changing people's beliefs can substantially increase support. Although significant, the effects of our informational treatments on beliefs are small. Indeed, the respondents that oppose the tax tend to discard positive information about it, which is consistent with distrust, uncertainty, or motivated reasoning.
Abstract
					We exploit changes in the discontinuity in health insurance coverage at age 65 induced by the implementation of the Affordable Care Act to examine effects on coverage, hospital use, and patient health. We then link these changes to effects on hospital finances. We show that a substantial share of the federally funded Medicaid expansion substituted for existing locally funded safety net programs. Despite this offset, the expansion produced a substantial increase in hospital revenue, reflected in an equivalent increase in operating surplus. We do not detect improvements in patient mortality, although the expansion led to substantially greater hospital and emergency room use.
Abstract
					Many safety net programs issue benefits as monthly lump-sum payments. We investigate how the timing of Supplemental Nutrition Assistance Program (SNAP) benefit issuance affects food purchases and the incidence of the transfer. Using scanner data from a large sample of grocery stores and state and time variation in SNAP issuance schedules, we document large, SNAP-induced intramonth cycles in food expenditures. However, we find that retailers do not adjust prices based on these predictable patterns of demand. Our results therefore suggest that reforming issuance schedules may reduce costs from SNAP-induced demand surges but are unlikely to affect the incidence of SNAP benefits.
Abstract
					College admissions in the United States are decentralized, creating frictions that limit student choice. We study the Common Application (CA) platform, under which students submit a single application to member schools, potentially reducing frictions and increasing student choice. The CA increases the number of applications received by schools, reflecting a reduction in frictions, and reduces the yield on accepted students, reflecting increased choice. The CA increases out-of-state enrollment, especially from other CA states, consistent with network effects. Entry into the CA changes the composition of students, with evidence of more racial diversity and more high-income students and imprecise evidence of increases in SAT scores.
Abstract
					Despite the near ubiquity of intertemporal choice, there is little consensus on the rate at which individuals trade present and future costs and benefits. We contribute to this debate by estimating discount rates from extensive data on housing transactions and spatiotemporal variation in property taxes in England. Our findings imply long-term average net of growth nominal discount rates that are between 3 and 4 percent. The close correspondence to prevailing market interest rates gives little reason to suggest that households misoptimize by materially undervaluing very long-term financial flows in this high-stakes context.
Abstract
					This paper uses changes in mortgage lenders' minimum credit score thresholds to credibly identify the effects of access to household credit. Falling under these thresholds has very large negative effects on borrowing for up to two years, and these effects fail to reverse within four years. The effects are particularly concentrated among individuals who have relatively high credit demand and face relatively large contractions in credit supply. In addition, access to new mortgage credit reduces delinquency on nonmortgage debt and appears to spill over to demand for auto loans.
Abstract
					Prior research documents that there are sometimes dominated options in health plan menus, but is that common? We analyze Kaiser Family Foundation data on health plans that firms offer to their employees. For firms offering both a high-deductible and lower-deductible health plan, 62 percent of the time the high-deductible option has lower maximum spending risk for the employee. We estimate that the high-deductible plan dominates at roughly half of firms. We discuss potential mechanisms behind these surprising patterns and find support both for two explanations: widespread adverse-selection pricing and some employers also differentially favoring high-deductible plans.
Abstract
					We examine the impact of the expansion of charter schools on racial segregation in public schools, defined using multiple measures of racial sorting and isolation. Our research design utilizes between-grade differences in charter expansion within school systems and an instrumental variables approach leveraging charter school openings. Charter schools modestly increase school segregation for Black, Hispanic, Asian, and White students. On average, charters have caused a 6 percent decrease in the relative likelihood of Black and Hispanic students being exposed to schoolmates of other racial or ethnic groups. For metropolitan areas, our analysis reveals countervailing forces, as charters reduce segregation between districts.
Abstract
					Many e-government initiatives introduce technology to improve efficiency and avoid potential human bias. Using experimental variation, we examine the impact of electronic tax filing (to replace in-person submission to tax officials) using data from Tajikistan firms. E-filing reduces the time firms spend on taxes by 40 percent. Further, among firms previously more likely to evade, e-filing doubles taxes paid. Conversely, evidence suggests that e-filing reduces tax payments among firms previously less likely to evade. These firms also pay fewer bribes, as e-filing reduces extortion opportunities. These patterns are consistent with differential treatment of firms by tax officials prior to e-filing.
Abstract
					The Acid Rain Program (ARP) cut sulfur dioxide (SO2) emissions from power plants in the United States, with considerable benefits. We show this also reduced ambient sulfate levels, which lowered agriculture productivity through decreased soil sulfur. Using plant-level SO2 emissions and an atmospheric transport model, we estimate the relationship between airborne sulfate levels and yields for corn and soybeans. We estimate crop revenue losses for these two crops at around $1–$1.5 billion per year, with accompanying decreases in land value. Back-of-the-envelope calculations of the costs to replace lost sulfur suggest producer responses were limited and suboptimal.
Abstract
					In recent decades, gentrification has transformed American central city neighborhoods. I estimate a spatial equilibrium model to show that the rising value of high-skilled workers' time contributes to the gentrification of American central cities. I show that the increasing value of time raises the cost of commuting and exogenously increases the demand for central locations by high-skilled workers. While change in the value of time has a modest direct effect on gentrification of central cities, the effect is substantially magnified by endogenous amenity change driven by the changes in local skill mix.
Abstract
					In countries where there exist limited opportunities to source inputs locally, rules of origin undermine access to preferential trade agreements for final goods exporters. I analyze the 2011 revision to the rules of origin associated with the European Union's Generalized System of Preferences, which allowed apparel producers in least developed countries to use internationally sourced textiles in exported products. Using transaction-level data on Bangladeshi apparel firms, I find that the rules of origin effectively cut the preferential margin by three-fourths. Liberalizing the rules of origin resulted in firm-level revenue growth, which was driven by the intensive margin through increased shipment sizes and quality upgrading.
Abstract
					Moonlighting is increasingly popular in OECD countries, with 5 to 10 percent of workers holding two or more jobs. However, little is known about the responsiveness of moonlighting to financial incentives due to the lack of identifying variation. This paper studies a unique reform in Germany that allowed workers to hold small secondary jobs tax-free, decreasing the marginal tax rate by between 19.5 to 66 pp. I show that the reform resulted in a dramatic increase in moonlighting that was not offset by reductions in primary earnings and that hours constraints are a key determinant of moonlighting.
Abstract
					This paper provides evidence that replacing minimum unemployment benefits with a basic income of equal size has minor employment effects at best. We examine an experiment in Finland in which 2,000 benefit recipients were randomized to receive a monthly basic income. The experiment lowered participation tax rates by 23 percentage points for full-time employment. Despite the considerable increase in work incentives, days in employment remained statistically unchanged in the first year of the experiment. Moreover, even though all job search requirements were waived, participation in reemployment services remained high.
Abstract
					Pharmaceutical companies market to physicians through individual detailing accompanied by monetary or in-kind transfers. Large compensation payments to a small number of physicians account for most of this promotional spending. Studying US promotional payments and prescriptions for anticoagulant drugs, we investigate how peer influence broadens the payments' reach. Following a compensation payment, prescriptions for the marketed drug increase from both the paid physician and the paid physician's peers. Payments increase prescriptions to both recommended and contraindicated patients. Over three years, marketed anticoagulant prescriptions rose 23 percent due to payments, with peer spillovers contributing a quarter of the increase.
Abstract
					The measles vaccine was introduced in 1963. Take-up of the vaccine in the United States occurred quickly and universally, leading to reductions in morbidity and mortality. New biological evidence on how the measles virus interacts with our immune system indicates the impact of the measles vaccine may be underestimated. Using a difference-in-difference identification strategy, I find evidence the measles vaccine increased earnings and employment. Long-term follow-up of adults finds an increase in income of 1.1 percent and positive effects on employment. This increase in income is not from an increase in hours worked but rather from greater productivity.
Abstract
					Using two RCTs in middle schools in Pakistan, we show that brief, expert-led, curriculum-based videos integrated into the classroom experience improved teaching effectiveness: student test scores in math and science increased by 0.3 standard deviations, 60 percent more than the control group, after 4 months of exposure. Students and teachers increased their attendance, and students were more likely to pass the high-stakes government exams. By contrast, providing similar content to students on personal tablets decreased student scores by 0.4 SD. The contrast between the two effects shows the importance of engaging teachers and the potential for technology to do so.
Abstract
					Many scholars have studied the employment effects of minimum wages, but little is known about effects on the composition of hires. I investigate whether Germany's minimum wage introduction raised hiring standards, using worker fixed effects as a proxy for worker productivity. For the least productive workers hired, the minimum wage led to a 4 percentile point shift in the productivity distribution. This increase is missed using standard observable measures of worker productivity. The effects are larger with greater pre-reform screening intensity—indicating an employer response. This more selective hiring compensates about two-thirds of higher wage costs for the least productive hires.
Abstract
					This paper investigates how a common form of environmental regulation—air quality standards—affects exporters. We develop a simple theoretical model to show how the design of these standards causes (i) some firms to stop exporting and (ii) a reduction in the export volumes of affected continuing exporters. We exploit quasi-experimental variation resulting from the design of Canadian air quality standards to test these predictions empirically. Our estimates confirm our model's predictions: we find that for the most affected manufacturers, regulation reduced export volumes by 32 percent and increased the likelihood plants stop exporting by 5 percentage points.
Abstract
					We examine the impact of temperature on mortality in Mexico using daily data over the period 1998–2017 and find that 3.8 percent of deaths in Mexico are caused by suboptimal temperature (26,000 every year). However, 92 percent of weather-related deaths are induced by cold (<12 degrees C) or mildly cold (12–20 degrees C) days and only 2 percent by outstandingly hot days (>32 degrees C). Furthermore, temperatures are twice as likely to kill people in the bottom half of the income distribution. Finally, we show causal evidence that the Seguro Popular, a universal health care policy, has saved at least 1,600 lives per year from cold weather since 2004.
Abstract
					This paper provides evidence on the external benefits of homeownership among low-income populations. A natural experiment in Israel generated large changes in neighborhood homeownership rates while holding fixed the residents and housing stock, two primary sources of bias in traditional estimates. When public housing tenants are given the opportunity to buy their units, buyers increase labor supply. Effects are felt in the neighborhood: when homeownership rises by 10 pp, neighborhood home prices rise 1.5–2 percent. Instrumenting for purchases using government discounts generates similar results. Results are relevant for policies using financial incentives to increase homeownership among low-income populations.
Abstract
					This paper estimates the impact of hospital crowding on medical treatment decisions and patient health outcomes. Exploiting pseudorandom variation in emergency admissions, I find that a one-standard-deviation admission shock increases the unplanned readmission rate by 4.1 percent. Nonparametric and heterogeneity analyses suggest that "quicker and sicker" discharges contribute to the additional readmissions. The crowding impacts are larger in hospital departments with fewer beds, sicker patients, and stronger incentives to admit nonemergency patients.
Abstract
					Seattle raised its minimum wage to as much as $11 in 2015 and as much as $13 in 2016. We use Washington State administrative data to conduct two complementary analyses of its impact. Relative 
to outlying regions of the state identified by the synthetic control method, aggregate employment at wages less than twice the original minimum—measured by total hours worked—declined. A 
portion of this reduction reflects jobs transitioning to wages above the threshold; the aggregate analysis likely overstates employment effects. Longitudinal analysis of individual Seattle workers 
matched to counterparts in outlying regions reveals no change in the probability of continued employment but significant reductions in hours, particularly for less experienced workers. Job turnover 
declined, as did hiring of new workers into low-wage jobs. Analyses suggest aggregate employment elasticities in the range of −0.2 to −2.0, concentrated on the intensive margin in the short run and 
largest among inexperienced workers.
Abstract
					Since 1982, all Alaskan residents have received a yearly cash dividend from the Alaska Permanent Fund. Using the Current Population Survey and a synthetic control method, this paper shows that the dividend had no effect on employment and increased part-time work by 1.8 percentage points (17 percent). A calibration of microeconomic and macroeconomic effects suggests that the empirical results are consistent with cash stimulating the local economy—a general equilibrium effect. Nontradable sectors have a more positive employment response than tradable sectors. Overall, the results suggest that a universal and permanent cash transfer does not significantly decrease aggregate employment.
Abstract
					In theory, regulators concerned about inequality will deviate from efficient two-part tariffs, charging lower-than-efficient fixed monthly fees and higher-than-efficient per-kilowatt-hour prices. To quantify that relationship, we develop a measure of the redistributive extent of utility tariffs: the "electric Gini." Utilities with higher electric Ginis shift more costs from households using relatively little electricity to households using more. In practice, US utilities whose ratepayers have more unequal incomes have higher electric Ginis. But electricity demand is only loosely correlated with income, which means that electricity prices are an indirect and ineffective policy for countering income inequality.
Abstract
					Liability laws designed to compensate for harms caused by defective products may also affect innovation. We examine this issue by exploiting a major quasi-exogenous increase in liability risk faced by US suppliers of polymers used to manufacture medical implants. Difference-in-difference analyses show that this surge in suppliers' liability risk had a large and negative impact on downstream innovation in medical implants, but it had no significant effect on upstream polymer patenting. Our findings suggest that liability risk can percolate throughout a vertical chain and may have a significant chilling effect on downstream innovation.
Abstract
					The rapid expansion of charter schools has fueled concerns about their impact on traditional public schools. I estimate the effect of charter openings on traditional public schools in Massachusetts and North Carolina by comparing schools near actual charter sites to those near proposed sites that were never occupied. I find charter openings reduced public school enrollment by around 5 percent and reduced White enrollment in North Carolina. I find no impact on student achievement, and my 95 percent confidence intervals rule out effects larger than ±0.05 standard deviations. I find no effects on attendance or suspensions.
Abstract
					I conduct a survey experiment to study the relationship between people's beliefs about the size of the gender wage gap and their demand for policies aimed at mitigating it. Beliefs causally affect support for equal pay legislation and affirmative action programs, but cannot account for the polarization in policy views by partisanship and gender. Changes in policy demand seem to be driven by changes in beliefs about discrimination in labor markets and fairness concerns, while self-interest appears less important. I provide evidence that pessimism about the effectiveness of government intervention limits the elasticity of policy demand to perceived wage differentials.
Abstract
					School choice programs break the link between residential location and school attendance, and should weaken the capitalization of school quality into house prices. For the first time, I quantify the effect of one such program—charter school expansions—across several states using a dataset covering charter entries and house prices. I embed an event study of charter entry into a boundary discontinuity design and find that, on average, school choice decreases the valuation of traditional schools by four percentage points. Suggestive evidence shows school choice can lead to neighborhood change through resorting as school boundaries become less important.
Abstract
					This paper employs Dutch administrative population data to test the "housing lock hypothesis": the conjecture that homeowners with negative home equity, low levels of financial assets, and restricted opportunities to borrow reduce their mobility. Variation in home equity driven by the timing of home purchase within a municipality and the harshness of Dutch recourse laws facilitates identification of housing lock effects. The 2SLS estimate for the effect of negative home equity is a 74–79 percent decline in mobility, where effects are substantially larger for households with low financial asset holdings or moves over longer distances.
Abstract
					This paper studies public sector pension obligations, the biggest fiscal challenge currently facing many US cities. Employing a regression discontinuity design around close elections, benefit payments out of a city's public sector pensions are shown to grow faster under Democratic party mayors, while contributions into the pensions do not. Previous research showed that parties do not matter for a wide range of cities' fiscal expenditures and explained this with voters imposing fiscal discipline. This paper replicates previous results but shows that parties can matter for shrouded expenditure types that voters do not pay attention to, especially if they benefit well-organized interest groups.
Abstract
					During the 2019 European elections campaign, we exposed a random sample of French voting-age Facebook users to false statements by a far-right populist party. A randomly selected subgroup was also presented with fact-checking of these statements; another subgroup was offered a choice of whether to view the fact-checking. Participants could then share these statements on their Facebook pages. We show that (i) both imposed and voluntary fact-checking reduce sharing of false statements by about 45 percent, (ii) the size of the effect is similar between imposed and voluntary fact-checking, and (iii) each additional click required to share false statements substantially reduces sharing.
Abstract
					Certain markets are illicit because part of the supply is coerced, but little is known about the optimal regulation of such markets. We model a prostitution market with voluntary and coerced prostitutes and ask what regulation can restore the benchmark outcome that would arise under laissez-faire absent coercion. Whereas current policies—decriminalization, criminalization of the buy or sell sides, and licensing—are ineffective against trafficking or harm voluntary suppliers, we show that an alternative policy can restore the benchmark outcome. Our results are relevant to the ongoing debate about decriminalizing prostitution and provide guidance for empirical work on prostitution regulation.
Abstract
					Childhood obesity is one of the most serious public health challenges of the twenty-first century. While small-scale experiments change behaviors among adults in the short run, we know little 
about the effectiveness of large-scale policies or the longer-run impacts. To nudge primary school children into a long-term habit of exercising, the German state of Saxony distributed sports club 
membership vouchers among all 33,000 third graders in 2009. In 2018, we carried out a register-based survey to evaluate the policy. Even after a decade, awareness of the voucher program was 
significantly higher in the treatment group. We also find that youth received and redeemed the vouchers. However, we do not find significant short- or long-term effects on sports club membership, 
physical activity, overweightness, or motor skills. Apparently, membership vouchers for children are not a strong enough policy tool to overcome barriers to exercise regularly.
Abstract
					I analyze how two reforms, introduced to expand college access in Brazil, impacted enrollments of low-SES students. The first policy centralized applications in a nationwide platform (SISU), and the second expanded affirmative action quotas (AA) to a uniform share of 50 percent of vacancies offered by degree. Results show that SISU changes enrollment decisions of high-SES students, crowding out low-SES groups from the least competitive degrees disproportionately. In contrast, AA increases enrollments of low-SES individuals not only mechanically but also through behavioral responses. Finally, their interaction creates a complementary effect, protecting the low-SES groups from the crowding-out of centralization.
Abstract
					Although in-person college access programs can be effective, less is known about whether low-cost and scalable virtual interventions can achieve the same benefits. We evaluate two variants of a virtual college counseling program. Students randomly assigned to the program felt more supported applying to college and applied more broadly to four-year colleges, but were not more likely to be accepted or enroll. We analyze rich and extensive survey data to explore mechanisms and why the program did not improve college enrollment. We conclude that low-intensity programs may work for some students, but many probably need in-person and intensive help.
Abstract
					We create a national-level longitudinal dataset to analyze how children's participation in public and voucher-assisted housing affects age-26 earnings and adult incarceration. Naïve OLS estimates suggest that returns to subsidized housing participation are negative, but that relationship is driven by household selection into assisted housing. Household fixed effects estimates indicate that additional years of public housing increase earnings by 6.2 percent for females and 6.1 percent for males, while voucher-assisted housing increases earnings by 4.8 percent for females and 2.7 percent for males. Childhood participation in assisted housing also reduces the likelihood of adult incarceration for all household race/ethnicity groups.
Abstract
					We study the impact of expanded adult Medicaid eligibility on the enrollment of already-eligible children. We analyze the 2008 Oregon Medicaid lottery, in which some low-income uninsured adults were randomly selected to be allowed to apply for Medicaid. Children in these households were eligible for Medicaid irrespective of the lottery outcome. We estimate statistically significant but transitory impacts of adult lottery selection on child Medicaid enrollment: at three months after the lottery, for every nine adults who enrolled in Medicaid due to winning the lottery, one additional child also enrolled. Our results shed light on the existence, magnitude, and nature of so-called "woodwork effects."
Abstract
					Fundraising interventions may lift donations and/or shift their composition and timing. Using data rich in both the charity space and time dimensions, we find that major fundraising appeals lift donations to the appeal charity and that this increase is not offset by lower donations later in time. Strikingly, major appeals also forward-shift donations to other (nonappeal) charities that are offset by lower donations later. To understand these response patterns, we introduce a two-period, two-charity "lift-shift" model. The model indicates that the observed response patterns are possible only if warm glow is substitutable, both intertemporally and between charities.
Abstract
					We study the long-run effects of historical place-based R&D policies: the creation of Science Cities in Soviet Russia. We compare current demographic and economic characteristics of Science Cities with those of localities that were similar to them at the time of their establishment. We find that in present-day Russia, Science Cities are more innovative and productive, host more highly skilled workers, and pay them higher salaries. We interpret these findings as the result of the interaction between persistence and agglomeration forces; we rule out explanations related to the differential use of public resources.
Abstract
					We solve the nonlinear income tax program for rank-dependent social welfare functions, expressing the trade-off between size and inequality using the Gini and related families of positional indices. Absent bunching, ranks in the actual and optimal allocations are invariant. Exploiting this feature, we provide new, simple, and intuitive tax formulas for both the quasilinear and additive cases and new comparative static results. Our approach makes insights from optimal taxation more widely accessible. In some of our simulations the actual US tax policy is close to being optimal—except at the top, where optimal rates are much higher than in actuality.
Abstract
					Many governments assign use licenses for natural resources, such as radio spectrum, fishing rights, and mineral extraction rights, through auctions or other market-like mechanisms. License design affects resource users' investment incentives as well as the efficiency of asset allocation. No existing license design achieves first-best outcomes on both dimensions. Long-term licenses give owners high investment incentives but impede reallocation to high-valued entrants. Short-term licenses improve allocative efficiency but discourage investment. We propose a simple new mechanism, the depreciating license, and we argue that it navigates this trade-off more effectively than existing license designs.
Abstract
					I measure the effect of child marriage bans on female educational attainment and employment using a difference-in-differences approach employing subnational spatial and cohort variation in a sample of over 250,000 female respondents from 17 low- and middle-income countries banning child marriage between 1995 and 2012. My results using the full study sample suggest that raising the minimum legal age of marriage to 18 increased age at marriage, age at first birth, and the likelihood of employment. In urban areas, the bans also reduced child marriage and increased educational attainment. Effects of the bans typically were smaller in rural areas, in countries with a lower pre-ban minimum legal age at marriage, for cohorts with lower temporal exposure to the ban, and for reducing marriage at ages just below 18, consistent with imperfect enforcement.
Abstract
					In a widely cited study, Fitzpatrick (2015) found that more than one quarter of Illinois teachers were unwilling to pay 19 cents for pension enhancements worth one dollar in present value. We revisit this finding by tracking the same cohort of teachers to retirement, permitting exact measurement of service years and the annuity received. The vast majority of teachers purchased the upgrade. Among those who did not, the net benefit of the upgrade is negative given their retirement timing. The complex relationship between the timing of retirement and potential gain in pension wealth makes drawing inferences about teachers' willingness to pay for this benefit difficult.
Abstract
					We model optimal e-cigarette regulation and estimate key parameters. Using tax changes and scanner data, we estimate relatively elastic demand. A demographic shift-share identification strategy suggests limited substitution between e-cigarettes and cigarettes. We field a new survey of public health experts who report that vaping is more harmful than previously believed. In our model's average Monte Carlo simulation, these results imply optimal e-cigarette taxes are higher than recent norms. However, e-cigarette subsidies may be optimal if vaping is a stronger substitute for smoking and is safer than our experts report, or if consumers overestimate the health harms from vaping.
Abstract
					Monthly government transfer programs create cycles of consumption that track the timing of benefit receipt. If these cycles correspond to critical moments for student learning and achievement, the timing of transfers may have important long-run implications for low-income students. In this paper we exploit state-level variation in the staggered timing of nutritional assistance benefit issuance to analyze effects on academic achievement. Using individual-level data from a large national college admission exam, we find taking this high-stakes exam during the last two weeks of the SNAP benefit cycle reduces test scores and lowers the probability of attending a four-year college.
Abstract
					Economists favor pricing pollution in part so that consumers face the full social marginal cost (SMC) of goods and services. But even absent externalities, retail electricity prices typically exceed private marginal cost, due to a utility's need to cover average costs. Furthermore, the SMC of electricity can fluctuate widely hour-to-hour, while retail prices do not. We show that residential electricity rates exceed average SMC in most of the US, but there is large geographic and temporal variation. This finding has important implications for pass-through of pollution costs, as well as for policies promoting dynamic pricing, alternative energy, and reduced electricity consumption.
Abstract
					We study how declared wealth responds to changes in wealth tax rates. Exploiting rich intranational variation in Switzerland, we find a 1 percentage point drop in a canton's wealth tax rate raises reported taxable wealth by at least 43 percent after 6 years. Administrative tax records of two cantons with quasi-randomly assigned differential tax reforms suggest that 24 percent of the effect arises from taxpayer mobility and 21 percent from a concurrent rise in housing prices. Savings responses appear unable to explain more than a small fraction of the remainder, suggesting sizable evasion responses in this setting with no third-party reporting of financial wealth.
Abstract
					This paper provides the first causal evidence on the impact of college advisor quality on student outcomes. To do so, we exploit a unique setting where students are randomly assigned to faculty advisors during their first year of college. We find that higher advisor value added (VA) substantially improves freshman year GPA, time to complete freshman year and four-year graduation rates. Additionally, higher advisor VA increases high-ability students' likelihood of enrolling and graduating with a STEM degree. Our results indicate that allocating resources towards improving the quality of academic advising may play a key role in promoting college success.
Abstract
					Child maltreatment has significant and long-lasting consequences. We examine how two interventions designed to curtail prescription opioid misuse, the reformulation of OxyContin and the implementation of must-access prescription drug monitoring programs (PDMPs), affected child maltreatment. Our results suggest counties with greater initial rates of prescription opioid usage experienced relatively larger increases in child physical abuse and neglect after OxyContin's reformulation. We also find some evidence of increases in alleged physical abuse and neglect due to must-access PDMP implementation. Our results uncover unintended consequences for children of reducing the supply of an addictive good without adequate support for dependent users.
Abstract
					Although there is abundant evidence on individual preferences for policies that reduce national inequality, there is very little evidence on preferences for policies addressing global inequality. To investigate the latter, we conducted a two-year, face-to-face survey experiment on a representative sample of Germans. We measure how individuals form perceptions of their ranks in the national and global income distributions and how these perceptions relate to their national and global policy preferences. We find that Germans systematically underestimate their true place in the world's income distribution but that correcting those misperceptions does not affect their support for policies related to global inequality.
Abstract
					In a field experiment, we provide financial incentives to teachers framed either as gains, received at the end of the year, or as losses, in which teachers receive up-front bonuses that must be paid back if their students do not improve sufficiently. Pooling two waves of the experiment, loss-framed incentives improve math achievement by an estimated 0.124 standard deviations (σ), with large effects in the first wave and no effects in the second wave. Effects for gain-framed incentives are smaller and not statistically significant, approximately 0.051σ. We find suggestive evidence that the effects on teacher value added persist posttreatment.
Abstract
					Leveraging the Tennessee STAR class size experiment, we show that Black students randomly assigned to at least one Black teacher in grades K–3 are 9 percentage points (13 percent) more likely to graduate from high school and 6 percentage points (19 percent) more likely to enroll in college compared to their Black schoolmates who are not. Black teachers have no significant long-run effects on White students. Postsecondary education results are driven by two-year colleges and concentrated among disadvantaged males. North Carolina administrative data yield similar findings, and analyses of mechanisms suggest role model effects may be one potential channel.
Abstract
					We investigate heterogeneity in responsiveness to reminder letters among New York City parking ticket recipients. Using variation in the timing of letters, we find a strong aggregate response. But we find large differences across individuals: those with a low baseline propensity to respond to tickets—a natural nudge target—react least to letters. These low-response types, who incur significant late penalties, disproportionately come from already disadvantaged groups. They do react strongly to traditional, incentive-based interventions. We discuss how accounting for response heterogeneity might change one's approach to policy and how one might use our analysis to target interventions at low-response types.
Abstract
					We show that US multinationals record sales and the profits from these sales in tax havens while their goods and services are physically sold in other countries. We propose a framework illustrating the strategy of sales shifting. Our results reveal the importance of tax havens, which attract a disproportionate fraction of worldwide sales. Our quantification shows a large contribution of sales shifting to multinationals' profit shifting, which amounted to $80 billion in 2013. Our findings suggest that international corporate tax rules based on sales may not address profit shifting efficiently if the policy designs are unable to identify sales by destination.
Abstract
					We study two mechanisms used by public health insurance programs for rationing health care: outsourcing to private managed care plans and quantity limits for prescription drugs. Leveraging a natural experiment in Texas's Medicaid program, we find that the shift to managed care and the relaxation of a strict drug cap increased access to high-value drugs and outpatient services and reduced avoidable hospitalizations. Program costs increased significantly, indicating a trade-off between cost and quality. We provide suggestive evidence attributing the reduction in hospitalizations to the relaxation of the drug cap and much of the spending increase to the shift to managed care.
Abstract
					The Earned Income Tax Credit distributes more than $60 billion to over 20 million low-income families annually. Nevertheless, an estimated one-fifth of eligible households do not claim it. We ran six preregistered, large-scale field experiments with 1 million observations to test whether "nudges" could increase EITC take-up. Despite varying the content, design, messenger, and mode of our messages, we find no evidence that they affected households' likelihood of filing a tax return or claiming the credit. We conclude that even the most behaviorally informed low-touch outreach efforts cannot overcome the barriers faced by low-income households who do not file returns.
Abstract
					Mandatory disclosure policies are implemented broadly despite sparse evidence that they improve market outcomes. We study the effects of requiring home sellers to provide buyers with certified audits of residential energy efficiency. Using similar nearby homes as a comparison group, we find that this requirement increases price premiums for energy efficiency and encourages energy-saving investments. We additionally present evidence highlighting the market failure—incomplete information by both buyers and sellers—that prevents widespread voluntary disclosure of energy efficiency in housing transactions. Our findings support that disclosure policies can improve market outcomes in settings with symmetrically incomplete information.
Abstract
					The old-age security motive for fertility postulates that people's needs for old-age support raise the demand for children. We exploit the extension of social pensions in Namibia during the 1990s to provide a quasi-experimental quantification of this widespread idea. The reform eliminated inequalities in pension coverage and benefits across regions and ethnic groups. Combining differences in pre-reform pensions and differences in exposure across cohorts, we show that pensions substantially reduce fertility, especially in late reproductive life. The results suggest that improving social protection for the elderly could go a long way in fostering fertility decline in sub-Saharan Africa.
Abstract
					Theories of partisan redistricting postulate unitary actors maximizing their party's expected seat share. Yet, the partition of a fixed supply of friendly voters necessarily implies a tragedy of the commons. We recast partisan redistricting as a bargaining game among the sitting representatives of the party controlling the map. The status quo is the threat point, explaining why changes are frequently minor. This bargaining framework implies that highly competitive districts will receive more help from redistricting if they are already represented by the party in charge. Employing a regression discontinuity design with precinct-level data, we find support for this prediction.
Abstract
					Housing is mostly exempted from Medicaid and Supplemental Social Insurance means tests. Reforms of this special treatment have been debated, but little is known about its costs, benefits, and redistributive implications. I estimate a life cycle model of single retirees accounting for this exemption. It shows that the homestead exemption explains important patterns of Medicaid recipiency and that it is highly valued. It also shows that estate recovery could cover most of its costs with possibly limited negative welfare consequences. Finally, the model predicts that removing the homestead exemption or enforcing estate recovery programs would reduce redistribution toward lower-income retirees.
Abstract
					We compare the effects of early childhood education on adult criminal behavior across time periods, using administrative crime data that provide significant precision advantages over existing work. We find that improvements in early childhood education led to large (20 percent) reductions in later criminal behavior, reductions that far exceed those implied by estimates of test score gains in prior studies. While the benefits generated account for a large portion of the costs of the education provided, we find substantial relative gains from the targeting of funds to high-poverty areas and areas without existing access to subsidized care.
Abstract
					Residual profit allocation (RPA) schemes have come to prominence in discussions of international tax reform but with almost nothing known about their economic impact. These schemes tax multinationals by allocating their "routine" profits to source countries and sharing their remaining "residual" profit across countries on some formulaic basis. This paper explores the implications, conceptual and empirical, of moving to some form of RPA. Residual profits are estimated to be substantial and concentrated in relatively few multinational enterprises. The impact on tax revenue appears beneficial for developing countries. Aggregate production efficiency is unlikely to increase unless routine profits are lightly taxed.
Abstract
					The canonical model of Allingham and Sandmo (1972) predicts that firms evade taxes by optimally trading off between the costs and benefits of evasion. However, there is no direct evidence that firms react to audits in this way. We conducted a large-scale field experiment in collaboration with a tax authority to address this question. We sent letters to 20,440 small- and medium-sized firms that collectively paid more than US$200 million in taxes per year. We find that providing information about audits significantly affected tax compliance but in a manner that was inconsistent with Allingham and Sandmo (1972).
Abstract
					This paper estimates the causal impact of a sizable German public investment program on employment at the county level. The program focused on improving the energy efficiency of school buildings, making it possible to use the number of schools as an instrument for investments. It also enforced tight deadlines, reducing potential implementation lags. The program was cost-effective, creating, on average, one job for one year for an investment of €24,000. The employment gains are detectable after nine months and are accompanied by an unemployment reduction amounting to half of the job creation. Employment grew predominately in the directly affected industries.
Abstract
					We study how Chinese state bank managers' lending incentives impact lending to state-owned enterprises (SOEs). We show lending quantity increases and quality decreases at month's end, indicating monthly lending targets that decrease lending standards. Increased quantity comes from both SOEs and private lending, whereas decreased quality is from only SOEs, which continue to receive loans even after prior defaults (particularly at month's end). We suggest that SOE lending may thus be beneficial for state bank managers, who lend to delinquent state enterprises to meet targets, which in turn may exacerbate SOEs' soft budget constraints.
Abstract
					In April 2014 Flint, Michigan switched its drinking water supply from the Detroit water system to the Flint River as a temporary means to save $5 million. Over 18 months it was revealed that the switch exposed residents to dangerous levels of lead, culminating in an emergency declaration in October 2015. This paper examines the impact of this crisis on the Flint housing market. The value of Flint's housing stock has fallen by $520 million to $559 million despite over $400 million in remediation spending. Home prices remain depressed through August 2019, 16 months after the water was declared safe for consumption.
Abstract
					Nonexclusive sequential borrowing can increase default and impose externalities on prior lenders. We document that sequential banking is pervasive with substantial effects. Using credit card applications from a large bank and data on the applicants' entire loan portfolios, we find that an additional credit line causes a 5.9 percentage point decline in default for high-score borrowers on previous loans. However, for low-score borrowers, it causes a 19 percentage point increase. The former use the new credit to smooth payments on preexisting loans, while the latter increase their total debt. These results have implications for "no-universal-default" regulation and financial inclusion.
Abstract
					Data from an 18-month randomized trial show large and sustained impacts on water purification and child health of a program providing monthly coupons for free water treatment solution to households with young children. The program is more effective and much more cost effective than asking Community Health Workers (CHWs) to distribute free chlorine to households during routine monthly visits. This is because only 40 percent of households use free chlorine, targeting through CHWs is worse than self-targeting through coupon redemption, and water treatment promotion by CHWs does not increase chlorine use among beneficiaries of free chlorine.
Abstract
					Work requirements are common in US safety net programs. Evidence remains limited, however, on the extent to which work requirements increase economic self-sufficiency or screen out vulnerable individuals. Using linked administrative data on food stamps (SNAP) and earnings with a regression discontinuity design, we find robust evidence that work requirements increase program exits by 23 percentage points (64 percent) among incumbent participants. Overall program participation among adults who are subject to work requirements is reduced by 53 percent. Homeless adults are disproportionately screened out. We find no effects on employment and suggestive evidence of increased earnings in some specifications.
Abstract
					We study tax loss asymmetry for S corporate owners. These owners use most losses contemporaneously, reducing the tax asymmetry compared to C corporations. However, these owners face distortions due to the progressive individual tax schedule. The value of this asymmetry is approximately $3.5 billion per year. We find that this asymmetry creates disincentives for risky investment and causes allocative inefficiencies among loss and gains owners. Finally, we simulate the effects of certain provisions of the Tax Cuts and Jobs Act; we estimate that these provisions—especially section 199A—reduce the behavioral distortions of the asymmetry for S corporate owners.
Abstract
					We estimate the effect of a permanent income increase on the health outcomes of the elderly poor. Our regression discontinuity design exploits an eligibility cutoff in a Chilean basic pension program that grants monthly payments to retirees without a contributory pension. Using administrative data, we find that four years after applying, basic pension recipients are 2.7 percentage points less likely to have died. Survey evidence suggests an increase in food consumption and visits to health centers as relevant drivers of the mortality reduction.
Abstract
					This paper evaluates the financial and economic consequences of being denied an abortion. We link credit report data to the Turnaway Study, which collected high-quality, longitudinal data on women receiving or being denied a wanted abortion in the United States. We compare financial outcomes over a ten-year period for women who had pregnancies just above and below a gestational age limit allowing for a wanted abortion. Outcomes evolved similarly for the two groups prior to the abortion encounter. Following the encounter, women who were denied an abortion experience a large increase in financial distress that remains for several years.
Abstract
					We examine the causal influence of educators elected to the school board on local education production. The key empirical challenge is that school board composition is endogenously determined through the electoral process. To overcome this, we develop a novel research design that leverages California's randomized assignment of the order that candidate names appear on election ballots. We find that an additional educator elected to the school board reduces charter schooling and increases teacher salaries in the school district relative to other board members. We interpret these findings as consistent with educator board members shifting bargaining in favor of teachers' unions.
Abstract
					Leveraging the random assignment of over 50,000 Medicaid enrollees in New York, I present causal evidence that narrower networks are a blunt instrument for reducing health care spending. While narrower networks constrain spending, they do so by generating hassle costs that reduce quantity, with modest effects on prices paid to providers. Enrollees assigned to narrower networks use fewer of both needed and unneeded services and are less satisfied with their plans. Using my causal estimates to construct counterfactuals, I identify an alternative assignment policy that reduces spending without harming satisfaction by matching consumers with narrower networks that include their providers.
Abstract
					We estimate the effects of an educational peer intervention in which previously high- and low-achieving students are randomly paired as deskmates in elementary schools in China. Our treatment boosts the mathematics scores of the low-achieving students. Moreover, the treatment enhances the extraversion and agreeableness of high- and low-achieving students, thereby providing evidence that peers can influence personality traits. The positive treatment effects can be attributed to the deskmate-level peer effects. We document friend network structure changes and present additional evidence on how friendship ties help us better understand the mechanisms behind peer effects.
Abstract
					I use narrative historical data on site selection decisions for a subset of US colleges to identify runner-up locations that were strongly considered to become the sites of new colleges. Using runner-up counties as counterfactuals in a difference-in-difference model, I find that establishing a college causes 62 percent more patents per year. Linking patents to novel college yearbook data reveals that only 12 percent of patents in a college's county came from that college's alumni or faculty. I find only small differences in patenting between establishing colleges and establishing other institutions as well as between colleges with different focuses on technical fields.
Abstract
					Treatment practices vary widely across hospitals, often with little connection to patients' medical needs. We assess impacts of these differences in delivery practices at childbirth. We find that infants quasi-randomly delivered at hospitals with higher C-section rates are born in better shape and are less likely to be readmitted, with suggestive evidence of improved survival. These benefits are driven by avoidance of prolonged labors that pose risks to infant health. In contrast, these infants are more likely to visit the emergency department for respiratory-related problems, consistent with a large observational literature linking C-section to chronic reductions in respiratory health.
Abstract
					I study optimal income taxation when human capital investment is imperfectly observable by employers. In the model, Bayesian inference about worker productivity compresses the wage distribution, lowering the private return to human capital investment. An externality arises: given the same information, employers are more optimistic about each individual if workers are generally more productive. The significance of this externality hinges on the accuracy of employers' beliefs and the responsiveness of human capital. For the United States, taking it into account lowers optimal marginal tax rates for most workers, reducing them by a maximum of 9–13 percentage points between $50,000 and $100,000.
Abstract
					This study identifies the causal effect of pension generosity on women's fertility behavior. It capitalizes on Brazil's expansion of the pension system to rural workers, whose pension wealth subsequently more than tripled. Difference-in-difference, instrumental variable, and event study methods show that the pension reform reduces the propensity of childbearing of women of fertile age by 8 percent in the short run. Completed fertility declines by 1.3 children within 20 years after the reform, reducing the contribution base of the pay-as-you-go pension system in the long run. The fertility response is strongest at higher birth parities, among older women, and among mothers with sons.
Abstract
					Using a difference-in-difference approach, we find that an increase to Medicaid's minimum drug rebate under the Affordable Care Act in 2010 lowered non-Medicaid drug spending by 2.5 percent. A stylized bargaining model shows that this is likely driven by the interaction of this reform with Medicaid's "most-favored customer" clause (MFCC). By examining the response of drugs that faced a change in incentives equivalent to the removal of Medicaid's MFCC, we estimate that removing the Medicaid MFCC would have reduced overall 2010 non-Medicaid drug spending by an additional 3.5 percent, though it would have likely also increased Medicaid spending.
Abstract
					This paper provides causal evidence that greater minority representation on school boards translates into greater investment in minority students. Focusing on California school boards, I instrument for minority (specifically, Hispanic) representation using random ballot ordering and leverage new data from a statewide capital investment program to capture intradistrict resource allocations. I show that Hispanic board members invest the marginal dollar in high-Hispanic schools within their districts. High-Hispanic schools also exhibit gains in student achievement and decreased teacher turnover. I conclude that enhancing minority representation on school boards could help combat long-standing disparities in education.
Abstract
					We study the 2011 Austrian pay transparency law, which requires firms above a size threshold to publish internal reports on the gender pay gap. Using an event-study design, we show that the policy had no discernible effects on male and female wages, thus leaving the gender wage gap unchanged. The effects are precisely estimated, and we rule out that the policy narrowed the gender wage gap by more than 0.4 p.p.. Moreover, we do not find evidence for wage compression within establishments. We discuss several possible reasons why the reform did not reduce the gender wage gap.
Abstract
					We study the link between police officers' on-duty injuries and their peers' force use using a network of officers who attended the police academy together through a random lottery. On-duty injuries increase the probability of officers using force by 7 percent in the subsequent week. Officers are also more likely to injure suspects and receive complaints about neglecting victims and violating constitutional rights. The effect is concentrated in a narrow time window following the event and is not associated with significantly lower injury risk to the officer. Together, these findings suggest that emotional responses drive the effects rather than social learning.
Abstract
					Forward markets are believed to aggregate information about future spot prices and reduce the cost of producing the commodity. We develop a measure of the extent to which forward and spot prices agree in markets with transaction costs. Using this measure, we show that day-ahead prices better reflect real-time prices at all locations in California's electricity market after the introduction of financial trading. We then present evidence suggesting that operating costs and input fuel use fell after the introduction of financial trading on days when the nonconvexities inherent to the production and transmission of electricity are especially relevant.
Abstract
					Can debt moratoria help countries weather negative shocks? We exploit the Debt Service Suspension Initiative (DSSI) to study the bond market effects of deferring official debt repayments. Using daily data on sovereign bond spreads and synthetic control methods, we show that countries eligible for official debt relief experience a larger decline in borrowing costs compared to similar, ineligible countries. This decline is stronger for countries that receive a larger relief, suggesting that the effect works through liquidity provision. By contrast, the results do not support the concern that official debt relief could generate stigma on financial markets.
Abstract
					Using administrative data from a large public university, we show that male students are 18.6 percent more likely than female students to receive favorable grade changes made by instructors. Surveys of students and instructors reveal that regrade requests are prevalent and that male students are more likely to ask for regrades on the intensive margin. We corroborate the gender differences in regrade requests in an incentivized controlled experiment: we find that males have a higher willingness to pay to ask for regrades. Almost a third of the gender difference is due to gender differences in beliefs and the Big Five traits.
Abstract
					How do rising temperatures affect long-term labor reallocation in developing economies? In this paper we examine how increases in temperature impact structural transformation and urbanization within Indian districts between 1951 and 2011. We find that rising temperatures are associated with lower shares of workers in nonagricultural sectors, with effects intensifying over a longer time frame. Supporting evidence suggests that local demand effects play an important role: declining agricultural productivity under higher temperatures reduces the demand for nonagricultural goods and services, which subsequently lowers nonagricultural labor demand. Our results illustrate that rising temperatures limit sectoral and rural-urban mobility for isolated households.
Abstract
					We contribute to the literature on the effect of taxes on the locational choices of wealthy individuals by examining the geographical sensitivity of the Forbes 400 richest Americans to state estate taxes. Though we find billionaires' effective tax rates are only about half the statutory rate, their residential choices are highly sensitive to these taxes, as 35 percent of local billionaires leave states with an estate tax. This tax-induced mobility causes a large reduction in the aggregate tax base. Nonetheless, we find that the revenue benefit of an estate tax exceeds the cost for the vast majority of states.
Abstract
					Chinese local leaders are frequently moved across prefectures. By combining local leader rotation data and comprehensive firm land parcel purchase data across prefectures from 2006 to 2016, this paper examines how firm-politician connections affect resource allocation and finds that a firm headquartered in a leader's previous work prefecture purchases three times more land parcels in that leader's new governing prefecture than the prefecture-year mean, at half the unit prices. Identification is from within-firm-year variation in various prefectures through exogenous politician rotation. Land usage efficiency is lower for these follower firms' land parcels. Land allocation distortion is also economically sizable.
Abstract
					We show that the fiscal authorities of high-tax countries can lack the incentives to combat profit shifting to tax havens. Instead, they have incentives to focus their enforcement efforts on relocating profits booked by multinationals in other high-tax countries, crowding out the enforcement on transactions that shift profits to tax havens, and reducing the global tax payments of multinational companies. The predictions of our model are motivated and supported by the analysis of two new datasets: the universe of transfer price corrections conducted by the Danish tax authority, and new cross-country data on international tax enforcement.
Abstract
					I examine the Coasean independence property in a large multinational cap-and-trade scheme for greenhouse gas emissions, the EU Emissions Trading System. I analyze whether emissions of power producers are independent from allowance allocations by leveraging a change in allocation policy for a difference-in-difference strategy. The evidence suggests that the independence property holds overall and for larger emitters and that firms respond to the loss in allocation by increasing allowance purchases. Suggestive evidence for small emitters indicates that trading costs or behavioral bias distorts their emission decisions. However, their small emission share leaves the independence property intact at the sector level.
Abstract
					According to theory, "sin taxes" are welfare improving if consumers with low self-control respond at least as much to the tax as consumers with high self-control. We investigate empirically if demand response to soft drink and fat tax variations in Denmark depends on consumers' self-control. We use a unique home-scan panel that includes a survey measure of self-control. When taxes increase, consumers with low self-control reduce purchases less strongly than consumers with high self-control. When taxes decrease, both groups increase their purchases similarly. The results show an asymmetry in price elasticities by self-control that is more pronounced when taxes increase.
Abstract
					By exploiting the large quantity and rich variety of special economic zones (SEZs) in China, this study investigates how such zones affect human capital investment. Results show that SEZs significantly increase the local high school enrollment rate, but the impact varies across zone types: technology-oriented zones encourage education, while export-led zones discourage it. The increased job opportunities and wage premiums inside SEZs for employees with high school education increase high school enrollment, while such opportunities and wages for employees with middle school education decrease enrollment. A very small portion of the impact, if any, can be attributed to increased income.
Abstract
					Efforts to raise US health-care productivity have proceeded slowly, potentially due to the fragmentation of payment across insurers. Each insurer's efforts to improve care could influence how doctors practice for other insurers, leading to unvalued externalities. We study a randomized letter intervention by Medicare to curtail overuse of antipsychotics. The letters did not mention private insurance but reduced prescribing to these patients by 12 percent, much like the 17 percent effect in Medicare. We cannot reject one-for-one spillovers, suggesting that physicians use similar medical practice styles across insurers. Our findings establish that insurers can affect health care well outside their direct purview.
Abstract
					This study explores the spending response to tax refunds for Earned Income Tax Credit recipients using a novel dataset combining transaction-based measures of retail spending with administrative IRS data on tax refunds. Our dataset allows us to exploit variation in the timing of EITC refunds, including changes related to the 2017 PATH Act, along with cross-state differences in refund magnitudes to identify spending responses. Results show EITC recipients spend about $0.30 per refund dollar ($1,150 for the average refund) within just two weeks of issuance, suggesting stimulus targeted at this population may provide a quick boost to aggregate demand.
Abstract
					A reform increasing the full retirement age (FRA) by one year leads to larger than expected delays in pension claiming and retirement, while making late claiming more lucrative leads to a smaller than expected delay in pension claiming. Survey evidence shows people view the FRA as the "normal" retirement age and prefer to couple pension claiming and retirement decisions together, even though these two decisions are not coupled through social security provisions. Two mechanisms are at work: reference dependence with loss aversion in pension claiming, and spillovers from pension claiming on retirement choices. The FRA increase leads to large government savings.
Abstract
					We explore how the US Patent and Trademark Office may improve the quality of issued patents on "secondary" drug features by giving examiners more time to review drug patent applications. Our findings suggest that current time allocations are causing examiners to issue low-quality secondary patents on the margin. To assess the merits of expanding ex ante scrutiny of drug patent applications at the agency, we set forth estimates of the various gains and losses associated with giving examiners more time, including reduced downstream litigation costs and added personnel expenses, along with both the static gains and dynamic innovation losses associated with earlier generic entry.
Abstract
					I analyze the effect of two corporate tax breaks, bonus depreciation and the Domestic Production Activities Deduction (DPAD), on executive compensation in publicly traded US firms. I find both tax breaks significantly increase executive compensation. For every dollar a firm benefits from the tax breaks, compensation of the firm's top five highest-paid executives increases by $0.17 to $0.25. The tax breaks increase compensation primarily in firms with weaker governance structures, suggesting the compensation response is driven by executive rent extraction.
Abstract
					Many countries use CCTs targeted to parents to promote schooling. Attendance conditions may work through two channels: incentivization and information. If children have private information, (i) providing attendance information to parents may increase attendance inexpensively relative to CCTs and (ii) it may be more effective to incentivize children, who have full information, than parents. Tackling both questions in a unified experimental setting, we find that information alone improves parental monitoring and has a large effect relative to our CCT. Incentivizing children is at least as effective as incentivizing parents—importantly, not because parents were able to appropriate transfers to children.
Abstract
					In many settings, misaligned incentives and inadequate monitoring lead employees to take self-interested actions. This paper identifies and quantifies the costs of this principal-agent problem in the context of an energy efficiency appliance replacement program. I show that contractors (agents) hired by the electric utility (the principal) increase their compensation by intentionally misreporting program data to authorize the replacement of nonqualified refrigerators. I estimate that each unqualified replacement reduces program benefits by $106 and saves 30 percent less electricity than replacements that follow program guidelines. The same program without a principal-agent distortion would increase program benefits by $60 per replacement.
Abstract
					We study the long-run effects of contact with individuals from other regions in early adulthood on preferences, beliefs, and national identity. We combine a natural experiment, the random assignment of male conscripts to different locations throughout Spain, with tailored survey data. Being randomly assigned to complete military service outside of one's region of residence fosters contact with conscripts from other regions and increases sympathy and trust toward people from the region of service, as measured decades later. We also observe a long-lasting increase in identification with Spain for individuals originating from regions with strong peripheral nationalism.
Abstract
					This paper investigates whether the anti-scientific rhetoric of modern populists can induce followers to engage in risky behavior. We gather electoral information, credit card expenses, and geo-localized mobile phone data for approximately 60 million devices in Brazil. After the president publicly dismissed the risks of the COVID-19 pandemic and challenged scientific recommendations, social distancing in pro-government localities declined. Consistently, credit card expenses increased immediately. Results are driven by localities with higher media penetration levels, active Twitter accounts, and a larger proportion of evangelical Christians, a critical electoral group.
Abstract
					I study optimal carbon taxation in an analytic quantitative integrated assessment model (IAM) that links IAM components, parametric assumptions, and calibration approaches directly to their policy impacts. I show how temperature's tax impact differs from that of previously analytically modeled carbon dynamics. Novel to analytic IAMs are a general economy, energy sectors including capital, varying degrees of substitutability across energy sources, an approximation of capital persistence, objective functions that include CES preferences and population weighting, and an explicit model of the greenhouse effect and ocean-atmosphere temperature dynamics. The paper enables economists to develop better-informed opinions about the social cost of carbon.
Abstract
					The ability to speak and understand a host country's primary language is strongly associated with measures of immigrant integration. We estimate the causal effects of English language training for adult immigrants on participants' civic and economic outcomes using randomized enrollment lotteries from a public adult education program in Massachusetts. Participation doubles voter participation and increases annual earnings by $2,400 (56 percent). Increased tax revenue from earnings gains cover program costs over time, generating a 6 percent return for taxpayers. Ours is the first randomized evaluation of adult English language training as a standalone intervention in the United States.
Abstract
					This paper assesses the long-term consequences of voting for democracy. We study Chile's 1988 plebiscite, which ended 15 years of dictatorship and reestablished democracy. Taking advantage of individual-level voting data, we implement an age-based regression discontinuity design comparing long-run registration and turnout rates across marginally eligible and ineligible individuals. We find plebiscite eligibility increased electoral turnout three decades later. The magnitude of the initial mobilization emerges as the mechanism. Plebiscite eligibility induced a sizable share of less-educated voters to register compared to other upstream elections. The event contributed to the emergence of one-party rule the 20 years following democratization.
Abstract
					I estimate the impact of a Louisiana state policy that mandated Free Application for Federal Student Aid (FAFSA) applications as a high school graduation requirement. I find significant increases in FAFSA completion rates (19 percentage points), and my estimates imply an increase of 1–2 percentage points in college enrollment. There is suggestive evidence that these effects were more concentrated among lower-income students/schools, and merit-based state financial aid applications also increased. The design of this mandate implies that pushing students into action may be more effective than informational nudges and that localized support systems such as counselors are important for the success of a top-down policy.
Abstract
					This paper studies the effect of bank credit supply shocks on formal employment in Mexico using a proprietary dataset containing information on all loans extended to firms by commercial banks during 2010–2015. We find large impacts on the formal employment of small and medium firms: a positive credit shock of 1 standard deviation increases yearly employment by 1.4 percentage points. The shares of uncollateralized credit and credit received by family firms, younger firms, and firms with no previous bank relationships also increase, suggesting that credit shocks may play a more prominent role for employment creation in credit-constrained settings.
Abstract
					Recent debates over health care reform, including in the context of the Military Health System (MHS) and Veterans Administration, highlight the dispute between public and private provision of health care services. Using novel data on childbirth claims from the MHS and drawing on the combination of plausibly exogenous patient moves and heterogeneity across bases in the availability of base hospitals, we identify the impact of receiving obstetrical care on versus off military bases. We find evidence that off-base care is associated with slightly greater resource intensity, but also notably better outcomes, suggesting marginal efficiency gains from care privatization.
Abstract
					We test whether age discrimination rises during recessions using two complementary analyses. Confidential EEOC microdata reveal that age-related firing and hiring charges rise by 3.3 percent and 1.6 percent, respectively, for each percentage point increase in a state-industry's monthly unemployment. Though the opportunity cost of filing falls, the fraction of meritorious claims increases—a sufficient condition for rising discrimination under plausible assumptions. Second, we repurpose data from hiring correspondence studies conducted across different cities and time periods during the recovery from the Great Recession. Each percentage point increase in local unemployment reduces the callback rate for older versus younger women by 15 percent.
Abstract
					We provide experimental evidence on the impact of specific faculty behaviors aimed at increasing student success for college students from historically underrepresented groups. The intervention was developed after conducting in-person focus groups and a pilot experiment. We find significant positive treatment effects across a multitude of short- and longer-run outcomes. Specifically, underrepresented students in the treatment report more positive perceptions of the professor and earned higher course grades. These positive effects persisted over the next several years, with students in the treatment more likely to persist in college, resulting in increased credit accumulation and degree completion.
Abstract
					We construct a database of public pension policy changes with motivation and implementation information for ten OECD countries. Structural pension reforms, motivated by long-run sustainability concerns, often come with prolonged phase-in periods. In response to pension retrenchments implemented immediately, people close to retirement stay in the workforce longer. News about future pension retrenchments with implementation lags, however, is likely to lead this group to exit the labor market. This decline in the labor force participation rate is particularly strong for reforms with long lags, ones that introduce fundamental policy changes, and ones where citizens have lower trust in the government.
Abstract
					During the South African apartheid, Black people were forced to move to homelands during the 1960s and 1970s, resulting in one of history's largest segregation policy experiments. We examine how and why relocation to the homelands affected human capital attainment. Exploiting the staggered timing of homeland establishment in a cross-cohort identification strategy, we find that moving to the homelands during childhood significantly reduces educational attainment, labor earnings, and employment rates in adulthood. The data suggest an important role for place effects. Moving to the homelands in childhood implies greater exposure to poorer neighborhoods, and it disproportionally reduces human capital attainment.
Abstract
					We investigate the impacts of school-based internet access on second graders' test scores, using over 2 million student observations from a panel of Peruvian public primary schools. We identify effects up to 6+ years after installation on different cohorts of second-grade students, exploiting variation in the timing of internet access induced by the rollout of a national program. We find positive but modest short-run impacts, but importantly, these effects grow for subsequent cohorts. Indeed, short-run estimates alone would have led to different conclusions. These dynamics underscore the value of extended evaluation windows to allow benefits of educational technology to materialize.
Abstract
					Using a rich dataset that merges student-level school records with birth records, and leveraging a student fixed effects design, we explore how a Florida private school choice program affected public school students' outcomes as the program matured and scaled up. We observe growing benefits (higher standardized test scores and lower absenteeism and suspension rates) to students attending public schools with more preprogram private school options as the program matured. Effects are particularly pronounced for lower-income students, but results are positive for more affluent students as well. Local and district-wide private school competition are both independently related to student outcomes.
Abstract
					Do politics matter for macroprudential policies? I show that changes in macroprudential regulation exhibit a predictable electoral cycle in the run-up to 221 elections across 58 countries from 2000 through 2014. Policies restricting mortgages and consumer credit are systematically looser before elections, particularly during economic expansions. Consistent with theories of opportunistic political cycles, this pattern is stronger when election outcomes are uncertain, regulators are closely tied to politicians, and institutions are poor. These results suggest that political pressures may limit the ability of regulators to "lean against the wind."
Abstract
					Given the critical role of renewable energies in current and future electricity markets, it is important to understand how they affect firms' pricing incentives. We study whether the price-depressing effect of renewables depends on their degree of market price exposure. Paying renewables with fixed prices, rather than market-based prices, is more effective at curbing market power when the dominant firms own large shares of renewables, and vice versa. Our empirical analysis leverages several short-lived changes to renewables regulation in the Spanish market and shows that switching from full-price exposure to fixed prices caused a 2–4 percent reduction in the average price-cost markup.
Abstract
					We study direct and indirect effects of Chinese import competition on union membership in the United States, 1990–2014. Import competition in manufacturing induced a modest decline in unionization within manufacturing industries. The magnitude is small because unionized manufacturers competed in higher-quality product segments. Manufacturers in right-to-work states experienced more direct competition with low-quality Chinese imports. Outside of manufacturing, however, import competition causes an important increase in union membership, as less educated women shift away from retail and toward jobs in health care and education where unions are stronger. We calculate that Chinese imports prevented 26 percent of the union density decline that would have otherwise occurred.
Abstract
					This paper establishes that a targeted policy backfires because it reveals information about nontargeted units. In the world's largest fishery, the regulator attempts to reduce the harvesting of juvenile fish by temporarily closing areas where the share of juvenile catch is high. By combining administrative microdata with biologically richer data from fishing firms, I isolate variation in closures that is due to the regulator's lower-resolution data. I estimate substantial temporal and spatial spillovers from closures. Closures increase total juvenile catch by 48 percent because closure announcements implicitly signal that fishing before, just outside, and after closures is high productivity.
Abstract
					The free digital distribution of creative works could cannibalize demand for physical versions, but it could also boost physical sales by enabling consumers to discover the original work. We study the impact of the Google Books digitization project on the market for physical books. We find that digitization significantly boosts the demand for physical versions and provide evidence for the discovery channel. Moreover, digitization allows independent publishers to introduce new editions for existing books, further increasing sales. Our results highlight the potential of free digital distribution to strengthen the demand for and supply of physical products.
Abstract
					We estimate the impact of increased policy uncertainty from Brexit on UK trade in services. We apply an uncertainty-augmented gravity equation to UK services trade with the European Union at the industry level from 2016:I to 2018:IV. By exploiting the variation in the probability of Brexit from prediction markets interacted with a new trade policy risk measure across service industries, we identify a significant negative impact of the threat of Brexit on trade values and participation. The increased probability of Brexit in this period lowered services exports by at least 20 log points.
Abstract
					We present causal evidence of R&D tax incentives' positive impacts on a firm's own innovation and that of its technological neighbors. Exploiting a change in size-based eligibility thresholds for R&D tax relief, we implement a Regression Discontinuity Design using administrative data. We find significant effects of tax relief on (quality-adjusted) patenting (and R&D) that persist up to seven years, and evidence of R&D spillovers on the innovation of technologically close firms. We can rule out elasticities of patenting with respect to R&D user cost of under 2 at the 5 percent level and show that our large effects are driven by financially constrained treated firms.
Abstract
					Can sanctions deter juvenile crime? Research indicates that they may not, as offending barely decreases when individuals cross the age of criminal majority and begin to face harsher sanctions. Several models of criminal behavior predict, however, that these small reactions close to the threshold may mask larger behavioral responses among individuals below the age threshold. Policy variation between 2007–2015 in the United States is used to show evidence consistent with these predictions—juvenile crime increases when the age of majority is increased. This increase is driven by younger age groups and is considerably larger than discontinuity estimates at the threshold.
Abstract
					We study how local grocery markets within a city are affected by changes in housing markets. Our empirical strategy exploits a shift in the spatial distribution of construction activity induced by a large-scale, place-based tax exemption in the city of Montevideo. The introduction of new housing stock induced by the policy causes a reduction in grocery prices of 2.3 percent and an increase in locally available product varieties. Using insights from a multiproduct model of imperfect competition and estimates for different types of stores, we show these changes are the result of incumbents' response to an increase in local demand.
Abstract
					Using administrative data, we analyze the response to Proposition 30, a 2012 measure that increased California marginal tax rates by up to 3 percentage points for high-income households. Relative to baseline departure rates, an additional 0.8 percent of the residential tax base that landed in the top bracket left California in 2013. Using matched out-of-state taxpayers as controls reveals an income elasticity with respect to the marginal net-of-tax rate of 2.5–3.2 for high earners who stayed. These responses eroded 45.2 percent of state windfall tax revenues within the first year and 60.9 percent within 2 years, driven largely by the intensive margin.
Abstract
					We study hassle costs versus information provision in explaining how prescription drug monitoring programs (PDMPs) decrease opioid prescribing. PDMPs aim to reduce opioid prescribing through information provision but may also unintentionally affect prescribing through the hassle of required record checks. We analyze Kentucky's landmark PDMP to disentangle these two mechanisms. Hassle costs reduce opioid prescribing across the board, including to opioid-naive patients; however, physicians continue to prescribe opioids to patients who would benefit the most. Although information also affects prescribing, hassle costs explain the majority of the decline. Introducing a cost to prescribing high-risk medications improves the targeting of treatment.
Abstract
					We use Rio de Janeiro's slum pacification program initiated in 2008 to analyze the effect of policies targeting crime in lawless areas. We correct the bias from the unobserved rise in crime reporting via the use of a proxy variable and bounded variation assumptions. We find that the program reduced the murder and robbery rates but strongly increased the assault and threat rates. We explain these results by providing evidence that increased enforcement weakened the security service that gangs provide on their turf, and may incentivize criminals to switch from serious to less serious crimes.
Abstract
					We study how closures of maternity wards affect maternal and neonatal health. Using data on all hospital births in Sweden between 1990 and 2004, we compare changes in birth-related outcomes across hospital catchment areas that were differently exposed to ward closures. Our findings show that the closures increased maternal obstetric trauma but also decreased fetal stress and infant trauma among newborns. Adverse maternal outcomes are mainly driven by ward overcrowding, whereas increases in travel distance have no distinguishable effects. Positive effects on infant health reflect a shift of births from smaller to larger wards of higher quality.
Abstract
					What is the efficacy of redrawing school attendance boundaries as a desegregation policy? To provide causal evidence on this question, we employ novel data with unprecedented detail on the universe of Danish children and exploit changes in attendance boundaries over time. Households defy reassignments to schools with lower socioeconomic status. There is a strong social gradient in defiance, as resourceful households are more sensitive to the student composition of new schools. We simulate school assignment policies and find that boundary changes that reassign areas to a highly disadvantaged school are ineffective at altering the socioeconomic composition at the disadvantaged school.
Abstract
					I assess whether the tax code is a viable policy lever for influencing labor supply among older workers. Specifically, using administrative data from Canada, I estimate the earnings responses to a unique reform that lowered tax burdens for couples with a pensioner, using quasi-experimental methods. I find that workers decrease labor supply as tax bills decline but do not respond to changes in marginal tax rates. Hence, while public policy often aims to keep people in the workforce longer, there are conflicting effects of offering tax advantage for seniors on work incentives. I consider implications of these results for age-dependent taxation.
Abstract
					We study the effects of increasing the statutory retirement age (SRA) in the Netherlands, using regression discontinuity design and administrative data on the universe of the population. We find clear and large employment effects of the reform. A simple model in which individuals stay longer in their pre-SRA labor market state predicts the treatment effects well. The employment level before the SRA and the retirement hazard at the SRA are the key determinants of the effects of the policy change. Exploring potential explanations for the high hazard rate observed in the Netherlands, our results point to an important role for employers' effects.
Abstract
					We conducted a randomized controlled trial of an intervention designed to assist victims of domestic violence in accessing nonpolice support services. The intervention led to a 22 percent decrease in the fraction of victims providing a witness statement to police. Witness statements are an important piece of evidence and a key input in the prosecution of perpetrators. Despite this, we do not find a significant change in perpetrator arrests and convictions or in reported future violence. Survey responses provide evidence of an increase in nonpolice service use and a reduction in future victimization risk, but also a potential decrease in short-run well-being.
Abstract
					Modern websites rely on personal data to design better content and to market themselves. The European Union's General Data Protection Regulation (GDPR) was intended to make access to such personal data more difficult, with the goal of protecting user privacy. We examine the GDPR's impact on website page views and revenue for 1,084 online firms using data from Adobe's website analytics platform. We find a reduction of 12 percent in both EU user website page views and website revenue recorded by the platform after the GDPR's enforcement deadline. We decompose these GDPR effects into changes in real outcomes and changes to data recording, respectively.
Abstract
					We evaluate how fiscal capacity and migration respond to the introduction of the individual income tax, drawing on new panel data on US states from 1900 to 2010. We find that the introduction of the income tax increased revenue per capita by 12 percent in the short term, 15 percent in the medium term, and 17 percent in the long term. The absolute level of revenue, however, did not significantly change over the long term for post–World War II adopters. To explain this, we show that the introduction of the income tax induced significant outmigration to non-income-tax states by middle- and high-earning households.
Abstract
					We experimentally vary signals and senders to identify which combination will increase vaccine demand among a disadvantaged population in the United States—Black and White men without a college education. Our main finding is that laypeople (nonexpert concordant senders) are most effective at promoting vaccination, particularly among those least willing to become vaccinated. This finding points to a trade-off between the higher qualifications of experts on the one hand and the lower social proximity to low-socioeconomic-status populations on the other hand, which may undermine credibility in settings of low trust.
Abstract
					In US environmental court cases, a cash penalty can be mitigated if a defendant volunteers to undertake an in-kind project, such as retrofitting school buses or building a public park. A goal of the policy is to address environmental justice concerns for low-income and minority populations, yet the historical record shows in-kind settlements most likely occur in cases involving high-income, majority-White communities. A choice experiment reveals that the public prefers in-kind settlements over cash, and a randomized survey reveals in-kind settlements improve the public's view of a violating firm, consistent with our finding of positive stock market reactions to in-kind settlements.
Abstract
					Prior studies show that taxes matter for the residential locations of high-income earners. But states raise a significant share of revenue from nonresidents. Using variation in state tax rates, we provide causal evidence on the effect of the net-of-tax rate on the location of labor supply for professional golfers. State taxes induce high-income earners to shift employment to low-tax states without a residence change. The elasticity of working in a state is 0.34 and, consistent with the superstar phenomenon, increases with earnings. Our results suggest a novel margin of mobility responses for top earners: the spatial relocation of labor supply by nonresidents.
Abstract
					We study corporate responses to a minimum income tax, using the universe of corporate tax filings in Honduras. The policy design allows us to separately estimate cost misreporting under profit taxation and the elasticity of reported revenue. Large corporations overreport true costs when taxed on profits. Taxing revenue leads to a substantial decrease in reported revenues: we estimate an elasticity in the range 0.35–1. The elasticity of revenue is attenuated when third-party information on the revenue of firms is available, suggesting misreporting plays an important role. Our results inform trade-offs when broadening tax bases to curb evasion.
Abstract
					This paper provides evidence on how mandatory retirement influences judge performance using reforms in US state supreme courts as a natural experiment. We find that introducing mandatory retirement improves court performance as measured by output (number of opinions) and legal influence (number of citations to opinions). While older judges are cited less than younger judges, the effect of mandatory retirement is larger than what is expected from a change in the age distribution. We find some evidence that the additional effect is due to selective attrition and that the presence of older judges reduces the performance of younger judges.
Abstract
					Does the presence of underrepresented racial/ethnic groups in a legislative body differentially impact outcomes for members of those groups? We study close elections between White and non-White candidates for California city council and the corresponding impact on housing values, a summary statistic for neighborhood investment. We find electing non-White rather than White candidates generates differential home value gains in majority non-White neighborhoods. This result, which is not explained by correlations between candidate race and political affiliation or neighborhood racial composition and income, suggests that increased representation can reduce racial disparities. Our results strengthen with increased city-level segregation and council member pivotality.
Abstract
					The returns to selective STEM programs depend on whether students complete these programs, earnings conditional on completion, and counterfactual schooling choices. Much research has focused on only one of these margins, potentially leading to an incomplete picture of the returns to STEM education for students with less academic preparation. Using data from a Colombian University and two empirical strategies, we find less-prepared students have higher earnings returns to selective STEM programs than more-prepared students, even though they are less likely to complete these programs. A key mechanism is that less-prepared students have lower-paying counterfactual schooling options.
Abstract
					Local governments spend over $12 billion annually funding the operation of 15,427 public libraries in the United States, yet we know little about their effects. We use data describing the near universe of public libraries to show that public library capital investment increases library visits, children's attendance at library events, and children's circulation by an average of 5–15 percent in the years following investment. Increases in library use translate into improved test scores in nearby school districts: a $200 or greater per student capital investment in local public libraries increases reading test scores by 0.01–0.04 standard deviations in subsequent years.
Abstract
					Do family policies reduce gender inequality in the labor market? We contribute to this debate by investigating the joint impact of parental leave and childcare, using administrative data covering Austrian workers over more than half a century. We start by quasi-experimentally identifying the causal effects of all family policy reforms since the 1950s on the full dynamics of male and female earnings. We then map these causal estimates into a decomposition framework to compute counterfactual gender inequality series. Our results show that the enormous expansions of parental leave and childcare have had virtually no impact on gender convergence.
Abstract
					Long waits for health care raise concerns about the consequences of delayed treatment. We use variation in queue congestion to estimate effects of wait time for orthopedic surgery. We do not find that longer wait times lead to increased health care utilization. However, we do find persistent reductions in labor supply: long waits increase medium to long-term work absences and permanent disability receipt. Effects are driven by individuals who are on sick leave at referral. Our results are consistent with patterns of state dependence, where extended periods of temporary disability while awaiting treatment create persistent barriers to returning to work.
Abstract
					Men and women tend to hold different jobs. Are these differences present already in the types of jobs men and women apply for? Using administrative data on job applications made by the universe of Danish unemployment insurance recipients, we provide evidence on gender differences in applied-for jobs for the broader labor market. Across a range of job characteristics, we find large gender gaps in the share of applications going to different job types even among observationally similar men and women. In a standard decomposition, gender differences in applications can explain more than 70 percent of the residual gender wage gap.
Abstract
					We examine the persistence of the impact of early-life exposure to air pollution on children's health from birth to school enrollment using administrative public health insurance records covering one-third of all children in Germany. For identification, we exploit air quality improvements caused by Low Emission Zones, a policy imposing driving restrictions on emission-intensive vehicles. Our results indicate that children exposed to cleaner air in utero and their first year of life require less medication for at least five years. The initially latent health response materializes only gradually, leaving important but subtle health benefits undetected in common measures of infant health.
Abstract
					We decompose the "China shock" into two components that induce different adjustments for firms exposed to Chinese exports: an output shock affecting firms selling goods that compete with similar imported Chinese goods, and an input supply shock affecting firms using inputs similar to the imported Chinese goods. Combining French accounting, customs, and patent information at the firm level, we show that the output shock is detrimental to firms' sales, employment, and innovation. Moreover, this negative impact is concentrated in low-productivity firms. On the other hand, the impact of the input supply shock is reversed.
Abstract
					Health insurance plans increasingly pay for expenses only beyond a large annual deductible. This paper explores the implications of deductibles that reset over shorter timespans. We develop a model of insurance demand between two actuarially equivalent deductible policies in which one deductible is larger and resets annually and the other deductible is smaller and resets biannually. Our model incorporates borrowing constraints, moral hazard, midyear contract switching, and delayable care. Calibrations using claims data show that the liquidity benefits of resetting deductibles can generate welfare gains of 3–10 percent of premium costs, particularly for individuals with borrowing constraints.
Abstract
					We develop a theory of commodity taxation featuring imperfect competition along with love-of-variety preferences and endogenous firm entry and exit. We derive new formulas for the efficiency and pass-through of specific and ad valorem taxes. These formulas unify existing canonical ones and feature a new term capturing the effect of variety on consumer surplus. As a proof of concept, we use theoretical formulas to identify love-of-variety preferences in an empirical application. Our welfare analysis shows that the marginal excess burden is sensitive to the estimated love of variety, which overturns classical results on the desirability of ad valorem versus specific taxation.
Abstract
					Many countries are facing and resisting strong migratory pressure, fueling irregular migration. In response to mounting deaths in the Central Mediterranean, European nations intensified rescue operations in 2013. We develop a model of irregular migration to identify the effects of these operations. We find that smugglers responded by sending boats in adverse weather and utilizing flimsy rafts, thus inducing more crossings in dangerous conditions and ultimately offsetting intended safety benefits due to moral hazard. Despite the increased risk, these operations likely increased aggregate migrant welfare; nevertheless, a more successful policy should instead restrict supply of rafts and expand legal alternatives.
Abstract
					How does the provision of public pension benefits impact private savings? We answer this question in the context of a Danish reform that increased social security eligibility ages. Using administrative data and a regression discontinuity design, we identify the causal effects of the policy on savings throughout the financial portfolio. We find increases in contributions to personal and employer-sponsored retirement accounts when delayed benefit eligibility induces extended employment. We argue that inertia—the continuation of previous savings behaviors—is a key mechanism, and we highlight how firm default contribution rate policies can mediate savings responses to social security reform.
Abstract
					This paper analyzes the effects of Denmark's Start Aid welfare reform that targets refugees. Implemented in 2002, it enables us to study not only the reform's immediate effects but also its longer-term consequences and its repeal a decade later. The reform-induced large transfer cuts led to an increase in employment rates, but only in the short run. Overall, the reform increased poverty rates and led to a rise in subsistence crime. Moreover, local demand conditions generate substantial heterogeneity in the reform's effects on immediate and longer-term employment.
Abstract
					Developing economies are not disproportionately exposed to natural disasters, but they experience significantly more deaths. Exploiting a discontinuity in the eligibility rules for Mexico's indexed disaster fund (Fonden), I show that the accelerated reconstruction of public infrastructure can significantly mitigate the mortality impacts of disasters. Fonden's impact is concentrated in areas with medical infrastructure and among conditions responsive to basic and freely available medical care. These findings suggest that Fonden operates by restoring access to health services. I also show that Fonden is cost-effective relative to other interventions and that its benefit–cost ratio is at least 3.2.
Abstract
					The correlation between hot weather and crime is well documented but not fully understood. We combine millions of administrative records, victimization surveys on unreported crime, and daily weather information to analyze the effect of temperatures on crime in Mexico. We find that sample selection cannot explain the observed positive correlation between temperature and crime. Moreover, we find that shifts in alcohol consumption and time use on weekends are responsible for 28 percent of temperature-induced crimes. We also observe changes in the hour and location of crimes, providing new evidence on the importance of time use as a determinant of crime.
Abstract
					Low-skilled immigrants indirectly affect public finances through their effect on resident wages and labor supply. We operationalize this indirect fiscal effect in a model of immigration and the labor market. We derive closed-form expressions for this effect in terms of estimable statistics. An empirical quantification for the United States reveals an indirect fiscal benefit for one average low-skilled immigrant of roughly $750 annually. The indirect fiscal benefit may outweigh the negative direct fiscal effect that has previously been documented. This challenges the perception of low-skilled immigration as a fiscal burden.
Abstract
					We exploit the 1997 and 2003 constitutional amendments in Texas—allowing home equity loans and lines of credit for nonhousing purposes—as natural experiments to estimate the effect of easier credit access on the labor market. Using state-level as well as micro data, we find that easier access to housing credit led to a notably lower labor force participation rate between 1997 and 2007. Our findings are remarkably robust to improved synthetic control methods based on insights from machine learning. Our research shows that negative labor market effects of easier credit access are important for assessing its stimulative impact on overall growth.
Abstract
					This paper investigates how criminals learn about criminal laws. It uses a natural experiment in which sentences were drastically increased for a specific type of recidivism in France. In the short run, advertising the reform did not trigger any change in criminal behavior. However, people who had firsthand experience of the reform learned about it and later committed significantly fewer targeted crimes, but the same number of nontargeted crimes. Learning appears to be limited to individuals with direct experience of the law. While codefendants also learned, other criminal peers and defendants attending the same trial for another case did not.
Abstract
					Scholars have examined whether preferences for job characteristics help explain why men and women sort into different occupations but have overlooked preferences for meaning at work. We first document gender differences in preferences for meaning in a large-scale survey covering individuals in 47 countries. We then conduct a choice-based conjoint analysis of a cohort of MBA students at a leading business school to study gender differences in preferences for meaning compared to other job attributes. We show that gender differences in preferences for meaning at work are widespread and partly explain gender differences in behavioral outcomes, including industry of work.
Abstract
					In this study, we examine the broader economic effects of the US federal government's Paycheck Protection Program by focusing on the performance of securitized commercial mortgages. We provide novel evidence for spillover effects of government interventions in the face of economic crises. We find that the PPP reduced mortgage delinquencies by approximately $36 billion in 2020. The strongest effects occur when PPP funds targeted businesses in areas most affected by COVID-19, where banks overperformed in providing PPP loans, and among mortgages on properties in retail and lodging. Thus, PPP relief to small businesses eased economic distress beyond the labor market.
Abstract
					This paper estimates family spillovers in high school major choice in Sweden, where admission to oversubscribed majors is determined based on GPA. Using a regression discontinuity design, we find large sibling and intergenerational spillovers that depend on the sex mix of a dyad. Same-sex siblings copy one another, while younger brothers recoil from an older sister's choices. Fathers and mothers influence sons but not their daughters, except when a mother majors in the male-dominated program of engineering. Back-of-the-envelope calculations reveal that these within-family spillovers have sizable implications for the sex composition of majors.
Abstract
					Legal abortion has recently been suggested as an essential health care service. In this study, we consider whether abortion legalization over 1969–1973 improved women's health as measured by maternal mortality. Our event study results indicate that legal abortion substantially lowered non-White maternal mortality by 30–50 percent, with 134 non-White maternal deaths averted nationally in the first year abortion became legal. We also find that early state-level legalizations were crucial and more influential than the Roe v. Wade decision itself.
Abstract
					We study France's 1995 ban on firm donations to politicians. We use a difference-in-differences approach and a novel dataset combining the campaign manifestos issued by candidates running in French parliamentary elections with data on their campaign contributions. We show that banning firm donations discourages candidates from advertising their local presence during the campaign, as well as economic issues. The ban also leads candidates from nonmainstream parties to use more extreme language. This suggests that private donors shape politicians' topics of interest, and that campaign finance reforms may affect the information made available to voters through their impact on candidates' rhetoric.
Abstract
					This paper studies the Brazilian Psychiatric Reform, which reorganized the public mental health care provision by introducing mental health centers (CAPS) as a community-based substitute for inpatient care. Our research design exploits the rollout of CAPS in a difference-in-differences framework. We show that these centers increased outpatient mental health care production and reduced psychiatric hospitalizations. These reductions were more pronounced for long-stay admissions and among patients with schizophrenia. We find that the savings implied by fewer admissions do not offset the cost of the policy. Also, the reform did not reduce mental health mortality and it increased violent crimes.
Abstract
					We estimate the causal effects of drug copayment coupons, which reduce consumer cost sharing for branded prescription drugs, on net-of-rebate price and quantities sold. We show that coupon introductions increase the quantity of drugs without generic substitutes sold by 23–25 percent for the commercial segment relative to Medicare Advantage, where coupons are banned. To quantify the resulting equilibrium price effects, we estimate a discrete choice model of demand for multiple sclerosis drugs and simulate a model of drug price negotiations. We estimate that net-of-rebate prices are 8 percent higher due to coupons being offered for most of these drugs.
Abstract
					Centralization of public procurement can lower prices for the government's direct purchase of goods and services. This paper focuses on indirect savings. Public administrations that do not procure directly through a central procurement agency might benefit from the availability of centrally procured goods. We exploit the introduction of a central purchasing agency in Italy and find that prices came down by 22 percent among administrations that bought autonomously. These indirect effects appear to be driven by informational externalities, especially for less competent public buyers purchasing technologically more complex goods. Accounting for indirect savings increases the estimate of direct ones.
Abstract
					We show that a targeted law can modify teens' risky behavior. We examine the effects of an Australian intervention banning first-year drivers from driving late at night with multiple peers, which had accounted for one-fifth of their traffic fatalities. Using data on individual drivers linked to crash outcomes, we find the reform more than halves targeted crashes, casualties and deaths. There are large positive spillovers through lower crashes earlier in the evening and beyond the first year, suggesting broad and persistent declines in high-risk driving. Overall, the targeted intervention delivers gains comparable to harsher restrictions that delay teen driving.
Abstract
					This paper explores how a benevolent policymaker should optimally tax (or subsidize) product attributes when consumers are behaviorally biased. We demonstrate that market choices are informative about biases, which can be exploited for targeting biased consumers via a nonlinear tax schedule. We show that the properties of this schedule depend on few parameters of the joint distribution of consumer valuations and biases. Furthermore, we provide a novel justification for behaviorally motivated product standards and derive when a combination of taxes and standards is optimal. We illustrate our findings based on a numerical example from the lightbulb market.
Abstract
					Even as policymakers seek to encourage economic development by addressing misallocation due to frictions in labor markets, the associated production externalities—such as air pollution—remain unexplored. Using a regression discontinuity design, we show access to rural roads increases agricultural fires and particulate emissions. Farm labor exits are a likely mechanism: rural roads cause movement of workers out of agriculture and induce farmers to use fire—a labor-saving but polluting technology—to clear agricultural residue or to make harvesting less labor-intensive. Overall, the adoption of fires due to rural roads increases infant mortality rates by 5.5 percent in downwind locations.
Abstract
					Government transfers might have long-lasting consequences on electoral outcomes. We study a regional policy implemented in Italy over the second half of the twentieth century and leverage variation in transfers to show that parties promoting more state intervention in the economy performed better in the targeted areas relative to places that were not subsidized, decades after the end of the policy. This effect does not seem to mirror long-term differences in the economic performance of treated and control areas, which were small, nor other attitudes within the electorate.
Abstract
					We study the equilibrium effects of introducing competitive bidding in drug procurement. In 2019, China introduced a competitive bidding program where drug companies bid for a prespecified procurement quantity in nine provinces. Using a difference-in-differences design, we show the program reduced average drug prices by 47.4 percent. Generic drugs won most bids and cut prices by 75.0 percent. We develop an equilibrium model to quantify the trade-off between lower prices and potential choice distortions. Competitive bidding increases consumer welfare if policymakers believe consumers should value branded and bioequivalent generic drugs equally. The program also reduced government expenditure on insurance by 19.8 percent.
Abstract
					This paper provides evidence that information frictions limit the labor market trajectories of US youth. We provide credible skill signals—recommendation letters based on supervisor feedback—to a random subset of 43,409 participants in New York's summer jobs program. Letters increase employment the following year by 3 percentage points (4.5 percent). Earnings effects grow over four years to a cumulative $1,349 (4.9 percent). We find little evidence of increased job search or confidence; instead, signals may help employers better identify successful matches with high-productivity workers. Pulling youth into the labor market can, however, hamper on-time graduation, especially among low-achieving students.
Abstract
					Over 18 million adults in the United States lack a high school credential. While some go on to attain the GED, diplomas are potentially more valuable. A network of high schools helps adults graduate by providing tailored curricula, nonacademic coaching, onsite child care, and transportation. After five years, earnings increase by 38 percent more for graduates than nonenrolling applicants. We address selection by conditioning on preapplication earnings and comparing to students who exit after positive shocks. Much of the wage gains can be accounted for by sectoral switching and evidence on credential completions is consistent with a human capital mechanism.
Abstract
					We study the variation of carbon price recommendations and their determinants using survey evidence from more than 400 experts across almost 40 countries. We quantify the extent of disagreement and reveal that a majority of experts can agree on short- and medium-term global carbon price levels, and on unilateral carbon price levels in most countries. The majority of recommendations do not exhibit a "free riding" pattern of lower unilateral than global carbon prices. Furthermore, border carbon adjustment facilitates higher unilateral price recommendations. We show how recommendations vary with additional survey responses, and with country and expert characteristics.
Abstract
					Solar and wind power are now cheaper than fossil fuels but are intermittent. The extra supply-side variability implies growing benefits of using real-time retail pricing (RTP). We evaluate the potential gains of RTP using a model that jointly solves investment, supply, storage, and demand to obtain a chronologically detailed dynamic equilibrium for the island of Oahu, Hawai'i. We find that, holding demand assumptions fixed, RTP reduces costs in high-renewable systems by roughly 6 to 12 times as much as in fossil systems, markedly lowering the cost of clean energy integration.
Abstract
					We explore the role of identity along multiple dimensions in high-stakes decision-making. Our data contain information about demographic and socioeconomic indicators for defendants and randomly assigned jurors in a Swedish court. Our results show that defendants are 4 to 6 percent less likely to get a prison sentence if judged by one more juror belonging to the same identity-forming group. Moreover, they are given 10 percent shorter prison sentences. Socioeconomic background and demographic attributes are equally important for identity effects, and these effects stem from trials of longer duration and where the defendant is present in the courtroom.
Abstract
					Schools must balance student behavior management with the potential negatives of strict discipline. These policies can deter misbehavior but may stigmatize students and expose them to the criminal justice system early. We assess the impact of attending a strict discipline school on achievement, educational attainment, and adult criminal activity. Using data from a boundary change and principal switches, we find that higher suspension rates have significant negative long-term effects. Students at such schools are 15–20 percent more likely to be arrested and incarcerated as adults. Negative impacts on educational attainment are particularly pronounced for males and students of color.
Abstract
					This paper estimates the causal effect of corporate tax hikes on firm investment based on more than 1,400 local tax changes. By observing planned and realized investment volumes in a representative sample of German manufacturing firms, we can study how tax hikes induce firms to revise their investment decisions. On average, the share of firms that invest less than previously planned increases by 3 percentage points after a tax hike. This effect is twice as large during recessions.
