How Do Supply Shocks to Inflation Generalize? Evidence from the Pandemic Era in Europe - Acharya, Viral V; Crosignani, Matteo; Eisert, Tim; Eufinger, Christian (National Bureau of Economic Research Working Paper Series, 2023)
We document how supply-chain pressures, household inflation expectations, and firm pricing power interacted to induce the pandemic-era surge in consumer price inflation in the euro area. Initially, supply-chain pressures increased inflation through a cost-push channel and raised inflation expectations. Subsequently, the cost-push channel intensified as firms with high pricing power increased product markups in sectors witnessing high demand. Eventually, even though supply-chain pressures eased, these firms were able to further increase markups due to the stickiness of inflation expectations. The resulting persistent impact on inflation suggests supply-side impulses can generalize into broad-based inflation via an interaction of household expectations and firm pricing power.
Author contact info: Viral V. Acharya Stern School of Business New York University 44 West 4th Street, Suite 9-65 New York, NY 10012 Tel: 212/998-0354 Fax: 212 995 4233 E-Mail: vacharya@stern.nyu.edu Matteo Crosignani New York Fed E-Mail: mcrosign@gmail.com Tim Eisert Portugal E-Mail: tim.eisert@novasbe.pt Christian Eufinger IESE Business School Avinguda de Pearson, 21 08034 Barcelona Spain E-Mail: ceufinger@iese.edu

Are Hospital Quality Indicators Causal? - Chandra, Amitabh; Dalton, Maurice; Staiger, Douglas O (National Bureau of Economic Research Working Paper Series, 2023)
Hospitals play a key role in patient outcomes and spending, but efforts to improve their quality are hindered because we do not know whether hospital quality indicators are causal or biased. We evaluate the validity of commonly used quality indicators, such as mortality, readmissions, inpatient costs, and length-of-stay, using a quasi-experimental design where hospital closures reallocate large numbers of patients to hospitals of different quality. This setting allows us to measure whether patient outcomes improve as much as quality indicators predict when a relatively low-quality hospital closes, or decline as predicted when a relatively high-quality hospital closes. Using more than 20 years of Medicare claims for over 30 million patients admitted with five common diagnoses, we find that hospital quality indicators overstate differences in the causal impact of hospitals on mortality and readmission rates by 7 percent or less, but overstate differences in the causal impact of hospitals on inpatient cost and length-of-stay measures by closer to 40 percent. On average, hospital closures reduce patient mortality by shifting patients to higher quality hospitals, but the but the effect varies widely depending on the relative quality of the closing hospital.
Author contact info: Amitabh Chandra John F. Kennedy School of Government Harvard University 79 JFK Street Cambridge, MA 02138 Tel: 617/496-7356 E-Mail: amitabh_chandra@harvard.edu Maurice Dalton E-Mail: maurice.dalton@yale.edu Douglas O. Staiger Dartmouth College Department of Economics HB6106, 301 Rockefeller Hall Hanover, NH 03755-3514 Tel: 603/646-2979 Fax: 603/646-2122 E-Mail: douglas.staiger@dartmouth.edu

AI Adoption in America: Who, What, and Where - McElheran, Kristina; Li, J. Frank; Brynjolfsson, Erik; Kroff, Zachary; Dinlersoz, Emin; Foster, Lucia S; Zolas, Nikolas (National Bureau of Economic Research Working Paper Series, 2023)
We study the early adoption and diffusion of five AI-related technologies (automated-guided vehicles, machine learning, machine vision, natural language processing, and voice recognition) as documented in the 2018 Annual Business Survey of 850,000 firms across the United States. We find that fewer than 6% of firms used any of the AI-related technologies we measure, though most very large firms reported at least some AI use. Weighted by employment, average adoption was just over 18%. AI use in production, while varying considerably by industry, nevertheless was found in every sector of the economy and clustered with emerging technologies such as cloud computing and robotics. Among dynamic young firms, AI use was highest alongside more-educated, more-experienced, and younger owners, including owners motivated by bringing new ideas to market or helping the community. AI adoption was also more common alongside indicators of high-growth entrepreneurship, including venture capital funding, recent product and process innovation, and growth-oriented business strategies. Early adoption was far from evenly distributed: a handful of “superstar” cities and emerging hubs led startups’ adoption of AI. These patterns of early AI use foreshadow economic and social impacts far beyond this limited initial diffusion, with the possibility of a growing “AI divide” if early patterns persist.
Author contact info: Kristina McElheran University of Toronto Scarborough 105 St. George Street Toronto, ON M5S 3E6 E-Mail: k.mcelheran@utoronto.ca J. Frank Li Tel: 7343581363 E-Mail: jfrankliwork@gmail.com Erik Brynjolfsson Stanford Digital Economy Laboratory 353 Jane Stanford Way, Office 136 Stanford, CA 94305 E-Mail: erik.brynjolfsson@gmail.com Zachary Kroff Center for Economic Studies U.S. Census Bureau 4600 Silver Hill Road Washington, DC 20233 Tel: 301-763-2199 E-Mail: zachary.kroff@census.gov Emin Dinlersoz E-Mail: emin.m.dinlersoz@census.gov Lucia S. Foster US Bureau of the Census Washington, DC 20233 E-Mail: lucia.s.foster@census.gov Nikolas Zolas Center for Economic Studies U.S. Census Bureau 4600 Silver Hill Road Washington, DC 20233 E-Mail: nick.zolas@gmail.com

