
Damon Jones
Research Associate
University of Chicago
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We study habit formation in annual biometric health screenings using a field experiment that randomly assigned financial incentives to 4,799 employees over three years. Completing the first screening raised subsequent screenings by 32.4-36.0 percentage points (84%-90%) annually. Habit formation was...
An Experimental Evaluation of Deferred Acceptance: Evidence from Over 100 Army Officer Labor Markets
We present evidence from a randomized trial of the impact of matching workers to jobs using the deferred acceptance (DA) algorithm. Our setting is the U.S. Armys annual many-to-one marketplace that matches 10,000 officers to units. Officers and jobs are partitioned into over 100 distinct markets,...

July 3, 2023 - Article
The American Rescue Plan Act of 2021 increased the maximum benefit per child of the Child Tax Credit (CTC) to between $3,000 and $3,600 for the period between July and December of 2021. It also removed the requirement that taxpayers earn income to receive this benefit. This temporary policy change...
We explore how much borrowers value student debt relief, in the setting of the federal Teacher Loan Forgiveness (TLF) program, and further document whether information and eligibility for this program affect teacher employment decisions. The program cancels between $5,000 and $17,500 in debt for...
We estimate the extensive and intensive margin labor supply response to the monthly Child Tax Credit disbursed in 2021 as a part of the American Rescue Plan Act. Using Current Population Survey microdata, we compare labor supply outcomes among households who qualify for varying relative increases in...

June 24, 2021 - Article
The Social Security Retirement Earnings Test (RET) applies to people before the full retirement age (FRA), which is age 67 for those turning 62 in 2022 and beyond. For individuals who claim retired worker benefits before the FRA, Social Security withholds benefits if earnings exceed a certain exempt...
Budget set kinks are much studied in economics, including in the context of bunching estimators that assume individuals react to the true marginal tax rate. We document that individuals disproportionately left-bunch below rather than above kinks in the context of the Social Security Earnings Test...
We study the consumption response to typical labor income shocks and investigate how these vary by wealth and race. First, we develop an instrument based on firm-wide changes in labor income. Household income volatility stems mostly from fluctuations in labor income and this research design...
We investigate the impact of the Social Security Annual Earnings Test (AET) on the employment decisions of older Americans. The AET reduces Social Security benefits by one dollar for every two dollars earned above the exempt amount. Using a differences-in-differences design, we find that the...

March 26, 2018 - Article
Workplace health programs have been touted as a way to reduce employee medical costs, but employees in the program studied spent $566 a month on health care compared to $562 a month in the control group. Spurred in part by incentives in the 2010 Affordable Care Act, the workplace wellness industry...
How would universal and permanent cash transfers affect the labor market? Since 1982, all Alaskan residents have received a yearly cash dividend from the Alaska Permanent Fund. Using data from the Current Population Survey and a synthetic control method, we show that the dividend had no effect on...
Workplace wellness programs cover over 50 million workers and are intended to reduce medical spending, increase productivity, and improve well-being. Yet, limited evidence exists to support these claims. We designed and implemented a comprehensive workplace wellness program for a large employer with...
We develop a method for estimating the effect of a kinked or notched budget set on workers employment decisions, and we use it to estimate the impact of the Social Security Old-Age and Survivors Insurance (OASI) Annual Earnings Test (AET). The AET reduces OASI claimants current OASI benefits in...
The design of retirement savings accounts must balance the long-term goal of retirement wealth accrual with the potential need for liquidity in the short-term. Penalties on pre-retirement withdrawals provide a possible lever for striking this balance. In the United States, penalties are typically...
Author(s) - Damon Jones
We explore a key underlying assumption, the exclusion restriction, commonly used in interpreting IV estimates in the presence of heterogenous treatment effects as a local average treatment effect (LATE). We show through a series of simple examples that in some commonly featured cases that this...
We conduct a field experiment designed to test theories of time-inconsistency, namely a "Beta-Delta" model of present bias. The experiment takes place in the context of a saving decision made by low-income tax filers who can deposit their income tax refund into an illiquid account. We find...
We explore evidence that the Old Age and Survivors Insurance (OASI) Retirement Earnings Test (RET) causes a substantial fraction of OASI claimants not to work. The RET reduces OASI claimants current OASI benefits as a proportion of earnings, once a claimant earns in excess of an exempt amount,...
Estimating Earnings Adjustment Frictions: Method and Evidence from the Social Security Earnings Test
We introduce a method for estimating the cost of adjusting earnings, as well as the earnings elasticity. Our method uses information on bunching in the earnings distribution at convex budget set kinks before and after policy-induced changes in the magnitude of the kinks: the larger is the adjustment...
Using a panel of Social Security Administration microdata on 1 percent of the U.S. population from 1961 to 2006, we study frictions in adjusting earnings to changes in the Social Security Annual Earnings Test (AET). Individuals continue to "bunch" at the convex kink the AET creates even when they...
April 1, 2013 - Article
Fifteen U.S. states currently have broad-based college merit scholarship programs. Based on either high school grade point averages or scores on college entrance exams, these in-state tuition scholarships are awarded to at least 30 percent of each state's graduating high school class. In total, the...
Employer-provided pension plans may affect employee mobility both through an "incentive effect," where the bundle of benefit characteristics such as vesting rules, pension wealth accrual, risk, and liquidity affect turnover directly, and a "selection effect," where employees with different...
We present new evidence on the effects of merit aid scholarship programs on residential migration and educational attainment using Census data on 24 to 32 year olds in the U.S. from 1990 to 2010. Eligibility for merit aid programs slightly increases the propensity of state natives to live in-state,...
Author(s) - Damon Jones
Over three-quarters of US taxpayers receive income tax refunds, indicating tax prepayments above the level of tax liability. This amounts to a zero interest loan to the government. Previous studies have suggested two main explanations for this behavior: precautionary behavior in light of tax...
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