Abstract
					Governments face many constraints in attracting talented managers to the public sector, which often lacks high-powered incentives. In this paper, we study how a civil service reform in Chile changed the effectiveness of a vital group of public sector managers: school principals. First, we estimate principal effectiveness by using an extension of the canonical teacher value-added model. Then we evaluate the effect of the reform on principal effectiveness using a difference-in-differences approach. We find that public schools appointed more effective managers and improved their students' outcomes after increasing the competitiveness and transparency of their selection process.
Abstract
					We test for labor market discrimination based on an understudied characteristic: name fluency. Analysis of recent economics PhD job candidates indicates that name difficulty is negatively related to the probability of landing an academic or tenure-track position and research productivity of initial institutional placement. Discrimination due to name fluency is also found using experimental data from prior audit studies. Within samples of African Americans (Bertrand and Mullainathan 2004) and ethnic immigrants (Oreopoulos 2011), job applicants with less fluent names experience lower callback rates, and name complexity explains roughly between 10 and 50 percent of ethnic name penalties. The results are primarily driven by candidates with weaker résumés, suggesting that cognitive biases may contribute to the penalty of having a difficult-to-pronounce name.
Abstract
					Weak enforcement of environmental regulations remains a global issue due to inadequate monitoring and misaligned incentives. This paper examines the effects of automated monitoring on achieving air pollution control targets amidst China's war on pollution. Utilizing the staggered rollout process and remote-sensing data, we find local governments respond to the advanced monitoring system by strategically targeting areas near monitors, resulting in a 3.2 percent decrease in pollution adjacent to automated monitors compared to areas farther away. Furthermore, we observe heterogeneity in response across cities with varying degrees of preexisting data manipulation and among officials facing different incentives and public pressure.
Abstract
					Many government program applications result in procedural denials due to administrative burdens associated with applying. We identify the intake interview as a key barrier to take-up of the Supplemental Nutrition Assistance Program and study the effect of an alternative application process designed to reduce burdens. Using a field experiment involving 65,000 Los Angeles applicants, we find that access to flexible interviews initiated by the applicant increases approvals by 6 percentage points, doubles early approvals, and increases long-term participation by over 2 percentage points. Our findings highlight the importance of incorporating flexibility when designing program integrity policies to minimize procedural denials.
Abstract
					Better educated workers accept many more long-distance job offers, and relocate quicker following local shocks. I attribute this to a fundamental feature of their labor market experience, unrelated to geography: large returns to job match quality. If a good offer happens to originate from far away, the match surplus is then more likely to justify the cost of moving. This "lubricates" labor markets spatially. Using wage transition data (and a jobs ladder model), I show this can explain the bulk of mobility differentials. These differentials can be closed by subsidizing long-distance matches, and I quantify the cost of doing so.
Abstract
					We evaluate the impacts of adopting algorithmic risk assessments in sentencing. We find that judges changed sentencing practices in response to the risk assessment, but that discretion played a large role in mediating its impact. Judges deviated from the recommendations associated with the algorithm in systematic ways, suggestive of alternative objectives. As a result, risk assessment did not lead to detectable gains in terms of public safety or reduced incarceration rates. Using simulations, we show that strict adherence to the sentencing recommendations associated with the algorithm would have had benefits (less incarceration) but also some costs (increased sentences for youth).
Abstract
					We empirically examine the Capital Purchase Program (CPP) used by the US government to bail out distressed banks and its implications for regulatory policy. We find strong evidence that a feature of the CPP—the government's ability to appoint independent directors on the board of an assisted bank that missed six dividend payments to the Treasury—had a significant effect on bank behavior. Banks were averse to these appointments—the empirical distribution of missed payments exhibits a sharp discontinuity at five. Director appointments by the Treasury were associated with improved bank performance and lower CEO pay.
Abstract
					We conducted a field experiment that randomized advertisements, advertisement content, and prices across 2,204 counties in the United States to study the impacts on online purchases of naloxone, an opioid overdose reversal drug. Advertising increased website users but only impacted purchases when combined with a price reduction. Messages emphasizing the discreet nature of online sales had no additional impact on purchases. Comparing counties with advertisements featuring a highly discounted price to those featuring the full price, we estimate a price elasticity of demand for online naloxone of −1.3. Price is a significant barrier to online purchases of this lifesaving medication.
Abstract
					When COVID-19 reached Sweden, upper-secondary students (ages 17–19) transitioned to remote instruction, while lower-secondary schools (ages 14–16) remained open. We use this setting as a natural experiment to analyze how modes of instruction affect student mental health. We find a 4.4 percent decrease in mental health care use from remote instruction, primarily due to fewer diagnoses and prescriptions for depression and anxiety. The reduction persists throughout the study period; 21 months after the initial closure and 9 months after schools resumed usual operations. This suggests potential mental health benefits from remote instruction, at least in the medium term.
Abstract
					We assess the US Clean Air Act standards for fine particulate matter (PM2.5). Using high-resolution data, we find that the 2005 regulation reduced PM2.5 levels by 0.4 μg/ m3 over five years, with larger effects in more polluted areas. Standard difference-in-differences overstates these effects by a factor of three because time trends differ by baseline pollution, a bias we overcome with three alternative approaches. We show that the regulation contributed to narrowing Urban-Rural and Black-White PM2.5 exposure disparities, but less than difference-in-differences suggest. Pollution damages capitalized into house prices, however, appear larger than previously thought when leveraging regulatory variation.
Abstract
					Maritime shipping emits as much fine particulate matter as half of global road traffic. We are the first to measure the consequences of US maritime emissions standards on air quality, human health, racial exposure disparities, and behavior. The introduction of US maritime emissions control areas significantly decreased fine particulate matter, low birth weight, and infant mortality. Yet, only about half of the forecasted fine particulate matter abatement was achieved by the policy. We show evidence consistent with behavioral responses among ship operators, other polluters, and individuals that muted the policy's impact, but were not incorporated in ex ante models.
Abstract
					Understanding whether and in what situations correctional sentencing improves or exacerbates defendants' mental health conditions is important for the design of criminal justice policies. We combine detailed Norwegian data on visits to health care professionals with quasi-experimental designs to measure the impacts of correctional sentences on mental health-related visits. Our causal evidence shows that rehabilitation-oriented sentencing can improve defendants' mental health conditions. We find that these effects are persistent and unlikely driven by shifts in health care demand. We interpret these findings in light of the rehabilitative focus of the Norwegian correctional system.
Abstract
					We analyze the effects of a large place-based policy, subsidizing up to 50 percent of the investment costs of East German manufacturing plants. We show that a 1 percentage point decrease in subsidy rate leads to a 1 percent decrease in manufacturing employment. We document important local spillovers for the untreated construction and retail sectors, counties connected via trade, and local tax rates. There is no evidence for regional reallocation, within-firm spillover, or changes in commuting and residential decisions. The cost per job amounts to about $19,000. We show local subsidies are substantially more effective in curbing regional inequality than place-blind policies.
Abstract
					We study a large-scale family planning intervention in which more than 260,000 Peruvian women were sterilized. Many of these medical procedures are alleged to have been performed without patient consent. The subsequent disclosure of alleged illegal sterilizations caused reductions in the usage of contraceptive methods and prenatal and birth delivery services and, more generally, the demand for medical services in affected areas. As a result, child health worsened. The results persist for at least 17 years after the information disclosure and are driven by disappointed supporters of the implementing government. Learning about the government's malpractices undermined trust in institutions.
Abstract
					Using mobility report card data, I show the income gap between alumni of elite and less selective universities widened for cohorts graduating during the Great Recession. This is evident for mean and median incomes and access to high earning percentiles. Results do not appear driven by differences in student composition, including parental income. Using a unique dataset of recruiting strategies for prestigious firms, I highlight one channel through which university selectivity may have a causal impact: high-wage firms concentrated their recruiting at elite universities during the recession. The results are informative for policies increasing lower-income students' representation at selective universities.
Abstract
					In the United States and globally, taxpayers can file a protest to legally reduce their property taxes. While tax protests can provide a unique opportunity to study the (un)willingness to pay taxes, they have received little attention from researchers. Using a field experiment and a quasi-experiment, we study what motivates households to protest their property taxes. We find that both expected savings and filing frictions play significant roles. We estimate the magnitude of filing frictions using a money metric. We also discuss how low-cost interventions targeted at disadvantaged groups can mitigate existing disparities in the system of tax appeals.
Abstract
					Families in poverty face numerous barriers to establishing stable economic footing. This paper estimates experimental effects of a holistic, individualized wraparound service intervention for low-income individuals. The intervention includes a detailed assessment, an individualized service plan, intensive case management administered by a two-person team with small caseloads, and strategic financial assistance. The program improved employment and housing outcomes two years postenrollment. Given the customized nature of the services, overall program effects mask heterogeneity. Exploratory analysis suggests that the program helped employ participants who lacked employment but had stable housing and that those without stable housing were helped in securing it.
Abstract
					This paper quantifies the value of electric vehicle (EV) charging networks and the marginal value of network speed and density. We estimate a model of gasoline drivers' refueling preferences and simulate how these potential future EV drivers value refueling time under counterfactual charging networks. Drivers value refueling time at $19.73/hour. EV adopters with home charging receive $675 per vehicle in benefits from avoiding travel to gas stations, whereas refueling travel and waiting time costs $7,763 for drivers using public charging. Increasing network charging speed yields three times greater time savings than a proportional increase in station density.
Abstract
					We use administrative tax data to analyze the cumulative, long-run effects of California's 2004 Paid Family Leave Act (CPFL) on women's employment, earnings, and childbearing. A regression-discontinuity design exploits the sharp increase in the weeks of paid leave available under the law. We find no evidence that CPFL increased employment, boosted earnings, or encouraged childbearing, suggesting that CPFL had little effect on the gender pay gap or child penalty. For first-time mothers, we find that CPFL reduced employment and earnings a decade after they gave birth.
Abstract
					We study how profit taxes affect establishments' R&D activities. Relying on detailed panel data of R&D-active firms in Germany over two decades, we exploit identifying variation induced by more than 10,000 municipal changes in the local business tax rate and federal tax reforms with locally varying effects. Using event-study techniques, we find a sizable, negative effect of profit taxes on establishments' total R&D spending and patents filed. Zooming into the innovation production process, we uncover substantial heterogeneity in the impact of profit taxation for various R&D input factors, among firm characteristics, and for different types of research projects.
Abstract
					We study the distributional effects of local taxes. They turn out to be strikingly progressive. We calibrate a municipality-level structural model with quasi-experimental estimates of taxpayer mobility by family type. Households with children are found to be less mobile than households without children and to have stronger preferences for locally provided public goods. Combined with capitalization of taxes into housing prices and nonhomothetic housing demand, this implies that the incidence of local income taxes mainly falls on high-income childless households. Increases in local income taxes, even if flat rate, turn out to be more progressive than property taxes.
Abstract
					Behavioral economists have proposed that incentive contracts result in higher productivity when bonuses are "loss framed"—prepaid then clawed back if targets are unmet. We test this claim by randomizing the pre- or postpayment of sales bonuses at 294 car dealerships. Although somewhat statistically imprecise, our analysis provides strong indications that the random assignment of loss framing had quantitatively important negative effects. We document that the negative effects of loss framing can arise due to an increase in incentives for "gaming" behaviors. Based on these claims, we reassess the common wisdom regarding the desirability of loss framing.
Abstract
					Gavi, the Vaccine Alliance has provided over US$16 billion in funding for vaccination in low- and middle-income countries since 1999. We exploit differential timing across countries and vaccines to estimate the effects of this public health initiative. We find that Gavi's support for a vaccine increased coverage rates by 2–5 percentage points across all vaccines and by 10–20 percentage points for newer vaccines. We also find that Gavi's support reduced child mortality from related causes by 1 child per 1,000 live births. We estimate these improvements saved around 1.5 million lives at a cost of about US$9,000 per life saved.
Abstract
					We analyze the performance of firms that were differentially affected by an unexpected tax on dividends before the global financial crisis. We use exogenous policy variation for firms with different legal statuses and financial year-end dates to separately identify the policy announcement and implementation effects. We provide causal evidence for a sharp drop in dividends but zero change in equipment purchases. Treated firms accumulate investment goods that are likely to be owner-manager's personal assets instead of productive capital. At a time of severe liquidity shortage, some of the funds kept in the firm are used to pay back short-term debt.
Abstract
					Are consumers in the marketplace aware of their cognitive limitations? I answer this question in the context of a ubiquitous form of price discrimination: instant rebates that require active redemption. In a large-scale field experiment with a major online retailer, I find that consumers correctly increase demand when the firm offers a redemption reminder, but they fail to reduce demand when the firm increases the hassle required to redeem. Structural estimates reveal that, while consumers are sophisticated about the probability of forgetting to redeem the rebate, they vastly underestimate the hassle of redeeming it by €20 per consumer.
Abstract
					The United States has a severe shortage of organs for transplant. Recently—inspired by research based on hypothetical choices—jurisdictions have tried to increase organ donor registrations by changing how the registration question is asked. We evaluate these changes with a novel "field-in-the-lab" experiment, in which subjects change their real organ donor status, and with new donor registration data collected from US states. A "yes/no" frame is not more effective than an "opt-in" frame, contradicting conclusions based on hypothetical choices, but other question wording can matter, and asking individuals to reconsider their donor status increases registrations.
Abstract
					This paper studies government and private advertising in market-based public programs. In a model of advertising, we first examine when government advertising increases welfare. Then, we estimate the effects of advertising on consumer demand and assess their welfare effects in the Affordable Care Act health insurance marketplaces. We find government advertising increases overall enrollment and enhances welfare. By contrast, the market expansion effect of private advertising is modest at most. Although private advertising increases demand for insurers in certain specifications, it is not a very efficient tool to induce consumers to select insurers with better plans due to rent-seeking competition.
Abstract
					We develop a framework to bound the welfare impacts of arbitrarily large reforms to notches using two sufficient statistics: the change in the number of households located below the new notch and the change in the number of households located below the old notch. Our bounds hold in a wide class of models, highlighting a new way to use reduced-form bunching evidence for welfare analysis without making strong assumptions on the economic environment. We estimate these two statistics using a difference-in-difference strategy for a reform to the antipoverty program Bolsa Família, finding that the reform's MVPF is between 0.90–1.12.
Abstract
					Can machine learning support better governance? This study uses a tree-based, gradient-boosted classifier to predict corruption in Brazilian municipalities using budget data as predictors. The trained model offers a predictive measure of corruption, which we validate through replication and extension of previous corruption studies. Our policy simulations show that machine learning can significantly enhance corruption detection: Compared to random audits, a machine-guided targeted policy could detect almost twice as many corrupt municipalities for the same audit rate.
Abstract
					A central assumption in economics is that consumers properly distinguish fixed cost from variable cost. This assumption is fundamental to various economic theories, including optimal taxation, redistribution, and price discrimination. Using a quasi-experiment in heating price reform in China, we find empirical evidence that is inconsistent with this conventional assumption and more consistent with the "schmeduling" model in Liebman and Zeckhauser (2004). As we demonstrate its policy implications for two-part energy tariffs, this schmeduling behavior makes fixed costs directly relevant to the perceived relative prices of goods, and therefore alters the welfare implications of price, tax, and subsidy designs.
Abstract
					We test the hypothesis that governments alter environmental policy in response to trade by studying NAFTA's effects on the formation of environmental policy in the US House of Representatives between 1990 and 2000. We find that reductions in US tariffs decreased political support for environmental legislation. This decrease appears to be due to (i) a reduction in support by incumbent Republican legislators in response to trade-induced changes in the policy preferences of their constituents and (ii) changes in partisan representation in affected districts due to decreased electoral support for pro-NAFTA Democrats following the agreement.
Abstract
					We use a field experiment to measure the effectiveness of financial incentives to shift the timing of electric vehicle (EV) charging. EV owners respond strongly to financial incentives, reducing charging during peak hours by 49 percent by shifting to off-peak hours. In contrast, a prosocial information treatment has no discernible effect. When financial incentives are removed, charge timing reverts to pre-intervention behavior, reinforcing that "money matters." Our findings highlight the substantial flexibility of EV charging compared to other forms of electricity demand. Such flexibility has the potential to greatly reduce future electric system costs arising from a rapidly decarbonizing transportation sector.
Abstract
					Do US municipal police departments respond to news coverage of local crime? We address this question exploiting an exogenous shock to local crime reporting induced by acquisitions of local TV stations by a large broadcast group, Sinclair. Using a unique dataset of 8.5 million news stories and a triple-differences design, we document that Sinclair ownership decreases news coverage of local crime. This matters for policing: Municipalities that experience the change in news coverage have lower violent crime clearance rates relative to municipalities that do not. The result is consistent with a decrease of crime salience in the public opinion.
Abstract
					This study examines the effects of a government-led, large-scale, multifaceted poverty alleviation program on rural income in China. We find that the program has a positive impact on national key poor counties, with a 10.9 percent increase in rural income. This effect mainly arises via industrial support, agricultural development, and public service improvement. Poverty alleviation strategies consistent with local comparative advantages yield more significant effects. Household-level analyses suggest the program changes households' income and expenditure, and the effects are particularly substantial for the poorest households. The study provides novel insights and policy implications for China's recent experience with poverty alleviation.
Abstract
					We examine business responses to a minimum tax (MT) that prescribed fixed floors on corporate tax liability while permitting MT credit carryforwards. Using 2010–2020 tax-return data on all Slovak corporations, we find that many companies immediately relocated from reporting zero taxable income toward bunching at the new floors. We infer the elasticity of taxable income (ETI) to be between 0.33 and 2.28 across value-added tax (VAT) and turnover categories, and quantify the marginal efficiency burden (MEB) of the corporation tax. Given limited extensive-margin responses, our evidence suggests the MT reduced the overall efficiency burden while raising additional tax revenue.
Abstract
					We evaluate a low-cost intervention designed to boost parents' verbal engagement with infants, which tends to be limited in developing countries. In our randomized experiment, recent or expectant mothers watched a three-minute informational video and received a themed calendar. Six months later, treated mothers reported stronger belief in the benefits of verbal engagement, more frequent parent-infant conversation, and more advanced infant language skills. Treatment effects on objective measures of parent-child conversation frequency and infant skills were positive but insignificant. We find larger immediate treatment effects on objective parent-child conversation, suggesting potentially larger long-term effects had the behavior change stuck more.
Abstract
					Since 2018, UK firms with at least 250 employees have been mandated to publicly disclose gender equality indicators. Exploiting variations in this mandate across firm size and time, we show that pay transparency closes 19 percent of the gender pay gap by reducing men's pay growth. By combining different sources of data, we also provide suggestive evidence that the public availability of the equality indicators enhances public scrutiny. In turn, employers more exposed to public scrutiny seem to reduce their gender pay gap the most.
Abstract
					We conducted a direct mail field experiment with 4,016,461 individuals to test several key hypotheses about why take-up of Supplemental Security Income among individuals age 65 and above is so low. Communicating likely eligibility in a basic letter generated substantial increases in take-up in relative terms. Adding behaviorally informed statements increased the effectiveness of these communications. Yet, the application rate in our study sample during the full 24-month follow-up period remained no greater than 7 percent. Our results reveal a modest trade-off between increasing applications and the conditional likelihood of award, as well as the award amount.
Abstract
					Treatment intensity varies remarkably across physicians, and physicians are increasingly working in groups. This paper tests whether group affiliation impacts physicians' treatment intensity and patient health. Using Medicare inpatient claims data, we focus on internists who switch groups within the same hospital. Event studies show that internists who join more-intensive groups immediately increase their own intensity, with an elasticity of 0.27. This change is reflected in higher Medicare spending due to higher-priced services. We do not detect a change in health outcomes, suggesting that treatment intensity induced by group affiliation may not be productive.
Abstract
					Participation of beneficiaries in the monitoring of public services is
increasingly seen as a key to improving their quality. We conducted
a randomized evaluation of three interventions to encourage beneficiaries'
participation to India: providing information on existing
institutions, training community members in a testing tool for children,
and training volunteers to hold remedial reading camps. These
interventions had no impact on community involvement, teacher
effort, or learning outcomes inside the school. However, in the third
intervention, youth volunteered to teach camps, and children who
attended substantially improved their reading skills. This suggests
that citizens face constraints in influencing public services. (JEL
H52, I21, I28, O15)
Abstract
					Prior studies suggest that with elastically supplied inputs free entry
may lead to an inefficiently high number of firms in equilibrium.
Under input scarcity, however, the welfare loss from free entry is
reduced. Further, free entry may increase use of high-quality inputs,
as oligopolistic firms underuse these inputs when entry is constrained.
We assess these predictions by examining how the 1996
repeal of certificate-of-need (CON ) legislation in Pennsylvania
affected the market for cardiac surgery in the state. We show that
entry led to a redistribution of surgeries to higher quality surgeons,
and that this entry was approximately welfare neutral. (JEL I11, L13)
Abstract
					This paper analyzes the impact of a preferential tax-price for monetary
donations on the joint decision to donate time (volunteer) and
money. The methodological approach takes into account that consumption
of each charitable good affects consumption of the other.
Using data from a national survey on household charitable giving,
the results show that donations of time and money are substitutes.
However, a decrease in the tax-price of monetary donations also has
a positive effect on donations of time that acts outside the change in
relative prices. This more than offsets the substitution effect leading
to an overall positive correlation between the two charitable goods.
(JEL D64, H24, H31)
Abstract
					This paper documents the rise of the Internet as a source of state tax-free
cigarettes and its impact on taxed sales elasticities. Using data
on cigarette tax rates, taxable cigarette sales and individual smoking
rates by state from 1980 to 2005 merged with data on Internet
penetration, this paper documents that there has been a substantial
increase in the sensitivity of taxable cigarette sales to state tax rates
that is correlated with the rise of Internet usage within states. The
estimates imply that the increased sensitivity from cigarette smuggling
over the Internet has lessened the revenue generating potential
of cigarette tax increases significantly, although states are still far
from the revenue-maximizing tax rates. (JEL D12, H25, H31, H71,
L66)
Abstract
					Should the income tax include a credit for short taxpayers and a
surcharge for tall ones? The standard utilitarian framework for tax
analysis answers this question in the affirmative. Moreover, a plausible
parameterization using data on height and wages implies a substantial
height tax: a tall person earning $50,000 should pay $4,500
more in tax than a short person. One interpretation is that personal
attributes correlated with wages should be considered more widely
for determining taxes. Alternatively, if policies such as a height tax
are rejected, then the standard utilitarian framework must fail to
capture intuitive notions of distributive justice. (JEL D64, H21, H23,
H24, J11)
Abstract
					The EITC is intended to encourage work. But EITC-induced
increases in labor supply may drive wages down. I simulate the economic
incidence of the EITC. In each scenario that I consider, a
large portion of low-income single mothers' EITC payments is captured
by employers through reduced wages. Workers who are EITC
ineligible also see wage declines. By contrast, a traditional Negative
Income Tax (NIT) discourages work, and so induces large transfers
from employers to their workers. With my preferred parameters, $1
in EITC spending increases after-tax incomes by $0.73, while $1
spent on the NIT yields $1.39. (JEL H22, H23, H24, H31, J22)
Abstract
					Using an optimal taxation model combined with a previously neglected scheme of public provision of private goods, we show that there is an efficiency gain if public provision of selected goods replaces market purchases and that efficiency requires marginal income tax rates to be higher than if the goods were purchased in the market. Part of the marginal tax serves the same role as a market price and conveys information about a real social cost of working more hours. It might be that economies with higher marginal tax rates have less severe distortions than economies with lower marginal tax rates. (JEL H21, H42, I38)
Abstract
					To study whether consumers will pay more for products that generate charitable donations, we analyze data from eBay on charity and noncharity auctions of otherwise identical products. Charity prices are 6 percent higher, on average, than noncharity prices. Bids below the closing price are also higher, as are bids by individuals bidding on identical charity and noncharity products. Bidders appear to value charity revenue at least partially as a public good, as they submit bids earlier in charity auctions, stimulating other bidders to bid more aggressively. Our results help explain why firms may pledge charitable donations, green production, or similar activities. (JEL D12, D44, D64, L81, M14, M31)
Abstract
					The large tax differentials between Chicago and neighboring jurisdictions provide an incentive for cigarette tax avoidance. Data from a random sample of cigarette packs littered in Chicago reveals a startling degree of tax avoidance: three-quarters did not display a Chicago tax stamp. Also, the $2.68 difference between the tax in Chicago and surrounding counties decreases the probability of a local stamp by almost 60 percent, and a one mile increase in distance to the lower-tax state border increases the probability a pack of a local stamp by about one percent. These results are consistent with the predictions of economic theory. (JEL H25, H26, H71)
Abstract
					We characterize welfare gains from government intervention when the private sector provides partial insurance. We analyze models in which adverse selection, pre-existing information, or imperfect optimization create a role for government intervention. We derive formulas that map existing empirical estimates into quantitative predictions for optimal policy. When private insurance generates moral hazard, standard formulas for optimal government insurance must be modified to account for fiscal externalities. In contrast,
standard formulas are unaffected by "informal" private insurance that does not generate moral hazard. Applications to health and unemployment show that formal private market insurance can significantly reduce optimal government benefit rates. (JEL D82, G22, H21, H23, J65)
Abstract
					This paper estimates the effect of tax incentives for charitable contributions in France. We focus on two reforms that increased the nonrefundable tax credit rate for charitable contributions by 32 percent. We use a difference-in-difference identification, comparing the evolution of contributions for groups of households with similar income, but different taxable status due to differences in family size. We control for censoring issues and investigate distributional effects using a three-step censored quantile regression estimator. We find that the price elasticity of contributions is relatively small, but tends to increase with the level of gifts. (JEL D14, D64, H24)
Abstract
					Previous research has demonstrated that benefit recipients decrease expenditures on, and consumption of, food throughout the benefit month. Using detailed grocery store scanner data, we ask two questions: whether cycling is due to a desire for variety that leads to within-month substitution across product quality, and whether cycling is driven by countercyclical retail pricing. We find that the decrease in food expenditures is largely driven by reductions in quantity, not quality, and that prices for foods purchased by benefit households vary pro-cyclically with demand, implying that households could save money by delaying their food purchases until later in the month. (JEL D12, I38)
Abstract
					We examine the effects of information and information presentation format on individuals' choice of payment method in a large randomized experiment carried out with the Belgian National Office for Family Benefits. We find that a one-time mailing providing information about method of payment for child benefit support caused a fourfold increase in parents' decision to switch from payment by check to electronic payment. Simple, low-cost supplements significantly raised people's responsiveness to the mailing. Our results suggest that complexity and information (processing) costs pose significant barriers to transitioning to electronic payment methods, and that deliberate efforts to lower these costs can contribute to large behavioral changes. (JEL D83, J13)
Abstract
					In this paper, we estimate the response of college enrollment to changes in student aid arising from a Danish reform. We separately identify the effect of aid from that of other observed and unobserved variables such as parental income. We exploit the combination of a kinked aid scheme and a reform to identify the effect of direct costs on enrollment. To allow for potential biases due to borrowing constraints, we use detailed information on parents' assets. We find that enrollment is less responsive than found in other studies and that borrowing constraints only deter college enrollment to a minor extent. (JEL H52, I22, I23)
Abstract
					We investigate how changes in the supply of fast food restaurants affect weight outcomes of 3 million children and 3 million pregnant women. Among ninth graders, a fast food restaurant within 0.1 miles of a school results in a 5.2 percent increase in obesity rates. Among pregnant women, a fast-food restaurant within 0.5 miles of residence results in a 1.6 percent increase in the probability of gaining over 20 kilos. The implied effects on caloric intake are one order of magnitude larger for children than for mothers, consistent with smaller travel cost for adults. Non-fast food restaurants and future fast-food restaurants are uncorrelated with weight outcomes. (JEL I12, J13, J16, L83)
Abstract
					Pollution regulations affect factor demands, relative returns, production,
and output prices. In our model, one sector includes pollution as an input that can be a complement or substitute for labor or capital. For each type of mandate, we find conditions where more burden is on labor or on capital. Stricter regulation does not always place less burden on the better substitute for pollution. Also, restrictions on pollution per unit output create an "output-subsidy effect" on factor prices that can reverse the usual output and substitution effects. We find analogous effects for a restriction on pollution per unit capital. (JEL H23, Q53, Q58)
Abstract
					We present an empirical test for the addictiveness of lottery gambling that exploits an exogenous shock to local market consumption of lottery gambling. It uses the sale of a winning jackpot ticket in a zip code as an instrument for present consumption and tests for a
causal relationship between present and future consumption. This test estimates the time path of persistence nonparametrically. Data from the Texas State Lottery suggests that after 6 months, roughly half of the initial increase in lottery consumption is maintained. After 18 months, roughly 40 percent of the initial shock persists,
though estimates become less precise. (JEL D12, H27, H71)
Abstract
					This paper calculates a trade restrictiveness index, i.e., the uniform
tariff that yields the same welfare loss as an existing tariff structure, for nearly a century of US data. The results show that the average tariff understates the TRI by about 75 percent. The static deadweight loss from US tariffs is about 1 percent of GDP after the Civil War, but falls almost continuously thereafter to less than one-tenth of 1 percent of GDP. Import duties produced an average welfare loss of 40 cents for every dollar of revenue, slightly higher than contemporary estimates of the marginal cost of taxation. (JEL F13, N71, N72)
Abstract
					This paper uses a unique dataset of monthly new vehicle sales by detailed model from 1978 to 2007, and implements a new identification strategy to estimate the effect of the price of gasoline on individual vehicle model sales. We control for unobserved vehicle and consumer characteristics by using within model year changes in the
price of gasoline and sales. We find a significant sales response, suggesting that the gasoline price increase from 2002 to 2007 explains nearly half of the decline in market share of US manufacturers. On the other hand, an increase in the gasoline tax would only modestly raise average fuel economy. (JEL H25, L11, L62, L71)
Abstract
					This paper develops an empirical framework for the problem of soft budgets which is explicitly based on a dynamic commitment problem, i.e., the inability of a supporting organization to commit itself not to extend more resources ex post to a budget-constrained organization than it was prepared to provide ex ante. Swedish local governments are used as a testing ground since the central government distributed a large number of fiscal transfers. The estimated soft-budget effect is economically significant: on average, a local government increases
its debt by more than 20 percent by going from a hard to a soft budget constraint. (JEL D82, G32, L32)
Abstract
					This paper uses tax return data to analyze bunching at the kink points of the US income tax schedule. We estimate the compensated elasticity of reported income with respect to (one minus) the marginal tax rate using bunching evidence. We find clear evidence of bunching around the first kink point of the Earned Income Tax Credit but concentrated solely among the self-employed. A simple tax evasion model can account for those results. We find evidence of bunching at the threshold of the first income tax bracket where tax liability starts but no evidence of bunching at any other kink point. (JEL H23, H24, H26)
Abstract
					This paper analyzes the relationship between postmarketing promotional
activity and reporting of adverse drug reactions (ADRs) by modeling the interaction between a regulator (the FDA) and a pharmaceutical firm. Promotion-driven market expansions enhance profitability yet may involve the risk of inappropriate drug prescriptions, leading to regulatory actions against the firm. We empirically test the relationship between drug promotion and reporting of ADRs using an innovative combination of commercial data on pharmaceutical promotion and FDA data on regulatory interventions and ADRs. We provide some evidence that increased levels of promotion and advertising lead to increased reporting of ADRs for certain conditions. (JEL L51, L65, M31, M37)
Abstract
					We propose a method to detect illegal arms trade based on investor knowledge. We focus on countries under arms embargo and identify events that suddenly increase or decrease conflict intensity. If a weapon-making company is trading illegally, an event that increases the demand for arms may increase stock prices. We find positive
event returns for companies headquartered in countries with high corruption and low transparency in arms trade. We also suggest a method to detect potential embargo violations based on chains of reactions by individual stocks. The presumed violations positively correlate with the number of UN investigations and Internet stories. (JEL D74, F13, G14, K42, L64)
Abstract
					Since trade restrictions were eliminated in 2005, Mexico has imported over 2.5 million used vehicles from the United States. Using a unique, vehicle-level dataset, we find that traded vehicles are dirtier than the stock of vehicles in the United States and cleaner than the stock in Mexico, so when a vehicle is traded from the United States to Mexico average vehicle emissions per mile tend to decrease in both countries. Overall, however, the evidence suggests that trade has increased total lifetime emissions, primarily because of low vehicle retirement rates in Mexico. (JEL F13, F14, L62, O13, O19, Q53, Q56)
Abstract
					We model the reaction of a PAYG pension system to demographic shocks. We compare the ex ante first best and second best solution of a Ramsey planner with full commitment to the outcome under simple third best rules. The model is calibrated to the German economy. We find that the German system comes relatively close to the second-best solution, and that the recent baby-boom/baby-bust cycle leads
to welfare losses of about 5 percent of lifetime consumption for some cohorts. We argue that it is crucial for all our results to correctly model the labor market distortions arising from the pension system. (JEL D91, E62, H55, J11)
Abstract
					In the fall of 2007, New York City began using student tests and other measures to assign each school a grade (A to F), and linked grades to rewards and consequences, including possible school closure. These grades were released in late September, arguably too late for schools to make major changes in programs or personnel, and students were tested again in January (English) and March (math). Despite this
time frame, regression discontinuity estimates indicate that receipt of a low grade significantly increased student achievement, more so in math than English, and improved parental evaluations of school quality. (JEL H75, I21, I28, J45)
Abstract
					This paper proposes a simple model to study how domestic institutions affect patterns of international capital flows. Inefficient financial system, and poor corporate governance, may be bypassed by two-way capital flows in which domestic savings leave the country
in the form of financial capital outflows but domestic investment takes place via inward FDI. While financial globalization always improves the welfare of a developed country with a good financial system, its effect is ambiguous for a developing country with an inefficient financial sector or poor corporate governance. Interestingly,
financial and property rights institutions can have opposite effects on capital flows. (JEL D02, E21, F21, F32, G34)
Abstract
					Our model illustrates how political institutions trade off between the competing goals of representation and governance, where governance is the responsiveness of an institution to a single pivotal voter. We use exogenous variation from the 30-year history of the federal Community Development Block Grant program to identify this trade-off. Cities with more representative governments—those with larger city councils—use more grant funds to supplement city revenues rather than implementing tax cuts, thereby moving policy further away from the governance ideal. In sum, more representative government is not without cost. (JEL D72, H71, R50)
Abstract
					This paper uses a within-school/across-cohort design to present new evidence of the effects of high school classmate characteristics on a wide range of post-secondary outcomes. We find that increases in the percent of classmates with college-educated mothers decreases
the likelihood of dropping out and increases the likelihood of attending
college, despite showing no impact on a range of in-school achievement, attitudes, and behaviors. The percent of students from disadvantaged minority groups does not show any effects on post-secondary outcomes, but is associated with students reporting less
caring student-teacher relationships and increased prevalence of some undesirable student behaviors during high school. (JEL I21, J13, J15)
Abstract
					We study the impact of mandatory calorie posting on consumers' purchase decisions using detailed data from Starbucks. We find that average calories per transaction fall by 6 percent. The effect is almost entirely related to changes in consumers' food choices—there is almost no change in purchases of beverage calories. There is no impact on Starbucks profit on average, and for the subset of stores
located close to their competitor Dunkin Donuts, the effect of calorie
posting is actually to increase Starbucks revenue. Survey evidence
and analysis of commuters suggests the mechanism for the effect is a combination of learning and salience. (JEL D12, D18, D83, L83)
Abstract
					This paper assesses the impact of policies to increase insurance coverage
for young adults. The introduction of SCHIP in 1997 enabled low-income teens up to age 19 to gain access to public health insurance. More recent policies enabled young adults between the ages of
19 and (typically) 24 to remain covered under their parents' health insurance. We use the discrete break in coverage at age 19 to evaluate the impact of SCHIP, and quasi-experimental variation to evaluate the impact of "extended parental coverage" laws. Our results
suggest that both types of policies were effective at increasing health insurance coverage. (JEL G22, H75, I18, J13)
Abstract
					Is culture an important determinant of preferences for redistribution? To separate culture from the economic and institutional environment ("context"), we relate immigrants' redistributive preferences to the average preference in their birth countries. We find a strong positive relationship that is robust to rich controls for economic factors and cannot easily be explained by selective migration. This effect
is as large as that of own household income and appears stronger for those less assimilated into the destination country. Immigrants from high-preference countries are more likely to vote for more pro-redistribution parties. The effect of culture persists strongly into the
second generation. (JEL H23, Z13)
Abstract
					This paper examines the impact of payment choice on charitable giving
with a door-to-door fund-raising field experiment. Respondents can donate cash only, use debit only, or have both options. Cash donations have lower visibility vis-à-vis solicitors than debit card donations. When debit replaces cash, participation drops by 87 percent. Conditional on participation, donors in the Debit-only treatment give more than donors in Cash-only. In Cash&Debit, almost all
donors prefer cash; participation decreases compared to Cash-only. Physical attractiveness of both female and male solicitors increases contributions. Solicitor self-confidence has a negative impact. (JEL D14, D64, L31)
Abstract
					We document how manipulation of a targeting system for social welfare
programs evolves over time. First, there was strategic behavior of some local politicians in the timing of the household interviews around local elections. Then, there was corrupt behavior with the sudden emergence of a sharp discontinuity in the score density, exactly at the eligibility threshold, which coincided with the release of the score algorithm to local officials. The discontinuity at the
threshold is larger where mayoral elections are more competitive. While cultural forces are surely relevant for corruption, our results also highlight the importance of information and incentives. (JEL D72, I32, I38, O15, O17).
Abstract
					Distortions in the allocation of resources between heterogeneous producers have the potential to generate large reductions in aggregate
productivity, a point that has been stressed by recent studies. There
is, however, little direct empirical evidence from actual policy experiments
on the magnitude of these effects. This paper proposes a simple methodology that empirically identifies the separate effects of entry and size restrictions on aggregate productivity, and uses it to analyse the impact of a policy reform in India. (JEL L11, L24, O14, O47)
Abstract
					Many developed countries are currently considering a move toward subsidized, widely accessible child care or preschool. However, studies on how large-scale provision of child care affects child development are scarce, and focused on short-run outcomes. We analyze a large-scale expansion of subsidized child care in Norway, addressing the impact on children's long-run outcomes. Our precise and robust difference-in-differences estimates show that subsidized child
care had strong positive effects on children's educational attainment and labor market participation, and also reduced welfare dependency. Subsample analyses indicate that girls and children with low-educated mothers benefit the most from child care. (JEL J13, J16)
Abstract
					In response to three Supreme Court rulings in the early 1990s, numerous court-ordered desegregation plans have been terminated. Using a unique dataset and an event study research design, this
paper explores the impact of these terminations. The results suggest that termination produces a moderate increase in racial segregation. Outside of the south, dismissal also increases the rate at which black students drop out of school and attend private school. In the south, in contrast, there is no change in the school attendance patterns of blacks. Finally, evidence is presented that whites re-enter dismissed districts in large numbers in the south. (JEL H75, I21, I28, J15, K10)
Abstract
					Within metropolitan areas, neighborhoods of growing immigrant settlement are becoming relatively less desirable to natives. We deploy
a geographic diffusion model to instrument for the growth of immigrant
density in a neighborhood. Our approach deals explicitly with potential unobservable shocks that may be correlated with proximity to immigrant enclaves. The evidence is consistent with a causal interpretation of an impact from growing immigrant density to native flight and relatively slower housing value appreciation. Further evidence indicates that these results are driven more by the demand for residential segregation based on ethnicity and education than by foreignness per se. (JEL I20, J11, J15, R23, Z13)
Abstract
					This paper estimates the incidence of tax incentives for the Toyota Prius. Transaction microdata indicate that both federal and state incentives were fully captured by consumers. This is surprising because Toyota faced a binding production constraint, which suggests that they could have appropriated the gains. The paper proffers an explanation based on an intertemporal link in pricing that stems
from search frictions, which has the unconventional implication that
statutory burden influenced economic burden. The paper develops a bounding estimator to account for endogenous selection into preferential tax regimes that may be useful in other contexts. (JEL H22, H24, L11, L62)
Abstract
					Estimates of moral hazard in health insurance markets can be confounded by adverse selection. This paper considers a plausibly exogenous source of variation in insurance coverage for childbirth in California. We find that additional health insurance coverage induces substantial extensions in length of hospital stay for mother and newborn. However, remaining in the hospital longer has no effect on readmissions or mortality, and the estimates are precise. Our results suggest that for uncomplicated births, minimum insurance mandates incur substantial costs without detectable health benefits. (JEL D82, G22, I12, I18, J13)
Abstract
					Public-place smoking restrictions are the most important non-price tobacco control measures worldwide, yet surprisingly little is known about their effects on exposure to environmental tobacco smoke (ETS). We study these laws in Canada using data with questions about respondents' ETS exposure in public and private places. In fixed effects models we find these laws had no effects on smoking but induced large and statistically significant reductions in public-place ETS exposure, especially in bars and restaurants. We do not find significant evidence of ETS displacement to private homes. Our results indicate wide latitude for health improvements from banning smoking in public places. (JEL D12, H75, I12, I18, Q51)
Abstract
					Recent sleep research finds that many adolescents are sleep-deprived because of both early school start times and changing sleep patterns during the teen years. This study identifies the causal effect of school start time on academic achievement by using two policy changes
in the daily schedule at the US Air Force Academy along with the randomized placement of freshman students to courses and instructors. Results show that starting the school day 50 minutes later has a significant positive effect on student achievement, which is roughly
equivalent to raising teacher quality by one standard deviation. (JEL I23, J13)
Abstract
					There are two main forms of government in US cities: council-manager and mayor-council. This paper develops a theory of fiscal policy determination under these two forms. The theory predicts that expected public spending will be lower under mayor-council but that either form of government could be favored by a majority of citizens. The latter prediction means that the theory is consistent with the coexistence of both government forms. Support for the former prediction is found in both a cross-sectional analysis and a panel analysis of changes in government form. (JEL H11, H72, R51)
Abstract
					Structural new trade theory models have never been used to evaluate and quantify the role of preferential trade agreement (PTA) membership for trade in a way which is consistent with general equilibrium. Apart from filling this gap, the present paper aims at delivering an empirical model which takes into account both that PTA membership is endogenous and that the world matrix of bilateral trade flows
contains numerous zero entries. These features are treated in an encompassing way by means of (possibly two-part) Poisson pseudomaximum likelihood estimation with endogenous binary indicator variables in the empirical model. (JEL F11, F13, F15)
Abstract
					Theory predicts that the majoritarian electoral system should produce more targeted redistribution and lower rents than proportional representation. We test these predictions using data on the Italian House of Representatives, and address the nonrandom selection into different systems exploiting one feature of the two-tier elections between 1994-2001: candidates could run for both the majoritarian and proportional tier, but if they won in both they had to accept the majoritarian seat. Focusing on elections decided by a narrow margin,
we find that majoritarian representatives put forward more bills
targeted at their constituency and show lower absenteeism rates than their proportional colleagues. (JEL D72)
Abstract
					We exploit changes in child benefits in Canada to study the impact of family income on child and family well-being. Using variation in child benefits across province, time, and family type, we study outcomes spanning test scores, mental health, physical health, and deprivation measures. The findings suggest that child benefit programs had significant positive effects on test scores, maternal health, and mental health, among other measures. We find strong and interesting differences in the effects of benefits by child sex: benefits have stronger effects on educational outcomes and physical health for boys, and on mental health outcomes for girls. (JEL I12, I31, I38, J13)
Abstract
					How should statistical models used for assigning prices or eligibility be implemented when there is concern about discrimination? In many settings, factors such as race, gender, and age are prohibited. However, the use of variables that correlate with these omitted characteristics (e.g., zip codes, credit scores) is often contentious. We provide a framework to address these issues and propose a method that can eliminate proxy effects while maintaining predictive accuracy
relative to an approach that restricts the use of contentious variables outright. We illustrate the value of our proposed method using data from the Worker Profiling and Reemployment Services system. (JEL C53, J15, J65, J71)
Abstract
					Aging populations are leading countries worldwide to social security reforms. Many countries are moving from pay-as-you-go to personal retirement account (PRA) systems because of their financial sustainability and positive impact on private savings. PRA systems boost private savings at a macro level by converting a government liability into financial wealth managed by private fund managers. However, at a
micro level, changes in retirement wealth affect individuals' saving and
consumption patterns through their working lives. Retirement wealth increased for lower-income workers after Mexico introduced PRAs, crowding out saving, increasing consumption, and offsetting some of the PRA effect on private savings. (JEL D14, E21, H55, J26, O16)
Abstract
					We examine the effects of the most durable employer health insurance mandate in the United States, Hawaii's Prepaid Health Care Act, using Current Population Survey data covering the years 1979 to 2005. Relying on a variation of the classical Fisher permutation test applied across states, we find that Hawaii's law increased insurance coverage over time for worker groups with low rates of coverage in the voluntary market. We find no statistically significant support for the hypothesis that the mandate reduced wages and employment probabilities. Instead, its primary detectable effect was an increased reliance on exempt part-time workers. (JEL G22, I18, J23, J32)
Abstract
					With heterogeneity in both skills and discount factors, the Atkinson-
Stiglitz theorem that savings should not be taxed does not hold. In a model with heterogeneity of preferences at each earnings level, introducing a savings tax on high earners or a savings subsidy on low earners increases welfare, regardless of the correlation between ability and discount factor. Extending Emmanuel Saez (2002), a uniform savings tax increases welfare if that correlation is sufficiently high. Key for the results is that types who value future consumption less are more tempted by a lower paid job. Some optimal tax results
and empirical evidence are presented. (JEL D14, H21, H24)
Abstract
					We examine the impact of the expansion of public prescription-drug insurance coverage from Medicare Part D and find evidence of substantial crowd-out. Using the 2002-2007 waves of the Medical
Expenditure Panel Survey, we estimate the extension of Part D benefits resulted in 75 percent crowd-out of both prescription-drug insurance coverage and expenditures of those 65 and older. Part D is associated with sizeable reductions in out-of-pocket spending, much of which has accrued to a small proportion of the elderly. On average, we estimate a welfare gain from Part D comparable to the deadweight
cost of program financing. (JEL H51, I18, J14)
Abstract
					This paper investigates the effect of 401(k) eligibility on saving. To address the possibility that eligibility correlates across individuals with their unobserved tastes for saving, I examine a change in eligibility: some individuals are initially ineligible for their 401(k) but become eligible when they have worked at their firm long enough. I find that eligibility raises 401(k) balances. Other financial assets and net worth respond insignificantly to eligibility, but the confidence intervals do not rule out substantial responses. In response to eligibility, IRA assets increase, consistent with a "crowd-in" hypothesis, and accumulation of cars decreases.(JEL D14, E21, J26)
Abstract
					Homeowners in financial distress can use bankruptcy to avoid defaulting on their mortgages, since filing loosens their budget constraints. But the 2005 bankruptcy reform made bankruptcy less favorable to homeowners and therefore caused mortgage defaults to rise. We test this relationship and find that the reform caused prime and subprime mortgage default rates to rise by 23% and 14%, respectively. Default rates rose even more for homeowners who were particularly negatively affected by the reform. We calculate that bankruptcy reform caused mortgage default rates to rise by one percentage point even before the start of the financial crisis. (JEL D14, G01, G21, K35)
Abstract
					Thousands of randomly manipulated resumes were sent in response to online job postings in Toronto to investigate why immigrants, allowed in based on skill, struggle in the labor market. The study finds substantial discrimination across a variety of occupations towards applicants with foreign experience or those with Indian,
Pakistani, Chinese, and Greek names compared with English names. Listing language fluency, multinational firm experience, education from highly selective schools, or active extracurricular activities had no diminishing effect. Recruiters justify this behavior based on language skill concerns but fail to fully account for offsetting features when listed. (JEL J15, J24, J61)
Abstract
					This paper reports the results of a 2007 experiment testing whether specific process simplification can foster increased take-up rates for savings products, particularly by low-to-moderate income (LMI) households. Tax refund recipients at certain H&R Block tax preparation offices were given the option to purchase US Savings Bonds with their tax refunds, augmenting the tax-site savings options offered by H&R Block. Those who received the savings bond offer were substantially more likely to purchase a savings product on-site than those who didn't, even after controlling for client demographics. Much of this take-up was directed at intra-family gifting, or asset building on behalf of children. (JEL D14, H24)
Abstract
					Substantial uncertainty exists regarding the causal effect of health
insurance on the utilization of care. We exploit a sharp change in insurance coverage rates that results from young adults "aging out" of their parents' insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpatient services. Aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that
uninsured status leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions. (JEL G22, I11, I18)
Abstract
					This paper studies the relationship between operational costs and state ownership in Indian railways between 1874 and 1912. We find the move to state ownership significantly decreased working expenses. The cost declines are not driven by anticipation effects, changes in reporting standards, or long run trends. Rather, the evidence suggests the colonial Government of India reduced operational costs by cutting labor costs. Our surprising results can be explained by the undemocratic colonial nature of the Government of India, a fiscal system heavily reliant on railways for revenues, and a regulatory environment under private ownership that weakened incentives to lower costs. (JEL L32, L51, L92, N45, N75, O18, R41)
Abstract
					The transportation sector is a major source of air pollution worldwide, yet little is known about the effects of transportation infrastructure on air quality. This paper quantifies the effects of one major type of transportation infrastructure—urban rail transit—on air quality using the sharp discontinuity in ridership on opening day of a new rail transit system in Taipei. We find that the opening of the Metro reduced air pollution from one key tailpipe pollutant, carbon monoxide, by 5 to 15 percent. Little evidence that the opening of the Metro affected ground level ozone pollution is found however. (JEL L92, Q53, R41, R53)
Abstract
					For political and practical reasons, environmental regulations sometimes treat point-source polluters, such as power plants, differently from mobile-source polluters, such as vehicles. This paper measures the extent of this regulatory asymmetry in the case of nitrogen oxides (NOx), the most recalcitrant criteria air pollutant in the United States. We find significant differences in marginal abatement costs across source types: the marginal cost of reducing NOx from cars is less than half the marginal cost of reducing NOx from power plants. Our results measure the possible efficiency gains and distributional implications associated with increasing the sectoral scope of environmental regulations.(JEL Q53, Q58, R41)
Abstract
					Hospitals now represent one of the largest union sectors of the US economy, and there is particular concern about the impact of strikes on patient welfare. We analyze the effects of nurses' strikes in hospitals on patient outcomes in New York State. Controlling for hospital specific heterogeneity, the results show that nurses' strikes increase in-hospital mortality by 18.3 percent and 30-day readmission by 5.7 percent for patients admitted during a strike, with little change in patient demographics, disease severity or treatment intensity. The
results suggest that hospitals functioning during nurses' strikes do so
at a lower quality of patient care. (JEL H75, I11, I12, J52)
Abstract
					Over three-quarters of US taxpayers receive income tax refunds, which are effectively zero-interest loans to the government. Previous explanations include precautionary and/or forced savings motives. I present evidence on a third explanation: inertia. I find that following a change in tax liability, prepayments are only adjusted by 29 percent of the tax change after one year and 61 percent after three years. Adjustment increases with income and experience, and for EITC
recipients, I rule out adjustment greater than 2 percent. Thus, policies
affecting default-withholding rules are no longer neutral decisions, but rather, may affect consumption smoothing, particularly for low-income taxpayers. (JEL D14, H24, K34)
Abstract
					We present evidence from nearly 14,000 American Red Cross blood drives and from a natural field experiment showing that economic incentives have a positive effect on blood donations without increasing the fraction of donors who are ineligible to donate. The effect increases with the incentive's economic value. However, a substantial proportion of the increase in donations is explained by donors leaving neighboring drives without incentives to attend drives with incentives; this displacement also increases with the economic value of the incentive. We conclude that extrinsic incentives stimulate prosocial
behavior, but unless displacement effects are considered, the effect may be overestimated. (JEL D64, H41, I12)
Abstract
					The link between taxes and occupational choices is central for understanding the welfare impacts of income taxes. Just as taxes distort the labor-leisure decision, they may also distort the wage-amenity decision. Yet, there have been few studies on the full response along this margin. When tax rates increase, workers favor jobs with lower wages and more amenities. We introduce a two-step methodology which uses compensating differentials to characterize the tax elasticity of occupational choice. We estimate a significant compensated elasticity of 0.03, implying that a 10 percent increase in the net-oftax rate causes workers to change to a 0.3 percent higher wage job. (JEL H24, H31, J22, J24, J31)
Abstract
					A key issue in current research and policy is the size of fiscal multipliers
when the economy is in recession. We provide three insights. First, using regime-switching models, we find large differences in the size of spending multipliers in recessions and expansions with fiscal policy being considerably more effective in recessions than in expansions. Second, we estimate multipliers for more disaggregate spending variables which behave differently relative to aggregate fiscal policy shocks, with military spending having the largest multiplier. Third, we show that controlling for predictable components of fiscal shocks tends to increase the size of the multipliers in recessions.
(JEL C32, E62, H20, H62, H63)
Abstract
					The SVAR and narrative approaches to estimating tax multipliers deliver significantly different results. The former yields multipliers of about 1 and the latter of about 3. The two approaches differ along two important dimensions: the identification scheme and the reduced-form transmission mechanism. This paper uses a DSGE-model
to evaluate the hypothesis that the difference in multipliers is due to differences in transmission mechanisms. The main finding of the paper is that this hypothesis is rejected. Instead, the observed differences in estimated multipliers are due either to the models failing to identify the same tax shock, or to small-sample uncertainty.
(JEL E13, E23, E32, E62, H20)
Abstract
					Balanced budget requirements lead to substantial pro-cyclicality in state government spending, with the stringency of a state's rules driving the pace at which it must adjust to shocks. We show that fiscal institutions can generate natural experiments in deficit-financed spending that are informative regarding fiscal stabilization policy. Alternative sources of variation in subnational fiscal policy often implicitly involve "windfall" financing, which precludes any effect
of future debt or taxation on current consumption and investment. Consistent with a role for these "Ricardian" effects, our estimates are smaller than those in related studies, implying an on-impact multiplier below 1. (JEL C51, E32, E62, H72)
Abstract
					This paper argues in favor of empirical models built by including in fiscal VAR models structural shocks identified via the narrative method. We first show that "narrative" shocks are orthogonal to the relevant information set a fiscal VAR. We then derive impulse
responses to these shocks. The use of narrative shocks does not require the inversion of the moving-average representation of a VAR for the identification of the relevant shocks. Therefore, within this framework, fiscal multipliers can be identified and estimated even when, in the presence of "fiscal foresight," the MA representation of the VARs is not invertible. (JEL C32, E62, H20, H62, H63)
Abstract
					This paper examines the effect of exogenous shocks to savings on world capital markets. Exogenous tax increases in the United States (from Romer and Romer 2010) are only partially offset by changes in domestic private savings, and only a small amount is absorbed by increased domestic investment (contra Feldstein and Horioka 1980). Almost half the change in taxes is transmitted abroad
through a change in the US current account. Other countries experience decreases in current accounts and increases in investment in response to exogenous US tax increases. We cannot reject symmetric responses across countries with different currency regimes and levels of development. (JEL E21, E22, E23, E62, F32, F42)
Abstract
					Legislative and implementation lags imply that substantial time evolves between when news arrives about fiscal changes and when the changes actually take place—time when households and firms can adjust their behavior. We identify two types of fiscal news—government spending using the Survey of Professional Forecasters and taxes using the municipal bond market. The main contribution of the paper is a mapping from reduced-form estimates of news into a DSGE framework. We find that news about fiscal policy is a time-varying process and show that ignoring the time variation can have important consequences in a conventional macroeconomic model. (JEL E12, E62, H20, H30, H62)
Abstract
					We provide evidence on the dynamic effects of tax liability changes in the United States. We distinguish between surprise and anticipated tax changes. Preannounced but not yet implemented tax cuts give rise to contractions in output, investment, and hours worked while real wages increase. There are no significant anticipation effects on
aggregate consumption. Implemented tax cuts, regardless of their timing, have expansionary effects, on output, consumption, investment, hours worked, and real wages. Results are shown to be robust. Tax shocks are important impulses to the US business cycle and
anticipation effects have been important during several business cycle episodes. (JEL E23, E32, E62, H20, H30)
Abstract
					During the last quarter of 2008, financial losses in state pension funds varied from 12 percent to 68 percent of the revenue generated by the state government. We quantify a sovereign default channel in the state municipal market by examining how changes in bond
spreads vary with state pension fund losses, controlling for credit ratings and various measures of the state's fiscal strength. Municipal bond spreads rose by 7-15 basis points for each 10 percent of state-generated revenue lost by states in the lower half of the credit quality spectrum. (JEL H71, H72, H74, H75)
Abstract
					We study the effect of electoral incentives on the allocation of public
services across legislative districts. We develop a model in which elections encourage legislators to cater to parochial interests and thus aggravate the common pool problem. Using unique data from seven US states, we study how the amount of funding that a legislator
channels to his district changes when he faces a term limit. We find that legislators bring less pork to their district when they cannot seek re-election. Consistent with the Law of 1/N, this last term reduction in funding is smaller in states with many legislative districts. (JEL D72, H70)
Abstract
					We examine the differential response of establishments to the recent global financial crisis with particular emphasis on the role of foreign ownership. Using a worldwide establishment panel dataset, we investigate how multinational subsidiaries around the world responded to the crisis relative to local establishments. We find that, first, multinational subsidiaries fared on average better than local counterfactuals with similar economic characteristics. Second, among multinational subsidiaries, establishments sharing stronger vertical production and financial linkages with parents exhibited greater resilience. Finally, in contrast to the crisis period, the effect of foreign ownership and linkages on establishment performance was insignificant in noncrisis years. (JEL F23, G01, L22, M16)
Abstract
					Electricity regulators often mandate increasing-block pricing (IBP)—i.e., marginal price increases with the customer's average daily usage—to protect low-income households from rising costs. IBP has no cost basis, raising a classic conflict between efficiency and distributional goals. Combining household-level utility billing data with census data on income, I find that IBP in California results in modest wealth redistribution, but creates substantial deadweight loss relative to the transfers. I also show that a common approach to studying income distribution effects by using median household income within census block groups may be misleading. (JEL D31, L11, L51, L94, L98, Q41, Q48)
Abstract
					We examine whether low-skilled immigration to the United States has contributed to immigrants' residential isolation by reducing native demand for public schools. We address endogeneity in school demographics using established Mexican settlement patterns in California and use a comparison group to account for immigration's broader effects. We estimate that between 1970 and 2000, the average California school district lost more than 14 non-Hispanic households with children to other districts in its metropolitan area for every 10 additional households enrolling low-English Hispanics in its public schools. By disproportionately isolating children, the native reaction to immigration may have longer-run consequences than previously thought. (JEL H75, I21, J15, J24, J61, R23)
Abstract
					The American Recovery and Reinvestment Act (ARRA) of 2009 included $88 billion of aid to state governments administered through the Medicaid reimbursement process. We examine the effect of these transfers on states' employment. Because state fiscal relief outlays are endogenous to a state's economic environment, OLS results are
biased downward. We address this problem by using a state's prerecession
Medicaid spending level to instrument for ARRA state fiscal relief. In our preferred specification, a state's receipt of a marginal $100,000 in Medicaid outlays results in an additional 3.8 job-years, 3.2 of which are outside the government, health, and education sectors. (JEL H75, I18, I38, R23)
Abstract
					We develop a simple model of trade relations in which legislators with different stakes in import-competing and export industries decide whether to grant fast-track authority (FTA) to the president, giving up the power to amend international trade agreements. We show that strategic delegation motives are key to understanding FTA votes, which involve a decision between alternative country representatives: the executive or the majority in Congress. We then examine the determinants of all votes by US congressmen on FTA since the introduction of this institutional procedure in 1974. Our empirical analysis provides strong support for the predictions of the model. (JEL D72, F12, F13)
Abstract
					In the United States, public health insurance programs cover over 90 million individuals. Expansions of these programs, such as the recently passed Patient Protection and Affordable Care Act (PPACA), may have large effects on physician behavior. This study finds that following the implementation of the State Children's
Health Insurance Program (SCHIP), physicians decreased the number of hours spent with patients, but increased their program participation.
Suggestive evidence shows that this decrease resulted from shorter office visits. These findings are consistent with the predictions from a mixed-economy model of physician behavior and provide evidence of crowd out resulting from the creation of SCHIP. (JEL H75, I11, I13, I18)
Abstract
					Recent fiscal policies, including the 2008 stimulus payments and the 2009 Making Work Pay Tax Credit, aimed to increase household spending. This paper quantifies the spending response to these policies and examines differences in spending by whether the stimulus was delivered as a one-time payment or as a flow of payments from reduced withholding. Based on responses from a representative sample of households in the Thomson Reuters/University of Michigan Surveys of Consumers, the paper finds that the reduction in withholding in 2009 boosted spending at roughly half the rate (13 percent) as
the one-time payments (25 percent) in 2008. (JEL D12, E21, E62)
Abstract
					This paper estimates the "jobs multiplier" of fiscal stimulus spending
using the state-level allocations of federal stimulus funds from the American Recovery and Reinvestment Act (ARRA) of 2009. Because the level and timing of stimulus funds that a state receives was potentially endogenous, I exploit the fact that most of these funds were allocated according to exogenous formulary allocation factors such as the number of federal highway miles in a state or its youth share of population. Cross-state IV results indicate that ARRA spending in its first year yielded about eight jobs per million dollars spent, or $125,000 per job. (JEL E24, E62, H72, H75, R23)
Abstract
					The budget forms the legal basis for government spending, and timely budgets, enacted before the new fiscal year, are an integral part of good governance. This paper examines the causes of late budgets using a unique dataset of budget completion dates for US state governments 1988-2007, constructed from news reports and state budget office surveys. We find 23 percent of state budgets to be late. We show that changing economic circumstances and divided government are the driving forces behind late budgets, which is consistent with a war-of-attrition bargaining model featuring budget baselines and preferences over deviations from such baselines. (JEL C78, D72, H61, H72)
Abstract
					We use a US Social Security reform as a quasi-experiment to provide evidence on framing effects in retirement behavior. The reform increased the full retirement age (FRA) from 65 to 66 in two-month increments per year of birth. We find strong evidence that the spike in the benefit claiming hazard at 65 moved in lockstep along with the FRA. Results on self-reported retirement and exit from employment go in the same direction. The responsiveness to the new FRA is stronger for people with higher cognitive skills. We interpret the findings as evidence of reference dependence with loss aversion. (JEL D91,
H55, J14, J26)
Abstract
					Connecting private dwellings to the water main is expensive and typically cannot be publicly financed. We show that households' willingness to pay for a private connection is high when it can be purchased on credit, not because a connection improves health but because it increases the time available for leisure and reduces inter- and intra-household conflicts on water matters, leading to sustained improvements in well-being. Our results suggest that facilitating access to credit for households to finance lump sum quality-oflife investments can significantly increase welfare, even if those investments do not result in any health or income gains. (JEL D12, I31, O12, O13, O18, Q25)
Abstract
					Poor women with children in Ecuador were selected at random for a cash transfer that is less than 20 percent of median child labor earnings. Poor families with children in school at the time of the award use the transfer to postpone the child's entry into the labor force. Students in families induced to take up the transfer by the experiment reduce paid employment by 78 percent and unpaid economic activity inside their home by 32 percent. Time in unpaid household services
increases, but overall time spent working declines. (JEL I32, I38, J13, J22, J82, O12)
Abstract
					We report the results of an experiment that was designed to test for discrimination in grading in India. We recruited teachers to grade exams. We randomly assigned child "characteristics" (age, gender, and caste) to the cover sheets of the exams to ensure that there is no relationship between these observed characteristics and the exam quality. We find that teachers give exams that are assigned to be lower caste scores that are about 0.03 to 0.08 standard deviations lower than those that are assigned to be high caste. The teachers' behavior appears consistent with statistical discrimination. (JEL I21, J13, O15, O17, Z13)
Abstract
					We use Nielsen Homescan data to examine who bears the economic burden of cigarette taxes. We find cigarette taxes are less than fully passed through to consumer prices, suggesting consumers and producers split the excess burden of these taxes. Using information on consumer location, we show the availability of lower-tax goods
across state borders creates significant differences in the pass-through rate. Tax avoidance opportunities also have a sizable effect
on purchasing behavior by altering consumer search, prices paid and quantities purchased. Finally, we demonstrate that the incidence of cigarette taxes and the border effect varies by household income and education. (JEL D12, H22, H25, H26, H71, L66)
Abstract
					This paper investigates competition between jurisdictions in the context of cross-border shopping for state lottery tickets. Our theoretical model, in which consumers consider both travel costs and lottery payoffs, predicts that per-resident sales should be more responsive to prices in small states with densely populated borders. Using weekly sales data from US lotteries and drawing identification from the rollover
feature of jackpots, we estimate this responsiveness and find large effects that vary significantly across states. Using these estimates, we show that competitive pressures from neighboring states may lead to substantially lower optimal prices. (JEL H27, H71, H73, R51)
Abstract
					In 2007, 22 Wake County, North Carolina traditional calendar schools were switched to year-round calendars, spreading the 180 instructional days evenly across the year. This paper presents a human capital model to illustrate the conditions under which these calendars might affect achievement. We then exploit the natural experiment to evaluate the impact of year-round schooling on student achievement using a multi-level fixed effects model. Results suggest that year-round schooling has essentially no impact on academic
achievement of the average student. Moreover, when the data are broken out by race, we find no evidence that any racial subgroup benefits from year-round schooling. (JEL H75, I21, I28, J24)
Abstract
					Vehicle retirement programs have become popular tools of public policy for reducing pollution. The efficacy of these programs is difficult to measure, as it is difficult to tell how much a vehicle would have polluted otherwise. I estimate that counterfactual using data from a long-running local program in California. I utilize the universe
of emissions inspections from the California Smog Check Program to construct vehicle usage histories of retired cars and similar vehicles which did not retire early. I find that the program's cost-effectiveness steadily declined over time because of the depreciation of the vehicle fleet, while adverse selection remained a problem throughout. (JEL D82, Q53, Q58, R48)
Abstract
					We present a model where special interest groups condition contributions on the receiving candidate's support and also her opponent's. This allows interest groups to obtain support from contributions as well as from threats of contributing. Out-of-equilibrium contributions help explain the missing money puzzle. Our framework contradicts standard models in predicting that interest groups give to only one side of a race. We also predict that special interest groups will mainly target lopsided winners, whereas general interest groups will contribute mainly to candidates in close races. We verify these predictions in FEC data for US House elections from 1984-1990. (JEL D72)
Abstract
					Most nonelderly Americans purchase health insurance through
their employers, which sponsor a limited number of plans. Using
a panel dataset representing over ten million insured lives, we estimate employees' preferences for different health plans and use the
estimates to predict their choices if more plans were made available
to them on the same terms, i.e., with equivalent subsidies and at
large-group prices. Using conservative assumptions, we estimate a
median welfare gain of 13 percent of premiums. A proper accounting
of the costs and benefits of a transition from employer-sponsored
to individually-purchased insurance should include this nontrivial
gain. (JEL G22, I13, J32)
Abstract
					The acceleration in US productivity growth since 1995 is often attributed to declining prices for information technology (IT ) goods, and therefore enhanced productivity growth in that sector. We investigate an alternative explanation for these IT price movements: gains in the US terms of trade and tariff reductions, especially for IT products, which led to greater gains than shown by official indexes. We do not, however, investigate the indexes used to deflate the domestic absorption components of GDP, and if upward biases are present in those indexes that could offset some of the effects of mismeasured export and import indexes. (JEL C43, E23, F13, F14, J24)
Abstract
					The early work of Stigler (1971) treats the regulatory process as the
arbitration of conflicting economic and political interests rather than
a pure welfare-maximizing effort. This paper builds on these ideas
and models the regulatory process as a game where the industry-lobby, consumers-voters, and a regulator-politician interact to define the regulated price, in alternating electoral and non-electoral periods. The equilibrium that emerges consists of a fully rational political price cycle in a regulated industry. Using monthly data for regulated gasoline and electricity prices from Brazil, we find strong evidence pointing towards the existence of electoral price cycles in both markets. (JEL D72, L51, L71, L78, L94, L98, O14)
Abstract
					We examine the long-term effects of a 1998-2003 randomized experiment in Tulsa, Oklahoma with Individual Development Accounts
that offered low-income households 2:1 matching funds for housing
down payments. Prior work shows that, among households who
rented in 1998, homeownership rates increased more through 2003
in the treatment group than for controls. We show that control group
renters caught up rapidly with the treatment group after the experiment ended. As of 2009, the program had an economically small and statistically insignificant effect on homeownership rates, the number of years respondents owned homes, home equity, and foreclosure activity among baseline renters. (JEL D14, H75, R21, R31)
Abstract
					We use Oportunidades, a conditional cash transfer to women, to
show that standard demand models do not represent the sample's
behavior: Oportunidades increases eligible households' food budget
shares, despite food being a necessity; demand for food and high-protein food changes over time only in treatment areas; the treatment effects on food and high-protein food consumption are larger than the prediction from the Engel curves at baseline; and the curves do not change in eligible households with high baseline bargaining power for the transfer recipient. Thus, handing transfers to women is a likely determinant of the observed nutritional changes. (JEL D12, H23, J16, O12)
Abstract
					We study whether transfer programs in which funds are targeted to
women decrease the incidence of spousal abuse. We examine the
impact of the Mexican Oportunidades program on spousal abuse
rates and threats of violence using data from a specialized survey.
Beneficiary women are 40 percent less likely to be victims of physical
abuse, but are more likely to receive violent threats with no associated
abuse. This evidence is consistent with a model of decision-makers'
interactions with asymmetric information in the male partner's gains
to marriage, who can then use threats of violence to extract rents
from their female partners. (JEL D82, J12, J16, K42, O15, O17)
Abstract
					Targeting assistance to the poor is a central problem in development.
We study the problem of designing a proxy means test when
the implementing agent is corruptible. Conditioning on more poverty
indicators may worsen targeting in this environment because of
a novel tradeoff between statistical accuracy and enforceability. We
then test necessary conditions for this tradeoff using data on Below
Poverty Line card allocation in India. Less eligible households pay
larger bribes and are less likely to obtain cards, but widespread rule
violations yield a de facto allocation much less progressive than the
de jure one. Enforceability appears to matter. (JEL D12, I32, I38,
O12, O15)
Abstract
					Many experts speculate that US antitrust policy towards horizontal
mergers has been too lenient. We estimate the price effects of
Whirlpool's acquisition of Maytag to provide new evidence on this
debate. We compare price changes in appliance markets most affected
by the merger to markets where concentration changed much less or
not at all. We estimate price increases for dishwashers and relatively
large price increases for clothes dryers, but no price effects for refrigerators or clothes washers. The combined firm's market share fell
across all four affected categories, and the number of distinct appliance products offered for sale fell. (JEL G34, K21, L11, L41, L68)
Abstract
					How do changes in labor market institutions, like more generous
unemployment benefits in one country, affect labor market outcomes
in other countries? We set up a two-country Armingtonian trade
model with frictions on the goods and labor markets. Contrary to the
literature, higher labor market frictions increase unemployment at
home and abroad. The strength of the spillover depends on the relative size of countries and on trade costs. It is exacerbated when real wages are rigid. Using panel data for 20 rich OECD countries, and
controlling for institutions as well as for business cycle comovement,
we confirm our theoretical predictions. (JEL E24, F16, J64, J65)
Abstract
					Recent evidence suggests consumers pay less attention to commodity
taxes levied at the register than to taxes included in a good's posted
price. If this attention gap is larger for high-income consumers than
for low-income consumers, policymakers can manipulate a tax's
regressivity by altering the fraction of the tax imposed at the register.
We investigate income differences in attentiveness to cigarette taxes,
exploiting state and time variation in cigarette excise and sales
tax rates. Whereas all consumers respond to taxes that appear in
cigarettes' posted price, our results suggest that only low-income
consumers respond to taxes levied at the register. (JEL D12, H22,
H25, H71, L66)
Abstract
					This paper examines the local economic impact of Yanacocha, a large
gold mine in Northern Peru. Using annual household data from 1997
to 2006, we find evidence of a positive effect of the mine's demand for
local inputs on real income. The effects are only present in the supply
market and surrounding areas, and reach unskilled workers in non-mining sectors. Consistent with a general equilibrium framework,
we also find an increase in the local price of nontradable goods.
Taken together, our results underline the potential of backward
linkages from extractive industries to create positive spillovers in
less developed economies. (JEL L72, O13, O18, Q32, Q33, R11)
Abstract
					Improving college performance and retention can be difficult. We
propose a simple and low-cost change in the way colleges use the
ACT exam in their admission decisions that can greatly increase
their ability to identify students at a high risk of underperforming
and dropping out. Specifically, we show that only two of the four
subtests of the ACT, English and Mathematics, can effectively predict
outcomes in college. This result is robust across various samples,
specifications and outcome measures. We demonstrate that by
eliminating the noise associated with the two nonpredictive subtests,
student-college matches can be significantly improved. (JEL I23)
Abstract
					We assemble a novel dataset of matched legislative and constituent
votes and demonstrate that less income does not mean less representation. We show: (i) The opinions of high- and low-income voters are highly correlated; the legislator's vote often reflects the desire of both. (ii) What differences in representation by income exist vary by legislator party. Republicans more often vote the will of their higher income over their lower income constituents; Democratic legislators do the reverse. (iii) Differences in representation by income are largely explained by the correlation between constituent income and party affiliation. (JEL D31, D72)
Abstract
					This paper studies the effect of exchange rate shocks on export
behavior of multi-product firms. We provide a theoretical framework
illustrating how firms adjust their prices, quantities, product scope,
and sales distribution across products in the event of exchange rate
fluctuations. In response to a real exchange rate depreciation, firms
increase markups for all products, but markup increases decline with
firm-product-specific marginal costs of production. We find robust
evidence for our theoretical predictions using Brazilian customs data
containing destination-specific and product-specific export sales and
quantities. The sample period covers the years 1997-2006, during
which Brazil experienced a series of drastic currency fluctuations.
(JEL F14, F31, F33, O19, O24)
Abstract
					The largest twentieth-century increase in US home ownership
occurred between 1940 and 1960, associated largely with declining
age at first ownership. I shed light on the contribution of coincident
government mortgage market interventions by examining home
loan benefits granted under the World War II and Korean War GI
Bills. Veterans' benefits increased home ownership rates primarily by
shifting purchase earlier in life, explaining 7.4 percent of the overall
1940-1960 increase, and 25 percent of the increase for affected
cohorts. A rough extrapolation suggests that broader changes in
mortgage terms can explain 40 percent of the 1940-1960 increase.
(JEL G21, N22, N92, R21, R31)
Abstract
					This paper employs an empirically estimated model to study the equilibrium effects of an increase in the US corporate average fuel economy (CAFE) standards. I identify and model heterogeneity across
firms and find that the profit impacts of CAFE fall almost entirely on
domestic producers. The welfare analyses consider the simultaneous
household decision of vehicle and miles traveled, allowing direct
comparison with a gasoline tax. Finally, I consider dynamic impacts
in the used car market. I find these comprise nearly half the gross
welfare cost of CAFE and fall disproportionately on low-income
households. Contrary to previous results, the overall welfare costs
are regressive. (JEL H24, L51, L62)
Abstract
					The earned income tax credit generates large average tax refunds for
low-income parents, and these refunds are distributed in a narrow
time frame. I rely on this plausibly exogenous source of variation
in liquidity to investigate the effect of cash on hand on unemployment
duration. Among EITC-eligible women, unemployment spells
beginning just after tax refund receipt last longer than unemployment
spells beginning at other times of year. There is no evidence that
tax refund receipt is associated with longer unemployment duration
for men, or that the longer durations for women are associated with
higher-quality subsequent job matches. (JEL H24, J64)
Abstract
					We investigate a channel through which social capital may improve
economic well-being and the functioning of institutions: political
accountability. The main idea is that voters who share values and
beliefs that foster cooperation are more likely to vote based on criteria
of social welfare rather than narrow personal interest. We frame this
intuition into a simple model of political agency and take it to the data
using information on the criminal prosecutions and absenteeism rates
of Italian members of Parliament. Empirical evidence shows that the
electoral punishment of these misbehaviors is considerably larger in
districts with higher social capital. (JEL D72, I31, Z13)
Abstract
					While numerous studies have found that school accountability
boosts test scores, it is uncertain whether estimated test score gains
reflect genuine improvements or merely "gaming" behaviors. This
paper brings to bear new evidence from a unique five-year, three-round survey conducted of a census of public elementary schools in Florida that is linked with detailed administrative data on student performance. We show that schools facing accountability pressure changed their instructional practices in meaningful ways, and
that these responses can explain a portion of the test score gains
associated with the Florida school accountability system. (JEL H75,
I21, I28)
Abstract
					We examine the contagion effect of residential foreclosures and find
strong evidence of a social interactions influence on default decisions
where the interaction is based on neighbors' behavior in a
previous period. Using a unique spatially explicit parcel-level dataset
documenting residential foreclosures in Maryland for the years
2006–2009 and a highly localized neighborhood definition, based on
13 nearest neighbors, we find that a neighbor in foreclosure increases
the hazard of additional defaults by 18 percent. This feedback effect
goes beyond a temporary reduction in local house prices and implies
a negative social multiplier effect of foreclosures. (JEL R23, R31)
Abstract
					We exploit the surprise election of Republican Scott Brown to the US Senate to evaluate the market's assessment of the impact of the recent US health reform legislation on the health care industry. We find that Brown's election was associated with abnormal returns of 2.1 percent and 6 percent for investments in the health care sector overall and managed care firms, respectively. Investments in the pharmaceutical sector experienced abnormal returns of 2.8 percent, while health care facilities (e.g., hospitals) experienced abnormal losses of 3.5 percent. Firms involved with Medicare Advantage benefitted more, while those involved with Medicaid Managed Care benefitted less from the election.
Abstract
					This analysis exploits new data from the Vehicle Ownership and Alternatives Survey, which elicits beliefs over the financial benefits of owning higher fuel economy vehicles. The data are used to test for underestimation and to document evidence of "MPG Illusion": consumers think as if fuel costs scale linearly in miles per gallon instead of gallons per mile. Counterfactuals suggest that the MPG Illusion reduces welfare by less than $4 per new vehicle. Furthermore, even the most severe plausible underestimation of the financial benefits of fuel economy cannot account for the consumer welfare gains attributed to fuel economy standards.
Abstract
					We investigate the effect of Reformed Protestantism, relative to Catholicism, on preferences for leisure, and for redistribution and intervention in the economy. We use a Fuzzy Spatial Regression Discontinuity Design to exploit a historical quasi-experiment in Western Switzerland, where in the sixteenth century a hitherto homogeneous region was split and one part assigned to adopt Protestantism. We find that Reformed Protestantism reduces referenda voting for more leisure by 14, redistribution by 5, and government intervention by 7 percentage points. These preferences translate into higher per capita income as well as greater income inequality.
Abstract
					We investigate the causal link between driver cell phone use and crash rates by exploiting a natural experiment induced by the 9 pm price discontinuity that characterizes a majority of recent cellular plans. We first document a 7.2 percent jump in driver call likelihood at the 9 pm threshold. Using a prior period as a comparison, we next document no corresponding change in the relative crash rate. Our estimates imply an upper bound in the crash risk odds ratio of 3.0, which rejects the 4.3 asserted by Redelmeier and Tibshirani (1997). Additional panel analyses of cell phone ownership and cellular bans confirm our result.
Abstract
					We analyze the effects of the introduction of Title I of the 1965 Elementary and Secondary Education Act, a large federal grants program designed to increase poor students' educational services and achievement. We focus on the South, the poorest region of the country. Title I increased school spending by $0.50 on the dollar in the average southern school district and by more in districts with less ability to offset grants through local tax reductions. Title I-induced increases in school budgets appear to have reduced high school dropout rates of whites, but not blacks.
Abstract
					I study the impact of a universal child benefit on fertility and maternal labor supply. I exploit the unanticipated introduction of a sizable child benefit in Spain in 2007. Following a regression discontinuity-type design, I find that the benefit significantly increased fertility, in part through a reduction in abortions. Families who received the benefit did not increase consumption. Instead, eligible mothers stayed out of the labor force longer after childbirth, which led to their children spending less time in formal child care.
Abstract
					We estimate long-term effects of Jewish presence in Europe before World War II, using discontinuity at the border of the "Pale of Settlement" area where Jews were allowed to live in the Russian Empire. Current residents of the Pale have lower support for market, and are less entrepreneurial but more trusting compared to those outside the Pale. We suggest a mechanism and test for it: anti-Semitism generated persistent antimarket culture and trust among non-Jews. Consistent with this mechanism, antimarket attitudes and trust decrease with distance to pogroms controlling for historical Jewish presence. Self-identification and cohesion of majority depends on the presence of minority.
Abstract
					This paper considers substitution between charitable activities in the context of religious practice by examining the Catholic Church sex abuse scandal's impact on both Catholic and non-Catholic religiosity. I find a fall in the Catholic population compensated by increases in non-Catholic participation and nonaffiliation. Back-of-the-envelope calculations suggest the scandal generated about $3 billion dollars in donations to non-Catholic faiths. Those leaving Catholicism frequently chose dissimilar alternatives: Baptist churches gained significantly while the Episcopal Church did not. These results challenge several theories of religiosity and suggest that policies or shocks specific to one religious group could have effects on other groups.
Abstract
					This paper studies Comprehensive Performance Assessment, an explicit incentive scheme for local government in England. Motivated by a theoretical political agency model, we predict that CPA should increase service quality and local taxation, but have an ambiguous effect on the efficiency of service provision. We test these predictions using Welsh local governments as a control group: CPA increased the property tax, and our index of service quality, but had no significant effect on efficiency overall. There is evidence of a heterogenous effect of CPA: it impacted more on councils where electoral competition was initially weak, in line with our theory.
Abstract
					Using information on 2,300 Air Services Agreements covering 184 countries, we investigate the impact of air services liberalization on passenger flows. We find that a certain level of liberalization is required to have a positive effect on passenger traffic. In particular, we estimate that the multilateralization of multiple designation provisions, Open Skies Agreements and European Economic Area-type agreements would increase passenger traffic worldwide by 0.5, 5, and 10 percent, respectively. The potential endogeneity problem is carefully dealt with using instrumental variables and propensity score matching.
Abstract
					The published version of our paper had an accounting mistake in the construction of one time series. This note describes the mistake and presents results based on corrected data. The revised results are very similar to those originally reported.
Abstract
					Using data from the Survey of Income and Program Participation
(SIPP), we study the health insurance and labor market implications
of the recent Affordable Care Act (ACA) provision that allows
dependents to remain on parental policies until age 26. Our comparison
of outcomes for young adults aged 19-25 with those who are
older and younger, before and after the law, shows a high take-up of
parental coverage, resulting in substantial reductions in uninsurance
and other forms of coverage. We also find preliminary evidence of
increased labor market flexibility in the form of reduced work hours.
Abstract
					Researchers often estimate average treatment effects of programs
without investigating heterogeneity across units. Yet, individuals,
firms, regions, or countries vary in their ability to utilize transfers.
We analyze Objective 1 transfers of the EU to regions below a
certain income level by way of a regression discontinuity design with
systematically varying heterogeneous treatment effects. Only about
30 percent and 21 percent of the regions—those with sufficient human
capital and good-enough institutions—are able to turn transfers
into faster per capita income growth and per capita investment,
respectively. In general, the variance of the treatment effect is much
bigger than its mean.
Abstract
					We investigate how cap-and-trade regulation affects profits. In late
April 2006, the EU CO2 allowance price dropped 50 percent, equating
to a €28 billion reduction in the value of aggregate annual allowances.
We examine daily returns for 552 stocks from the EUROSTOXX
index. Despite reductions in environmental costs, we find that stock
prices fell for firms in both carbon- and electricity-intensive industries,
particularly for firms selling primarily within the EU. Our
results imply that investors focus on product price impacts, rather
than just compliance costs and the nominal value of pollution permits.
Abstract
					Production subsidies for renewable energy, such as solar or wind
power, are rationalized by their environmental benefits. Subsidizing
these projects allows clean, renewable technologies to produce
electricity that otherwise would have been produced by dirtier,
fossil-fuel power plants. In this paper, I quantify the emissions
offset by wind power for a large electricity grid in Texas using the
randomness inherent in wind power availability. When accounting
for dynamics in the production process, the results indicate that only
for high estimates of the social costs of pollution does the value of
emissions offset by wind power exceed cost of renewable energy
subsidies.
Abstract
					The effect of competition on the quality of health care remains
a contested issue. Most empirical estimates rely on inference
from nonexperimental data. In contrast, this paper exploits a procompetitive
policy reform to provide estimates of the impact of
competition on hospital outcomes. The English government introduced
a policy in 2006 to promote competition between hospitals. Using
this policy to implement a difference-in-differences research design,
we estimate the impact of the introduction of competition on not only
clinical outcomes but also productivity and expenditure. We find
that the effect of competition is to save lives without raising costs.
Abstract
					We document large long-run differences in average house price
appreciation across metropolitan areas over the past 50 years, and
show they can be explained by an inelastic supply of land in some
unique locations combined with an increasing number of highincome
households nationally. The resulting high house prices and
price-to-rent ratios in those "superstar" areas crowd out lower
income households. The same forces generate a similar pattern
among municipalities within a metropolitan area. These facts suggest
that disparate local house price and income trends can be driven by
aggregate demand, not just changes in local factors such as productivity
or amenities.
Abstract
					This paper provides a theoretical and empirical analysis of crossstate
externalities associated with gun regulations that impact gun
trafficking. Using tracing data, which identify the source state for
crime guns recovered in destination states, we find that firearms tend
to flow from states with weak laws to states with strict laws, satisfying
a key theoretical condition for the existence of externalities. We
also find that gun flows are more significant between nearby states,
suggesting that externalities are spatial in nature. Finally, we present
evidence that criminal possession of guns is higher in states exposed
to weak laws in nearby states.
Abstract
					Theoretical work on disciplining corrupt agents has emphasized
the role of expected future rents -- for example, efficiency wages. Yet
taken seriously this approach implies that illicit future rents should
also deter corruption. We study this "golden goose" effect in the
context of a statutory wage increase in India's employment guarantee
scheme, comparing official microrecords to original household
survey data to measure corruption. We estimate large golden goose
effects that reduced the total impact of the wage increase on theft
by roughly 64 percent. In short, rent expectations matter.
(JEL D73, D82, H83, J41, K42, O17, O21)
Abstract
					How likely is a catastrophic event that would substantially reduce
the capital stock, GDP, and wealth? How much should society be
willing to pay to reduce the probability or impact of a catastrophe?
We answer these questions and provide a framework for policy
analysis using a general equilibrium model of production, capital
accumulation, and household preferences. Calibrating the model to
economic and financial data, we estimate the mean arrival rate of
shocks and their size distribution, the tax on consumption society
would accept to limit the maximum size of a catastrophic shock, and
the cost to insure against its impact.
Abstract
					We estimate the "incapacitation effect" on crime using variation
in Italian prison population driven by eight collective pardons
passed between 1962 and 1990. The prison releases are sudden
(within one day), very large (up to 35 percent of the entire prison
population), and happen nationwide. Exploiting this quasi-natural
experiment we break the simultaneity of crime and prisoners and,
in addition, use the national character of the pardons to separately
identify incapacitation from changes in deterrence. The elasticity
of total crime with respect to incapacitation is between -17 and
-30 percent. A cost-benefit analysis suggests that Italy's prison
population is below its optimal level.
Abstract
					I use the Medicare Part D prescription drug insurance market to
examine the dynamics of firm interaction with consumers on an
insurance exchange. Enrollment data show that consumers face
switching frictions leading to inertia in plan choice, and a regression
discontinuity design indicates initial defaults have persistent effects.
In the absence of commitment to future prices, theory predicts firms
respond to inertia by raising prices on existing enrollees, while
introducing cheaper alternative plans. The complete set of enrollment
and price data from 2006 through 2010 confirms this prediction:
older plans have approximately 10 percent higher premiums than
comparable new plans.
Abstract
					During the financial crisis, G20 countries compelled tax havens to
sign bilateral treaties providing for exchange of bank information.
