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The Digest

Quantifying 'Mortgage Rate Lock' for US Homeowners
Article
 The traditional 30-year, fixed-rate, nonassumable mortgage used by most home buyers in the United States can create strong disincentives to move when interest rates rise. In Household Mobility and Mortgage Rate Lock (NBER Working Paper 32781), Jack Liebersohn and Jesse Rothstein find that rising rates in the last three years have discouraged mobility for homeowners with fixed-rate mortgages. Because rising interest rates have increased the costs of obtaining a new...

In the Battle against Inflation, Commitment Matters
Article
 Since World War II, the Federal Reserve’s most effective campaigns against inflation have been characterized by clear-cut goals, a willingness to accept higher unemployment, and a refusal to give up prematurely.In Lessons from History for Successful Disinflation (NBER Working Paper 32666), Christina D. Romer and David H. Romer study nine attempts by the Federal Reserve between 1946 and 2016 to put the brakes on inflation. They investigate what made some efforts more...

The Reporter

Lessons for Economists from the Pandemic
Article
Author(s): Cecilia E. Rouse
It is an honor to be here today; I owe my love of economics to the Bureau as well as my many friends and colleagues. Marty [Martin] Feldstein was one of the people who made it such a special place. I enjoyed seeing him around the Bureau, learning public finance from him, and briefly serving as his research assistant. I’d sit in his office, in awe of his incredible intellect and economic insights, and be completely distracted by the hilarious cartoons he had framed...

Understanding Early Childhood Development and Its Importance
Article
Author(s): Orazio Attanasio
In the process of human development, what happens in the early years — including the first thousand days after conception — is of key importance for determining life-cycle outcomes. Early outcomes, however, are not fixed at birth or determined exclusively by genetics; they are influenced by a variety of factors, including parental behaviors, the environments children live in, and policy interventions. Furthermore, human development is a multidimensional process, with...

The Bulletin on Retirement & Disability

Inflation’s Impact on Social Security Disability Program Beneficiaries
Article
 Social Security Disability (SSD) program beneficiaries, like other consumers, have been negatively affected by inflation over the past several years. In a survey from June of 2023, more than half (59 percent) of SSD program beneficiaries reported higher prices for the disability-related goods and services they need to purchase, and more than one-quarter reported reducing food spending to cover disability-related costs, Zachary Morris and Stephanie Rennane found in...

Financial Inclusion and Wellbeing
Article
Despite the US’s well-established banking system, a significant share of the population has limited access to basic financial services that facilitate saving, investing, and preparing for retirement. In Financial Inclusion, Inequality, and Retirement Trends among Older Workers (NBER RDRC Paper NB22-16), Isaac Marcelin and Wei Sun study how financial inclusion affects household wellbeing.The researchers use data from the Bureau of Economic Analysis and the Health and...

The Bulletin on Health

How Health Disparities Develop over the Lifecycle
Article
In the Netherlands, there are striking socioeconomic differences in mortality among older adults, with a 4.4 percentage point (67 percent) higher five-year mortality rate for 70-year-old individuals with below-median income than for those with above-median income. To better understand the role of chronic disease in these health disparities, Kaveh Danesh, Jonathan T. Kolstad, William D. Parker, and Johannes Spinnewijn develop an index of chronic disease burden in The Chronic...

Health Consequences of Wildfire Smoke
Article
Tiny, inhalable particles known as fine particulate matter (PM2.5) are a primary component of wildfire smoke and are detrimental to human health. Since smoke can drift hundreds of miles from its source, exposure to these pollutants is widespread: wildfire smoke accounts for about 18 percent of the ambient PM2.5 concentrations affecting the US population. In The Nonlinear Effects of Air Pollution on Health: Evidence from Wildfire Smoke (NBER Working Paper 32924), Nolan H...

The Bulletin on Entrepreneurship

“Third Places” Boost Local Economic Activity
Article
 Sociologists have argued that “third places” like cafés, which provide opportunities for individuals to socialize and exchange ideas outside of home and work, improve neighborhood life. But what about the relationship between such places and economic activity? In Third Places and Neighborhood Entrepreneurship: Evidence from Starbucks Cafés (NBER Working Paper 32604), researchers Jinkyong Choi, Jorge Guzman, and Mario L. Small use data on US business...

Stock Market Wealth and Entrepreneurship
Article
 In Stock Market Wealth and Entrepreneurship (NBER Working Paper 32643), Gabriel Chodorow-Reich, Plamen T. Nenov, Vitor Santos, and Alp Simsek evaluate the relationship between the performance of a household’s stock market portfolio and the likelihood that someone in that household launches an entrepreneurial venture. They analyze administrative data from Norway’s shareholder register and compute the holdings of every Norwegian household in all...