Policymakers have celebrated this global initiative as the end of
bank secrecy. Exploiting a unique panel dataset, our study is the
first attempt to assess how the treaties affected bank deposits in tax
havens. Rather than repatriating funds, our results suggest that tax
evaders shifted deposits to havens not covered by a treaty with their
home country. The crackdown thus caused a relocation of deposits
at the benefit of the least compliant havens. We discuss the policy
implications of these findings.
Abstract
					We exploit the introduction of pedestrian countdown signals—timers
that indicate when traffic lights will change—to evaluate a policy
that improves the information of all market participants. We find
that although countdown signals reduce the number of pedestrians
struck by automobiles, they increase the number of collisions between
automobiles. They also cause more collisions overall, implying that
welfare gains can be attained by hiding the information from drivers.
Whereas most empirical studies on the role of information in markets
suggest that asymmetric information reduces welfare, we conclude that
asymmetric information can, in fact, improve it.
Abstract
					This paper provides evidence that dividend and capital gains tax
rates importantly influence household portfolio choices. Using data
from the Surveys of Consumer Finances around the 2003 dividend tax
reductions, I estimate the relationship between taxes and household
portfolio dividend yields. I find that a one percentage point decrease
in the dividend tax rate relative to the long-term capital gains tax
rate causes household portfolio dividend yields to increase by 0.04
percentage points. The results suggest that high income households
significantly increased their portfolio dividend yields in response to
the 2003 dividend tax rate reductions.
Abstract
					We investigate the optimal policy response to the possibility of abrupt,
irreversible shifts in system dynamics. The welfare cost of a tipping
point emerges from the policymaker's response to altered system
dynamics. Our policymaker also learns about a threshold's location
by observing the system's response in each period. Simulations with
a recursive, numerical climate-economy model show that tipping
possibilities raise the optimal carbon tax more strongly over time. The
resulting policy paths ultimately lower optimal peak warming by up
to 0.5°C. Different types of posttipping shifts in dynamics generate
qualitatively different optimal pretipping policy paths.
Abstract
					We apply the regression kink design to the Swedish grant system and
estimate causal effects of intergovernmental grants on local public
employment. Our robust conclusion is that grants do not stimulate
local public employment. We find no statistically significant effects
on total local public employment, and we can exclude even moderate
effects. When disaggregating the total effect by sector, we find
that personnel in the traditional welfare sectors are unaffected, a
conclusion which applies to both publicly and privately employed
in these sectors. The only positive and statistically significant effect
of grants is that on administrative personnel.
Abstract
					We calculate increases in contributions required to achieve full
funding of state and local pension systems in the United States
over 30 years. Without policy changes, contributions would have to
increase by 2.5 times, reaching 14.1 percent of the total own revenue
generated by state and local governments. This represents a tax
increase of $1,385 per household per year, around half of which
would go to pay down legacy liabilities while half would fund the cost
of new promises. We examine sensitivity to asset return assumptions,
wage correlations, the treatment of workers not currently in Social
Security, and endogenous geographical shifts in the tax base.
Abstract
					This paper derives optimal top tax rate formulas in a model where
top earners respond to taxes through three channels: labor supply,
tax avoidance, and compensation bargaining. The optimal top tax
rate increases when there are zero-sum compensation-bargaining
effects. We present empirical evidence consistent with bargaining
effects. Top tax rate cuts are associated with top one percent pretax
income shares increases but not higher economic growth. US CEO
"pay for luck" is quantitatively more prevalent when top tax rates
are low. International CEO pay levels are negatively correlated with
top tax rates, even controlling for firms' characteristics and performance.
Abstract
					This paper uses transaction data to investigate the effects of Internet
purchase on airline fares. Our data include ticket characteristics,
restrictions, flight load factors, and dates and channel of purchase.
Controlling for ticket and flight characteristics, online purchasers
pay about 11 percent less than offline purchasers, which seems rooted
in more efficient shopping. The results do not support a spillover in
terms of reduced fares or dispersion from greater Internet shopping.
The paper also uses the data to reevaluate the relationship between
market concentration and fares, but fails to identify any statistically
significant, robust relationship.
Abstract
					Bilateral tax treaties (BTTs) are intended to promote foreign direct
investment through double-taxation relief. Using BEA firm-level
data, we find a positive effect of BTTs on FDI, which is larger for
firms that use differentiated inputs. BTTs allow multinational firms
to request assistance from treaty partners' governments if they have
a grievance about how tax liabilities are determined. These provisions
disproportionately benefit firms that use inputs for which an
arm's-length price is difficult to observe, since allocation of earnings
across countries is more complex. We find differential BTT
effects for both sales by existing affiliates and entry of new affiliates.
Abstract
					We estimate the elasticity of corporate taxable income with respect to
the statutory corporation tax rate using the population of UK corporation
tax returns. We analyze bunching in the distribution of taxable
income at kinks in the marginal rate schedule. We decompose this
elasticity into an elasticity of total income with respect to the corporation
tax rate, and an elasticity of the share of income taken as profit
with respect to the difference between the personal and corporate tax
rates. This implies a marginal deadweight cost at the £10,000 kink of
around 29 percent of tax revenue.
Abstract
					This study develops a theoretical model of a multinational firm
with an internal capital market. Hypotheses regarding the role of
local versus foreign characteristics such as profit tax rates, lack of
institutional quality, financial underdevelopment, and productivity
for internal debt financing at the level of foreign affiliates are derived
and assessed empirically in a panel dataset covering the universe
of German multinationals. We show that differences in nontax
incentives given by fundamentals in local and foreign markets can
offset or reinforce tax incentives. The results point at a many times
higher tax-sensitivity of internal debt financing compared to previous
research.
Abstract
					This paper examines empirically how international taxation
affects the volume and pricing of cross-border banking activities
for a sample of banks in 38 countries over the 1998ï¿½2008 period.
International double taxation of foreign-source bank income is found
to reduce banking-sector FDI. Furthermore, such taxation is almost
fully passed on into higher interest margins charged abroad. These
results imply that international double taxation distorts the activities
of international banks, and that the incidence of international double
taxation of banks is on bank customers in the foreign subsidiary
country.
Abstract
					We investigate whether women's political representation in state
legislatures improves public provision of antenatal and childhood
health services in the districts from which they are elected, arguing
that the costs of poor services in this domain fall disproportionately
upon women. Using large representative data samples from India and
accounting for potential endogeneity of politician gender and the sample
composition of births, we find that a 10 percentage point increase in
women's representation results in a 2.1 percentage point reduction in
neonatal mortality, and we elucidate mechanisms. Women's political
representation may be an underutilized tool for addressing health in
developing countries.
Abstract
					Rent extraction by public sector workers may be limited by the ability
of taxpayers to vote with their feet. But rent extraction may be higher
in regions where high amenities mute the migration response. This
paper develops a theoretical model that predicts such a link between
public sector wage differentials and local amenities, and the predictions
are tested by analyzing variation in these differentials and
amenities across states. Public sector wage differentials are, in fact,
larger in the presence of high amenities, with the effect stronger for
unionized public sector workers, whose political power may allow
greater scope for rent extraction.
Abstract
					Simultaneity complicates the estimation of the causal effect of police
on crime. We overcome this obstacle by focusing on a mass layoff of
Oregon State Police in February of 2003. Due solely to budget cuts,
35 percent of the roadway troopers were laid off, which dramatically
reduced citations. The subsequent decrease in enforcement is
associated with a significant increase in injuries and fatalities. The
effects are similar using control groups chosen either geographically
or through data-driven methods. Our estimates suggest that a highway
fatality can be prevented with $309,000 of expenditures on state
police.
Abstract
					The 1993 expansions of the Earned Income Tax Credit created the
first meaningful separation in benefits between families containing
two or more children and those with only one child. If income is protective
of health, we should see improvements over time in the health
for mothers eligible for these higher EITC benefits. Using data from
the Behavioral Risk Factors Surveillance Survey, we find improvements
in self-reported health for affected mothers. Using data from
the National Health and Nutrition Examination Survey, we find
reductions in the probability of having risky levels of biomarkers for
these same women
Abstract
					This paper exploits the effectively random assignment of judges to
Disability Insurance cases to estimate the causal impact of Disability
Insurance receipt on labor supply. We find that benefit receipt reduces
labor force participation by 26 percentage points three years after a
disability determination decision, although the reduction is smaller
for older people, college graduates, and those with mental illness.
OLS and instrumental variables estimates are similar. Furthermore,
over 60 percent of those denied benefits by an administrative law
judge are subsequently allowed benefits within ten years, showing
that most applicants apply, reapply, and appeal until they get benefits.
Abstract
					This paper studies the policy impact of civil service regulations,
exploiting reforms undertaken by US state governments throughout
the twentieth century. These reforms replaced political patronage with
a civil service recruited based on merit and protected from politics.
I find that state politicians respond to these changes by spending
relatively less through the reformed state-level bureaucracies.
Instead, they allocate more funds to lower level governments. The
reallocation of expenditures leads to reduced long-term investment
by state governments.
Abstract
					In transportation systems with unpriced congestion, allowing single-occupant low-emission vehicles in high-occupancy vehicle (HOV) lanes to encourage their adoption exacerbates congestion costs for carpoolers. The resulting welfare effects of the policy are negative, with environmental benefits overwhelmingly dominated by the increased congestion costs. Exploiting the introduction of the Clean Air Vehicle Stickers policy in California with a regression discontinuity design, our results imply a best-case cost of $124 per ton of reductions in greenhouse gases, $606,000 per ton of nitrogen oxides reduction, and $505,000 per ton of hydrocarbon reduction, exceeding those of other options readily available to policymakers.
Abstract
					We evaluate the impact of Gifted and Talented (GT) programs on students through a regression discontinuity (RD) design, and by analyzing a randomized lottery for elite magnet GT schools. We show that GT students in each analysis are exposed to higher achieving peers and, in the RD sample, a more advanced curriculum. We find that achievement for marginal students neither improves nor worsens from GT services in the short run. We also find that lottery winners only perform better in science. Using a bounding analysis we cannot rule out zero, though we do not find any significant negative effects.
Abstract
					We demonstrate that personal connections amongst US politicians have a significant impact on Senate voting behavior. Networks based on alumni connections between politicians are consistent predictors of voting behavior. We estimate sharp measures that control for common characteristics of the network, as well as heterogeneous impacts of a common network characteristic across votes. We find that the effect of alumni networks is close to 60 percent as large as the effect of state-level considerations. We show that politicians use school ties as a mechanism to engage in vote trading ("logrolling"), and that alumni networks help facilitate the procurement of discretionary earmarks.
Abstract
					Although past research has found that recessions reduce contemporaneous mortality, workers nearing retirement age may experience reduced longevity attributable to lengthy unemployment spells and lost health insurance at a particularly vulnerable time. To test this hypothesis, we generate age-specific cohort survival probabilities using 1965–2008 Vital Statistics mortality data and link them to labor market conditions at earlier ages. Our results indicate that experiencing a recession in one's late 50s reduces longevity. We also find that it leads to several years of reduced employment, health insurance coverage, and health care utilization, which may contribute to the lower long-term likelihood of survival.
Abstract
					Early retirement incentives (ERIs) are increasingly prevalent in education as districts seek to close budget gaps by replacing expensive experienced teachers with lower cost newer teachers. Combined with the aging of the teacher workforce, these ERIs are likely to change the composition of teachers dramatically in the coming years. We use exogenous variation from an ERI program in Illinois in the mid-1990s to provide the first evidence in the literature of the effects of large-scale teacher retirements on student achievement. We find the program did not reduce test scores; likely, it increased them, with positive effects most pronounced in lower SES schools.
Abstract
					Following electricity market restructuring, approximately half of all commercial US nuclear power reactors were sold by price-regulated public utilities to independent power producers. At the time of the sales, some policymakers raised concerns that these corporations would ignore safety. Others claimed that the sales would bring improved reactor management, with positive effects on safety. Using data on various safety measures and a difference-in-differences estimation strategy, I find that safety improved following ownership transfers and the removal of price regulations. Generation increased, and this does not appear to have come at the cost of public safety.
Abstract
					We conduct the first nationwide study of incentives under the No Child Left Behind (NCLB) Act, which requires states to punish schools failing to meet target passing rates on students' standardized exams. States' idiosyncratic policies created variation in the risk of failure among very similar schools in different states, which we use to identify effects of accountability pressure. We find NCLB lowers teachers' perceptions of job security, shifts time towards specialist teachers in high-stakes subjects and away from whole-class instruction, and has positive or neutral effects on students' enjoyment of learning and achievement in reading, math, and science.
Abstract
					This paper uses the interwar United States as a laboratory for investigating the incentive effects of marginal income tax rates. We examine the impact of the large changes in rates in this period on taxable income using time-series/cross-section analysis of data by small slices of the income distribution. We find that the effect operated in the expected direction but was economically small, and that it is precisely estimated and highly robust. We also find suggestive time-series evidence of a positive impact of marginal rate cuts on business formation, but no evidence of an important effect on other indicators of investment.
Abstract
					Whether user fees for health services should be charged or abolished for the poor has recently been debated. This study examines the impact on child health status of removing user fees in South Africa. Our main innovation is to exploit plausibly exogenous variation in access to free health care, due to the fact that black Africans under apartheid could exercise little political power and residential choice. We find substantial improvements in weight-for-age z-scores among ex ante similar children. Falsification exercises confirm no preexisting trend in the pre-reform period or no treatment effect among noneligible children in the post-reform period.
Abstract
					"Chilling effects" are a popular explanation for low program take-up rates among immigrants, but the effects of an icy policy climate are inherently hard to measure. This paper finds robust evidence that heightened federal immigration enforcement reduces Medicaid participation among children of noncitizens, even when children are themselves citizens. The decline in immigrant Medicaid participation around the time of welfare reform is largely explained by a contemporaneous spike in enforcement activity. The results imply that safety net participation is influenced not only by program design, but also by a broader set of seemingly unrelated policy
choices.
Abstract
					This paper analyzes the efficiency of and the substitutability between
three urban congestion management policies: transit subsidization,
car congestion pricing, and dedicated bus lanes. The model features
user heterogeneity, cross-congestion effects between cars and transit,
intertemporal and total transport demand elasticities, and is
simulated using data for London, UK and Santiago, Chile. We find
that the substitutability between policies is large and, in particular,
the marginal contribution of increased transit subsidies, as other
policies are implemented first, diminishes rapidly. Bus lanes are an
attractive way to increase frequencies and decrease fares without
injecting public funds.
Abstract
					We exploit a cohort discontinuity in the stringency of Dutch disability
reforms to estimate the effects of decreased DI (disability insurance)
generosity on behavior of existing recipients. We find evidence of
social support substitution: individuals on average offset €1.00 of
lost DI benefits by collecting €0.30 more from other social assistance
programs, but this benefit-substitution effect declines over time.
Individuals also exhibit a rebound in earnings: earnings increase by
€0.62 on average per euro of lost DI benefits and this effect remains
roughly constant over time. This is strong evidence of substantial
remaining earnings capacity among long-term claimants of DI.
Abstract
					In 2002, the Mexican government began an effort to improve health
access to the 50 million uninsured in Mexico, a program known as
Seguro Popular (SP). The SP offered virtually free health insurance
to informal workers, altering the incentives to operate in the formal
economy. We find that the SP program had a negative effect on the
number of employers and employees formally registered in small and
medium firms (up to 50 employees). Our results suggest that the positive gains of expanding health coverage should be weighed against the implications of the reallocation of labor away from the formal sector.
Abstract
					This paper evaluates a unique R&D subsidy program implemented
in northern Italy. Firms were invited to submit proposals for new
projects and only those which scored above a certain threshold
received the subsidy. We use a sharp regression discontinuity
design to compare the investment spending of subsidized firms with
that of unsubsidized firms. For the sample as a whole we find no
significant increase in investment. This overall effect, however, masks
substantial heterogeneity in the program's impact. We estimate that
small enterprises increased their investments- by approximately the
amount of the subsidy they received- whereas larger firms did not.
Abstract
					This paper provides new estimates of the medium- and long-term
impacts of Head Start on health and behavioral problems. We identify
these impacts using discontinuities in the probability of participation
induced by program eligibility rules. Our strategy allows us to identify the effect of Head Start for the individuals in the neighborhoods of multiple discontinuities. Participation in the program reduces the incidence of behavioral problems, health problems, and obesity of male children at ages 12 and 13. It lowers depression and obesity among adolescents, and it reduces engagement in criminal activities and idleness for young adults.
Abstract
					We provide the first comprehensive estimates of the size of the for-profit higher education sector and evaluate whether for-profits increase tuition in response to federal subsidies. By using state administrative data we include institutions that do not participate in federal student aid programs and are missed in official counts. Including these institutions doubles the number of for-profits and increases students by one-third compared with official counts. Aid-eligible institutions charge tuition for sub-baccalaureate (mainly certificate) programs that is about 78 percent higher than that charged by comparable programs in nonparticipating institutions, lending some credence to the "Bennett hypothesis" of federal aid capture.
Abstract
					This paper evaluates a large-scale appliance replacement program
in Mexico that from 2009 to 2012 helped 1.9 million households
replace their old refrigerators and air conditioners with energyefficient
models. Using household-level billing records from the universe of Mexican residential customers, we find that refrigerator replacement reduces electricity consumption by 8 percent, about one-quarter of what was predicted by ex ante analyses. Moreover, we find that air conditioning replacement actually increases electricity consumption. Overall, we find that the program is an expensive way to reduce externalities from energy use, reducing carbon dioxide emissions at a program cost of over $500 per ton.
Abstract
					We examine the heterogeneous relationship between the adoption of EMR and hospital operating costs at thousands of US hospitals between 1996 and 2009. We first document a previously-identified puzzle: Adoption of EMR is associated with a slight cost increase. Drawing on the literature on IT and productivity, we analyze why this average effect arises. We find that: (i) EMR adoption is initially associated with a rise in costs; (ii) EMR adoption at hospitals in IT-intensive locations leads to a decrease in costs after three years; and (iii) Hospitals in other locations experience an increase in costs even after six years.
Abstract
					This paper estimates taxable income responses using a series of
Danish tax reforms and population-wide administrative data since
1980. The tax variation and data in Denmark makes it possible to
overcome the biases from nontax changes in inequality and mean
reversion that plague the existing literature. We provide compelling
graphical evidence of taxable income responses, arguably representing the first nonparametrically identified evidence of taxable income elasticities using tax reforms. We also present panel regression evidence that is extremely robust to specification, unlike previous results which have been very sensitive.
Abstract
					Gasoline taxes can be employed to correct externalities from automobile use and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to gasoline price changes. In this paper, we examine directly how gasoline taxes affect gasoline consumption as distinct from tax-inclusive retail gasoline prices. We find robust evidence that consumers respond more strongly to gasoline tax changes under a variety of model specifications. We discuss two potential reasons for our main findings as well as their implications.
Abstract
					How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by firms. Estimating a binary choice model of firm behavior, we find significant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs is further confirmed in studying how firms responded to a particular policy change: the expiration of legislation relating to the H-1B visa. Due to its influence on firm behavior, we argue that this persistence fundamentally changes the environment in which legislation is made.
Abstract
					This paper tests the rational ignorance hypothesis by Downs (1957).
This theory predicts that people do not acquire costly information to
educate their votes. We provide new estimates for the effect of voting
participation by exploring the Brazilian dual voting system- voluntary
and compulsory- whose exposure is determined by citizens' date of birth. Using a fuzzy RD approach and data from a self-collected survey, we find no impact of voting on individuals' political knowledge or information consumption. Our results corroborate Downs' predictions and refute the conjecture by Lijphart (1997) that compulsory voting stimulates civic education.
Abstract
					There have been suggestions for monetary policy to engineer higher inflation expectations to stimulate spending. We examine the relationship between expected inflation and spending attitudes using the microdata from the Michigan Survey of Consumers. The impact of higher inflation expectations on the reported readiness to spend on durables is generally small, outside the zero lower bound, often statistically insignificant, and inside of it typically significantly negative. In our baseline specification, a one percentage point increase in expected inflation during the recent zero lower bound period reduces households' probability of having a positive attitude towards spending by about 0.5 percentage points. (JEL D12, D84, E21, E31, E52)
Abstract
					Although Norway has a long tradition of public disclosure of tax filings, starting in 2001 anyone with Internet access could obtain individual information on income and income taxes paid. We examine the effect on income reporting of this change in the degree of public disclosure, making use of the fact that prior to 2001, in some municipalities, tax information was distributed widely through locally produced paper catalogs. We find an approximately 3 percent higher average increase in reported income among business owners living in areas where the switch to Internet disclosure represented a large change in access. (JEL H24, H25, H26)
Abstract
					We investigate the relationship between foreclosures and hospital visits using data on all foreclosures and all hospital and emergency room visits from four states that were among the hardest hit by the foreclosure crisis. We find that living in a neighborhood with a spike in foreclosures is associated with significant increases in urgent unscheduled visits, including increases in visits for preventable conditions. The estimated relationships cannot be accounted for by increasing unemployment, declines in housing prices, migration, or by people switching from out-patient providers to hospitals. (JEL D14, F12, R31)
Abstract
					We test the equivalence of tax-inclusive, tax-exclusive and tax-rebate prices through a series of experiments differing only in their handling of the tax. Subjects receive a cash budget and decide how much to keep and how much to spend on various attractively priced goods. Subjects spend significantly more under tax-exclusive prices whereas total purchases under tax-inclusive and tax-rebate prices are similar. These results persist throughout most of the ten rounds despite feedback and the ability to revise purchases. The asymmetric response to tax liabilities and rebates highlights consumers' ability both to internalize and to willfully ignore hidden price components. (JEL D12, H25, H31)
Abstract
					We measure the effect of foreclosures on the sale prices of nearby properties using a dataset of condominiums in Boston. A foreclosure in the same association and at the same address depresses the sale price by 2.5 percent, but properties in the same association but located at a different address have an effect that is tightly estimated at zero. Since properties in the same association are close substitutes, we argue that the evidence points against the pecuniary externality of property coming on the market and toward a physical externality as the source of measured foreclosure externalities. (JEL R31)
Abstract
					Increasing the attractiveness of voting is often seen as a remedy for unequal participation and the influence of special-interest groups on public policy. However, lower voting costs may also bring less informed citizens to the poll, thereby inviting efforts to sway these voters. We substantiate this argument in a probabilistic voting model with campaign contributions. In an empirical analysis for the 26 Swiss cantons, we find that lower voting costs due to postal voting are related to higher turnout, lower average education and political knowledge of participants as well as lower government welfare expenditures and lower business taxation. (JEL D72, H25, H75, I20, I38)
Abstract
					This paper uses quasi-experimental variation from federal tax reform to evaluate the effect of the EITC on infant health outcomes. We find that the EITC reduces the incidence of low birth weight and increases mean birth weight: a $1,000 treatment-on-the-treated leads to a 2 to 3 percent decline in low birth weight. Our results suggest that the candidate mechanisms include more prenatal care and less negative health behaviors (smoking). Additionally, we find a shift from public to private insurance coverage, and for some a reduction in insurance overall, indicating a potential change in the quality and perhaps quantity of coverage. (JEL H24, I12, I38, J13)
Abstract
					France, Germany, and Sweden link taxes to passenger vehicles' carbon dioxide (CO2) emissions rates. Based on new vehicle registration data from 2005 to 2010, we find that CO2 taxes reduce registrations. The effect is larger in France than in either Germany or Sweden, and the French results are robust to alternative estimation models. Compared with those of France, the German results vary somewhat more, and the Swedish estimates are the least robust. We find some evidence that the French tax affected the mix of new vehicles that vehicle manufacturers offered in the French market. (JEL H23, L62, Q54, Q58)
Abstract
					We investigate the impact of hospital system membership on negotiations between hospitals and managed care organizations (MCOs). Previous research finds that system hospitals secure higher reimbursements by exploiting local market concentration. By leveraging system membership in the bargaining game, however, system hospitals may also extract a higher percentage of their value to an MCO. Our findings reveal that more of the observed price gap between system and nonsystem hospitals can be attributed to bargaining power differences than to differences linked to relative concentration. These results highlight the importance of explicitly modeling the bargaining process when evaluating negotiated-price markets more generally. (JEL C78, I11, I13, L14)
Abstract
					This paper presents the results of a randomized field experiment that provided information about key Social Security features to older workers. The experiment was designed to examine whether it is possible to affect individual behavior using a relatively inexpensive informational intervention about the provisions of a public program and to explore the mechanisms underlying the behavior change. We find that our relatively mild intervention (sending an informational brochure and an invitation to a web-tutorial) increased labor force participation one year later by 4 percentage points relative to the control group mean of 74 percent. (JEL C93, D12, H55)
Abstract
					Do low property taxes attract new home construction? This question is answered using a large shock to property tax burdens caused by an unusual school finance reform in the state of New Hampshire. The estimates suggest that, in most of the state, communities with a reduced tax burden experience a substantial increase in residential construction. In the area of the state near the region's primary urban center (Boston), however, the shock clears through a price adjustment—i.e., by capitalizing into property values. The differing responses are attributed to differing housing supply elasticities. (JEL H71, H73, R31)
Abstract
					Due to federal regulations, automobile air bag availability was a model-specific discontinuous function of model year for used vehicles in the 1990s and early 2000s. We use the discontinuities and the gradual increase in the supply of air bags to trace out the demand curve for air bags and the implied distribution of the Value of a Statistical Life (VSL) across consumers. Although imprecise, our preferred point estimates indicate that the median VSL is between $9 million and $11 million and that a sizable portion of consumers placed negative values on air bags, probably due to distrust of the technology. (JEL D12, J17, L51, L62)
Abstract
					We consider the long-lived slant towards Berlusconi in political information on Italian television (TV). We exploit a shock to the slanted exposure of viewers: idiosyncratic deadlines to switch to digital TV from 2008 to 2012, which increased the number of free view channels tenfold. The switch caused a drop in the vote share of Berlusconi's coalition by between 5.5 and 7.5 percentage points. The effect was stronger in towns with older and less educated voters. At least 20 percent of digital users changed their voting behavior after the introduction of digital TV. Our evidence is consistent with the existence of persuasion-biased viewers. (JEL D72, D83, L82, L88)
Abstract
					It is known that when people generate externalities, a birth also generates an externality and efficiency requires a Pigou tax/subsidy on having children. The size of the externality from a birth is important for studying policy. We calculate the size of this "population externality" in a specific case: we consider a maintained hypothesis that greenhouse gas emissions are a serious problem and assume government reacts by optimally restricting emissions. Calculated population externalities are large under many assumptions (JEL D62, H23, J11, J13, Q54, Q58)
Abstract
					This paper shows that urban geography matters to the effectiveness of place-based policies, using the French enterprise zone program as a case study. Whereas this program created more jobs in spatially integrated neighborhoods, its impact on local wages was only visible in the more isolated ones. In addition, a focus on the average impact of the program would lead to the conclusion that it mostly succeeded in displacing preexisting firms, but a lower level of spatial isolation was a clear determinant of the decision to create new firms from scratch. (JEL H25, H32, L52, R32, R38)
Abstract
					Theories of market failures and targeting motivate the promotion of entrepreneurship training programs and generate testable predictions regarding heterogeneous treatment effects from such programs. Using a large randomized evaluation in the United States, we find no strong or lasting effects on those most likely to face credit or human capital constraints, or labor market discrimination. We do find a short-run effect on business ownership for those unemployed at baseline, but this dissipates at longer horizons. Treatment effects on the full sample are also short-term and limited in scope: we do not find effects on business sales, earnings, or employees. (JEL I26, J24, J68, L25, L26, M13)
Abstract
					I empirically examine the impact of the 1948 Paramount antitrust case on ticket prices using a unique dataset collected from Variety magazine issues between 1945 and 1955. With information on prices, revenues, and theater ownership for an unbalanced panel of 393 theaters in 26 cities, I find that vertically integrated theaters charged lower prices and sold more admission tickets than nonintegrated theaters. I also find that the rate at which prices increased in theaters was slower while integrated than after vertical divestiture. These findings together with institutional details are consistent with the prediction that vertical integration lowers prices through the elimination of double marginalization. (JEL G34, K21, L11, L22, L42, L82)
Abstract
					Agriculture may support the local nonagricultural economy in rural areas, though agricultural expansion may also crowd-out nonagricultural activity. On the United States Plains, areas over the Ogallala aquifer experienced windfall agricultural gains when post WWII technologies increased farmers' access to groundwater. Comparing counties over the Ogallala with similar counties, nonagricultural sectors experienced only short-run relative benefits. Despite substantial and persistent agricultural gains, there was no long run relative expansion of nonagricultural sectors in Ogallala counties. Agricultural development may still encourage regional or national nonagricultural development, but agriculture does not appear to generate local economic spillovers that differentially encourage local nonagricultural activity. (JEL Q12, Q15, Q18, Q25, R11)
Abstract
					Using discontinuities in housing transaction taxes in New York and New Jersey we find robust price bunching. Incidence for transactions local to the notch falls on sellers, with no evidence of evasion. The volume of missing transactions above the notch exceeds those bunching (beyond the usual extensive-margin response), indicating incentives for buyers and sellers not to transact (market unravels). The possibility of unraveling affects interpretation and estimation of bunching. Away from the threshold, we find increased discounts and weaker relationship between listing and sale prices. Equilibrium bargaining framework highlights that taxation affects the ultimate allocation in this search market. (JEL H71, R21, R31)
Abstract
					This paper uses data from the universe of tax returns filed between 2001 and 2010 to test whether parents shift the timing of childbirth around the New Year to gain tax benefits. Filers have an incentive to shift births from early January into late December, through induction or cesarean delivery, because child-related tax benefits are not prorated. We find evidence of a positive, but very small, effect of tax incentives on birth timing. An additional $1,000 of tax benefits increases the probability of a late-December birth by only about 1 percentage point. We argue that the response to tax incentives is small in part because of confusion about eligibility and delays in the issuance of Social Security numbers for newborns, as well as a lack of control over medical procedures on the part of filers with the highest tax values. In contrast to this small behavioral response, we do document a substantial reporting response among self-employed parents facing changes in the Earned Income Tax Credit as a result of a child's birth. We estimate that this reporting response reduces federal revenue by hundreds of millions of dollars per year. (JEL H24, H31, J13, J23)
Abstract
					This paper provides an economic framework for examining how economic openness affects nationalism. Within a country, a region's level of nationalism varies according to its economic interests in its domestic market relative to its foreign market. All else being equal, increasing a region's foreign trade reduces its economic interests in its domestic market and thus weakens its nationalism. This prediction holds both cross-sectionally and over time, as evidenced by our empirical study using the Chinese Political Compass data and the World Value Surveys. Our framework also applies to analysis of nationalism across countries and receives support from cross-country data. (JEL F14, F52, O17, O19, P26, P33)
Abstract
					We present evidence from a natural field experiment and structural model to shed light on the efficacy of alternative fundraising schemes. In conjunction with the Bavarian State Opera, we mailed 25,000 opera attendees a letter describing a charitable fundraising project organized by the opera house. Recipients were randomly assigned to treatments designed to explore responses to fundraising schemes varying in: the presence of a lead donor; and how individual donations would be matched using the lead donation. The structural model estimates extensive and intensive margin responses, and is then utilized to predict giving behavior in counterfactual fundraising schemes. (JEL C93, D64, L31, L82)
Abstract
					The United States has negotiated bilateral open skies agreements to deregulate airline competition on US international routes, but little is known about their effects on travelers' welfare and the gains from the US negotiating agreements with more countries. We develop a model of international airline competition to estimate the effects of open skies agreements on fares and flight frequency. We find the agreements have generated at least $4 billion in annual gains to travelers and that travelers would gain an additional $4 billion if the US negotiated agreements with other countries that have a significant amount of international passenger traffic. (JEL D12, L11, L51, L93, L98)
Abstract
					How does complexity affect people's reaction to tax changes? To answer this question, we conduct an experiment in which subjects work for a piece rate and face taxes. One treatment features a simple tax system, the other a complex one. Subjects' economic incentives are identical across treatments. We introduce the same sequence of additional taxes in both treatments. Subjects in the complex treatment underreact to new taxes; some ignore new taxes entirely. The underreaction is stronger for subjects with lower cognitive ability. Contrary to predictions from models of rational inattention, subjects are equally likely to ignore large or small incentive changes (JEL D14, H24, H31)
Abstract
					Improving access to the formal health care sector is a primary public health goal in many low-income countries. But the returns to this access are unclear, given that the quality of care at public health facilities is often considered inadequate. We exploit temporal and geographic variation in the cost of traveling to formal sector health facilities to show that treatment at these facilities improves short-term health outcomes for acutely ill children in Tanzania. Our results suggest that these improvements are driven in part by more timely receipt of and better adherence to antimalarial treatment. (JEL I11, I12, I15, I18, J13, O15)
Abstract
					This paper examines the long-term direct and spillover effects of large-scale human capital loss caused by the persecution of Jewish professionals in Nazi Germany. Using region-by-cohort variation in the percentage of the Jewish population as a quasi-experiment, we find that German children who were at school-age during the persecutions have fewer years of schooling on average in adulthood. Moreover, these children are less likely to finish high school and go to college. These results are robust after controlling for regional unemployment and income per capita, wartime destruction, Nazi and Communist Party support, compulsory schooling reform, migration, urbanization, and mortality. (JEL I21, I28, J24, J44, N34, N44, Z12)
Abstract
					Conditional Cash Transfers (CCTs) have been shown to increase human capital investments, but their standard features make them expensive. We use a large randomized experiment in Morocco to estimate an alternative government-run program, a "labeled cash transfer" (LCT): a small cash transfer made to fathers of school-aged children in poor rural communities, not conditional on school attendance but explicitly labeled as an education support program. We document large gains in school participation. Adding conditionality and targeting mothers made almost no difference in our context. The program increased parents' belief that education was a worthwhile investment, a likely pathway for the results. (JEL H23, I24, 128, I38, J24, O15, O18)
Abstract
					In this paper, we examine the role of impatience in human capital formation—arguably the most important investment decision individuals make during their lifetimes. We focus on a set of investment behaviors that cannot be explained solely by variation in exponential discounting. Using data from the NL SY and a straightforward measure of impatience, we find that impatient people more frequently invest in dynamically inconsistent ways, such as dropping out of college with one year or less remaining. The cumulative investment differences result in the impatient earning 13 percent less and expressing more regret as this cohort reaches middle age. (JEL D91, I26, J24, J31)
Abstract
					We estimate the effect of increasing the supply of housing vouchers on rents using a panel of housing units in the American Housing Survey. We do not find that an increase in vouchers affected the overall price of rental housing but do estimate differences in effects based on an individual unit's rent before the voucher expansion. Our results are consistent with voucher recipients renting more expensive units after receiving the subsidy. We also find that the largest price increases were for units near the maximum allowable voucher rent in cities with an inelastic housing supply. (JEL H23, I38, R31, R38)
Abstract
					We examine data on capital-gains-tax-related information search to determine when and how taxpayers acquire information. We find seasonal increases in information search around tax deadlines, suggesting that taxpayers seek information to comply with tax law. Positive correlations between stock market activity and search as well as year-end spikes in information search on capital losses when the market performs poorly suggest that taxpayers seek information for tax planning purposes. Policy changes and news events cause information search. These data suggest that taxpayers are not always fully informed, but that rational attention and exogenous shocks to tax salience drive taxpayer information search. (JEL D12, D83, H24, H31, K34)
Abstract
					Many countries use substantial public funds to subsidize reductions in negative externalities. Such policy designs create asymmetric incentives because increases in externalities remain unpriced. I investigate the implications of such policies by using a regression discontinuity design in California's electricity rebate program. Using household-level panel data, I find that the incentive produced precisely estimated zero treatment effects on energy conservation in coastal areas. In contrast, the rebate induced short-run and long-run consumption reductions in inland areas. Income, climate, and air conditioner saturation significantly drive the heterogeneity. Finally, I provide a cost-effectiveness analysis and investigate how to improve the policy design. (JEL D12, D62, H76, L94, L98, Q48)
Abstract
					An analytical framework predicts that, in response to an exogenous increase in resource-based government revenue, a benevolent government will partially substitute away from taxing income, increase spending and save. Fifty-one years of US-state level data are largely consistent with this theory. A baseline fixed effects model predicts that a $1.00 increase in resource revenue results in a $0.25 decrease in nonresource revenue, a $0.43 increase in spending and a $0.32 increase in savings. Instrumenting for resource revenue reveals that a positive revenue shock is largely saved and the rest is transferred back to residents in the form of lower non resource tax rates. (JEL H71, H72, H76, Q38, R11)
Abstract
					We provide the first estimates of the effect of statutes requiring English as the language of instruction and compulsory schooling laws on the school enrollment, work, literacy, and English fluency of immigrant children during the Americanization period (1910-1930). English-only statutes moderately increased the literacy of certain foreign-born children, particularly those living in cities or whose parents were not fluent in English. However, these laws had no impact on immigrants' eventual labor market outcomes or measures of social integration (from 1940 census and WWII enlistment records). Only laws regulating the age when children could work significantly affected immigrant outcomes. (JEL I21, I26, I28, J13, J15, N31, N32)
Abstract
					Exploiting variation in the hourly production from wind turbines, this paper quantifies the heterogeneity in the marginal impact of renewable electricity on pollution. The results reveal that output from competing renewable capacity additions—e.g., wind turbines versus solar panels—provide different marginal external benefits. This finding suggests that, if governments continue to subsidize renewables, an emphasis should be placed on designing policies that internalize the heterogeneous benefits. More generally, my results highlight that, by incorrectly assuming renewable electricity is a homogenous good, we will understate the relative efficiency of the first-best pollution prices. (JEL L94, L98, Q42, Q48, Q51, Q53, Q58)
Abstract
					It is well known by now that government spending has typically been procyclical in developing economies but acyclical or countercyclical in industrial countries. Little, if any, is known, however, about the cyclical behavior of tax rates (as opposed to tax revenues, which are endogenous to the business cycle and, hence, cannot shed light on the cyclicality of tax policy). We build a novel dataset on tax rates for 62 countries for the period 1960-2013 that comprises corporate income, personal income, and value-added tax rates. We find that tax policy is acyclical in industrial countries but mostly pro cyclical in developing countries. (JEL E32, E64, H24, H25, O11, O23)
Abstract
					Environmental conditional cash transfers are popular but their impacts are not well understood. We evaluate land cover and wealth impacts of a federal program that pays landowners for protecting forest. Panel data for program beneficiaries and rejected applicants allow us to control for fixed differences and time trends affecting both groups. We find the program reduces the expected land cover loss by 40-51 percent and generates small but positive poverty alleviation. Environmental gains are higher where poverty is low while household gains are higher where deforestation risk is low, illustrating the difficulty of meeting multiple policy goals with one tool. (JEL I32, I38, O13, O15, Q23, Q28, Q56)
Abstract
					Medicare offers substantial protection from medical expenditure risk, protection that has increased in recent years. At age 65, out-of-pocket expenditures drop by 33 percent at the mean and 53 percent at the ninety-fifth percentile. Medical-related financial strain, such as difficulty paying bills and collections agency contact, is dramatically reduced. Nonetheless, using a stylized expected utility framework, the gain from reducing out-of-pocket expenditures accounts for only 18 percent of the social costs of financing Medicare. This calculation ignores any direct health benefits from Medicare or any indirect health effects due to reductions in financial stress. (JEL D14, H51, I13, I18, J14)
Abstract
					We employ loan-level data on over a million loans disbursed in India between 1995 and 2010 to understand how fast-changing regulation impacted mortgage lending and risk. Our paper uses changes in regulatory treatment discontinuities associated with loan size and leverage to detect regulation-induced loan delinquencies. We also find that an acceleration in the classification of assets as nonperforming resulted in substantially lower delinquency probabilities and losses given delinquency. (JEL D14, G21, G28, L51, O16, R31)
Abstract
					I study identity-marker based policies and demonstrate the existence of identity manipulation. I analyze the impact of the Punjab Alienation of Land Act (1901), a caste-based legislation, on identity manipulation. Using data from the colonial census, I show that a movement of identity manipulation took place in response to the law. I estimate that in 20 years, 7.5 percent of the population that had an incentive to do so manipulated its identity. I then use an accounting exercise to estimate that the amount of mistargeting caused by this manipulation is between 3.9 percent and 8.2 percent of the land distributed. (JEL J15, N35, N45, N55, Q15, Q24, Z13)
Abstract
					We study if taxpayers are loss averse when filing returns. Preliminary deficits might be viewed as losses assuming zero preliminary balances as reference points. Swedish taxpayers can to try to escape such losses by claiming deductions after receiving information about the preliminary balance. Using a regression kink and discontinuity approach, we study data for 3.6 million Swedish taxpayers for 2006. There are strong causal effects of preliminary tax deficits on the probability of claiming deductions. Compliance will increase and auditing costs will be reduced if preliminary taxes are calibrated so that most taxpayers receive refunds. (JEL H24, H26)
Abstract
					Public sector employees receive large fractions of their lifetime income in the form of deferred compensation. The introduction of the opportunity provided to Illinois public school employees to purchase additional pension benefits allows me to estimate employees' willingness-to-pay for benefits relative to the cost of providing them. The results show employees are willing to pay 20 cents on average for a dollar increase in the present value of expected retirement benefits. The findings suggest substantial inefficiency in compensation and cast doubt on the ability of deferred compensation schemes to attract employees. (JEL H75, I21, J26, J45)
Abstract
					In a dynamic model with sunk export costs, a firm's export investment is lower under trade policy uncertainty, and credible preferential trade agreements (PTAs) increase trade even if current tariffs are low. Exploring Portugal's accession to the European Community as a policy uncertainty shock we find that the trade reform accounted for a large fraction of Portuguese exporting firms' entry and sales; the accession removed uncertainty about future EC trade policies; and this uncertainty channel accounted for a large fraction of the predicted growth. Our approach can be applied to other PTAs and sources of policy uncertainty. (JEL D22, F12, F14, F15, G31, L11)
Abstract
					At political boundaries, local leaders have weak incentives to reduce polluting activity because the social costs are borne by downstream neighbors. This paper exploits a natural experiment set in China in which the central government changed the local political promotion criteria and thus incentivized local officials to reduce border pollution along specific criteria. We document evidence of pollution progress with respect to targeted criteria at province boundaries. Heavy metal pollutants, not targeted by the central government, have not decreased in concentration after the regime shift. Using data on the economic geography of key industrial water polluters, we explore possible mechanisms. (JEL D72, O13, O18, P25, P28, Q25, Q53)
Abstract
					I show how, in the tradition of the dynamic labor supply literature, one can identify the moral hazard effects and liquidity effects of unemployment insurance (UI) using variations along the time profile of unemployment benefits. I use this strategy to investigate the anatomy of labor supply responses to UI. I identify the effect of benefit level and potential duration in the regression kink design using kinks in the schedule of benefits in the US. My results suggest that the response of search effort to UI benefits is driven as much by liquidity effects as by moral hazard effects. (JEL D82, J22, J65)
Abstract
					It is well-known that mortality rates are pro-cyclical. In this paper, we attempt to understand why. We find little evidence that cyclical changes in individuals' own employment-related behavior drives the relationship; own-group employment rates are not systematically related to own-group mortality. Further, most additional deaths that occur when the economy is strong are among the elderly, particularly elderly women and those residing in nursing homes. We also demonstrate that staffing in nursing homes moves countercyclically. These findings suggest that cyclical fluctuations in the quality of health care may be a critical contributor to cyclical movements in mortality. (JEL E24, E32, I12, J16, L84)
Abstract
					This paper examines mortgage outcomes for a large sample of individual home purchases and refinances linked to credit scores in seven major US markets. Among those with similar credit scores and loan attributes, black and Hispanic homeowners had much higher rates of delinquency and default in the downturn. These estimated differences are especially pronounced for loans originated near the peak of the housing boom. These findings suggest that black and Hispanic homeowners drawn into the market near the peak were especially vulnerable to adverse economic shocks and raise concerns about homeownership as a mechanism for reducing racial disparities in wealth. (JEL D14, J15, R23, R31, R38)
Abstract
					We ask whether the threat of carbon tariffs might lower the cost of reductions in world carbon emissions by inducing unregulated regions to adopt emission controls. We use a numerical model to generate payoffs of a game in which a coalition regulates emissions and chooses whether to employ carbon tariffs against unregulated regions. Unregulated regions respond by abating, retaliating, or ignoring the tariffs. In the Nash equilibrium, the use of tariffs is a credible and effective threat. It induces cooperation from noncoalition regions that lowers the cost of global abatement substantially relative to the case where the coalition acts alone. (JEL D58, F13, F18, H23, Q54, Q58)
Abstract
					We present a simple graphical framework to illustrate the potential welfare gains from a "top-up" health insurance policy requiring patients to pay the incremental price for more expensive treatment options. We apply this framework to breast cancer treatments, where lumpectomy with radiation therapy is more expensive than mastectomy but generates similar average health benefits. We estimate the relative demand for lumpectomy using variation in distance to the nearest radiation facility, and estimate that the "top-up" policy increases social welfare by $700-2,500 per patient relative to two common alternatives. We briefly discuss additional tradeoffs that arise from an ex ante perspective. (JEL G22, I11, I13, I18)
Abstract
					Laboratory studies suggest that improved cooking stoves can reduce indoor air pollution, improve health, and decrease greenhouse gas emissions in developing countries. We provide evidence, from a large-scale randomized trial in India, on the benefits of a common, laboratory-validated stove with a four-year follow-up. While smoke inhalation initially falls, this effect disappears by year two. We find no changes across health outcomes or greenhouse gas emissions. Households used the stoves irregularly and inappropriately, failed to maintain them, and usage declined over time. This study underscores the need to test environmental technologies in real-world settings where behavior may undermine potential impacts. (JEL D12, O12, O13, Q53, Q54, Q55)
Abstract
					This paper provides new evidence on the interaction between patient information and physician financial incentives. Using rich microdata on childbirth, we compare the treatment of physicians when they are patients with that of comparable nonphysicians. We also exploit the presence of HMO-owned hospitals to determine how the treatment gap varies with providers' financial incentives. Consistent with induced demand, physicians are approximately 10 percent less likely to receive a C-section, with only a quarter of this effect attributable to differential sorting. While financial incentives affect the treatment of nonphysicians, physician-patients are largely unaffected. Physicians also have better health outcomes. (JEL D83, I11, J16, J44)
Abstract
					This paper provides evidence on the behavior of reservation wages over the spell of unemployment, using high-frequency longitudinal data on unemployed workers in New Jersey. In comparison to a calibrated job search model, the reservation wage starts out too high and declines too slowly, on average, suggesting that many workers persistently misjudge their prospects or anchor their reservation wage on their previous wage. The longitudinal nature of the data also allows for testing the relationship between job acceptance and the reservation wage, where the reservation wage is measured from a previous interview to avoid bias due to cognitive dissonance. (JEL J22, J31, J64)
Abstract
					We evaluate a comprehensive activation program in Norway targeted at hard-to-employ social assistance claimants with reduced work capacity. The program offers a combination of tailored rehabilitation, training, and job practice, and a generous, stable, and non-means-tested benefit. Its primary aims are to mitigate poverty and subsequently promote self-supporting employment. Our evaluation strategy exploits a geographically staggered program introduction, and the causal effects are identified on the basis of changes in employment prospects that coincide with local program implementation in a way that correlates with the predicted probability of becoming a participant. We find that the program raised employment prospects considerably. (JEL H55, I32, I38, J24)
Abstract
					This paper argues that openness, by lowering costs to access existing research, can enhance both early and late stage innovation through greater exploration of novel research directions. We examine a natural experiment in openness: late-1990s NIH agreements that reduced academics' access costs regarding certain genetically engineered mice. Implementing difference-in-differences estimators, we find that increased openness encourages entry by new researchers and exploration of more diverse research paths, and does not reduce the creation of new genetically engineered mice. Our findings highlight a neglected cost of strong intellectual property restrictions: lower levels of exploration leading to reduced diversity of research output. (JEL I23, O31, O33, O34)
Abstract
					We explore how extended unemployment insurance (UI) benefits for older workers affect early retirement and welfare. We argue that extending UI benefits generates program complementarity (more labor market exits and disability benefit take-up in the future) and program substitution (less disability benefit take-up in the present). Exploiting a policy change in Austria, which extended UI benefits to 4 years, we find program complementarity effects for workers aged 50+ and program substitution effects for workers aged 55+. We apply the Baily-Chetty formula for optimal UI to account for complementarity and substitution, showing that UI benefits for older workers were too generous. (JEL J14, J22, J26, J65)
Abstract
					There is limited empirical evidence on whether cash transfers to poor
pregnant women improve children's birth outcomes and potentially
help weaken the cycle of intergenerational poverty. Using a unique
array of program and social security administrative micro-
data
matched to longitudinal vital statistics in Uruguay, we estimate that
participation in a generous social assistance program led to a sizable
reduction in the incidence of low birthweight. The effect is due
to faster intrauterine growth rather than longer gestational length.
Our findings are consistent with improved maternal nutrition during
pregnancy being a key driver of improved birthweight. (JEL I14, I32,
I38, J13, J16, O15)
Abstract
					This paper uses a natural experiment to study the impact of an
agricultural insurance program on household production, borrowing,
and saving behavior. The empirical strategy includes
difference-in-differences and triple difference estimations. The results
show that insurance provision increases the insured crop production
by 16 percent and raises borrowing by 29 percent. Interestingly, it
does not affect total household savings; however, it does affect the
relative proportion of flexible-term savings. Furthermore, effects
on production and savings persist in the long run, while effects on
borrowing are significant in only the medium run. Lastly, calibration
results suggest that the policy is both welfare improving and
cost-effective. (JEL D13, D14, G22, O16, P32, P36, Q12)
Abstract
					The United States has higher infant mortality than peer countries.
In this paper, we combine microdata from the United States with
similar data from four European countries to investigate this US
infant mortality disadvantage. The US disadvantage persists after
adjusting for potential differential reporting of births near the
threshold of viability. While the importance of birth weight varies
across comparison countries, relative to all comparison countries the
United States has similar neonatal (<1 month) mortality but higher
postneonatal (1–12 months) mortality. We document similar patterns
across census divisions within the United States. The postneonatal
mortality disadvantage is driven by poor birth outcomes among
lower socioeconomic status individuals. (JEL I12, I14, I32, J14)
Abstract
					Does the lack of peers contribute to the observed gender gap in
entrepreneurial success? A random sample of customers of India’s
largest women's bank was offered two days of business counseling,
and a random subsample was invited to attend with a friend. The
intervention significantly increased participants' business activity,
but only if they were trained with a friend. Those trained with a friend
were more likely to have taken out business loans, were less likely to
be housewives, and reported increased business activity and higher
household income, with stronger impacts among women subject to
social norms that restrict female mobility. (JEL G21, J16, J24, L26,
M53, O16, Z13)
Abstract
					Because geographic variation in medical care utilization is jointly
determined by both supply and demand, it is difficult to empirically
estimate whether capacity itself has a causal impact on utilization in
health care. In this paper, I exploit short-term variation in Neonatal
Intensive Care Unit (NICU) capacity that is unlikely to be correlated
with unobserved demand determinants. I find that available NICU
beds have little to no effect on NICU utilization for the sickest infants,
but do increase utilization for those in the range of birth weights
where admission decisions are likely to be more discretionary.
(JEL I11, I12, I18, J13)
Abstract
					We investigate the impact of limited network insurance plans in the
context of the Massachusetts Group Insurance Commission (GIC), the
insurance plan for state employees. Our quasi-experimental analysis
examines the introduction of a major financial incentive to choose
limited network plans that affected a subset of GIC enrollees. We find
that enrollees are very price sensitive in their decision to enroll in
limited network plans. Those who switched spent almost 40 percent
less on medical care. This reflects reductions in the quantity of services
and prices paid per service. The spending reductions came from
specialist and hospital care, while spending on primary care rose.
(JEL G22, H75, I11, I13, J45)
Abstract
					In simple models, the incidence of a tax is independent of the identity
of the remitting party. We illustrate that this prediction fails to hold if
opportunities for evasion differ across economic agents. Second, we
estimate how the incidence of state diesel taxes varies with the point
of collection, where the remitting party varies across states and over
time. Moving tax collection upstream from retailers substantially
raises the pass-through of diesel taxes to consumers. Furthermore,
tax revenues increase when collecting taxes from wholesalers rather
than from retailers, suggesting that evasion is the likely explanation
for the incidence result. (JEL H22, H25, H26, H71, L71)
Abstract
					We provide evidence of corruption in allocation of public procurement
and assess its efficiency. Firms with procurement revenue increase
tunneling around regional elections, whereas neither tunneling of
firms without procurement revenue, nor legitimate business of firms
with procurement exhibits a political cycle. Data are consistent with
the corruption channel—cash is tunneled to politicians in exchange
for procurement contracts—and inconsistent with alternative channels.
Using the strength of correlation between procurement revenue
and tunneling around elections as a proxy for local corruption, we
reject the "efficient grease" hypothesis: in more corrupt localities,
procurement contracts go to unproductive firms. (JEL D22, D72,
H57, K42, P26, P31, P37)
Abstract
					This study estimates the effects of Personal Financial Management
Course attendance and enrollment assistance using a natural experiment
in the US Army. New enlistees' course attendance reduces the
probability of having credit account balances, average balances,
delinquencies, and adverse legal actions in the first year after the
course, but it has no effects on accounts in the second year or credit
scores in either year. The course and its enrollment assistance substantially
increase retirement savings rates and average monthly
contributions, with effects that persist through at least two years. The
course has no significant effects on military labor market outcomes.
(JEL D14, I21, J45)
Abstract
					We examine the effects of state health insurance mandates requiring coverage of screening mammograms. We find evidence that mammography mandates significantly increased mammography screenings by 4.5-25 percent. Effects are larger for women with less than a high school degree in states that ban deductibles, a policy similar to a provision of federal health reform that eliminates cost-sharing for preventive care. We also find that mandates increased detection of early stage in-situ precancers. Finally, we find a substantial proportion of the increased screenings were attributable to mandates that are not consistent with 2014 recommendations of the American Cancer Society.
Abstract
					Because cities are constrained by the boundaries of land ownership, fundamental urban modifications require land delineation changes. We evaluate whether there is enough land assembly--the joining together of two or more parcels of land--to put land to its highest value use. We hypothesize that in the absence of market frictions such as holdouts, the price of land sold for assembly should not exceed the price of land sold for other uses. Empirically, we find that to-be-assembled land in Los Angeles trades at a 15 to 40 percent premium and conclude that significant frictions prevent assembly.
Abstract
					Understanding the potential impacts of climate change on economic outcomes requires knowing how agents might adapt to a changing climate. We exploit large variation in recent temperature and precipitation trends to identify adaptation to climate change in US agriculture, and use this information to generate new estimates of the potential impact of future climate change on agricultural outcomes. Longer run adaptations appear to have mitigated less than half--and more likely none--of the large negative short-run impacts of extreme heat on productivity. Limited recent adaptation implies substantial losses under future climate change in the absence of countervailing investments.
Abstract
					We study the effect of outdoor air pollution on the productivity of indoor workers at a pear-packing factory. Increases in fine particulate matter (PM2.5), a pollutant that readily penetrates indoors, leads to significant decreases in productivity, with effects arising at levels below air quality standards. In contrast, pollutants that do not travel indoors, such as ozone, have little, if any, effect on productivity. This effect of outdoor pollution on indoor worker productivity suggests an overlooked consequence of pollution. Back-of-the envelope calculations suggest the labor savings from nationwide reductions in PM2.5 generated a sizable fraction of total welfare benefits.
Abstract
					Using a firm-level dataset of Danish exports between 1999-2006, we find robust evidence for profit shifting by multinational corporations. Our triple difference estimations exploit the response of export unit values to acquisitions of foreign affiliates and to changes in statutory corporate tax rates. This identification strategy corrects for a downward bias resulting from firms adjusting arm's length prices to obscure transfer price manipulations. We find that Danish multinationals reduce the unit values of their exports to low tax countries between 5.7 to 9.1 percent. This difference corresponds to a tax revenue loss of 3.24 percent of Danish multinationals' tax returns.
Abstract
					We study extrinsic and intrinsic motivations for tax compliance in the context of a local church tax in Germany. This tax system has historically relied on zero deterrence so that any compliance at baseline is intrinsically motivated. Starting from this zero deterrence baseline, we implement a field experiment that incentivized compliance through deterrence or rewards. Using administrative records of taxes paid and true tax liabilities, we use these treatments to document that intrinsically motivated compliance is substantial, that a significant fraction of it may be driven by duty-to-comply preferences, and that there is no crowd-out between extrinsic and intrinsic motivations.
Abstract
					This paper uses monthly payroll records for all Danish employees to identify widespread intertemporal shifting of labor income in response to a tax reform that significantly reduced the marginal tax rates for one-fourth of all employees. When ignoring shifting, the estimate of the overall elasticity of taxable income equals 0.1, and the elasticity is increasing with earnings. When removing the shifting component, the elasticity is close to zero at all earnings levels. The evidence also indicates that tax salience, liquidity constraints and firm willingness to cooperate in shifting are important factors in explaining shifting behavior.
Abstract
					This paper examines whether electronic procurement (e-procurement), which increases access to information and reduces personal interactions with potentially corrupt officials, improves procurement outcomes. We develop unique datasets from India and Indonesia and use variation in adoption of e-procurement within both countries. We find no evidence of reduced prices but do find that e-procurement leads to quality improvements. In India, where we observe quality directly, e-procurement improves road quality, and in Indonesia, e-procurement reduces delays. Regions with e-procurement are more likely to have winners come from outside the region. On net, the results suggest that e-procurement facilitates entry from higher quality contractors.
Abstract
					In this paper, we examine the effect of a major health care reform in Massachusetts on a broad set of financial outcomes using credit report data. We exploit variation in the impact of the reform across counties and age groups using pre-reform insurance coverage as a measure of the potential effect of the reform. We find that the reform reduced the amount of debt that was past due, improved credit scores, reduced personal bankruptcies and reduced third-party collections. Our results show that health care reform has implications that extend well beyond the health of those who gain insurance coverage.
Abstract
					We present legislative, historical and statistical evidence of a substantial upward ratchet in transfers and taxes in the US due to World War II. This finding is explained within a political-economy framework with defense spending responding to a war threat and a median voter in the population who interacts with a (richer) agenda setter in Congress in setting redistribution. While the setter managed to cap redistribution before the War, the War itself raised the status quo tax burden and improved tax collection technology, strengthening the bargaining power of the median voter as defense spending receded. This permanently raised the level of redistribution.
Abstract
					This paper provides evidence concerning the extent to which consumers of liquor employ commitment devices. One widely recommended commitment strategy is to regulate alcohol consumption by deliberately manipulating availability. The paper assesses the prevalence of the "availability strategy" by evaluating the effects of policies that would influence its effectiveness--specifically, changes in allowable Sunday sales hours. It finds that consumers increase their liquor consumption in response to extended Sunday on-premises sales hours, but not in response to extended off-premises sales hours. The latter finding is inconsistent with widespread use of the availability strategy.
Abstract
					This study evaluates how large changes in public health insurance coverage affect provider behavior and patient wait times by analyzing a common type of primary care: dental services. When states expand coverage of dental services to adult Medicaid beneficiaries, dentists' participation in Medicaid increases and dentists see more publicly insured patients. Dentists supply more visits but only modestly increase the amount of time spent working. They achieve this in part by making greater use of dental hygienists. Wait times increase modestly, with the largest increases in wait times observed in states with restrictive scope of practice laws governing dental hygienists.
Abstract
					We analyze the Nielsen Household Consumer Panel to estimate the effects of tobacco policies on tobacco-related purchases using within-household variation. We also match purchases to cigarette contents from NHANES. Higher cigarette taxes reduce cigarette purchases and increase smoking cessation product purchases, while estimates of smoking ban effects are less precisely estimated. Smokeless tobacco (SLT) taxes lead to reductions in SLT use but also lead to substitution among SLT products. We find evidence that cigarette taxes induce purchases of cigarettes with higher tar, nicotine, and carbon monoxide contents, but this compensatory behavior is overwhelmed by the reduction in cigarettes purchased.
Abstract
					This paper investigates workers' spending response to the 2011 payroll tax cuts. Respondents were surveyed at the beginning and end of 2011, which allows the comparison of ex ante and ex post reported use of the extra income. While workers on average intended to spend 14 percent of their tax cut income, they ex post reported spending 36 percent of the funds. This pattern of higher spending ex post is shared across all demographic groups. Differences across workers in this shift to greater ex post spending are largely unexplained by differences in either present bias or unanticipated shocks, so in the end the upward revision in spending remains a puzzle.
Abstract
					This paper presents new evidence on the effects of retirement benefits on labor force participation decisions. The analysis is based on a mandated rule for employer-provided retirement benefits in Austria that creates discontinuities in the incentives for workers to delay retirement. The paper presents graphical evidence on labor supply responses and develops a conceptual framework that accounts for the dynamic incentive structure and for adjustment frictions. Using bunching methods, a semi-elasticity of participation is estimated, which ranges from 0.1 to 0.3 and is highest for incentives targeted at a delay in retirement by 6 to 9 months.
Abstract
					We explore the power of behavioral economics to influence the level of effort exerted by students in a low stakes testing environment. We find a substantial impact on test scores from incentives when the rewards are delivered immediately. There is suggestive evidence that rewards framed as losses outperform those framed as gains. Nonfinancial incentives can be considerably more cost-effective than financial incentives for younger students, but are less effective with older students. All motivating power of incentives vanishes when rewards are handed out with a delay. Our results suggest that the current set of incentives may lead to underinvestment.
Abstract
					This paper quantifies how international trade affects CO2 emissions and analyzes the welfare consequences of regulating the CO2 emissions from shipping. To this end, the paper describes a model of trade and the environment, compiles new data on the CO2 emissions from shipping, and estimates key parameters using panel data regressions. Results show that the benefits of international trade exceed trade's environmental costs due to CO2 emissions by two orders of magnitude. While proposed regional carbon taxes on the CO2 emissions from shipping would increase global welfare and increase the implementing region's GDP, they would also harm poor countries.
Abstract
					This paper exploits the subdistrict randomization of Indonesia's household Conditional Cash Transfer (CCT) program to analyze how the program affects the local health care market. The CCT program is associated with increased use of midwives as the main delivery attendants. The program is also associated with a 10 percent increase in both the number of midwives and the delivery fees charged by midwives in treated communities. Program participants report receiving a higher quality of prenatal care. This is due, however, not to improvements in quality of care in the market, but to increased utilization among program participants.
Abstract
					Ten percent of federal judgeships are currently vacant, yet little is known on the impact of these vacancies on criminal justice outcomes. Using judge deaths and pension eligibility as instruments for vacancies, I find that prosecutors dismiss more cases during vacancies. Prosecuted defendants are more likely to plead guilty and less likely to be incarcerated during vacancies, with defendants who are detained pretrial more likely to be incarcerated. The current rate of vacancies has resulted in 1,000 fewer prison inmates annually compared to a fully-staffed court system, a 1.5 percent decrease.
Abstract
					Many governments have banned strikes in public transportation. Whether this can be justified depends on whether strikes endanger public safety or health. We use time-series and cross-sectional variation in powerful registry data to quantify the effects of public transit strikes on urban populations in Germany. Due to higher traffic volumes and longer travel times, total car hours operated increase by 11 to 13 percent during strikes. This effect is accompanied by a 14 percent increase in vehicle crashes, a 20 percent increase in accident-related injuries, a 14 percent increase in particle pollution, and an 11 percent increase in hospital admissions for respiratory diseases among young children.
Abstract
					Subsidized health insurance markets use diagnosis-based risk adjustment to induce insurers to offer an equitable benefit to individuals of varying expected cost. I demonstrate that technological change after risk adjustment calibration--new drug entry and the onset of generic competition--made certain diagnoses profitable or unprofitable in Medicare Part D. I then exploit variation in diagnoses' profitability driven by technological change to show insurers designed more favorable benefits for drugs that treat profitable diagnoses as compared to unprofitable diagnoses. In the presence of technological change, risk adjustment may not fully neutralize insurers' incentives to select through benefit designs.
Abstract
					Governments may extract rent from private citizens by inflating taxes and spending on projects benefiting special interests. Using a spatial equilibrium model, I show that less elastic housing supplies increase governments' abilities to extract rents. Inelastic housing supply, driven by exogenous variation in local topography, raises local governments' tax revenues and causes citizens to combat rent seeking by enacting laws limiting the power of elected officials. I find that public sector workers, one of the largest government special interests, capture a share of these rents through increased compensation when collective bargaining is legal or through corruption when collective bargaining is outlawed.
Abstract
					How does ethnic diversity in government impact public good provision? We construct a novel dataset linking the ethnicity of California city council candidates to election outcomes and expenditure decisions. Using a regression discontinuity approach, we find that increased diversity on the council leads to less spending on public goods. This is especially true in cities with high segregation and economic inequality. Those serving on councils that experience an increase in diversity also receive fewer votes when they run for reelection. These results point towards disagreement within the council generating lower spending.
Abstract
					This paper advances our understanding of consumption behavior using the 2009 Taiwan Shopping Voucher Program. This program was universal and well publicized, and its payment to each individual was medium-sized. Based on survey data, it is found that the marginal propensity to consume is about one quarter, which is comparable to findings obtained by previous studies on consumers'response to fiscal stimulus payments. Further, vendors' discounts for voucher users played a significant role in boosting the effectiveness of the program.
Abstract
					Consumers rarely know the price of medical care before they consume it. I use variation in the timing of access to a new source of price information to show how access to and search for price information leads consumers to pay significantly less for care. I provide suggestive evidence that insurance coverage inhibits the use of price information, rationalizing the relatively low rates of search. The results indicate that availability of price information could have large impacts on prices even in the absence of general equilibrium effects.
Abstract
					We investigate the distributional consequences of a corruption-fighting initiative in Romania targeting the endemic fraud in a high-stakes high school exit exam, which introduced CCTV monitoring of the exam and credible punishment threats for teachers and students. We find that the campaign was effective in reducing corruption and, in particular, that monitoring increased the effectiveness of the punishment threats. Estimating the heterogeneous impact for students of different poverty status we show that curbing corruption led to a worrisome score gap increase between poor and nonpoor students. Consequently, the poor students have reduced chances to enter an elite university.
Abstract
					This paper provides novel estimates of the interest rate elasticity of mortgage demand by measuring the degree of bunching in response to a discrete jump in interest rates at the conforming loan limit--the maximum loan size eligible for purchase by Fannie Mae and Freddie Mac. The estimates indicate that a 1 percentage point increase in the rate on a 30-year fixed-rate mortgage reduces first mortgage demand by between 2 and 3 percent. One-third of this response is driven by borrowers who take out second mortgages, which implies that total mortgage debt only declines by 1.5 to 2 percent.
Abstract
					Conventional labor supply studies assume constant eligibility monitoring of income-tested program participants, but the time between two consecutive eligibility certifications (the "recertification period") can be as long as a year for Medicaid/CHIP recipients. In this paper, I study the optimal recertification period for this population. A long recertification period, while reducing monitoring costs, is predicted to induce program participation via temporary income adjustments. However, I find no support for this prediction using the 2001 and 2004 Survey of Income and Program Participation. Given this, I propose a simple framework to compute the optimal recertification period and find 12 months to be its lower bound.
Abstract
					Consumer protection in financial markets in the form of information disclosure is high on government agendas, even though there is little evidence of its effectiveness. We implement a randomized control trial in the credit card market for a large population of indebted cardholders and measure the impact of Truth-in-Lending-Act-type disclosures, de-biasing warning messages and social comparison information on default, indebtedness, account closings, and credit scores. We conduct extensive external validity exercises in several banks, with different disclosures, and with actual policy mandates. We find that providing salient interest rate disclosures had no effects, while comparisons and de-biasing messages had only modest effects at best.
Abstract
					We examine the broad consequences of the right to counsel by exploiting a legal reform in Israel that extended the right to publicly provided legal counsel to suspects in arrest proceedings. Using the staggered regional rollout of the reform, we find that the reform reduced arrest duration and the likelihood of arrestees being charged. We also find that the reform reduced the number of arrests made by the police. Lastly, we find that the reform increased crime. These findings indicate that the right to counsel improves suspects' situation, but discourages the police from making arrests, which results in higher crime.
Abstract
					State laws that limit how much hospitals are paid by uninsured patients provide a unique opportunity to study how financial incentives of health care providers affect the care they deliver. We estimate the laws reduce payments from uninsured patients by 25-30 percent. Even though the uninsured represent a small portion of their business, hospitals respond by decreasing the amount of care delivered to these patients, without measurable effects on a broad set of quality metrics. The results show that hospitals can, and do, target care based on financial considerations, and suggest that altering provider financial incentives can generate more efficient care.
Abstract
					The EPA's Clean Power Plan sets goals for CO2 emissions rate reductions by 2030 that vary substantially across states. States can choose the regulatory mechanism they use and whether or not to join with other states in implementing their goals. We analyze incentives to adopt rate standards versus cap-and-trade with theory and simulation. We show conditions where adoption of inefficient rate standards is a dominant strategy from both consumers' and generators' perspectives. Numerical simulations of the western electricity system highlight incentives for uncoordinated policies that lower welfare and increase emissions relative to coordination.
Abstract
					Branded pharmaceutical manufacturers frequently offer "copay coupons" that insulate consumers from cost-sharing, thereby undermining insurers' ability to influence drug utilization. We study the impact of copay coupons on branded drugs first facing generic entry between 2007 and 2010. To overcome endogeneity concerns, we exploit cross-state and cross-consumer variation in coupon legality. We find that coupons increase branded sales by 60+ percent, entirely by reducing the sales of bioequivalent generics. During the five years following generic entry, we estimate that coupons increase total spending by $30 to $120 million per drug, or $700 million to $2.7 billion for our sample alone.
Abstract
					This study provides plausibly causal estimates of the effect of public insurance coverage on the employment of non-elderly, nondisabled adults without dependent children ("childless adults"). We take advantage of the sudden imposition of an enrollment cap in Wisconsin, comparing the labor supply of enrollees to eligible applicants placed on a waitlist using a regression discontinuity design and difference-in-differences methods. We find enrollment into public insurance leads to sizable and statistically meaningful reductions in employment, with an estimated effect size of just over 5 percentage points, a 12 percent decline. Confidence intervals rule out positive and large negative effects.
Abstract
					This paper examines the effects of community college tuition on college enrollment. I exploit quasi-experimental variation from discounts for community college tuition in Texas that were expanded over time and across geography for identification. Community college enrollment in the first year after high school increased by 5.1 percentage points for each $1,000 decrease in tuition, which implies an elasticity of -0.29. Lower tuition also increased transfer from community colleges to universities. Marginal community college enrollees induced to attend by reduced tuition have similar graduation rates as average community college enrollees.
Abstract
					This paper shows that an economic slump can induce a government to invest in fiscal capacity. Large negative income shocks stress the revenue-raising capability of narrow tax bases, making an increase in tax base breadth desirable relative to its fixed implementation cost. A broader tax base enables revenue to be raised at lower tax rates, and so lower deadweight loss. The behavior of US state governments during the Great Depression supports the model: states experiencing larger than average negative income shocks were more likely to adopt a retail sales tax than were states experiencing smaller than average income shocks.
Abstract
					A critical immigration policy question is whether state and federal policy can deter undocumented workers from entering the United States. We examine whether Arizona SB 1070, arguably the most restrictive and controversial state immigration law ever passed, deterred entry into Arizona. We do so by exploiting a unique dataset from a survey of undocumented workers passing through Mexican border towns on their way to the United States. Results indicate the bill's passage reduced the flow of undocumented immigrants into Arizona by 30 to 70 percent, suggesting that undocumented workers from Mexico are responsive to changes in state immigration policy.
Abstract
					This paper examines how state governments adjusted spending in response to the large temporary increase in federal highway grants under the 2009 American Recovery and Reinvestment Act (ARRA). The mechanism used to apportion ARRA highway grants to states allows one to isolate exogenous changes in these grants. The results indicate that states increased highway spending over 2009 to 2011 more than dollar-for-dollar with the ARRA grants they received. Rent-seeking efforts are shown to help explain this result: states with more political contributions from the public works sector to the governor and state legislators tended to spend more out of their ARRA highway funds than other states.
Abstract
					We present evidence of how policies that create opportunities to avoid open competition in procurement lead to the manipulation of procurement values. We exploit a policy reform in which public bodies were given the autonomy to preselect potential contractors below newly defined discretionary thresholds. Manipulation is revealed through bunching of procurements just below the thresholds in construction works and services, and to a lesser degree, in goods. Among manipulated contracts, we document a threefold increase in the probability that procurements are allocated to anonymous firms, which can hide their owners. This sorting violates assumptions behind regression-discontinuity designs.
Abstract
					This paper studies the effects of quota-based labor regulations on firms in the context of Saudi Arabia's Nitaqat program, which imposed quotas for Saudi hiring at private firms. I use a comprehensive firm-level administrative dataset and exploit kinks in hiring incentives generated by the quotas to estimate the effects of this policy. I find that the program increased native employment at substantial cost to firms, as demonstrated by increasing exit rates and decreasing total employment at surviving firms. Firms without any Saudi employees at the onset of the program appear to bear most of these costs.
Abstract
					Beginning in the mid-2000s, the incidence of drug shortages rose, especially for generic injectable drugs such as anesthetics and chemotherapy treatments. We examine whether reimbursement changes contributed to the shortages, focusing on a reduction in Medicare Part B reimbursement to providers for drugs. We hypothesize that lower reimbursement put downward pressure on manufacturers' prices, which reduced manufacturers' incentives to invest in capacity, reliability, and new launches. We show that after the policy change, shortages rose more for drugs with higher shares of patients insured by Medicare, greater decreases in provider reimbursement, and greater decreases in manufacturer prices.
Abstract
					Sparked by high-profile confrontations between police and citizens in Ferguson, Missouri, and elsewhere, many commentators have criticized the excessive militarization of law enforcement. We investigate whether surplus military-grade equipment acquired by local police departments from the Pentagon has an effect on crime rates. We use temporal variations in US military expenditure and between-counties variation in the odds of receiving a positive amount of military aid to identify the causal effect of militarized policing on crime. We find that (i) military aid reduces street-level crime; (ii) the program is cost-effective; and (iii) there is evidence in favor of a deterrence mechanism.
Abstract
					We study the impact of politicians' tenure in office on the outcomes of public procurement using a dataset on Italian municipal governments. To identify a causal relation, we first compare elections where the incumbent mayor barely won or barely lost another term. We then use the introduction of a two-term limit, which granted one potential extra term to mayors appointed before the reform. The main result is that an increase in tenure is associated with "worse" procurement outcomes. Our estimates are informative of the possibility that time in office progressively leads to collusion between government officials and local bidders.
Abstract
					This paper examines how carbon pricing would reduce emissions in the electricity sector. Both carbon prices and cheap natural gas reduce the historic cost advantage of coal plants. The shale revolution resulted in unprecedented variation in natural gas prices that we use to estimate the potential near-term effects of carbon prices. Estimates imply that a price of $20 ($70) per ton of CO2 would reduce emissions by 5 (10) percent. Carbon prices are most effective at reducing emissions when natural gas prices are low, but have negligible effects when gas prices are at levels seen prior to the shale revolution.
Abstract
					We study the impact of organized crime on electoral results, analyzing in detail the national parliamentary elections in Sicily for the period 1946-1992. We document the significant support given by the Sicilian mafia to the Christian Democratic Party when the electoral competition by the Communist Party strengthened. We also provide suggestive evidence that, in exchange for its electoral support, the mafia obtained economic advantages in the construction sector.
Abstract
					Little is known about the fiscal costs of natural disasters, especially regarding social safety nets that do not specifically target extreme weather events. This paper shows that US hurricanes lead to substantial increases in non-disaster government transfers, such as unemployment insurance and public medical payments, in affected counties in the decade after a hurricane. The present value of this increase significantly exceeds that of direct disaster aid. This implies, among other things, that the fiscal costs of natural disasters have been significantly underestimated and that victims in developed countries are better insured against them than previously thought.
Abstract
					Little is known about how affected residents are able to cope with the financial shock of a natural disaster. This paper investigates the impact of flooding on household finance. Spikes in credit card borrowing and overall delinquency rates for the most flooded residents are modest in size and short-lived. Greater flooding results in larger reductions in total debt. Lower debt levels are driven by homeowners using flood insurance to repay their mortgages rather than to rebuild. Mortgage reductions are larger in areas where reconstruction costs exceeded pre-Katrina home values and where mortgages were likely to be originated by nonlocal lenders.
Abstract
					A crucial issue is whether social insurance affects work decisions through income or substitution effects. We examine this in the context of US Social Security Disability Insurance (DI), exploiting discontinuous changes in the benefit formula with a regression kink design to estimate the income effect of payments on earnings and employment. Using administrative data on all new DI beneficiaries from 2001 to 2007, our preferred estimate is that an increase in DI payments of $1 causes an average decrease in beneficiaries' earnings of $0.20 and that annual employment rates decrease by 1.3 percentage points per $1,000 of DI payments. These findings suggest that the income effect accounts for a majority of DI-induced reductions in earnings.
Abstract
					Students in India who cheat on a simple laboratory task are more likely to prefer public sector jobs. This paper shows that cheating on this task predicts corrupt behavior by civil servants, implying that it is a meaningful predictor of future corruption. Students who demonstrate pro-social preferences are less likely to prefer government jobs, while outcomes on an explicit game and attitudinal measures to measure corruption do not systematically predict job preferences. A screening process that chooses high-ability applicants would not alter the average propensity for corruption. The findings imply that differential selection into government may contribute, in part, to corruption.
Abstract
					We provide the first local level empirical analysis of the causal effects of providing military equipment to local police. Employing a novel combination of publicly available county-year panel data matched to hand-collected data on citizen complaints, we investigate the effects of acquiring tactical weapons, optics, and vehicles on citizen complaints, assaults on police officers, and offender deaths. For causal identification, we exploit exogenous variation in equipment availability and cost-shifting institutional aspects of the 1033 Program. Our results indicate that these items have generally positive effects: reduced citizen complaints, reduced assaults on officers, increased drug crime arrests, and no increases in offender deaths.
Abstract
					Daily city-level expenditures and prices are used to estimate the price responsiveness of gasoline demand in the United States. Using a frequency of purchase model that explicitly acknowledges the distinction between gasoline demand and gasoline expenditures, the price elasticity of demand is consistently found to be an order of magnitude larger than estimates from recent studies using more aggregated data. Estimating demand using higher levels of spatial and temporal aggregation is shown to produce increasingly inelastic estimates. A decomposition is then developed and implemented to understand the relative importance of several different factors in explaining this result.
Abstract
					We estimate the degree to which expanding access to long-acting reversible contraceptives (LARCs) can reduce teen birth rates by analyzing Colorado's Family Planning Initiative, the first large-scale policy intervention to expand access to LARCs in the United States. Using a difference-in-differences approach, we find that the $23M program reduced the teen birth rate in counties with clinics receiving funding by 6.4 percent over 5 years. These effects were concentrated in the second through fifth years of the program and in counties with relatively high poverty rates. State-level synthetic control estimates offer supporting evidence but suffer from a lack of power.
Abstract
					This paper studies how affirmative action exemptions in public procurement can improve efficiency and government expenditures without harming disadvantaged business enterprise (DBE) utilization. I examine a unique program employed by the Iowa Department of Transportation, where prior to 2013 prime contractors were allowed an exemption from a project's affirmative action requirement if their history of DBE utilization was sufficiently high. I find that prime contractors use the exemption to smooth demands on capacity constrained DBEs, building a history of utilization during low demand periods and exploiting the resulting exemption during high demand. The exemption policy was unexpectedly eliminated in 2013, which I exploit to evaluate its effect on DBE utilization and procurement costs. I find that average DBE utilization was unchanged and bids rose on affirmative action contracts.
Abstract
					Do Medicaid expansions to working-age adults affect healthcare spending and utilization among older Medicare beneficiaries? Although economic theory provides conflicting predictions about the presence and direction of such spillover effects, it does identify circumstances when spillovers can reduce Medicare spending. Using data on Medicaid expansions during the 2000s and microdata from the Medicare Current Beneficiary Survey, we find that a 1 percentage point rise in the share of working-age adults eligible for Medicaid has modest effects on the average Medicare beneficiary's spending, but reduces average spending by $477 among dual eligibles. Importantly, we find no evidence of adverse health effects.
Abstract
					States offer sales tax holidays (STHs) temporarily exempting items like clothes, shoes, and school supplies from the state sales tax. Spending response to these temporary tax changes are investigated using two datasets: the Diary portion of the Consumer Expenditure Survey and a unique dataset of credit card transactions. Results based on a difference-in-differences methodology show that there are substantial increases in spending on covered goods during these holidays that are not offset by declines in spending before or after the holidays.
Abstract
					This paper studies the effects of legal street prostitution zones on registered and perceived crime. We exploit a unique setting in the Netherlands where these tippelzones were opened in nine cities under different regulation systems. Our difference-in-difference analysis of 25 Dutch cities between 1994-2011 shows that opening a tippelzone decreases registered sexual abuse and rape by about 30-40 percent in the first two years. For cities which enforced licensing in tippelzones, we also find reductions in drug-related crime and long-term effects on sexual assaults. Effects on perceived drug nuisance depend on the regulation system and the proximity of respondents to the tippelzone.
Abstract
					This paper examines implications of the terms-of-trade theory for the determinants of outcomes arising under the enforcement provisions of international agreements. Like original trade agreement negotiations, formal trade dispute negotiations are modeled as potentially addressing the terms-of-trade externality problem that governments implement import protection above the globally efficient level so as to shift some of the policy's costs onto trading partners. The approach first extends the Bagwell and Staiger (1999, 2011) model from trade agreement accession negotiations to the setting of enforcement negotiations, and the resulting theory guides the empirical assessment on trade volume outcomes from WTO disputes over 1995-2009.
Abstract
					We analyze the impact of trade-induced income shocks on the size of local government and the provision of public services. Areas in the United States with declining labor demand and incomes due to increasing import competition from China experience relative declines in housing prices and business activity. Since local governments are disproportionately funded through property and sales taxation, declining property values and a decrease in economic activity translate into less revenue, which constrains the ability of local governments to provide public services. State and federal governments have limited ability to smooth local shocks, and the impact on the provision of public services is compounded when local income shocks are highly correlated with shocks in the rest of the state. The outcome is a relative decline not only in incomes but also in the quality of public services and amenities in trade exposed localities.
Abstract
					Current methods of cost effectiveness analysis implicitly assume zero spillovers among social ties. This can underestimate the benefits of health interventions and misallocate resources toward interventions with lower comprehensive effects. We discuss the implications of social spillovers for program evaluation and document the first evidence of causal spillovers of health behaviors between spouses by leveraging experimental data from the Lung Health Study (smoking) and COMBINE Study (drinking). We find large decreases in spousal substance use from treatments with a therapy component, which reduces the incremental cost effectiveness ratios of some treatments by 12 to 18 percent.
Abstract
					This paper studies the treatment effect of monthly payment size on mortgage default, using a sample of adjustable-rate loans that experienced large payment reductions thanks to the recent low interest rate environment. Payment size has an economically large effect on repayment behavior; for instance, cutting the required payment in half reduces the delinquency hazard by about 55 percent. Importantly, the link between payment size and delinquency is equally strong for borrowers that are significantly underwater on their mortgage. Relying on payment reductions for identification circumvents the selection concerns due to prepayments that would be associated with rate increases.
Abstract
					Many jurisdictions around the world have deregulated utilities and opened retail markets to competition. However, inertial decision making can diminish consumer benefits of retail competition. Using household-level data from the Texas residential electricity market, we document evidence of consumer inertia. We estimate an econometric model of retail choice to measure two sources of inertia: search frictions/inattention and a brand advantage that consumers afford the incumbent. We find that households rarely search for alternative retailers, and when they do search, households attach a brand advantage to the incumbent. Counterfactual experiments show that low-cost information interventions can notably increase consumer surplus.
Abstract
					Through an evaluation of the 2009 Recovery Act's State Energy Efficient Appliance Rebate Program, this paper examines consumers' response to energy efficiency rebates. The analysis shows that 70 percent of consumers claiming a rebate were inframarginal and an additional 15 percent-20 percent of consumers simply delayed their purchases by a few weeks. Consumers responded to rebates by upgrading to higher quality, but less energy-efficient models. Overall the impact of the program on long-term energy demand is likely to be small. Measures of government expenditure per unit of energy saved are an order of magnitude higher than estimates for other energy efficiency programs.
Abstract
					This paper measures the effect of increased primary school spending on students' college enrollment and completion. Using student-level panel administrative data, I exploit variation in the school funding formula imposed by Michigan's 1994 school finance reform, Proposal A. Students exposed to $1,000 (10 percent) more spending were 3 percentage points (7 percent) more likely to enroll in college and 2.3 percentage points (11 percent) more likely to earn a postsecondary degree. The effects were concentrated among districts that were urban and suburban, lower poverty, and higher achieving at baseline. Districts targeted the marginal dollar toward schools serving less-poor populations within the district.
Abstract
					A large literature focuses on two important rationales for government subsidies to college students: positive fiscal externalities from a larger tax base, and liquidity constraints. This paper provides a first attempt to gauge the relative importance of these mechanisms. I use US data in combination with two modeling approaches: calibration of a simple structural model of human capital accumulation, and a "sufficient statistics" approach. The resulting optimal subsidies are larger than median public tuition by about $3,000 per year. This finding is driven by fiscal externalities; optimal tuition subsidy policy is not sensitive to the extent of liquidity constraints.
Abstract
					Low-income households not required to file often fail to receive benefits provided through the tax code. In 2008, the US government made people with at least $3,000 in earnings eligible for a stimulus payment if they filed a tax return. Using eligibility for this credit as an instrument for filing, we find with administrative data that filing reduces the probability of living in poverty in future years, which is a result of increases in EITC claiming, workforce attachment, and earnings. These results demonstrate that temporary incentives to participate in the tax system have persistent real effects on economic activity and poverty.
Abstract
					This paper provides an empirical assessment of an annual wealth tax. Using Swedish administrative data, I estimate net-of-tax-rate elasticities of taxable wealth in the range [0.09, 0.27]. Cross-checking self-reported assets against asset data unavailable to the tax agency reveals that around a third of the elasticity estimates are due to underreporting of asset values. Difference-in-difference designs further suggest that the responses reflect evasion and avoidance rather than changes in saving.
Abstract
					This paper investigates the role of social learning in the diffusion of a new agricultural
technology in Ghana. We use unique data on farmers' communication
patterns to define each individual's information neighborhood. Conditional on
many potentially confounding variables, we find evidence that farmers adjust
their inputs to align with those of their information neighbors who were surprisingly
successful in previous periods. The relationship of these input adjustments
to experience further indicates the presence of social learning. In addition,
applying the same method to input choices for another crop, of known technology,
correctly indicates an absence of social learning effects. (JEL D83, O13,
O33, Q16)
Abstract
					This paper examines the frequency, pervasiveness, and determinants of product
switching by US manufacturing firms. We find that one-half of firms alter
their mix of five-digit SIC products every five years, that product switching is
correlated with both firm- and firm-product attributes, and that product adding
and dropping induce large changes in firm scope. The behavior we observe is
consistent with a natural generalization of existing theories of industry dynamics
that incorporates endogenous product selection within firms. Our findings
suggest that product switching contributes to a reallocation of resources within
firms toward their most efficient use. (JEL L11, L21, L25, L60)
Abstract
					The 1960s ushered in a new era in US demographic history characterized by
significantly lower fertility rates and smaller family sizes. What catalyzed these
changes remains a matter of considerable debate. This paper exploits idiosyncratic
variation in the language of "Comstock" statutes, enacted in the late
1800s, to quantify the role of the birth control pill in this transition. Almost 50
years after the contraceptive pill appeared on the US market, this analysis provides
new evidence that it accelerated the post-1960 decline in marital fertility.
(JEL J12, J13, K10, N31, N32)
Abstract
					Using data on user attributes and interactions from an online dating site, we
estimate mate preferences, and use the Gale-Shapley algorithm to predict stable
matches. The predicted matches are similar to the actual matches achieved
by the dating site, and the actual matches are approximately efficient. Out-of-
sample predictions of offline matches, i.e., marriages, exhibit assortative
mating patterns similar to those observed in actual marriages. Thus, mate preferences,
without resort to search frictions, can generate sorting in marriages.
However, we underpredict some of the correlation patterns; search frictions
may play a role in explaining the discrepancy. (JEL C78, J12)
Abstract
					Using European data, this paper finds that (i) industry entry and exit rates
are positively related to industry rates of investment-specific technical change
(ISTC); and (ii) the sensitivity of industry entry and exit rates to cross-country
differences in entry costs depends on industry rates of ISTC. The paper constructs
a general equilibrium model in which the rate of ISTC varies across
industries and new investment-specific technologies can be introduced by
entrants or by incumbents. In the calibrated model, equilibrium behavior is
consistent with stylized facts (i) and (ii), provided the cost of technology adoption
is increasing in the rate of ISTC. (JEL G31, L11, O31, O33)
Abstract
					In the Medicare program, increases in cost sharing by a supplemental insurer
can exert financial externalities. We study a policy change that raised patient
cost sharing for the supplemental insurer for retired public employees in
California. We find that physician visits and prescription drug usage have elasticities
that are similar to those of the RAND Health Insurance Experiment
(HIE). Unlike the HIE, however, we find substantial "offset" effects in terms of
increased hospital utilization. The savings from increased cost sharing accrue
mostly to the supplemental insurer, while the costs of increased hospitalization
accrue mostly to Medicare. (JEL G22, I12, I18, J14)
Abstract
					We analyze how contractibility affects contract design. A major concern when
designing research agreements is that researchers use their funding to subsidize
other projects. We show that, when research activities are not contractible, an
option contract is optimal. The financing firm obtains the option to terminate
the agreement and, in case of termination, broad property rights. The threat
of termination deters researchers from cross-subsidization, and the cost of
exercising the termination option deters the financing firm from opportunistic
termination. We test this prediction using 580 biotechnology research agreements.
Contracts with termination options are more common when research is
non-contractible. (JEL D86, L65, O31, O34)
Abstract
					During the 1990s, anti-sweatshop activists campaigned to improve conditions
for workers in developing countries. This paper analyzes the impact of anti-sweatshop
campaigns in Indonesia on wages and employment. Identification is
based on comparing the wage growth of workers in foreign-owned and exporting
firms in targeted regions or sectors before and after the initiation of anti-sweatshop
campaigns. We find the campaigns led to large real wage increases
for targeted enterprises. There were some costs in terms of reduced investment,
falling profits, and increased probability of closure for smaller plants, but we
fail to find significant effects on employment. (JEL F23, J31, J81, L67, O14, O15)
Abstract
					We show, using novel data on currency and prices for US imports, that even
conditional on a price change, there is a large difference in the exchange
rate pass-through of the average good priced in dollars (25 percent) versus
nondollars
(95 percent). We document this to be the case across countries and
within disaggregated sectors. This finding contradicts the assumption in an
important class of models that the currency of pricing is exogenous. We present
a model of endogenous currency choice in a dynamic price setting environment
and show that the predictions of the model are strongly supported by the data.
(JEL E31, F14, F31)
Abstract
					This article studies the effects of demographics on the mix of tax rates on labor
and capital. It uses a quantitative general-equilibrium, overlapping-generations
model where tax rates are voted without past commitments in every period
and characterized as a Markov equilibrium. In the United States, the younger
voting-age population in 1990 compared to 1965 accounts for the observed
decline in the relative capital tax rate between those two years. A younger population
raises the net return to capital, leads voters to increase their savings,
and results in a preference for lower taxes on capital. Conversely, aging might
increase capital taxation. (JEL E13, H24, H25, J11)
Abstract
					A large empirical literature finds that there is too little international trade
and too much intranational trade to be rationalized by observed international
trade costs, such as tariffs and transport costs. This paper investigates whether
a model in which the nature of production can change in response to trade
costs -- a framework with multistage production -- can better explain the home
bias in trade. The calibrated model can explain about two-fifths of the Canada
border effect, about two-and-one-half times that of a model with one production
stage. The model also explains a significant fraction of Canada-US "back-and-
forth," or vertical specialization, trade. (JEL F11, F13, F14)
Abstract
					We study how conflict in contest games is influenced by rival parties being
groups and by group members being able to punish each other. Our motivation
stems from the analysis of sociopolitical conflict. The theoretical prediction
is that conflict expenditures are independent of group size and of whether
punishment is available. We find, first, that conflict expenditures of groups are
substantially larger than those of individuals, and both are above equilibrium.
Second, allowing group members to punish each other leads to even larger conflict
expenditures. These results contrast with those from public goods experiments
where punishment enhances efficiency. (JEL C72, D74, H41)
Abstract
					I revisit the question of indeterminacy in US monetary policy using limited-information identification-robust methods. I find that the conclusions of Clarida, Galí, and Gernter (2000) that policy was inactive before 1979 are robust, but the evidence over the Volcker-Greenspan periods is inconclusive. I show that this is in fact consistent with policy being active over that period. Problems of identification also arise because policy reaction has been more gradual recently. At a methodological level, the paper demonstrates that identification issues should be taken seriously, and that identification-robust methods can be informative even when they produce wide confidence sets. (E31, E32, E52, E65,)
Abstract
					Tournaments can elicit more effort but sabotage may attenuate the effect of competition. Because it is hard to separate effort and ability, the evidence on tournaments is thin. There is even less evidence on sabotage because these acts often consist of subjective peer evaluation or "office politics." We discuss real effort experiments in which quality adjusted output and office politics are compared under piece rates and tournaments and find that tournaments increase effort only in the absence of office politics. Competitors subvert each other more in tournaments, and as a result, workers produce less because they expect to be sabotaged. (D82, M54)
Abstract
					In order to gain a better empirical understanding of the international financial implications of currency movements, we construct a database of international currency exposures for a large panel of countries over 1990-2004. We show that trade-weighted exchange rate indices are insufficient to understand the financial impact of currency movements and that our currency measures have high explanatory power for the
valuation term in net foreign asset dynamics. Exchange rate valuation shocks are sizable, not quickly reversed, and may entail substantial wealth redistributions. Further, we show that many developing countries have substantially reduced their negative foreign currency positions over the last decade. (F31, F32, G15)
Abstract
					One lingering puzzle is why voluntary contributions to public goods decline over time in experimental and real-world settings. We show that the decline of cooperation is driven by individual preferences for imperfect conditional cooperation. Many people's desire to contribute less than others, rather than changing beliefs of what others will contribute over time or people's heterogeneity in preferences makes voluntary cooperation fragile. Universal free riding thus eventually emerges, despite the fact that most people are not selfish. (D12, D 83, H41, Z13)
Abstract
					We conducted experiments in Vietnamese villages to determine the predictors of risk and time preferences. In villages with higher mean income, people are less loss-averse and more patient. Household income is correlated with patience but not with risk. We expand measurements of risk and time preferences beyond expected utility and exponential discounting, replacing those models with prospect theory and a three-parameter hyperbolic discounting model. Comparable risk parameter estimates have been found for Chinese farmers, using our method. (C83, D12, O12, P38)
Abstract
					Earnings losses of Connecticut workers affected by mass layoff are calculated using administrative data. Estimated reductions are initially more than 30 percent and six years later, as much as 15 percent. The Connecticut estimates are smaller than comparable ones from Pennsylvania administrative data but similar to those from the Panel Study of Income Dynamics (PSID) and Department of Workforce Services (DWS). Earnings reductions in Connecticut and Pennsylvania are concentrated among Unemployment Insurance recipients. An unusually high proportion of Unemployment Insurance beneficiaries in Pennsylvania explains the larger estimated losses relative to other studies. Fixed-effects, random growth, and matching estimators produced similar earnings loss estimates suggesting each is relatively unbiased in this context. (J31, J 63, J65, R23)
Abstract
					Medicare Part D began coverage of prescription drugs in 2006. Rather than setting pharmaceutical prices, the government contracted with private insurers to provide drug coverage. Theory suggests that additional insured consumers will raise the optimal price of a branded drug, while the insurer's ability to move demand to substitute treatments may lower prices. We estimate the program's effect on the price and utilization of pharmaceutical treatments. We find that Part D enrollees paid substantially lower prices than while uninsured, and increased their utilization of prescription drugs. We find relative price declines only for drugs with significant therapeutic competition.  (L18, L11, L65)
Abstract
					This paper describes the extent of product creation and destruction in a large sector of the US economy. We find four times more entry and exit in product markets than is found in labor markets because most product turnover happens within firms. Net product creation is strongly procyclical and primarily driven by creation rather than destruction. We find that a cost-of-living index that takes product turnover into account is 0.8 percentage points per year lower than a "fixed goods" price index like the CPI. The procyclicality of the bias implies that business cycles are more volatile than indicated by official statistics.
(JEL E31, E32, L11, O31)
Abstract
					This paper examines bidding in over 1,700 knockout auctions used by a bidding cartel (or ring) of stamp dealers in the 1990s. The knockout was conducted using a variant of the model studied by Daniel Graham, Robert Marshall, and Jean-Francois Richard (1990). Following a reduced form examination of these data, damages, induced inefficiency, and the ring's benefit from colluding are estimated using a structural model in the spirit of Emmanuel Guerre, Isabelle Perrigne, and Quang Vuong (2000). A notable finding is that nonring bidders
suffered damages that were of the same order of magnitude as those of the sellers. (JEL D43, D44, L12)
Abstract
					This paper investigates the impact of tax changes on economic activity. We
use the narrative record, such as presidential speeches and Congressional
reports, to identify the size, timing, and principal motivation for all major postwar tax policy actions. This analysis allows us to separate legislated changes into those taken for reasons related to prospective economic conditions and those taken for more exogenous reasons. The behavior of output following these more exogenous changes indicates that tax increases are highly contractionary. The effects are strongly significant, highly robust, and much larger than those
obtained using broader measures of tax changes. (JEL E32, E62, H20, N12)
Abstract
					This paper analyzes an emissions trading program that was introduced to
reduce smog-causing pollution from large stationary sources. Using variation in state level electricity industry restructuring activity, I identify the effect of economic regulation on pollution permit market outcomes. There are two main findings. First, deregulated plants in restructured electricity markets were less likely to adopt more capital intensive environmental compliance options as compared to regulated or publicly owned plants. Second, as a consequence of heterogeneity in electricity market regulations, a larger share of the permitted pollution is being emitted in states where air quality problems tend to be more severe. (JEL L51, L94, L98, Q53, Q58)
Abstract
					A major puzzle in international finance is that high interest rate currencies tend to appreciate (forward discount puzzle). Motivated by the fact that only a small fraction of foreign currency holdings is actively managed, we calibrate a two-country model in which agents make infrequent portfolio decisions. We show that the model can account for the forward discount puzzle. It can also account for several related empirical phenomena, including that of "delayed overshooting." We also show that making infrequent portfolio decisions is optimal as the welfare gain from active currency management is smaller than the corresponding fees. (JEL F31, G11, G15)
Abstract
					Dating to the classic works of Alonso, Mills, and Muth, the production function
for housing has played a central role in urban economics and local public finance. This paper provides a new flexible approach for estimating the housing production function which treats housing quantities and prices as latent variables. The empirical analysis is based on a comprehensive database of recently built properties in Allegheny County, Pennsylvania. We find that the new method proposed in this paper works well in the application and provides reasonable estimates for the underlying production function. (JEL C51, D24, R11, R31)
Abstract
					This study examines why people initially give to charities, why they remain committed to the cause, and what factors attenuate these influences. Using an experimental design that links donations across distinct treatments separated in time, we present several results. For example, previous donors are more likely to give, and contribute more, than other donor types. Yet, how previous donors were acquired is critical: agents initially attracted by an economic mechanism are more likely to continue giving than agents attracted by a nonmechanism factor.
From a methodological viewpoint, our study showcases the benefit of moving
beyond an experimental design that focuses on short-run substitution effects. (JEL C93, D64, D82, H41, L31, Z12)
Abstract
					We report experiments on sender-receiver games with an incentive for senders to exaggerate. Subjects "overcommunicate" -- messages are more informative of the true state than they should be, in equilibrium. Eyetracking shows that senders look at payoffs in a way that is consistent with a level-k model. A combination of sender messages and lookup patterns predicts the true state about twice as often as predicted by equilibrium. Using these measures to infer the state would enable receiver subjects to hypothetically earn 16-21 percent more than they actually do, an economic value of 60 percent of the maximum increment. (JEL C72, C91, D82, Z13)
Abstract
					The welfare effects of trade shocks turn on the nature and magnitude of the
costs workers face in moving between sectors. Using an Euler-type equilibrium
condition derived from a rational expectations model of dynamic labor adjustment, we estimate the mean and variance of workers' switching costs from the US CPS. We estimate high values of both parameters, implying slow adjustment of the economy and sharp movements in wages in response to trade shocks. However, import-competing workers can still benefit from tariff removal; liberalization lowers their wages in the short and long run but raises their option value.(JEL E24, F13, F16)
Abstract
					The success of new technologies depends on both the firms' investment and consumers' usage decisions. We study this problem in a shared ATM network.
Inefficiencies may arise because banks coordinate investment, and consumers
may not make proper use of the network. Based on an empirical model of ATM investment and demand, we find that banks substantially underinvested in
ATMs, in contrast with earlier findings of strategic overinvestment in the United States. Furthermore, ATM usage was too low, because regulation prohibited fees for cash withdrawals. A direct promotion of investment improves welfare, but fees for branch cash withdrawals would be more effective. (JEL G21, G31, O33)
Abstract
					There is continuing controversy over the importance of credit constraints. This paper investigates whether total household expenditure and debt is affected by an exogenous increase in access to credit provided by a credit market reform that enabled Danish house owners to use housing equity as collateral for consumption loans. We find that the magnitude of the response is correlated with the amount of equity released by the reform and that the effect is strongest for younger households. Even for this group, the response was moderate. The aggregate
effect of the reform was significant but small. (JEL D14, D91, E21)
Abstract
					An incentives based theory of policing is developed which can explain the phenomenon of random "crackdowns," i.e., intermittent periods of high interdiction/
surveillance. For a variety of police objective functions, random crackdowns
can be part of the optimal monitoring strategy. We demonstrate support for implications of the crackdown theory using traffic data gathered by the
Belgian Police Department and use the model to estimate the deterrence effect
of additional resources spent on speeding interdiction. (JEL K42, R41)
Abstract
					Entrepreneurship is risky. We study the risk facing a well-documented and important class of entrepreneurs, those backed by venture capital. Using a
dynamic program, we calculate the certainty-equivalent of the difference
between the cash rewards that entrepreneurs actually received over the past 20 years and the cash that entrepreneurs would have received from a risk-free salaried job. The payoff to a venture-backed entrepreneur comprises a below-market salary and a share of the equity value of the company when it
goes public or is acquired. We find that the typical venture-backed entrepreneur received an average of $5.8 million in exit cash. Almost three-quarters of entrepreneurs receive nothing at exit and a few receive over a billion dollars. Because of the extreme dispersion of payoffs, an entrepreneur with a coefficient
of relative risk aversion of two places a certainty equivalent value only slightly greater than zero on the distribution of outcomes she faces at the time of her company's launch. (JEL G24, G32, L26, M13)
Abstract
					Why do firms cluster near one another? We test Marshall's theories of industrial agglomeration by examining which industries locate near one another, or coagglomerate. We construct pairwise coagglomeration indices for US manufacturing industries from the Economic Census. We then relate coagglomeration levels to the degree to which industry pairs share goods, labor, or ideas. To reduce reverse causality, where collocation drives input-output linkages or hiring patterns, we use data from UK industries and from US areas where the
two industries are not collocated. All three of Marshall's theories of agglomeration are supported, with input-output linkages particularly important. (JEL L14, L60, O33, R23, R32)
Abstract
					In a reasonably calibrated Mortensen and Pissarides matching model, shocks to average labor productivity can account for a small portion of the fluctuations in unemployment and vacancies (Shimer (2005)). I add heterogeneity in jobs (matches) with respect to the time the job is created in the form of different embodied technology levels. I also introduce specific capital that, once adapted for a match, has less value in another match. I show that the augmented model can account for fluctuations in unemployment and vacancies, and that specific capital is important to decreasing the volatility of the destruction rate of existing matches.
Abstract
					This paper investigates whether there is a link between cognitive ability, risk aversion, and impatience, using a representative sample of roughly 1,000 German adults. Subjects participate in choice experiments with monetary incentives measuring risk aversion, and impatience over an annual horizon, and conduct two different, widely used, tests of cognitive ability. We find that lower cognitive ability is associated with greater risk aversion, and more pronounced impatience. These relationships are significant, and robust to controlling for personal characteristics, education, income, and measures of credit constraints. We perform a series of additional robustness checks, which help rule out other possible confounds.
Abstract
					In their comment, Taylor, Kreisle and Zimmerman use gasoline price data taken from fleet card transactions at selected gasoline stations to re-examine a subset of results presented in Hastings (2004). Bringing new data to re-examine the question is a helpful contribution. Both data sets have limitations, potentially causing differences in the estimated effect. I worked with the authors to explore and understand the differences in the data sets and how they impact the estimates in both analyses, and conclude that the effects sizes are likely smaller in areas of overlap between the two data sets.
Abstract
					This reply responds to a comment that correctly identifies an invalid assumption in our original article that antidumping (AD) duties are subtracted from the U.S. price when calculating AD duties in administrative reviews. While this point invalidates our theoretical explanation and empirical evidence on the magnitude of AD duty pass-through, it does not affect our original article's theory or empirical evidence on the magnitude of exchange rate pass-through, or the presence of structural breaks in both the AD duty and exchange-rate pass-through coefficients stemming from AD investigations and orders.
Abstract
					The capital-labor substitution elasticity and technical biases in production are critical parameters. The received wisdom claims their joint identification is infeasible. We challenge that interpretation. Putting the new approach of "normalized"
production functions at the heart of a Monte Carlo analysis we identify the conditions under which identification is feasible and robust. The key result is that jointly modeling the production function and first-order conditions is superior to single-equation approaches especially when merged with "normalization." Our results will have fundamental implications for production-function estimation under non-neutral technical change, for understanding the empirical relevance of normalization and variability underlying past empirical studies. (JEL E22, O33, O41)
Abstract
					We design a field experiment to explore the use of social comparison to increase contributions to an online community. We find that, after receiving behavioral information about the median user's total number of movie ratings, users below the median demonstrate a 530 percent increase in the number of monthly movie ratings, while those above the median decrease their ratings by 62 percent. When given outcome information about the average user's net benefit score, above-average users mainly engage in activities that help others. Our findings suggest that effective personalized social information can increase the level of public goods provision. (JEL C93, H41, L82)
Abstract
					To gauge the competitiveness of the group health insurance industry, I investigate whether health insurers charge higher premiums, ceteris paribus, to more profitable firms. Such "direct price discrimination" is feasible only in imperfectly competitive settings. Using a proprietary national database of health
plans offered by a sample of large, multisite firms from 1998-2005, I find firms with positive profit shocks subsequently face higher premium growth, even for the same health plans. Moreover, within a given firm, those sites located in concentrated insurance markets experience the greatest premium increases. The findings suggest health care insurers are exercising market power in an increasing number of geographic markets. (JEL G22, I11, I18, L11, L25)
Abstract
					We specify a life-cycle model of consumption, labor supply and job mobility in an economy with search frictions. We distinguish different sources of risk, including shocks to productivity, job arrival, and job destruction. Allowing for job mobility has a large effect on the estimate of productivity risk. Increases in the latter impose a considerable welfare loss. Increases in employment risk have large effects on output and, primarily through this channel, affect welfare. The welfare value of programs such as Food Stamps, partially insuring productivity risk, is greater than the value of unemployment insurance which provides (partial) insurance against employment risk. (JEL D91, J22, J31, J61, J64, J65)
Abstract
					This paper describes a series of laboratory experiments studying whether the form in which items are displayed at the time of decision affects the dollar value that subjects place on them. Using a Becker-DeGroot auction under three different conditions — (i) text displays, (ii) image displays, and (iii) displays of the actual items — we find that subjects' willingness-to-pay is 40-61 percent larger in the real than in the image and text displays. Furthermore, follow-up experiments suggest the presence of the real item triggers preprogrammed consummatory Pavlovian processes that promote behaviors that lead to contact with appetitive items whenever they are available. (JEL C91, D03, D12, D87)
Abstract
					We investigate political determinants of land reform implementation in the
Indian state of West Bengal. Using a village panel spanning 1974-1998, we do
not find evidence supporting the hypothesis that land reforms were positively and monotonically related to control of local governments by a Left Front coalition vis-à-vis the right-centrist Congress party, combined with lack of commitment to policy platforms. Instead, the evidence is consistent with a quasi-Downsian theory stressing the role of opportunism (reelection concerns) and electoral competition. (JEL D72, O13, O17, Q15)
Abstract
					This study considers replacing the current US tax system with only a flat tax consumption tax, showing, in contrast to the literature, that such a reform leads to a decline in inequality and increase in welfare for the welfare-poor. The results are obtained from a simple model that identifies the main channels through which the reform affects the economy.  It is shown also that these novel results depend on the distribution of wealth and earnings, and that they hold for the relevant empirical distributions. (JEL D31, H23, H25)
Abstract
					We analyze how family ties affect incentives, with focus on the strategic interaction between two mutually altruistic siblings. The siblings exert effort to produce output under uncertainty, and they may transfer output to each other. With equally altruistic siblings, their equilibrium effort is nonmonotonic in the common degree of altruism, and it depends on the harshness of the environment. We define a notion of local evolutionary stability of degrees of sibling altruism and show that this degree is lower than the kinship-relatedness factor. Numerical simulations show how family ties vary with the environment, and how this affects economic outcomes. (JEL D13, D64, J12, Z13)
Abstract
					We study an open economy where a pro-labor and a pro-business candidate compete in an election. The winner chooses taxes, which affect investment returns. Electoral outcomes depend on the size of the foreign debt, but the debt itself reflects expectations about the election. The resulting interaction is novel and has several implications. Elections are associated with increased volatility. Politico-economic crises can occur. Inefficiencies vanish if the candidates commit to an appropriate tax policy, but such commitments have predictable effects on the election. Empirical evidence supporting the theory is discussed. (JEL D72, F34, O17, O19)
Abstract
					Several impatient investors with private costs Ci face an indivisible irreversible investment opportunity whose value V is governed by geometric Brownian motion. The first investor i to seize the opportunity receives the entire payoff, V-Ci. We characterize the symmetric Bayesian Nash equilibrium for this game. A laboratory experiment confirms the model's main qualitative predictions: competition drastically lowers the value at which investment occurs; usually the lowest-cost investor preempts the other investors; observed investment patterns in competition (unlike monopoly) are quite insensitive to changes in the Brownian parameters. Support is more qualified for the prediction that markups decline with cost. (JEL C73, D44, D82, G31)
Abstract
					Can marriage institutions limit marital inefficiency? We study the pervasive custom of watta satta in rural Pakistan, a bride exchange between families coupled with a mutual threat of retaliation. Watta satta can be seen as a mechanism for coordinating the actions of two sets of parents, each wishing to restrain their son-in-law. We find that marital discord, as measured by estrangement, domestic abuse, and wife's mental health, is indeed significantly lower in watta satta versus "conventional" marriage, but only after accounting for selection bias. These benefits
cannot be explained by endogamy, a marriage pattern associated with watta satta. (JEL J12, J16, O15, O18, Z13)
Abstract
					Principal-agent relationships are typically assumed to be motivated by efficiency gains from comparative advantage. However, principals may also delegate tasks to avoid taking direct responsibility for selfish or unethical behavior. We report three laboratory experiments in which principals repeatedly either decide how much money to share with a recipient or hire agents to make sharing decisions on their behalf. Across several experimental treatments, recipients receive significantly less, and in many cases close to nothing, when allocation decisions are made by agents. (JEL D82)
Abstract
					Three quarters of all violence against women is perpetrated by domestic partners. This study exploits exogenous changes in the demand for labor in female-dominated industries to estimate the impact of the male-female wage gap on domestic violence. Decreases in the wage gap reduce violence against women, consistent with a household bargaining model. These findings shed new light on the health production process as well as observed income gradients in health and suggest that in addition to addressing concerns of equity and efficiency, pay parity can also improve the health of American women via reductions in violence. (JEL D13, I12, J16, J23, J31)
Abstract
					The literature on school choice assumes that families can submit a preference list over all the schools they want to be assigned to. However, in many real-life instances families are only allowed to submit a list containing a limited number of schools. Subjects' incentives are drastically affected, as more individuals manipulate their preferences. Including a safety school in the constrained list explains most manipulations. Competitiveness across schools plays an important role. Constraining choices increases segregation and affects the stability and efficiency of the final allocation. Remarkably, the constraint reduces significantly the proportion of subjects playing a dominated strategy (JEL D82, I21 )
Abstract
					The need for efficient coordination is ubiquitous in organizations and industries. The literature on the determinants of efficient coordination has focused on individual decision making so far. In reality, however, teams often have to coordinate with other teams. We present a series of coordination experiments with a total of 1,101 participants. We find that teams of three subjects each coordinate much more efficiently than individuals. This finding adds one important cornerstone to the recent literature on the conditions for successful coordination. We explain the differences between individuals and teams using the experience weighted attraction learning model. (JEL C71, C91, D23, D83, M54 )
Abstract
					Social identities prescribe behaviors for people. We identify the marginal behavioral effect of these norms on discount rates and risk aversion by measuring how laboratory subjects' choices change when an aspect of social identity is made salient. When we make ethnic identity salient to Asian-American subjects, they make more patient choices. When we make racial identity salient to black subjects, non-immigrant blacks (but not immigrant blacks) make more patient choices. Making gender identity salient has no effect on intertemporal or risk choices. (JEL D81, J15, J16, Z13 )
Abstract
					Financial crashes were followed by deep recessions in the Sudden Stops of emerging economies. An equilibrium business cycle model with a collateral
constraint explains this phenomenon as a result of the amplification and asymmetry that the constraint induces in the responses of macro-aggregates to
shocks. Leverage rises during expansions, and when it rises enough it triggers the constraint, causing a Fisherian deflation that reduces credit and the price and quantity of collateral assets. Output and factor allocations fall because access to working capital financing is also reduced. Precautionary saving makes Sudden Stops low probability events nested within normal cycles, as observed in the data. (JEL E21, E23, E32, E44, G01, O11, O16)
Abstract
					We examine the effects of constituents, special interests, and ideology on congressional voting on two of the most significant pieces of legislation in US economic history. Representatives whose constituents experience a sharp increase
in mortgage defaults are more likely to support the Foreclosure Prevention Act, especially in competitive districts. Interestingly, representatives are more sensitive to defaults of their own-party constituents. Special interests in the form ofhigher campaign contributions from the financial industry increase the likelihood
of supporting the Emergency Economic Stabilization Act. However, ideologically conservative representatives are less responsive to both constituent and special interests. (JEL D72, G21, G28)
Abstract
					Employment at a multinational enterprise (MNE) responds to wages at the extensive margin, when an MNE enters a foreign location, and at the intensive margin, when an MNE operates existing affiliates. We present an MNE model and conditions for parametric and nonparametric identification. Prior studies rarely found wages to affect MNE employment. Our integrated approach documents salient labor substitution for German manufacturing MNEs and removes bias. In Central and Eastern Europe, most employment responds at the extensive margin, while in Western Europe the extensive margin accounts for around two-thirds of employment shifts. At distant locations, MNEs respond to wages only at the extensive margin. (JEL F23, J23, J31, R32)
Abstract
					This paper develops a new method to uncover the causal effect of trust on economic growth by focusing on the inherited component of trust and its time variation. We show that inherited trust of descendants of US immigrants is significantly influenced by the country of origin and the timing of arrival of their forebears. We thus use the inherited trust of descendants of US immigrants as a time-varying measure of inherited trust in their country of origin. This strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the twentieth century by controlling for country fixed effects. (JEL N11, N12, N31, N32, O47, Z13)
Abstract
					I develop a novel view of the trade frictions between rich and poor countries by arguing that to reconcile bilateral trade volumes and price data within a standard gravity model, the trade frictions between rich and poor countries must be systematically asymmetric, with poor countries facing higher costs to export relative to rich countries. I provide a method to model these asymmetries and demonstrate the merits of my approach relative to alternatives in the trade literature. I then argue that these trade frictions are quantitatively important to understanding the large differences in standards of living and total factor
productivity across countries. (JEL F11, F13, F14, O19 )
Abstract
					Early admissions are widely used by selective colleges and universities. We identify some basic facts about early admissions policies, including the admissions advantage enjoyed by early applicants and patterns in application behavior, and propose a game-theoretic model that matches these facts. The key feature of the model is that colleges want to admit students who are enthusiastic about attending, and early admissions programs give students an opportunity to signal this enthusiasm. (JEL C78, I23)
Abstract
					The incidence of bilateral trade costs is calculated here using neglected properties of the structural gravity model, disaggregated by commodity and region, and re-aggregated into forms useful for economic geography. For Canada's provinces, 1992-2003, sellers' incidence is on average some five times higher than buyers' incidence. Sellers' incidence falls over time due to specialization, despite constant gravity coefficients. This previously unrecognized globalizing force drives big reductions in "constructed home bias," the disproportionate predicted share of local trade; and large but varying gains in real GDP. (JEL F11, F14, R12)
Abstract
					We investigate the impact of reputation in a laboratory experiment. We do so by varying whether the past choices of a long-run player are observable by the short-run players. Our framework allows for reputation to have either a beneficial
or a harmful effect on the long-run player. We find that reputation is seldom harmful and its beneficial effects are not as strong as theory suggests. When reputational concerns are at odds with other-regarding preferences, we find th latter overwhelm the former. (JEL C91, D12, D82, D83, Z13)
Abstract
					A novel experiment is used to show that the effect of a policy on the level of cooperation is greater when it is chosen democratically by the subjects than when it is exogenously imposed. In contrast to the previous literature, our experimental design allows us to control for selection effects (e.g., those who choose the policy may be affected differently by it). Our finding implies that democratic institutions may affect behavior directly in addition to having effects through the choice of policies. Our findings have implications for the generalizability of the results of randomized policy interventions. (JEL C91, D02, D12, D72)
Abstract
					This paper reports a three-phase experiment on a stylized labor market. In the first two phases, agents face simple games, which we use to estimate subjects' social and reciprocity concerns. In the last phase, four principals compete by offering agents a contract from a fixed menu. Then, agents "choose to work" for a principal by selecting one of the available contracts. We find that (i) (heterogeneous) social preferences are significant determinants of choices, (ii) for both principals and agents, strategic uncertainty aversion is a stronger determinant of choices than fairness, and (iii) agents display a marked propensity to work for principals with similar distributional concerns. (JEL D82, D86, J41)
Abstract
					We document that delivery lags and transaction-level economics of scale matter for international trade, leading importers to import infrequently and hold additional inventory. In a model with these frictions calibrated to empirical measures of inventory and trade lumpiness, these frictions have a large (20 percent) tariff equivalent, mostly due to inventory carrying costs. These frictions also alter the dynamics of imports and prices. Consistent with evidence from large devaluation episodes in six developing economies, following terms-of-trade and interest
rate shocks, the model generates a short-term implosion of imports and a gradual increase in the retail price of imports. (JEL D92, F14, G31, L81, M11)
Abstract
					The paper presents a meta dataset covering 13 experiments on social learning games. It is found that in situations where it is empirically optimal to follow others and contradict one's own information, the players err in the majority of cases, forgoing substantial parts of earnings. The average player contradicts her own signal only if the empirical odds ratio of the own signal being wrong, conditional on all available information, is larger than 2:1, rather than 1:1 as would be implied by rational expectations. A regression analysis formulates a straightforward test of rational expectations which strongly rejects the null. (JEL D82, D83, D84)
Abstract
					The controversy over how much to charge for health products in the developing
world rests, in part, on whether higher prices can increase use, either by targeting distribution to high-use households (a screening effect), or by stimulating use psychologically through a sunk-cost effect. We develop a methodology for separating these two effects. We implement the methodology in a field experiment in Zambia using door-to-door marketing of a home water purification solution. We find evidence of economically important screening effects. By contrast, we find no consistent evidence of sunk-cost effects. (JEL C93, D12, I11, M31, O12)
Abstract
					Entrepreneurs may be legally bound to bequeath a minimal stake to noncontrolling heirs. The size of this stake can reduce investment in family firms, by reducing the future income they can pledge to external financiers. Using a purpose-built indicator of the permissiveness of inheritance law and data for 10,004 firms from 38 countries in 1990-2006, we find that stricter inheritance law is associated with lower investment in family firms but does not affect investment in nonfamily firms. Moreover, as the model predicts, inheritance law affects investment only in family firms that experience a succession. (JEL G31, G32, K22, L26, O17).
Abstract
					This paper investigates experimentally how a group's structure affects its ethical behavior towards a passive outsider. We analyze one vertical and two horizontal structures (one requiring consensus, one implementing a compromise by averaging proposals). We also control for internal communication. The data support our main predictions: (1) horizontal, averaging structures are more ethical than vertical structures (where subordinates do not feel responsible) and than consensual structures (where responsibility is dynamically diffused); (2) communication makes vertical structures more ethical (subordinates with voice feel responsible); (3) with communication, vertical structures are more ethical than consensual structures (where in-group bias hurts the outsider). (JEL C92, D23, L21, M14)
Abstract
					This paper provides the first credible evidence on the economic value of "green buildings" derived from impersonal market transactions rather than engineering estimates. We analyze clusters of certified green and nearby buildings, establishing that "rated" buildings command substantially higher rents and selling prices than otherwise identical buildings. Variations in premiums are systematically related to energy-saving characteristics. Increased energy efficiency is associated with increased selling prices -- beyond the premiums paid for a labeled building. Evidence suggests that the intangible effects of the label itself may also play a role in determining the values of green buildings in the marketplace. (JEL G31, M14, Q52, R33)
Abstract
					We use more than a century of Argentine and Mexican data to estimate the structural parameters of a small-open-economy real-business-cycle model driven by nonstationary productivity shocks. We find that the RBC model does a poor job of explaining business cycles in emerging countries. We then estimate an augmented model that incorporates shocks to the country premium and financial frictions. We find that the estimated financial-friction model provides a remarkably good account of business cycles in emerging markets and, importantly, assigns a negligible role to nonstationary productivity shocks. (JEL E13, E32, E44, F43, O11, O16)
Abstract
					Emotions can have important effects on performance and socioeconomic outcomes. We study a natural experiment where two teams of professionals compete in a tournament taking turns in a sequence. As the sequential order is determined by the random outcome of a coin flip, the treatment and control groups are determined via explicit randomization. Hence, absent any psychological effects, both teams should have the same probability of winning. Yet, we find a systematic first-mover advantage. Further, professionals are self-aware of their own psychological effects and, when given the chance, they rationally react by systematically taking advantage of these effects. (JEL C93, D03, D82, L83)
Abstract
					By extending his data, we document the instability of low-frequency regression coefficients that Lucas (1980) used to express the quantity theory of money. We impute the differences in these regression coefficients to differences in monetary policies across periods. A DSGE model estimated over a subsample like Lucas's implies values of the regression coefficients that confirm Lucas's results for his sample period. But perturbing monetary policy rule parameters away from the values estimated over Lucas's subsample alters the regression coefficients in ways that reproduce their instability over our longer sample. (JEL C51, E23, E31, E43, E51, E52)
Abstract
					We construct a growth model consistent with China's economic transition: high output growth, sustained returns on capital, reallocation within the manufacturing sector, and a large trade surplus. Entrepreneurial firms use more productive technologies, but due to financial imperfections they must finance investments through internal
savings. State-owned firms have low productivity but survive because of better access to credit markets. High-productivity firms outgrow low-productivity firms if entrepreneurs have sufficiently high savings. The downsizing of financially integrated firms forces domestic savings to be invested abroad, generating a foreign surplus. A calibrated version of the theory accounts quantitatively for China's economic transition. (JEL E21, E22, E23, F43, L60, O16, O53, P23, P24, P31)
Abstract
					We assess the importance of nominal rigidities using a new weekly scanner dataset. We find that nominal rigidities take the form of inertia
in reference prices and costs, defined as the most common prices and costs within a given quarter. Reference prices are particularly inertial and have an average duration of roughly one year, even though weekly prices change roughly once every two weeks. We document the relation between prices and costs and find sharp evidence
of state dependence in prices. We use a simple model to argue that reference prices and costs are useful statistics for macroeconomic analysis. (JEL L11, L25, L81)
Abstract
					Multiproduct firms can set separate prices for all possible bundled combinations of its products "mixed bundling"). However, this is impractical for firms with more than a few products, because the number of prices increases exponentially with the number of products. We find that simple pricing strategies are often nearly optimal. Specifically, we show that bundle-size pricing—setting prices that depend only on the size of bundle purchased—tends to be more profitable than offering the individual products priced separately and tends to closely approximate the profits from mixed bundling. (JEL D24, D42, L11, L13, L25)
Abstract
					This paper studies the impact of a regional free trade agreement, MERCOSUR, on technology upgrading by Argentinean firms. To guide empirical work, I introduce technology choice in a model of trade with heterogeneous firms. The joint treatment of the technology and exporting choices shows that the increase in revenues produced
by trade integration can induce exporters to upgrade technology. An
empirical test of the model reveals that firms in industries facing higher reductions in Brazil's tariffs increase investment in technology faster. The effect of tariffs is highest in the upper-middle range of the firm-size distribution, as predicted by the model. (JEL F13, F15, O19, O24, O33)
Abstract
					With positive trend inflation, the Taylor principle does not guarantee a determinate equilibrium. We provide new theoretical results on determinacy in New Keynesian models with positive trend inflation and new empirical findings on the Federal Reserve's reaction function before and after the Volcker disinflation to find that, (i) while the Fed likely satisfied the Taylor principle before Volcker, the US economy was still subject to self-fulfilling fluctuations in the 1970s, (ii) the US economy switched to determinacy during the Volcker disinflation, and (iii) the switch reflected changes in the Fed's response to macroeconomic variables and the decline in trend inflation. (JEL E12, E23, E31, E32, E52)
Abstract
					We study the long-run relation between money (inflation or interest rates) and unemployment. We document positive relationships between these variables at low frequencies. We develop a framework where money and unemployment are modeled using explicit microfoundations, providing a unified theory to analyze labor and goods markets. We calibrate the model and ask how monetary factors account for labor market behavior. We can account for a sizable fraction of the increase in unemployment rates during the 1970s. We show how it matters whether one uses monetary theory based on the search-and-bargaining approach or on an ad hoc cash-in-advance constraint. (JEL E24, E31, E41, E43, E52)
Abstract
					A usual criticism of the theory of infinitely repeated games is that it does not provide sharp predictions since there may be a multiplicity of equilibria. To address this issue, we present experimental evidence on the evolution of cooperation in infinitely repeated prisoner's dilemma games as subjects gain experience. We show that cooperation may prevail in infinitely repeated games, but the conditions under which this occurs are more stringent than the subgame perfect conditions usually considered or even a condition based on risk dominance. (JEL C71, C73)
Abstract
					In a market-clearing economy, declines in demand from one sector do not cause large declines in aggregate output because other sectors expand. The key price mediating the response is the interest rate. A decline in the rate stimulates all categories of spending. But in a low-inflation economy, the room for a decline in the rate is small,
because of the notorious lower limit of zero on the nominal interest rate. In the Great Depression, substantial deflation caused the real interest rate to reach high levels. In the Great Slump that began at the end of 2007, low inflation resulted in an only slightly negative real rate when full employment called for a much lower real rate because of declines in demand. Fortunately, the inflation rate hardly
responded to conditions in product and labor markets, else deflation might have occurred, with an even higher real interest rate. I concentrate on three closely related sources of declines in demand: the buildup of excess stocks of housing and consumer durables, the
corresponding expansion of consumer debt that financed the buildup, and financial frictions that resulted from the decline in real-estate prices. (JEL E23, E24, E31, E32, E65)
Abstract
					A key open question for theories of reference-dependent preferences is: what determines the reference point? One candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision. We find that effort provision is significantly different between treatments in the way predicted by models of expectation-based, reference-dependent preferences: if expectations
are high, subjects work longer and earn more money than if expectations are low. (JEL D12, D84, J22)
Abstract
					Hart and John Moore (2008) introduce new behavioral assumptions that can explain long-term contracts and the employment relation. We examine experimentally their idea that contracts serve as reference points. The evidence confirms the prediction that there is a trade-off between rigidity and flexibility. Flexible contracts—which would dominate rigid contracts under standard assumptions—cause significant shading in ex post performance, while under rigid contracts much less shading occurs. The experiment appears to reveal a new behavioral force: ex ante competition legitimizes the terms of a contract, and aggrievement and shading occur mainly about outcomes within the contract. (JEL D44, D86, J41)
Abstract
					Credence goods markets are characterized by asymmetric information
between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market breakdown. We study in a large experiment with 936 participants the determinants for efficiency in credence goods markets. While theory predicts that liability or verifiability yield efficiency, we find that liability has a
crucial, but verifiability at best a minor, effect. Allowing sellers to build up reputation has little influence, as predicted. Seller competition drives down prices and yields maximal trade, but does not lead
to higher efficiency as long as liability is violated. (JEL D12, D82)
Abstract
					This paper studies the impact of incentives on worker self-selection
in a controlled laboratory experiment. Subjects face the choice between a fixed and a variable payment scheme. Depending on the treatment, the variable payment is a piece rate, a tournament, or a revenue-sharing scheme. We find that output is higher in the variable-payment schemes compared to the fixed-payment scheme.
This difference is largely driven by productivity sorting. In addition,
different incentive schemes systematically attract individuals with
different attitudes, such as willingness to take risks and relative self-assessment as well as gender, which underlines the importance of multidimensional sorting. (JEL C91, D81, D82, J16, J31)
Abstract
					Using a unique dataset, we test whether households' deductible choices in auto and home insurance reflect stable risk preferences. Our test relies on a structural model that assumes households are objective expected utility maximizers and claims are generated by household-coverage specific Poisson processes. We find that the hypothesis of stable risk preferences is rejected by the data. Our
analysis suggests that many households exhibit greater risk aversion in their home deductible choices than their auto deductible choices. Our results are robust to several alternative modeling assumptions. (JEL D11, D83)
Abstract
					We often deal with uncertain events for which no probabilities are known. Several normative models have been proposed. Descriptive studies have usually been qualitative, or they estimated ambiguity aversion through one single number. This paper introduces the source method, a tractable method for quantitatively analyzing uncertainty empirically. The theoretical key is the distinction between different sources of uncertainty, within which subjective (choice-based) probabilities can still be defined. Source functions convert those subjective probabilities into willingness to bet. We apply our method in an experiment, where we do not commit to particular ambiguity attitudes
but let the data speak. (JEL D81)
Abstract
					We employ a novel approach to identify overbidding in auctions. We compare online auction prices to fixed prices for the same item on the same webpage. In detailed data on auctions of a board game, 42 percent of auctions exceed the simultaneous fixed price. The result
replicates in a broad cross-section of auctions (48 percent overbidding). A small fraction of overbidders, 17 percent of bidders, suffices to generate the large fraction of auctions with overbidding. We show that the observed behavior is inconsistent with rational behavior, even allowing for uncertainty about prices and switching costs, since the expected auction price also exceeds the fixed price. Limited
attention best explains our results. (JEL D12, D44)
Abstract
					This paper provides the first experimental test of Edward Lazear's
(1979) model of deferred compensation. We examine the relationship between firms' wage offers and workers' effort supply in a multi-period environment. If firms can ex ante commit to a wage schedule with deferred compensation, workers should respond by supplying
sufficient effort to avoid dismissal. We contrast this full-commitment case to controls with no commitment and computer-generated wages in order to examine the roles of monetary incentives, social preferences, and reciprocity. Finally, we examine a setup without formal commitment, but where firms can build a reputation for paying deferred wages. (JEL D86, J22, J31, J33, J41)
Abstract
					A striking fact about pricing is the prevalence of "sales": large temporary price cuts followed by prices returning to exactly their former levels. This paper builds a macroeconomic model with a rationale for sales based on firms facing customers with different price sensitivities. Even if firms can adjust sales without cost, monetary policy has large real effects owing to sales being strategic substitutes: a firm's incentive to have a sale is decreasing in the number of other firms having sales. Thus the flexibility seen in individual prices due to sales does not translate into flexibility of the aggregate price level. (JEL E13, E31, E52, L11, L25, L81, M31)
Abstract
					Debt and equity issuance are procyclical for most size-sorted firm categories of listed US firms and the procyclicality of equity issuance decreases monotonically with firm size. At the aggregate level, however, the results for equity issuance are not conclusive due to different behavior of the largest firms, especially those in the top one percent. During a deterioration in economic conditions, firms limit the impact of the reduction in external financing on investment by shedding financial assets. This is true for a worsening in aggregate as well as firm-specific conditions. (JEL E32, G32, L11, L25)
Abstract
					We study decisions that involve choosing between different numbers of options under time pressure using eye-tracking to monitor the search process of the subjects. We find that subjects are quite adept at optimizing within the set of items that they see, that the initial search process is random in value, that subjects use a stopping rule to terminate the search process that combines features of optimal search and satisficing, and that subjects search more often in certain focal regions of the display, which leads to choice biases. (JEL C91, D12, M31)
Abstract
					We explore the relationship between outcomes in a coordination game and a pre-play asset market where asset values are determined by outcomes in the subsequent coordination game. Across two experiments, we vary the payoffs from the market relative to the game, the degree of interdependence in the game, and whether traders' asset payoffs are dependent on outcomes in their own or another game. Markets lead to significantly lower efficiency across treatments, even when they produce no distortion of incentives in the game. Market prices forecast game outcomes. Our experiments shed light on how financial markets may influence affiliated economic outcomes. (JEL C91, D83, G13, G14)
Abstract
					While widely accepted labor market search models imply a constant reservation wage policy, empirical evidence strongly suggests that reservation wages decline in search duration. This paper reports the results of the first real-time-search laboratory experiment. The controlled environment subjects face is stationary, and the payoff-maximizing reservation wage is constant. Nevertheless, subjects' reservation wages decline sharply over time. We investigate two hypotheses to explain this decline: 1. Searchers respond to the stock of accruing search costs. 2. Searchers experience non-stationary subjective costs of time spent searching. Our data support the latter hypothesis, and we substantiate this conclusion both experimentally and econometrically. (JEL C91, D83, J64)
Abstract
					Although backward induction is a cornerstone of game theory, most laboratory experiments have found that agents are not able to successfully backward induct. We analyze the play of world-class chess players in the centipede game, which is ill-suited for testing backward induction, and in pure backward induction games—Race to 100 games. We find that chess players almost never play the backward induction equilibrium in the centipede game, but many properly backward induct in the Race to 100 games. We find no systematic within-subject relationship between choices in the centipede game and performance in pure backward induction games. (JEL C73)
Abstract
					Plott and Zeiler (2005) report that the willingness-to-pay/willingness-to-accept disparity is absent for mugs in a particular experimental setting, designed to neutralize misconceptions about the procedures used to elicit valuations. This result has received sustained attention in the literature. However, other data from that same study, not published in that paper, exhibit a significant and persistent disparity when the same experimental procedures are applied to lotteries. We report new data confirming both results, thereby suggesting that the presence or absence of a disparity may be a more complex issue than some may have supposed. (JEL C91, D12, D81, D83)
Abstract
					Isoni, Loomes, and Sugden (2011) assert that Plott and Zeiler (2005) reported inaccurate results. Placing ILS's selective quotes into context demonstrates otherwise. Additionally, examining the data closely yields three conclusions. First, all mug data reject endowment effect theory. Second, lottery gaps are associated with unstable attitudes toward uncertainty, a finding consistent with PZ's (2005) lottery data description, explicit warnings about procedure limitations and the data supplement, which reports the lottery data and cautions. Third, lottery outcome beliefs are influenced by whether WTP or WTA is reported, suggesting that changing beliefs, as opposed to the shape of preferences, produce lottery gaps. (JEL C91)
Abstract
					Reinhard Selten and Thorsten Chmura (2008) recently reported laboratory results for completely mixed 2 X 2 games used to compare Nash equilibrium with four other stationary concepts: quantal response equilibrium, action-sampling equilibrium, payoff-sampling equilibrium, and impulse balance equilibrium. We reanalyze their data, correct some errors, and find that Nash clearly fits worst while the four other concepts perform about equally well. We also report new analysis of other previous experiments that illustrate the importance of the loss aversion hardwired into impulse balance equilibrium: when the other non-Nash concepts are augmented with loss aversion, they outperform impulse balance equilibrium.
Abstract
					This study uses data from pre- and post-crash surveys from the Cognitive Economics study to examine the impact of recent stock and labor market wealth losses on the planned retirement ages of older Americans. Regression estimates imply that the average wealth loss between July 2008 and May/June 2009 is associated with an increase in planned retirement age of approximately 2.5 months. Furthermore, pessimism about future stock market returns is found to amplify the impact of wealth losses on retirement timing.
Abstract
					Evidence from a nationally representative sample of households illuminates the determinants of recycling behavior for plastic water bottles. Private values of the environment are influential in promoting recycling, as are personal norms for pro-environmental behavior. However, social norms with respect to the assessment of the household's recycling behaviors by others have little independent effect. Particularly influential are policies that create economic incentives to promote recycling either through state recycling laws that reduce the time and inconvenience costs of recycling or through bottle deposits. Effective policies can have a discontinuous effect at the individual level, transforming non-recyclers into avid recyclers.
Abstract
					We find that households living in California homes built in the 1960s and 1970s had high electricity consumption in 2000 relative to houses of more recent vintages because the price of electricity at the time of home construction was low. Homes built in the early 1990s had lower electricity consumption than homes of earlier vintages because the price of electricity was higher. The elasticity of the price of electricity at the time of construction was -0.22. As homes built between 1960 and 1989 become a smaller share of the housing stock, average household electricity purchases will fall.
Abstract
					Economic models that do not incorporate financial frictions only explain about 70 to 80 percent of the decline in world trade that occurred in the 2008-2009 crisis. We review evidence that shows financial factors also contributed to the great trade collapse and uncover two new stylized facts in support of it. First, we show that the prices of manufactured exports rose relative to domestic prices during the crisis. Second, we show that US seaborne exports and imports, which are likely to be more sensitive to trade finance problems, saw their prices rise relative to goods shipped by air or land.
Abstract
					We examine the source of the large fall and rebound in US trade in the recent recession. While trade fell and rebounded more than expenditures or production of traded goods, we find that relative to the magnitude of the downturn, these trade fluctuations were in line with those in previous business cycle fluctuations. We argue that the high volatility of trade is attributed to more severe inventory management considerations of firms involved in international trade. We present empirical evidence for autos as well as at the aggregate level that the adjustment of inventory holdings help explain these fluctuations in trade.
Abstract
					The classic regression based estimator of counterfactual means studied by Ronald Oaxaca (1973) and Alan Blinder (1973) is shown to constitute a propensity score reweighting estimator based upon a linear model for the conditional odds of being treated.
Abstract
					Due to inadequate savings and binding borrowing constraints, income volatility can make households in developing countries particularly susceptible to economic hardship. We examine the role of remittances in either alleviating or increasing household income volatility using Mexican household level data over the 2000 through 2008 period. We correct for reverse causality and endogeneity and find that while income smoothing does not appear to be the main motive for sending remittances in a non-negligible share of households, remittances do indeed smooth household income on average. Other variables surrounding income volatility are also considered and evaluated.
Abstract
					The paper constructs a model of optimal portfolio allocation incorporating the role of housing as collateral. Current house value is a state variable in the portfolio decision due to a nonconvex adjustment cost. Holding risk aversion constant, the percentage of the portfolio held in stocks is decreasing in the ratio of house value to net wealth; thus an older household with a lower ratio of house value to net wealth will generally hold more its portfolio in stocks than younger households. Empirical results using the Survey of Consumer Finances confirm the quantitative and statistical significance of the housing state variable.
Abstract
					This paper investigates how trading frictions vary with the thickness
of the asset market by examining patterns of asset allocations and
prices in commercial aircraft markets. The empirical analysis indicates
that assets with a thinner market are less liquid — i.e., more
difficult to sell. Thus, firms hold on longer to them amid profitability
shocks. Hence, when markets for assets are thin, firms' average
productivity and capacity utilization are lower, and the dispersions
of productivity and of capacity utilization are higher. In turn, prices
of assets with a thin market are lower and have a higher dispersion.
(JEL A12, L11, L93)
Abstract
					Existing indicators of technical change are plagued by shortcomings.
I present new measures based on books published in the field of
technology that resolve many of these problems and use them to identify
the impact of technology shocks on economic activity. They are
positively linked to changes in R&D and scientific knowledge, and
capture the new technologies' commercialization dates. Changes in
information technology are found to be important sources of economic
fluctuations in the post-WWII period, and total factor productivity,
investment, and, to a lesser extent, labor are all shown to
increase following a positive technology shock. (JEL E22, E23, E32,
O33, O34, O47 )
Abstract
					We evaluate the choices of elders across their insurance options
under the Medicare Part D Prescription Drug plan, using a unique
dataset of prescription drug claims matched to information on the
characteristics of choice sets. We document that elders place much
more weight on plan premiums than on expected out-of-pocket costs;
value plan financial characteristics beyond any impacts on their
own financial expenses or risk; and place almost no value on variance-
reducing aspects of plans. Partial equilibrium welfare analysis
implies that welfare would have been 27 percent higher if patients
had all chosen rationally. (JEL D12, I11, J14)
Abstract
					We show experimentally that whether and how communication
achieves beneficial social outcomes in a hidden-information context
depends crucially on whether low-talent agents can participate in
a Pareto-improving outcome. Communication is effective (and patterns
of lies and truth quite systematic) when this is feasible, but
otherwise completely ineffective. We examine the data in light of two
potentially relevant behavioral models: cost-of-lying and guilt-fromblame.
(JEL D82, D83, Z13)
Abstract
					According to the terms-of-trade theory, governments use trade
agreements to escape from a terms-of-trade-driven prisoner's
dilemma. We use the terms-of-trade theory to develop a relationship
that predicts negotiated tariff levels on the basis of pre-negotiation
data: tariffs, import volumes and prices, and trade elasticities. We
then confront this predicted relationship with data on the outcomes
of tariff negotiations associated with the accession of new members
to the World Trade Organization. We find strong and robust support
for the central predictions of the terms-of-trade theory in the
observed pattern of negotiated tariff cuts. (JEL F11, F13)
Abstract
					We show that political institutions affect corruption levels. We use
audit reports in Brazil to construct new measures of political corruption
in local governments and test whether electoral accountability
affects the corruption practices of incumbent politicians. We
find significantly less corruption in municipalities where mayors can
get reelected. Mayors with reelection incentives misappropriate 27
percent fewer resources than mayors without reelection incentives.
These effects are more pronounced among municipalities with less
access to information and where the likelihood of judicial punishment
is lower. Overall our findings suggest that electoral rules that
enhance political accountability play a crucial role in constraining
politician's corrupt behavior. (JEL D72, K42, O17)
Abstract
					This paper estimates a dynamic structural model of a producer's
decision to invest in R&D and export, allowing both choices to endogenously
affect the future path of productivity. Using plant-level data
for the Taiwanese electronics industry, both activities are found to
have a positive effect on the plant's future productivity. This in turn
drives more plants to self-select into both activities, contributing to
further productivity gains. Simulations of an expansion of the export
market are shown to increase both exporting and R&D investment
and generate a gradual within-plant productivity improvement. (JEL
D24, F14, G31, L63, O31, O33)
Abstract
					Estimating the cost of regulation is difficult. Firms sometimes reveal
costs indirectly, however, when they exploit loopholes to avoid regulation.
We apply this insight to fuel economy standards for automobiles.
These standards feature a loophole that gives automakers a
bonus when they equip a vehicle with flexible-fuel capacity. Profitmaximizing
automakers will equate the marginal cost of compliance
using the loophole, which is observable, with the unobservable costs
of strategies that genuinely improve fuel economy. Based on this
insight, we estimate that tightening standards by one mile per gallon
would have cost automakers just $9-$27 per vehicle in recent years.
(JEL L51, L62, Q48)
Abstract
					Major League Baseball umpires express their racial/ethnic preferences
when they evaluate pitchers. Strikes are called less often if the
umpire and pitcher do not match race/ethnicity, but mainly where
there is little scrutiny of umpires. Pitchers understand the incentives
and throw pitches that allow umpires less subjective judgment (e.g.,
fastballs over home plate) when they anticipate bias. These direct
and indirect effects bias performance measures of minorities downward.
The results suggest how discrimination alters discriminated
groups' behavior generally. They imply that biases in measured productivity
must be accounted for in generating measures of wage discrimination.
(JEL J15, J31, J44, J71, L83)
Abstract
					The macroeconomic implications of downward nominal wage rigidities
are analyzed via a dynamic stochastic general equilibrium model
featuring aggregate and idiosyncratic shocks. A closed-form solution
for a long-run Phillips curve relates average output gap to average
wage inflation: it is virtually vertical at high inflation and flattens
at low inflation. Macroeconomic volatility shifts the curve outwards
and reduces output. The results imply that stabilization policies play
an important role, and that optimal inflation may be positive and differ
across countries with different macroeconomic volatility. Results
are robust to relaxing the wage constraint, for example, when large
idiosyncratic shocks arise. (JEL E23, E24, E31, E63)
Abstract
					Using a model of statistical discrimination and educational sorting,
we explain why blacks get more education than whites of similar
cognitive ability, and we explore how the Armed Forces Qualification
Test (AFQT), wages, and education are related. The model suggests
that one should control for both AFQT and education when comparing
the earnings of blacks and whites, in which case a substantial
black-white wage differential emerges. We reject the hypothesis that
differences in school quality between blacks and whites explain the
wage and education differentials. Our findings support the view that
some of the black-white wage differential reflects the operation of the
labor market. (JEL I21, J15, J24, J31, J71)
Abstract
					People pay attention to the appearance of others, and personal characteristics can affect many types of decisions. We ask, is there informational value in a face in a situation where trust and reciprocity can increase earnings? We use a laboratory trust game experiment where subjects are unable to observe a counterpart, must observe a counterpart, or can pay to reveal a counterpart's photograph. Both senders and responders are willing to pay to observe the photos, and we show that behavior, earnings, and efficiency are affected. When subjects are "face to face," efficiency is enhanced, and senders have higher earnings. (JEL D12, D83, Z13)
Abstract
					This paper provides cross-country empirical evidence on term premia. I construct a panel of zero-coupon nominal government bond yields spanning ten industrialized countries and nearly two decades. I hence compute forward rates and use two different methods to decompose these forward rates into expected future short-term interest rates and term premiums. The first method uses an affine term structure model with macroeconomic variables as unspanned risk factors; the second method uses surveys. I find that term premiums declined internationally over the sample period, especially in countries that apparently reduced inflation uncertainty by making substantial changes in their monetary policy frameworks. (JEL E13, E43, E52, G12, H63)
Abstract
					Since Akerlof (1970), economists have understood the adverse selection problem that information asymmetries can create in used goods markets. The remarkable growth in online used goods auctions thus poses a puzzle. Part of the solution is that sellers voluntarily disclose their private information on the auction web page. This defines a precise contract -- to deliver the car shown for the closing price -- which helps protect the buyer from adverse selection. I test this theory using data from eBay Motors, finding that online disclosures are important price determinants, and that disclosure costs impact both the level of disclosure and prices. (JEL D44, D82, L81)
Abstract
					The literature on the private provision of public goods suggests an inverse relationship between incentives to contribute and group size. We find, however, that after an exogenous reduction of group size at Chinese Wikipedia, the nonblocked contributors decrease their contributions by 42.8 percent on average. We attribute the cause to social effects: contributors receive social benefits that increase with both the amount of their contributions and group size, and the shrinking group size weakens these social benefits. Consistent with our explanation, we find that the more contributors value social benefits, the more they reduce their contributions after the block.  (JEL H41, L17, L82)
Abstract
					One of the most commonly cited studies on the effect of child subsidies on fertility, Whittington, Alm, and Peters (1990), claimed a large positive effect of child tax benefits on fertility using time series methods. We revisit this question in light of recent increases in child tax benefits by replicating this earlier study and extending the analysis. We do not find strong evidence to justify the model specification from the original paper. Moreover, even if the original specification is appropriate, we show that the results are not robust to more general measures of child tax benefits. (JEL H24, J13)
Abstract
					In an article published in the American Economic Review, Dorothe Bonjour et al. (2003) used a dataset  on female monozygotic twins and showed that the within-twin estimated return to one year of education was 7.7 percent and statistically significant at the 5 percent level. This comment illustrates that the point estimate conclusion is driven by one twin pair, which is an outlier in the dataset. If one eliminates this twin pair, then the estimated return to education is 5.1 percent and statistically significant at the 10 percent level only.  (JEL I21, J16, J24, J31)
Abstract
					This study presents a framework to include environmental externalities into a system of national accounts. The paper estimates the air pollution damages for each industry in the United States. An integrated-assessment model quantifies the marginal damages of air pollution emissions for the US which are multiplied times the quantity of emissions by industry to compute gross damages. Solid waste combustion, sewage treatment, stone quarrying, marinas, and oil and coal-fired power plants have air pollution damages larger than their value added. The largest industrial contributor to external costs is coal-fired electric generation, whose damages range from 0.8 to 5.6 times value added. (JEL E01, L94, Q53, Q56)
Abstract
					Newly developed historical time series on public debt, along with data on external debts, allow a deeper analysis of the debt cycles underlying serial debt and banking crises. We test three related hypotheses at both "world" aggregate levels and on an individual
country basis. First, external debt surges are an antecedent to banking crises. Second, banking crises (domestic and those in financial centers) often precede or accompany sovereign debt crises; we find they help predict them. Third, public borrowing surges ahead of external sovereign default, as governments have "hidden domestic debts" that exceed the better documented levels of external debt. (JEL E44, F34, F44, G01, H63, N20)
Abstract
					The CPI component indices are obtained from comparing price quotes at a given store in different periods. If we omit comparisons from goods in the store in the initial, but not in the comparison, period we generate a selection bias: goods that exit are disproportionately
obsolete goods that have falling prices. Building on Pakes (2003), we
explain why standard hedonic predictions for second-period prices
of exiting goods do not account for this bias. New hedonic methods are derived, shown to have desirable properties, and are applied to three CPI samples where they generate significant selection corrections. (JEL C43, E31)
Abstract
					To the extent that students benefit from high-achieving peers, tracking will help strong students and hurt weak ones. However, all students may benefit if tracking allows teachers to better tailor their instruction level. Lower-achieving pupils are particularly likely to benefit from tracking when teachers have incentives to teach to the top of the distribution. We propose a simple model nesting these effects and
test its implications in a randomized tracking experiment conducted with 121 primary schools in Kenya. While the direct effect of high-achieving peers is positive, tracking benefited lower-achieving pupils indirectly by allowing teachers to teach to their level. (JEL I21, J45, O15)
Abstract
					We examine the impact of state child care regulations on the supply and quality of care in child care markets. We exploit panel data on both individual establishments and local markets to control for state, time, and, where possible, establishment-specific fixed effects to mitigate the potential bias due to policy endogeneity. We find that the imposition of regulations reduces the number of center-based child care establishments, especially in lower income markets. However, such regulations increase the quality of services provided, especially in higher income areas. Thus, there are winners and losers from the regulation of child care services. (JEL H75, J13, L51, L84)
Abstract
					We analyze the effect of search frictions in the market for commercial
health insurance. Frictions increase insurance premiums (enough to transfer 13.2 percent of consumer surplus from fully insured employer groups to insurers—approximately $34.4 billion in 1997); and increase insurance turnover (by 64 percent for the average policy).
This rent transfer harms consumers and—when combined with heightened turnover—reduces incentives to invest in future health. We also find that a publicly financed insurance option can improve the efficiency of private insurance markets by reducing search friction induced distortions in pricing and marketing efforts. (JEL D83 G22, I18)
Abstract
					We provide a new compilation of data on ethnic, linguistic, and religious composition at the subnational level for a large number of countries. Using these data, we measure segregation of groups within the country. To overcome the endogeneity problem that arises
because of mobility and endogenous internal borders, we construct an instrument for segregation. We find that more ethnically and linguistically
segregated countries, i.e., those where groups live more spatially separately, have a lower quality of government; there is no relationship between religious segregation and governance. Trust is an important channel of influence; it is lower in more segregated countries. (JEL H11, H77, J15, O17, Z12, Z13)
Abstract
					This paper proposes a model of cab drivers' labor supply, building on Henry S. Farber's (2005, 2008) empirical analyses and Botond Koszegi and Matthew Rabin's (2006; henceforth "KR") theory of reference-dependent preferences. Following KR, our model has targets for hours as well as income, determined by proxied rational
expectations. Our model, estimated with Farber's data, reconciles his finding that stopping probabilities are significantly related to hours but not income with Colin Camerer et al.'s (1997) negative "wage" elasticity of hours; and avoids Farber's criticism that estimates of drivers' income targets are too unstable to yield a useful model of labor supply. (JEL J22, J31, L92)
Abstract
					While cumulative knowledge production is central to growth, little empirical research investigates how institutions shape whether existing knowledge can be exploited to create new knowledge. This paper assesses the impact of a specific institution, a biological resource
center, whose objective is to certify and disseminate knowledge. We disentangle the marginal impact of this institution on cumulative research from the impact of selection, in which the most important discoveries are endogenously linked to research-enhancing institutions. Exploiting exogenous shifts of biomaterials across institutional settings and employing a difference-in-differences approach, we find that effective institutions amplify the cumulative impact of individual scientific discoveries. (JEL D02, D83, I23, O30)
Abstract
					We develop a quantitative framework to explain the relationship between aggregate/sector-level total factor productivity (TFP) and financial development across countries. Financial frictions distort the allocation of capital and entrepreneurial talent across production units, adversely affecting measured productivity. In our model, sectors with larger scales of operation (e.g., manufacturing) have more financing needs, and are hence disproportionately vulnerable to financial frictions. Our quantitative analysis shows that financial frictions
account for a substantial part of the observed cross-country differences in output per worker, aggregate TFP, sector-level relative productivity, and capital-to-output ratios. (JEL E23, E44, O41, O47)
Abstract
					This paper examines the central hypothesis of the influential Malthusian theory, according to which improvements in the technological environment during the preindustrial era had generated only temporary gains in income per capita, eventually leading to a larger, but not significantly richer, population. Exploiting exogenous sources of cross-country variations in land productivity and the level of technological advancement, the analysis demonstrates that, in accordance with the theory, technological superiority and higher
land productivity had significant positive effects on population density
but insignificant effects on the standard of living, during the time
period 1-1500 CE. (JEL N10, N30, N50, O10, O40, O50)
Abstract
					This paper examines the equilibrium price effects of the privatization of housing assets that were previously owned and allocated by the state. I develop a theoretical framework that shows that privatization can have ambiguous effects on prices in the private market, and tha the degree of misallocation of the assets prior to privatization determines the subsequent price effects. I test the predictions of the model using a large-scale housing reform in China. The results suggest that the removal of price distortions allowed households to increase their consumption of housing and led to an increase in equilibrium housing prices. (JEL L33, O18, P25, R31, R38)
Abstract
					Borrowing against the increase in home equity by existing homeowners was responsible for a significant fraction of the rise in US household leverage from 2002 to 2006 and the increase in defaults from 2006 to 2008. Instrumental variables estimation shows that homeowners extracted 25 cents for every dollar increase in home equity. Home equity-based borrowing was stronger for younger households and households with low credit scores. The evidence suggests that borrowed funds were used for real outlays. Home equity-based borrowing added $1.25 trillion in household debt from 2002 to 2008, and accounts for at least 39 percent of new defaults from 2006 to 2008. JEL: D14, R31
Abstract
					In this paper we study the causal impact of police on crime, looking at what happened to crime and police before and after the terror attacks that hit central London in July 2005. The attacks resulted in a large redeployment of police officers to central London as compared to outer London. During this time, crime fell significantly in central relative to outer London. The instrumental variable approach we use uncovers an elasticity of crime with respect to police of approximately -0.3 to -0.4, so that a 10 percent increase in police activity reduces crime by around 3 to 4 percent.
JEL: K42
Abstract
					The distribution of city populations has attracted much attention, in part because it constrains models of local growth. However, there is no consensus on the distribution below the very upper tail, because available data need to rely on "legal" rather than "economic" definitions for medium and small cities. To remedy this difficulty, we construct cities "from the bottom up" by clustering populated areas obtained from high-resolution data. We find that Zipf's law for population holds for cities as small as 5,000 inhabitants in Great Britain and 12,000 inhabitants in the US. We also find a Zipf's law for areas.
JEL: R11, R12, R23
Abstract
					Each week, the Dutch Postcode Lottery (PCL) randomly selects a postal code, and distributes cash and a new BMW to lottery participants in that code. We study the effects of these shocks on lottery winners and their neighbors. Consistent with the life-cycle hypothesis, the effects on winners' consumption are largely confined to cars and other durables. Consistent with the theory of in-kind transfers, the vast majority of BMW winners liquidate their BMWs. We do, however, detect substantial social effects of lottery winnings: PCL nonparticipants who live next door to winners have significantly higher levels of car consumption than other nonparticipants.
JEL: D14, D91, H23, H27
Abstract
					I show that after accounting for predictable variation arising from movements in real interest rates, preferences and income shocks, liquidity constraints and measurement errors, volatility of household consumption in the US increased by 25 percent between 1970 and 2004. The increase was lower than that of volatility of family income. Nonwhite and those with less than 13 years of education, for whom there was no differential increase in income volatility, experienced a significantly larger increase in volatility of household consumption. Substantial differences in wealth and access to credit markets point to the main reason for this divide. JEL: D12, D14, E21, J15
Abstract
					I study a dynamic model of trial-and-error search in which agents do not have complete knowledge of how choices are mapped into outcomes. Agents learn about the mapping by observing the choices of earlier agents and the outcomes that are realized. The key novelty is that the mapping is represented as the realized path of a Brownian motion. I characterize for this environment the optimal behavior
each period as well as the trajectory of experimentation and learning through time. Applied to new product development, the model shares features of the data with the well-known Product Life Cycle. (JEL D81, D83, D92, L26)
Abstract
					This paper presents new evidence that increases in college enrollment lead to a decline in the average quality of college graduates between 1960 and 2000, resulting in a decrease of 6 percentage
points in the college premium. A standard demand and supply framework can qualitatively account for the trend in the college and age premia over this period, but substantial quantitative adjustments are needed to account for changes in quality. (JEL I23, J24, J31)
Abstract
					We model farmers as facing small fixed costs of purchasing fertilizer and assume some are stochastically present biased and not fully sophisticated about this bias. Such farmers may procrastinate, postponing fertilizer purchases until later periods, when they may be too impatient to purchase fertilizer. Consistent with the model, many farmers in Western Kenya fail to take advantage of apparently profitable
fertilizer investments, but they do invest in response to small, time-limited discounts on the cost of acquiring fertilizer (free delivery) just after harvest. Calibration suggests that this policy can yield
higher welfare than either laissez-faire policies or heavy subsidies. (JEL Q13, Q12, Q16, Q18)
Abstract
					We study the purchasing power parity (PPP) puzzle in a multisector, two-country, sticky-price model. Sectors differ in the extent of price stickiness, leading to heterogeneous sectoral real exchange rate dynamics. Deviations from PPP are more volatile and persistent than in an otherwise identical one-sector world economy with the same average frequency of price changes. Under the empirical distribution of price stickiness of the US economy, the model produces PPP deviations with a half-life of 39 months. We provide a structural interpretation of the approaches found in the empirical literature on aggregation and PPP, and reconcile its apparently conflicting findings. (JEL F31, G31)
Abstract
					Relative cross-border retail prices, in a common currency, comove closely with the nominal exchange rate. Using product-level prices and wholesale costs from a grocery chain operating in the United States and Canada, we decompose this variation into relative costs and markup components. The high correlation of nominal and real exchange rates is driven mainly by changes in relative costs. National borders segment markets. Retail prices respond to changes in costs in neighboring stores within the same country but not across the border. Prices have a median discontinuous change of 24 percent at the border and 0 percent at state boundaries. (JEL F31, L11, L81)
Abstract
					We develop a human capital model with borrowing constraints explicitly derived from government student loan (GSL) programs and private lending under limited commitment. The model helps explain the persistent strong positive correlation between ability and
schooling in the United States, as well as the rising importance of family income for college attendance. It also explains the increasing share of undergraduates borrowing the GSL maximum and the rise in student borrowing from private lenders. Our framework offers new insights regarding the interaction of government and private lending, as well as the responsiveness of private credit to economic and policy changes. (JEL D14, H52, I22, I23, J24)
Abstract
					We show how changes in the volatility of the real interest rate at which small open emerging economies borrow have an important effect on variables like output, consumption, investment, and hours. We start by documenting the strong evidence of time-varying volatility in the real interest rates faced by four emerging economies: Argentina, Brazil, Ecuador, and Venezuela. We estimate a stochastic
volatility process for real interest rates. Then, we feed this process in
a standard small open economy business cycle model. We find that an increase in real interest rate volatility triggers a fall in output, consumption, investment, hours, and debt. (JEL E13, E20, E32, E43, F32, F43, 011)
Abstract
					When does a common group identity improve efficiency in coordination games? To answer this question, we propose a group-contingent social preference model and derive conditions under which social identity changes equilibrium selection. We test our predictions in the minimum-effort game in the laboratory under parameter configurations which lead to an inefficient low-effort equilibrium for subjects with no group identity. For those with a salient group identity, consistent with our theory, we find that learning leads to ingroup coordination to the efficient high-effort equilibrium. Additionally, our theoretical framework reconciles findings from a number of coordination
game experiments. (JEL C71, C91, D71)
Abstract
					We investigate the effect of lane kilometers of roads on vehicle-kilometers traveled (VKT) in US cities. VKT increases proportionately to roadway lane kilometers for interstate highways and probably slightly less rapidly for other types of roads. The sources for this extra VKT are increases in driving by current residents, increases in commercial traffic, and migration. Increasing lane kilometers for one type of road diverts little traffic from other types of road. We find no evidence that the provision of public transportation affects VKT. We conclude that increased provision of roads or public transit is
unlikely to relieve congestion. (JEL R41, R48)
Abstract
					We use data from highway procurement auctions subject to California's Small Business Preference program to study the effect of bid preferences on auction outcomes. Our analysis is based on
an estimated model of firms' bidding and participation decisions, which allows us to evaluate the effects of current and alternative policy designs. We show that incorporating participation responses significantly alters the assessment of preferential treatment policies. (JEL D44, H76, R42)
Abstract
					This paper examines whether US gasoline content regulations, which impose substantial costs on consumers, have successfully reduced ozone pollution. We take advantage of spatial and temporal variation in the regulations' implementation to show that federal gasoline standards, which allow refiners flexibility in choosing a compliance mechanism, did not improve air quality. This outcome occurred because minimizing the cost of compliance does not reduce emissions of those compounds most prone to forming ozone. In California, however, we find that precisely targeted, inflexible regulations requiring the removal of particularly harmful compounds significantly improved air quality. (JEL L51, L71, L78, Q53, Q58)
Abstract
					In 2005-2008, over a dozen put warrants traded in China went so deep out of the money that they were almost certain to expire worthless. Nonetheless, each warrant was traded more than three times
each day at substantially inflated prices. This bubble is unique in that the underlying stock prices make warrant fundamentals publicly observable and that warrants have predetermined finite maturities. This sample allows us to examine a set of bubble theories. In particular, our analysis highlights the joint effects of short-sales constraints and heterogeneous beliefs in driving bubbles and confirms several key findings of the experimental bubble literature. (JEL G12, G13, O16, P34)
Abstract
					This paper estimates marginal returns to college for individuals induced to enroll in college by different marginal policy changes. The recent instrumental variables literature seeks to estimate this parameter, but in general it does so only under strong assumptions that are tested and found wanting. We show how to utilize economic theory and local instrumental variables estimators to estimate the effect of marginal policy changes. Our empirical analysis shows that returns are higher for individuals with values of unobservables that make them more likely to attend college. We contrast our estimates with IV estimates of the return to schooling. (JEL I23, J24, J31)
Abstract
					A well-known problem with revealed preference methods is that when data are found to satisfy their restrictions it is hard to know whether this should be viewed as a triumph for economic theory, or a warning that these conditions are so undemanding that almost anything goes. This paper allows researchers to make this distinction. Our approach uses an axiomatic characterization of a measure of predictive success due to Selten (1991). We illustrate the idea using a panel dataset. The results show that this approach can lead us to radically reassess our view of the empirical performance of economic theory. (JEL  D11, D12)
Abstract
					This paper develops a tractable extension of a Mortensen-Pissarides style matching model that allows for risk averse workers with limited ability to smooth consumption. I show that this leads to a form of equilibrium wage rigidity, as the inability of workers to smooth their consumption across unemployment and employment spells changes how unemployed workers value wage offers, and hence also the offers that employers find profitable to make. In the model risk-averse entrepreneurs use optimal long-term contracts to attract risk averse workers facing limited access to asset markets. A simple analytic representation for the equilibrium is derived. (JEL D81, E21, E24, E32, J31, J41, J64)
Abstract
					This paper develops a theory of expectations-driven business cycles based on learning. Agents have incomplete knowledge about how market prices are determined and shifts in expectations of future prices affect dynamics. Learning breaks the tight link between fundamentals and equilibrium prices, inducing periods of erroneous optimism or pessimism about future returns to capital and wages which subsequent data partially validate. In a real business cycle model, the theoretical framework amplifies and propagates technology shocks. Moreover, it produces agents' forecast errors consistent with business cycle properties of forecast errors for a wide range of variables from the Survey of Professional Forecasters. (JEL C53, D83, D84, E32, E37)
Abstract
					Many everyday decisions are made without full examination of all available options, and, as a result, the best available option may be missed. We develop a search-theoretic choice experiment to study the impact of incomplete consideration on the quality of choices. We find that many decisions can be understood using the satisficing model of Herbert Simon (1955): most subjects search sequentially, stopping when a "satisficing" level of reservation utility is realized. We find that reservation utilities and search order respond systematically to changes in the decision making environment. (JEL D03, D12, D83)
Abstract
					Is lifetime inequality mainly due to differences across people established
early in life or to differences in luck experienced over the working lifetime? We answer this question within a model that features idiosyncratic shocks to human capital, estimated directly from data, as well as heterogeneity in ability to learn, initial human capital, and initial wealth. We find that, as of age 23, differences in initial conditions account for more of the variation in lifetime earnings, lifetime wealth, and lifetime utility than do differences in shocks received
over the working lifetime. (JEL D31, D91, J24, J31)
Abstract
					We use new data on entries and exits of US daily newspapers from 1869 to 2004 to estimate effects on political participation, party vote shares, and electoral competitiveness. Our identification strategy exploits the precise timing of these events and allows for the possibility of confounding trends. We focus our analysis on the years 1869-1928, and we use the remaining years of data to look at changes over time. We find that newspapers have a robust positive effect on political participation, with one additional newspaper increasing both
presidential and congressional turnout by approximately 0.3 percentage points. Newspaper competition is not a key driver of turnout: our effect is driven mainly by the first newspaper in a market, and the effect of a second or third paper is significantly smaller. The effect on presidential turnout diminishes after the introduction of radio and television, while the estimated effect on congressional turnout remains similar up to recent years. We find no evidence that partisan
newspapers affect party vote shares, with confidence intervals that rule out even moderate-sized effects. We find no clear evidence that newspapers systematically help or hurt incumbents. (JEL D72, L11, L82, N41, N42, N81, N82)
Abstract
					This paper examines the residential location and school choice responses to the desegregation of large urban public school districts. We decompose the well documented decline in white public enrollment following desegregation into migration to suburban districts and increased private school enrollment and find that migration was the more prevalent response. Desegregation caused black public enrollment to increase significantly outside of the South, mostly by slowing decentralization of black households to the suburbs, and large black private school enrollment declines in southern districts. Central district school desegregation generated only a small portion of overall urban population decentralization between 1960 and 1990. (JEL H75, I21, J15, R23)
Abstract
					We investigate the effects of the institutional settings of the US health
care system on individuals' life-cycle medical expenditures. Health is a form of general human capital; labor turnover and labor-market frictions prevent an employer-employee pair from capturing the entire surplus from investment in an employee's health. Thus, the pair underinvests in health during working years, thereby increasing
medical expenditures during retirement. We provide empirical evidence consistent with the comparative statics predictions of our model using the Medical Expenditure Panel Survey (MEPS) and the Health and Retirement Study (HRS). Our estimates suggest significant
inefficiencies in health investment in the United States. (JEL D14, D91, G22, I11, J32)
Abstract
					This paper estimates the impact of electrification on employment growth by analyzing South Africa's mass roll-out of electricity to rural households. Using several new data sources and two different identification strategies (an instrumental variables strategy and a fixed effects approach), I find that electrification significantly raises female employment within five years. This new infrastructure appears to increase hours of work for men and women, while reducing female wages and increasing male earnings. Several pieces of evidence suggest that household electrification raises employment by releasing women from home production and enabling microenterprises. Migration behavior may also be affected. (JEL H54, L94,
L98, O15, O18, R23)
Abstract
					We conduct a random-assignment experiment to investigate whether positive affect impacts time preference, where time preference denotes a preference for present over future utility. Our result indicates that, compared to neutral affect, mild positive affect significantly reduces time preference over money. This result is robust to various specification checks, and alternative interpretations of the result are considered. Our result has implications for the effect of happiness on time preference and the role of emotions in economic decision making, in general. Finally, we reconfirm the ubiquity of time preference and start to explore its determinants. (JEL D12, D83, I31)
Abstract
					We examine US local telephone markets shortly after the Telecommunications Act of 1996. The data suggest that more experienced, better-educated managers tend to enter markets with fewer
competitors. This motivates a structural econometric model based on behavioral game theory that allows heterogeneity in managers' ability to conjecture competitor behavior. We find that manager characteristics are key determinants in managerial ability. This estimate of ability predicts out-of-sample success. Also, the measured level of ability rises following a shakeout, suggesting that our behavioral assumptions may be most relevant early in the industry's life cycle. (JEL L96, L98, M10)
Abstract
					In the sixteenth century, North America contained 25 to 30 million buffalo; by the late nineteenth century fewer than 100 remained. While removing the buffalo east of the Mississippi took over 100 years, the remaining 10 to 15 million buffalo on the Great Plains
were killed in a punctuated slaughter lasting little more than ten years. I employ theory, international trade statistics, and first-person accounts to argue the slaughter was initiated by a foreign-made innovation and fueled by a foreign demand for industrial leather.
European demand and American policy failure are jointly responsible for the "Slaughter on the Plains." (JEL F14, N51, N71, Q57)
Abstract
					We study David Gale's (1963) economy using laboratory markets.
Tatonnement theory predicts prices will diverge from an equitable
interior equilibrium toward infinity or zero depending only on initial
prices. The inequitable equilibria determined by these dynamics give
all gains from exchange to one side of the market. We show surprisingly
strong support for these predictions. In most sessions one side
of the market eventually outgains the other by more than 20 times,
leaving the disadvantaged side to trade for mere pennies. We also
find preliminary evidence that these dynamics are sticky, resisting
exogenous interventions designed to reverse their trajectories. (JEL
C92, D50)
Abstract
					We show that current differences in trust levels within Africa can be traced back to the transatlantic and Indian Ocean slave trades. Combining contemporary individual-level survey data with historical data on slave shipments by ethnic group, we find that individuals whose ancestors were heavily raided during the slave trade are less trusting today. Evidence from a variety of identification strategies
suggests that the relationship is causal. Examining causal mechanisms,
we show that most of the impact of the slave trade is through factors that are internal to the individual, such as cultural norms, beliefs, and values. (JEL J15, N57, Z13)
Abstract
					This paper compares electoral outcomes of 1999 parliamentary elections in Russia among geographical areas with differential access to the only national TV channel independent from the government. It was available to three-quarters of Russia's population and its signal availability was idiosyncratic, conditional on observables. Independent TV decreased aggregate vote for the government party
by 8.9 percentage points, increased the combined vote for major opposition parties by 6.3 percentage points, and decreased turnout by 3.8 percentage points. The probability of voting for opposition parties increased for individuals who watched independent TV even controlling for voting intentions measured one month before elections.
(JEL D72, L82, P26)
Abstract
					The French Revolution had a momentous impact on neighboring countries. It removed the legal and economic barriers protecting oligarchies, established the principle of equality before the law, and prepared economies for the new industrial opportunities of the second half of the 19th century. We present within-Germany evidence on the long-run implications of these institutional reforms. Occupied areas appear to have experienced more rapid urbanization growth, especially after 1850. A two-stage least squares strategy provides evidence consistent with the hypothesis that the reforms instigated by the French had a positive impact on growth. (JEL: N13, N43, O47)
Abstract
					This paper investigates the relationship between relative earnings and giving in a two-stage, real-effort experiment. In the first stage, four players compete in a tournament that determines their earnings. In the second stage, they decide whether to make a transfer to one or more of their group members. Our main finding is that those ranked first are significantly less likely to give than those ranked second. This difference disappears if individuals learn about the second stage after earning their income or if earnings are randomly determined. This
suggests that our main finding is driven by selection based on other-regarding preferences. (JEL: D64, J31)
Abstract
					This paper estimates the technological progress that has occurred since 1980 in the automobile industry and the trade-offs faced when choosing between fuel economy, weight, and engine power characteristics. The results suggest that if weight, horsepower, and torque were held at their 1980 levels, fuel economy could have increased by nearly 60 percent from 1980 to 2006. Once technological progress is considered, meeting the CAFE standards adopted in 2007 will require halting the trend in weight and engine power characteristics, but little more. In contrast, the standards recently announced by the new administration, while attainable, require nontrivial "downsizing." (JEL: L50, L60)
Abstract
					Credit constraints linking debt to market-determined prices embody a systemic credit externality that drives a wedge between competitive and constrained socially optimal equilibria, inducing private agents to overborrow. This externality arises because private agents fail to internalize the financial amplification effects of carrying a large amount of debt when credit constraints bind. We conduct a quantitative analysis of this externality in a two-sector dynamic stochastic general equilibrium (DSGE) model of a small open economy calibrated to emerging markets. Raising the cost of borrowing during tranquil times restores constrained efficiency and significantly reduces the incidence and severity of financial crises. (JEL: E13, E32, E44, F41, G01)
Abstract
					One of the most robust findings in experimental economics is that individuals in one-shot ultimatum games reject unfair offers. Puzzlingly, rejections have been found robust to substantial increases in stakes. By using a novel experimental design that elicits frequent low offers and uses much larger stakes than in the literature, we are able to examine stakes' effects over ranges of data that are heretofore unexplored. Our main result is that proportionally equivalent offers are less likely to be rejected with high stakes. In fact, our paper is the first to present evidence that as stakes increase, rejection rates approach zero. (JEL: C72, C78, C91)
Abstract
					Counter to extant stylized facts, using newly available data on country allocations in US investors' foreign equity portfolios we find that (i) US investors do not exhibit returns-chasing behavior, but, consistent with partial portfolio rebalancing, tend to sell past winners; and (ii) US investors increase portfolio weights on a country's equity market just prior to its strong performance, behavior inconsistent with an informational disadvantage. Over the past two decades, US investors' foreign equity portfolios outperformed a value-weighted foreign benchmark by 160 basis points per year. (JEL: C58, G11, G15)
Abstract
					Lustig and Verdelhan (2007) argue that the excess returns to borrowing US dollars and lending in foreign currency "compensate US investors for taking on more US consumption growth risk," yet the stochastic discount factor corresponding to their benchmark model is approximately uncorrelated with the returns they study. Hence, one cannot reject the null hypothesis that their model explains none of the cross sectional variation of the expected returns. Given this finding, and other evidence, I argue that the forward premium puzzle remains a puzzle. (JEL: C58, E21, F31, G11, G12)
Abstract
					The consumption growth beta of an investment strategy that goes long in high interest rate currencies and short in low interest rate currencies is large and significant. Consumption risk price differs significantly from zero, even after accounting for the sampling uncertainty introduced by the estimation of the consumption betas. The constant in the regression of average returns on consumption betas is not significant. Additionally, this investment strategy's consumption and market betas increase during recessions and times of crisis, when risk prices are high, implying that the unconditional betas understate its riskiness. (JEL: C58, E21, F31, G11, G12)
Abstract
					This paper introduces endogenous and directed technical change in a growth model with environmental constraints. The final good is produced from "dirty" and "clean" inputs. We show that: (i) when inputs are sufficiently substitutable, sustainable growth can be achieved with temporary taxes/subsidies that redirect innovation toward clean inputs; (ii) optimal policy involves both "carbon taxes" and research subsidies, avoiding excessive use of carbon taxes; (iii) delay in intervention is costly, as it later necessitates a longer transition phase with slow growth; and (iv) use of an exhaustible resource in dirty input
production helps the switch to clean innovation under laissez-faire. (JEL O33, O44, Q30, Q54, Q56, Q58)
Abstract
					US productivity growth accelerated after 1995 (unlike Europe's), particularly in sectors that intensively use information technologies
(IT). Using two new micro panel datasets we show that US multinationals
operating in Europe also experienced a "productivity miracle." US multinationals obtained higher productivity from IT than non-US multinationals, particularly in the same sectors responsible for the US productivity acceleration. Furthermore, establishments taken over by US multinationals (but not by non-US multinationals) increased the productivity of their IT. Combining pan-European firm-level IT data with our management practices survey, we find
that the US IT related productivity advantage is primarily due to its tougher "people management" practices. (JEL D24, E23, F23, M10, M16, O30)
Abstract
					We estimate an equilibrium model of decision making in the US Supreme Court that takes into account both private information and ideological differences between justices. We measure the value
of information in the court by the probability that a justice votes differently from how she would have voted without case-specific information. Our results suggest a sizable value of information: in 44 percent of cases, justices' initial leanings are changed by their personal assessments of the case. Our results also confirm the increased politicization of the Supreme Court in the last quarter century. Counterfactual simulations provide implications for institutional design. (JEL D72, D82, D83, K10)
Abstract
					We document the cyclical properties of US firms' financial flows and show that equity payout is procyclical and debt payout is countercyclical. We then develop a model with debt and equity financing to explore how the dynamics of real and financial variables are affected by "financial shocks." We find that financial shocks contributed significantly to the observed dynamics of real and financial variables. The recent events in the financial sector show up as a tightening of firms' financing conditions which contributed to the 2008-2009 recession. The downturns in 1990-1991 and 2001 were also influenced by changes in credit conditions. (JEL E23, E32, E44, G01, G32)
Abstract
					This study estimates the effects of means-tested housing programs on labor supply using data from a randomized housing voucher wait-list lottery in Chicago. Economic theory is ambiguous about the expected sign of any labor supply response. We find that among working-age, able-bodied adults, housing voucher use reduces labor force participation by around 4 percentage points (6 percent) and quarterly earnings by $329 (10 percent), and increases Temporary Assistance for Needy Families program participation by around 2 percentage points (15 percent). We find no evidence that the housing-specific mechanisms hypothesized to promote work, such as neighborhood quality or residential stability, are important empirically. (JEL I38, J22, R23, R38)
Abstract
					Voluntary Standard Setting Organizations (SSOs) use a consensus process to create new compatibility standards. Practitioners have suggested that SSOs are increasingly politicized and perhaps incapable of producing timely standards. This article develops a simple model of standard setting committees and tests its predictions using data from the Internet Engineering Task Force, an SSO that produces many of the standards used to run the Internet. The results show that
an observed slowdown in standards production between 1993 and 2003 can be linked to distributional conflicts created by the rapid commercialization of the Internet. (JEL C78, L15, L86)
Abstract
					We study prisoners' dilemmas played in continuous time with flow payoffs accumulated over 60 seconds. In most cases, the median rate of mutual cooperation is about 90 percent. Control sessions with repeated matchings over eight subperiods achieve less than half as much cooperation, and cooperation rates approach zero in one-shot sessions. In follow-up sessions with a variable number of subperiods, cooperation rates increase nearly linearly as the grid size decreases, and, with one-second subperiods, they approach continuous levels. Our data support a strand of theory that explains how capacity to respond rapidly stabilizes cooperation and destabilizes defection in the prisoner's dilemma. (JEL C72, C78, C91)
Abstract
					The article develops a new theory of pricing to market driven by dynamic frictions of building market shares. Our key innovation is a capital theoretic model of marketing in which relations with customers are valuable. We discipline the introduced friction using data on differences between short-run and long-run price elasticity of international
trade flows. We show that the model accounts for several pricing "puzzles" of international macroeconomics. (JEL E13, F14, F31, F41, F44, M31)
Abstract
					Compulsory licensing allows firms in developing countries to produce foreign-owned inventions without the consent of foreign patent owners. This paper uses an exogenous event of compulsory licensing after World War I under the Trading with the Enemy Act to examine the effects of compulsory licensing on domestic invention. Difference-in-differences analyses of nearly 130,000 chemical inventions suggest that compulsory licensing increased domestic invention by 20 percent. (JEL D45, L24, N42, O31, O34)
Abstract
					We propose a method that enables one to test efficient risk sharing even when households have different risk preferences. The method is composed of three tests. The first one determines whether in the data households have homogeneous risk preferences. The second and third tests evaluate efficient risk sharing when the hypothesis of homogeneous risk preferences is rejected. We use this method to test efficient risk sharing in rural India. Using the first test, we strongly reject the hypothesis of identical risk preferences. Using the second and third tests, we reject efficiency at the village but not at the caste level. (JEL D12, D86, G22, O12, O18, R23, Z13)
Abstract
					We develop a novel computerized real effort task, based on moving sliders across a screen, to test experimentally whether agents are disappointment averse when they compete in a real effort sequential-move tournament. We predict that a disappointment averse agent, who is loss averse around her endogenous choice-acclimating expectations-based reference point, responds negatively to her rival's effort. We find significant evidence for this discouragement effect, and use the Method of Simulated Moments to estimate the strength of disappointment aversion on average and the heterogeneity in disappointment aversion across the population. (JEL C91, D12, D81, D84)
Abstract
					Average living standards are converging among developing countries and faster growing economies see more progress against poverty. Yet we do not find poverty convergence; countries starting with higher poverty rates do not see higher proportionate rates of poverty reduction. The paper tries to explain why. Analysis of a new dataset suggests that, at given mean consumption, high initial poverty has an adverse effect on
consumption growth and also makes growth less poverty-reducing. Thus, for many poor countries, the growth advantage of starting out with a low mean is lost due to a high incidence of poverty. (JEL D63, I31, I32, O15)
Abstract
					Can government policies that increase the monopoly power of firms and the militancy of unions increase output? This paper shows that the answer is yes under certain "emergency" conditions. These emergency conditions—zero interest rates and deflation—were satisfied during the Great Depression in the United States. The New Deal, which facilitated monopolies and union militancy, was therefore expansionary in
the model presented. This conclusion is contrary to a large previous literature. The main reason for this divergence is that this paper incorporates rigid prices and the zero bound on the short-term interest rate.
(JEL E23, E32, E52, E62, J51, N12, N42)
Abstract
					How did the diffusion of the internet affect regional wage inequality? We examine the relationship between business investment in advanced internet technology and local variation in US wage growth between 1995 and 2000. We identify a puzzle. The internet
is widespread, but the economic payoffs are not. Advanced internet technology is only associated with substantial wage growth in the 6 percent of counties that were already highly wealthy, educated, and populated and had IT-intensive industry. Advanced internet and wage growth appear unrelated elsewhere. Overall, advanced internet explains over half the difference in wage growth between already well-off counties and all others. (JEL J31, L86, O33, R11, R23)
Abstract
					We study a natural experiment in the Indian mutual funds sector that created a 22-month period in which closed-end funds were allowed to charge an arguably shrouded fee, whereas open-end funds were forced to charge entry loads. Forty-five new closed-end funds were started during this period, collecting $7.6 billion US, whereas only two closed-end funds were started in the 66 months prior to this period, collecting $42 billion US, and no closed-end funds were started in the 20 months after this period. We estimate that investors lost and fund firms gained approximately $350 million US due to this shrouding. (JEL D14, G23, G28, O16)
Abstract
					Fraas and Lutter raise two important points in their comment on Muller and Mendelsohn (2009): How to design policies for sources that yield negative marginal damages? How does statistical uncertainty in the marginal damages affect the trading ratios across emitters? We address both issues in this response. (JEL H53, Q53, Q58)
Abstract
					We measure how the bundling of television channels affects short-run
welfare. We estimate an industry model of viewership, demand, pricing, bundling, and input-market bargaining using data on ratings, purchases, prices, bundles, and input costs. We conduct simulations of à la carte policies that require distributors to offer individual channels for sale to consumers. We estimate that negotiated input costs rise by 103.0 percent under à la carte. These higher input costs offset consumer benefits from purchasing individual channels. Mean consumer and total surplus change by an estimated — 5.4 to 0.2 percent and — 1.7 to 6.0 percent, respectively. (JEL D12, L11, L51, L82, M31)
Abstract
					Bundling is at the forefront of many policy debates as new technologies
allow firms to implement more complex bundling arrangements. Realistic analyses of bundling—particularly between suppliers and retailers—require detailed data on both supply arrangements and consumer demand. We analyze firms' use of bundling as a vertical restraint (known as full-line forcing) using extensive supply and demand data from the video rental industry. Our model captures key details of the market that determine firms' contractual choices, and sheds light on the implications of these decisions. The empirical approach provides a model for how to analyze bundling when detailed data are available. (JEL D86, L14, L81, L82)
Abstract
					We study the experimental play of the repeated prisoner's dilemma when intended actions are implemented with noise. In treatments where cooperation is an equilibrium, subjects cooperate substantially more than in treatments without cooperative equilibria. In all
settings there was considerable strategic diversity, indicating that subjects had not fully learned the distribution of play. Furthermore, cooperative strategies yielded higher payoffs than uncooperative strategies in the treatments with cooperative equilibria. In these treatments successful strategies were "lenient" in not retaliating for the first defection, and many were "forgiving" in trying to return to cooperation after inflicting a punishment. (JEL C72, C73, D81)
Abstract
					This article exploits data on the pattern of violence across regions and over time to estimate the impact of the peace process in Northern Ireland on house prices. After establishing a negative correlation between killings and house prices, we estimate the parameters of a
Markov switching model with conflict and peace as latent states. We use the model to estimate the size of the peace dividend as captured in house price changes. (JEL D74, R23, R31)
Abstract
					High-performance work systems give workers more discretion, thereby increasing effort productivity but also shirking opportunities. We show experimentally that screening for work attitude and labor market competition are causal determinants of the viability of high-performance work systems, and we identify the complementarities between discretion, rent-sharing, and screening that render them profitable. Two fundamentally distinct job designs emerge endogenously in our experiments: "bad" jobs with low discretion, low wages, and little rent-sharing, and "good" jobs with high discretion, high wages, and substantial rent-sharing. Good jobs are profitable only if employees can be screened, and labor market competition fosters their dissemination. (JEL D12, D82, J24, J31, J41, M12, M54)
Abstract
					To explore why bubbles frequently emerge in the experimental asset market model of Smith, Suchanek, and Williams (1988), we vary the fundamental value process (constant or declining) and the cash-to-asset value ratio (constant or increasing). We observe high mispricing
in treatments with a declining fundamental value, while overvaluation emerges when coupled with an increasing C/A ratio. A questionnaire reveals that the declining fundamental value process
confuses subjects, as they expect the fundamental value to stay constant. Running the experiment with a different context ("stocks of a depletable gold mine" instead of "stocks") significantly reduces mispricing and overvaluation as it reduces confusion. (JEL C91, D14, G11, G12)
Abstract
					This paper develops a model of industry dynamics where firms compete to acquire customers over time by disseminating information about themselves in the presence of random shocks to their efficiency. The properties of the model's stationary equilibrium are related to
empirical regularities on firm and industry dynamics. As an application of the model, the effects of a decline in the cost of information dissemination on firm and industry dynamics are explored. (JEL D11, D83, L11, L81, M37)
Abstract
					We use a series of field experiments in rural Burundi to examine the impact of exposure to conflict on social, risk, and time preferences. We find that conflict affects behavior: individuals exposed to violence display more altruistic behavior towards their neighbors, are more risk-seeking, and have higher discount rates. Large adverse shocks can thus alter savings and investments decisions, and potentially have long-run consequences—even if the shocks themselves are temporary. (JEL C93, D12, D74, 012, 017, 018)
Abstract
					An advantage of cap-and-trade programs over more prescriptive environmental regulation is that compliance flexibility and cost effectiveness can make more stringent emissions reductions politically feasible. However, when markets (versus regulators) determine where emissions occur, it becomes more difficult to assure that mandated emissions reductions are equitably achieved. We investigate these issues in the context of Southern California's RECLAIM program
by matching facilities in RECLAIM with similar California facilities also in nonattainment areas. Our results indicate that average emissions fell 20 percent at RECLAIM facilities relative to our counterfactual. Furthermore, observed changes in emissions do not vary significantly with neighborhood demographic characteristics. (JEL H23, L51, Q53, Q58)
Abstract
					We develop a statistical framework to use satellite data on night lights to augment official income growth measures. For countries with poor national income accounts, the optimal estimate of growth is a composite with roughly equal weights on conventionally measured growth and growth predicted from lights. Our estimates differ from official data by up to three percentage points annually. Using lights, empirical analyses of growth need no longer use countries as the unit of analysis; we can measure growth for sub- and supranational regions. We show, for example, that coastal areas
in sub-Saharan Africa are growing slower than the hinterland. (JEL E01, E23, O11, 047, 057)
Abstract
					The financial crisis has refocused attention on money and credit fluctuations, financial crises, and policy responses. We study the behavior of money, credit, and macroeconomic indicators over the long run based on a new historical dataset for 14 countries over the years 1870-2008. Total credit has increased strongly relative to output and money in the second half of the twentieth century. Monetary policy responses to financial crises have also been more aggressive, but the output costs of crises have remained large. Credit growth is a powerful predictor of financial crises, suggesting that policymakers ignore credit at their peril. (JEL E32, E44, E52, G01, N10, N20)
Abstract
					The joint dynamics of US net output, consumption, and (the market value of) foreign assets and liabilities, characterized empirically following Lettau and Ludvigson (2004), is shown to be consistent with current account theory. US consumption is virtually insulated from transitory shocks, while these contribute to variations in net output and gross foreign positions—consumption is smoothed against temporary fluctuations in returns. A single permanent shock—naturally interpreted as a supply shock—raises consumption swiftly while causing net output to adjust gradually. This leads to persistent, procyclical external deficits, while moving gross assets and liabilities in the same direction. (JEL E21, E23, F32, F34)
Abstract
					Purchasing power-adjusted incomes applied in cross-country comparisons are measured with bias. This paper estimates the purchasing power parity (PPP) bias in Penn World Table incomes and provides corrected incomes. The bias is substantial and systematic: the poorer a country, the more its income tends to be overestimated. Consequently, international income inequality is substantially underestimated. The methodological contribution is to exploit the analogies between PPP bias and the bias in consumer price index (CPI) numbers. The PPP bias and subsequent corrected incomes are measured by estimating Engel curves for food, an established method of measuring CPI bias. (JEL C43, D31, E31, O11, O12)
Abstract
					We use experimental measures of time discounting and risk aversion for villagers in south India to highlight behavioral features of microcredit, a financial tool designed to reduce poverty and fix credit market imperfections. The evidence suggests that microcredit contracts may do more than reduce moral hazard and adverse selection by imposing new forms of discipline on borrowers. We find that, conditional on borrowing from any source, women with present-biased preferences are more likely than others to borrow through microcredit institutions. Another particular contribution of microcredit may thus be to provide helpful structure for borrowers seeking self-discipline. (JEL G21, I38, O15, O16, O18)
Abstract
					We examine whether and to what extent consolidation in the US health insurance industry has contributed to higher employer-sponsored insurance premiums. We exploit the differential impact across local markets of a national merger of two insurers to identify the causal effect of concentration on premiums. Using data for large groups, we estimate premiums in average markets were approximately seven percentage points higher by 2007 due to increases in local concentration from 1998-2006. We also find evidence consolidation facilitates the exercise of monopsonistic power vis-Ã -vis physicians, leading to reductions in their absolute employment and earnings relative to other healthcare workers. (JEL G22, I13)
Abstract
					We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were insured prior to the reform. We find that counties with larger increases in insurance coverage over the reform period face the smallest increase in average hospital costs for the insured population, consistent with adverse selection into insurance before the reform. Additional results, incorporating cross-state variation and data on health measures, provide further evidence for adverse selection.
Abstract
					Using microdata from the 2000 Census, we analyze how the employment rates of foreign-born and US-born men vary with education. After a period of adjustment during the first few years upon arrival, the overall employment rate of immigrant men quickly approaches that of US natives. Among those with the lowest education levels, immigrants exhibit substantially higher rates of employment than comparable natives. This pattern is consistent with a simple theoretical model of migrant selectivity that jointly considers a potential migrant's decisions regarding where to locate and whether to work.
Abstract
					Research on intrahousehold time allocations has assumed that housework is a necessary evil and focused exclusively on the causal role of opportunity costs. In fact, agents likely act to maximize happiness, and preferences regarding even mundane household chores differ considerably. I use information from the 2000-01 UK Time Use Survey to examine time spent on laundry, ironing, cleaning, and food shopping.  Joint multivariate analysis of his and her time on weekend and weekday days as well as maid service reveals that her opportunity cost of time matters more than his, but that his preferences play a greater role than hers.
Abstract
					This paper reports an experiment in 640 Indonesian villages on three approaches to target the poor: proxy means tests (PMT), where assets are used to predict consumption; community targeting, where villagers rank everyone from richest to poorest; and a hybrid. Defining
poverty based on PPP$2 per capita consumption, community targeting and the hybrid perform somewhat worse in identifying the poor than PMT, though not by enough to significantly affect poverty outcomes for a typical program. Elite capture does not explain these
results. Instead, communities appear to apply a different concept of poverty. Consistent with this finding, community targeting results in higher satisfaction. (JEL C93, I32, I38, O12, O15, O18, R23)
Abstract
					We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in India. In treatment schools, teachers' attendance was monitored daily using cameras, and their salaries were made a nonlinear function of attendance. Teacher absenteeism in the treatment group fell by 21 percentage points relative to the control group, and the children's test scores increased by 0.17 standard deviations. We estimate a structural dynamic labor supply model and find that teachers respond strongly to financial incentives. Our model is used to compute cost-minimizing compensation policies. (JEL I21, J31, J45, O15)
Abstract
					We examine empirically the impact of ethnic divisions on conflict, by using a specification based on Esteban and Ray (2011). That theory links conflict intensity to three indices of ethnic distribution: polarization, fractionalization, and the Gini-Greenberg index. The empirical
analysis verifies that these distributional measures are significant correlates of conflict. These effects persist as we introduce country-specific
measures of group cohesion and of the importance of public goods, and combine them with the distributional measures exactly as described by the theory. (JEL D63, D74, J15, O15, O17)
Abstract
					Innovations to consumer confidence convey incremental information about economic activity far into the future. Does this reflect a causal effect of animal spirits on economic activity, or news about exogenous future productivity received by consumers? Using indirect inference, we study the impulse responses to confidence innovations in conjunction with an appropriately augmented New Keynesian
model. While news, animal spirits, and pure noise all contribute to confidence innovations, the relationship between confidence and subsequent activity is almost entirely reflective of the news component. Confidence innovations are well characterized as noisy measures
of changes in expected productivity growth over a relatively long horizon. (JEL D12, D83, D84, E12)
Abstract
					That the employment rate appears to respond to changes in trend growth is an enduring macroeconomic puzzle. This paper shows that, in the presence of a return to experience, a slowdown in productivity growth raises reservation wages, thereby lowering aggregate
employment. The paper develops new evidence that shows this mechanism is important for explaining the growth-employment puzzle. The combined effects of changes in aggregate wage growth and returns to experience account for all the increase from 1968 to 2006 in nonemployment among low-skilled men and for approximately half the increase in nonemployment among all men. (JEL E24, J24, J31)
Abstract
					We use unique depositor-level data for a bank that faced a run to understand the factors that affect depositor behavior. We find uninsured depositors are most likely to run. Deposit insurance helps, but is only partially effective. Bank-depositor relationships mitigate runs, suggesting that relationship with depositors help banks reduce fragility. In addition, we also find that social networks matter. Finally, we find long-term effects of a solvent bank run in that depositors
who run do not return back to the bank. Our results help understand the underlying dynamics of bank runs and hold important policy implications. (JEL D12, G21, O16, Z13)
Abstract
					The 1930s American Dust Bowl was an environmental catastrophe that greatly eroded sections of the Plains. The Dust Bowl is estimated to have immediately, substantially, and persistently reduced agricultural land values and revenues in more-eroded counties relative to
less-eroded counties. During the Depression and through at least the 1950s, there was limited relative adjustment of farmland away from activities that became relatively less productive in more-eroded areas. Agricultural adjustments recovered less than 25 percent of the initial difference in agricultural costs for more-eroded counties. The economy adjusted predominantly through large relative population declines in more-eroded counties, both during the 1930s and through the 1950s. (JEL N32, N52, Q15, Q18, Q54)
Abstract
					This study explores the determinants of ethnolinguistic diversity within as well as across countries, shedding light on its geographic origins. The empirical analysis conducted across countries, virtual countries, and pairs of contiguous regions establishes that geographic variability, captured by variation in regional land quality
and elevation, is a fundamental determinant of contemporary linguistic
diversity. The findings are consistent with the proposed hypothesis that differences in land endowments gave rise to location-specific human capital, leading to the formation of localized ethnicities. (JEL J15, J24, Z13)
Abstract
					Liberalization of the European automobile distribution system in
2002 limits the ability of manufacturers to impose vertical restraints, leading to a substantial increase in competitive pressure among
dealers. We estimate an equilibrium model of profit maximization to evaluate how dealers change their innovation adoption strategies
following the elimination of exclusive territories. Using French data we evaluate the existence of complementarities between the adoption
of software applications and the scale of production. Firms view these innovations as substitutes and concentrate their effort in one type of software as they expand their scale of production. Results are robust to the existence of unobserved heterogeneity. (JEL D24, K21, L21, L22, L62, O32)
Abstract
					Using matched data on product-level prices and the producing firm's unit labor cost, we find a moderate pass-through of current idiosyncratic marginal-cost changes. Also, the
response does not vary across firms facing very different idiosyncratic shock variances, but identical aggregate conditions. These results do not fit the predictions of Mackowiak
and Wiederholt (2009). Neither do firms react strongly to predictable marginal-cost changes, as expected from Mankiw and Reis (2002). We find that firms consider both current and expected future marginal cost when setting prices. This points toward impediments to continuous price adjustments as a key driver of monetary non-neutrality.
Abstract
					We present evidence on the term structure of the equity premium. We recover prices of dividend strips, which are short-term assets that pay dividends on the stock index every
period up to period T and nothing thereafter. It is short-term relative to the index because the index pays dividends in perpetuity. We find that expected returns, Sharpe ratios, and
volatilities on short-term assets are higher than on the index, while their CAPM betas are below one. Short-term assets are more volatile than their realizations, leading to excess
volatility and return predictability. Our findings are inconsistent with many leading theories.
Abstract
					Why did Finland experience, in 1991-1993, the deepest recession observed in an industrialized country since the 1930s? Using a dynamic general equilibrium model with
labor frictions, we argue that the collapse of the Soviet-Finnish trade was a major contributor to the contraction. Finland's experience mirrors that of the transition
economies of Eastern Europe, which suffered similar deep recessions coupled with institutional changes. By focusing on the Finnish case, we isolate the effects of the Finnish-Soviet trade collapse and shed new light on the sources of recessions in transition economies.
Abstract
					What determines reciprocity in employment relations? We conducted a controlled field experiment to measure the extent to which monetary and nonmonetary gifts affect workers' performance. We find that nonmonetary gifts have a much stronger impact than
monetary gifts of equivalent value. We also observe that when workers are offered the choice, they prefer receiving money, but reciprocate as if they received a nonmonetary gift. This result is consistent with the common saying, "it's the thought that counts." We underline this point by showing that monetary gifts can effectively trigger reciprocity if the employer invests more time and effort into the gift's presentation.
Abstract
					The household's labor margin has a substantial effect on risk aversion, and hence asset prices, in dynamic equilibrium models even when utility is additively separable between consumption and labor. This paper derives simple, closed-form expressions for risk aversion that take into account the household's labor margin. Ignoring this margin can dramatically overstate the household's true aversion to risk. Risk premia on assets priced
with the stochastic discount factor increase essentially linearly with risk aversion, so measuring risk aversion correctly is crucial for asset pricing in the model.
Abstract
					Using micro-level data, we construct a credit spread index with considerable predictive power for future economic activity. We decompose the credit spread into a component that captures firm-specific information on expected defaults and a residual component—the excess bond premium. Shocks to the excess bond premium that are orthogonal to the
current state of the economy lead to declines in economic activity and asset prices. An increase in the excess bond premium appears to reflect a reduction in the risk-bearing capacity of the financial sector, which induces a contraction in the supply of credit and a deterioration in macroeconomic conditions.
Abstract
					This paper proposes a search-and-matching model of unemployment in which jobs are rationed: the labor market does not clear in the absence of matching frictions. This job shortage arises in an economic equilibrium from the combination of some wage rigidity
and diminishing marginal returns to labor. In recessions, job rationing is acute, driving the rise in unemployment, whereas matching frictions contribute little to unemployment. Intuitively in recessions, jobs are lacking, the labor market is slack, and recruiting is easy
and inexpensive, so matching frictions do not matter much. In a calibrated model, cyclical fluctuations in the composition of unemployment are large.
Abstract
					This paper re-examines Adda and Cornaglia's (2006) evidence on the compensatory behavior of smokers who, in face of higher taxes, are found to reduce their consumption of cigarettes while maintaining their cotinine—a biomarker for nicotine—levels constant.
This comment examines the robustness of the empirical findings in Adda and Cornaglia (2006) using: appropriate clustered standard errors, a larger sample from the same years and survey as the data in Adda and Cornaglia (2006), cigarette-prices instead of and in addition to cigarette-taxes, and sampling weights. The empirical findings of Adda and Cornaglia (2006) are not robust. Further, little systematic evidence of compensatory
behavior is found among subsamples of smokers.
Abstract
					We study the effects of network externalities within a protocol for
matching faculty to offices in a new building. Using web and survey data on faculty's attributes and choices, we identify the different layers of the social network: institutional affiliation, coauthorships, and friendships. We quantify the effects of network externalities on choices and outcomes, disentangle the layers of the networks, and quantify their relative influence. Finally, we assess the protocol used from a welfare perspective. Our study suggests the importance and feasibility of accounting for network externalities in assignment problems and evaluates techniques that can be employed to this end. (JEL C78, C93, D62, D85, Z13)
Abstract
					During the age of mass migration (1850-1913), one of the largest migration episodes in history, the United States maintained a nearly open border, allowing the study of migrant decisions unhindered by entry restrictions. We estimate the return to migration while accounting for migrant selection by comparing Norway-to-US migrants with their brothers who stayed in Norway in the late nineteenth century. We also compare fathers of migrants and nonmigrants by wealth and
occupation. We find that the return to migration was relatively low (70 percent) and that migrants from urban areas were negatively selected from the sending population. (JEL J11, J61, N31, N33)
Abstract
					We propose a new strategy for a pervasive problem in the hedonics literature: recovering hedonic prices in the presence of time-varying correlated unobservables. Our approach relies on an assumption about home buyer rationality, under which prior sales prices can be used to control for time-varying unobservable attributes of the house or neighborhood. Using housing transactions data from California's Bay Area between 1990 and 2006, we apply our estimator to recover
marginal willingness to pay for reductions in three of the EPA's "criteria" air pollutants. Our findings suggest that ignoring bias from
time-varying correlated unobservables considerably understates the benefits of a pollution reduction policy. (JEL D12, D84, Q53, Q58, R21)
Abstract
					Using an instrumental variables strategy, we estimate the causal effect of income on children's math and reading achievement. Our identification derives from the large, nonlinear changes in the Earned Income Tax Credit. The largest of these changes increased family income by as much as 20 percent, or approximately $2,100,
between 1993 and 1997. Our baseline estimates imply that a $1,000 increase in income raises combined math and reading test scores by 6 percent of a standard deviation in the short run. Test gains are larger for children from disadvantaged families and robust to a variety of alternative specifications. (JEL H24, H31, I21, I38, J13)
Abstract
					Organ donations from deceased donors provide the majority of transplanted organs in the United States, and one deceased donor can save numerous lives by providing multiple organs. Nevertheless, most Americans are not registered organ donors despite the relative ease of becoming one. We study in the laboratory an experimental game modeled on the decision to register as an organ donor and investigate how changes in the management of organ waiting lists might impact donations. We find that an organ allocation policy giving priority on waiting lists to those who previously registered as donors has a significant positive impact on registration. (JEL C91, D64, I11)
Abstract
					In 2005, Hurricanes Katrina and Rita forced many children to relocate across the Southeast. While schools quickly enrolled evacuees, families in receiving schools worried about the impacts on incumbent students. We find no effect, on average, of the inflow of evacuees on achievement in Houston. In Louisiana we find little impact on
average and we reject linear-in-means models. Moreover, we find that student achievement improves with high achieving peers and worsens with low achieving peers. Finally, an increase in the inflow of evacuees raised incumbent absenteeism and disciplinary problems in Houston's secondary schools. (JEL I21, Q54)
Abstract
					Would people choose what they think would maximize their subjective well-being (SWB)? We present survey respondents with hypothetical scenarios and elicit both choice and predicted SWB rankings of two alternatives. While choice and predicted SWB rankings usually coincide in our data, we find systematic reversals. We identify
factors—such as predicted sense of purpose, control over one's life,
family happiness, and social status—that help explain hypothetical choice controlling for predicted SWB. We explore how our findings vary by SWB measure and by scenario. Our results have implications
regarding the use of SWB survey questions as a proxy for utility. (JEL
D03, I31)
Abstract
					This paper provides a new theory of international capital flows. In a framework that integrates factor-proportions-based trade and financial
capital flows, a novel force emerges: capital tends to flow toward countries that become more specialized in capital-intensive industries. This "composition" effect competes with the standard force that channels capital toward the location where it is scarcer. If the composition effect dominates, capital flows away from the country hit by a positive labor force/productivity shock—a flow "reversal." Extended to a quantitative framework, the model generates sizable current account imbalances between developing and developed countries
broadly consistent with the data. (JEL F14, F21, F32, F41, L16, O19)
Abstract
					Can heuristic information processing affect important product markets? Analyzing over 22 million wholesale used-car transactions, we find evidence of left-digit bias in the processing of odometer values, whereby individuals focus on the number's leftmost digits. The bias leads to discontinuous drops in sale prices at 10,000-mile odometer
thresholds, along with smaller drops at 1,000-mile thresholds. These findings reveal that information-processing heuristics matter even in markets with large stakes and easily observed information. We model left-digit bias in an inattention framework and structurally estimate the inattention parameter. Empirical patterns suggest the results are driven by final customers rather than professional agents. (JEL D12, D44, D83, L81)
Abstract
					We use theory and field data to study the draft mechanism used to allocate courses at Harvard Business School. We show that the draft is manipulable in theory, manipulated in practice, and that these manipulations cause significant welfare loss. Nevertheless, we find that welfare is higher than under its widely studied strategyproof
alternative. We identify a new link between fairness and welfare that explains why the draft performs well despite the costs of strategic behavior, and then design a new draft that reduces these costs. We draw several broader lessons for market design, regarding Pareto efficiency, fairness, and strategyproofness. (JEL D63, D82, I23)
Abstract
					The empirical evidence on rational inattention lags the theoretical developments: micro evidence on one of the most immediate consequences of observation costs—the infrequent observation of state variables—is not available in standard datasets. We contribute to filling the gap using new household surveys. To match these data we modify existing models, shifting the focus from nondurable to durable consumption. The model features both observation and transaction costs and implies a mixture of time-dependent and state-dependent rules. Numerical simulations explain the frequencies of trading and observation of the median investor with small observation costs and larger transaction costs. (JEL D12, D14, E21, G11)
Abstract
					We analyze the impact of monetary policy on the supply of bank credit. Monetary policy affects both loan supply and demand, thus making identification a steep challenge. We therefore analyze a novel, supervisory dataset with loan applications from Spain. Accounting for time-varying firm heterogeneity in loan demand, we find that tighter monetary and worse economic conditions substantially reduce loan granting, especially from banks with lower capital or liquidity ratios; responding to applications for the same loan, weak banks are less likely to grant the loan. Finally, firms cannot offset the resultant credit restriction by applying to other banks. (JEL E32, E44, E52, G21, G32)
Abstract
					Is skill dispersion a source of comparative advantage? In this paper we use microdata from the International Adult Literacy Survey to show that the effect of skill dispersion on trade flows is quantitatively similar to that of the aggregate endowment of human capital. In particular we investigate, and find support for, the hypothesis that countries with a more dispersed skill distribution specialize in industries characterized by lower complementarity of workers' skills. The result is robust to the introduction of controls for alternative sources of comparative advantage, as well as to alternative measures of industry-level skill complementarity. (JEL F14, F16, J24, J31)
Abstract
					This paper analyzes the effect on performance and earnings of delegating the wage choice to employees. Our results show that such delegation significantly increases effort levels. Moreover, we observe a Pareto improvement, as the earnings of both employers and employees increase when employers delegate than when they do not. Interestingly, we also find that the employees' performance under delegation is higher than under nondelegation, even for similar wages. While there is strong evidence that behavior reflects strategic considerations, this result also holds for one-shot interactions. A possible nonstrategic motivation explaining the positive reaction to delegation is a sense of enhanced responsibility. (JEL J31, J33, J41)
Abstract
					What is the impact of real estate prices on corporate investment? In
the presence of financing frictions, firms use pledgeable assets as collateral to finance new projects. Through this collateral channel, shocks to the value of real estate can have a large impact on aggregate investment. To compute the sensitivity of investment to collateral value, we use local variations in real estate prices as shocks to the collateral value of firms that own real estate. Over the 1993-2007 period, the representative US corporation invests $0.06 out of each
$1 of collateral. (JEL D22, G31, R30)
Abstract
					In this paper, we develop a method to estimate markups using plant-level
production data. Our approach relies on cost-minimizing producers and the existence of at least one variable input of production. The suggested empirical framework relies on the estimation of a production function and provides estimates of plant-level markups without specifying how firms compete in the product market. We rely on our method to explore the relationship between markups and export behavior. We find that markups are estimated significantly higher when controlling for unobserved productivity; that exporters charge, on average, higher markups and that markups increase upon export entry. (JEL D22, D24, F14, L11, L60)
Abstract
					We study the long-run evolution of brand preferences, using new data on consumers' life histories and purchases of consumer packaged goods. Variation in where consumers have lived in the past allows us to isolate the causal effect of past experiences on current purchases, holding constant contemporaneous supply-side factors. We
show that brand preferences form endogenously, are highly persistent, and explain 40 percent of geographic variation in market shares. Counterfactuals suggest that brand preferences create large entry barriers and durable advantages for incumbent firms and can explain the persistence of early-mover advantage over long periods. (JEL D12, L11, M31, M37)
Abstract
					We document a negative correlation, at business cycle frequencies, between the net job creation rate of large employers and the level of aggregate unemployment that is much stronger than for small employers. The differential growth rate of employment between initially large and small employers has an unconditional correlation of -0.5 with the unemployment rate, and varies by about 5 percent over the business cycle. We exploit several datasets from the United States, Denmark, and France, both repeated cross sections and job flows with employer longitudinal information, spanning the last four decades and several business cycles. We discuss implications for theories of factor demand. (JEL D22, E23, E32, J23, L25)
Abstract
					This paper analyzes the role of specialized high-skilled labor in the disproportionate growth of the service sector. Empirically, the importance of skill-intensive services has risen during a period of increasing relative wages and quantities of high-skilled labor. We develop a theory in which demand shifts toward more skill-
intensive output as productivity rises, increasing the importance of market services relative to home production. Consistent with the data, the theory predicts a rising level of skill, skill premium, and relative price of services that is linked to this skill premium. (JEL J24, L80, L90)
Abstract
					We analyze the extent to which individuals' choices over five employer-provided insurance coverage decisions and one 401(k) investment decision exhibit systematic patterns, as would be implied by a general utility component of risk preferences. We provide evidence consistent with an important domain-general component that operates across all insurance choices. We find a considerably weaker relationship between one's insurance decisions and 401(k) asset allocation, although this relationship appears larger for more "financially sophisticated" individuals. Estimates from a stylized coverage choice model suggest that up to 30 percent of our sample makes choices that may be consistent across all 6 domains. (JEL D12, D14, D81, G22, J33)
Abstract
					Under Medicare Part D, senior citizens choose prescription drug insurance offered by numerous private insurers. We examine nonpoor enrollees- actions in 2006 and 2007 using panel data. Our sample reduced overspending by $298 on average, with gains by 81 percent of them. The greatest improvements were by those who overspent most in 2006 and by those who switched plans. Decisions to switch depended on individuals' overspending in 2006 and on individual-specific effects of changes in their current plans. The oldest consumers and those initiating medications for Alzheimer's disease improved by more than average, suggesting that real-world institutions help overcome cognitive limitations. (JEL D14, G22, H51, I13, I18)
Abstract
					We advance quantitative-theoretic models of sovereign debt by proving
the existence of a downward sloping equilibrium price function for long-term debt and implementing a novel method to accurately compute it. We show that incorporating long-term debt allows the model to match Argentina's average external debt-to-output ratio,
average spread on external debt, the standard deviation of spreads, and simultaneously improve upon the model's ability to account for Argentina's other cyclical facts. We also investigated the welfare properties of maturity length and showed that if the possibility of self-fulfilling rollover crises is taken into account, long-term debt is superior to short-term debt. (JEL E23, E32, F34, O11, O19)
Abstract
					I use bilateral import data to test for and quantify the importance of trade costs and asset market frictions in explaining the failure of perfect international consumption risk sharing. I find that while frictions in international asset markets significantly impede optimal consumption risk sharing between developed and developing countries
over the period 1970-2000, developed countries are close to optimal risk sharing with each other. Trade costs, in contrast, significantly impede risk sharing for all countries. (JEL E21, E44, F14, F41, G15)
Abstract
					Motivated by the evidence that risk premia are large and countercyclical,
this paper studies a tractable real business cycle model with a small risk of economic disaster, such as the Great Depression. An increase in disaster risk leads to a decline of employment, output, investment, stock prices, and interest rates, and an increase in the
expected return on risky assets. The model matches well data on quantities, asset prices, and particularly the relations between quantities and prices, suggesting that variation in aggregate risk plays a significant role in some business cycles. (JEL E13, E32, E44, G32)
Abstract
					Many business cycle models use a flat short-run Phillips curve, due to time-dependent pricing and strategic complementarities, to explain fluctuations in real output. But, in doing so, these models predict unrealistically high persistence and stability of US inflation in recent decades. We calculate "reset price inflation"—based on new prices chosen by the subsample of price changers—to dissect this discrepancy. We find that the models generate too much persistence and stability both in reset price inflation and in the way reset price inflation is converted into actual inflation. Our findings present a challenge to existing explanations for business cycles. (JEL E31, E52)
Abstract
					I examine physician agency in health care services in the context of the choice between brand-name and generic pharmaceuticals. I examine micro-panel data from Japan, where physicians can legally make profits by prescribing and dispensing drugs. The results indicate
that physicians often fail to internalize patient costs, explaining
why cheaper generics are infrequently adopted. Doctors respond to markup differentials between the two versions, indicating another agency problem. However, generics' markup advantages are shortlived, which limits their impact on increasing generic adoption.
Additionally, state dependence and heterogeneous doctor preferences
affected generics' adoption. Policy makers can target these factors to improve static efficiency. (JEL D82, I11, J44, L65)
Abstract
					Our paper examines whether the failure of unsophisticated investors to rebalance their portfolios can help to explain the countercyclical volatility of aggregate risk compensation in financial markets. To answer this question, we set up a model in which a large mass of investors do not rebalance their portfolio shares in response to aggregate shocks, while a smaller mass of active investors do. We find that intermittent rebalancers more than double the effect of aggregate shocks on the time variation in risk premia by forcing active traders to sell more shares in good times and buy more shares in bad times. (JEL D14, E32, G11, G12)
Abstract
					We implemented a randomized field experiment in Malawi examining borrower responses to being fingerprinted when applying for loans. This intervention improved the lender's ability to implement dynamic repayment incentives, allowing it to withhold future loans from past defaulters while rewarding good borrowers with better loan terms. As predicted by a simple model, fingerprinting led to substantially higher repayment rates for borrowers with the highest ex ante default risk, but had no effect for the rest of the borrowers. We provide unique evidence that this improvement in repayment rates is accompanied by behaviors consistent with less adverse selection and lower moral hazard. (JEL D14, D82, G21, O12, O16)
Abstract
					Using a large dataset on web browsing and purchasing behavior we test to what extent consumers are searching in accordance to various search models. We find that the benchmark model of sequential search with a known price distribution can be rejected based on recall patterns found in the data as well as the absence of dependence of search decisions on prices. Our findings suggest fixed sample size search provides a more accurate description of search behavior. We then utilize the fixed sample size search model to estimate demand elasticities of online bookstores in an environment where store preferences are heterogeneous. (JEL D12, D83, L81)
Abstract
					We study the effect of disclosing information on peers' salaries on workers' job satisfaction and job search intentions. A randomly chosen subset of University of California employees was informed about a new website listing the pay of University employees. All employees were then surveyed about their job satisfaction and job search intentions. Workers with salaries below the median for their pay unit and occupation report lower pay and job satisfaction and a significant increase in the likelihood of looking for a new job. Above-median earners are unaffected. Differences in pay rank matter more than differences in pay levels. (JEL I23, J28, J31, J64)
Abstract
					Acemoglu, Johnson, and Robinson's (2001) seminal article argues property-rights institutions powerfully affect national income, using estimated mortality rates of early European settlers to instrument capital expropriation risk. However, 36 of the 64 countries in the sample are assigned
mortality rates from other countries, often based on mistaken or conflicting evidence. Also, incomparable mortality rates from populations of laborers, bishops, and soldiers—often on campaign—are combined in a manner that favors the hypothesis. When these data issues are controlled for, the relationship between mortality and expropriation risk lacks robustness, and
instrumental-variable estimates become unreliable, often with infinite confidence intervals. (JEL D02, E23, F54, I12, N40, O43, P14)
Abstract
					Acemoglu, Johnson, and Robinson (2001) established that economic institutions today are correlated with expected mortality of European colonialists. David Albouy argues this relationship is not robust. He drops all data from Latin America and much of the data from
Africa, making up almost 60 percent of our sample, despite much information on the mortality of Europeans in those places during the colonial period. He also includes a "campaign" dummy that
is coded inconsistently; even modest corrections undermine his claims. We also show that limiting the effect of outliers strengthens our results, making them robust to even extreme versions of Albouy's critiques. (JEL D02, E23, F54, I12, N40, O43, P14)
Abstract
					Immediately following a minimum wage hike, household income
rises on average by about $250 per quarter and spending by roughly
$700 per quarter for households with minimum wage workers. Most
of the spending response is caused by a small number of households
who purchase vehicles. Furthermore, we find that the high spending
levels are financed through increases in collateralized debt. Our
results are consistent with a model where households can borrow
against durables and face costs of adjusting their durables stock.
(JEL D12, D14, D91, J38)
Abstract
					We examine how employers learn about worker productivity in a
randomized pilot experiment which provided objective estimates of
teacher performance to school principals. We test several hypotheses
that support a simple Bayesian learning model with imperfect
information. First, the correlation between performance estimates
and prior beliefs rises with more precise objective estimates and more
precise subjective priors. Second, new information exerts greater
influence on posterior beliefs when it is more precise and when
priors are less precise. Employer learning affects job separation and
productivity in schools, increasing turnover for teachers with low
performance estimates and producing small test score improvements.
(JEL D83, I21, J24, J45)
Abstract
					Premiums in health insurance markets frequently do not reflect individual differences in costs, either because consumers have private
information or because prices are not risk rated. This creates inefficiencies when consumers self-select into plans. We develop a simple econometric model to study this problem and estimate it using data on small employers. We find a welfare loss of 2-11 percent of coverage costs compared to what is feasible with risk rating. Only about one-quarter of this is due to inefficiently chosen uniform contribution levels. We also investigate the reclassification risk created by risk rating individual incremental premiums, finding only a modest welfare cost. (JEL G22, I13, I18)
Abstract
					Mortgage loans are leading examples of transactions where experts
on one side of the market take advantage of consumers' lack of knowledge and experience. We study the compensation that borrowers pay to mortgage brokers for assistance from application to closing. Two findings support the conclusion that confused borrowers overpay for brokers' services: (i ) A model of effective shopping shows that borrowers sacrifice at least $1,000 by shopping from too few brokers. (ii ) Borrowers who compensate their brokers with both cash and a commission from the lender pay twice as much as similar borrowers who pay no cash. (JEL D12, D14, G21)
Abstract
					In the microdata underlying US trade price indexes, 40 percent of
products are replaced before a single price change is observed and
70 percent are replaced after two price changes or fewer. A price
index that focuses on price changes for identical items may, therefore,
miss an important component of price adjustment occurring
at the time of product replacements. We provide a model of this
"product replacement bias" and quantify its importance using US
data. Accounting for product replacement bias, long-run exchange
rate "pass-through" is substantially higher than conventional estimates
suggest, and the terms of trade are substantially more volatile.
(JEL F14, F31)
Abstract
					This paper experimentally investigates the effects of a costly punishment option on cooperation and social welfare in long, finitely
repeated public good contribution games. In a perfect monitoring
environment, increasing the severity of the potential punishment
monotonically increases average net payoffs. In a more realistic
imperfect monitoring environment, we find a U-shaped relationship.
Access to a standard punishment technology in this setting significantly decreases net payoffs, even in the long run. Access to a severe punishment technology leads to roughly the same payoffs as with no punishment option, as the benefits of increased cooperation offset the social costs of punishing. (JEL C92, H41, K42)
Abstract
					Experimentally elicited discount rates are frequently higher than what
seems reasonable for economic decision-making. Such high rates are
often attributed to present-biased discounting. A well-known bias of
standard measurements is the assumption of linear consumption utility. Attempting to correct this bias using measures of risk aversion
to identify concavity, researchers find reasonable discounting but at
the cost of exceptionally high utility function curvature. We present a
new methodology for identifying time preferences, both discounting
and curvature, from simple allocation decisions. We find reasonable
levels of both discounting and curvature and, surprisingly, dynamically
consistent time preferences. (JEL C91, D12, D81)
Abstract
					Risk and time are intertwined. The present is known while the future
is inherently risky. This is problematic when studying time preferences
since uncontrolled risk can generate apparently present-biased
behavior. We systematically manipulate risk in an intertemporal
choice experiment. Discounted expected utility performs well with
risk, but when certainty is added common ratio predictions fail
sharply. The data cannot be explained by prospect theory, hyperbolic
discounting, or preferences for resolution of uncertainty, but seem
consistent with a direct preference for certainty. The data suggest
strongly a difference between risk and time preferences. (JEL C91
D81 D91)
Abstract
					We propose a collective labor supply model with household production
that generalizes a model of Blundell, Chiappori, and Meghir
(2005). Adults' preferences depend not only on own leisure and individual private consumption of market goods. They also depend on
the consumption of domestic goods, which are produced by combining
market goods with individuals' time. A new identification result,
which uses production shifters, is developed. We apply our model to
unique data on Dutch couples with children. Our application uses
a novel estimation strategy that builds upon the familiar two-stage
allocation representation of the collective model. (JEL D12, J12, J22)
Abstract
					This paper explores the links between exports, export destinations,
and skill utilization. We identify two mechanisms behind these links:
differences across destinations in quality valuation and in exporting
required services, activities that are intensive in skilled labor.
Depending on the characteristics of the source country (income,
language), the theories suggest a skill-bias in export destinations.
We test the theory using a panel of Argentine manufacturing firms.
We find that Argentine firms exporting to high-income countries
hired more skilled workers than other exporters and domestic firms.
Instead, we cannot identify any causal effect of exporting per se on
skill utilization. (JEL F14, F16, J24, L60, O14, O19)
Abstract
					Separate identification of the price and quantity of human capital
has important implications for understanding key issues in economics.
Price and quantity series are derived for four education levels.
The price series are highly correlated and they exhibit a strong secular
trend. Three resulting implications are explored: the rising college
premium is found to be driven more by relative quantity than
relative price changes, life-cycle wage profiles are readily interpretable
as reflecting optimal human capital investment paths using
the estimated price series, and adjusting the labor input for quality
increases dramatically reduces the contribution of MFP to growth.
(JEL D91, I20, J24, J31, O47)
Abstract
					Researchers have scrutinized foreign aid's effects on poverty and growth, but anecdotal evidence suggests that donors often use aid for other ends. We test whether donors use bilateral aid to influence elections in developing countries. We find that recipient country administrations closely aligned with a donor receive more aid during election years, while those less aligned receive less. Consistent with our interpretation, this effect holds only in competitive elections, is absent in US aid flows to non-government entities, and is driven by bilateral alignment rather than incumbent characteristics.
Abstract
					A model of human capital investment and activity choice is used to explain facts describing gender differentials in the levels and returns to human capital investments and occupational choice. These include the higher return to and level of schooling, the small effect of healthiness on wages, and the large effect of healthiness on schooling for females relative to males. The model incorporates gender differences in the level and responsiveness of brawn to nutrition in a
Roy-economy setting in which activities reward skill and brawn differentially. Evidence from rural Bangladesh provides support for the model and the importance of the distribution of brawn.
Abstract
					We study experimentally a new two-player game: each player requests an amount between 11 and 20 shekels. He receives the requested amount and if he requests exactly one shekel less than the
other player, he receives an additional 20 shekels. Level-k reasoning is appealing due to the natural starting point (requesting 20) and the straightforward best-response operation. Nevertheless, almost all subjects exhibit at most three levels of reasoning. Two variants of the
game demonstrate that the depth of reasoning is not increased by enhancing the attractiveness of the level-0 strategy or by reducing the cost of undercutting the other player.
Abstract
					We use recruitment into a laboratory experiment in Kolkata, India to analyze how social networks select individuals for jobs. The experiment allows subjects to refer actual network members for
casual jobs as experimental subjects under exogenously varied incentive contracts. We provide evidence that some workers, those who are high ability, have useful information about the abilities of members of their social network. However, the experiment also shows that social networks provide incentives to refer less qualified workers, and firms must counterbalance these incentives in order to effectively use existing employees to help overcome their screening problem.
Abstract
					This paper uses a rich panel dataset of Spanish manufacturing firms (1990-2006) and a propensity score reweighting estimator to show that multinational firms acquire the most productive domestic firms, which, on acquisition, conduct more product and process innovation
(simultaneously adopting new machines and organizational practices) and adopt foreign technologies, leading to higher productivity. We propose a model of endogenous selection and innovation in heterogeneous firms that explains both the observed selection patterns and the innovation decisions. Further, we show in the data that innovation upon acquisition is associated with the increased market scale provided by the parent firm.
Abstract
					Teacher performance evaluation has become a dominant theme in school reform efforts. Yet, whether evaluation changes the performance of teachers, the focus of this paper, is unknown.
Instead, evaluation has largely been studied as an input to selective dismissal decisions. We study mid-career teachers for whom we observe an objective measure of productivity -- value-added to
student achievement -- before, during, and after evaluation. We find teachers are more productive in post-evaluation years, with the largest improvements among teachers performing relatively
poorly ex-ante. The results suggest teachers can gain information from evaluation and subsequently develop new skills, increase long-run effort, or both.
Abstract
					This paper assesses the impact of pollution on worker productivity by relating exogenous daily variations in ozone with productivity of agricultural workers as recorded under piece rate contracts. We find robust evidence that ozone levels well below federal air quality standards have a significant impact on productivity. These results suggest that, in contrast to common characterizations of environmental protection as a tax on producers, environmental protection can also be viewed as an investment in human capital, and thus a tool for promoting economic growth.
Abstract
					Using life insurance holdings by age, sex, and marital status, we infer how individuals value consumption in different demographic stages. We estimate equivalence scales and bequest motives simultaneously within a fully specified model where agents face US demographics and
save and purchase life insurance. Our findings indicate that individuals are very caring for dependents, that economies of scale are large, that children are very costly (or yield very high marginal utility), that wives with children produce lots of home goods, and that females display habits from marriage, while men do not. These findings contrast sharply with standard equivalence scales.
Abstract
					Washington's "revolving door"—the movement from government service into the lobbying industry—is regarded as a major concern for policy-making. We study how ex-government staffers benefit from the personal connections acquired during their public service. Lobbyists with experience in the office of a US Senator suffer a 24 percent drop in generated revenue when that Senator leaves office. The effect is immediate, discontinuous around the exit period, and long-lasting. Consistent with the notion that lobbyists sell access to powerful politicians, the drop in revenue is increasing in the seniority of and committee assignments power held by the exiting politician.
Abstract
					In a series of studies employing a variety of approaches, we have found that the potential impact of climate change on US agriculture is likely negative. DeschÃªnes and Greenstone (2007) report
dramatically different results based on regressions of agricultural profits and yields on weather variables. The divergence is explained by (1) missing and incorrect weather and climate data in their study; (2) their use of older climate change projections rather than the more recent and less optimistic projections from the Fourth Assessment Report; and (3) difficulties in their profit measure due to the confounding effects of storage.
Abstract
					Fisher et al. (2012) (henceforth, FHRS) have uncovered coding and data errors in our paper, Deschênes and Greenstone (2007), henceforth, DG. We acknowledge and are embarrassed by these mistakes. We are grateful to FHRS for uncovering them. We hope that this Reply will also contribute to advancing the literature on the vital question of the impact of climate change on the US agricultural sector.
Abstract
					This comment highlights different ways of coding crisis episodes in Cerra and Saxena (2008) (CS). The comment shows that the coding used for civil war implies a misrepresentation of its impact. A correct coding of civil war reveals that the average civil war leads to a loss in output of 18 percent. This makes civil wars more devastating than all other crisis studied by CS.
Abstract
					This research advances and empirically establishes the hypothesis
that, in the course of the prehistoric exodus of Homo sapiens out of
Africa, variation in migratory distance to various settlements across
the globe affected genetic diversity and has had a persistent hump-shaped effect on comparative economic development, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. While the low diversity of Native American populations and the high diversity of African populations have been detrimental for the development of these regions, the intermediate levels of diversity associated with European and Asian populations have been conducive for development. (JEL N10, N30, N50, O10, O50, Z10)
Abstract
					British Master and Servant law made employee contract breach a
criminal offense until 1875. We develop a contracting model generating equilibrium contract breach and prosecutions, then exploit
exogenous changes in output prices to examine the effects of labor
demand shocks on prosecutions. Positive shocks in the textile, iron,
and coal industries increased prosecutions. Following the abolition
of criminal sanctions, wages differentially rose in counties that
had experienced more prosecutions, and wages responded more to
labor demand shocks. Coercive contract enforcement was applied in
industrial Britain; restricted mobility allowed workers to commit to
risk-sharing contracts with lower, but less volatile, wages. (JEL J31,
J41, K12, K31, N33, N43)
Abstract
					Many important issues in business-to-business markets involve price
discrimination and negotiated prices, situations where theoretical
predictions are ambiguous. This paper uses new panel data on buyer-supplier transfers and a structural model to empirically analyze
bargaining and price discrimination in a medical device market.
While many phenomena that restrict different prices to different
buyers are suggested as ways to decrease hospital costs (e.g.,
mergers, group purchasing organizations, and transparency), I find
that: (i) more uniform pricing works against hospitals by softening
competition; and (ii) results depend ultimately on a previously
unexplored bargaining effect. (JEL C78, L13, L14, L64)
Abstract
					We use employee-level panel data from a single firm to explore the
possibility that individuals may select insurance coverage in part
based on their anticipated behavioral ("moral hazard") response
to insurance, a phenomenon we label "selection on moral hazard."
Using a model of plan choice and medical utilization, we present
evidence of heterogenous moral hazard as well as selection on it,
and explore some of its implications. For example, we show that,
at least in our context, abstracting from selection on moral hazard
could lead to overestimates of the spending reduction associated
with introducing a high-deductible health insurance option. (JEL
D82, G22, I13, J32)
Abstract
					We investigate whether car buyers are myopic about future fuel
costs. We estimate the effect of gasoline prices on short-run equilibrium prices of cars of different fuel economies. We then compare the implied changes in willingness-to-pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates. Using different assumptions about annual mileage, survival rates, and demand elasticities, we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow. We interpret this as showing little evidence of consumer myopia. (JEL D12, H25, L11, L62, L71, L81)
Abstract
					I explore the association between regional variations in physician
behavior and the geographical scope of malpractice standards of
care. I estimate a 30-50 percent reduction in the gap between state
and national utilization rates of various treatments and diagnostic
procedures following the adoption of a rule requiring physicians
to follow national, as opposed to local, standards. These findings
suggest that standardization in malpractice law may lead to greater
standardization in practices and, more generally, that physicians may
indeed adhere to specific liability standards. In connection with the
estimated convergence in practices, I observe no associated changes
in patient health. (JEL I11, I18, J44, K13)
Abstract
					We find that greater institutional ownership is associated with
more innovation. To explore the mechanism, we contrast the "lazy
manager" hypothesis with a model where institutional owners
increase innovation incentives through reducing career risks. The
evidence favors career concerns. First, we find complementarity
between institutional ownership and product market competition,
whereas the lazy manager hypothesis predicts substitution. Second,
CEOs are less likely to be fired in the face of profit downturns
when institutional ownership is higher. Finally, using instrumental
variables, policy changes, and disaggregating by type of institutional
owner, we argue that the effect of institutions on innovation is causal.
(JEL G23, G32, L25, M10, O31, O34)
Abstract
					This paper investigates the effect of idiosyncratic (firm-level) policy
distortions on aggregate outcomes. Exploiting harmonized firm-level
data for a number of countries, we show that there is substantial
and systematic cross-country variation in the within-industry
covariance between size and productivity. We develop a model in
which heterogeneous firms face adjustment frictions (overhead labor
and quasi-fixed capital) and distortions. The model can be readily
calibrated so that variations in the distribution of distortions allow
matching the observed cross-country moments. We show that the
differences in the distortions that account for the size-productivity
covariance imply substantial differences in aggregate performance.
(JEL D24, L25, O47)
Abstract
					Economies at early stages of development are frequently shaken by
large changes in growth rates, whereas advanced economies tend
to experience relatively stable growth rates. To explain this pattern,
we propose a model of technological diversification. Production
makes use of input-varieties that are subject to imperfectly correlated
shocks. Endogenous variety adoption by firms raises average
productivity and provides diversification benefits against variety-specific shocks. Firm-level and aggregate volatility thus decline as a
by-product of the development process. We quantitatively assess the
model's predictions and find that it can generate patterns of volatility
and development consistent with the data. (JEL D21, D24, E23,
O33, O47)
Abstract
					We study if and how social preferences extend to risky environments.
We provide experimental evidence from different versions of dictator
games with risky outcomes and establish that preferences that are
exclusively based on ex post or on ex ante comparisons cannot generate the observed behavioral patterns. The more money decision-makers transfer in the standard dictator game, the more likely they are to equalize payoff chances under risk. Risk to the recipient does, however, generally decrease the transferred amount. Ultimately, a utility function with a combination of ex post and ex ante fairness concerns may best describe behavior. (JEL C72, D63, D64, D81)
Abstract
					The share of household resources devoted to children is hard to
identify because consumption is measured at the household level
and goods can be shared. Using semiparametric restrictions on
individual preferences within a collective model, we identify how
total household resources are divided up among household members
by observing how each family member's expenditures on a single
private good like clothing vary with income and family size. Using
data from Malawi we show how resources devoted to wives and
children vary by family size and structure, and we find that standard
poverty indices understate the incidence of child poverty. (JEL I31,
I32, J12, J13, O12, O15)
Abstract
					This paper develops a learning model of cultural change to investigate why women's labor force participation (LFP) and attitudes toward women's work both changed dramatically. In the model, women's beliefs about the long-run payoff from working evolve endogenously via an intergenerational learning process. This process generically generates the data's S-shaped LFP curve and introduces a novel role for wage changes via their effect on the speed of intergenerational learning. The calibrated model does a good job of replicating the evolution of female LFP in the United States over the last 120 years and finds that the new role for wages was quantitatively significant.
Abstract
					We study risk attitudes, ambiguity attitudes, and time preferences of 661 children and adolescents, aged ten to eighteen years, in an incentivized experiment and relate experimental choices to field behavior. Experimental measures of impatience are found to be significant predictors of health-related field behavior, saving decisions, and conduct at school. In particular, more impatient children and adolescents are more likely to spend money on alcohol and cigarettes, have a higher body mass index, are less likely to save money, and show worse conduct at school. Experimental measures for risk and ambiguity attitudes are only weak predictors of field behavior.
Abstract
					We conduct an experiment assessing the extent to which people trade off the economic costs of truthfulness against the intrinsic costs of lying. The results allow us to reject a type-based model. People's preferences for truthfulness do not identify them as only either "economic types" (who care only about consequences) or "ethical types" (who care only about process). Instead, we find that preferences for truthfulness are heterogeneous among individuals. Moreover, when examining possible sources of intrinsic costs of lying and their interplay with economic costs of truthfulness, we find that preferences for truthfulness are also heterogeneous within individuals.
Abstract
					Drastic changes in central bank operations and monetary institutions
in recent years have made previously standard approaches to explaining the determination of the price level obsolete. Recent
expansions of central bank balance sheets and of the levels of rich-country sovereign debt, as well as the evolving political economy of the European Monetary Union, have made it clear that fiscal policy
and monetary policy are intertwined. Our thinking and teaching
about inflation, monetary policy, and fiscal policy should be based on
models that recognize fiscal-monetary policy interactions. (JEL E31,
E52, E58, E62, H63)
Abstract
					We estimate a model of strategic voting and quantify the impact it
has on election outcomes. Because the model exhibits multiplicity of
outcomes, we adopt a set estimator. Using Japanese general-election
data, we find a large fraction (63.4 percent, 84.9 percent) of strategic
voters, only a small fraction (1.4 percent, 4.2 percent) of whom voted
for a candidate other than the one they most preferred (misaligned
voting). Existing empirical literature has not distinguished between
the two, estimating misaligned voting instead of strategic voting.
Accordingly, while our estimate of strategic voting is high, our
estimate of misaligned voting is comparable to previous studies.
(JEL D72)
Abstract
					Languages differ widely in the ways they encode time. I test the
hypothesis that the languages that grammatically associate the future
and the present, foster future-oriented behavior. This prediction
arises naturally when well-documented effects of language structure
are merged with models of intertemporal choice. Empirically, I
find that speakers of such languages: save more, retire with more
wealth, smoke less, practice safer sex, and are less obese. This
holds both across countries and within countries when comparing
demographically similar native households. The evidence does not
support the most obvious forms of common causation. I discuss
implications for theories of intertemporal choice. (JEL D14, D83,
E21, I12, J26, Z13)
Abstract
					We model the dynamics of risk premia during crises in asset markets
where the marginal investor is a financial intermediary. Intermediaries face an equity capital constraint. Risk premia rise
when the constraint binds, reflecting the capital scarcity. The calibrated model matches the nonlinearity of risk premia during crises
and the speed of reversion in risk premia from a crisis back to precrisis
levels. We evaluate the effect of three government policies: reducing intermediaries borrowing costs, injecting equity capital, and purchasing distressed assets. Injecting equity capital is particularly
effective because it alleviates the equity capital constraint that
drives the model's crisis. (JEL E44, G12, G21, G23, G24)
Abstract
					We consider a model with on-the-job search where current wages
depend only on current aggregate labor market conditions and idiosyncratic match-specific productivities. We show theoretically that
the model replicates the findings in Bils (1985) and Beaudry and
DiNardo (1991) on the history dependence in wages. We develop a
method to measure match qualities in the data and show empirically
that various variables summarizing past aggregate labor market
conditions have explanatory power for current wages only because
they are correlated with match qualities. They lose any predictive
power once match qualities are accounted for. (JEL E3, E24, J3)
Abstract
					We use novel data to study genetic testing among individuals at
risk for Huntington disease (HD), a hereditary disease with limited
life expectancy. Although genetic testing is perfectly predictive and
carries little economic cost, presymptomatic testing is rare. Testing
rates increase with increases in ex ante risk of having HD. Untested
individuals express optimistic beliefs about their health and make
decisions (e.g., retirement) as if they do not have HD, even though
individuals with confirmed HD behave differently. We suggest that
these facts can be reconciled by an optimal expectations model
(Brunnermeier and Parker 2005). (JEL D84, I12)
Abstract
					We estimate a spatial model of liquor demand to analyze the impact of
government-controlled retailing on entry patterns. In the absence of
the Pennsylvania Liquor Control Board, the state would have roughly
2.5 times the current number of stores, higher consumer surplus, and
lower payments to liquor store employees. With just over half the
number of stores that would maximize welfare, the government system is instead best rationalized as profit maximization with profit sharing. Government operation mitigates, but does not eliminate, free entry's bias against rural consumers. We find only limited evidence of political influence on entry. (JEL D42, D72, L11, L12, L43, L81)
Abstract
					We provide evidence that increased political influence, arising from
CIA interventions during the Cold War, was used to create a larger
foreign market for American products. Following CIA interventions,
imports from the US increased dramatically, while total exports to
the US were unaffected. The surge in imports was concentrated in
industries in which the US had a comparative disadvantage, not a
comparative advantage. Our analysis is able to rule out decreased
trade costs, changing political ideology, and an increase in US loans
and grants as alternative explanations. We provide evidence that the
increased imports arose through direct purchases of American products by foreign governments. (JEL D72, F14, F54, N42, N72)
Abstract
					This paper empirically assesses the incidence and efficiency of
Round I of the federal urban Empowerment Zone (EZ ) program
using confidential microdata from the Decennial Census and the
Longitudinal Business Database. Using rejected and future applicants
to the EZ program as controls, we find that EZ designation
substantially increased employment in zone neighborhoods and
generated wage increases for local workers without corresponding
increases in population or the local cost of living. The results suggest
the efficiency costs of first Round EZs were relatively modest.
(JEL H26, H77, J31, R23, R58)
Abstract
					Cross-country labor productivity differences are larger in agriculture
than in non-agriculture. We propose a new explanation for these
patterns in which the self-selection of heterogeneous workers
determines sector productivity. We formalize our theory in a general-equilibrium Roy model in which preferences feature a subsistence
food requirement. In the model, subsistence requirements induce
workers that are relatively unproductive at agricultural work to
nonetheless select into the agriculture sector in poor countries. When
parameterized, the model predicts that productivity differences are
roughly twice as large in agriculture as non-agriculture even when
countries differ by an economy-wide efficiency term that affects both
sectors uniformly. (JEL J24, J31, J43, O11, O13, O40)
Abstract
					Using a new nationally representative dataset, we find minor differences in test outcomes between black and white infants that disappear with a limited set of controls. However, relative to whites, all other races lose substantial ground by age two. Combining our estimates with results in prior literature, we show that a simple model with assortative mating fits our data well, implying that differences in children's environments between racial groups can fully explain gaps in intelligence. If parental ability influences a child's test scores both genetically and through environment, then our findings are less informative and can be reconciled with a wide range of racial differences in inherited intelligence.
Abstract
					Using recent results in the measurement error literature, we show that the official US unemployment rate substantially underestimates the true level of unemployment, due to misclassification errors in the labor force status in the Current Population Survey. During the period from January 1996 to August 2011, the corrected monthly unemployment rates are between 1 and 4.4 percentage points (2.1 percentage points on average) higher than the official rates, and are more sensitive to changes in business cycles. The labor force participation rates, however, are not affected by this correction.
Abstract
					The Bagwell and Staiger (1990) theory of cooperative trade agreements predicts new tariffs (i) increase with imports, (ii) increase with the inverse of the sum of the import demand and export supply elasticities, and (iii) decrease with the variance of imports. We find US import policy during 1997-2006 to be consistent with this theory. A one standard deviation increase in import growth, the inverse of the sum of the import demand and export supply elasticity, and the standard deviation of import growth changes the probability that the US imposes an antidumping tariff by 35 percent, by 88 percent, and by -76 percent, respectively.
Abstract
					The Federal Reserve's mandate has evolved considerably over the organization's hundred-year history. It was changed from an initial focus in 1913 on financial stability, to fiscal financing in World War II and its aftermath, to a strong anti-inflation focus from the late 1970s, and then back to greater emphasis on financial stability since the Great Contraction. Yet, as the Fed's mandate has expanded in recent years, its range of instruments has narrowed, partly based on a misguided belief in the inherent stability of financial markets. We argue for a return to multiple instruments, including a more active role for reserve requirements.
Abstract
					Milton Friedman and Anna J. Schwartz published A Monetary History of the United States: 1867 to 1960 with Princeton University Press in 1963, to critical acclaim. Since then the book's reputation has grown and it clearly has become one of the most influential volumes in economics in the twentieth century. In this paper we document the extraordinary impact of A Monetary History and argue that the key to this success was the use of the "narrative approach" to the problem of identifying the effects of monetary policy on economic activity.
Abstract
					This essay assesses whether network linkages within the banking system amplified the real effects of bank failures during the Great Contraction. In 1929, nearly all interbank deposits held by Federal Reserve member banks belonged to "shadowy" nonmember banks which were outside the regulatory reach of federal regulators. Regional banking panics in the early 1930s drained these interbank deposits from central reserve city banks. Money-center banks in Chicago and New York responded to volatile and declining interbank deposits by changing their asset composition. They reduced their lending to businesses and individuals, and increased their holdings of cash and government bonds.
Abstract
					Changes in the work week drove a larger portion of changes in total labor input during the Great Depression of the 1930s than during other decades. Work-sharing policies appear to be responsible. Herbert Hoover created various work-sharing committees--led by key industrialists--which pushed for shorter work weeks. And Franklin Roosevelt's President's Reemployment Agreement called for sharp cuts in weekly work hours. Spreading available work amongst more people was the goal. During these periods between 50 and 90 percent of declines in labor input were accommodated by falling hours. In recent decades employers have instead relied on layoffs to achieve the same end.
Abstract
					A key question that has arisen during recent debates is whether government spending multipliers are larger during times when resources are idle. This paper seeks to shed light on this question by analyzing new quarterly historical data covering multiple large wars and depressions in the United States and Canada.  Using Jorda's (2005) method for estimating impulse responses, we find no evidence that multipliers are greater during periods of high unemployment in the United States.  In every case, they are below unity. We do find evidence of higher multipliers during periods of slack in Canada, with some multipliers above unity.
Abstract
					For a large number of OECD countries we estimate the cross-country spillover effects of government purchases on output. Following the methodology in Auerbach and Gorodnichenko (2012a, b), we allow these multipliers to vary smoothly according to the state of the economy and use real-time forecast data to purge policy innovations of their predictable components. Our findings suggest that cross-country spillovers have an important impact. The findings also confirm those of our earlier papers--namely that fiscal shocks have a larger impact when the affected country is in recession.
Abstract
					This paper asks whether the slow recovery of the US economy from the trough of the Great Recession was anticipated, and identifies some of the factors that contributed to surprises in the course of the recovery. We construct a narrative using news reports and government announcements to identify policy and financial shocks. We then compare forecasts and forecast revisions of GDP to the narrative. Successive financial and fiscal shocks emanating from Europe, together with self-inflicted wounds from the political stalemate over the US fiscal situation, help explain the slowing of the pace of an already slow recovery.
Abstract
					While cross-sectional data show increasing income inequality in the United States, it is also important to examine how incomes change over time. Using income tax data, this paper provides new evidence on long-term and intergenerational mobility, and persistence at the top of the income distribution. Half of those aged 35-40 in the top or bottom quintile in 1987 remain there in 2007; the others have moved up or down. While 30 percent of dependents aged 15-18 from bottom quintile households are themselves in the bottom quintile after 20 years, most have moved up. Persistence is lower in the highest income groups.
Abstract
					We present evidence on the level of and trend in inequality from 1985-2010 in the United States, using disposable income and consumption for a sample of individuals from the Consumer Expenditure (CE) Survey. Differing from the findings in other recent research, we find that the trends in income and consumption inequality are broadly similar between 1985 and 2006, but diverge during the Great Recession with consumption inequality decreasing and income inequality increasing. Given the differences in the trends in inequality in the last four years, using both income and consumption provides useful information.
Abstract
					We explain a counterintuitive empirical finding: Firms facing more import competition do more innovation. In our model, factors are trapped inside a firm. An increase in import competition encourages a firm to innovate by reducing the opportunity cost of inputs. Without trapped factors, trade liberalization leads to a small permanent increase in the worldwide rate of growth. With trapped factors, firms that face more import competition do relatively more innovation. The extra innovation induced by trapped factors induces a small permanent increase in aggregate output, consumption, and welfare, generalizing the appropriate estimate of the gains from trade.
Abstract
					We examine long-term neighborhood effects on low-income families using data from the Moving to Opportunity (MTO) randomized housing-mobility experiment. This experiment offered to some public-housing families but not to others the chance to move to less-disadvantaged neighborhoods. We show that ten to 15 years after baseline, MTO: (i) improves adult physical and mental health; (ii) has no detectable effect on economic outcomes or youth schooling or physical health; and (iii) has mixed results by gender on other youth outcomes, with girls doing better on some measures and boys doing worse. Despite the somewhat mixed pattern of impacts on traditional behavioral outcomes, MTO moves substantially improve adult subjective well-being.
Abstract
					We develop a stylized model of frictional local labor markets with the goal of studying the efficiency of unemployment differences across areas. The model adapts the widely used Diamond-Mortensen-Pissarides framework to a local labor market setting with a competitive housing market. The result is a simple search analogue of the classic Roback model that provides a tractable environment for studying the effects of local job creation efforts.
Abstract
					I report on measures of life satisfaction and emotional well-being across groups of college-educated women, based on whether they have a career, a family, both, or neither. The biggest premium to life satisfaction is associated with having a family. While there is also a life satisfaction premium associated with having a career, women do not seem able to "double up" on these premiums. A qualitatively similar picture emerges from the emotional well-being data. Among college-educated women with family, those with a career spend a larger share of their day unhappy, sad, stressed and tired.
Abstract
					In 1990, the US had the sixth highest female labor participation rate among 22 OECD countries. By 2010 its rank had fallen to seventeenth. We find that the expansion of "family-friendly" policies, including parental leave and part-time work entitlements in other OECD countries, explains 29 percent of the decrease in US women's labor force participation relative to these other countries. However, these policies also appear to encourage part-time work and employment in lower level positions: US women are more likely than women in other countries to have full time jobs and to work as managers or professionals.
Abstract
					The most prominent feature of the female labor force across the past hundred years is its enormous growth. But many believe that the increase was discontinuous. Our purpose is to identify the short- and long-run impacts of WWII on the labor supply of women who were currently married in 1950 and 1960. Using WWII mobilization rates by state, we find a wartime impact on weeks worked and the labor force participation of married white (non-farm) women in both 1950 and 1960. The impact, moreover, was experienced almost entirely by women in the top half of the education distribution.
Abstract
					This paper presents evidence that school districts' use of an alternative academic calendar, the year-round school calendar, results in a reduction in maternal employment for women with school-aged children that varies in magnitude across racial groups. Negative employment effects are larger in districts with a particularly high proportion white and smaller in districts with a particularly high proportion of minorities. The larger effects in primarily white school districts is not likely to be explained by income differences, yet could potentially be explained by the lower reliance on relatives for child care among whites than minorities.
Abstract
					The literature on the determinants of firms' financing constraints has paid little attention to gender as a determinant of access to finance. Using data for 34,342 firms from 90 developing countries, the paper analyzes the determinants of firms' financing constraints and assesses whether female-owned firms are more financially constrained than male-owned businesses. The results show that female-owned firms in sub-Saharan Africa are more likely to be financially constrained than male-owned firms, but there is no gender gap in other developing regions. The gender gap in sub-Saharan Africa is robust to variations in specifications and econometric estimation procedures.
Abstract
					In the presence of imperfect information, voluntary certification can provide an important complement to mandatory inspections as a basis for environmental regulation in low income countries. Using data from Mexico's Clean Industry Program, we show that patterns of compliance and certification by sector are consistent with a model in which selection into the voluntary program permits more efficient targeting of regulator effort. As expected given the informational role played by certification in the model, we also find evidence, for a sample of publicly traded firms, of positive stock price deviations linked to the announcement of certification.
Abstract
					We study differences in quality in the market for third-party environmental auditors in Gujarat, India. We find that, despite the low overall quality, auditors are heterogeneous and some perform well. We posit that these high-quality auditors survive by using their good name to insulate select client plants from regulatory scrutiny. We find two pieces of evidence broadly consistent with this hypothesis: (i) though estimates are not precise, higher-quality auditors appear to be paid more both in their work as third-party auditors and in their complementary work as consultants; and (ii) plants with high-quality auditors incur fewer costly penalties from the regulator.
Abstract
					Emissions restrictions in one region may decrease emissions elsewhere (negative leakage), as increased demand for capital and labor to abate emissions in constrained regions may reduce output in unconstrained regions. We investigate leakage in computable general equilibrium (CGE) models under alternative fossil fuel supply elasticity values and factor mobility assumptions. We find that fossil fuel supply elasticities must be equal or close to infinity to generate net negative leakage. As empirical estimates for fossil fuel supply elasticities are less than 1, we conclude that leakage estimates from CGE models are unlikely to be negative.
Abstract
					I use an applied general equilibrium model to quantify the influence of a new, theoretical channel for carbon leakage effects, as identified by Fullerton, Karney and Baylis (2012). I first produce parameterizations of the model that generate a close correspondence with the theory, isolating the quantitative effect of this channel. I then produce parameterizations that allow for an examination of net leakage rates in a model with a more comprehensive set of leakage channels. I find that the new channel exerts a negative influence on net leakage rates but that positive forces of leakage dominate in the comprehensive assessment.
Abstract
					We conducted an experiment providing fertilizer grants to female rice farmers in Mali. We found that women who received fertilizer used both more fertilizer and more complementary inputs such as herbicides and hired labor. This shows that farmers respond to an increase in one input by re-optimizing other inputs. Second, while the increase in inputs led to a considerable increase in output, we found no evidence that profits increased. Our results suggest that fertilizer's impact on profits is small compared to other sources of variation. This may make it difficult for farmers to learn about the returns to fertilizer.
Abstract
					This paper addresses the relationship between child access to and use of health services, perceived health, and parental nativity. Parental region of birth is identified to include the underlying cultural differences across immigrant groups. We found that children of immigrant families, regardless of their immigration status, have lower odds to visit the doctor at least once a year and lack of usual place of care. Conversely, this group has better outcomes with regard to their perceived health.  Results hold when parental region of birth is included. Overall, non-citizen children of Latino American, Asian and African families have the worse outcomes.
Abstract
					Title I of the 1965 Elementary and Secondary Education Act explicitly directed more federal aid for K-12 education to poorer areas for the first time in US history, with a goal of promoting regional convergence in school spending. Using newly collected data, we find some evidence that Title I narrowed the gap in per-pupil school spending between richer and poorer states in the short- to medium-run. However, the program was small relative to then-existing poverty gaps in school spending; even in the absence of crowd-out by local or state governments, the program could have reduced the gap by only 15 percent.
Abstract
					Immigrants residing among many coethnics are especially likely to receive SSI for a disability when they belong to high SSI take-up immigrant groups. After showing that this relationship cannot be fully explained by differences in health, we consider the likely sources of these network effects by separately examining their role in the decision to apply for SSI and, conditional on applying, their role in determining who ultimately receives benefits. Our results suggest that networks may increase the probability of applying for SSI despite minor disabilities, but it is unlikely that network effects are driven by egregious lies on applications.
Abstract
					Most interpretations of prevalent counterinsurgency theory imply that increasing government services reduces rebel violence. Empirically, however, development programs and economic activity sometimes increase violence. Using new panel data on development spending in Iraq, we show that violence-reducing effects of development assistance are greater when: (i) projects are small; (ii) troop strength is high; and (iii) professional development expertise is available. These findings are consistent with an information-centric ("hearts and minds") model, which implies that violence-reduction is greatest when projects are secure, valued by community members, and services derived are conditional on government control of the territory.
Abstract
					The origin of the uneven distribution of ethnic and cultural fragmentation across countries has been underexplored, despite the importance attributed to the effects of diversity on the stability and prosperity of nations. Building on the role of deeply-rooted biogeographical forces in comparative development, this research empirically demonstrates that genetic diversity, predominantly determined during the prehistoric "out of Africa" migration of humans, is an underlying cause of various existing manifestations of ethnolinguistic heterogeneity. Further research may revolutionize our understanding of how  economic development and the composition of human capital across the globe are affected by these deeply-rooted factors.
Abstract
					The interplay between religion and the economy has long occupied social scientists. We construct a unique panel of income and Protestant church attendance using 175 Prussian counties, presented in six waves from 1886 to 1911. The data reveal a marked decline in church attendance coinciding with increasing income. The cross-section also shows a negative association between income and church attendance. The associations disappear in panel analyses, including first-differenced models of the 1886 to 1911 change, panel models with county and time fixed effects, and panel Granger-causality tests. The results cast doubt on causal interpretations of the religion-economy nexus in Prussian secularization.
Abstract
					Do laboratory subjects correctly perceive the dynamics of a mean-reverting time series? In our experiment, subjects receive historical data and make forecasts at different horizons. The time series process that we use features short-run momentum and long-run partial mean reversion. Half of the subjects see a version of this process in which the momentum and partial mean reversion unfold over ten periods ("fast"), while the other subjects see a version with dynamics that unfold over 50 periods ("slow"). Typical subjects recognize most of the mean reversion of the fast process and none of the mean reversion of the slow process.
Abstract
					We outline a strategy for distinguishing rank-dependent probability weighting from systematic risk misperceptions in field data. Our strategy relies on singling out a field environment with two key properties: (i) the objects of choice are money lotteries with more than two outcomes; and (ii) the ranking of outcomes differs across lotteries. We first present an abstract model of risky choice that elucidates the identification problem and our strategy. The model has numerous applications, including insurance choices and gambling. We then consider the application of insurance deductible choices and illustrate our strategy using simulated data.
Abstract
					Many scholars have argued that once "basic needs" have been met, further rises in income are not associated with further increases in subjective well-being. We assess the validity of this claim in comparisons of both rich and poor countries, and also of rich and poor people within a country. Analyzing multiple datasets, multiple definitions of "basic needs" and multiple questions about well-being, we find no support for this claim. The relationship between well-being and income is roughly log-linear and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it.
Abstract
					We conducted a national survey of department Chairs to investigate whether departments of economics changed course requirements for bachelors degrees since the Siegfried and Bidani (1992) paper using 1980 data. There have been few changes to course requirements. Most notable are a large increase in the number of departments requiring econometrics and a drop in departments requiring courses such as money, banking and economic history--courses once required in many business schools.
Abstract
					The US tolerates more inequality than Europe and believes its economic
mobility is greater than Europe's, though they had roughly
equal rates of intergenerational occupational mobility in the late
twentieth century. We extend this comparison into the nineteenth century using 10,000 nationally-representative British and US fathers
and sons. The US was more mobile than Britain through 1900, so
in the experience of those who created the US welfare state in the
1930s, the US had indeed been "exceptional." The US mobility lead
over Britain was erased by the 1950s, as US mobility fell from its
nineteenth century levels.
Abstract
					Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can
substantially increase investment in preventative health and reduce
vulnerability to health shocks. Simply providing a safe place to
keep money was sufficient to increase health savings by 66 percent.
Adding an earmarking feature was only helpful when funds were put
toward emergencies, or for individuals that are frequently taxed by
friends and relatives. Group-based savings and credit schemes had
very large effects.
Abstract
					When the zero lower bound on nominal interest rates binds, monetary
policy cannot provide appropriate stimulus. We show that, in the
standard New Keynesian model, tax policy can deliver such stimulus
at no cost and in a time-consistent manner. There is no need to use
inefficient policies such as wasteful public spending or future commitments to low interest rates.
Abstract
					This paper estimates the dynamic effects of changes in taxes in the
United States. We distinguish between changes in personal and corporate income taxes and develop a new narrative account of federal
tax liability changes in these two tax components. We develop an
estimator which uses narratively identified tax changes as proxies
for structural tax shocks and apply it to quarterly post-WWII data.
We find that short run output effects of tax shocks are large and that
it is important to distinguish between different types of taxes when
considering their impact on the labor market and on expenditure
components.
Abstract
					This paper applies a regression discontinuity design to the Romanian
secondary school system, generating two findings. First, students
who have access to higher achievement schools perform better in
a (high stakes) graduation test. Second, the stratification of schools
by quality in general, and the opportunity to attend a better school
in particular, result in significant behavioral responses: (i) teachers
sort in a manner consistent with a preference for higher achieving
students; (ii) children who make it into more selective schools realize
they are relatively weaker and feel marginalized; (iii) parents reduce
effort when their children attend a better school.
Abstract
					Authority and power permeate political, social, and economic
life, but empirical knowledge about the motivational origins and
consequences of authority is limited. We study the motivation
and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain authority even when its
delegation is in their material interest—suggesting that authority has
nonpecuniary consequences for utility. Authority also leads to overprovision of effort by the controlling parties, while a large percentage of subordinates underprovide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices.
Abstract
					We study how two selection systems for public officials, appointment
and election, affect policy outcomes, focusing on state court judges
and their criminal sentencing decisions. First, under appointment,
policy congruence with voter preferences is attained through
selecting judges with homogeneous preferences. In contrast, under
election, judges face strong reelection incentives, while selection on
preferences is weak. Second, the effectiveness of election in attaining
policy congruence critically depends on payoffs from the job, which
implies that the effectiveness of election may vary substantially across
public offices. Third, reelection incentives may discourage judges
with significant human capital from holding office.
Abstract
					Choices involving risk significantly affect the distribution of income
and wealth in society. This paper reports the results of the first
experiment, to our knowledge, to study fairness views about risktaking,
specifically whether such views are based chiefly on ex ante
opportunities or on ex post outcomes. We find that, even though
many participants focus exclusively on ex ante opportunities, most
favor some redistribution ex post. Many participants also make
a distinction between ex post inequalities that reflect differences
in luck and ex post inequalities that reflect differences in choices.
These findings apply to both stakeholders and impartial spectators.
Abstract
					We analyze the international operations of multinational firms to
measure the spatial barriers to transferring knowledge. We model
firms that can transfer bits of knowledge to their foreign affiliates in
either embodied (traded intermediates) or disembodied form (direct
communication). The model shows how knowledge transfer costs can
be inferred from multinationals' operations. We use firm-level data
on the trade and sales of US multinationals to confirm the model's
predictions. Disembodied knowledge transfer costs not only make
the standard multinational firm model consistent with the fact that
affiliate sales fall in distance but quantitatively accounts for much of
the gravity in multinational activity.
Abstract
					We consider two life cycle models of labor supply that use nonconvexities to generate retirement. In each case we derive a link between hours worked prior to retirement, the intertemporal elasticity of substitution for labor (IES), and the size of the nonconvexities. This link is robust to allowing for credit constraints and human capital accumulation by younger workers and suggests values for the IES that are .75 or higher.
Abstract
					This paper provides new estimates of the macroeconomic effects of tax changes using a new narrative dataset for the United Kingdom. Identification is achieved by isolating "exogenous" tax policy changes using the Romer and Romer narrative strategy. I find that a 1 percent cut in taxes increases GDP by 0.6 percent on impact and 2.5 percent over three years. The findings are remarkably similar to Romer and Romer narrative estimates for the United States, reinforcing the view that tax changes have powerful and persistent effects. "Exogenous" tax changes are also shown to have contributed to important episodes in the UK business cycle.
Abstract
					We offer a unified analysis of the growth of low-skill service
occupations between 1980 and 2005 and the concurrent polarization
of US employment and wages. We hypothesize that polarization
stems from the interaction between consumer preferences, which
favor variety over specialization, and the falling cost of automating
routine, codifiable job tasks. Applying a spatial equilibrium model, we
corroborate four implications of this hypothesis. Local labor markets
that specialized in routine tasks differentially adopted information
technology, reallocated low-skill labor into service occupations
(employment polarization), experienced earnings growth at the tails
of the distribution (wage polarization), and received inflows of skilled
labor.
Abstract
					This paper develops a structural model of newspaper markets
to analyze the effects of ownership consolidation, taking into
account not only firms' price adjustments but also the adjustments
in newspaper characteristics. A new dataset on newspaper prices
and characteristics is used to estimate the model. The paper then
simulates the effect of a merger in the Minneapolis newspaper
market and studies how welfare effects of mergers vary with market
characteristics. It finds that ignoring adjustments of product
characteristics causes substantial differences in estimated effects of
mergers.
Abstract
					This paper explores the causes and consequences of regional taste
differences. I introduce habit formation into a standard general equilibrium
model. Household tastes evolve over time to favor foods consumed
as a child. Thus, locally abundant foods are preferred in every
region, as they were relatively inexpensive in prior generations. These
patterns alter the correspondence between price changes and nutrition.
For example, neglecting this relationship between tastes and agro-climatic
endowments overstates the short-run nutritional gains from agricultural
trade liberalization, since preferred foods rise in price in every
region. I examine the model's predictions using household survey data
from many regions of India.
Abstract
					Using data from the American Time Use Survey between 2003
and 2010, we document that home production absorbs roughly
30 percent
of foregone market work hours at business cycle frequencies.
Leisure absorbs roughly 50 percent of foregone market work
hours, with sleeping and television watching accounting for most
of this increase. We document significant increases in time spent
on shopping, child care, education, and health. Job search absorbs
between 2 and 6 percent of foregone market work hours. We discuss
the implications of our results for business cycle models with home
production and non-separable preferences.
Abstract
					We investigate the hypothesis that macroeconomic fluctuations are primitively the results of many microeconomic shocks. We define fundamental volatility as the volatility that would arise from an economy made entirely of idiosyncratic sectoral or firm-level shocks. Fundamental volatility accounts for the swings in macroeconomic volatility in the major world economies in the past half-century. It accounts for the "great moderation" and its undoing. The initial great moderation is due to a decreasing share of manufacturing between 1975 and 1985. The recent rise of macroeconomic volatility
is chiefly due to the growth of the financial sector.
Abstract
					This paper studies the effect of additional government revenues
on political corruption and on the quality of politicians, both with
theory and data. The theory is based on a political agency model
with career concerns and endogenous entry of candidates. The data
refer to Brazil, where federal transfers to municipal governments
change exogenously at given population thresholds, allowing us to
implement a regression discontinuity design. The empirical evidence
shows that larger transfers increase observed corruption and reduce
the average education of candidates for mayor. These and other
more specific empirical results are in line with the predictions of the
theory.
Abstract
					We present the first causal estimates of the effect of Social Security
Disability Insurance benefit receipt on labor supply using all program
applicants. We use administrative data to match applications to
disability examiners and exploit variation in examiners' allowance
rates as an instrument for benefit receipt. We find that among the
estimated 23 percent of applicants on the margin of program entry,
employment would have been 28 percentage points higher had they
not received benefits. The effect is heterogeneous, ranging from
no effect for those with more severe impairments to 50 percentage
points for entrants with relatively less severe impairments.
Abstract
					A bidding process can be organized so that offers are submitted
simultaneously or sequentially. In the latter case, potential buyers
can condition their behavior on previous entrants' decisions. The
relative performance of these mechanisms is investigated when entry
is costly and selective, meaning that potential buyers with higher
values are more likely to participate. A simple sequential mechanism
can give both buyers and sellers significantly higher payoffs than the
commonly used simultaneous bid auction. The findings are illustrated
with parameters estimated from simultaneous entry USFS timber
auctions where our estimates predict that the sequential mechanism
would increase revenue and efficiency.
Abstract
					This paper studies the effect of improved early life health care on
mortality and long-run academic achievement in school. We use the
idea that medical treatments often follow rules of thumb for assigning
care to patients, such as the classification of Very Low Birth
Weight (VLBW), which assigns infants special care at a specific birth
weight cutoff. Using detailed administrative data on schooling and
birth records from Chile and Norway, we establish that children who
receive extra medical care at birth have lower mortality rates and
higher test scores and grades in school. These gains are in the order
of 0.15-0.22 standard deviations.
Abstract
					We analyze the effects of top tax rates on international migration of
football players in 14 European countries since 1985. Both country
case studies and multinomial regressions show evidence of strong
mobility responses to tax rates, with an elasticity of the number of
foreign (domestic) players to the net-of-tax rate around one (around
0.15). We also find evidence of sorting effects (low taxes attract highability
players who displace low-ability players) and displacement
effects (low taxes on foreigners displace domestic players). Those
results can be rationalized in a simple model of migration and taxation
with rigid labor demand.
Abstract
					Following Grossman and Rossi-Hansberg (2008) we present a model in which tasks of varying complexity are matched to workers of varying skill in order to develop and test predictions regarding the effects of immigration and offshoring on US native-born workers. We find that immigrant and native-born workers do not compete much due to the fact that they tend to perform tasks at opposite ends of the task complexity spectrum, with offshore workers performing the tasks in the middle. An effect of offshoring and a positive effect of immigration on native-born employment suggest that immigration and offshoring improve industry efficiency.
Abstract
					A growing body of research examines the regional effects of trade liberalization using a weighted average of trade policy changes across industries. This paper develops a specific-factors model of regional economies that provides a theoretical foundation for this intuitively appealing empirical approach and also provides guidance on treatment of the nontraded sector. In the context of Brazil's early 1990s trade liberalization, I find that regions facing a 10 percentage point larger liberalization-induced price decline experienced a 4 percentage point larger wage decline. The results also confirm the empirical relevance of appropriately dealing with the nontraded sector.
Abstract
					Human capital theory predicts that life expectancy will impact human capital attainment. We estimate this relationship using variation in life expectancy driven by Huntington disease, an inherited neurological disorder. We compare investments for individuals who have ex-ante identical risks of HD but differ in disease realization. Individuals with the HD mutation complete less education and job training. The elasticity of demand for college attendance with respect to life expectancy is around 1.0. We relate this to cross-country and over-time differences in education. We use smoking and cancer screening data to test the corollary that health capital responds to life expectancy.
Abstract
					Using historical census and survey data, Long and Ferrie (2013) found a significant decline in social mobility in the United States from 1880 to 1973. We present two critiques of the Long-Ferrie study. First, the data quality of the Long-Ferrie study is more limiting than the authors acknowledge. Second, and more critically, they applied a method ill-suited for measuring social mobility of farmers in a comparative study between 1880 and 1973, a period in which the proportion of farmers dramatically declined in the United States. We show that Long and Ferrie's main conclusion is all driven by this misleading result for farmers.
Abstract
					We reanalyze Long and Ferrie's data. We find that the association of occupational status across generations was quite similar over time and place. Two significant differences were: (i) American farms in 1880 were far more open to men who had nonfarm backgrounds than were American farms in 1973 or British farms in either century; (ii) of the four cases, the intergenerational correlation was strongest in Britain in 1881. Structural mobility related to, among other things, economic growth and occupational differentiation, affected mobility most in 1970s America.
Abstract
					We respond to several criticisms by Avery Guest and Michael Hout (2013) and Yu Xie and Alexandra Killewald (2013) to Jason Long and Joseph Ferrie (2013). We do not dispute Guest and Hout's characterization of the importance of total mobility in addition to relative mobility. We find much in their additional analyses that supports our original findings. In response to Xie and Killewald, we discuss the limitations of our data and the conceptualization of mobility.
Abstract
					A growing literature establishes that high quality early childhood
interventions targeted toward disadvantaged children have
substantial impacts on later life outcomes. Little is known about the
mechanisms producing these impacts. This paper uses longitudinal
data on cognitive and personality skills from an experimental
evaluation of the influential Perry Preschool program to analyze
the channels through which the program boosted both male and
female participant outcomes. Experimentally induced changes in
personality skills explain a sizable portion of adult treatment effects.
Abstract
					There is a strong, positive, and well-documented correlation
between education and health outcomes. In this paper, we attempt to
understand to what extent this relationship is causal. Our approach
exploits two changes to British compulsory schooling laws that
generated sharp across-cohort differences in educational attainment.
Using regression discontinuity methods, we find the reforms did not
affect health although the reforms impacted educational attainment
and wages. Our results suggest caution as to the likely health returns
to educational interventions focused on increasing educational
attainment among those at risk of dropping out of high school, a
target of recent health policy efforts.
Abstract
					We analyze the effect of rising Chinese import competition between
1990 and 2007 on US local labor markets, exploiting cross-
market
variation in import exposure stemming from initial differences in
industry specialization and instrumenting for US imports using
changes in Chinese imports by other high-income countries. Rising
imports cause higher unemployment, lower labor force participation,
and reduced wages in local labor markets that house import-competing
manufacturing industries. In our main specification,
import competition explains one-quarter of the contemporaneous
aggregate decline in US manufacturing employment. Transfer
benefits payments for unemployment, disability, retirement, and
healthcare also rise sharply in more trade-exposed labor markets.
Abstract
					If trade barriers are managed by inefficient institutions, trade
liberalization can lead to greater-than-expected gains. We examine
Chinese textile and clothing exports before and after the elimination
of externally imposed export quotas. Both the surge in export
volume and the decline in export prices following quota removal
are driven by net entry. This outcome is inconsistent with a model
in which quotas are allocated based on firm productivity, implying
misallocation of resources. Removing this misallocation accounts
for a substantial share of the overall gain in productivity associated
with quota removal.
Abstract
					Do the repayment requirements of the classic microfinance contract
inhibit investment in high-return but illiquid business opportunities
among the poor? Using a field experiment, we compare the classic
contract which requires that repayment begin immediately after
loan disbursement to a contract that includes a two-month grace
period. The provision of a grace period increased short-run business
investment and long-run profits but also default rates. The results,
thus, indicate that debt contracts that require early repayment
discourage illiquid risky investment and thereby limit the potential
impact of microfinance on microenterprise growth and household
poverty.
Abstract
					We analyze the emergence of the first socioeconomic institution
in history limiting fertility: west of a line from St. Petersburg to
Trieste, the European Marriage Pattern (EMP) reduced childbirths
by approximately one-third between the fourteenth and eighteenth
century. To explain the rise of EMP we build a two-sector model
of agricultural production—grain and livestock. Women have a
comparative advantage in animal husbandry. After the Black Death
in 1348–1350, land abundance triggered a shift toward the pastoral
sector. This improved female employment prospects, leading to later
marriages. Using detailed data from England, we provide strong
evidence for our mechanism.
Abstract
					We present a new framework to identify supply elasticities of storable
commodities where past shocks are used as exogenous price shifters.
In the agricultural context, past yield shocks change inventory
levels and futures prices of agricultural commodities. We use our
estimated elasticities to evaluate the impact of the 2009 Renewable
Fuel Standard on commodity prices, quantities, and food consumers'
surplus for the four basic staples: corn, rice, soybeans, and wheat.
Prices increase 20 percent if one-third of commodities used to
produce ethanol are recycled as feedstock, with a positively skewed
95 percent confidence interval that ranges from 14 to 35 percent.
Abstract
					We use a simple theory of a system of cities to decompose
the determinants of the city size distribution into three main
components: efficiency, amenities, and frictions. Higher efficiency
and better amenities lead to larger cities but also to greater frictions
through congestion and other negative effects of agglomeration.
Using data on MSAs in the United States, we estimate these city
characteristics. Eliminating variation in any of them leads to large
population reallocations, but modest welfare effects. We apply the
same methodology to Chinese cities and find welfare effects that are
many times larger than those in the US.
Abstract
					Contract theory claims that renegotiation prevents attainment of
the efficient solution that could be obtained under full commitment.
Assessing the cost of renegotiation remains an open issue from an
empirical viewpoint. We fit a structural principal-agent model with
renegotiation on a set of contracts for urban transport services. The
model captures two important features of the industry as only two
types of contracts are used (fixed price and cost-plus) and subsidies
are greater following a cost-plus contract than following a fixed price
one. We conclude that the welfare gains from improving commitment
would be significant but would accrue mostly to operators.
Abstract
					In August 2006, the Italian government released one-third of the
nation's prison inmates via a national collective pardon. We test for
a discontinuous break in national crime rates corresponding to the
mass release. We also test for the effect of the return of the incarceration
rate to its predicted steady state level on national crime rates.
Finally, we exploit regional variation in prison releases based on
the province of residence of pardoned inmates. All three sources of
variation yield substantial incapacitation effect estimates and suggest
that the crime-preventing effects of incarceration diminish with
increases in the incarceration rate.
Abstract
					We use data on insurance deductible choices to estimate a structural
model of risky choice that incorporates "standard" risk aversion
(diminishing marginal utility for wealth) and probability distortions.
We find that probability distortions—characterized by substantial
overweighting of small probabilities and only mild insensitivity to
probability changes—play an important role in explaining the aversion
to risk manifested in deductible choices. This finding is robust to
allowing for observed and unobserved heterogeneity in preferences.
We demonstrate that neither Köszegi-Rabin loss aversion alone nor
Gul disappointment aversion alone can explain our estimated probability
distortions, signifying a key role for probability weighting.
Abstract
					We measure the change in household spending caused by receipt of the economic stimulus payments of 2008, using questions added to the Consumer Expenditure Survey and variation from the randomized timing of disbursement. Households spent 12-30 percent (depending on specification) of their payments on nondurable goods during the three-month period of payment receipt, and a significant amount more on durable goods, primarily vehicles, bringing the total response to 50-90 percent of the payments. The responses are substantial and significant for older, lower-income, and home-owning households. Spending does not vary significantly with the method of disbursement (check versus electronic transfer).
Abstract
					We adopt a statistical approach to identify the shocks that explain most of the fluctuations of the slope of the term structure of interest rates. We find that one shock can explain the majority of unpredictable movements in the slope. Impulse response functions lead us to interpret this shock as news about future total factor productivity (TFP). By showing that "slope shocks" are essentially "TFP news shocks" we provide a new explanation for the relationship between the slope and macroeconomic fundamentals. Our results also provide a new empirical benchmark for structural models at the intersection of macroeconomics and finance.
Abstract
					The payoff of actions is estimated and the resulting empirical payoff is controlled for in regression analyses to formulate a test of rational expectations in information cascade experiments. We show that the empirical payoff of actions is a function of estimates of choice probabilities and estimates of the information parameters of the game. We introduce an alternative empirical payoff of actions with true values of the information parameters. Our improved measure of the success of social learning confirms that rational expectations are violated, but deviations from rational expectations are statistically significantly smaller than in Weizsacher (2010).
Abstract
					This paper investigates consumer inertia in health insurance markets,
where adverse selection is a potential concern. We leverage a major
change to insurance provision that occurred at a large firm to
identify substantial inertia, and develop and estimate a choice model
that also quantifies risk preferences and ex ante health risk. We use
these estimates to study the impact of policies that nudge consumers
toward better decisions by reducing inertia. When aggregated,
these improved individual-level choices substantially exacerbate
adverse selection in our setting, leading to an overall reduction in
welfare that doubles the existing welfare loss from adverse selection.
Abstract
					We estimate the impacts of the Earned Income Tax Credit on labor
supply using local variation in knowledge about the EITC schedule.
We proxy for EITC knowledge in a Zip code with the fraction
of individuals who manipulate reported self-employment income to
maximize their EITC refund. This measure varies significantly across
areas. We exploit changes in EITC eligibility at the birth of a child
to estimate labor supply effects. Individuals in high-knowledge areas
change wage earnings sharply to obtain larger EITC refunds relative
to those in low-knowledge areas. These responses come primarily
from intensive-margin earnings increases in the phase-in region.
Abstract
					We study intertemporal price discrimination when consumers can
store for future consumption needs. We offer a simple model of demand dynamics, which we estimate using market-level data. Optimal pricing involves temporary price reductions that enable sellers to discriminate between price sensitive consumers, who stockpile for future consumption, and less price-sensitive consumers, who do not stockpile. We empirically quantify the impact of intertemporal price discrimination on profits and welfare. We find that sales (i) capture 25-30 percent of the gap between non-discriminatory profits and (unattainable) third-degree price discrimination profits, (ii) increase total welfare, and (iii) have a modest impact on consumer welfare.
Abstract
					This paper analyzes a dynamic lending relationship where the borrower
cannot be forced to make repayments, and the lender offers
long-term contracts that are imperfectly enforced and repeatedly
renegotiated. No commitment and full commitment by the lender
are special cases of this model where the probability of enforcement
equals zero and one, respectively. I show that an increase in
the degree of enforcement can lower social welfare. Furthermore,
properties of equilibrium investment dynamics with partial commitment
drastically differ from those with full and no commitment. In
particular, investment is positively related to cash flow, consistent
with empirical findings.
Abstract
					If profit maximization is the objective of a firm, new information
about quality should affect firm behavior only through its effects
on market demand. I consider an alternate model in which suppliers
are motivated by a desire to perform well in addition to profit.
The introduction of quality "report cards" for cardiac surgery in
Pennsylvania provides an empirical setting to isolate the relative role
of extrinsic and intrinsic incentives in determining surgeon response.
Information on performance that was new to surgeons and unrelated
to patient demand led to an intrinsic response four times larger than
surgeon response to profit incentives.
Abstract
					To investigate whether secondary markets aid or harm durable goods
manufacturers, we build a dynamic model of durable goods oligopoly
with transaction costs in the secondary market. Calibrating model
parameters using data from the US automobile industry, we find the
net effect of opening the secondary market is to decrease new car
manufacturers' profits by 35 percent. Counterfactual scenarios in
which the size of the used good stock decreases, such as when products
become less durable, when the number of firms decreases, or when
firms can commit to future production levels, increase the profitability
of opening the secondary market.
Abstract
					A large and growing share of world trade travels by air. We model
exporters' choice between fast, expensive air cargo and slow, cheap
ocean cargo, which depends on the price elasticity of demand and
the value that consumers attach to fast delivery. We use US imports
data that provide rich variation in the premium paid for air shipping
and in time lags for ocean transit to extract consumers' valuation
of time. We estimate that each day in transit is equivalent to an advalorem
tariff of 0.6 to 2.1 percent. The most time-sensitive trade
flows involve parts and components trade.
Abstract
					This paper measures the impact of vertically integrated and exclusive
software on industry structure and welfare in the sixth-generation of
the US video game industry (2000-2005). I specify and estimate a
dynamic model of both consumer demand for hardware and software
products, and software demand for hardware platforms. I use estimates
to simulate market outcomes had platforms been unable to own
or contract exclusively with software. Driven by increased software
compatibility, hardware and software sales would have increased
by 7 percent and 58 percent and consumer welfare by $1.5 billion.
Gains would be realized only by the incumbent, suggesting exclusivity
favored the entrant platforms.
Abstract
					A growing literature explores differences in subjective well-being
across demographic groups, often relying on surveys with high nonresponse
rates. By using the reported number of call attempts made
to participants in the University of Michigan's Surveys of Consumers,
we show that comparisons among easy-to-reach respondents differ
from comparisons among hard-to-reach ones. Notably, easy-to-reach
women are happier than easy-to-reach men, but hard-to-reach men
are happier than hard-to-reach women, and conclusions of a survey
could reverse with more attempted calls. Better alternatives to
comparing group sample averages might include putting greater
weight on hard-to-reach respondents or even extrapolating trends in
responses.
Abstract
					Over the business cycle young workers experience much greater volatility of hours
worked than prime-aged workers. This can arise from age differences in labor supply or
labor demand characteristics. To distinguish between these, we document that, for young
workers, both the cyclical volatilities of hours and wages are greater than those of the
prime-aged. We argue that a general class of models featuring only age-specific labor
supply differences cannot reconcile these facts. We then show that a simple model
featuring labor demand differences can.
Abstract
					We explore empirically models of aggregate fluctuations in which consumers form
anticipations about the future based on noisy sources of information and these
anticipations affect output in the short run. Our objective is to separate fluctuations due to
changes in fundamentals (news) from those due to temporary errors in agents' estimates
(noise). We show that structural VARs cannot be used to identify news and noise shocks,
but identification is possible via a method of moments or maximum likelihood. Next, we
estimate our model on US data. Our results suggest that noise shocks explain a sizable
fraction of short-run consumption fluctuations.
Abstract
					This paper shows that smoking intensity, i.e. the amount of nicotine extracted per
cigarette smoked, responds to changes in excise taxes and tobacco prices. We exploit
NHANES data covering the period 1988 to 2006 across many US states. Moreover, using
panel data from the Coronary Artery Risk Development in Young Adults (CARDIA)
study, we provide new evidence on the importance of cotinine measures in explaining
long-run smoking behavior. We show the importance of smoking intensity as a long-run
determinant of smoking cessation. We also investigate the sensitivity of smoking
cessation to changes in excise taxes and their interaction with smoking intensity.
Abstract
					We estimate the sensitivity of Internet retail purchasing to sales taxes
using eBay data. Our first approach exploits the fact that a seller's
location—and therefore the applicable tax rate—is revealed only
after a buyer has expressed interest in an item. We document how
adverse tax "surprises" reduce the likelihood of purchase and shift
subsequent purchases toward out-of-state sellers. We then use more
aggregated data to estimate that every one percentage point increase
in a state's sales tax increases online purchases by state residents by
almost 2 percent, while decreasing their online purchases from state
retailers by 3–4 percent.
Abstract
					We augment a standard monetary dynamic general equilibrium
model to include a Bernanke-Gertler-Gilchrist financial accelerator
mechanism. We fit the model to US data, allowing the volatility of
cross-sectional idiosyncratic uncertainty to fluctuate over time. We
refer to this measure of volatility as risk. We find that fluctuations in
risk are the most important shock driving the business cycle.
Abstract
					This paper analyzes long-term effects of skilled-worker immigration
on productivity for the Huguenot migration to Prussia. In 1685,
religiously persecuted French Huguenots settled in Brandenburg-
Prussia and compensated for population losses due to plagues during
the Thirty Years' War. We combine Huguenot immigration lists from
1700 with Prussian firm-level data on the value of inputs and outputs
in 1802 in a unique database to analyze the effects of skilled immigration
to places with underused economic potential. Exploiting this
settlement pattern in an instrumental-variable approach, we find substantial
long-term effects of Huguenot settlement on the productivity
of textile manufactories.
Abstract
					We investigate the relationship between violence and economic risk
preferences in Afghanistan combining: (i) a two-part experimental
procedure identifying risk preferences, violations of Expected Utility,
and specific preferences for certainty; (ii) controlled recollection of
fear based on established methods from psychology; and (iii) administrative
violence data from precisely geocoded military records. We
document a specific preference for certainty in violation of Expected
Utility. The preference for certainty, which we term a Certainty
Premium, is exacerbated by the combination of violent exposure
and controlled fearful recollections. The results have implications
for risk taking and are potentially actionable for policymakers and
marketers.
Abstract
					We develop a model in which connections between individuals serve
as social collateral to enforce informal insurance payments. We show
that: (i) The degree of insurance is governed by the expansiveness of
the network, measured with the per capita number of connections
that groups have with the rest of the community. "Two-dimensional"
networks—like real-world networks in Peruvian villages—are sufficiently
expansive to allow very good risk-sharing. (ii) In second-
best
arrangements, insurance is local: agents fully share shocks within,
but imperfectly between endogenously emerging risk-sharing groups.
We also discuss how endogenous social collateral affects our results.
Abstract
					We explore the impact of reduced transaction costs on risk sharing by
estimating the effects of a mobile money innovation on consumption.
In our panel sample, adoption of the innovation increased from 43 to
70 percent. We find that, while shocks reduce consumption by 7 percent
for nonusers, the consumption of user households is unaffected. The
mechanisms underlying these consumption effects are increases in
remittances received and the diversity of senders. We report robustness
checks supporting these results and use the four-fold expansion of the
mobile money agent network as a source of exogenous variation in
access to the innovation.
Abstract
					We develop a new methodology to estimate herd behavior in financial
markets. We build a model of informational herding that can
be estimated with financial transaction data. In the model, rational
herding arises because of information-event uncertainty. We estimate
the model using data on a NYSE stock (Ashland Inc.) during 1995.
Herding occurs often and is particularly pervasive on some days. On
average, the proportion of herd buyers is 2 percent; that of herd sellers
is 4 percent. Herding also causes important informational inefficiencies
in the market, amounting, on average, to 4 percent of the
asset's expected value.
Abstract
					We study interdependencies in spousal labor supply by exploiting the
design of the French workweek reduction, which introduced exogenous
variation in one's spouse's labor supply, at constant earnings.
Treated employees work on average two hours less per week.
Husbands of treated women respond by reducing their labor supply
by about half an hour, consistent with substantial leisure complementarity,
and specifically cut the nonusual component of their
workweek, leaving usual hours unchanged. Women's response to
their husband's treatment is instead weak and rarely statistically
significant, possibly due to heavier constraints in the organization of
their workweek.
Abstract
					Some researchers have argued that anchoring in economic valuations
casts doubt on the assumption of consistent and stable preferences. We
present new evidence that explores the strength of certain anchoring
results. We then present a theoretical framework that provides insights
into why we should be cautious of initial empirical findings in general.
The model importantly highlights that the rate of false positives
depends not only on the observed significance level, but also on statistical
power, research priors, and the number of scholars exploring
the question. Importantly, a few independent replications dramatically
increase the chances that the original finding is true.
Abstract
					Term premia implied by maximum likelihood estimates of affine
term structure models are misleading because of small-sample
bias. We show that accounting for this bias alters the conclusions
about the trend, cycle, and macroeconomic determinants of the term
premia estimated in Wright (2011). His term premium estimates are
essentially acyclical, and often just parallel the secular trend in longterm
interest rates. In contrast, bias-corrected term premia show
pronounced countercyclical behavior, consistent with theoretical
and empirical arguments about movements in risk premia.
Abstract
					Bauer, Rudebusch, and Wu (2014) advocate the use of bias-corrected
estimates in their comment on Wright (2011). Econometric estimation
of a macro-finance VAR provides quite imprecise estimates of future
short-term interest rates. Nonetheless, comparison with survey
responses indicates that the proposed bias-corrected point estimates
are less plausible than their maximum-likelihood counterparts.
Abstract
					We document three remarkable features of the Opower program, in
which social comparison-based home energy reports are repeatedly
mailed to more than six million households nationwide. First, initial
reports cause high-frequency "action and backsliding,"  but these
cycles attenuate over time. Second, if reports are discontinued after
two years, effects are relatively persistent, decaying at 10-20 percent
per year. Third, consumers are slow to habituate: they continue to
respond to repeated treatment even after two years. We show that the
previous conservative assumptions about post-intervention persistence had dramatically understated cost effectiveness and illustrate how empirical estimates can optimize program design.
Abstract
					Using the most comprehensive developing country dataset ever
compiled on air and water pollution and environmental regulations,
the paper assesses India's environmental regulations with a
difference-in-differences design. The air pollution regulations are
associated with substantial improvements in air quality. The most
successful air regulation resulted in a modest but statistically
insignificant decline in infant mortality. In contrast, the water
regulations had no measurable benefits. The available evidence leads
us to cautiously conclude that higher demand for air quality prompted
the effective enforcement of air pollution regulations, indicating that
strong public support allows environmental regulations to succeed in
weak institutional settings.
Abstract
					We study cascades of failures in a network of interdependent financial
organizations: how discontinuous changes in asset values
(e.g., defaults and shutdowns) trigger further failures, and how this
depends on network structure. Integration (greater dependence on
counterparties) and diversification (more counterparties per organization) have different, nonmonotonic effects on the extent of cascades. Diversification connects the network initially, permitting
cascades to travel; but as it increases further, organizations are
better insured against one another's failures. Integration also faces
trade-offs: increased dependence on other organizations versus less
sensitivity to own investments. Finally, we illustrate the model with
data on European debt cross-holdings.
Abstract
					According to standard macroeconomic models, the zero lower bound
greatly reduces the effectiveness of monetary policy and increases the
efficacy of fiscal policy. However, private-sector decisions depend
on the entire path of expected future short-term interest rates, not
just the current short-term rate. Put differently, longer-term yields
matter. We show how to measure the zero bound's effects on yields
of any maturity. Indeed, 1- and 2-year Treasury yields were surprisingly unconstrained throughout 2008 to 2010, suggesting that monetary and fiscal policy were about as effective as usual during this
period. Only beginning in late 2011 did these yields become more
constrained.
Abstract
					I develop a highly tractable general equilibrium model in which
heterogeneous producers face collateral constraints, and study the
effect of financial frictions on capital misallocation and aggregate
productivity. My economy is isomorphic to a Solow model but with
time-varying TFP. I argue that the persistence of idiosyncratic productivity shocks determines both the size of steady-state productivity losses and the speed of transitions: if shocks are persistent, steady-state losses are small but transitions are slow. Even if financial frictions are unimportant in the long run, they tend to matter in the short run and analyzing steady states only can be misleading.
Abstract
					Historical accounts suggest that Jewish émigrés from Nazi Germany
revolutionized US science. To analyze the émigrés' effects on chemical
innovation in the United States, we compare changes in patenting
by US inventors in research fields of émigrés with fields of other
German chemists. Patenting by US inventors increased by 31 percent
in émigré fields. Regressions which instrument for émigré fields with
pre-1933 fields of dismissed German chemists confirm a substantial
increase in US invention. Inventor-level data indicate that émigrés
encouraged innovation by attracting new researchers to their fields,
rather than by increasing the productivity of incumbent inventors.
Abstract
					We investigate Schelling's hypothesis that payoff-irrelevant labels
("cues") can influence the outcomes of bargaining games with
communication. In our experimental games, players negotiate over
the division of a surplus by claiming valuable objects that have
payoff-irrelevant spatial locations. Negotiation occurs in continuous
time, constrained by a deadline. In some games, spatial cues are
opposed to principles of equality or efficiency. We find a strong tendency for players to agree on efficient and minimally unequal payoff divisions, even if spatial cues suggest otherwise. But if there are two such divisions, cues are often used to select between them, inducing distributional effects.
Abstract
					This paper revisits the results of Moskowitz and Vissing-Jøgensen
(2002) on returns to entrepreneurial investments in the United States.
Following the authors' methodology and new data from the Survey of
Consumer Finances, I find that the "private equity premium puzzle"
does not survive the period of high public equity returns in the 1990s.
The difference between private and public equity returns is positive
and large period-by-period between 1999 and 2007. Whereas in
the 2008-2010 period, overlapping with the Great Recession,
public and private equities performances are substantially closer.
I validate these results in the aggregate data going back to the 1960s.
Abstract
					To combat adverse selection, governments increasingly base payments to health plans and providers on enrollees' scores from
risk-adjustment formulae. In 2004, Medicare began to risk-adjust
capitation payments to private Medicare Advantage (MA) plans to
reduce selection-driven overpayments. But because the variance
of medical costs increases with the predicted mean, incentivizing
enrollment of individuals with higher scores can increase the scope
for enrolling "overpriced" individuals with costs significantly below
the formula's prediction. Indeed, after risk adjustment, MA plans
enrolled individuals with higher scores but lower costs conditional
on their score. We find no evidence that overpayments were on net
reduced.
Abstract
					We examine the relationship between concentration and price dispersion using variation induced by a merger in the Canadian mortgage market. Since interest rates are determined through a search and negotiation process, consolidation weakens consumers' bargaining positions. We use reduced-form techniques to estimate the mergers' distributional impact, and show that competition benefits only consumers at the bottom and middle of the transaction price distribution, and that mergers reduce the dispersion of prices. We illustrate that these effects can be explained by the presence of search frictions, and that the average effect of mergers on rates underestimates the increase in market power.
Abstract
					We collect a new dataset on capital punishment in the US and we propose a test of racial bias based upon patterns of sentence reversals. We model the courts as minimizing type I and II errors.
If trial courts were unbiased, conditional on defendants race the error rate should be independent of the victims race. Instead we uncover 3 and 9 percentage points higher reversal rates in Direct Appeal and Habeas Corpus cases, respectively, against minority defendants who killed whites. The pattern for white defendants is opposite but not statistically significant. This bias is confined to Southern States.
Abstract
					A key feature of arbitration is the possibility for conflicting parties to participate in the selection of the arbitrator, the individual who will rule the case. We analyze this problem of the selection of arbitrators from the perspective of implementation theory. In particular, theoretical analyses document problems with veto-rank,
a simultaneous procedure that is commonly used in practice, and
develop a new sequential procedure, shortlisting, with better properties. Experimental results are consistent with the theoretical predictions, highlighting both the disadvantages associated with the
veto-rank procedure and the advantages associated with the short-listing procedure.
Abstract
					We survey 561 students from U.S. medical schools shortly after they submit choice rankings over residencies to the National Resident Matching Program. We elicit (a) these choice rankings, (b) anticipated subjective well-being (SWB) rankings, and (c) expected features of the residencies (such as prestige). We find substantial differences between choice and anticipated-SWB rankings in the implied tradeoffs between residency features. In our data, evaluative SWB measures (life satisfaction and Cantril's ladder) imply tradeoffs closer to choice than does affective happiness (even time-integrated), and as close as do multi-measure SWB indices. We discuss implications for using SWB data in applied work.
Abstract
					We develop a framework where mismatch between vacancies and job seekers across sectors translates into higher unemployment by lowering the aggregate job-finding rate. We use this framework to measure the contribution of mismatch to the recent rise in U.S. unemployment by exploiting two sources of cross-sectional data on vacancies, JOLTS and HWOL. Our calculations indicate that mismatch, across industries and 3-digit occupations, explains at most 1/3 of the total observed increase in the unemployment rate. Occupational mismatch has become especially more severe for college graduates, and in the West of the United States. Geographical mismatch unemployment plays no apparent role.
Abstract
					Hiring inexperienced workers generates information about their abilities. If this information is public, workers obtain its benefits. If workers cannot compensate firms for hiring them, firms will hire too few inexperienced workers. I determine the effects of hiring workers and revealing more information about their abilities through a field experiment in an online marketplace. I hired 952 randomly-selected workers, giving them either detailed or coarse public evaluations. Both hiring workers and providing more detailed evaluations substantially improved workers' subsequent employment outcomes. Under plausible assumptions, the experiment's market-level benefits exceeded its cost, suggesting that some experimental workers had been inefficiently unemployed.
Abstract
					Motivated by empirical evidence I uncover on the dynamics of
French firms exports, I offer a novel theory of trade frictions.
Firms only export into markets where they have a contact. They
directly search for new trading partners, but also use their existing network of contacts to remotely search for new partners. I
characterize the dynamic formation of an international network
of exporters in this model. I structurally estimate this model on
French data and confirm its predictions regarding the distribution
of the number of foreign markets accessed by exporters and the
geographic distribution of exports.
Abstract
					If workers self-select into industries based upon their relative
productivity in different tasks, and comparative advantage is aligned
with absolute advantage, then the average efficacy of a sector's
workforce will be negatively correlated with its employment share.
This might explain the difference in the reported productivity growth
of contracting goods and expanding services. Instrumenting with
defense expenditures, I find the elasticity of worker efficacy with
respect to employment shares is substantially negative, albeit
imprecisely estimated. The estimates suggest that the view that
goods and services have similar productivity growth rates is a
plausible alternative characterization of growth in developed
economies.
Abstract
					We quantitatively investigate the allocative and welfare effects of
secondary markets for cars. An important source of gains from
trade in these markets is the heterogeneity in the willingness to
pay for higher-quality (newer) goods, but transaction costs are an
impediment to instantaneous trade. Calibration of the model successfully matches several aggregate features of the U.S. and French used-car markets. Counterfactual analyses show that transaction costs have a large effect on volume of trade, allocations, and the primary market. Aggregate effects on consumer surplus and welfare are relatively small, but the effect on lower-valuation households can be large.
Abstract
					By allowing for an extensive margin in the standard quantity-quality model, we generate new insights into fertility transitions. We test the model on Southern black women aected by a large-scale school construction program. Consistent with our model, women facing improved schooling opportunities for their children were more likely to have at least one child but chose to have smaller families overall. By contrast, women who themselves obtained more schooling due to the program delayed childbearing along both the extensive and intensive margins and entered higher quality occupations, consistent with education raising opportunity costs of child rearing.
Abstract
					This paper reconsiders the traditional approach to human capital measurement in the study of cross-country income differences. Within a broader class of neoclassical human capital aggregators, traditional accounting is found to be a theoretical lower bound on human capital difference across economies. Implementing a generalized accounting empirically illustrates the possibility that capital variation may now account (even fully) for the large income variation between rich and poor countries. These findings reject the constraints on human capital variation that traditional accounting has imposed.
Abstract
					We estimate an insurer-specific preference function which rationalizes
hospital referrals for privately insured births in California. The function
is additively separable in: a hospital price paid by the insurer,
the distance traveled, and plan- and severity-specific hospital fixed
effects (capturing hospital quality). We use an inequality estimator
that allows for errors in price and detailed hospital-severity interactions and obtain markedly different results than those from a logit. The estimates indicate that insurers with more capitated physicians are more responsive to price. Capitated plans send patients further to utilize similar quality, lower-priced hospitals; but the cost-quality trade-off does not vary with capitation rates. (JEL G22, H51, I11, I13, I18, J44)
Abstract
					We make use of a new data resource -- merged birth and school
records for all children born in Florida from 1992 to 2002 -- to study
the relationship between birth weight and cognitive development.
Using singletons as well as twin and sibling fixed effects models,
we find that the effects of early health on cognitive development are
essentially constant through the school career; that these effects are
similar across a wide range of family backgrounds; and that they
are invariant to measures of school quality. We conclude that the
effects of early health on adult outcomes are therefore set very early.
(JEL I12, J13, J24)
Abstract
					Private equity critics claim that leveraged buyouts bring huge job
losses and few gains in operating performance. To evaluate these
claims, we construct and analyze a new dataset that covers US
buyouts from 1980 to 2005. We track 3,200 target firms and their
150,000 establishments before and after acquisition, comparing to
controls defined by industry, size, age, and prior growth. Buyouts
lead to modest net job losses but large increases in gross job creation
and destruction. Buyouts also bring TFP gains at target firms,
mainly through accelerated exit of less productive establishments
and greater entry of highly productive ones. (JEL D24, G24, G32,
G34, J23, J63, L25)
Abstract
					Every year housing markets in the United Kingdom and the United
States experience systematic above-trend increases in prices and
transactions during the spring and summer ("hot season") and
below-trend falls during the autumn and winter ("cold season").
House price seasonality poses a challenge to existing housing models.
We propose a search-and-matching model with thick-market effects.
In thick markets, the quality of matches increases, rising buyers' willingness to pay and sellers' desire to transact. A small, deterministic
driver of seasonality can be amplified and revealed as deterministic
seasonality in transactions and prices, quantitatively mimicking seasonal fluctuations in UK and US markets. (JEL C78, R21, R31)
Abstract
					We conduct the first empirical investigation of common-pool
resource users' dynamic and strategic behavior at the micro level
using real-world data. Fishermen's strategies in a fully dynamic
game account for latent resource dynamics and other players'
actions, revealing the profit structure of the fishery. We compare the
fishermen's actual and socially optimal exploitation paths under
a time-specific vessel allocation policy and find a sizable dynamic
externality. Individual fishermen respond to other users by exerting
effort above the optimal level early in the season. Congestion
is costly instantaneously but is beneficial in the long run because it
partially offsets dynamic inefficiencies. (JEL D24, Q21, Q22)
Abstract
					How large are optimal tariffs? What tariffs would prevail in a worldwide
trade war? How costly would a breakdown of international
trade policy cooperation be? And what is the scope for future multilateral trade negotiations? I address these and other questions
using a unified framework which nests traditional, new trade, and
political economy motives for protection. I find that optimal tariffs
average 62 percent, world trade war tariffs average 63 percent, the
government welfare losses from a breakdown of international trade
policy cooperation average 2.9 percent, and the possible government
welfare gains from future multilateral trade negotiations average
0.5 percent. (JEL F12, F13, O19)
Abstract
					We develop a revealed preference methodology that allows us to
explore whether time inconsistencies in household choice are the
product of individual preference nonstationarities or the result of
individual heterogeneity and renegotiation within the household.
An empirical application to household-level microdata highlights
that an explicit recognition of the collective nature of household
choice enables the observed behavior to be rationalized by a theory
that assumes preference stationarity at the individual level. The
methodology created in this paper also facilitates the recovery of
theory-consistent discount rates for each individual within particular
household under study. (JEL E24, F13, F16)
Abstract
					We study collective decisions by time-discounting individuals choosing
a common consumption stream. We show that with any heterogeneity
in time preferences, utilitarian aggregation necessitates a
present bias. In lab experiments three quarters of "social planners"
exhibited present biases, and less than two percent were time consistent. Roughly a third of subjects acted as if they were pure utilitarians, and the rest chose as if they also had varying degrees of
distributional concerns. (JEL C91, D12, D71, D72)
Abstract
					This paper uses a unique panel dataset of consumer financial transactions to study how consumers respond to an exogenous unanticipated income shock. Consumption rose significantly after the fiscal policy announcement: during the ten subsequent months, for each $1 received, consumers on average spent $0.80. We find a strong
announcement effect -- 19 percent of the response occurs during the
first two-month announcement period via credit cards. Subsequently,
consumers switched to debit cards after disbursement before finally
increasing spending on credit cards in the later months. Consumers
with low liquid assets or with low credit card limit experienced stronger
consumption responses. (JEL D12, D14, E21)
Abstract
					We show that the risk-shock business cycle model of
Fernández-Villaverde et al. (2011) must be recalibrated because
it underpredicts the targeted business cycle moments by a factor
of three once a time aggregation error is corrected. Recalibrating
the corrected model for the benchmark case of Argentina, the peak
response and the contribution of interest rate risk shocks to business
cycle volatility increase. However, the recalibrated model does
worse in capturing the business cycle properties of net exports once
an additional error in the computation of net exports is corrected.
Abstract
					This article studies the full equilibrium dynamics of an economy with
financial frictions. Due to highly nonlinear amplification effects, the
economy is prone to instability and occasionally enters volatile crisis
episodes. Endogenous risk, driven by asset illiquidity, persists
in crisis even for very low levels of exogenous risk. This phenomenon,
which we call the volatility paradox, resolves the Kocherlakota
(2000) critique. Endogenous leverage determines the distance to crisis.
Securitization and derivatives contracts that improve risk sharing
may lead to higher leverage and more frequent crises.
Abstract
					We use producer-level data to evaluate the role of financial frictions
in determining total factor productivity (TFP). We study a model
of establishment dynamics in which financial frictions reduce TFP
through two channels. First, finance frictions distort entry and
technology adoption decisions. Second, finance frictions generate
dispersion in the returns to capital across existing producers and thus
productivity losses from misallocation. Parameterizations of our model
consistent with the data imply fairly small losses from misallocation,
but potentially sizable losses from inefficiently low levels of entry and
technology adoption.
Abstract
					This paper proposes an accounting framework that breaks up a country's gross exports into various value-added components by source
and additional double-counted terms. Our parsimonious framework
bridges a gap between official trade statistics (in gross value terms)
and national accounts (in value-added terms), and integrates all previous measures of vertical specialization and value-added trade in the literature into a unified framework. To illustrate the potential of such
a method, we present a number of applications including re-computing
revealed comparative advantages and the magnifying impact of
multi-stage production on trade costs.
Abstract
					We build a theoretical model of multi-product firms that highlights
how competition across market destinations affects both a firm's
exported product range and product mix. We show how tougher
competition in an export market induces a firm to skew its export sales
toward its best performing products. We find very strong confirmation
of this competitive effect for French exporters across export market
destinations. Theoretically, this within-firm change in product mix
driven by the trading environment has important repercussions on
firm productivity. A calibrated fit to our theoretical model reveals
that these productivity effects are potentially quite large.
Abstract
					Nonlinear pricing and taxation complicate economic decisions by
creating multiple marginal prices for the same good. This paper
provides a framework to uncover consumers' perceived price of
nonlinear price schedules. I exploit price variation at spatial
discontinuities in electricity service areas, where households in
the same city experience substantially different nonlinear pricing.
Using household-level panel data from administrative records, I find
strong evidence that consumers respond to average price rather than
marginal or expected marginal price. This suboptimizing behavior
makes nonlinear pricing unsuccessful in achieving its policy goal of
energy conservation and critically changes the welfare implications
of nonlinear pricing.
Abstract
					This paper explores the nature of fluctuations in world bulk shipping
by quantifying the impact of time to build and demand uncertainty on
investment and prices. We examine the impact of both construction
lags and their lengthening in periods of high investment activity, by
constructing a dynamic model of ship entry and exit. A rich dataset
of secondhand ship sales allows for a new estimation strategy: resale
prices provide direct information on value functions and allow their
nonparametric estimation. We find that moving from time-varying
to constant to no time to build reduces prices, while significantly
increasing both the level and volatility of investment.
Abstract
					Using a local randomized experiment that arises from a sharp discontinuity in Disability Insurance (DI) policy in Norway, we provide
transparent and credible identification of how financial incentives
induce DI recipients to return to work. We find that many DI recipients
have considerable capacity to work that can be effectively
induced by providing financial work incentives. We further show that
providing work incentives to DI recipients may both increase their
disposable income and reduce program costs. Our findings also suggest
that targeted policies may be the most effective in encouraging
DI recipients to return to work.
Abstract
					While filtering has long been considered the primary mechanism by
which markets supply low-income housing, direct estimates of that
process have been absent. This has contributed to doubts about the
viability of markets and to misplaced policy. I fill this gap by estimating
a "repeat income" model using 1985-2011 panel data. Real annual filtering rates are faster for rental housing (2.5 percent) than
owner-occupied (0.5 percent), vary inversely with the income elasticity
of demand and house price inflation, and are sensitive to tenure
transitions as homes age. For most locations, filtering is robust which
lends support for housing voucher programs.
Abstract
					Acemoglu et al. (2008) document that the correlation between
income per capita and democracy disappears when including time
and country fixed effects. While their results are robust for the full
sample, we find evidence for significant but heterogeneous effects of
income on democracy: negative for former colonies, but positive for
non-colonies. Within the sample of colonies we detect heterogeneous
effects related to colonial history and early institutions. The zero
mean effect estimated by Acemoglu et al. (2008) is consistent with
effects of opposite signs in the different subsamples. Our findings are
robust to the use of alternative data and estimation techniques.
Abstract
					We use rich historical data on military procurement to estimate the effects of government spending. We exploit regional variation in military build-ups to estimate an "open economy relative multiplier" of approximately 1.5. We develop a framework for interpreting this estimate and relating it to estimates of the standard closed economy aggregate multiplier. The latter is highly sensitive to how strongly aggregate monetary and tax policy "leans against the wind." Our open economy relative multiplier "differences out" these effects because monetary and tax policies are uniform across the nation. Our evidence indicates that demand shocks can have large effects on output.
Abstract
					We empirically characterize the mechanics of trade adjustment during the Argentine crisis. Though imports collapsed by 70 percent from 2000-2002, the entry and exit of firms or products at the country level played a small role. The within-firm churning
of imported inputs, however, played a sizeable role. We build a model of trade in intermediate inputs with heterogeneous firms, fixed import costs, and roundabout production. Import demand is non-homothetic and the implications of an import price shock
depend on the full distribution of firm-level adjustments. An import price shock generates a significant decline in productivity.
Abstract
					Food purchases differ substantially across countries. We use detailed household level data from the US, France and the UK to (i) document these differences; (ii) estimate a demand system for food and nutrients, 
and (iii) simulate counterfactual choices if households faced prices and nutritional characteristics from other countries. We find that differences in prices and characteristics are important and can explain some difference 
(e.g., US-France difference in caloric intake), but generally cannot explain many of the compositional patterns by themselves. Instead, it seems an interaction between the economic environment and differences in 
preferences is needed to explain cross country differences.
Abstract
					We formally characterize predatory pricing in a modern industry-dynamics framework that endogenizes competitive advantage and industry structure. As an illustrative example we focus on learning-by-doing. 
To disentangle predatory pricing from mere competition for efficiency on a learning curve we decompose the equilibrium pricing condition.  We show that forcing firms to ignore the predatory incentives in setting 
their prices can have a large impact and that this impact stems from eliminating equilibria with predation-like behavior. Along with the predation-like behavior, however, a fair amount of competition for the market is eliminated.
Abstract
					Endowment payouts have become an increasingly important component of universities' revenues in recent decades. We study how universities respond to financial shocks to endowments and thus shed light on a number of existing models 
of endowment behavior. Endowments actively reduce payouts relative to their stated payout policies following negative, but not positive, shocks. This asymmetric behavior is consistent with "endowment hoarding," especially among endowments 
whose current value is close to the benchmark value at the start of the university president's tenure. We also document the effect of negative endowment shocks on university operations, such as personnel cuts.
Abstract
					In the American South, post-bellum economic development may have been restricted in part by white landowners' access to low-wage black labor. This paper examines the impact of the Great Mississippi Flood of 1927 on black out-migration and subsequent 
agricultural development. Flooded counties experienced an immediate and persistent out-migration of black population. Over time, landowners in flooded counties modernized agricultural production and increased its capital intensity relative to landowners in 
nearby similar non-flooded counties. Landowners resisted black out-migration, however, benefiting from the status quo system of labor-intensive agricultural production.
Abstract
					We study the impact of a public school choice lottery in Charlotte-Mecklenburg schools on college enrollment and degree completion. We find a significant overall increase in college attainment among lottery winners who attend their first choice school. 
Using rich administrative data on peers, teachers, course offerings and other inputs, we show that the impacts of choice are strongly predicted by gains on several measures of school quality. Gains in attainment are concentrated among girls. Girls respond 
to attending a better school with higher grades and increases in college-preparatory course-taking, while boys do not.
Abstract
					The stigma associated with long-term unemployment spells could create large inefficiencies in labor markets. While the existing literature points toward large stigma effects, it has proven difficult to estimate causal relationships. Using data from a field experiment,
we find that long-term unemployment spells in the past do not matter for employers' hiring decisions, suggesting that subsequent work experience eliminate this negative signal. Nor do employers treat contemporary short-term unemployment spells differently,
suggesting that they understand that worker/firm matching takes time. However, employers attach a negative value to contemporary unemployment spells lasting at least nine months, providing evidence of stigma effects.
Abstract
					This paper experimentally investigates whether money illusion generates substantial nominal inertia. Building on the design of Fehr and Tyran (2001), we find no evidence that agents choose high nominal payoffs over high real payoffs. However, participants
do select prices associated with high nominal payoffs within a set of maximum real payoffs as a heuristic to simplify their decision task. The cognitive challenge of this task explains the majority of the magnitude of nominal inertia; money illusion exerts only a
second-order effect. The duration of nominal inertia depends primarily on participants' best response functions, not the prevalence of money illusion.
Abstract
					The data in Fehr and Tyran (FT, 2001) and Luba Petersen and Abel Winn (PW,2013) show that money illusion plays an important role in nominal price adjustment after a fully anticipated negative monetary shock. Money Illusion affects subjects'
expectations, and causes pronounced nominal inertia after a negative shock but much less inertia after a positive shock. Thus PW provide a misleading interpretation both of our and their own data.
Abstract
					In an article published in the American Economic Review, Jón Steinsson (2008) argues that two sticky price models driven by real shocks can explain the observed persistence, volatility and hump-shaped impulse response function of the
real exchange rate. This comment shows, first, that correcting an error in one of Steinsson's models leads to substantially lower persistence and volatility of the real exchange rate; second, that Steinsson's models cannot match real exchange rate
volatility relative to output; and, third, that reasonable variations of the model calibration or specification all lead to lower real exchange rate persistence and volatility (or both).
Abstract
					The converging roles of men and women are among the grandest
advances in society and the economy in the last century. These
aspects of the grand gender convergence are figurative chapters in
a history of gender roles. But what must the "last" chapter contain
for there to be equality in the labor market? The answer may come
as a surprise. The solution does not (necessarily) have to involve
government intervention and it need not make men more responsible
in the home (although that wouldn't hurt). But it must involve
changes in the labor market, especially how jobs are structured and
remunerated to enhance temporal flexibility. The gender gap in pay
would be considerably reduced and might vanish altogether if firms
did not have an incentive to disproportionately reward individuals
who labored long hours and worked particular hours. Such change
has taken off in various sectors, such as technology, science, and
health, but is less apparent in the corporate, financial, and legal
worlds.
Abstract
					We use broad-based yet detailed data from the economy's goods-producing sectors to investigate firms' ownership of production
chains. It does not appear that vertical ownership is primarily used
to facilitate transfers of goods along the production chain, as is often
presumed: roughly one-half of upstream establishments report no
shipments to downstream establishments within the same firm. We
propose an alternative explanation for vertical ownership, namely
that it promotes efficient intrafirm transfers of intangible inputs. We
show evidence consistent with this hypothesis, including the fact
that, after a change of ownership, an acquired establishment begins
to resemble the acquiring firm along multiple dimensions.
Abstract
					This paper models growth via on-the-job learning when firms and
workers are heterogeneous. It is an overlapping generations model
in which young agents match with the old. More efficient assignments
lead to faster long-run growth, more inequality, and less turnover
in the distribution of human capital. Constant-growth paths are
characterized for general functional forms and then, for the Cobb-Douglas case, the transition dynamics are solved analytically when the skill of the young is log-normally distributed and the initial
human capital of the old generation is also log-normal. Growth and
inequality move together on the transition to the balanced growth path.
Abstract
					The dynamics of house prices, sales, construction, and population
growth in response to city-specific income shocks are characterized
for 106 US cities. A dynamic model of search in the housing market
in which construction, the entry of buyers, house prices, and sales
are determined in equilibrium is then developed. The theory generates
dynamics qualitatively consistent with the observations and a
version calibrated to match key features of the US housing market
offers a substantial quantitative improvement over models without
search. In particular, variation in the time it takes to sell induces
transaction prices to exhibit serially correlated growth.
Abstract
					We present a theory of spatial development. Manufacturing and
services firms located in a continuous geographic area choose each
period how much to innovate. Firms trade subject to transport costs
and technology diffuses spatially. We apply the model to study the
evolution of the US economy in the last half-century and find that it
can generate the reduction in the manufacturing employment share,
the increased spatial concentration of services, the growth in service
productivity starting in the mid-1990s, the rise in the dispersion of
land rents in the same period, as well as several other spatial and
temporal patterns.
Abstract
					This paper shows that the body of appointed officials that a new
democracy inherits from the previous regime is a key determinant
of the extent of electoral fraud and clientelistic spending in new
democracies. I develop a model that predicts that appointed officials
have stronger incentives to influence voters during national level
elections because of their career concerns. I test the implications
of the model using data from Indonesia's transition to democracy.
Both the pattern of alignment of electoral results between village
and district levels and the pattern of subsequent turnover of
appointed village heads corroborate the predictions of the model.
Abstract
					Procurement contracts are often renegotiated because of changes
that are required after their execution. Using highway paving contracts
we show that renegotiation imposes significant adaptation
costs. Reduced form regressions suggest that bidders respond strategically to contractual incompleteness and that adaptation costs are an important determinant of their bids. A structural empirical model
compares adaptation costs to bidder markups and shows that adaptation costs account for 7.5-14 percent of the winning bid. Markups
from private information and market power, the focus of much of the
auctions literature, are much smaller by comparison. Implications
for government procurement are discussed.
Abstract
					We investigate whether physicians' financial incentives influence
health care supply, technology diffusion, and resulting patient outcomes.  In 1997, Medicare consolidated the geographic regions
across which it adjusts physician payments, generating area-specific
price shocks. Areas with higher payment shocks experience significant
increases in health care supply. On average, a 2 percent increase
in payment rates leads to a 3 percent increase in care provision.
Elective procedures such as cataract surgery respond much more
strongly than less discretionary services. Non-radiologists expand
their provision of MRIs, suggesting effects on technology adoption.
We estimate economically small health impacts, albeit with limited
precision.
Abstract
					Many new technologies display long adoption lags, and this is often
interpreted as evidence of frictions inconsistent with the standard
neoclassical model. We study the diffusion of the tractor in American
agriculture between 1910 and 1960-a well-known case of slow
diffusion-and show that the speed of adoption was consistent with
the predictions of a simple neoclassical growth model. The reason for
the slow rate of diffusion was that tractor quality kept improving over
this period and, more importantly, that only when wages increased
did it become relatively unprofitable to operate the alternative, labor-intensive, horse technology.
Abstract
					The cross-sectional dispersion of firm-level investment rates is
procyclical. This makes investment rates different from productivity,
output, and employment growth, which have countercyclical
dispersions. A calibrated heterogeneous-firm business cycle model
with nonconvex capital adjustment costs and countercyclical
dispersion of firm-level productivity shocks replicates these facts and
produces a correlation between investment dispersion and aggregate
output of 0.53, close to 0.45 in the data. We find that small shocks to
the dispersion of productivity, which in the model constitutes firm
risk, suffice to generate the mildly procyclical investment dispersion
in the data but do not produce serious business cycles.
Abstract
					Imperfect information about product attributes inhibits efficiency in
many choice settings, but can be overcome by providing simple, lowcost information. We use a randomized control trial to test the effect
of high-frequency information about residential electricity usage on
the price elasticity of demand. Informed households are three standard
deviations more responsive to temporary price increases, an
effect that is not attributable to price salience. Conservation extends
beyond pricing events in the short and medium run, providing evidence
of habit formation and implying that the intervention leads to
greenhouse gas abatement. Survey evidence suggests that information
facilitates learning.
Abstract
					Beaudry and Portier (2006) propose an identification scheme to
study the effects of news shocks about future productivity in vector
error correction models (VECMs). This comment shows that, when
applied to their VECMs with more than two variables, the identification
scheme does not have a unique solution. The problem arises
from a particular interplay of cointegration assumptions and longrun
restrictions.
Abstract
					Chang and Kim (2007) develop an incomplete asset markets
model incorporating discrete labor supply and idiosyncratic labor
productivity. Their results resolve long-standing puzzles for business
cycle models. Specifically, they produce a low correlation between
aggregate hours worked and labor productivity (0.23) and a labor
wedge with 76 percent the volatility of output. I show that these
results arise from errors in their computational method. I resolve
their model using a corrected method and find a strong, positive
correlation between hours and productivity (0.80). Fluctuations in
the labor wedge decrease to 24 percent of those in output.
Abstract
					Takahashi (2014) has uncovered coding errors in our paper,
Chang and Kim (2007)-henceforth, CK. We acknowledge and are
embarrassed by these mistakes. We are grateful to Takahashi for
uncovering them. While the correction decreases the volatility of the
labor market wedge, we find that the main message of CK remains
valid: the measured labor market wedge arises endogenously in
an economy with incomplete capital markets and indivisible labor
supply. For example, our model accounts for 18 percent of the
volatility in the labor market wedge in the data; it was 43 percent in
CK.
Abstract
					Elderly individuals exhibit wide disparities in their sources of income. For those in the bottom half of the income distribution, Social Security is the most important source of support; program changes would directly affect their well-being. Income from private pensions, assets, and earnings are relatively more important for higher-income elderly individuals, who have more diverse income sources. The trend from private sector defined benefit to defined contribution pension plans has shifted responsibility for retirement security to individuals. A significant subset of the population is unlikely to be able to sustain their standard of living in retirement without higher pre-retirement saving.
Abstract
					The rate of inflation fell far less over the period 2007-2013 than in the period 1979-1985 despite similar large increases in the unemployment rate. This paper asks why. Possible explanations include a change in the persistence of inflation, changes in NAIRU, and other shocks. A change in the persistence of inflation, with inflation more anchored in the period 2007-2013 than in the period 1979-1985, is found to be important. The level and change in the NAIRU cannot be precisely estimated, but the data suggest an increase of nearly 1 percentage point since 2007.
Abstract
					We estimate a state-of-the-art DSGE model to study the natural rate of interest in the United States over the last 20 years. The natural rate is highly procyclical, and fell substantially below zero in each of the last three recessions. Although the drop was of comparable magnitude across the three recessions, the decline was considerably more persistent in the Great Recession. We discuss the usefulness and limitations, particularly due to the zero lower bound, of the natural rate for the conduct of monetary policy.
Abstract
					Modern growth theory suggests that more than three-quarters of growth since 1950 reflects rising educational attainment and research intensity. As these transition dynamics fade, US economic growth is likely to slow at some point. However, the rise of China, India, and other emerging economies may allow another few decades of rapid growth in world researchers. Finally, and more speculatively, the shape of the idea production function introduces a fundamental uncertainty into the future of growth. For example, the possibility that artificial intelligence will allow machines to replace workers to some extent could lead to higher growth in the future.
Abstract
					We examine the evolution of real per capita GDP around 100 systemic banking crises. Part of the costs of these crises owes to the protracted nature of recovery. On average, it takes about 8 years to reach the pre-crisis level of income; the median is about 6.5 years. Five to six years after the onset of crisis, only Germany and the United States (out of 12 systemic cases) have reached their 2007-2008 peaks in real income. Forty-five percent of the episodes recorded double dips. Post-war business cycles are not the relevant comparator for the recent crises in advanced economies.
Abstract
					We consider two classes of explanations for the rise in policy-related economic uncertainty in the United States since 1960. The first stresses growth in government spending, taxes, and regulation. A second stresses increased political polarization and its implications for the policymaking process and policy choices.
Abstract
					This paper studies housing markets where a subset of houses in a restricted area is available exclusively to a subset of "eligible" buyers. An empirical part shows that houses on Stanford campus (available only to faculty) trade at substantial discounts to comparable houses off campus. The theoretical part describes an assignment model with heterogeneous houses and buyers which predicts such discounts if the matchup of quality and buyer pools is sufficiently different inside versus outside the restricted area. The restriction can distort allocations by making eligible buyers choose either higher or lower qualities than ineligible buyers with the same characteristics.
Abstract
					In January 1995, US President Bill Clinton organized a bailout for Mexico that imposed penalty interest rates and induced the Mexican government to reduce its debt, ending the debt crisis. Can the Troika (European Commission, European Central Bank, and International Monetary Fund) organize similar bailouts for the troubled countries in the eurozone? Our analysis suggests that debt levels are so high that bailouts with penalty interest rates could induce the eurozone governments to default rather than reduce their debt. A resumption of economic growth is one of the few ways that the eurozone crises can end.
Abstract
					We propose a continuous time model to investigate the impact of inflation credibility on sovereign debt dynamics. At every point in time, an impatient government decides fiscal surplus and inflation, without commitment. Inflation is costly, but reduces the real value of outstanding nominal debt. In equilibrium, debt dynamics is the result of two opposing forces: (i) impatience and (ii) the desire to conquer low inflation. A large increase in inflation credibility can trigger a process of debt accumulation. This rationalizes the sovereign debt booms that are often experienced by low inflation credibility countries upon joining a currency union.
Abstract
					We estimate how durable expenditures respond to government spending shocks at different points in the business cycle using a nonlinear VAR approach that allows for the durable multiplier to vary smoothly with the state of the economy. We find strong evidence that the aggregate durable spending response to fiscal shocks is substantially larger during expansions than during recessions, in contrast to what has been has been observed for the aggregate multiplier. We argue that these results are consistent with the theoretical predictions of the fixed cost model of durable demand in Berger and Vavra (2012).
Abstract
					This paper contributes to the debate regarding trends in consumption inequality in the United States. We present a new measure of consumption inequality based on the redesigned 1999–2011 PSID. We impute consumption to the families observed before 1999 using the more comprehensive consumption data available from 1999 onward. One advantage of this procedure is in sample verification of the quality of the imputation procedure; another is that it yields a long time series (1967–2010). Consumption inequality was stable in the 1970s, as was income inequality. It increased significantly after 1980. The Great Recession was associated with a decline in consumption inequality.
Abstract
					We use new PSID data on consumption and health, along with information on annual sick time, to estimate a structural labor supply model that incorporates a health capital stock with the traditional human capital learning-by-doing model. The estimates show strong evidence of learning by doing as well as strong persistence in health. However, the estimates reveal that time and money seem to have little effect on health consistent with "flat of the curve" medicine. We find strong evidence that consumption and leisure are direct substitutes in preferences, and consumption and leisure are each utility complements with good health.
Abstract
					Comprehensive data on consumption expenditures have historically not been collected in US longitudinal household surveys. The Panel Study of Income Dynamics (PSID) expanded its expenditure data collection in 1999 and 2005.  We examine these new expenditure data, highlighting several unique features of the PSID data. We then compare the PSID expenditure data with those in the Consumer Expenditure Survey (CE). We document that the PSID data cover nearly the entire scope of the CE data, and the mean statistics of total expenditures compare favorably between the two surveys. However, significant differences remain for certain expenditure categories.
Abstract
					Using data recently collected by the Panel Study of Income Dynamics, we find that the intergenerational correlation in expenditures is no larger than that in income, suggesting limited intra-family risk-sharing. On the other hand, even after controlling for the intergenerational correlation in income, the expenditures correlation remains significant. This suggests that other factors such as preferences, access to credit, and non-pecuniary inter vivos transfers potentially played a role in consumption smoothing across generations within a family. We also find that the correlation coefficients estimated using food and imputed total expenditures are smaller than that estimated using the measured total expenditures.
Abstract
					We present new evidence on trends in intergenerational mobility in the United States using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971–1993 birth cohorts. For children born between 1971 and 1986, we measure intergenerational mobility based on the correlation between parent and child income percentile ranks. For more recent cohorts, we measure mobility as the correlation between a child's probability of attending college and her parents' income rank. We also calculate transition probabilities, such as a child's chances of reaching the top quintile of the income distribution starting from the bottom quintile. Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the “birth lottery”–the parents to whom a child is born–are larger today than in the past.
Abstract
					How sensitive to business cycles are the earnings of top earners? And, how does the business cycle sensitivity of top earners vary by industry? We use a confidential dataset on earnings histories of US males from the Social Security Administration. On average, individuals in the top 1 percent of the earnings distribution are slightly more cyclical than the population average. But there are large differences across sectors; top earners in Finance, Insurance, and Real Estate (FIRE) and Construction face substantial business cycle volatility, whereas those in Services (who make up 40 percent of individuals in the top 1 percent) have earnings that are less cyclical than the average worker.
Abstract
					Using Danish high-frequency payroll data and tax reform variation, we detect year-end tax avoidance among top managers. Five to seven percent of top managers exploit year-end tax planning strategies to save taxes. Around 30 percent of the top managers engaging in year-end tax avoidance do so by retiming bonus payments while the rest shift regular wage income. However, bonus timing is most tax-sensitive. When considering all of the top managers receiving a December bonus, we find that more than one-quarter retime the bonus payment, whereas only 5 percent of those not receiving a bonus shift regular wage income.
Abstract
					We provide a simple quantitative general equilibrium model of occupational choice with credit market frictions to analyze the aggregate and distributional effects of asset transfer programs. Asset transfer programs have a positive but transient effect on aggregate productivity, and a negative impact on the aggregate capital stock. On net they have a negative but small effect on per capita income. The effects are very heterogeneous across treated individuals. We compare the results in our model to those from recent randomized control trials and historical natural experiments.
Abstract
					Recent studies argue that cross-country labor productivity differences are much larger in agriculture than in the aggregate. We reexamine the agricultural productivity data underlying this conclusion using new evidence from disaggregate sources. We find that for the world's staple grains—maize, rice, and wheat—cross-country differences in the quantity of grain produced per worker are enormous according to both micro- and macrosources. Our findings validate the idea that understanding agricultural productivity is at the heart of understanding world income inequality.
Abstract
					We develop a model of households with multiple needs (smoothing shocks, financing investment) and constraints (limited credit, self-control issues) in order to examine the nature of household's financing constraints in a developing country, and the impact of relaxing them. We show that increased access to credit has very different implications for the aggregate model economy depending on its form: asset-financed or cash. We then illustrate how a short-term increase in access to loans leads to very distinct behavior in the short run. The relevance of the model can be evaluated using a field experiment, which we are currently implementing in Uganda.
Abstract
					During the downturn of 2008–2009, output and hours fell significantly, but labor productivity rose. These facts have led many to conclude that there is a significant deviation between observations and current macrotheories that assume business cycles are driven, at least in part, by fluctuations in total factor productivities of firms. We show that once investment in intangible capital is included in the analysis, there is no inconsistency. Measured labor productivity rises if the fall in output is underestimated; this occurs when there are large unmeasured intangible investments. Microevidence suggests that these investments are large and cyclically important.
Abstract
					Intangible capital is an important factor of production in modern economies that is generally neglected in business cycle analyses. We demonstrate that intangible capital can have a substantial impact on business cycle dynamics, especially if the intangible is complementary with production capacity. We focus on customer capital: the capital embodied in the relationships a firm has with its customers. Introducing customer capital into a standard real business cycle model generates a volatile and countercyclical labor wedge, due to a mismeasured marginal product of labor. We also provide new evidence on cyclical variation in selling effort to discipline the exercise.
Abstract
					Intangible capital which relies on essential human inputs, or "organization capital," presents a unique challenge for measurement. Organization capital cannot be fully owned by firms' financiers, because it is partly embodied in key labor inputs. Instead, cash flows must be shared with key talent and thus neither book nor market values will fully capture its value. Measurement of organization capital requires a model featuring these unique property rights. We use accounting data along with a simple example of such a model to measure the fraction of the US capital stock which is missing from book and market values.
Abstract
					Commercial health insurers in California use provider capitation payments to different extents. These are similar to arrangements introduced by the recent health reforms to give physicians incentives to control costs. In a previous paper we showed that patients whose insurers used capitation incentives traveled further to access lower-priced, similar-quality hospitals than other same-severity patients. This paper predicts the implied effects of a move to widespread capitation. We show that, if the introduction of capitation prompted low-capitation insurers to act like high-capitation insurers, this would generate a 4–5 percent cost saving with some reduction in patient convenience but no reduction in quality.
Abstract
					This paper estimates an education production function using data on the College Scholastic Ability Test score and high school characteristics from Seoul, Korea, where, on entering high school, students are randomly assigned to schools within each school district. We derive a school production function by aggregating the individuals' potential outcomes under the random assignment and no cohort effect assumption. We find that the school production function coefficients differ between districts and that the single-sex school effect estimate is much larger than that found in previous studies.
Abstract
					This article develops a Bayesian framework for estimating multivariate treatment effect models in the presence of sample selection. The methodology is applied to a banking study that evaluates the effectiveness of lender of last resort (LOLR) policies and their ability to resuscitate the financial system. This paper employs a novel bank-level dataset from the Reconstruction Finance Corporation, and jointly models a bank's decision to apply for a loan, the LOLR's decision to approve the loan, and the bank's performance a few years after the disbursements. This framework offers practical estimation tools to unveil new answers to important regulatory questions.
Abstract
					The aging of the US population undoubtedly will be associated with macroeconomic changes. In particular, some combination of lower consumption growth and increased labor input will ultimately be required. But, the timing of these changes can have important effects on variables like the rate of return to capital and wages. If the adjustment to consumption is slow, which would be the case if budget deficits were allowed to rise significantly as the population ages, then aging is likely to be associated with an increase in the return to capital and a reduction in wages.
Abstract
					Using over two decades of Survey of Consumer Finances data and a pseudo-panel technique, we measure the impact of the Great Recession on US family wealth relative to the counterfactual of what wealth would have been given wealth accumulation trajectories. Our synthetic cohort-level models find that the Great Recession reduced average family wealth by 28.5 percent–nearly double the magnitude of previous pre-post mean descriptive estimates and double the magnitude of any previous recession since the 1980s. The housing market was only part of the story; all major wealth components fell as a result of the Great Recession.
Abstract
					In light of the growing numbers of women of color in the entrepreneurial sector in the United States, employing public-use microdata from the 2007 Survey of Business Owners, this study finds that new firms owned by black and Hispanic women were more likely to cease operations than those owned by their male counterparts or by non-Hispanic whites, even when controlling for other owner- and firm-level characteristics and labor market conditions. These differences occurred despite the existence of public programs designed to help female and minority entrepreneurs, raising the question of efficiency of the current policy infrastructure in the United States.
Abstract
					A typical strategy for measuring the returns to international experience—comparing the earnings of returning migrants to comparable non-migrants—has been criticized for not adequately accounting for self-selection. I suggest an alternative, testing whether individuals born beyond US borders, but into US citizenship, earn more in US labor markets relative to counterparts born on US soil. Those born abroad to US citizens did not self-select an international experience. Using the ACS, I find that the US market rewards international experience, especially in occupations that value creativity and innovation.  Women, in particular, are handsomely rewarded for international human capital.
Abstract
					The mobile applications (apps) industry has exhibited rapid entry and growth in the midst of a recession. Using unique data from the iPhone application ecosystem, we examine how the development of "killer apps" (apps appearing in the top grossing rank) varies by market and app characteristics. We find that previous app experience and no updating increase the likelihood of becoming a killer game app, while more updates increase the likelihood of becoming a non-game killer app. Development opportunities, level of competition, and demand preferences are possible drivers of the opposing innovation process results in game and non-game markets.
Abstract
					From 1980 to 1992, emerging and developing countries grew by 3.4 percent per year. Their annual rate of growth increased to 5.4 percent between 1993 and 2012. No such increase occurred for advanced nations, whose average growth from 1980 to 2012 was roughly constant (excluding the impact of the 2008–2009 Recession). Developing nations turned themselves around by embracing discipline-sustained commitment to a pragmatic and flexible growth strategy. Three illustrations of discipline through the lens of trade, fiscal, and debt reforms in the developing world offer relevant, practical lessons for recovery in advanced economies and continued catch-up growth in developing nations.
Abstract
					This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total income, the tradable side of the economy is a catalyst for restoring strong growth. A structural rebalancing is already underway; although it is only a third of the economy, the tradable sector generated more than half of gross gains in value-added since the start of the recovery. However, distributional issues loom on the horizon.
Abstract
					We look at the effects of rainfall forecasts and realized rainfall on equilibrium agricultural wages over the course of the agricultural production cycle. We show theoretically that a forecast of good weather can lower wages in the planting stage, by lowering ex ante out-migration, and can exacerbate the negative impact of adverse weather on harvest-stage wages. Using Indian household panel data describing early-season migration and district-level planting- and harvest-stage wages over the period 2005–2010, we find results consistent with the model, indicating that rainfall forecasts improve labor allocations on average but exacerbate wage volatility because they are imperfect.
Abstract
					This paper estimates how experimentally-manipulated experiences with a novel financial product, rainfall index insurance, affect subsequent insurance demand. Using a seven-year panel, we develop three main findings. First, recent experience matters for demand, consistent with overinference from small samples. Second, spillovers also matter, in the sense that the recent payout experience of village co-residents affects insurance demand about as much as one's own recent payout experience. Third, the spillover effect decays as time passes while the effect of one's own experience does not. We discuss implications of this analysis for commercial sustainability of this complicated but promising risk management technology.
Abstract
					Microfinance institutions have started to bundle their basic loans with other financial services, such as health insurance. Using a randomized control trial in Karnataka, India, we evaluate the impact on loan renewal from mandating the purchase of actuarially-fair health insurance covering hospitalization and maternity expenses. Bundling loans with insurance led to a 16 percentage points (23 percent) increase in drop-out from microfinance, as many clients preferred to give up microfinance than pay higher interest rates and receive insurance. In a Pyrrhic victory, the total absence of demand for health insurance led to there being no adverse selection in insurance enrollment.
Abstract
					Quantifications of gains from trade in heterogeneous firm models assume that productivity is Pareto distributed. Replacing this assumption with log-normal heterogeneity retains some useful Pareto features, while providing a substantially better fit to sales distributions-especially in the left tail. The cost of log-normal is that gains from trade depend on the method of calibrating the fixed cost and productivity distribution parameters. When set to match the size distribution of firm sales in a given market, the log-normal assumption delivers gains from trade in a symmetric two-country model that can be twice as large as under the Pareto assumption.
Abstract
					In 2008, a group of uninsured low-income adults in Oregon was selected by lottery for the chance to apply for Medicaid. Using this randomized design and 2009 administrative data, we find no significant effect of Medicaid on employment or earnings. Our 95 percent confidence intervals allow us to reject that Medicaid causes a decline in employment of more than 4.4 percentage points, or an increase of more than 1.2 percentage points. Medicaid increases food stamps receipt, but has little, if any, impact on receipt of other measured government benefits, including SSDI.
Abstract
					As health insurance becomes available outside of the employment relationship as a result of the Affordable Care Act (ACA), the cost of applying for Social Security Disability Insurance (SSDI)–potentially going without health insurance coverage during a waiting period totaling 29 months from disability onset–will decline for many people with employer-sponsored health insurance. At the same time, the value of SSDI and Supplemental Security Income (SSI) participation will decline for individuals who otherwise lacked access to health insurance. We study the 2006 Massachusetts health insurance reform to estimate the potential effects of the ACA on SSDI and SSI applications.
Abstract
					We use data from the Accelerated Benefits demonstration to estimate the impacts of providing newly entitled disability insurance (DI) beneficiaries with health insurance and additional services during the DI program's 24-month Medicare waiting period. While health insurance alone did not increase employment, the additional employment services appeared to have positive short-term impacts on labor market activity. We find a statistically significant increase in employment and earnings in the second calendar year after random assignment; although these findings disappear in the third calendar year. Our results may have implications for disability reform proposals and provisions within the Affordable Care Act.
Abstract
					Married women's labor force participation (LFP) increased dramatically in the United States between the 1940 and 1960 cohort. The two cohorts lived under different divorce regimes (unilateral divorce rather than mutual consent). The 1960 cohort also had a lower gender wage gap. We use a quantitative dynamic life-cycle model of endogenous marital status, calibrated to key statistics for the 1940 cohort, to study the effects of these two changes. We find that both drivers combined are able to account for over 50 percent of the increase in married women's LFP and also generate large movements in marriage and divorce rates.
Abstract
					Has there been an increase in positive assortative mating? Does assortative mating contribute to household income inequality? Data from the United States Census Bureau suggests there has been a rise in assortative mating. Additionally, assortative mating affects household income inequality. In particular, if matching in 2005 between husbands and wives had been random, instead of the pattern observed in the data, then the Gini coefficient would have fallen from the observed 0.43 to 0.34, so that income inequality would be smaller. Thus, assortative mating is important for income inequality. The high level of married female labor-force participation in 2005 is important for this result.
Abstract
					Using the Panel Study of Income Dynamics, we provide evidence that to understand household decisions and evaluate policies designed to affect individual welfare, it is important to add an intertemporal dimension to the by-now standard static collective models of the household. Specifically, we document that the observed differences in labor supply by gender and marital status do not arise suddenly at the time of marriage, but rather emerge gradually over time. We then propose an intertemporal collective model that has the potential of explaining the observed patterns.
Abstract
					We use the confidential files of the Canadian Census 1991–2006, combined with information from O*NET on the skill requirements of jobs, to show that the labor market patterns of female immigrants do not fit the profile of secondary workers, but rather conform to the recent experience of married native women with rising participation (and wage assimilation). At best, only relatively uneducated immigrant women in unskilled occupations may fit the profile of secondary workers. Educated immigrant women experience skill assimilation over time: a reduction in physical strength and a gradual increase in analytical skills required in their jobs relative to natives.
Abstract
					This paper examines the possibility that a child's years of schooling could increase in the number of siblings, instead of being diminished by competition for parents' resources: if unable to finance the education of their younger children, parents may do so through their older children's labor income. We examine this possibility in a model combining convex returns to education and credit constraints. Our model predicts correlations among family size, years of schooling and birth order, which would not exist when either of these two elements is absent. Empirical patterns shown in the United States, Mexico, and South Korea support the model predictions.
Abstract
					We introduce the idea that easily inferable demographic characteristics such as gender may not be sufficient to define type in the supervisor-employee mentoring relationship. We use longitudinal data on athletic directors at NCAA Division I programs to identify through observed mobility the propensity of top-level administrators to hire and retain female head coaches, above and beyond an organization's culture. We show that supervisor gender appears to be unrelated to female friendliness in this setting. Overall, our findings indicate that more focus should be placed on the more complex manager type defined by attitudes in addition to attributes.
Abstract
					In Mexico, as in most Latin American countries with indigenous populations, it is commonly believed that European phenotypes are preferred to mestizo or indigenous phenotypes. However, it is hard to test for such racial biases in the labor market using official statistics since race can only be inferred from native language. The experiment consisted on sending fictitious curriculums responding to job advertisements with randomized information of the applicants. The resumes included photographs representing three distinct phenotypes: Caucasian, mestizo, and indigenous. We find that indigenous looking females are discriminated against, but the effect is not present for males.
Abstract
					We document that successive cohorts of college and post-college degree graduates experienced an increase in the probability of obtaining cognitive jobs both at the start of their careers and with time in the labor market in the 1990s. However, this pattern reversed for cohorts entering after 2000; profiles of the proportion of a cohort in cognitive occupations since school completion fall and become flatter with successive cohorts. Since cohort-wage profiles display a similar pattern, these findings appear to fit with a strong increase in demand for cognitive tasks in the 1990s followed by a decline in the 2000s.
Abstract
					We show that, among college graduates, earnings differentials across field of study have increased substantially since the early 1990s. We study the degree to which this increase can be accounted for by changes in the labor market return to skills associated with a major. To do so, we define major-specific measures of the relative importance of abstract, routine, and manual tasks on the job, by linking majors to the occupations they typically lead to. Changes in the relationship between earnings and these measures can account for about two-thirds of the rise in inequality.
Abstract
					An increasingly influential "technological-discontinuity" paradigm suggests that IT-induced technological changes are rapidly raising productivity while making workers redundant. This paper explores the evidence for this view among the IT-using US manufacturing industries. There is some limited support for more rapid productivity growth in IT-intensive industries depending on the exact measures, though not since the late 1990s. Most challenging to this paradigm, and to our expectations, is that output contracts in IT-intensive industries relative to the rest of manufacturing. Productivity increases, when detectable, result from the even faster declines in employment.
Abstract
					This paper provides new evidence on tracking by studying an innovative curriculum implemented by Chicago Public Schools (CPS). In 2003, CPS enacted a double-dose algebra policy requiring 9th grade students with 8th grade math scores below the national median to take two periods of algebra instead of one. This policy led schools to sort students into algebra classes by math ability, so that tracking increased in all algebra classes. We show that double-dosed students are exposed to a much lower-skilled group of peers in their algebra classes but nonetheless benefit substantially from the additional instructional time and improved pedagogy.
Abstract
					Value-added models (VAMs) are increasingly used to measure school effectiveness. Yet, random variation in school attendance is necessary to test the validity of VAMs and to guide the selection of models for measuring causal effects of schools. In this paper, I use random assignment from a public school choice lottery to test the predictive power of VAM specifications. In VAMs with minimal controls and two or more years of prior data, I fail to reject the hypothesis that school effects are unbiased. Overall, many commonly used VAMs are accurate predictors of student achievement gains.
Abstract
					Recent evidence suggests that exposure to a larger share of Limited English (LE) students is associated with a slight decline in performance for students at the top of the achievement distribution. In this paper we explore whether LE peer effects differ by gender and race. Utilizing school-by-year fixed effect methods that allow us to address possible endogeneity with respect to the schools students attend, we find evidence of heterogeneous peer effects of LE students on natives. Specifically, we find no LE student peer effects on females' achievement in math and reading but significant negative effects on males and black students.
Abstract
					The paper reports the architecture of a continuous combinatorial auction. Preferences are based on sets of items and feasibility requires the nonintersection of sets. Countdown clocks replace eligibility and activity requirements typical of rounds-based auctions. Bids remain in the system to be combined with new bids to form winning collections. Increment requirements dictate improvements over appropriate collections of existing bids. The auction evolved from experimental methods and operates at high levels of efficiency. Field applications are reported and result in natural equilibration in a few hours as opposed to days or weeks required by round-based architectures.
Abstract
					Popular accounts suggest that advertising revenue per unit of consumer attention is lower online than offline, and has fallen in traditional media as the Internet has made advertising markets more competitive. I assess these claims theoretically and empirically, and compare the patterns we observe for the Internet to trends in advertising around the introduction of television and radio. The evidence suggests that the price of attention for similar consumers is actually higher online than offline, and that the growth of new media is not robustly associated with a declining price of attention.
Abstract
					We document some early effects of how mobile devices might change Internet and retail commerce. We present three main findings based on an analysis of eBay's mobile shopping application and core Internet platform. First, early adopters of mobile e-commerce applications appear to be people who already were relatively heavy Internet commerce users. Second, adoption of the mobile shopping application is associated with both an immediate and sustained increase in total platform purchasing, with little evidence of substitution from the core platform. Third, differences in user behavior across the mobile applications and the regular Internet site are not yet so dramatic.
Abstract
					A model is proposed in which stochastic choice results from noise in cognitive processing rather than random variation in preferences. The mental process used to make a choice is nonetheless optimal, subject to a constraint on available information-processing capacity that is motivated by neurophysiological evidence. The optimal information-constrained model is found to offer a better fit to experimental data on choice frequencies and reaction times than either a purely mechanical process model of choice (the drift-diffusion model) or an optimizing model with fewer constraints on feasible choice processes (the rational inattention model).
Abstract
					Neuroeconomics strives to use knowledge from neuroscience to improve models of decisionmaking. Here we introduce a biologically plausible, drift-diffusion model that is able to jointly predict choice behavior and response times across different choice environments. The model has both normative and positive implications for economics. First, we consistently observe that decisionmakers inefficiently allocate their time to choices for which they are close to indifference. We demonstrate that we can improve subjects' welfare using a simple intervention that puts a time limit on their choices. Second, response times can be used to predict indifference points and the strength of preferences.
Abstract
					Massive Online Open Courses (MOOCs) present the potential to deliver high quality education to a large number of students. But they suffer from low completion rates. This paper identifies disorganization as a factor behind failure to complete a MOOC. Students who enroll one day late are 17 percentage points less likely to earn a certificate than students who enroll exactly on time. This reflects selection, but it does seem to be related to demographic characteristics, motivation to complete the course, or ability. This suggests that building in even more structure in the MOOC could be a factor in improving performance.
Abstract
					I consider economically sustainable online postsecondary education, including massive open online courses (MOOCs). The analysis suggests that MOOCs will be financially sustainable substitutes for some non-selective postsecondary education, but there are substantial risks. The analysis suggests that MOOCs will be financially sustainable substitutes for only a small share of highly selective postsecondary education (HSPE) and are likely to collapse the economic model that allows HSPE institutions to invest in advanced education and research. I outline a non-MOOC model of online education that may allow HSPE institutions to sustain their distinctive activities and to reach a larger number of students.
Abstract
					US climate policy is unfolding under the Clean Air Act. Mobile source and construction permitting regulations are in place. Most important, EPA and the states will determine the form and stringency of the regulations for power plants. Various approaches would create an implicit price on emitting greenhouse gases and create valuable assets that would be distributed differently among electricity producers, consumers, and the government. We compare a tradable performance standard with several cap-and-trade policies. Distributing asset values to fossil-fueled producers and consumers has small effects on average electricity prices but imposes greater social cost than a revenue-raising policy.
Abstract
					A carbon tax is a promising tool for discouraging the greenhouse gas emissions that cause climate change. In principle, a well-designed tax could reduce the risk of climate change, minimize the cost of emissions reductions, encourage innovation in low-carbon technologies, and raise new public revenue. But designing a real-world carbon tax poses significant challenges. We analyze those challenges from a public finance perspective, emphasizing three tax policy design issues: setting the tax rate, collecting the tax, and using the resulting revenue. The benefits of a carbon tax will depend on how policymakers address those issues.
Abstract
					By 2015, global oil consumption will reach 90 million barrels per day. In part, this high level of consumption reflects the fact that many countries provide subsidies for gasoline and diesel. This paper examines global fuel subsidies using the latest available data from the World Bank, finding that road-sector subsidies for gasoline and diesel totaled $110 billion in 2012. Pricing fuels below cost is inefficient because it leads to overconsumption. Under baseline assumptions about supply and demand elasticities, the total annual deadweight loss worldwide is $44 billion. Incorporating external costs increases the economic costs substantially.
Abstract
					India's coal-fired generating capacity doubled between 1990 and 2010 and currently accounts for 70 percent of electricity produced. Despite this, thermal efficiency at state-owned coal-fired power plants in India is significantly lower than at plants in the United States. When matched on age and capacity, heat input per kWh was 8 percent higher at Indian plants between 1997 and 2009. This can only partly be explained by the lower heat content of Indian coal. Electricity sector restructuring in the United States improved thermal efficiency at investor-owned plants; however, electricity sector restructuring in India has yet to improve thermal efficiency at state-owned coal-fired power plants.
Abstract
					Revealed preference theory offers a criterion for decision-making quality: if decisions are high quality then there exists a utility function the choices maximize. We conduct a large-scale experiment to test for consistency with utility maximization. Consistency scores vary markedly within and across socioeconomic groups. In particular, consistency is strongly related to wealth: a standard deviation increase in consistency is associated with 15-19 percent more household wealth. This association is quantitatively robust to conditioning on correlates of unobserved constraints, preferences, and beliefs. Consistency with utility maximization
under laboratory conditions thus captures decision-making ability
that applies across domains and influences important real-world outcomes.
Abstract
					We develop and estimate an equilibrium job search model of worker careers, allowing for human capital accumulation, employer heterogeneity and individual-level shocks. Wage growth is decomposed into contributions of human capital and job search,
within and between jobs. Human capital accumulation is largest
for highly educated workers. The contribution from job search to
wage growth, both within- and between-job, declines over the first
ten years of a career – the ‘job-shopping’ phase of a working life – after which workers settle into high-quality jobs using outside offers to generate gradual wage increases, thus reaping the benefits from competition between employers.
Abstract
					We employ data that match the population of Danish workers to the universe of
private-sector Danish firms, with product-level trade flows by origin- and destination-countries.
We document new stylized facts about offshoring and instrument for offshoring and exporting.
Within job spells, offshoring increases (decreases) the high-skilled (low-skilled) wage; exporting
increases the wages of all skill-types; the net wage-effect of trade varies substantially within the
same skill-type; conditional on skill, the wage-effect of offshoring varies across task
characteristics. We estimate the overall effects of offshoring on workers' present and future
income streams by constructing pre-offshoring-shock worker-cohorts and tracking them over
time.
Abstract
					We study the effect of U.S. food aid on conflict in recipient countries. Our analysis exploits
time variation in food aid shipments due to changes in U.S. wheat production and cross-sectional
variation in a country's tendency to receive any U.S. food aid. According to our estimates, an
increase in U.S. food aid increases the incidence and duration of civil conflicts, but has no robust
effect on inter-state conflicts or the onset of civil conflicts. We also provide suggestive evidence
that the effects are most pronounced in countries with a recent history of civil conflict.
Abstract
					We study the determinants of differences in farm-size across countries and their impact on agricultural and aggregate productivity using a quantitative sectoral model featuring a distribution of farms. Measured aggregate factors (capital, land, economy-wide productivity) account for ¼ of the observed differences in farm size and productivity. Policies and institutions that misallocate resources across farms have the potential to account for the remaining differences. Exploiting within-country variation in crop-specific price distortions and their correlation with farm size, we construct a cross-country measure of farm-size distortions which together with aggregate factors accounts for ½ of the cross-country differences in size and productivity.
Abstract
					This paper estimates the response of investment to changes in uncertainty using data on oil drilling in Texas and the expected volatility of the future price of oil. Using a dynamic model of firms' investment problem, I find that: (1) the response of drilling activity to changes in price volatility has a magnitude consistent with the optimal response prescribed by theory, (2) the cost of failing to respond to volatility shocks is economically significant, and (3) implied volatility data derived from futures options prices yields a better fit to firms' investment behavior than backward-looking volatility measures such as GARCH.
Abstract
					We study the Lagos and Wright (2005) model of monetary exchange in the laboratory.
With a finite population of sufficiently patient agents, this model has a unique
monetary equilibrium and a continuum of non-monetary gift exchange equilibria, some
of which Pareto dominate the monetary equilibrium. We find that subjects avoid the
gift-exchange equilibria in favor of the monetary equilibrium. We also study versions of
the model without money where all equilibria involve non-monetary gift-exchange. We
find that welfare is higher in the model with money than without money, suggesting
that money plays a role as an efficiency enhancing coordination device.
Abstract
					Causal estimates of the benefits of increased schooling using U.S.
state schooling laws as instruments typically rely on specifications
which assume common trends across states in the factors affecting
different birth cohorts. Differential changes across states during
this period, such as relative school quality improvements, suggest
that this assumption may fail to hold. Across a number of outcomes including wages, unemployment, and divorce, we find that
statistically significant causal estimates become insignificant and,
in many instances, wrong-signed when allowing year of birth effects
to vary across regions.
Abstract
					The endowment effect, the tendency to value possessions more
than non-possessions, is a well known departure from rational
choice and has been replicated in numerous settings. We investigate the universality of the endowment effect, its evolutionary significance, and its dependence on environmental factors. We experimentally test for the endowment effect in an isolated and evolutionarily relevant population of hunter-gatherers, the Hadza Bushmen of Northern Tanzania. We find that Hadza living in isolated regions do not display the endowment effect, while Hadza living in a geographic region with increased exposure to modern society and markets do display the endowment effect.
Abstract
					This paper investigates the effect of early exposure to neighborhood crime on
subsequent criminal behavior of youth exploiting a unique natural experiment between 1986 and
1998 when refugee immigrants to Denmark were assigned to neighborhoods quasi-randomly. We
find strong evidence that the share of young people convicted for crimes, in particular violent
crimes, in the neighborhood increases convictions of male assignees later in life. No such effects
are found for other measures of neighborhood crime including the rate of committed crimes. Our
findings suggest social interaction as a key channel through which neighborhood crime is linked
to individual criminal behavior.
Abstract
					We estimate the causal effect of a large development program on conflict in the
Philippines through a regression discontinuity design that exploits an arbitrary poverty
threshold used to assign eligibility for the program. We find that barely eligible municipalities experienced a large increase in conflict casualties compared to barely ineligible
ones. This increase is mostly due to insurgent-initiated incidents in the early stages of
program preparation. Our results are consistent with the hypothesis that insurgents
try to sabotage the program because its success would weaken their support in the
population.
Abstract
					We describe findings from the first large-scale cluster randomized controlled trial in a developing country that evaluates the uptake of a health-protecting technology, insecticide-treated bednets (ITNs), through micro-consumer loans, as compared to free distribution and control conditions. Despite a relatively high price, 52 percent of sample households purchased ITNs, highlighting the role of liquidity constraints in explaining earlier low adoption rates. We find mixed evidence of improvements in malaria indices. We interpret the results and their implications within the debate about cost sharing, sustainability and liquidity constraints in public health initiatives in developing countries.
Abstract
					Large exporters are simultaneously large importers. We show that this pattern is key to understanding low aggregate exchange rate pass-through as well as the variation in pass-through across exporters. We develop a theoretical framework with variable markups and imported inputs, which predicts that firms with high import shares and high market shares have low exchange rate pass-through. We test and quantify the theoretical mechanism using Belgian firm-product-level data on imports and exports. Small nonimporting firms have nearly complete pass-through, while large import-intensive exporters have pass-through around 50 percent, with the marginal cost and markup channels contributing roughly equally.
Abstract
					Do intellectual property rights influence multinationals' manufacturing location decisions? My theoretical model indicates that countries with strong patent laws attract multinational activity, but only in sectors with relatively long product life cycles. By contrast, firms with short life-cycle technologies are insensitive, because offshore imitation is less likely to succeed before obsolescence. I document strong empirical regularities consistent with the model using a panel dataset on the global operations of US-based multinational firms and a new measure of product obsolescence. Moreover, my identification strategy allows me to isolate the causal effect of patent laws on multinational activity.
Abstract
					We estimate peer effects in paid paternity leave in Norway using a regression discontinuity design. Coworkers and brothers are 11 and 15 percentage points, respectively, more likely to take paternity leave if their peer was exogenously induced to take up leave. The most likely mechanism is information transmission, including increased knowledge of how an employer will react. The estimated peer effect snowballs over time, as the first peer interacts with a second peer, the second peer with a third, and so on. This leads to long-run participation rates which are substantially higher than would otherwise be expected.
Abstract
					Many of the facts about the extensive margin of trade—which firms export, and how many products are sent to how many destinations—are consistent with a surprisingly large class of trade models because of the sparse nature of trade data. We propose a statistical model to account for sparsity, formalizing the assignment of trade shipments to country, product, and firm categories as balls falling into bins. The balls-and-bins model quantitatively reproduces the pattern of zero product- and firm-level trade flows across export destinations, and the frequency of multiproduct, multidestination exporters. In contrast, balls-and-bins overpredicts the fraction of exporting firms.
Abstract
					This paper exploits a sharp reduction in patient cost sharing at age 70 in Japan, using a regression discontinuity design to examine its effect on utilization, health, and financial risk arising from out-of-pocket expenditures. Due to the national policy, cost sharing is 60–80 percent lower at age 70 than at age 69. I find that both outpatient and inpatient care are price sensitive among the elderly. While I find little impact on mortality and other health outcomes, the results show that reduced cost sharing is associated with lower out-of-pocket expenditures, especially at the right tail of the distribution.
Abstract
					A law issued to combat political corruption and Mafia infiltration of city councils in Italy has resulted in episodes of large, unanticipated, temporary contractions in local public spending. Using these episodes as instruments, we estimate the output multiplier of spending cuts at provincial level—controlling for national monetary and fiscal policy, and holding the tax burden of local residents constant—to be 1.5. Assuming that lagged spending is exogenous to current output brings the estimate of the overall multiplier up to 1.9. These results suggest that local spending adjustment may be quite consequential for local activity.
Abstract
					We posit that household decision-making over fertility is characterized by moral hazard since most contraception can only be perfectly observed by the woman. Using an experiment in Zambia that varied whether women were given access to contraceptives alone or with their husbands, we find that women given access with their husbands were 19 percent less likely to seek family planning services, 25 percent less likely to use concealable contraception, and 27 percent more likely to give birth. However, women given access to contraception alone report a lower subjective well-being, suggesting a psycho-social cost of making contraceptives more concealable.
Abstract
					This paper analyzes the effects on voting behavior of information disseminated over the Internet. We address endogeneity in Internet availability by exploiting regional and technological peculiarities of the preexisting voice telephony network that hindered the roll-out of fixed-line infrastructure for high-speed Internet. We find negative effects of Internet availability on voter turnout, which we relate to a crowding-out of TV consumption and increased entertainment consumption. We find no evidence that the Internet systematically benefits specific parties, suggesting ideological self-segregation in online information consumption. Robustness tests, including placebo estimations from the pre-Internet period, support a causal interpretation of our results.
Abstract
					During the last three decades government debt has increased in most developed countries. During the same period we have also observed a significant liberalization of international financial markets. We propose a multi-country model with incomplete markets and show that governments may choose higher levels of debt when financial markets become internationally integrated. We also show that public debt increases with the volatility of uninsurable income (idiosyncratic risk). To the extent that the increase in income inequality observed in some industrialized countries has been associated with higher idiosyncratic risk, the paper suggests another potential mechanism for the rise in public debt.
Abstract
					The newsworthiness of an event is partly determined by how unusual it is and this paper investigates the business cycle implications of this fact. Signals that are more likely to be observed after unusual events may increase both uncertainty and disagreement among agents. In a simple business cycle model, such signals can explain why we observe (i) occasional large changes in macro economic aggregate variables without a correspondingly large change in underlying fundamentals (ii) persistent periods of high macroeconomic volatility and (iii) a positive correlation between absolute changes in macro variables and the cross-sectional dispersion of survey expectations.
Abstract
					This paper studies a New Keynesian business cycle model with agents who are averse to ambiguity (Knightian uncertainty). Shocks to confidence about future TFP are modeled as changes in ambiguity. To assess the size of those shocks, our estimation uses not only data on standard macro variables, but also incorporates the dispersion of survey forecasts about growth as a measure of confidence. Our main result is that TFP and confidence shocks together can explain roughly two thirds of business cycle frequency movements in the major macro aggregates. Confidence shocks account for about 70% of this variation.
Abstract
					Firms' incentives to manufacture biased user reviews impede review usefulness. We examine the differences in reviews for a given hotel between two sites: Expedia.com (only a customer can post a review) and TripAdvisor.com (anyone can post). We argue that the net gains from promotional reviewing are highest for independent hotels with single-unit owners and lowest for branded chain hotels with multi-unit owners. We demonstrate that the hotel neighbors of hotels with a high incentive to fake have more negative reviews on TripAdvisor relative to Expedia; hotels with a high incentive to fake have more positive reviews on TripAdvisor relative to Expedia.
Abstract
					We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision.
Abstract
					When regulated firms are offered compensation to prevent them from relocating, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to analyzing compensation rules proposed under the EU Emissions Trading Scheme, where emission permits are allocated free of charge to carbon intensive and trade exposed industries. We show that this practice results in substantial overcompensation for given carbon leakage risk. Efficient permit allocation reduces the aggregate risk of job loss by more than half without increasing aggregate compensation.
Abstract
					This paper documents the pervasiveness of job polarization in 16 Western European countries over the period 1993-2010. It then develops and estimates a framework to explain job polarization using routine-biased technological change and offshoring. This model can explain much of both total job polarization and the split into within-industry and between-industry components.
Abstract
					Using new data on real estate listings, we provide new evidence that foreclosures have a causal effect on nearby house prices and disentangle the effect into two sources: competition and disamenities. We identify the causal effect by showing that sellers respond to new REO listings in the exact week of listing, not a week before and not a week after. We disentangle competition and disamenity effects by examining the spillover effect across various stages of the foreclosure process. We find that competition effects are important in all areas, but only find evidence for disamenity effects in high density, low price neighborhoods.
Abstract
					Administrative data from a large and diverse community college are used to examine if underrepresented minority students benefit from taking courses with underrepresented minority instructors. To identify racial interactions we estimate models that include both student and classroom fixed effects and focus on students with limited choice in courses. We find that the performance gap in terms of class dropout rates and grade performance between white and underrepresented minority students falls by 20 to 50 percent when taught by an underrepresented minority instructor. We also find these interactions affect longer term outcomes such as subsequent course selection, retention, and degree completion.
Abstract
					Are teachers' impacts on students' test scores ("value-added") a good measure of their quality? One reason this question has sparked debate is disagreement about whether value-added (VA) measures provide unbiased estimates of teachers' causal impacts on student achievement. We test for bias in VA using previously unobserved parent characteristics and a quasi-experimental design based on changes in teaching staff. Using school district and tax records for more than one million children, we find that VA models which control for a student's prior test scores exhibit little bias in forecasting teachers' impacts on student achievement.
Abstract
					Are teachers' impacts on students' test scores ("value-added") a good measure of their quality? This question has sparked debate partly because of a lack of evidence on whether high value-added (VA) teachers improve students' long-term outcomes. Using school district and tax records for more than one million children, we find that students assigned to high-VA teachers are more likely to attend college, earn higher salaries, and are less likely to have children as teenagers. Replacing a teacher whose VA is in the bottom 5% with an average teacher would increase the present value of students' lifetime income by approximately $250,000 per classroom.
Abstract
					Though risk aversion and the elasticity of intertemporal substitution have been the subjects of careful scrutiny, the long-run risks literature as well as the broader literature using recursive utility to address asset pricing puzzles have ignored the full implications of their parameter specifications. Recursive utility implies that the temporal resolution of risk matters and a quantitative assessment thereof should be part of the calibration process. This paper gives a sense of the magnitudes of implied timing premia. Its objective is to inject temporal resolution of risk into the discussion of the quantitative properties of long-run risks and related models.
Abstract
					This paper proposes foundations and a methodology for survey-based tracking of well-being. First, we develop a theory in which utility depends on "fundamental aspects" of well-being, measurable with surveys. Second, drawing from psychologists, philosophers, and economists, we compile a comprehensive list of such aspects. Third, we demonstrate our proposed method for estimating the aspects' relative marginal utilities—a necessary input for constructing an individual-level well-being index—by asking ~4,600 U.S. survey respondents to state their preference between pairs of aspect bundles. We estimate high relative marginal utilities for aspects related to family, health, security, values, freedom, happiness, and life satisfaction.
Abstract
					We reevaluate the role of human capital in determining the wealth of nations. We use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries. Our model can explain differences in schooling and earnings profiles and consequently estimates of Mincerian rates of return across countries. We find that effective human capital per worker varies substantially across countries. Cross-country differences in Total Factor Productivity (TFP) are significantly smaller than found in previous studies. Our model implies that output per worker is highly responsive to changes in TFP and demographic variables.
Abstract
					Public transit accounts for 1 percent of U.S. passenger miles traveled but attracts strong public support. Using a simple choice model, we predict that transit riders are likely to be individuals who commute along routes with severe roadway delays. These individuals' choices thus have high marginal impacts on congestion. We test this prediction with data from a strike in 2003 by Los Angeles transit workers. Estimating a regression discontinuity design, we find that average highway delay increases 47 percent when transit service ceases. We find that the net benefits of transit systems appear to be much larger than previously believed.
Abstract
					We analyze whether mid-level managers in securitized finance were aware of a large-scale housing bubble and a looming crisis in 2004-2006 using their personal home transaction data. We find that the average person in our sample neither timed the market nor were cautious in their home transactions, and did not exhibit awareness of problems in overall housing markets. Certain groups of securitization agents were particularly aggressive in increasing their exposure to housing during this period, suggesting the need to expand the incentives-based view of the crisis to incorporate a role for beliefs.
Abstract
					We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by settlement of U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers. Using a difference-in-difference framework, we find that Countrywide's monthly delinquency rate increased more than 0.54 percentage points—a ten percent relative increase—immediately after the settlement's announcement. The estimated increase in default rates is largest among borrowers least likely to default otherwise. These results suggest that strategic behavior should be an important consideration in designing mortgage modification programs. (JEL D10, G21, G33, K00)
Abstract
					We measure the pass-through of emissions costs to electricity prices. We perform both reduced-form and structural estimations based on optimal bidding in this market. Using rich micro-level data, we estimate the channels affecting pass-through in a flexible manner, with minimal functional form assumptions. Contrary to many studies in the general pass-through literature, we find that emissions costs are almost fully passed-through to electricity prices. Since electricity is traded through high-frequency auctions for highly inelastic demand, firms have weak incentives to adjust markups after the cost shock. Furthermore, the costs of price adjustment are small.
Abstract
					Electricity and water are often subsidized in developing countries to increase their affordability for low-income households. Ideally, such subsidies would create sufficient demand in poor neighborhoods to encourage private investment in their infrastructure. Instead, many regions receiving large subsidies have precarious distribution networks supplying users who never pay. Using a structural model of household electricity demand in Colombia, I predict the change in consumption and profits from upgrading low-quality electricity connections. I show that the existing subsidies, which provide greater transfers to areas with unreliable supply, deter investment to modernize infrastructure. Finally, I analyze alternative programs with stronger investment incentives. (JEL H23, H54, L94, L98, O12, O13)
Abstract
					Teacher contracts that condition pay and retention on demonstrated performance can improve selection into and out of teaching. I study alternative contracts in a simulated teacher labor market that incorporates dynamic self-selection and Bayesian learning. Bonus policies create only modest incentives and thus have small effects on selection. Reductions in tenure rates can have larger effects, but must be accompanied by substantial salary increases; elimination of tenure confers little additional benefit unless firing rates are extremely high. Benefits of both bonus and tenure policies exceed costs, though optimal policies are sensitive to labor market parameters about which little is known. (JEL I21, J22, J23, J24, J31, J41, J45)
Abstract
					We measure the impact of a drastic new technology for producing steel—the minimill—on industry-wide productivity in the US steel industry, using unique plant-level data between 1963 and 2002. The sharp increase in the industry's productivity is linked to this new technology through two distinct mechanisms: (i) the mere displacement of the older technology (vertically integrated producers) was responsible for a third of the increase in the industry's productivity, and (ii) increased competition, due the minimill expansion, drove a productivity resurgence at the surviving vertical integrated producers and, consequently, the productivity of the industry as a whole. (JEL D24, L13, L23, L61, M11, O31, O33)
Abstract
					We estimate a bargaining model of competition between hospitals and managed care organizations (MCOs) and use the estimates to evaluate the effects of hospital mergers. We find that MCO bargaining restrains hospital prices significantly. The model demonstrates the potential impact of coinsurance rates, which allow MCOs to partly steer patients toward cheaper hospitals. We show that increasing patient coinsurance tenfold would reduce prices by 16 percent. We find that a proposed hospital acquisition in Northern Virginia that was challenged by the Federal Trade Commission would have significantly raised hospital prices. Remedies based on separate bargaining do not alleviate the price increases. (JEL C78, G34, I11, I13, L13)
Abstract
					We study whether people became less likely to switch Medicare prescription drug plans (PDPs) due to more options and more time in Part D. Panel data for a random 20 percent sample of enrollees from 2006-2010 show that 50 percent were not in their original PDPs by 2010. Individuals switched PDPs in response to higher costs of their status quo plans, saving them money. Contrary to choice overload, larger choice sets increased switching unless the additional plans were relatively expensive. Neither switching overall nor responsiveness to costs declined over time, and above-minimum spending in 2010 remained below the 2006 and 2007 levels. (JEL H51, I13, I18)
Abstract
					Following FCC pressure to end bill shock, cellular carriers now alert customers when they exceed usage allowances. We estimate a model of plan choice, usage, and learning using a 2002-2004 panel of cellular bills. Accounting for firm price adjustment, we predict that implementing alerts in 2002-2004 would have lowered average annual consumer welfare by $33. We show that consumers are inattentive to past usage, meaning that bill-shock alerts are informative. Additionally, our estimates imply that consumers are overconfident, underestimating the variance of future calling. Overconfidence costs consumers $76 annually at 2002-2004 prices. Absent overconfidence, alerts would have little to no effect. (JEL D12, D18, L11, L96, L98)
Abstract
					In a large-scale controlled trial in collaboration with the reelection campaign of an Italian incumbent mayor, we administered (randomized) messages about the candidate's valence or ideology. Informational treatments affected both actual votes in the precincts and individual vote declarations. Campaigning on valence brought more votes to the incumbent, but both messages affected voters' beliefs. Cross-learning occurred, as voters who received information about the incumbent also updated their beliefs on the opponent. With a novel protocol of beliefs elicitation and structural estimation, we assess the weights voters place upon politicians' valence and ideology, and simulate counterfactual campaigns. (JEL D12, D72, D83)
Abstract
					We investigate the relationship between political networks, weak institutions, and election fraud during the 2010 parliamentary election in Afghanistan combining: (i) data on political connections between candidates and election officials; (ii) a nationwide controlled evaluation of a novel monitoring technology; and (iii) direct measurements of aggregation fraud. We find considerable evidence of aggregation fraud in favor of connected candidates and that the announcement of a new monitoring technology reduced theft of election materials by about 60 percent and vote counts for connected candidates by about 25 percent. The results have implications for electoral competition and are potentially actionable for policymakers. (JEL C93, D02, D72, K42, O17)
Abstract
					The TseTse fly is unique to Africa and transmits a parasite harmful to humans and lethal to livestock. This paper tests the hypothesis that the TseTse reduced the ability of Africans to generate an agricultural surplus historically. Ethnic groups inhabiting TseTse-suitable areas were less likely to use domesticated animals and the plow, less likely to be politically centralized, and had a lower population density. These correlations are not found in the tropics outside of Africa, where the fly does not exist. The evidence suggests current economic performance is affected by the TseTse through the channel of precolonial political centralization. (JEL I12, N57, O13, O17, Q12, Q16, Q18)
Abstract
					This paper evaluates changes in fuel procurement practices by coal and gas-fired power plants in the United States following state-level legislation that ended cost-of-service regulation of electricity generation. I find that deregulated plants substantially reduce the price paid for coal (but not gas) and tend to employ less capital-intensive sulfur abatement techniques relative to matched plants that were not subject to any regulatory change. Deregulation also led to a shift toward more productive coal mines. I show how these results lend support to theories of asymmetric information, capital bias, and regulatory capture as important sources of regulatory distortion. (JEL L51, L71, L94, L98, Q35, Q41, Q48)
Abstract
					During the financial crisis, life insurers sold long-term policies at deep discounts relative to actuarial value. The average markup was as low as -19 percent for annuities and -57 percent for life insurance. This extraordinary pricing behavior was due to financial and product market frictions, interacting with statutory reserve regulation that allowed life insurers to record far less than a dollar of reserve per dollar of future insurance liability. We identify the shadow cost of capital through exogenous variation in required reserves across different types of policies. The shadow cost was $0.96 per dollar of statutory capital for the average company in November 2008. (JEL G01, G22, G28, G32)
Abstract
					Faced with numerous potential catastrophes—nuclear and bioterrorism, mega-viruses, climate change, and others—which should society attempt to avert? A policy to avert one catastrophe considered in isolation might be evaluated in cost-benefit terms. But because society faces multiple catastrophes, simple cost-benefit analysis fails: even if the benefit of averting each one exceeds the cost, we should not necessarily avert them all. We explore the policy interdependence of catastrophic events, and develop a rule for determining which catastrophes should be averted and which should not. (JEL D61, Q51, Q54)
Abstract
					We provide a life-cycle framework for comparing insurance and disincentive effects of disability benefits. The risks that individuals face and the parameters of the Disability Insurance (DI) program are estimated from consumption, health, disability insurance, and wage data. We characterize the effects of disability insurance and study how policy reforms impact behavior and welfare. DI features high rejection rates of disabled applicants and some acceptance of healthy applicants. Despite worse incentives, welfare increases as programs become less strict or generosity increases. Disability insurance interacts with welfare programs: making unconditional means-tested programs more generous improves disability insurance targeting and increases welfare. (JEL D14, J24, J65)
Abstract
					We develop and analyze a labor market model in which heterogeneous
firms operate under decreasing returns and compete for labor by posting long-term contracts. Firms achieve faster growth by offering higher lifetime wages, which allows them to fill vacancies with higher probability, consistent with recent empirical findings. The model also captures several other regularities about firm size, job flows, and pay, and generates sluggish aggregate dynamics of labor market variables. In contrast to existing bargaining models with large firms, efficiency obtains and the model allows a tractable characterization over the business cycle. (JEL E24, J64, L11)
Abstract
					This paper considers the normative implications of technical change for tax policy design. A task-to-talent assignment model of the labor market is embedded into an optimal tax problem. Technical change modifies equilibrium wage growth across talents and the substitutability of talents across tasks. The overall optimal policy response is to reduce marginal income taxes on low to middle incomes, while raising those on middle to high incomes. The reform favors those in the middle of the income distribution, reducing their average taxes while lowering transfers to those at the bottom. (JEL D31, H21, H23, H24, J31, O33)
Abstract
					In many developing countries property rights over rural land are maintained through continuous personal use instead of by land titles. We show that removing the link between land use and land rights through the issuance of ownership certificates can result in large-scale adjustments to labor and land allocations. Using the rollout of the Mexican land certification program from 1993 to 2006, we find that households obtaining certificates were subsequently 28 percent more likely to have a migrant member. We also show that even though land certification induced migration, it had little effect on cultivated area due to consolidation of farm units. (JEL O13, O17, P14, Q15, Q18, Q24, Q28)
Abstract
					We describe the theory and practice of real GDP comparisons across countries and over time. Version 8 of the Penn World Table expands on previous versions in three respects. First, in addition to comparisons of living standards using components of real GDP on the expenditure side, we provide a measure of productive capacity, called real GDP on the output side. Second, growth rates are benchmarked to multiple years of cross-country price data so they are less sensitive to new benchmark data. Third, data on capital stocks and productivity are (re)introduced. Applications including the Balassa-Samuelson effect and development accounting are discussed. (JEL C43, C82, E01, E23, I31, O47)
Abstract
					We use microdata to show that young households with children are underinsured against the risk that an adult member of the household dies. This empirical finding can be explained by a macroeconomic model with human capital risk, age-dependent returns to human capital investment, and endogenous borrowing constraints due to limited contract enforcement. When calibrated, the model quantitatively accounts for the observed life-cycle variation in life insurance holdings, financial wealth, earnings, and consumption inequality. The model also predicts that reforms making consumer bankruptcy more costly will substantially increase the volume of both credit and insurance. (JEL D14, D91, G22, J13, J24)
Abstract
					The conventional wisdom since Yaari (1965) is that households without a bequest motive should fully annuitize their investments. Numerous frictions do not break this sharp result. We modify the Yaari framework by allowing a household's mortality risk itself to be stochastic due to health shocks. A lifetime annuity still helps to hedge longevity risk. But the annuity's remaining present value is correlated with medical costs, such as those for nursing home care, thereby reducing annuity demand, even without ad-hoc liquidity constraints. We find that most households should not hold a positive level of annuities, and many should hold negative amounts. (JEL D14, D82, G23, I12, J14, J26)
Abstract
					We study how unexpected changes in uncertainty about fiscal policy affect economic activity. First, we estimate tax and spending processes for the United States with time-varying volatility to uncover evidence of time-varying volatility. Second, we estimate a VAR for the US economy using the time-varying volatility found in the previous step. Third, we feed the tax and spending processes into an otherwise standard New Keynesian model. Both in the VAR and in the model, we find that unexpected changes in fiscal volatility shocks can have a sizable adverse effect on economic activity. An endogenous increase in markups is a key mechanism. (JEL E12, E23, E32, E52, E62)
Abstract
					We use data from a housing-assistance experiment to estimate a model of neighborhood choice. The experimental variation effectively randomizes the rents which households face and helps identify a key structural parameter. Access to two randomly selected treatment groups and a control group allows for out-of-sample validation of the model. We simulate the effects of changing the subsidy-use constraints implemented in the actual experiment. We find that restricting subsidies to even lower poverty neighborhoods would substantially reduce take-up and actually increase average exposure to poverty. Furthermore, adding restrictions based on neighborhood racial composition would not change average exposure to either race or poverty. (JEL I32, I38, R23, R38)
Abstract
					We present results from a "corruption game" (a dictator game modified so that recipients can take a side payment in exchange for accepting a reduction in the overall size of the pie). Dictators (silently) treated to be able to take more of the recipient's tokens, took more of them. They were also more likely to believe that recipients had accepted side payments, even if there was a prize for accuracy. The results favor the hypothesis that people avoid altruistic actions by distorting beliefs about others' altruism. (JEL C72, D63, D64, D83)
Abstract
					We consider an economy where individuals face uninsurable risks to their human capital accumulation and analyze the optimal level of linear taxes on capital and labor income together with the optimal path of government debt. We show that in the presence of such risks, it is beneficial to tax both labor and capital and to issue public debt. We also assess the quantitative importance of these findings, and show that the benefits of government debt and capital taxes both increase with the magnitude of idiosyncratic risks and the degree of relative risk aversion. (JEL D52, H21, H24, H25, H63, J24)
Abstract
					We address the role of "psychological frictions" in the incomplete take-up of EITC benefits with an IRS field experiment. We specifically assess the influence of program confusion, informational complexity, and stigma by evaluating response to experimental mailings distributed to 35,050 tax filers who failed to claim $26 million despite an initial notice. While the mere receipt of the mailing, simplification, and the heightened salience of benefits led to substantial additional claiming, attempts to reduce perceived costs of stigma, application, and audits did not. The study, and accompanying surveys, suggests that low program awareness/understanding and informational complexity contribute to the puzzle of low take-up. (JEL C93, D03, H24, M38)
Abstract
					This paper tests whether the 2003 dividend tax cut—one of the largest reforms ever to a US capital tax rate—stimulated corporate investment and increased labor earnings, using a quasi-experimental design and US corporate tax returns from years 1996-2008. I estimate that the tax cut caused zero change in corporate investment and employee compensation. Economically, the statistical precision challenges leading estimates of the cost-of-capital elasticity of investment, or undermines models in which dividend tax reforms affect the cost of capital. Either way, it may be difficult to implement an alternative dividend tax cut that has substantially larger near-term effects. (JEL C72, C78, C91)
Abstract
					We provide evidence that unemployment insurance affects equilibrium conditions in the labor market, which creates significant "market externalities." We provide a framework for identification of such equilibrium effects and implement it using the Regional Extension Benefit Program (REBP) in Austria which extended the duration of UI benefits for a large group of eligible workers in selected regions of Austria. We show that non-eligible workers in REBP regions have higher job finding rates, lower unemployment durations, and a lower risk of long-term unemployment. We discuss the implications of our results for optimal UI policy. (JEL E24, J64, J65, R23)
Abstract
					This paper explores the impact of the introduction of the widely viewed MTV reality show 16 and Pregnant on teen childbearing. Our main analysis relates geographic variation in changes in teen childbearing rates to viewership of the show. We implement an instrumental variables (IV) strategy using local area MTV ratings data from a pre-period to predict local area 16 and Pregnant ratings. The results imply that this show led to a 4.3 percent reduction in teen births. An examination of Google Trends and Twitter data suggest that the show led to increased interest in contraceptive use and abortion. (JEL D12, J13, J16, L82, Z13)
Abstract
					Using data from Pennsylvania and an array of empirical techniques to control for confounding factors, we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source, well productivity, and visibility. Results indicate large negative impacts on nearby groundwater-dependent homes, while piped-water-dependent homes exhibit smaller positive impacts, suggesting benefits from lease payments. Results have implications for the debate over regulation of shale gas development. (JEL L71, Q35, Q53, R31)
Abstract
					This paper studies the impact of an R&D cost shock on R&D investments, imported inputs, and their joint impact on firm performance. We introduce imported inputs into a model of R&D and endogenous productivity, and show that R&D and international sourcing are complementary activities. Exploiting the introduction of an R&D tax credit in Norway in 2002, we find that cheaper R&D stimulated not only R&D investments but also imports of intermediates, quantitatively consistent with the model. An implication of our work is that improved access to imported inputs promotes R&D investments and, ultimately, technological change. (JEL D92, F14, G31, H25, L25, O32, O33)
Abstract
					A sovereign's inability to commit to a course of action regarding future borrowing and default behavior makes long-term debt costly (the problem of debt dilution). One mechanism to mitigate this problem is the inclusion of a seniority clause in debt contracts. In the event of default, creditors are to be paid off in the order in which they lent (the "absolute priority" or "first-in-time" rule). In this paper, we propose a modification of the absolute priority rule suited to sovereign debts contracts and analyze its positive and normative implications within a quantitatively realistic model of sovereign debt and default. (JEL E32, E44, F34, G15, H63, O16, O19)
Abstract
					The Great Migration–the massive migration of African Americans
out of the rural South to largely urban locations in the North,
Midwest, and West–was a landmark event in US history. Our paper
shows that this migration increased mortality of African Americans
born in the early twentieth century South. This inference comes from
an analysis that uses proximity of birthplace to railroad lines as an
instrument for migration. (JEL I12, J15, N31, N32, N91, N92, R23)
Abstract
					This paper studies, theoretically and empirically, the role of overconfidence in political behavior. Our model of overconfidence in
beliefs predicts that overconfidence leads to ideological extremeness,
increased voter turnout, and stronger partisan identification.
The model also makes nuanced predictions about the patterns of ideology in society. These predictions are tested using unique data that
measure the overconfidence and standard political characteristics of
a nationwide sample of over 3,000 adults. Our numerous predictions
find strong support in these data. In particular, we document that
overconfidence is a substantively and statistically important predictor
of ideological extremeness, voter turnout, and partisan identification.
(JEL C83, D03, D72, D83)
Abstract
					Both under- and over-treatment of communicable diseases are public
bads. But efforts to decrease one run the risk of increasing the
other. Using rich experimental data on household treatment-
seeking behavior in Kenya, we study the implications of this trade-off for subsidizing life-saving antimalarials sold over-the-counter at retail drug outlets. We show that a very high subsidy (such as the one under consideration by the international community) dramatically increases access, but nearly one-half of subsidized pills go to patients without malaria. We study two ways to better target subsidized drugs:
reducing the subsidy level, and introducing rapid malaria tests
over-the-counter. (JEL D12, D82, I12, O12, O15)
Abstract
					Regulatory oversight of toxic emissions from industrial plants and
understanding about these emissions' impacts are in their infancy.
Applying a research design based on the openings and closings of
1,600 industrial plants to rich data on housing markets and infant
health, we find that: toxic air emissions affect air quality only within
1 mile of the plant; plant openings lead to 11 percent declines in
housing values within 0.5 mile or a loss of about $4.25 million
for these households; and a plant's operation is associated with
a roughly 3 percent increase in the probability of low birthweight
within 1 mile. (JEL I12, L60, Q52, Q53, Q58, R23, R31)
Abstract
					This paper examines the implicit health insurance that households
receive from the ability to declare bankruptcy. Exploiting multiple
sources of variation in asset exemption law, I show that uninsured
households with a greater financial cost of bankruptcy make higher
out-of-pocket medical payments, conditional on the amount of
care received. In turn, I find that households with greater wealth at
risk are more likely to hold health insurance. The implicit insurance
from bankruptcy distorts the insurance coverage decision. Using a
microsimulation model, I calculate that the optimal Pigovian penalties
are three-quarters as large as the average penalties under the Affordable Care Act. (JEL D14, H51, I13, K35)
Abstract
					We conduct a social dilemma experiment in which real-world leaders
can punish group members as a third party. Despite facing an
identical environment, leaders are found to take remarkably different
punishment approaches. The different leader types revealed experimentally explain the relative success of groups in managing their
forest commons. Leaders who emphasize equality and efficiency see
positive forest outcomes. Antisocial leaders, who punish indiscriminately, see relatively negative forest outcomes. Our results highlight the importance of leaders in collective action, and more generally the idiosyncratic but powerful roles that leaders may play, leading to substantial variation in group cooperation outcomes. (JEL C93, D03, O13, Q23)
Abstract
					We identify a key role of factor supply, driven by demographic changes, in shaping several empirical regularities that are a focus of active research in macro and labor economics. In particular, demographic changes alone can account for the large movements of the return to experience over the last four decades, for the differential dynamics of the age premium across education groups emphasized by Katz and Murphy (1992), for the differential dynamics of the college premium across age groups emphasized by Card and Lemieux (2001), and for the changes in cross-sectional and cohort-based life-cycle profiles emphasized by Kambourov and Manovskii (2005). (JEL D91, E24, I23, J11, J24, J31)
Abstract
					We argue that US welfare would rise if unemployment insurance
were increased for younger and decreased for older workers. This
is because the young tend to lack the means to smooth consumption
during unemployment and want jobs to accumulate high-return human capital. So unemployment insurance is most valuable to
them, while moral hazard is mild. By calibrating a life cycle model
with unemployment risk and endogenous search effort, we find that
allowing unemployment replacement rates to decline with age yields
sizeable welfare gains to US workers. (JEL D91, E24, J13, J64, J65)
Abstract
					Countercyclical risk aversion can explain major puzzles such as the
high volatility of asset prices. Evidence for its existence is, however,
scarce because of the host of factors that simultaneously change
during financial cycles. We circumvent these problems by priming
financial professionals with either a boom or a bust scenario.
Subjects primed with a financial bust were substantially more fearful
and risk averse than those primed with a boom, suggesting that fear
may play an important role in countercyclical risk aversion. The
mechanism described here is relevant for theory and may explain
self-reinforcing processes that amplify market dynamics. (JEL E32,
E44, G01, G11, G12)
Abstract
					Market outcomes depend on the quality of information available to
its participants. We measure the effect of information disclosure on
market outcomes using a large-scale field experiment that randomly
discloses quality information in wholesale automobile auctions. We
argue that buyers in this market are horizontally differentiated across
cars that are vertically ranked by quality. This implies that information
disclosure helps match heterogeneous buyers to cars of varying quality, causing both good and bad news to increase competition and revenues. The data confirm these hypotheses. These findings have implications for the design of other markets, including e-commerce, procurement auctions, and labor markets. (JEL C93, D44, D82, L15)
Abstract
					Do women and men behave differently in financial asset markets?
Our results from an asset market experiment show a marked gender
difference in producing speculative price bubbles. Mixed markets
show intermediate values, and a meta-analysis of 35 markets from
different studies confirms the inverse relationship between the magnitude of price bubbles and the frequency of female traders in the
market. Women's price forecasts also are significantly lower, even in
the first period. Implications for financial markets and experimental
methodology are discussed. (JEL D14, D81, G01, G11, J16)
Abstract
					An exogenous expansion in mortgage credit has significant effects on house prices. This finding is established using US branching deregulations between 1994 and 2005 as instruments for credit. Credit increases for deregulated banks, but not in placebo samples. Such differential responses rule out demand-based explanations, and identify an exogenous credit supply shock. Because of geographic diversification, treated banks expand credit: housing demand increases, house prices rise, but to a lesser extent in areas with elastic housing supply, where the housing stock increases instead. In an instrumental variable sense, house prices are well explained by the credit expansion induced by deregulation. (JEL G21, G28, R21, R31)
Abstract
					We study the cyclical properties of sales, regular price changes, and average prices paid by consumers ("effective" prices) using data on prices and quantities sold for numerous retailers across many US metropolitan areas. Inflation in the effective prices paid by consumers declines significantly with higher unemployment while little change occurs in the inflation rate of prices posted by retailers. This difference reflects the reallocation of household expenditures across retailers, a feature of the data which we document and quantify, rather than sales. We propose a simple model with household store-switching and assess its implications for business cycles and policymakers. (JEL D12, E31, E32, L25, L81)
Abstract
					We develop a model of selection that incorporates a key element of recent health reforms: an individual mandate. Using data from Massachusetts, we estimate the parameters of the model. In the individual market for health insurance, we find that premiums and average costs decreased significantly in response to the individual mandate. We find an annual welfare gain of 4.1 percent per person or $51.1 million annually in Massachusetts as a result of the reduction in adverse selection. We also find smaller post-reform markups. (JEL D82, G22, H75, I13)
Abstract
					This paper uses the rollout of the first Community Health Centers (CHCs) to study the longer-term health effects of increasing access to primary care. Within ten years, CHCs are associated with a reduction in age-adjusted mortality rates of 2 percent among those 50 and older. The implied 7 to 13 percent decrease in one-year mortality risk among beneficiaries amounts to 20 to 40 percent of the 1966 poor/non-poor mortality gap for this age group. Large effects for those 65 and older suggest that increased access to primary care has longer-term benefits, even for populations with near universal health insurance. (JEL H75, I12, I13, I18, I32, I38, J14)
Abstract
					We show that endogenous firm selection provides a new welfare margin for heterogeneous firm models of trade (relative to homogeneous firm models). Under some parameter restrictions, the trade elasticity is constant and is a sufficient statistic for welfare, along with the domestic trade share. However, even small deviations from these restrictions imply that trade elasticities are variable and differ across markets and levels of trade costs. In this more general setting, the domestic trade share and endogenous trade elasticity are no longer sufficient statistics for welfare. Additional empirically observable moments of the micro structure also matter for welfare. (JEL F12, F13, F41)
Abstract
					This paper exploits a data rich environment to provide direct econometric estimates of time-varying macroeconomic uncertainty. Our estimates display significant independent variations from popular uncertainty proxies, suggesting that much of the variation in the proxies is not driven by uncertainty. Quantitatively important uncertainty episodes appear far more infrequently than indicated by popular uncertainty proxies, but when they do occur, they are larger, more persistent, and are more correlated with real activity. Our estimates provide a benchmark to evaluate theories for which uncertainty shocks play a role in business cycles. (JEL C53, D81, E32, G12, G35, L25)
Abstract
					Consumer bankruptcy is one of the largest social insurance programs in the United States, but little is known about its impact on debtors. We use 500,000 bankruptcy filings matched to administrative tax and foreclosure data to estimate the impact of Chapter 13 bankruptcy protection on subsequent outcomes. Exploiting the random assignment of bankruptcy filings to judges, we find that Chapter 13 protection increases annual earnings by $5,562, decreases five-year mortality by 1.2 percentage points, and decreases five-year foreclosure rates by 19.1 percentage points. These results come primarily from the deterioration of outcomes among dismissed filers, not gains by granted filers. (JEL D14, I12, J22, J31, K35)
Abstract
					We estimate the sensitivity of scrap decisions to changes in used car values and show how this "scrap elasticity" produces emissions leakage under fuel efficiency standards, a process known as the Gruenspecht effect. We first estimate the effect of gasoline prices on used vehicle values and scrappage of vehicles with different fuel economies. We then estimate the scrap elasticity itself, which we find to be -0.7. When applied in a model of fuel economy standards, 13-16 percent of the expected fuel savings leak away through the used vehicle market. This effect rivals or exceeds the importance of the often-cited mileage rebound effect. (JEL H23, L62, L78, Q35, Q38, Q48, Q58)
Abstract
					Notwithstanding great progress in scientific and economic understanding of climate change, it has proven difficult to forge international agreements because of free-riding, as seen in the defunct Kyoto Protocol. This study examines the club as a model for international climate policy. Based on economic theory and empirical modeling, it finds that without sanctions against non-participants there are no stable coalitions other than those with minimal abatement. By contrast, a regime with small trade penalties on non-participants, a Climate Club, can induce a large stable coalition with high levels of abatement. (JEL Q54, Q58, K32, K33)
Abstract
					This paper uses an assignment model to understand the cross section of house prices within a metro area. Movers' demand for housing is derived from a life-cycle problem with credit market frictions. Equilibrium house prices adjust to assign houses that differ by quality to movers who differ by age, income, and wealth. To quantify the model, we measure distributions of house prices, house qualities, and mover characteristics from micro-data on San Diego County during the 2000s boom. The main result is that cheaper credit for poor households was a major driver of prices, especially at the low end of the market. (JEL D14, D91, R21, R31)
Abstract
					A quantitative investigation of financial intermediation in the United States over the past 130 years yields the following results: (i) the finance industry's share of gross domestic product (GDP) is high in the 1920s, low in the 1960s, and high again after 1980; (ii) most of these variations can be explained by corresponding changes in the quantity of intermediated assets (equity, household and corporate debt, liquidity); (iii) intermediation has constant returns to scale and an annual cost of 1.5-2 percent of intermediated assets; (iv) secular changes in the characteristics of firms and households are quantitatively important. (JEL D24, E44, G21, G32, N22)
Abstract
					Does credit availability exacerbate asset price inflation? Are there long run consequences? During the farm land price boom and bust before the Great Depression, we find that credit availability directly inflated land prices. Credit also amplified the relationship between positive fundamentals and land prices, leading to greater indebtedness. When fundamentals soured, areas with higher credit availability suffered a greater fall in land prices and had more bank failures. Land prices and credit availability also remained disproportionately low for decades in these areas, suggesting that leverage might render temporary credit induced booms and busts persistent. We draw lessons for regulatory policy. (JEL E31, G21, G28, N22, N52, Q12, Q14)
Abstract
					We analyze randomized online survey experiments providing interactive, customized information on US income inequality, the link between top income tax rates and economic growth, and the estate tax. The treatment has large effects on views about inequality but only slightly moves tax and transfer policy preferences. An exception is the estate tax—informing respondents of the small share of decedents who pay it doubles support for it. The small effects for all other policies can be partially explained by respondents' low trust in government and a disconnect between concerns about social issues and the public policies meant to address them. (JEL D31, D72, H23, H24)
Abstract
					We develop an equilibrium wage-posting model with heterogeneous
firms that decide to locate in the formal or the informal sector and
workers who search randomly on and off the job. We estimate the
model on Brazilian labor force survey data. In equilibrium, firms of
equal productivity locate in different sectors, a fact observed in the
data. Wages are characterized by compensating differentials. We show
that tightening enforcement does not increase unemployment and
increases wages, total output, and welfare by enabling better allocation
of workers to higher productivity jobs and improving competition
in the formal labor market. (JEL E26, J24, J31, J46, O15, O17)
Abstract
					This paper shows how in Medicare Part D insurers' gaming of the subsidy paid to low-income enrollees distorts premiums and raises the program cost. Using plan-level data from the first five years of the program, I find multiple instances of pricing strategy distortions for the largest insurers. Instrumental variable estimates indicate that the changes in a concentration index measuring the manipulability of the subsidy can explain a large share of the premium growth observed between 2006 and 2011. Removing this distortion could reduce the cost of the program without worsening consumer welfare. (JEL G22, H51, I13, I18)
Abstract
					I test the effect of harsher punishments and sanctions on driving under the influence (DUI). In this setting, punishments are determined by strict rules on blood alcohol content (BAC) and previous offenses. Regression discontinuity derived estimates suggest that having a BAC above the DUI threshold reduces recidivism by up to 2 percentage points (17 percent). Likewise having a BAC over the aggravated DUI threshold reduces recidivism by an additional percentage point (9 percent). The results suggest that the additional sanctions experienced by drunk drivers at BAC thresholds are effective in reducing repeat drunk driving. (JEL I12, K42, R41)
Abstract
					In his influential book, Capital in the Twenty-First Century, Thomas Piketty argues forcefully that rising wealth and wealth inequality is an inherent characteristic of capitalist economies and calls for strong policy responses, in particular a substantial wealth tax implemented globally. This paper takes issue with the facts, logic, and policy conclusions in Piketty's book, suggesting that the factors needed to support the inexorable rise in capital's share and concentration are lacking and that among tax policy reforms aimed at dealing with economic inequality a wealth tax finds little support either in Piketty's own work or elsewhere in the literature.
Abstract
					In this article, I present three key facts about income and wealth inequality in the long run emerging from my book, Capital in the Twenty-First Century, and seek to sharpen and refocus the discussion about those trends. In particular, I clarify the role played by r > g in my analysis of wealth inequality. I also discuss some of the implications for optimal taxation, and the relation between capital-income ratios and capital shares.
Abstract
					Secular stagnation on the supply side takes the form of a slow 1.6 percent annual growth rate of US potential real GDP, roughly half the 3.1 percent annual growth rate of actual real GDP realized from 1972 to 2004. This slowdown stems from a sharp decline in the growth rate of aggregate hours of work and of output per hour. This paper attributes the productivity growth decline to diminishing returns in the digital revolution that had its peak effect business hardware, software, and best practices in the late 1990s but has resulted in little change in those methods over the past decade.
Abstract
					The experience of first Japan and now Europe and the USA suggests that Hansen's concept of secular stagnation is highly relevant. Recovery has been anemic and follows a generation of financially unsustainable and often lackluster growth. Investment demand has declined while the supply of saving has increased, leaving the economy vulnerable to liquidity traps. Although some US indicators have improved, forward real rates have declined sharply, European prospects remain muddled, and the zero-bound will likely constrain again during the next recession. Infrastructure and private investment are the best ways to both minimize the risk of secular stagnation and raise demand.
Abstract
					Four explanations for secular stagnation are distinguished: a rise in global saving, slow population growth that makes investment less attractive, adverse trends in technology and productivity growth, and a decline in the relative price of investment goods. A long view from economic history is most supportive of the last of these four views.
Abstract
					The ability of web-based retailers to learn about and provide targeted consumer experiences is touted as an important distinction from traditional retailers. In principal, web-based insurance exchanges could benefit from these advantages. Using data from a large-scale experiment by a private sector health insurance exchange we estimate the returns to experimentation and targeted messaging. We find significant improvements in conversions in one treatment tested. Underlying the average impact were both inter temporal and demographic heterogeneity. We estimate that learning and targeted messaging could increase insurance applications by approximately 13 percent of the baseline conversion rate.
Abstract
					The Affordable Care Act has engendered significant changes in the design of health insurance products. We examine the "narrowness" of hospital networks affiliated with plans offered in the first year of the marketplaces. Using data from Texas, we find limited evidence of a tight link between pricing and a simple measure of network breadth, or a more complex measure of network value derived from a logit model of hospital choice. The state's largest insurer priced its narrow networks at a fairly constant discount relative to its broad networks, notwithstanding significant variation in its broad-narrow gap across geographic markets in Texas.
Abstract
					We measure the breadth of insurance networks in the Massachusetts health insurance exchange. Using our measures, we estimate consumer willingness-to-pay for broad and narrow networks. We find that consumers have a wide range of plans available with dramatically different networks. While consumers value broader networks, their willingness-to-pay is smaller than the brand premium, indicating an additional role for brand preferences. Consumers place additional value on star hospitals, which may affect upstream negotiations. Finally, we find significant geographic heterogeneity in the value of broad networks.
Abstract
					Under the Affordable Care Act, individual states have discretion in how they define coverage regions, within which insurers must charge the same premium to buyers of the same age, family structure, and smoking status. We exploit variation in these definitions to investigate whether the size of the coverage region affects outcomes in the ACA marketplaces. We find large consequences for small and rural markets. When states combine small counties with neighboring urban areas into a single region, the included rural markets see 0.6 to 0.8 more active insurers, on average, and savings in annual premiums of between $200 and $300.
Abstract
					We provide new evidence on the effect of the unemployment insurance (UI) weekly benefit amount on unemployment insurance spells based on administrative data from the state of Missouri covering the period 2003-2013. Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule. We find that UI durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity between 0.65 and 0.9 as compared to about 0.35 pre-recession.
Abstract
					We explore time trends in the labor force participation of veterans and non-veterans and investigate whether they are consistent with a rising role for the Department of Veterans Affairs' Disability Compensation (DC) program, which pays benefits to veterans with service-connected disabilities and has grown rapidly since 2000. Using 35 years of March CPS data, we find that veterans' labor force participation declined over time in a way that coincides closely with DC growth and that veterans have become more sensitive to economic shocks. Our findings suggest that DC program growth has contributed to recent declines in veterans' labor force participation.
Abstract
					Two key questions in thinking about the size and growth of the disability insurance program are to what extent it discourages work, and how valuable the insurance is to individuals and families. These questions motivate our paper. We begin by describing the earnings, disposable income, and consumption of awarded and rejected DI applicants, before and after the disability onset and the allowance decision. Next, we discuss how these descriptive results can be interpreted through the lens of alternative empirical approaches. Our analysis uses a Norwegian population panel data set with detailed information about every individual and household.
Abstract
					Using novel administrative data from Austria, we investigate the nature of temporary layoffs and recalls. We find that on average jobs ending in temporary layoffs lasted shorter but paid higher wages. The majority of temporarily laid-off workers return to their previous employer, but also one-fifth of those permanently laid-off are recalled. Compared to job switchers, recalls have shorter unemployment spells and do not experience wage losses. Negative duration dependence of unemployment only appears once recall exits are excluded for temporary and permanent layoffs. However, for temporary layoffs, the aggregate pattern masks significant heterogeneity by pre-unemployment tenure. Additional survey evidence suggests a lower average search level for temporary layoffs.
Abstract
					In this paper, we document trends in credit use across income groups in the period surrounding the Great Recession. We investigate trends in access to different credit markets, including mortgages, home equity, automobiles, and student loans. We disentangle growth rates of new market entrants from the aggregates and analyze overall as well as within-county growth rate differentials across income strata. Our findings may provide insight into the financial well-being of different income groups in the context of the Great Recession.
Abstract
					In this paper, we examine the effects of economic cycles on low- to moderate-income families. We use variation across states and over time to estimate the effects of cycles on the distribution of income, using fine gradations of the household income-to-poverty ratio. We also explore how the effects of cycles affect the risk of falling into poverty across demographic groups, focusing on age, race/ethnicity, and family type. We conclude by testing to see whether these relationships have changed in the Great Recession. We discuss the results in light of the changes in the social safety net in recent decades.
Abstract
					We examine how participation in social safety net programs differs by income-to-poverty levels, and how that relationship changed after the Great Recession. We define income-to-poverty based on the average of 2 years of merged CPS data, and investigate program participation among households with income less than 300 percent of poverty. We find changes in both the level and distribution of safety-net program participation during the Great Recession, with SNAP expanding most at the bottom, the EITC expanding most in the middle, and UI expanding most at the top of the income ranges that we investigate; TANF did not expand.
Abstract
					The Great Recession marks the worst downturn since those of the early 1980s. A large literature considers how the public safety net responded to this shock. We instead consider the responsiveness of one dimension of the private safety net. Families can react to negative shocks by moving in with relatives or downsizing. We use across-state over-time variation to estimate the effects of cycles on living arrangements, paying particular attention to young adults. We find living arrangements are cyclical, but effects are small. Surprisingly given the press attention, we find no evidence that things are different in the Great Recession.
Abstract
					Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014.
Abstract
					The US Social Security Disability Insurance (SSDI) program is designed to provide income support to workers who become unable to work because of a severe, long-lasting disability. In this study, we use administrative data to estimate the effect of labor market conditions, as measured by the unemployment rate, on the number of SSDI applications, the number and composition of initial allowances and denials, and the timing of applications relative to disability onset. We analyze the period of the Great Recession, and compare this period with business cycle effects over the past two decades, from 1992 through 2012.
Abstract
					Inattention may be an important contributor to the energy efficiency gap and may be particularly acute in residential buildings where many different features will determine a home's energy use. Energy audits can provide information on how to reduce energy loss in a home, but the use of audits is rare. We use data from a national survey of 1700 homeowners to study the factors affecting a home owner's choice to have an audit.  We create an index of energy inattention for our survey respondents. This index and two additional behavioral factors prove to be important determinants of the audit choice.
Abstract
					We document very low take-up of an energy efficiency program that is widely believed to be privately beneficial. Program participants receive a substantial home "weatherization" retrofit; all installation and equipment costs are covered by the program. Less than 1 percent of presumptively eligible households take up the program in the control group. This rate increased only modestly after we took extraordinary efforts to inform households—via multiple channels—about the sizable benefits and zero monetary costs. These findings are consistent with high non-monetary costs associated with program participation and/or energy efficiency investments.
Abstract
					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.
Abstract
					I examine the effects that the 1986 Immigration Reform and Control Act (IRCA), which legalized almost 3 million immigrants, had on crime in the United States. I exploit the IRCA's quasi-random timing as well as geographic variation in the intensity of treatment to isolate causal impacts. I find decreases in crime of 3-5 percent, primarily due to decline in property crimes, equivalent to 120,000-180,000 fewer violent and property crimes committed each year due to legalization. I calibrate a labor market model of crime, finding that much of the drop in crime can be explained by greater labor market opportunities among applicants.
Abstract
					Changes in the treatment of individuals by the criminal justice system following a policy intervention may bias estimates of the effects of the intervention on underlying criminal activity. We explore the importance of such changes in the context of the Immigration Reform and Control Act of 1986 (IRCA). Using administrative data from San Antonio, Texas, we examine variation across neighborhoods and ethnicities in police arrests and in the rate at which those arrests are prosecuted. We find that changes in police behavior around IRCA confound estimates of the effects of the policy and its restrictions on employment on criminal activity.
Abstract
					Using historical data on the size of state-specific Mexican birth cohorts and geographic migration networks between Mexican states and US metropolitan areas, I construct an instrumental variable that predicts decadal migration from Mexico to the United States. The intuition behind this identification strategy is that larger historical birth cohorts in Mexico yield more potential migrants once each birth cohort reaches prime migration age. I report evidence that Mexican immigration is associated with a decline in property crimes and an increase in aggravated assaults. The available evidence suggests that this is not an artifact of reduced crime reporting among immigrants.
Abstract
					This paper examines the relationship between income, pollution, and mortality in China from 1991-2012. Using first-difference models, we document a robust positive association between city-level GDP and life expectancy. We also find a negative association between city-level particulate air pollution exposure and life expectancy that is driven by elevated cardiorespiratory mortality rates. The results suggest that while China's unprecedented economic growth over the last two decades is associated with health improvements, pollution has served as a countervailing force.
Abstract
					A burgeoning "Climate-Economy" literature has uncovered many effects of changes in temperature and precipitation on economic activity, but has made considerably less progress in modeling the effects of other associated phenomena, like natural disasters. We develop new, objective data on floods, focusing on Bangladesh. We show that rainfall and self-reported exposure are weak proxies for true flood exposure. These data allow us to study adaptation, giving accurate measures of both long-term averages and short term variation in exposure. This is important in studying climate change impacts, as people will not only experience new exposures, but also experience them differently.
Abstract
					High rates of customer default on utility bills present a barrier to the expansion of electricity access in the developing world. Pre-paid electricity metering offers a technological solution to ensuring timely payment. Using an eleven-year panel of pre-paid electricity customers in Cape Town, South Africa, we describe patterns of purchase behavior across property values, our measure of socioeconomic status. Poorer households buy electricity more often, in smaller increments, and are most likely to buy on payday. These patterns suggest difficulties smoothing income, and reveal a preference for small, frequent purchases that is incompatible with a standard monthly electricity billing cycle.
Abstract
					Rising household wealth may potentially impact both total fuel consumption and fuel-type composition, resulting in significant health and environmental implications. Using data from a field experiment in India, we explore the effects of a transfer program that provided poor, rural households with greater levels of assets and cash. Total fuel consumption rose as a result of the transfers. Households shifted from using electricity rather than kerosene as their primary form of light, but total kerosene consumption also rose. In contrast, we did not observe a shift to cleaner cooking fuels.
Abstract
					It has been proposed that geography influences economic growth for many reasons. Previous analyses of comparative development seem to have sidestepped the question of location-dependent depreciation. However the construction of new measures of tropical cyclone exposure enables us to consider the potential impact of this single source of capital depreciation. Using an estimate of asset destruction due to tropical cyclones, we identify the "sandcastle depreciation" rate, and find support for location-dependent depreciation by looking at average growth rates. This leads us to propose that heterogeneous and geographically-dependent depreciation rates may play an important role in global patterns of economic development.
Abstract
					Why wealth is systematically lower in the tropics remains a puzzle. We point out that latitude may have fundamental economic consequence because it plays a key role in how countries experience geophysical processes that have economic implications.  We demonstrate that annual fluctuations in the El Nino Southern Oscillation (ENSO) leads to hotter and dryer local weather across tropical countries and subsequently to substantial losses in agricultural yields, output, and value-added. If volatility in agricultural production impedes economic growth, the relatively stronger influence of ENSO on the tropics may offer yet another partial explanation for slower historical growth in the tropics.
Abstract
					Despite significant progress in average yields, the sensitivity of corn and soybean yields to extreme heat has remained relatively constant over time. We combine county-level corn and soybeans yields in the United States from 1989-2013 with the fraction of the planting area that is insured under the federal crop insurance program, which expanded greatly over this time period as premium subsidies increased from 20 percent to 60 percent. Insured corn and soybeans are significantly more sensitive to extreme heat that uninsured crops. Insured farmers do not have the incentive to engage in costly adaptation as insurance compensates them for potential losses.
Abstract
					Organizations depend on members' "loyalty" for their success. Studying a cooperative's attempt to increase deliveries by members, we show that the threat of sanctions leads to highly heterogeneous response among members. Despite the cooperative not actually enforcing the threatened sanctions, positive effects for some members persist for several months. Other members "exit," stopping delivering altogether. Among non-compliant members we document substantial heterogeneity in beliefs about the legitimacy of the sanctions. This lack of common understanding highlights the role played by managers in organizations and provides a candidate explanation for lack of sanctions enforcement documented by Ostrom (1990) and other studies.
Abstract
					We document the presence of multiple and varied constraints to small
and medium firm growth. This presents both a practical problem for
business training programs and a challenge to academic economists
trying to identify mechanisms though which these programs may affect
outcomes. External validity needs theory. This pushes researchers to
narrowly defined and highly selected sample frames, which limits the
potential for clear, generalizable policy prescriptions. Ultimately,
larger samples, multi-arm evaluations, process documentation, and
narrowly-focused, theory-supported empirical work are all needed,
but the complexity of the problem limits what we learn from any
single study.
Abstract
					We marketed a training program for lower level managers (line supervisors) to large factories in the Bangladeshi ready-made garment industry. Take-up of the program (even for a free slot) was low, due to intense production pressures, fire-fighting and concerns over retention of trained workers. Take-up is quite insensitive to pricing. There was higher interest and demand in training modules aimed at improving production processes and quality, rather than human resources and social compliance. Since the program was priced close to a commercially viable rate, it might be possible to develop a market provided they could be proved to be effective.
Abstract
					Traditional capital structure theory predicts that reducing banks' leverage reduces the risk and cost of equity but does not change the weighted average cost of capital, and thus the rates for borrowers. We confirm that the equity of better-capitalized banks has lower beta and idiosyncratic risk. However, over the last 40 years, lower risk banks have not had lower costs of equity (lower stock returns), consistent with a stock market anomaly previously documented in other samples. A calibration suggests that a binding ten percentage point increase in Tier 1 capital to risk-weighted assets could double banks' risk premia over Treasury bills.
Abstract
					We use a variant of the Implicit Association Test (IAT) to examine
individuals' implicit attitudes towards various ethnic groups. Using
a population from the Democratic Republic of Congo, we find that the
IAT measures show evidence of an implicit bias in favor of one's own
ethnicity. Individuals have implicit views of their own ethnic group
that are more positive than their implicit views of other ethnic
groups. We find this implicit bias to be quantitatively smaller than
the (explicit) bias one finds when using self-reported attitudes
about different ethnic groups.
Abstract
					In earlier work we identified a robust negative association between religiosity and patents per capita, holding across countries as well as US states. In this paper we relate 11 indicators of individual openness to innovation (e.g., attitudes toward science and technology, new versus old ideas, change, risk taking, agency, imagination, and independence in children) to 5 measures of religiosity, including beliefs and attendance. We use five waves of the World Values Survey and control for sociodemographics, country and year fixed effects. Across the 52 regressions, greater religiosity is almost uniformly associated to less favorable views of innovation, with high significance.
Abstract
					Using data from an anti-vote-buying field experiment we conducted in the Philippines, we report and validate a proxy measure for vote-selling. We demonstrate that our proxy measure, vote-switching, changes as expected with voter preferences and monetary offers from candidates. Voters are less likely to vote for someone different than their initial preference the larger the favorability rating difference between the preferred and alternative candidates. Similarly, vote-switching increases the more money the alternative candidate offers compared to the preferred candidates. We also describe the effects of the promise-based interventions on vote-switching, reported in full in a companion paper.
Abstract
					IRBs can disallow high incentives they deem coercive. A vignette study on MTurk concerning participation in medical trials shows that a substantial minority of subjects concurs. They think high incentives cause more regret, and that more people would be better off without the opportunity to participate. We model observers as judging the ethicality of incentives by partially using their own utility. The model predicts that payments are repugnant only to the extent that they affect the participation decision, and more so for larger transactions. Incentivizing poorer participants is more repugnant, and in-kind incentives are less repugnant than monetary incentives.
Abstract
					Are attitudes about morally controversial (and often prohibited) market transactions affected by information about their costs and benefits? We address this question for the case of payments for human organs. We find in a survey experiment with US residents (N=3,417) that providing information on the potential efficiency benefits of a regulated price mechanism for organs significantly increased support for payments from a baseline of 52 percent to 71 percent. The survey was devised to minimize social desirability biases in responses, and additional analyses validate the interpretation that subjects were reflecting on the case-specific details provided, rather than just reacting to any information.
Abstract
					This paper develops a new laboratory test of the hypothesis that individual investors sell winners too early and ride losers too long. In the experiment, subjects invest in a risky asset, whose price evolves in near-continuous time, and they are provided with the option to liquidate it at a fixed salvage value. Optimal behavior is characterized by an upper and a lower stopping thresholds in the asset price space, thus producing a clear rational benchmark and eliminating known confounds. This design allows me to detect and quantify the disposition effect in a sample of 108 subjects.
Abstract
					This paper considers the measurement of consumer loss aversion in product markets. We introduce a test based on a "substitution effect," focusing on how the end of a sale affects sales not of the good itself, but a substitute good. Such an effect cannot be easily confounded with consumer stockpiling. Using a unique dataset from an online hardware retailer, we find evidence consistent with consumer loss aversion. Moreover, we find that less experienced consumers suffer a more prominent loss aversion bias compared to more experienced consumers.
Abstract
					We examine high stakes three-person bargaining in a game show where contestants bargain over a large money amount that is split into three unequal shares. We find that individual behavior and outcomes are strongly influenced by equity concerns: those who contributed more to the jackpot claim larger shares, are less likely to make concessions, and take home larger amounts. Contestants who announce that they will not back down do well relative to others, but they do not secure larger absolute amounts and they harm others. There is no evidence of a first-mover advantage and little evidence that demographic characteristics matter.
Abstract
					We derive a dynamic theoretical model of renewable resource extraction. In the social optimum, maximum extraction occurs in the last period only, while in the unique subgame perfect Nash equilibrium, the resource is depleted immediately. The predictions are tested in a field experiment conducted at a recreational fishing pond. The subjects, experienced recreational fishermen, face a dynamic social dilemma, in which they risk depletion of the resource by overfishing. We find strong support for the Nash equilibrium. Fishermen exert as much effort in the last period as in preceding periods, and effort is independent of the stock of fish.
Abstract
					In most collective actions, individuals' incentives are not perfectly aligned with the goals of the group/team they are part of. We investigate how individual specific incentives affect both individuals and team leaders' strategies in a natural setting. We use a discontinuity in individual rewards in batsmen scoring in cricket to identify the causal effect of such incentives on behavior. We find that batsmen react to the presence of individual-specific incentives by adopting strategies that may be suboptimal at the team level. More surprisingly, we also find that team captains react to these individual incentives by adopting suboptimal strategies at the team level, which may bring large benefits to the individual players. These results suggest a complex interplay of individual and team incentives which we conjecture may arise in repeated team interactions.
Abstract
					It is well established that consumption is "hump" shaped over an individual's lifecycle, peaking in middle age and then declining in the years that follow. Prior research has documented that consumption declines at retirement, which is inconsistent with the standard lifecycle model with consumption smoothing. Using a unique dataset with detailed administrative records of credit and debit card transactions, we show the hump shaped lifecycle consumption pattern as documented in the literature. Additionally, we show compositional changes in consumption expenditures across individuals in the years surrounding retirement confirming the results of Aguiar and Hurst (2005, 2013).
Abstract
					In this paper we compare changes in asset allocations between mutual funds held in defined contribution pension plans and funds held by other investors. We investigate how flows into equity and fixed income mutual funds depend on macroeconomic conditions. We find that defined contribution plans react more sensitively to these conditions, suggesting effects on mutual fund managers and other investors.
Abstract
					Using data from China's Urban Household Survey and exploiting China's mandatory retirement policy, we use the regression discontinuity approach to estimate the impact of retirement on household expenditures. Retirement reduces total non-durable expenditures by 20 percent. Among the categories of non-durable expenditures, retirement reduces work-related expenditures and expenditures on food consumed at home but has an insignificant effect on entertainment expenditures. After excluding these three components, retirement does not have an effect on the remaining non-durable expenditures. It suggests that the retirement consumption puzzle might not be a puzzle if a life-cycle model with home production is considered.
Abstract
					Using an innovative survey measure of management practices on over 15,000 firms, we find private equity firms are better managed than government, family, and privately owned firms, and have similar management to publicly listed firms. This is true both in developed and developing countries. Looking at management practices in detail we find that private equity owned firms have strong people management practices (hiring, firing, pay, and promotions), but even stronger monitoring management practices (lean manufacturing, continuous improvement, and monitoring). Plant managers working in private equity owned firms also report greater autonomy from headquarters over sales, marketing, and new product introduction.
Abstract
					We document the correlation between the workplace diversity in bureaucratic organizations and public service delivery. We do so in the context of Nigeria, where ethnicity is a salient form of self-identity. We thus expand the empirical management literature highlighting beneficial effects of workplace diversity, that has focused on private sector firms operating in high-income settings. Our analysis combines two data sources: (i) a survey to over 4,000 bureaucrats eliciting their ethnic identities; (ii) independent engineering assessments of completion rates for 4,700 public sector projects. The ethnic diversity of bureaucracies matters positively: a one standard deviation increase in the ethnic diversity of bureaucrats corresponds to 9 percent higher completion rates. In line with the management literature from private sector firms in high-income countries, this evidence highlights a potentially positive side of ethnic diversity in public sector organizations, in the context of Sub-Saharan Africa.
Abstract
					It is very important to know how much we can extrapolate from a study's results. This paper examines the issue using data from impact evaluations in development.
Abstract
					Suppose a policymaker is interested in the impact of an existing social program. Impact estimates using observational data suffer potential bias, while unbiased experimental estimates are often limited to other contexts. This creates a practical trade-off between internal and external validity for evidence-based policymaking. We explore this trade-off empirically for several common policies analyzed in development economics, including microcredit, migration, and education interventions. Based on mean-squared error, non-experimental evidence within context outperforms experimental evidence from another context. This advantage declines, but may not reverse, with experimental replication. We offer four reasons these findings are of general relevance to policy evaluation.
Abstract
					We survey and apply several techniques from the statistical and computer science literature to the problem of demand estimation. To improve out-of-sample prediction accuracy, we propose a method of combining the underlying models via linear regression. Our method is robust to a large number of regressors; scales easily to very large data sets; combines model selection and estimation; and can flexibly approximate arbitrary non-linear functions. We illustrate our method using a standard scanner panel data set and find that our estimates are considerably more accurate in out-of-sample predictions of demand than some commonly used alternatives.
Abstract
					We consider estimation of and inference about coefficients on endogenous variables in a linear instrumental variables model where the number of instruments and exogenous control variables are each allowed to be larger than the sample size. We work within an approximately sparse framework that maintains that the signal available in the instruments and control variables may be effectively captured by a small number of the available variables. We provide a LASSO-based method for this setting which provides uniformly valid inference about the coefficients on endogenous variables. We illustrate the method through an application to demand estimation.
Abstract
					We examine whether online learning technologies have led to lower prices in higher education. Using data from the Integrated Postsecondary Education Data System, we show that online education is concentrated in large for-profit chains and less-selective public institutions. We find that colleges with a higher share of online students charge lower tuition prices. We present evidence of declining real and relative prices for full-time undergraduate online education from 2006 to 2013. Although the pattern of results suggests some hope that online technology can "bend the cost curve" in higher education, the impact of online learning on education quality remains uncertain.
Abstract
					In an ongoing evaluation of post-secondary financial aid, we use random assignment to assess the causal effects of large privately-funded aid awards. Here, we compare the unbiased causal effect estimates from our RCT with two types of non-experimental econometric estimates. The first applies a selection-on-observables assumption in data from an earlier, nonrandomized cohort; the second uses a regression discontinuity design. Selection-on-observables methods generate estimates well below the experimental benchmark. Regression discontinuity estimates are similar to experimental estimates for students near the cutoff, but sensitive to controlling for the running variable, which is unusually coarse.
Abstract
					Rising student loan default rates and protests over debt suggest that many students make college enrollment and financing choices they regret. Policymakers have considered tying the availability of federally subsidized loans at degree programs to financial outcomes for past students. This paper considers the implementation of such a policy in Chile. We describe how loan repayment varied by degree type at baseline, the design of the loan reform, and how earnings-based loan caps change availability of loans and incentives for students and higher education institutions. We discuss the challenges facing policymakers seeking to link loan availability to earnings outcomes.
Abstract
					Previous work demonstrates that low-income higher achievers fail to apply to selective colleges despite their being admitted at high rates and receiving financial aid so generous that they pay less than at non-selective schools. The Expanding College Opportunities project, a randomized controlled trial, provides individualized information about colleges' net prices, resources, curricula, students, and outcomes.  Our prior study shows that the intervention raises students' applications to, admissions at, enrollment, and progress at selective colleges. Here we use survey data to show that it actually changes students' knowledge and decision-making. We highlight topics on which they are misinformed.
Abstract
					This paper documents the existence and characteristics of US firms that do not manufacture themselves, but nonetheless are heavily involved in the production of goods. These factoryless goods producing firms (FGPFs) are formally in the wholesale sector but, unlike traditional wholesale firms, FGPFs design the goods they sell and coordinate production activities. FGPFs in the wholesale sector are larger and younger, pay higher wages, span more sectors and had more manufacturing employment in previous years compared to traditional wholesalers. FGPFs are more likely to import than typical wholesalers, though their imports constitute a smaller share of their total domestic activity.
Abstract
					We present a comprehensive data set on the bilateral activity of multinational firms, with focus on two variables: affiliate revenues and the number of affiliates across country pairs. Our basic data are from UNCTAD and include 59 countries, an average over 1996-2001. We implement an extrapolation procedure that fills in missing values using, alternately, FDI stocks and the bilateral number of M&A transactions. Our dataset allows for the analysis of new patterns of multinational production activities across countries, by taking into account firm rather than balance of payment variables, and both the intensive and extensive margins of multinational activities.
Abstract
					Researchers typically invoke theoretical assumptions to estimate mark-ups. Instead, we directly obtain mark-ups by surveying Pakistani soccer-ball producers. We document six facts: (i) Mark-ups are more dispersed than costs; (ii) Mark-ups and costs increase with firm size; (iii) The mark-up elasticity with respect to size exceeds the cost elasticity; (iv) Costs increase with size because larger firms use higher-quality inputs; (v) Larger firms charge higher mark-ups because they have higher production shares of high-quality balls that carry higher mark-ups, and because they charge higher mark-ups conditional on ball type; (vi) Correlations suggest marketing efforts are important for generating higher mark-ups.
Abstract
					We document several facts about workforce transitions from the informal to the formal sector in Vietnam, a fast growing, industrializing, and low-income country. First, younger workers, particularly migrants, are more likely to work in the formal sector and stay there permanently. Second, the decline in the aggregate share of informal employment occurs through changes between and within birth cohorts. Third, younger, educated, male, and urban workers are more likely to switch to the formal sector than other workers initially in the informal sector. Poorly educated, older, female, rural workers face little prospect of formalization. Fourth, formalization coincides with occupational upgrading.
Abstract
					We develop a specific-factors model of regional economies that includes two types of workers, skilled and unskilled. The model delivers a simple equation relating trade-induced local shocks to changes in local skill premia. We apply the methodology to Brazil's early 1990s trade liberalization and find statistically significant but modest effects of liberalization on the evolution of the skill premium between 1991 and 2010. The methodology uses widely available household survey data and can easily be applied to other countries and liberalization episodes.
Abstract
					We contrast evidence of urban path dependence with efforts to analyze calibrated models of city sizes. Recent evidence of persistent city sizes following the obsolescence of historical advantages suggests that path dependence cannot be understood as the medium-run effect of legacy capital but instead as the long-run effect of equilibrium selection. In contrast, a different, recent literature uses stylized models in which fundamentals uniquely determine city size. We show that a commonly used model is inconsistent with evidence of long run persistence in city sizes and propose several modifications that might allow for multiplicity and thus historical path dependence.
Abstract
					In the United States in the late 19th and early 20th century, large cities had extremely high death rates from infectious disease. Within major cities such as New York City and Philadelphia, there was significant variation at any point in time in the mortality rate across neighborhoods. Between 1900 and 1930 neighborhood mortality convergence took place in New York City and Philadelphia. We document these trends and discuss their consequences for neighborhood quality of life dynamics and the economic incidence of who gains from effective public health interventions.
Abstract
					The industrial cities of the 19th century were incredibly unhealthy places to live. How much progress has been made in reducing these negative health effects over the past 150 years? To help answer this question, we compare mortality patterns in 19th century England to those in Chinese urban areas in 2000. We document that substantial improvements have been made in improving health in cities over this period. Unlike historical English cities, large cities in China have lower mortality than less populated areas. However, we also provide evidence that in China a substantial relationship between industrial pollution and mortality remains.
Abstract
					The United States currently provides Temporary Protected Status (TPS) to more than 300,000 immigrants. TPS is typically granted if dangerous conditions prevail in migrants' home countries. Individuals with TPS are allowed to stay and work in the United States temporarily. Little is known about how TPS affects beneficiaries, most of whom are unauthorized prior to receiving TPS. Our results suggest that TPS eligibility leads to higher employment rates among women and higher earnings among men. The results have implications for recent programs that allow millions of unauthorized immigrants to receive temporary permission to remain and work in the United States.
Abstract
					During the 1990s the Kagera region of Tanzania experienced a forced migration shock. A series of geographical barriers led to a higher concentration of forced migrants in some parts of the region relative to others, resulting in a natural experiment. Using panel data (pre and post forced migration shock), we find that greater exposure to the refugee shock resulted in Tanzanians having a lower likelihood of working outside the household as employees. However, employees more affected by the shock had a higher probability of being in professional occupations and being part of a pensions program.
Abstract
					Using state-level data from 1980-2010 we examine whether economic freedom, as measured by the Economic Freedom of North America Index, has had any impact in increasing or decreasing the ratio of median income for black households to the median income of white households. To our knowledge, there has been no research on racial income disparities and the role that economic freedom might have in alleviating or exacerbating the problem. We find evidence that economic freedom is associated with an increase in the racial income gap.
Abstract
					We examine the relationship between capitalism and income inequality for a large sample of countries using an adjusted economic freedom index as proxy for capitalism. Our results suggest that there is no robust relationship between economic freedom and Gini coefficients based on gross income. Subsequently, we analyze the relationship between income redistribution and ethno-linguistic fractionalization. We find that the impact of ethno-linguistic fractionalization on income redistribution is conditional on the level of economic freedom: countries that have a high degree of fractionalization redistribute income less, while capitalist countries that have a low degree of fractionalization redistribute income more.
Abstract
					We evaluate how intensified interior immigration enforcement impacts the likelihood that children of unauthorized immigrants will repeat a grade or drop out of school. Using a weighted index of the intensity of interior immigration enforcement at the MSA level, we find that increased enforcement has the largest impact on younger children ages 6 to 13. The estimates, which account for the non-random residential location of children and their families, reveal that increased enforcement raises young children's probability of repeating a grade by 6 percent and their likelihood of dropping out of school by 25.2 percent.
Abstract
					College is a pathway to social mobility in the United States. Yet too often high-achieving students from low-income and minorities families fail to apply to selective postsecondary institutions. Our study examines the extent to which academic undermatching occurs among high-achieving minority students by analyzing the application choices of students who undergo two distinct admissions policies. We find that minority students eligible for automatic admissions and those who undergo holistic admissions are both less likely to apply to elite flagship universities than white students, despite being equally qualified based on high school performance. Instead, minorities often opt for lower tier universities.
Abstract
					This paper finds households with children and elderly dependents, the "Sandwich Generation," significantly reduce both college savings and stockholding. Having any elderly dependents decreases the probability of both stockholding and college savings by twice as much as poor personal health. Hence, these results have critical implications as they demonstrate the importance and magnitude of links between the pension system, college financial aid, and wealth accumulation. Elderly dependents limiting parental funds for offspring education can decrease offspring long-term earnings potential via decreased human capital accumulation. Furthermore, decreased stock holdings can decrease long-term wealth accumulation and thus intergenerational wealth transfers.
Abstract
					This paper uses a unique and rich administrative data set to analyze the impact of the introduction of a new grading policy on graduations rates at Benedict College, a Historically Black College in Columbia, South Carolina. According to the new grading policy, grades for underclassmen are determined in part by performance on tests and in part by measures of "effort" such as attendance and class participation. This paper finds that while graduates graduate at a faster rate under the policy, there is no significant difference between graduation rates before and after the policy was implemented.
Abstract
					I present results from the first trust game conducted among married couples. The experiment consisted of a one-shot trust game where spouses were taken into separate rooms, not allowed to communicate, given a significant endowment, and both strategies and payoffs were common knowledge. Results indicate that only 3 percent of spouses in the sender role transfer the entire amount; the average proportion sent is 57 percent of the endowment. The limited sending is costly because the household on average is walking away with half of the potential earnings. The results provide further evidence of the lack of Pareto Efficiency within the household.
Abstract
					Violence against women is a critical problem across the world. In this paper, we exploit state and temporal variation in alcohol control in India to examine the impact of prohibition on alcohol consumption and violent crimes against women. We first use detailed household survey data to show that prohibition policies are associated with substantially lower rates of drinking among men and domestic violence. Next, we provide evidence that alcohol prohibition reduces aggregate violence against women in officially reported crime data. The results suggest that policies that restrict access to alcohol may help reduce gender violence.
Abstract
					Sex ratio at birth remains highly skewed in Asian countries due to son preference. In South Korea, however, it has declined to the natural ratio. In this paper, we investigate whether son preference has disappeared in Korea by analyzing parents' time and monetary inputs by the sex of their child. We exploit randomness of the first child's sex to overcome potential bias from endogenous fertility decisions. Our findings show that mothers are more likely to work after having a girl, girls spend twice as much time as boys in housework activities, and parents spend more on private education for boys.
Abstract
					We propose new indices to measure macroeconomic uncertainty. The indices measure how unexpected a realization of a representative macroeconomic variable is relative to the unconditional forecast error distribution. We use forecast error distributions based on the nowcasts and forecasts of the Survey of Professional Forecasters. We further compare the new indices with those proposed in the literature and assess their macroeconomic impact.
Abstract
					This paper considers the effect of different dimensions of the FOMC's forward guidance on ex ante investor expectations about future changes in US Treasury yields. Options and Futures data for 2- and 10-year Treasuries is used to extract State-Price Densities of investor beliefs, and the corresponding standard deviation, skewness, and excess kurtosis of these densities are computed. Announcements about extension of the zero-lower bound in 2012-13 are found to reduce the expectations about crash risk, but increase the uncertainty about future yields for the 10-year. Policies about long-security purchases lead investors to place greater weight on no change in future yields.
Abstract
					Relative to backward firms, technologically-advanced firms source inputs from other advanced firms. These sourcing patterns lead to a magnification effect of technology adoption. A firm that adopts higher-technology increases the relative supply and demand for higher-technology inputs. As a result, it positively influences the technology of other firms in its production chain. Using data from a Colombian manufacturing survey, we provide evidence that advanced firms disproportionately value advanced inputs.  More novel, we provide suggestive evidence that technological advancements in some firms increase the technology of other firms indirectly linked to them through a common input market.
Abstract
					Drug trade-related violence has escalated dramatically in Mexico since 2007, and recent years have also witnessed large-scale efforts to combat trafficking, spearheaded by Mexico's conservative PAN party. This study examines the direct and spillover effects of Mexican policy toward the drug trade. Regression discontinuity estimates show that drug-related violence increases substantially after close elections of PAN mayors. Empirical evidence suggests that the violence reflects rival traffickers' attempts to usurp territories after crackdowns have weakened incumbent criminals. Moreover, the study uses a network model of trafficking routes to show that PAN victories divert drug traffic, increasing violence along alternative drug routes. (JEL D72, D85, K42, O17, Z13)
Abstract
					We study the operation of local governments (Panchayats) in rural Maharashtra, India, using a survey that we designed for this end. Elections are freely contested, fairly tallied, highly participatory, non-coerced, and lead to appointment of representative politicians. However, beneath this veneer of ideal democracy we find evidence of deeply ingrained clientelist vote-trading structures maintained through extra-political means. Elite minorities undermine policies that would redistribute income toward the majority poor. We explore the means by which elites use their dominance of land ownership and traditional social superiority to achieve political control in light of successful majoritarian institutional reforms. (JEL D72, H23, I38, J15, O15, O17, O18)
Abstract
					Ethnic favoritism is seen as antithetical to development. This paper provides credible quantification of the extent of ethnic favoritism using data on road building in Kenyan districts across the 1963-2011 period. Guided by a model, it then examines whether the transition in and out of democracy under the same president constrains or exacerbates ethnic favoritism. Across the post-independence period, we find strong evidence of ethnic favoritism: districts that share the ethnicity of the president receive twice as much expenditure on roads and have five times the length of paved roads built. This favoritism disappears during periods of democracy. (JEL D72, H54, J15, O15, O17, O22, R42)
Abstract
					We develop a theory of fertility, distinguishing its intensive margin from its extensive margin. The deep parameters are identified using facts from the 1990 US Census: (i) fertility of mothers decreases with education; (ii) childlessness exhibits a U-shaped relationship with education; (iii) the relationship between marriage rates and education is hump-shaped for women and increasing for men. We estimate that 2.5 percent of women were childless because of poverty and 8.1 percent because of high opportunity cost of childrearing. Over time, historical trends in total factor productivity and in education led to a U-shaped response in childlessness rates while fertility of mothers decreased. (JEL I20, J13, J16, N31, N32)
Abstract
					This paper develops a framework for estimating preferences in a many-to-one matching market using only observed matches. I use pairwise stability and a vertical preference restriction on one side to identify preferences on both sides of the market. Counterfactual simulations are used to analyze the antitrust allegation that the centralized medical residency match is responsible for salary depression. Due to residents' willingness to pay for desirable programs and capacity constraints, salaries in any competitive equilibrium would remain, on average, at least $23,000 below the marginal product of labor. Therefore, the match is not the likely cause of low salaries. (JEL C78, I11, J31, J44, K21, L44)
Abstract
					We propose a unified model of limited market integration, asset-price determination, leveraging, and contagion. Investors and firms are located on a circle, and access to markets involves participation costs that increase with distance. Due to a complementarity between participation and leverage decisions, the equilibrium may exhibit diverse leverage and participation choices across investors, although investors are ex ante identical. Small changes in market-access costs can cause a change in the type of equilibrium, leading to discontinuous price changes, deleveraging, and portfolio-flow reversals. Moreover, the market is subject to contagion—an adverse shock to investors in some locations affects prices everywhere. (JEL D83, G11, G12, G32, G35)
Abstract
					We develop an infinite horizon macroeconomic model of banking that allows for liquidity mismatch and bank runs. Whether a bank run equilibrium exists depends on bank balance sheets and an endogenous liquidation price for bank assets. While in normal times a bank run equilibrium may not exist, the possibility can arise in recessions. A run leads to a significant contraction in intermediation and aggregate economic activity. Anticipations of a run have harmful effects on the economy even if the run does not occur. We illustrate how the model can shed light on some key aspects of the recent financial crisis. (JEL E23, E32, E44, G01, G21, G33)
Abstract
					We investigate whether private research investments are distorted away from long-term projects. Our theoretical model highlights two potential sources of this distortion: short-termism and the fixed patent term. Our empirical context is cancer research, where clinical trials -- and hence, project durations -- are shorter for late-stage cancer treatments relative to early-stage treatments or cancer prevention. Using newly constructed data, we document several sources of evidence that together show private research investments are distorted away from long-term projects. The value of life-years at stake appears large. We analyze three potential policy responses: surrogate (non-mortality) clinical-trial endpoints, targeted R&D subsidies, and patent design. (JEL D92, G31, I11, L65, O31, O34)
Abstract
					We explore how changes in ownership affect the productivity and profitability of producers. Using detailed data from the Japanese cotton spinning industry at the turn of the last century, we find that acquired firms' production facilities were not on average less physically productive than the plants of the acquiring firms before acquisition. They were much less profitable, however, due to higher inventory levels and lower capacity utilization—differences that reflected problems in managing the uncertainties of demand. After acquisitions, less profitable acquired plants saw drops in inventories and gains in capacity utilization that raised both their productivity and profitability levels. (JEL D24, G32, G34, L11, L25, L66, N65)
Abstract
					This paper empirically studies firm's strategic exit decisions in an environment where demand is declining. Specifically, I quantify the extent to which the exit process generated by firms' strategic interactions deviates from the outcome that maximizes industry profits. I develop and estimate a dynamic exit game using data from the US movie theater industry in the 1950s, when the industry faced demand declines. Using the estimated model, I quantify the magnitude of strategic delays and find that strategic interactions cause an average delay of exit of 2.7 years. I calculate the relative importance of several components of these strategic delays. (JEL D92, L11, L82, N72)
Abstract
					Andreoni and Sprenger (2012a, b) report evidence that distinct utility functions govern choices under certainty and risk. I investigate the robustness of this result to the experimental design. I find that the effect disappears completely when a multiple price list instrument is used instead of a convex time budget design. Alternatively, the effect is reduced by half when sooner and later payment risks are realized using a single lottery instead of two independent lotteries. The result is thus at least partially driven by intertemporal diversification, supporting an explanation in terms of concavity of the intertemporal, and not only atemporal, utility function. (JEL C91, D81, D91)
Abstract
					Andreoni and Sprenger (2012a,b) observe that utility functions are
distinct for risk and time preferences, and show that their findings
are consistent with a preference for certainty. We revisit this
question in an enriched experimental setting in which subjects make
intertemporal decisions under different risk conditions. The observed choice behavior supports a separation between risk attitude and intertemporal substitution rather than a preference for certainty. We further show that several models, including Epstein and Zin (1989); Chew and Epstein (1990); and Halevy (2008) exhibit such a separation and can account for the overall experimental findings. (JEL C91, D81, D91)
Abstract
					This paper examines how divorce laws affect couples' intertemporal choices and well-being. Exploiting panel variation in US laws, I estimate the parameters of a model of household decision-making. Household survey data indicate that the introduction of unilateral divorce in states that imposed an equal division of property is associated with higher household savings and lower female employment, implying a distortion in household assets accumulation and a transfer toward wives whose share in household resources is smaller than the one of their husband. When spouses share consumption equally, separate property or prenuptial agreements can reduce distortions and increase equity. (JEL D13, D14, D91, J12, J16, K36)
Abstract
					We study the direct and spillover effects of local state capacity in Colombia. We model the determination of state capacity as a network game between municipalities and the national government. We estimate this model exploiting the municipality network and the roots of local state capacity related to the presence of the colonial state and royal roads. Our estimates indicate that local state capacity decisions are strategic complements. Spillover effects are sizable, accounting for about 50 percent of the quantitative impact of an expansion in local state capacity, but network effects driven by equilibrium responses of other municipalities are much larger. (JEL D85, H41, H77, O17, O18)
Abstract
					Many lament that weak accountability and poor governance impede economic development in Africa. Politicians rely on ethnic allegiances that deliver the vote irrespective of performance, dampening electoral incentives. Giving voters information about candidate competence counters ethnic loyalty and strengthens accountability. I extend a canonical electoral model to show how information provision flows through voter behavior and ultimately impacts the distribution of political spending. I test the theory on data from Sierra Leone using decentralization and differential radio coverage to identify information's effects. Estimates suggest that information increases voting across ethnic-party lines and induces a more equitable allocation of campaign spending. (JEL D72, D83, J15, O17, Z13)
Abstract
					Traditional models of insurance choice are predicated on fully informed and rational consumers protecting themselves from exposure to financial risk. In practice, choosing an insurance plan is a complicated decision often made without full information. In this paper we combine new administrative data on health plan choices and claims with unique survey data on consumer information to identify risk preferences, information frictions, and hassle costs. Our additional friction measures are important predictors of choices and meaningfully impact risk preference estimates. We study the implications of counterfactual insurance allocations to illustrate the importance of distinguishing between these micro-foundations for welfare analysis. (JEL D81, D8 3, G22, I13)
Abstract
					Imperfect information and inattention to energy costs are important potential motivations for energy efficiency standards and subsidies. We evaluate these motivations in the lightbulb market using a theoretical model and two randomized experiments. We derive welfare effects as functions of reduced-form sufficient statistics capturing economic and psychological parameters, which we estimate using a novel within-subject information disclosure experiment. The main results suggest that moderate subsidies for energy-efficient lightbulbs may increase welfare, but informational and attentional biases alone do not justify a ban on incandescent lightbulbs. Our results and techniques generate broader methodological insights into welfare analysis with misoptimizing consumers. (JEL D12, D83, H21, H31, L67, Q41, Q48)
Abstract
					Claims that the VAT facilitates tax enforcement by generating paper trails on transactions between firms contributed to widespread VAT adoption worldwide, but there is surprisingly little evidence. This paper analyzes the role of third-party information for VAT enforcement through two randomized experiments among over 400,000 Chilean firms. Announcing additional monitoring has less impact on transactions that are subject to a paper trail, indicating the paper trail's preventive deterrence effect. This leads to strong enforcement spillovers up the VAT chain. These findings confirm that when taking evasion into account, significant differences emerge between otherwise equivalent forms of taxation. (JEL D83, H25, H26, K34, O17)
Abstract
					We propose a new approach to test the full-information rational expectations hypothesis which can identify whether rejections of the null arise from information rigidities. This approach quantifies the economic significance of departures from the null and the underlying degree of information rigidity. Applying this approach to US and international data of professional forecasters and other agents yields pervasive evidence consistent with the presence of information rigidities. These results therefore provide a set of stylized facts which can be used to calibrate imperfect information models. Finally, we document evidence of state-dependence in the expectations formation process. (JEL C53, D83, D84, E13, E31, E37)
Abstract
					This paper estimates historical intergenerational elasticities between fathers and children of both sexes in the United States using a novel empirical strategy. The key insight of our approach is that the information about socioeconomic status conveyed by first names can be used to create pseudo-links across generations. We find that both father-son and father-daughter elasticities were flat during the nineteenth century, increased sharply between 1900 and 1920, and declined slightly thereafter. We discuss the role of regional disparities in economic development, trends in inequality and returns to human capital, and the marriage market in explaining these patterns.
(JEL D63, J12, J16, J24, J62, N31, N32)
Abstract
					We revisit to what extent the increase in income inequality since 1980 was mirrored by consumption inequality. We do so by constructing an alternative measure of consumption expenditure using a demand system to correct for systematic measurement error in the Consumer Expenditure Survey. Our estimation exploits the relative expenditure of high- and low-income households on luxuries versus necessities. This double differencing corrects for measurement error that can vary over time by good and income. We find consumption inequality tracked income inequality much more closely than estimated by direct responses on expenditures. (JEL D31, D63, E21)
Abstract
					A seven-year randomized evaluation suggests education subsidies reduce adolescent girls' dropout, pregnancy, and marriage but not sexually transmitted infection (STI). The government's HIV curriculum, which stresses abstinence until marriage, does not reduce pregnancy or STI. Both programs combined reduce STI more, but cut dropout and pregnancy less, than education subsidies alone. These results are inconsistent with a model of schooling and sexual behavior in which both pregnancy and STI are determined by one factor (unprotected sex), but consistent with a two-factor model in which choices between committed and casual relationships also affect these outcomes. (JEL I12, I18, I21, J13, J16, O15)
Abstract
					Default contribution rates for 401(k) pension plans powerfully influence choices. Potential causes include opt-out costs, procrastination, inattention, and psychological anchoring. Using realistically parameterized models, we show how the optimal default, the magnitude of the welfare effects, and the degree of normative ambiguity depend on the behavioral model, the scope of the choice domain deemed welfare-relevant, the use of penalties for passive choice, and other 401(k) plan features. While results are theory-specific, our analysis provides reasonably robust justifications for setting the default either at the highest contribution rate matched by the employer or—contrary to common wisdom—at zero. (JEL D14, D91, J26, J32)
Abstract
					We show that in an open-economy OLG model, the interaction between growth differentials and household credit constraints—more severe in fast-growing countries—can explain three prominent global trends: a divergence in private saving rates between advanced and emerging economies, large net capital outflows from the latter, and a sustained decline in the world interest rate. Micro-level evidence on the evolution of age-saving profiles in the US and China corroborates our mechanism. Quantitatively, our model explains about a third of the divergence in aggregate saving rates, and a significant portion of the variations in age-saving profiles across countries and over time. (JEL E21, E22, F21, F32, F41, O16, P24)
Abstract
					In the repeated prisoner's dilemma, predictions are notoriously difficult. Recently, however, Blonski, Ockenfels, and Spagnolo (2011)—henceforth, BOS&dash;showed that experimental subjects predictably cooperate when the discount factor exceeds a particular threshold. I analyze individual strategies in four recent experiments to examine whether strategies are predictable, too. Behavior is well summarized by "Semi-Grim" strategies: cooperate after mutual cooperation, defect after mutual defection, randomize otherwise. This holds both in aggregate and individually, and it explains the BOS-threshold: Semi-Grim equilibria appear as the discount factor crosses this threshold, and then, subjects start cooperating in round 1 and switch to Semi-Grim in continuation play. (JEL C72, C73, C92, D12)
Abstract
					This paper provides evidence on the importance of reputation in the context of the Kenyan rose export sector. A model of reputation and relational contracting is developed and tested. A seller's reputation is defined by buyer's beliefs about seller's reliability. We show that (i) due to lack of enforcement, the volume of trade is constrained by the value of the relationship; (ii) the value of the relationship increases with the age of the relationship; and (iii) during an exogenous negative supply shock deliveries are an inverted-U shaped function of relationship's age. Models exclusively focusing on enforcement or insurance considerations cannot account for the evidence. (JEL D86, F14, L14, O13, O19, Q17)
Abstract
					Lincoln's election produced Southern secession, war, and abolition. Using a new dataset on slave sales, we examine connections between news and slave prices for the period 1856-1861. By August 1861, slave prices had declined by roughly one-third from their 1860 peak. That decline was similar for all age and sex cohorts and thus did not reflect expected emancipation without compensation. The decision to secede reflected beliefs that the North would not invade and that emancipation without compensation was unlikely. Both were encouraged by Lincoln's conciliatory tone before the attack on Fort Sumter, and subsequently dashed by Lincoln's willingness to wage all-out war. (JEL D72, D74, D83, G14, H77, N31, N41)
Abstract
					This paper proposes to evaluate tax reforms by aggregating money metric losses and gains of different individuals using "generalized social marginal welfare weights." Optimum tax formulas take the same form as standard welfarist tax formulas by simply substituting standard marginal social welfare weights with those generalized weights. Weights directly capture society's concerns for fairness without being necessarily tied to individual utilities. Suitable weights can help reconcile discrepancies between the welfarist approach and actual tax practice, as well as unify in an operational way the most prominent alternatives to utilitarianism such as Libertarianism, equality of opportunity, or poverty alleviation. (JEL D60, D63, H21, H23, I38)
Abstract
					We provide an explanation for the large spatial wage disparities and low male migration in India based on the trade-off between consumption smoothing, provided by caste-based rural insurance networks, and the income gains from migration. Our theory generates two key empirically verified predictions: (i) males in relatively wealthy households within a caste who benefit less from the redistributive (surplus-maximizing) network will be more likely to migrate, and (ii) males in households facing greater rural income risk (who benefit more from the insurance network) migrate less. Structural estimates show that small improvements in formal insurance decrease the spatial misallocation of labor by substantially increasing migration. (JEL G22, J31, J61, O15, O18, R23, Z13)
Abstract
					In 2005, as the result of a World Trade Organization mandate, India implemented a patent reform for pharmaceuticals that was intended to comply with the 1995 Trade-Related Aspects of Intellectual Property Rights (TRIPS). Exploiting variation in the timing of patent decisions, we estimate that a molecule receiving a patent experienced an average price increase of just 3-6 percent, with larger increases for more recently developed molecules and for those produced by just one firm when the patent system began. Our results also show little impact on quantities sold or on the number of pharmaceutical firms operating in the market. (JEL K33, L11, L13, L65, O14, O34, O38)
Abstract
					Analysis of the timing of launches of 642 new drugs in 76 countries during 1983-2002 shows that patent and price regulation regimes strongly affect how quickly new drugs become commercially available in different countries. Price regulation delays launch, while longer and more extensive patent rights accelerate it. Health policy institutions and economic and demographic factors that make markets more profitable also speed up diffusion. The estimated effects are generally robust to controlling for endogeneity of policy regimes with country fixed effects and instrumental variables. The results highlight the important role of policy choices in driving the diffusion of new innovations. (JEL I18, L11, L51, L65, O31, O33, O34)
Abstract
					We show that after monetary policy announcements, the conditional volatility of stock market returns rises more for firms with stickier prices than for firms with more flexible prices. This differential reaction is economically large and strikingly robust to a broad array of checks. These results suggest that menu costs—broadly defined to include physical costs of price adjustment, informational frictions, etc.—are an important factor for nominal price rigidity at the micro level. We also show that our empirical results are qualitatively and, under plausible calibrations, quantitatively consistent with New Keynesian macroeconomic models in which firms have heterogeneous price stickiness. (JEL E12, E31, E43, E44, E52, G12, L11)
Abstract
					We evaluate a tracking program in a large urban district where schools with at least one gifted fourth grader create a separate "gifted/high achiever" classroom. Most seats are filled by non-gifted high achievers, ranked by previous-year test scores. We study the program's effects on the high achievers using (i) a rank-based regression discontinuity design, and (ii) a between-school/cohort analysis. We find significant effects that are concentrated among black and Hispanic participants. Minorities gain 0.5 standard deviation units in fourth-grade reading and math scores, with persistent gains through sixth grade. We find no evidence of negative or positive spillovers on nonparticipants.
Abstract
					We prove that the ratio of kurtosis to the frequency of price changes is a sufficient statistic for the real effects of monetary shocks, measured by the cumulated output response following the shock. The sufficient statistic result holds in a large class of models which includes Taylor (1980); Calvo (1983); Reis (2006); Golosov and Lucas (2007); Nakamura and Steinsson (2010); Midrigan (2011); and Alvarez and Lippi (2014). Several models in this class are able to account for the positive excess kurtosis of the size distribution of price changes that appears in the data. We review empirical measures of kurtosis and frequency and conclude that a model that successfully matches the microevidence on kurtosis and frequency produces real effects that are about four times larger than in the Golosov-Lucas model, and about 30 percent below those of the Calvo model. We discuss the robustness of our results to changes in the setup, including small inflation and leptokurtic cost shocks.
Abstract
					Regulations governing the energy efficiency of new buildings have become a cornerstone of US environmental policy. California enacted the first such codes in 1978 and has tightened them every few years since. I evaluate the resulting energy savings three ways: comparing energy used by houses constructed under different standards, controlling for building and occupant characteristics; examining how energy use varies with outdoor temperatures; and comparing energy used by houses of different vintages in California to that same difference in other states. All three approaches yield estimated energy savings significantly short of those projected when the regulations were enacted.
Abstract
					Antipoverty programs in developing countries are often difficult to implement; in particular, many governments lack the capacity to deliver payments securely to targeted beneficiaries. We evaluate the impact of biometrically authenticated payments infrastructure ("Smartcards") on beneficiaries of employment (NREGS) and pension (SSP) programs in the Indian state of Andhra Pradesh, using a large-scale experiment that randomized the rollout of Smartcards over 157 subdistricts and 19 million people. We find that, while incompletely implemented, the new system delivered a faster, more predictable, and less corrupt NREGS payments process without adversely affecting program access. For each of these outcomes, treatment group distributions first-order stochastically dominated those of the control group. The investment was cost-effective, as time savings to NREGS beneficiaries alone were equal to the cost of the intervention, and there was also a significant reduction in the "leakage" of funds between the government and beneficiaries in both NREGS and SSP programs. Beneficiaries overwhelmingly preferred the new system for both programs. Overall, our results suggest that investing in secure payments infrastructure can significantly enhance 'state capacity' to implement welfare programs in developing countries.
Abstract
					Regional shocks are an important feature of the US economy. Households' ability to self-insure against these shocks depends on how they affect local interest rates. In the United States, most borrowing occurs through the mortgage market and is influenced by the presence of government-sponsored enterprises (GSE). We establish that despite large regional variation in predictable default risk, GSE mortgage rates for otherwise identical loans do not vary spatially. In contrast, the private market does set interest rates which vary with local risk. We use a spatial model of collateralized borrowing to show that the national interest rate policy substantially affects welfare by redistributing resources across regions.
Abstract
					This paper exploits quasi-experimental variation in tariffs in southern Africa to estimate trade elasticities. Traded quantities respond only weakly to a 30 percent reduction in the average nominal tariff rate. Trade flow data combined with primary data on firm behavior and bribe payments suggest that corruption is a potential explanation for the observed low elasticities. In contexts of pervasive corruption, even small bribes can significantly reduce tariffs, making tariff liberalization schemes less likely to affect the extensive and the intensive margins of firms' import behavior. The tariff liberalization scheme is, however, still associated with improved incentives to accurately report quantities of imported goods, and with a significant reduction in bribe transfers from importers to public officials.
Abstract
					This research explores the origins of observed differences in time preference across countries and regions. Exploiting a natural experiment associated with the expansion of suitable crops for cultivation in the course of the Columbian Exchange, the research establishes that pre-industrial agro-climatic characteristics which were conducive to higher return to agricultural investment triggered selection, adaptation, and learning processes that generated a persistent positive effect on the prevalence of long-term orientation in the contemporary era. Furthermore, the research establishes that these agro-climatic characteristics have had a culturally embodied impact on economic behavior such as technological adoption, education, saving, and smoking.
Abstract
					In recent years, central banks have increasingly turned to forward guidance as a central tool of monetary policy. Standard monetary models imply that far future forward guidance has huge effects on current outcomes, and these effects grow with the horizon of the forward guidance. We present a model in which the power of forward guidance is highly sensitive to the assumption of complete markets. When agents face uninsurable income risk and borrowing constraints, a precautionary savings effect tempers their responses to changes in future interest rates. As a consequence, forward guidance has substantially less power to stimulate the economy.
Abstract
					Because of scale effects, idea-based growth models imply that larger countries should be much richer than smaller ones. New trade models share the same counterfactual feature. In fact, new trade models exhibit other counterfactual implications associated with scale effects: import shares decrease and relative income levels increase too steeply with country size. We argue that these implications are largely a result of the standard assumption that countries are fully integrated domestically. We depart from this assumption by treating countries as collections of regions that face positive costs to trade among themselves. The resulting model is largely consistent with the data.
Abstract
					I present novel empirical evidence on the term structure of the equity risk premium. In contrast to previous research that documented high discount rates for the short-term component of the market portfolio, I show evidence for an unconditionally flat term structure of equity risk premia. The tension with previous literature arises largely as a result of differential treatments of heterogeneous investment taxes, manifested in micro evidence on abnormal equity returns on ex-dividend days, and liquidity. The results not only help resolve an important recent "puzzle" but provide further important insights on the role of investment taxes in asset pricing.
Abstract
					Schulz (2016) replicates the findings of van Binsbergen, Brandt, and Koijen (2012)--henceforth, BBK--and agrees that the average pretax returns on short-term dividend strips are higher than those of the index, but argues that the after-tax returns are not. He thus provides a possible economic interpretation of the results in BBK: taxes. Schulz (2016) estimates the differential tax rates of dividends versus capital gains from ex-dividend day returns. We show that these estimated tax rates are suspect and imprecisely measured, peaking at over 100 percent in some periods. The results in BBK are robust to using tax rates from the literature (Sialm 2009). The arguments in Schulz (2016) thus crucially depend on implausibly large tax estimates. We further discuss two other financial market imperfections discussed in the literature and show that they are also unlikely to explain the results in BBK.
Abstract
					I estimate the effects of removing low-income youth with disabilities from Supplemental Security Income (SSI) on their earnings and income in adulthood. Using a regression discontinuity design based on a 1996 policy change in age 18 medical reviews, I find that youth who are removed from SSI at age 18 recover one-third of the lost SSI cash income in earnings. SSI youth who are removed and stay off SSI earn on average $4,400 annually, and they lose $76,000 in present discounted observed income over the 16 years following removal relative to those who do not receive a review.
Abstract
					We use a firm-CEO assignment framework to model the market for CEO effective labor. In the model's equilibrium, more talented CEOs match with and supply more effort to larger firms. Taxation of CEO incomes affects the equilibrium pricing of CEO effective labor and, hence, spills over and affects firm profits. Absent the ability to tax profits or a direct concern for firm owners, a standard prescription for high marginal income taxes emerges. However, given such an ability or concern, the optimal marginal tax rates are much lower.
Abstract
					What determines risk-bearing capacity and the amount of leverage in financial markets? Using unique archival data on collateralized lending, we show that personal experience can affect individual risk-taking and aggregate leverage. When an investor syndicate speculating in Amsterdam in 1772 went bankrupt, many lenders were exposed. In the end, none of them actually lost money. Nonetheless, only those at risk of losing money changed their behavior markedly; they lent with much higher haircuts. The rest continued largely as before. The differential change is remarkable since the distress was public knowledge. Overall leverage in the Amsterdam stock market declined as a result.
Abstract
					We develop a dynamic multicountry general equilibrium model to investigate forces acting on the global economy during the Great Recession and ensuing recovery. Our multisector framework accounts completely for countries' trade, investment, production, and GDPs in terms of different sets of shocks. Applying the model to 21 countries, we investigate the 29 percent drop in world trade in manufactures during the period 2008-2009. A shift in final spending away from tradable sectors, largely caused by declines in durables investment efficiency, accounts for most of the collapse in trade relative to GDP. Shocks to trade frictions, productivity, and demand play minor roles.
Abstract
					We show how size-contingent laws can be used to identify the equilibrium and welfare effects of labor regulation. Our framework incorporates such regulations into the Lucas (1978) model and applies it to France where many labor laws start to bind on firms with 50 or more employees. Using population data on firms between 1995 and 2007, we structurally estimate the key parameters of our model to construct counterfactual size, productivity, and welfare distributions. We find that the cost of these regulations is equivalent to that of a 2.3 percent variable tax on labor. In our baseline case with French levels of partial real wage inflexibility, welfare costs of the regulations are 3.4 percent of GDP (falling to 1.3 percent if real wages were perfectly flexible downward). The main losers from the regulation are workers--and to a lesser extent, large firms--and the main winners are small firms.
Abstract
					The old age provisions of the Medicaid program were designed to insure retirees against medical expenses. We estimate a structural model of savings and medical spending and use it to compute the distribution of lifetime Medicaid transfers and Medicaid valuations across currently single retirees. Compensating variation calculations indicate that current retirees value Medicaid insurance at more than its actuarial cost, but that most would value an expansion of the current Medicaid program at less than its cost. These findings suggest that for current single retirees, the Medicaid program may be of the approximately right size.
Abstract
					Choice in public services is controversial. We exploit a reform in the English National Health Service to assess the effect of removing constraints on patient choice. We estimate a demand model that explicitly captures the removal of the choice constraints imposed on patients. We find that, post-removal, patients became more responsive to clinical quality. This led to a modest reduction in mortality and a substantial increase in patient welfare. The elasticity of demand faced by hospitals increased substantially post-reform and we find evidence that hospitals responded to the enhanced incentives by improving quality. This suggests greater choice can raise quality.
Abstract
					Analyzing 474 cases of firms going public in the German capital between 1892 and 1913, we show that innovative firms could rely on the Berlin stock market as a source of financing. Our data also reveal that initial public offerings (IPO) of innovative firms were characterized by particularly low underpricing, comparatively high first trading prices, and no long-run underperformance. We interpret these empirical results as evidence for the surprising fact that in the period of the Second Industrial Revolution the Berlin stock exchange was already a well-functioning market for new technology.
Abstract
					We develop a quantitative equilibrium model of financial crises to assess the interaction between ex post interventions in credit markets and the buildup of risk ex ante. During a systemic crisis, bailouts relax balance sheet constraints and mitigate the severity of the recession. Ex ante, the anticipation of such bailouts leads to an increase in risk-taking, making the economy more vulnerable to a financial crisis. We find that moral hazard effects are limited if bailouts are systemic and broad-based. If bailouts are idiosyncratic and targeted, however, this makes the economy significantly more exposed to financial crises.
Abstract
					We combine a theoretical discrete-choice model of vehicle purchases, an econometric analysis of electricity emissions, and the AP2 air pollution model to estimate the geographic variation in the environmental benefits from driving electric vehicles. The second-best electric vehicle purchase subsidy ranges from $2,785 in California to -$4,964 in North Dakota, with a mean of -$1,095. Ninety percent of local environmental externalities from driving electric vehicles in one state are exported to others, implying they may be subsidized locally, even when the environmental benefits are negative overall. Geographically differentiated subsidies can reduce deadweight loss, but only modestly.
Abstract
					A large body of research has investigated whether physicians overuse care. There is less evidence on whether, for a fixed level of spending, doctors allocate resources to patients with the highest expected returns. We assess both sources of inefficiency, exploiting variation in rates of negative imaging tests for pulmonary embolism. We document enormous across-doctor heterogeneity in testing conditional on patient population, which explains the negative relationship between physicians' testing rates and test yields. Furthermore, doctors do not target testing to the highest risk patients, reducing test yields by one-third. Our calibration suggests misallocation is more costly than overuse.
Abstract
					We present unique audit-study evidence on health care quality in rural India, and find that most private providers lacked medical qualifications, but completed more checklist items than public providers and recommended correct treatments equally often. Among doctors with public and private practices, all quality metrics were higher in their private clinics. Market prices are positively correlated with checklist completion and correct treatment, but also with unnecessary treatments. However, public sector salaries are uncorrelated with quality. A simple model helps interpret our findings: Where public-sector effort is low, the benefits of higher diagnostic effort among private providers may outweigh costs of potential overtreatment.
Abstract
					We develop a tractable general equilibrium model that captures the interplay between nominal long-term corporate debt, inflation, and real aggregates. We show that unanticipated inflation changes the real burden of debt and, more significantly, leads to a debt overhang that distorts future investment and production decisions. For these effects to be both large and very persistent, it is essential that debt maturity exceeds one period. We also show that interest rate rules can help stabilize our economy.
Abstract
					We study the gains from increased wage flexibility using a small open economy model with staggered price and wage setting. Two results stand out: (i) the effectiveness of labor cost reductions as a means to stimulate employment is much smaller in a currency union, and (ii) an increase in wage flexibility often reduces welfare, more likely so in an economy that is part of a currency union or with an exchange-rate-focused monetary policy. Our findings call into question the common view that wage flexibility is particularly desirable in a currency union.
Abstract
					In this paper we analyze the relationship between turnover-driven growth and subjective well-being. Our model of innovation-led growth and unemployment predicts that: (i) the effect of creative destruction on expected individual welfare should be unambiguously positive if we control for unemployment, less so if we do not; (ii) job creation has a positive and job destruction has a negative impact on well-being; (iii) job destruction has a less negative impact in areas with more generous unemployment insurance policies; and (iv) job creation has a more positive effect on individuals that are more forward-looking. The empirical analysis using cross sectional MSA (metropolitan statistical area)-level and individual-level data provide empirical support to these predictions.
Abstract
					This paper shows that an income effect can drive expenditure switching between domestic and imported goods. We use a unique Latvian scanner-level dataset, covering the 2008-2009 crisis, to document several empirical findings. First, expenditure switching accounted for one-third of the fall in imports, and took place within narrowly defined product groups. Second, there was no corresponding within group change in relative prices. Third, consumers substituted from expensive imports to cheaper domestic alternatives. These findings motivate us to estimate a model of nonhomothetic consumer demand, which explains two-thirds of the observed expenditure switching. Estimated switching is driven by income, not changes in relative prices.
Abstract
					Consumers' enrollment decisions in Medicare Part D can be explained by Abaluck and Gruber's (2011) model of utility maximization with psychological biases or by a neoclassical version of their model that precludes such biases. We evaluate these competing hypotheses by applying nonparametric tests of utility maximization and model validation tests to administrative data. We find that 79 percent of enrollment decisions from 2006 to 2010 satisfied basic axioms of consumer theory under the assumption of full information. The validation tests provide evidence against widespread psychological biases. In particular, we find that precluding psychological biases improves the structural model's out-of-sample predictions for consumer behavior.
Abstract
					We explore the in- and out-of-sample robustness of tests for choice inconsistencies based on parameter restrictions in parametric models, focusing on tests proposed by Ketcham, Kuminoff, and Powers (2016). We argue that their nonparametric alternatives are inherently conservative with respect to detecting mistakes. We then show that our parametric model is robust to KKP's suggested specification checks, and that comprehensive goodness of fit measures perform better with our model than the expected utility model. Finally, we explore the robustness of our 2011 results to alternative normative assumptions highlighting the role of brand fixed effects and unobservable characteristics.
Abstract
					We study the effect of financial resources on decision-making. Low-income US households are randomly assigned to receive an online survey before or after payday. The survey collects measures of cognitive function and administers risk and intertemporal choice tasks. The study design generates variation in cash, checking and savings balances, and expenditures. Before-payday participants behave as if they are more present-biased when making intertemporal choices about monetary rewards but not when making intertemporal choices about nonmonetary real-effort tasks. Nor do we find before-after differences in risk-taking, the quality of decision-making, the performance in cognitive function tasks, or in heuristic judgments. (JEL C83, D14, D81, D91, I32)
Abstract
					We study a contract change for tea pluckers on an Indian plantation, with a higher government-stipulated baseline wage. Incentive piece rates were lowered or kept unchanged. Yet, in the following month, output increased by 20 to 80 percent. This response contradicts the standard model and several variants, is only partly explicable by greater supervision, and appears to be "behavioral." But in subsequent months, the increase is comprehensively reversed. Though not an unequivocal indictment of "behavioral" models, these findings suggest that nonstandard responses may be ephemeral, and should ideally be tracked over an extended period of time. (JEL D82, D86, J33, J41, J43, O13, Q12)
Abstract
					We study optimal redistribution and insurance in a life-cycle economy with private idiosyncratic shocks. We characterize Pareto optima, show the forces determining optimal labor distortions, and derive closed form expressions for their limiting behavior. The labor distortions for high-productivity shocks are determined by the labor elasticity and the higher moments of the shock process; the labor distortions for low-productivity shocks are determined by the autocorrelation of the shock process, redistributive objectives, and past distortions. In a model calibrated using newly available estimates of idiosyncratic shocks, the labor distortions are U-shaped and the savings distortions generally increase in current earnings. (JEL D82, D91, H21, H23, I38, J22, J24)
Abstract
					We examine the link between wage and consumption inequality using a life-cycle model incorporating consumption and family labor supply decisions. We derive analytical expressions for the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, nonseparability, progressive taxation, and asset accumulation. The model is estimated using panel data for hours, earnings, assets, and consumption. We focus on family labor supply as an insurance mechanism and find strong evidence of smoothing of permanent wage shocks. Once family labor supply, assets, and taxes are properly accounted for there is little evidence of additional insurance. (JEL D12, D14, D91, J22, J31)
Abstract
					The uncovered interest parity puzzle concerns the empirical regularity that high interest rate countries tend to have high expected returns on short term deposits. A separate puzzle is that high real interest rate countries tend to have currencies that are stronger than can be accounted for by the path of expected real interest differentials under uncovered interest parity. These two findings have apparently contradictory implications for the relationship of the foreign-exchange risk premium and interest-rate differentials. We document these puzzles, and show that existing models appear unable to account for both. A model that might reconcile the findings is discussed. (JEL E43, F31, G15)
Abstract
					From 1980 to 2000, the rise in the US college/high school graduate
wage gap coincided with increased geographic sorting as college
graduates concentrated in high wage, high rent cities. This paper
estimates a structural spatial equilibrium model to determine causes
and welfare consequences of this increased skill sorting. While local
labor demand changes fundamentally caused the increased skill
sorting, it was further fueled by endogenous increases in amenities
within higher skill cities. Changes in cities' wages, rents, and
endogenous amenities increased inequality between high school
and college graduates by more than suggested by the increase in the
college wage gap alone. (JEL D31, I26, J24, J31, J61, R23)
Abstract
					We examine differences in minority science graduation rates among
University of California campuses when racial preferences were
in place. Less prepared minorities at higher ranked campuses had
lower persistence rates in science and took longer to graduate. We
estimate a model of students' college major choice where net returns
of a science major differ across campuses and student preparation.
We find less prepared minority students at top ranked campuses
would have higher science graduation rates had they attended lower
ranked campuses. Better matching of science students to universities
by preparation and providing information about students' prospects
in different major-university combinations could increase minority
science graduation. (JEL D14, E23, E32, E43, E52, E61, E62)
Abstract
					We estimate the effects of electricity shortages on Indian
manufacturers, instrumenting with supply shifts from hydroelectric
power availability. We estimate that India's average reported level of
shortages reduces the average plant's revenues and producer surplus
by 5 to 10 percent, but average productivity losses are significantly
smaller because most inputs can be stored during outages. Shortages
distort the plant size distribution, as there are significant economies
of scale in generator costs and shortages more severely affect plants
without generators. Simulations show that offering interruptible
retail electricity contracts could substantially reduce the impacts of
shortages. (JEL D24, L60, L94, O13, O14, Q41)
Abstract
					This paper explores the combined effects of reductions in trade frictions, tariffs, and firing costs on firm dynamics, job turnover, and
wage distributions. It uses establishment-level data from Colombia
to estimate an open economy dynamic model that links trade to job
flows and wages. Counterfactual experiments imply that Colombia's
integration with global product markets increased its national income
at the expense of higher unemployment, greater wage inequality, and
increased firm-level volatility. In contrast, contemporaneous labor
market reforms dampened the increase in unemployment and aggregate job turnover. The results speak more generally to the effects of globalization on labor markets. (JEL F13, F16, F66, J31, J63, O15,
O19)
Abstract
					Parameter learning strongly amplifies the impact of macroeconomic
shocks on marginal utility when the representative agent has a preference for early resolution of uncertainty. This occurs as rational
belief updating generates subjective long-run consumption risks.
We consider general equilibrium models with unknown parameters
governing either long-run economic growth, rare events, or model
selection. Overall, parameter learning generates long-lasting,
quantitatively significant additional macroeconomic risks that help
explain standard asset pricing puzzles. (JEL C52, D83, E13, E32,
G12)
Abstract
					We investigate the role of macroprudential policies in mitigating
liquidity traps. When constrained households engage in deleveraging,
the interest rate needs to fall to induce unconstrained households to
pick up the decline in aggregate demand. If the fall in the interest rate
is limited by the zero lower bound, aggregate demand is insufficient
and the economy enters a liquidity trap. In this environment,
households' ex ante leverage and insurance decisions are associated
with aggregate demand externalities. Welfare can be improved with
macroprudential policies targeted toward reducing leverage. Interest
rate policy is inferior to macroprudential policies in dealing with
excessive leverage. (JEL D14, E23, E32, E43, E52, E61, E62)
Abstract
					We estimate that unemployment insurance (UI ) extensions reduce
reemployment wages using sharp age discontinuities in UI eligibility
in Germany. We show this effect combines two key policy parameters:
the effect of UI on reservation wages and the effect of nonemployment
durations on wage offers. Our framework implies if UI extensions do
not affect wages conditional on duration, then reservation wages do
not bind. We derive resulting instrumental variable estimates for the
effect of nonemployment durations on wage offers and bounds for
reservation wage effects. The effect of UI on wages we find arises
mainly from substantial negative nonemployment duration effects.
(JEL J31, J64, J65)
Abstract
					We study employers' perceptions of the value of postsecondary
degrees using a field experiment. We randomly assign the sector
and selectivity of institutions to fictitious resumes and apply to real
vacancy postings for business and health jobs on a large online job
board. We find that a business bachelor's degree from a for-profit
online institution is 22 percent less likely to receive a callback than
one from a nonselective public institution. In applications to health
jobs, we find that for-profit credentials receive fewer callbacks unless
the job requires an external quality indicator such as an occupational
license. (JEL I23, I26, J24, J44, J63, M51)
Abstract
					We develop an empirical test for whether households understand
or misperceive their marginal tax rate. Our identifying variation
comes from the loss of the Child Tax Credit when a child turns 17.
Using this age discontinuity, we find that despite this tax liability
increase being lump-sum and predictable, households reduce their
reported wage income upon discovering they have lost the credit.
This finding suggests that households misinterpret at least part of
this tax liability change as an increase in their marginal tax rate.
This evidence supports the hypothesis that tax complexity can cause
confusion and leads to unintended behavioral responses. (JEL D12,
D14, H24, H31)
Abstract
					We show that the Armenter and Koren model's firm-product-country
results rely on the assumption that export shipment size is independent of firm size, and this assumption is contradicted by the data.
When actual shipment sizes are used in the balls-and-bins model, it
cannot reproduce the data on single product/single country exporters.
Beyond just showing that the shipment size assumption matters
to balls-and-bins outcomes, our results highlight the important fact
that shipment size is an economic decision, co-determined with other
export choices. For this reason, we argue that a balls-and-bins model
cannot be a purely statistical benchmark model. (JEL F11, F14, O13,
O19, Q37)
Abstract
					The Moving to Opportunity (MTO) experiment offered randomly
selected families housing vouchers to move from high-poverty
housing projects to lower-poverty neighborhoods. We analyze MTO's
impacts on children's long-term outcomes using tax data. We find that
moving to a lower-poverty neighborhood when young (before age
13) increases college attendance and earnings and reduces single
parenthood rates. Moving as an adolescent has slightly negative
impacts, perhaps because of disruption effects. The decline in the
gains from moving with the age when children move suggests that the
duration of exposure to better environments during childhood is an
important determinant of children's long-term outcomes. (JEL I31,
I38, J13, R23, R38)
Abstract
					We examine the impact of a positive and policy-driven change in
economic resources available in utero and during childhood. We
focus on the introduction of the Food Stamp Program, which was
rolled out across counties between 1961 and 1975. We use the Panel
Study of Income Dynamics to assemble unique data linking family
background and county of residence in early childhood to adult
health and economic outcomes. Our findings indicate access to food
stamps in childhood leads to a significant reduction in the incidence
of metabolic syndrome and, for women, an increase in economic self-sufficiency. (JEL I12, I38, J24)
Abstract
					We estimate the long-run impact of cash transfers to poor families
on children's longevity, educational attainment, nutritional status,
and income in adulthood. To do so, we collected individual-
level administrative records of applicants to the Mothers' Pension
program -- the first government-sponsored welfare program in the
United States (1911-1935) -- and matched them to census, WWII,
and death records. Male children of accepted applicants lived one
year longer than those of rejected mothers. They also obtained one-third more years of schooling, were less likely to be underweight, and had higher income in adulthood than children of rejected mothers.
(JEL I12, I14, I18, I32, I38, J16, N32)
Abstract
					We study the short-term impact of Connecticut's Jobs First welfare
reform experiment on women's labor supply and welfare participation
decisions. A nonparametric optimizing model is shown to restrict
the set of counterfactual choices compatible with each woman's
actual choice. These revealed preference restrictions yield informative
bounds on the frequency of several intensive and extensive margin
responses to the experiment. We find that welfare reform induced
many women to work but led some others to reduce their earnings in
order to receive assistance. The bounds on this latter "opt-in" effect
imply that intensive margin labor supply responses are nontrivial.
(JEL H23, H75, I38, J16, J22)
Abstract
					The US economy has performed better when the president of the
United States is a Democrat rather than a Republican, almost regardless of how one measures performance. For many measures, including real GDP growth (our focus), the performance gap is large and significant. This paper asks why. The answer is not found in technical time series matters nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the
Democratic edge stems mainly from more benign oil shocks, superior
total factor productivity (TFP) performance, a more favorable
international environment, and perhaps more optimistic consumer
expectations about the near-term future. (JEL D72, E23, E32, E65,
N12, N42)
Abstract
					Anthropologists have documented substantial and persistent
differences in food preferences across social groups. My paper
asks whether such food cultures can constrain caloric intake?
I first document that interstate migrants within India consume
fewer calories per rupee of food expenditure compared to their
neighbors. Second, I show that migrants bring their origin-state food
preferences with them. Third, I link these findings by showing that the
gap in caloric intake between locals and migrants depends on the
suitability and intensity of the migrants' origin-state preferences. The
most affected migrants would consume seven percent more calories
if they possessed their neighbors' preferences. (JEL D12, I12, O15,
R23, Z12, Z13)
Abstract
					The prices of auctions on eBay often exceed eBay's fixed-price "Buy-
It-Now" prices. I investigate the causes of this overbidding, focusing
on the interpretation in Malmendier and Lee (2011) that the observed
overbidding cannot be explained "without allowing for nonstandard
preferences or beliefs" and that the "strongest direct evidence points
to limited attention." Using data from their study and new data from
eBay, I provide evidence that a key condition for identifying nonstandard behavior may not have been met, and that the observed overbidding is not inconsistent with standard behavior once we allow for the likely presence of search costs. (JEL D12, D44, D83)
Abstract
					Much has happened in the world of central banking in the past decade. In this paper, I focus on three issues associated with the zero lower bound (ZLB) on short-term nominal interest rates and the nexus between monetary policy and financial stability: 1) whether we are moving toward a permanently lower long-run equilibrium real interest rate; 2) what steps can be taken to mitigate the constraints imposed by the ZLB; and 3) whether and how financial stability considerations should be incorporated in the conduct of monetary policy. These important topics deserve the attention of both academic and government professionals.
Abstract
					Today's weakness in the US economy results from lack of aggregate demand, due to high and growing inequality, underinvestment in public infrastructure and technology that is complementary to private capital, continuing mild austerity, difficulties encountered in making the structural transformation from manufacturing to a service-based economy, and a financial sector failing to provide adequate funds to SMEs. An agenda to restore growth includes a carbon price, inducing climate investments; increased public investments in infrastructure and technology; fighting inequality through redistribution and rewriting the rules structuring the economy; and reforming the financial sector and the global reserve system.
Abstract
					Many have argued that a deviation from good economic policy has been a cause of the poor U.S. economic performance of the past decade and that policy reforms are needed to restore strong growth. Yet others argue that the recent stagnation is secular or that the possibility of a rapid recovery is long gone without more fiscal stimulus. Here I show that unusual economic conditions leave plenty of room for a reform-induced rebound. Taking demographics and the growth of capital services into account, labor force participation and productivity growth are unusually low. Hence, policy reforms could generate a post-recession-like acceleration as well as sustained growth and stability.
Abstract
					In Sub-Saharan Africa, there are active debates about whether increases in energy access should be driven by investments in electric grid infrastructure or small-scale "home solar" systems (e.g., solar lanterns and solar home systems). We summarize the results of a household electrical appliance survey and describe how households in rural Kenya differ in terms of appliance ownership and aspirations. Our data suggest that home solar is not a substitute for grid power. Furthermore, the environmental advantages of home solar are likely to be relatively small in countries like Kenya, where grid power is primarily derived from non-fossil fuel sources.
Abstract
					The conventional wisdom in health economics is that large differences in average productivity across US hospitals are the result of idiosyncratic features of the healthcare sector which dull the role of market forces. Strikingly, however, we find that productivity dispersion in heart attack treatment across hospitals is, if anything, smaller than in narrowly defined manufacturing industries such as ready-mixed concrete. While this fact admits multiple interpretations, it suggests that healthcare may have more in common with "traditional" sectors than is often assumed, and relatedly, that insights from research on productivity and allocation in other sectors may enrich analysis of healthcare.
Abstract
					This study is, to our knowledge, the first attempt to infer the consequences on productivity entailed by anticompetitive regulations in product and labor markets through their impacts on production prices and wages. Results show that changes in production prices and wages at country*industry levels are informative about the creation of rents impeding productivity in different ways and to different extents. A simulation based on OECD regulation indicators suggests that nearly all countries could expect sizeable gains in multifactor productivity from the implementation of large structural reform programs changing anticompetitive regulation practices on product and labor markets.
Abstract
					This paper seeks to understand the drivers of country-level multi-factor productivity (MFP) with a special emphasis on product and labour market policies and the quality of institutions. For a panel of OECD countries, we find that anticompetitive product market regulations reduce MFP levels and that higher innovation intensity and greater openness result in higher MFP. We also find that the impact of product market regulations on MFP may depend on the level of labour market regulations. Better institutions, a more business friendly environment and lower barriers to trade and investment amplify the positive impact of R&D spending on MFP. Finally, we also show that cross-country MFP variations can be explained to a considerable extent by cross-country variation in labour market regulations, barriers to trade and investment and institutions.
Abstract
					Economists have become increasingly interested in studying the nature of production functions in social policy applications, with the goal of improving productivity. Traditionally models have assumed workers are homogenous inputs. However, in practice, substantial variability in productivity means the marginal productivity of labor depends substantially on which new workers are hired--which requires not an estimate of a causal effect, but rather a prediction. We demonstrate that there can be large social welfare gains from using machine learning tools to predict worker productivity, using data from two important applications - police hiring and teacher tenure decisions.
Abstract
					We provide a systematic empirical study of the diffusion and adoption patterns of data-driven decision making (DDD) in the U.S. Using data collected by the Census Bureau for a large representative sample of manufacturing plants, we find that DDD rates nearly tripled (11%-30%) between 2005 and 2010. This rapid diffusion, along with results from a companion paper, are consistent with case-based evidence that DDD tends to be productivity-enhancing. Yet certain plants are significantly more likely to adopt than others. Key correlates of adoption are size, presence of potential complements such as information technology and educated workers, and firm learning.
Abstract
					Digital technologies for sharing creative goods create new opportunities for copyright infringement and challenge established enforcement methods. We establish several important facts about the nature of copyright infringement and efforts to settle past infringing use in the market for digital images. Infringement in this, and many other markets, is often uninformed: users may be unaware that their use infringes, and may lack information about the price of a license. The uninformed nature of infringement implies that price may not be the primary factor in the decision to settle past use; in contrast, non-price factors may significantly affect settlement outcomes.
Abstract
					We document that the Bay Area rose from 4% of all successful US patent applications in 1976 to 16% in 2008. This is partly driven by the increase in the prevalence of information and communication technology; however, even for patents unrelated to information and communication technology, we see a disproportionate increase in the share of US patents from the Bay Area. We interpret this growth as a trend to coagglomeration in invention across technologies, and explore different dimensions of this trend.
Abstract
					In most cities, the taxi industry is highly regulated and has restricted entry. Ride sharing services, such as Uber and Lyft, which use mobile internet technology to connect passengers and drivers, have begun to compete with traditional taxis. This paper examines the efficiency of ride sharing services vis-a-vis taxis. In most cities with data available, UberX drivers spend a significantly higher fraction of their time, and drive a substantially higher share of miles, with a passenger in their car than do taxi drivers. Reasons for this efficiency advantage are explored.
Abstract
					Using an annual panel of US states over the period 1982-2014, we estimate the response of macroeconomic variables to a shock to the number of new firms (startups). We find that these shocks have significant effects that persist for many years on real GDP, productivity, and population. This is consistent with simple models of firm dynamics where a "missing generation" of firms affects productivity persistently.
Abstract
					The U.S. economy has been going through a striking structural transformation--the secular reallocation of employment across sectors--over the past several decades. We propose a decomposition framework to assess the contributions of various margins of firm dynamics to this shift. Using firm-level data, we find that at least 50 percent of the adjustment has been taking place along the entry margin, due to sectors receiving different shares of startup employment than their employment shares. The rest is mostly due to life cycle differences across sectors. Declining overall entry has a small but growing effect of dampening structural transformation.
Abstract
					We repeat a survey we did in the waning days of the Soviet Union (Shiller, Boycko and Korobov, AER 1991) comparing attitudes towards free markets between Moscow and New York. Additional survey questions, from Gibson Duch and Tedin (J. Politics 1992) are added to compare attitudes towards democracy. Two comparisons are made: between countries, and through time, to explore the existence of international differences in allegiance to democratic free-market institutions, and the stability of these differences.
Abstract
					We use weekly data from 79 Russian regions to measure the impact of economic shocks and proximity to war in Ukraine on social capital in Russian regions. We proxy social capital by the relative intensity of internet searches for the most salient dimensions of pro-social behavior such as "donate blood", "charity", "adopt a child" etc. This measure of social capital is correlated with a survey-based measure of generalized social trust. Our search-based measure of social capital responds negatively to the spikes of inflation and positively to the intensity of the conflict in Ukraine (controlling for region and week fixed effects).
Abstract
					Using data collected by Forbes since the 1990s, I examine the emergence and survival of the super-wealthy in Russia over the past two decades and compare Russia's record to those of other countries. The major surge in the number of Russian billionaires came in the mid-2000s, mirroring the dynamic worldwide. While early billionaires were predominantly found in the oil, gas, metals, and banking sectors, the distribution has become more diverse, now including some in trade, real estate, chemicals, and information technology. Only a minority of today's Russian billionaires acquired significant assets in the privatization of the 1990s.
Abstract
					I analyze the effects of short-duration paid parental leave on maternal labor supply. Using monthly longitudinal data from the Survey of Income and Program Participation, my event-study research design estimates impacts of paid leave laws in California and New Jersey on women's labor-force outcomes around childbirth. I find that paid leave laws are associated with a substantial increase in labor-force attachment in the months directly around birth. While US-style short-duration leave is unlikely to change prolonged exits from the labor force, my findings imply that paid leave laws induce some women stay more attached to jobs, particularly low-skill women.
Abstract
					An increase in a married woman's attachment to the labor market affected her family's ability to smooth unexpected income shocks. Between 1970 and 1990, the sharp rise in labor market attachment provided an increasingly important channel for smoothing shocks to spousal income. As the participation rate stabilized, this contribution to smoothing evened out. In the Great Recession, both spouses received negative income shocks, and access to transfer income became the main insurance mechanism. Volatility of consumption followed volatility of family income trends but at a lower magnitude. Families' ability to weather income shocks didn't change during the 1970-2010 period.
Abstract
					This paper investigates the effect of gender-related culture on the math gender gap by analysing math test scores of second-generation immigrants, who are all exposed to a common set of host country laws and institutions. We find that immigrant girls whose parents come from more gender-equal countries perform better (relative to similar boys) than immigrant girls whose parents come from less gender-equal countries, suggesting an important role of cultural beliefs on the role of women in society on the math gender gap. The transmission of cultural beliefs accounts for at least two thirds of the overall contribution of gender-related factors.
Abstract
					We study how investors perceive the skill set that different types of CEOs bring into their companies. We compare CEOs who started their careers during a recession with other CEOs. We show that the announcement return around the appointment of a recession CEO is very significant and positive, and this positive market reaction is driven by cases where a recession CEO replaces a non-recession CEO. Our results indicate that the market assigns a positive and economically meaningful value to a recession CEO, suggesting that there is a limited supply of these types of CEOs in the executive labor market.
Abstract
					We show that gender diversity in corporate boards could improve firm value because of the contributions that women make to the board. Prior studies examine valuation effects of gender-diverse boards and reach mixed conclusions. To help resolve this conundrum, we consider how gender diversity could affect firm value, that is, what mechanisms could explain how female directors benefit corporate board performance. We hypothesize and provide evidence that women directors contribute to boards by offering specific functional expertise, often missing from corporate boards. The additional expertise increases board heterogeneity which Kim and Starks (2015) show can increase firm value.
Abstract
					We study the participation of women in golf, a predominately male social activity, and its influence on their likelihood of serving on a board of directors. Exploiting a novel dataset of all golfers in Singapore, we find that woman golfers enjoy a 54% higher likelihood of serving on a board relative to male golfers. A woman's probability of serving on the board in a large firm or in a predominately male industry increases by 117% to 125% when she plays golf. Joining the boy's informal network appears to facilitate women's entrance or success in the executive labor market.
Abstract
					We document that women are less represented on corporate boards in Finance and more traditional STEM industry sectors. Even after controlling for differences in firm and country characteristics, average diversity in these sectors is 24% lower than the mean. Our findings suggest that well-documented gender differences in STEM university enrolments and occupations have long-term consequences for female business leadership. The leadership gap in Finance and STEM may be difficult to eliminate using blanket boardroom diversity policies. Diversity policies are also likely to have a different impact on firms in these sectors than in non-STEM sectors.
Abstract
					We show that differences in childhood environments shape gender gaps in adulthood by documenting three facts using population tax records for children born in the 1980s. First, gender gaps in employment rates, earnings, and college attendance vary substantially across the parental income distribution. Notably, the traditional gender gap in employment rates is reversed for children growing up in poor families: boys in families in the bottom quintile of the income distribution are less likely to work than girls. Second, these gender gaps vary substantially across counties and commuting zones in which children grow up. The degree of variation in outcomes across places is largest for boys growing up in poor, single-parent families. Third, the spatial variation in gender gaps is highly correlated with proxies for neighborhood disadvantage. Low-income boys who grow up in high-poverty, high-minority areas work significantly less than girls. These areas also have higher rates of crime, suggesting that boys growing up in concentrated poverty substitute from formal employment to crime. Together, these findings demonstrate that gender gaps in adulthood have roots in childhood, perhaps because childhood disadvantage is especially harmful for boys.
Abstract
					Recent evidence indicates that boys and girls are differently affected by the quantity and quality of family inputs received in childhood. We assess whether this is also true for schooling inputs. Using matched Florida birth and school administrative records, we estimate the causal effect of school quality on the gender gap in educational outcomes by contrasting opposite-sex siblings who attend the same sets of schools--thereby purging family heterogeneity--and leveraging within-family variation in school quality arising from family moves. Investigating middle school test scores, absences and suspensions, we find that boys benefit more than girls from cumulative exposure to higher quality schools.
Abstract
					We exploit a unique data set, combining rich experimental data with high-quality administrative data, to study dropout from the college track in Norway, and why boys are more likely to drop out. The paper provides three main findings. First, we show that family background and personal characteristics contribute to explain dropout. Second, we show that the gender difference in dropout rates appears both when the adolescents select into the college track and after they have started. Third, we show that different processes guide the choices of the boys and the girls of whether to drop out from the college track.
Abstract
					We design and implement a large-scale field experiment on age discrimination to address limitations of past research that may bias their results. One limitation is the practice of giving older and younger applicants similar experience in the job to which they are applying, to make them "otherwise comparable." The second limitation is ignoring the likelihood of greater variation in unobserved differences among older workers owing to human capital investment. Based on evidence from over 40,000 job applications, we find robust evidence of age discrimination in hiring against older women, but considerably less evidence of age discrimination against older men.
Abstract
					We summarize findings from an audit study investigating how unemployment duration, age, and holding a low-level "interim" job affect the likelihood that experienced college-educated females applying for administrative support jobs receive a callback from potential employers. The results show no relationship between callback rates and unemployment duration. In contrast, workers age 50 and older and workers with an "interim" job are significantly less likely to receive callbacks. We also summarize disparate findings in the growing literature of resume-based audit studies of career histories, and discuss avenues in which the literature could achieve results that are more comparable and externally valid.
Abstract
					In strategic settings a player may be able to influence the behavior of an opponent by revealing information about their own characteristics. They may for example aim to exploit stereotypes held by others. We provide an experimental test of this. A substantial fraction of players in a trust game exhibit a positive willingness to pay to reveal a photograph of themselves to their randomly-assigned partner. This suggests that they perceive that they can use their own characteristics to influence the behavior of others. The demand for such self-revelation depends negatively on price.
Abstract
					We examine the effect of a student loan information intervention on changes in college major using administrative data from the Montana University System from 2002-2014. Our difference-in-difference-in-differences strategy exploits the relative trends for students at Montana State University above and below the cutoff for receiving a warning letter about their student debt, compared to their counterparts at the University of Montana. We find that students who receive information suggesting they may be unlikely to be able to repay their loans are more likely to switch to higher earning majors, with higher academic performers most likely to choose STEM fields.
Abstract
					Economic theory suggests that medical spending risk affects the extent to which households are willing to accept financial risk, and consequently their investment portfolios. In this study, we focus on the elderly for whom medical spending represents a substantial risk. We exploit the exogenous reduction in prescription drug spending risk due to the introduction of Medicare Part D in the U.S. in 2006 to identify the causal effect of medical spending risk on portfolio choice. Consistent with theory, we find that Medicare-eligible persons increased risky investment after the introduction of prescription drug coverage, relative to a younger, ineligible cohort.
Abstract
					Why do so many students mismatch when choosing a college? A plausible hypothesis is a lack of information about the likelihood of admission. This study contributes to the literature on mismatch by testing whether public university automatic admissions policies mitigate academic undermatch and promote academic overmatch by providing some students with admissions certainty. Focusing on the interaction of admissions certainty and race/ethnicity, our results support the hypothesis that a priori admissions information can vastly improve minority access to college quality by encouraging eligible students to apply to, and more importantly, enroll in more challenging institutions.
Abstract
					Studies have demonstrated that classroom experiments have a positive effect on student achievement in economics courses. Questions remain regarding the appropriate number of experiments. In the current study we attempt to determine whether more intensive use of classroom experiments is associated with greater student achievement. Our data contains variation in the number of experiments administered in a principles of microeconomics course. We find that participation in classroom experiments has a positive, but diminishing, marginal benefit on students' final course scores. We also find that classroom experiments can bridge some achievement gaps (between older and younger students, between whites and minorities).
Abstract
					We compare introductory microeconomics courses that employ a blended learning approach to more traditional control courses at a selective liberal arts college. The blended learning courses required students to complete online homework and watch video lectures before problem-based class sessions, while the control courses used paper homework and primarily traditional lecturing. We use the Test of Understanding in College Economics to measure improvement and use the Student Opinion Survey to control for students' self-reported effort and amount of importance placed on the test. We find that students in the blended courses improve more than those in traditional courses.
Abstract
					We evaluate the efficacy of a blended formative/summative assessment tool developed to support mastery learning by students without placing undue burden on instructors. Our innovation provides students with an opportunity to take a more difficult "challenge" quiz to demonstrate their command of the material and improve their grade on regular in-class quizzes. The structure of these quizzes motivates students to modify study behaviors (formative component) and take responsibility for knowledge acquisition (summative component). This mastery-based testing approach serves to bring the student's objective of a quality grade in line with the instructor's objective of quality learning.
Abstract
					A microeconomics principles course employing random assignment across three sections with different teaching models is used to explore learning outcomes as measured by a cumulative final exam for students who participate in traditional face-to-face classroom instruction, blended face-to-face and online instruction with reduced instructor contact time, and a purely online instructional format. Evidence indicates learning outcomes were reduced for students in the purely online section relative to those in the face-to-face format by 5 to 10 points on a cumulative final exam. No statistically significant differences in outcomes are observed for students in the blended relative to the face-to-face section.
Abstract
					Healthcare and education exhibit wide variation in spending that is loosely associated with outcomes. We study supply-side explanations for such variation in in healthcare, and extend this discussion to how it might apply to education. In both sectors, variation in risk-adjusted rates could arise from some providers or educators doing too much (overuse) or others are using too little (underuse). Alternatively, the production function varies across providers and educators, so that hospitals and educators with higher returns to treatment deliver more because of comparative advantage. We discuss how a prototypical Roy model can separate these explanations.
Abstract
					We develop over-identification tests that use admissions lotteries to assess the predictive value of regression-based value-added models (VAMs). These tests have degrees of freedom equal to the number of quasi-experiments available to estimate school effects. By contrast, previously implemented VAM validation strategies look at a single restriction only, sometimes said to measure forecast bias. Tests of forecast bias may be misleading when the test statistic is constructed from many lotteries or quasi-experiments, some of which have weak first stage effects on school attendance. The theory developed here is applied to data from the Charlotte-Mecklenberg School district analyzed by Deming (2014).
Abstract
					Value-added (VA) models measure agents' productivity based on the outcomes they produce. The utility of VA models for performance evaluation depends on the extent to which VA estimates are biased by selection. One common method of evaluating bias in VA is to test for balance in lagged values of the outcome. We show that such balance tests do not yield robust information about bias in value-added models using Monte Carlo simulations. Even unbiased VA estimates can be correlated with lagged outcomes. More generally, tests using lagged outcomes are uninformative about the degree of bias in misspecified VA models. The source of these results is that VA is itself estimated using historical data, leading to non-transparent correlations between VA and lagged outcomes.
Abstract
					Refugees and asylum seekers are only a small proportion of the 60 million forcibly displaced persons. But those seeking asylum in the developed world have received much of the attention as western governments have struggled to develop a policy response. An analysis of asylum applications by origin and destination indicates that these flows are largely driven by political terror and human rights abuses. Poor economic conditions in origin countries and tough asylum policies in destination countries matter too. In the light of the findings I suggest that greater coordination among OECD countries could improve the lot of those fleeing from persecution but even this would make only modest inroads into the sum of human misery that displaced people exemplify.
Abstract
					We analyze children of immigrants' healthy immigrant effect using parental year of arrival and region of birth. Using data from Integrated National Health Interview Survey 2008-2014, we evaluate children of immigrants' health status by using obesity rates and the number of visits to the doctor versus their native counterparts. Consistent with their parents, children of immigrants' health status declines the longer their parents, remain in the United States. Meanwhile, there is an increase in the number of visits to the doctor the more years their parents, have resided in the country. The convergence rate differs by immigrant group.
Abstract
					Numerous studies find that U.S.-born Hispanics differ significantly from non-Hispanic whites on important measures of human capital, including health. Nevertheless, almost all studies rely on subjective measures of ethnic self-identification to identify immigrants' U.S.-born descendants. This can lead to bias due to "ethnic attrition," which occurs whenever a U.S.-born descendant of a Hispanic immigrant fails to self-identify as Hispanic. This paper shows that Mexican American ethnic attritors are generally more likely to display health outcomes closer to those of non-Hispanic whites. This biases conventional estimates of Mexican American health away from suggesting patterns of assimilation and convergence with non-Hispanic whites.
Abstract
					We build an economico-epidemiological Solow-Swan model. Mortality and morbidity effects on effective labor are taken into account. A Ben-Porath-like mechanism affects the dynamics of the saving rate and reduces labor productivity. Based on optimal projections of the demographic and economic South African series on the period 2000-2050, we identify a delayed effect of HIV/AIDS on economic growth: the growth rate gap between the AIDS and no-AIDS scenarios is rather stable between 2010 and 2020, but then it increases sharply between 2020 and 2030, keeps increasing at a much lower pace between 2030 and 2040, and finally stabilizes after 2040. The fall in active population is the main factor behind AIDS impact on economic growth during the decade 2020-2030 while the Ben-Porath mechanism on labor productivity is more relevant in the last decade. Physical capital accumulation plays a minor role.
Abstract
					Policy might partly shape the English-language acquisition of Hispanics migrating to the U.S. mainland, particularly policies related to limited-English-language disability benefits and immigration reform. Using data from the American Community Survey, we find that island-born Puerto Ricans on the U.S. mainland, as U.S. citizens, may have lower incentives to learn English than Hispanic immigrants because of their higher participation in LEP disability programs. However, among Mexican immigrants, recent immigration reform aimed at interior enforcement might have increased incentives for Mexican immigrants to learn English to reduce their probability of detection, if speaking English proxies for undocumented status.
Abstract
					We endogenize asset liquidity and financing constraints in a dynamic general equilibrium model with search frictions on capital markets. Assets traded on frictional capital markets are only partially saleable. Liquid assets, such as fiat money, instead, are not subject to search frictions and can be used to insure idiosyncratic investment risks. Partially saleable assets thus carry a liquidity premium over fully liquid assets. We show that, in equilibrium, low asset saleability is typically associated with lower asset prices, tighter financing constraints, thus stronger demand for public liquidity. Lower asset liquidity feeds into real allocations, constraining real investment, consumption, and production.
Abstract
					US government bonds are considered to be the world's safe store of value, especially during periods of economic turmoil such as the events of 2008. But what makes US government bonds "safe assets"? We highlight coordination among investors, and build a model in which two countries with heterogeneous sizes issue bonds that may be chosen as safe asset. Our model illustrates the benefit of a large absolute debt size as safe asset investors have "nowhere else to go" in equilibrium, and the large country's bonds are chosen as the safe asset. Moreover, the effect becomes stronger in crisis periods.
Abstract
					This paper studies the long run effects of financial crises using new bank and town level data from around the Great Depression. We find evidence that banking markets became much more concentrated in areas that experienced a greater initial collapse in the local banking system. There is also evidence that financial regulation after the Great Depression, and in particular limits on bank branching, may have helped to render the effects of the initial collapse persistent. All of this suggests a reason why post-crisis financial regulation, while potentially reducing financial instability, might also have longer run real consequences.
Abstract
					"Too-big-to-fail" is consistent with policies followed by private bank clearing houses during financial crises in the U.S. National Banking Era prior to the existence of the Federal Reserve System. Private bank clearing houses provided emergency lending to member banks during financial crises. This behavior strongly suggests that "too-big-to-fail" is not the problem causing modern crises. Rather it is a reasonable response to the threat posed to large banks by the vulnerability of short-term debt to runs.
Abstract
					This paper examines the impact of the Federal Reserve's founding on seasonal pressures and contagion risk in the interbank system. Deposit flows among classes of banks were highly seasonal before 1914; amplitude and timing varied regionally. Panics interrupted normal flows as banks throughout the country sought funds from the central money markets simultaneously. Seasonal pressures and contagion risk in the system were lower by the 1920s, when the Fed provided seasonal liquidity and reserves. Panics returned in the 1930s, due in part to shocks from nonmember banks and because the Fed's decentralized structure hampered a vigorous response to national crises.
Abstract
					The surge in credit and house prices that preceded the Great Recession was particularly pronounced in ZIP codes with a higher fraction of subprime borrowers (Mian and Sufi, 2009). We present a simple model with prime and subprime borrowers distributed across geographic locations, which can reproduce this stylized fact as a result of an expansion in the supply of credit. Due to their low income, subprime households are constrained in their ability to meet interest payments and hence sustain debt. As a result, when the supply of credit increases and interest rates fall, they take on disproportionately more debt than their prime counterparts, who are not subject to that constraint.
Abstract
					Changes in household debt and employment across regions of the U.S. during the Great Recession are highly correlated: regions where the decrease in household debt was most pronounced were also regions where the decline in employment was most severe. We show that the drop in employment in the regions that have experienced the largest decrease in household debt is mostly accounted for by changes in the labor wedge (deviations from a static consumption-leisure choice) as opposed to changes in real wages. We argue that such a pattern is consistent with fluctuations in debt constraints in a standard Bewley-Aiyagari model.
Abstract
					The workhorse open-economy macro model suggests that capital inflows are contractionary because they appreciate the currency and reduce net exports. Emerging market policy makers, however, believe that inflows lead to credit booms and rising output; the evidence appears to go their way. To reconcile theory and reality, we extend the set of assets in the Mundell-Fleming model to include both bonds and non-bonds. At a given policy rate, inflows may decrease the rate on non-bonds, stimulating financial intermediation and, potentially, output as well. We explore the implications, and find support for the key predictions in the data.
Abstract
					Capital flow and commodity cycles have long been connected with economic crises. Sparse historical data, however, has made it difficult to connect their timing. We date turning points in global capital flows and commodity prices across two centuries and provide estimates from alternative data sources. We then document a strong overlap between the ebb and flow of financial capital, the commodity price super-cycle, and sovereign defaults since 1815. The results have implications for today, as many emerging markets are facing a double bust in capital inflows and commodity prices, making them vulnerable to crises.
Abstract
					We investigate in a sample of 53 emerging markets over 1980-2014 whether countries with open capital accounts are necessarily at the mercy of global events, or are able to take policy actions when receiving inflows to mitigate the impact of a subsequent reversal. Our analysis suggests that, while changes in global conditions have an important bearing on crisis susceptibility, countries that allow the buildup of macroeconomic and financial vulnerabilities during boom times, and which receive mostly debt flows, are significantly more likely to see capital inflow surge episodes end in a financial crisis.
Abstract
					We assess the potential magnitude of the economic effects of an ocean acidification (OA) catastrophe by focusing on marine ecosystem services most likely to be affected. It is scientifically plausible that by 2200 OA could cause a complete collapse of marine capture fisheries, complete destruction of coral reefs, and significant rearrangement of marine ecosystems. Upper-bound values for losses from the first two effects range from 97 to 301 billion 2014 dollars per year (0.09 - 0.28% of current world GDP). We argue that aquaculture output would not be reduced, due to the high potential for adaptation by this young industry.
Abstract
					Although major changes in mortgage finance have occurred since the subprime bust, several issues remain unresolved, centering on the roles of Fannie Mae, Freddie Mac, and the FHA. We analyze how some reforms might affect house prices in a framework rich enough to simulate the impact of several reforms which change mortgage interest rates and/or loan-to-value (LTV) ratios of first time home buyers, the key drivers of house prices in recent decades. Simulations suggest that ending the GSE interest rate subsidy would have small effects, while changes in capital requirements or maximum FHA loan size limits would have larger effects.
Abstract
					This paper identifies the impact of borrowing constraints on homeownership in the U.S. in the aftermath of the 2008 financial crisis. While homeownership declines and tightened credit are evident, the role the tightening of credit has had on the probability of individual households to become homeowners has not been previously identified. The homeownership rate in 2010-2013 is estimated to be 2.3 percentage points lower than if the constraints were set at the 2001 level.
Abstract
					We exploit regional variations in U.S. house price fluctuations during the boom-bust cycle of the 2000s to study the impact of the housing cycle on young Americans' choices related to education and employment. We find that in MSAs which experienced large increases in house prices between 2001 and 2006, young adults were substantially more likely to forego a higher education and join the workforce, lowering skill formation. During the bust years, the young, especially those without higher education, were more likely to be unemployed in areas which experienced higher declines in house prices.
Abstract
					We use a strategic household survey to study the sensitivity of intended homeownership decisions to financing constraints. We find that the average stated likelihood of buying a home is strongly sensitive to the size of the required down payment, which we vary exogenously across three scenarios. This sensitivity is particularly high for respondents that appear more liquidity constrained based on observable characteristics (including current renters, or owners with low savings or low home equity). For renters, expectations of future rent inflation and of improvements to their personal financial situation also predict intention to buy.
Abstract
					Administrative income tax data indicate that U.S. top income and wealth shares are both substantial and larger than shares observed in household surveys. However, these estimates are sensitive to the unit of analysis, the income concept measured in tax records, and, in the case of wealth, to assumptions about the correlation between income and wealth. We constrain a household survey--the Survey of Consumer Finances--to be conceptually comparable to tax records and are able to reconcile the much of the difference between the survey and administrative estimates. Wealth estimates from administrative income tax data are sensitive to model parameters.
Abstract
					This paper uses the Household Finance and Consumption Survey to construct new estimates of top wealth shares in Germany, France, Spain, Italy, Belgium, Austria, Finland and The Netherlands. It provides a methodology to address simultaneously non-response and underreporting in wealth surveys.
Abstract
					Lacking a long time series on the assets of the very wealthy, Saez and Zucman (2015) use US tax records to obtain estimates of wealth holdings by capitalizing asset income from tax returns. They document marked upward trends in wealth concentration. We use data on tax returns and actual wealth holdings from tax records for the whole Norwegian population to test the robustness of the methodology. We document that measures of wealth based on the capitalization approach can lead to misleading conclusions about the level and the dynamics of wealth inequality if returns are heterogeneous and even moderately correlated with wealth.
Abstract
					Using Danish administrative data, we estimate the impact of bequests on the level and inequality of wealth. We compare the distributions of wealth over time of people whose parent died and those whose parent did not. Bequests account for 26 percent of the average post-bequest wealth 1-3 years after parental death and significantly affect wealth throughout the distribution. Bequests increase absolute wealth inequality (variance of the distribution censored at the top/bottom 1% increases by 33 percent), but reduce relative inequality (the top 1% share declines by 6 percentage points from the base of 31 percent).
Abstract
					In 2010, the U.S. estate tax expired and executors of wealthy decedents were not required to file estate tax returns. In the absence of the estate tax, beneficiaries received assets with carryover rather than stepped-up basis. Unrealized capital gains accounted for 44 percent of the fair market value of non-cash assets in estates that chose the carryover basis regime, and an even higher percentage for some asset categories. Many of the largest gains were on assets that had been held for at least two decades.
Abstract
					This paper uses data from the American Mathematics Competitions to examine the rates at which different high schools produce high-achieving math students. There are large differences in the frequency with which students from seemingly similar schools reach high achievement levels. The distribution of unexplained school effects includes a thick tail of schools that produce many more high-achieving students than is typical. Several additional analyses suggest that the differences are not primarily due to unobserved differences in student characteristics. The differences are persistent across time, suggesting that differences in the effectiveness of educational programs are not primarily due to direct peer effects.
Abstract
					We examine the pricing of financial crash insurance during the 2007-2009 financial crisis in US option markets, and we show that a large amount of aggregate tail risk is missing from the cost of financial sector crash insurance during the crisis. The difference in costs between out-of-the-money put options for individual banks and puts on the financial sector index increases four-fold from its precrisis 2003-2007 level. We provide evidence that a collective government guarantee for the financial sector lowers index put prices far more than those of individual banks and explains the increase in the basket-index put spread.
Abstract
					We study the effects of the adoption of new agricultural technologies on structural transformation. To guide empirical work, we present a simple model where the effect of agricultural productivity on industrial development depends on the factor-bias of technical change. We test the predictions of the model by studying the introduction of genetically engineered soybean seeds in Brazil, which had heterogeneous effects on agricultural productivity across areas with different soil and weather characteristics. We find that technical change in soy production was strongly labor-saving and led to industrial growth, as predicted by the model.
Abstract
					We study household decisions to acquire energy-using assets in the presence of rising incomes. We develop a theoretical framework to characterize the effect of income growth on asset purchases when consumers face credit constraints. We use large and plausibly exogenous shocks to household income generated by the conditional-cash-transfer program in Mexico, Oportunidades, to show that asset acquisition is nonlinear, depends, as predicted in the presence of credit constraints, on the pace of income growth, and both effects are economically large among beneficiaries. Our results may help explain important worldwide trends in the relationship between energy use and income growth.
Abstract
					China has defied the declining trend in domestic content in exports in many countries. This paper studies China's rising domestic content in exports using firm- and customs transaction-level data. The approach embraces firm heterogeneity and hence reduces aggregation bias. The study finds that the substitution of domestic for imported materials by individual processing exporters caused China's domestic content in exports to increase from 65 to 70 percent in the period 2000-2007. Such substitution was induced by the country's trade and investment liberalization, which deepened its engagement in global value chains and led to a greater variety of domestic materials becoming available at lower prices.
Abstract
					We integrate tools to monitor information acquisition in field experiments on discrimination and examine whether gaps arise already when decision makers choose the effort level for reading an application. In both countries we study, negatively stereotyped minority names reduce employers' effort to inspect resumes. In contrast, minority names increase information acquisition in the rental housing market. Both results are consistent with a model of endogenous allocation of costly attention, which magnifies the role of prior beliefs and preferences beyond the one considered in standard models of discrimination. The findings have implications for magnitude of discrimination, returns to human capital and policy.
Abstract
					We introduce a new method to measure the temporal discounting of money. Unlike preceding methods, our method requires neither knowledge nor measurement of utility. It is easier to implement, clearer to subjects, and requires fewer measurements than existing methods.
Abstract
					Public policy in modern India features affirmative action programs intended to reduce inequality that stems from a centuries-old caste structure and history of disparate treatment by gender. We study the effects of one such affirmative action program: an admissions policy that fixes percentage quotas, common across more than 200 engineering colleges, for disadvantaged castes and for women. We show that the program increases college attendance of targeted students, particularly at relatively higher-quality institutions. An important concern is that affirmative action might harm intended beneficiaries by placing them in academic programs for which they are ill-prepared. We find no evidence of such adverse impacts.
Abstract
					We use a randomized experiment in India to show that improved technology enhances agricultural productivity by crowding in modern inputs and cultivation practices. Specifically, we show that a new rice variety that reduces downside risk by providing flood tolerance has positive effects on adoption of a more labor-intensive planting method, area cultivated, fertilizer usage, and credit utilization. We find that a large share of the expected gains from the technology comes from crowding in of other investments. Therefore, improved technologies that reduce risk by protecting production in bad years have the potential to increase agricultural productivity in normal years.
Abstract
					This paper links the sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imports from China, and higher entry by US importers and foreign-owned Chinese exporters. At the plant level, shifts toward less labor-intensive production and exposure to the policy via input-output linkages also contribute to the decline in employment. Results are robust to other potential explanations of employment loss, and there is no similar reaction in the European Union, where policy did not change.
Abstract
					We use unique data from over 600 Indonesian communities on what individuals know about the poverty status of others to study how network structure influences information aggregation. We develop a model of semi-Bayesian learning on networks, which we structurally estimate using within-village data. The model generates qualitative predictions about how cross-village patterns of learning relate to network structure, which we show are borne out in the data. We apply our findings to a community-based targeting program, where citizens chose households to receive aid, and show that the networks that the model predicts to be more diffusive differentially benefit from community targeting.
Abstract
					CoVaR, defined as the change in the value at risk of the financial system conditional on an institution being under distress relative to its median state. Our estimates show that characteristics such as leverage, size, maturity mismatch, and asset price booms significantly predict CoVaR. We also provide out-of-sample forecasts of a countercyclical, forward-looking measure of systemic risk, and show that the 2006:IV value of this measure would have predicted more than one-third of realized CoVaR during the 2007-2009 financial crisis.
Abstract
					Credit record panel data from 1999-2010 indicates that the likelihood of home equity extraction (borrowing, on average, about $40,000 against one's home) peaked in 2003 when mortgage rates reached historic lows. We estimate a 27 percent rise in extraction in response to a 100 basis point rate decline, and that house price growth amplifies this relationship. Differential responses to interest rates and home price appreciation by borrower age and credit score provide new evidence of financial frictions. Finally, equity extractions are associated with higher default risk, consistent with the use of borrowed funds for consumption or illiquid investment.
Abstract
					We explore the consequences of ethnic partitioning, a neglected aspect of the Scramble for Africa, and uncover the following. First, apart from the land mass and water bodies, split and non-split groups are similar across several dimensions. Second, the incidence, severity, and duration of political violence are all higher for partitioned homelands which also experience frequent military interventions from neighboring countries. Third, split groups are often entangled in a vicious circle of government-led discrimination and ethnic wars. Fourth, respondents from survey data identifying with split ethnicities are economically disadvantaged. The evidence highlights the detrimental repercussions of the colonial border design.
Abstract
					Charter takeovers are traditional public schools restarted as charter schools. We develop a grandfathering instrument for takeover attendance that compares students at schools designated for takeover with a matched sample of students attending similar schools not yet taken over. Grandfathering estimates from New Orleans show substantial gains from takeover enrollment. In Boston, grandfathered students see achievement gains at least as large as the gains for students assigned charter seats in lotteries. A non-charter Boston turnaround intervention that had much in common with the takeover strategy generated gains as large as those seen for takeovers, while other more modest turnaround interventions yielded smaller effects.
Abstract
					Marijuana is the most common illicit drug with vocal advocates for legalization. Among other things, legalization would increase access and remove the stigma of illegality. Our model disentangles the role of access from preferences and shows that selection into access is not random. We find that traditional demand estimates are biased resulting in incorrect policy conclusions. If marijuana were legalized, those under 30 would see modest increases in use of 28 percent, while on average use would increase by 48 percent (to 19.4 percent). Tax policies are effective at curbing use, where Australia could raise AU$1 billion (and the United States US$12 billion).
Abstract
					This paper presents empirical evidence that the growth of export manufacturing in Mexico during a period of major trade reforms (the years 1986 to 2000) altered the distribution of education. I use variation in the timing of factory openings across commuting zones to show that school drop-out increased with local expansions in export-manufacturing industries. The magnitudes I find suggest that for every 25 jobs created, one student dropped out of school at grade 9 rather than continuing through to grade 12. These effects are driven by less-skilled export-manufacturing jobs which raised the opportunity cost of schooling for students at the margin.
Abstract
					Understanding how prior outcomes affect risk attitudes is critical for the study of choice under uncertainty. A large literature documents the significant influence of prior losses on risk attitudes. The findings appear contradictory: some studies find greater risk-taking after a loss, whereas others show the opposite—that people take on less risk. I reconcile these seemingly inconsistent findings by distinguishing between realized versus paper losses. Using new and existing data, I replicate prior findings and demonstrate that following a realized loss, individuals avoid risk; if the same loss is not realized, a paper loss, individuals take on greater risk.
Abstract
					The conventional wisdom for the health care sector is that idiosyncratic features leave little scope for market forces to allocate consumers to higher performance producers. However, we find robust evidence across several different conditions and performance measures that higher quality hospitals have higher market shares and grow more over time. The relationship between performance and allocation is stronger among patients who have greater scope for hospital choice, suggesting that patient demand plays an important role in allocation. Our findings suggest that health care may have more in common with "traditional" sectors subject to market forces than often assumed.
Abstract
					We study choice over prescription insurance plans by the elderly using government administrative data to evaluate how these choices evolve over time. We find large "foregone savings" from not choosing the lowest cost plan that has grown over time. We develop a structural framework to decompose the changes in "foregone welfare" from inconsistent choices into choice set changes and choice function changes from a fixed choice set. We find that foregone welfare increases over time due primarily to changes in plan characteristics such as premiums and out-of-pocket costs; we estimate little learning at either the individual or cohort level.
Abstract
					This paper exploits deregulation in the 1990s to estimate viewership and revenue effects of consolidation in broadcast television, then finds cost effects that explain the ownership structure given viewership and revenue effects. Results suggest that consolidation greatly increased profitability in an industry with otherwise declining profitability. Groups with broader national coverage attract more advertising per station. Joint ownership of two stations within a market and network ownership both allow for significant cost savings. There is some evidence that within-market consolidation allows stations to achieve local market power. However, both within-market and across-market consolidation appear to have boosted viewership, on net.
Abstract
					I study the implications of two major debt-relief policies in the United States: the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and the Home Affordable Refinance Program (HARP). To do so, I develop a model of housing and default that includes relevant dimensions of credit-market policy and captures rich heterogeneity in household balance sheets. The model also explains the observed cross-state variation in consumer default rates. I find that BAPCPA significantly reduced bankruptcy rates, but increased foreclosure rates when house prices fell. HARP reduced foreclosures by 1 percentage point and provided substantial welfare gains to households with high loan-to-value mortgages.
Abstract
					I use micro data to quantify key features of US firm financing. In particular, I establish that a substantial 35 percent of firms' investment is funded using financial markets. I then construct a dynamic equilibrium model that matches these features and fit the model to business cycle data using Bayesian methods. In the model, financial intermediaries enable trades of financial assets, directing funds toward investment opportunities, and charge an intermediation spread to cover their costs. According to the model estimation, exogenous shocks to the intermediation spread explain 25 percent of GDP and 30 percent of investment volatility.
Abstract
					This paper studies optimal dynamic tax policy under the threat of political reform. A policy will be reformed ex post if a large enough coalition of citizens supports reform; thus, sustainable policies are those that will continue to attract enough political support in the future. We find that optimal marginal capital taxes are either progressive or U-shaped, so that savings are subsidized for the poor and/or the middle class but are taxed for the rich. U-shaped capital taxes always emerge when individuals' political behavior is purely determined by economic motives.
Abstract
					We compare single round versus runoff elections under plurality rule, allowing for partly endogenous party formation. Under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy, and hence policy volatility, is smaller because the bargaining power of the political extremes is reduced compared to single round elections. The predictions on the number of candidates and on policy volatility are confirmed by evidence from a regression discontinuity design in Italy, where cities above 15,000 inhabitants elect the mayor with a runoff system, while those below hold single round elections.
Abstract
					Does monitoring corrupt activities induce a sustained reduction in corruption? Using longitudinal data on audits of municipal governments in Puerto Rico, we show corruption is considerably lower in municipalities with timely audits—before elections. However, these municipalities do not exhibit decreased levels of corruption in subsequent audits, even while mayors in these benefit from higher reelection rates. Our results suggest that audits enable voters to select responsive but corruptible politicians to office. Audit programs must disseminate results when they are most relevant for voters—shortly before an election—and ensure that these programs are sustained, long-term commitments.
Abstract
					We propose a summary statistic for the economic well-being of people in a country. Our measure incorporates consumption, leisure, mortality, and inequality, first for a narrow set of countries using detailed micro data, and then more broadly using multi-country datasets. While welfare is highly correlated with GDP per capita, deviations are often large. Western Europe looks considerably closer to the United States, emerging Asia has not caught up as much, and many developing countries are further behind. Each component we introduce plays a significant role in accounting for these differences, with mortality being most important.