Induced Innovation, Inventors, and the Energy Transition - Dugoua, Eugenie; Gerarden, Todd (National Bureau of Economic Research Working Paper Series, 2023)
We study how individual inventors respond to incentives to work on “clean” electricity technologies. Using natural gas price variation, we estimate output and entry elasticities of inventors and measure the medium-term impacts of a price increase mirroring the social cost of carbon. We find that the induced clean innovation response primarily comes from existing clean inventors. New inventors are less responsive on the margin than their average contribution to clean energy patenting would indicate. Our findings highlight the potential importance of policies that increase the supply of clean inventors who are focused on mitigating climate change.
Author contact info: Eugenie Dugoua Department of Geography and Environment London School of Economics Houghton Street London WC2A 2AE United Kingdom E-Mail: e.dugoua@lse.ac.uk Todd D. Gerarden Dyson School of Applied Economics and Management Cornell University Ithaca, NY 14853 E-Mail: gerarden@cornell.edu

Global Natural Rates in the Long Run: Postwar Macro Trends and the Market-Implied r* in 10 Advanced Economies - Davis, Josh; Fuenzalida, Cristian; Huetsch, Leon; Mills, Benjamin; Taylor, Alan M (National Bureau of Economic Research Working Paper Series, 2023)
Benchmark finance and macroeconomic models appear to deliver conflicting estimates of the natural rate and bond risk premia. This natural rate puzzle applies not only in the U.S. but across many advanced economies. We use a unified no-arbitrage macro- finance model with two trend factors to estimate the natural rate r* for 10 advanced economies. We cover a longer and wider sample than previous studies and draw on new sources to construct yield curves and excess returns. The two-trend model improves the explanatory power of yield regressions and return forecasts. Most variation in yields is due to the macro trends r* and π*, and not bond risk premia. Global components of unexpected bond returns are influential, while the local components of natural rates are large. Our r* estimates covary with growth and demographic variables in a manner consistent with theory and previous findings.
Author contact info: Josh Davis PIMCO 650 Newport Center Drive Newport Beach CA 92660 E-Mail: josh.davis@pimco.com Cristian Fuenzalida Graham Capital Management E-Mail: cristian.fuenzalida@nyu.edu Leon Huetsch University of Pennsylvania The Ronald O. Perelman Center for Political Science and Economics 133 South 36th Street, Philadelphia, PA 19104 Philadelphia, Penn 19104 Tel: 2676007537 E-Mail: lhuetsch@sas.upenn.edu Benjamin Mills 650 Newport Center Drive Newport Beach, CA 92660 E-Mail: ben.mills@pimco.com Alan M. Taylor Columbia University 1313 International Affairs 420 West 118th Street New York, NY 10027 E-Mail: amt2314@columbia.edu

Optimal Deterrence, Inequality and the Jean-Valjean Effect - MacLeod, W. Bentley (National Bureau of Economic Research Working Paper Series, 2023)
Abstract This paper extends the Becker (1968)-Ehrlich (1973) model of crime to allow for government transfers. Using the Shapiro and Stiglitz (1984) model, it is shown that one can view deterrence as a tax on (criminal) labor supply. That in turn allows an integration of a crime model with a standard public finance model. Using King et al. (1988) preferences, it is shown that when individuals are needy or desperate the income effect may dominate the substitution effect. The is that policies undertaken with the intent of deterring crime may, unintuitively, lead to an increase in crime. This provides an alternative to to Becker (1968)'s explanation for persistent crime levels. The results are also consistent with recent research showing that extending social welfare programs can reduce crime. Finally, the policy that minimizes net social costs is characterized by a combination of deterrence and transfers to reduce inequality. This result illustrates how Posner (1973)'s criteria of wealth maximization can imply that reducing inequality is a part of optimal crime policy.
Author contact info: W. Bentley MacLeod Department of Economics Princeton University 214 Robertson Hall, 20 Prospect St. Princeton, NJ 08544-1013 Tel: 609-258-1856 E-Mail: wbmacleod@wbmacleod.net

The Effect of Organizations on Physician Prescribing: The Case of Opioids - Bundorf, M. Kate; Kessler, Daniel; Lalwani, Sahil (National Bureau of Economic Research Working Paper Series, 2023)
In theory, there are several reasons why physician organizational form might affect the price, quantity, and quality of physician services. In this paper, we examine the effect of three aspects of physician organizational form on opioid prescribing: the number of physicians in the physician’s group (if any); the physician’s integration with or employment by a hospital or hospital system; and the average age of the other physicians in the physician’s group. We present three key findings. First, all else held constant, group physicians prescribe far fewer opioids, and prescribe them more appropriately, than do solo physicians. Second, although physicians who are employed by a hospital or practice in a hospital-owned group prescribe fewer opioids than do independent physicians, there is evidence that this difference may be due to differences in the other characteristics of physicians who are hospital-integrated rather than a causal effect. Third, we find substantial peer effects on opioid prescribing. Physicians in groups with a higher average age (excluding the physician him- or herself) prescribe more intensively and are more likely to write inappropriate opioid prescriptions than physicians in younger groups – holding constant the physician’s own age and other characteristics of his or her group.
Author contact info: Kate Bundorf Sanford School of Public Policy Duke University Durham, NC 27708 E-Mail: kate.bundorf@duke.edu Daniel Kessler Stanford University 434 Galvez Mall Stanford, CA 94305 Tel: 650/723-0596 E-Mail: fkessler@stanford.edu Sahil Lalwani E-Mail: slal36@law.stanford.edu

Macroeconomic Effects of UI Extensions at Short and Long Durations - Acosta, Miguel; Mueller, Andreas I; Nakamura, Emi; Steinsson, Jón (National Bureau of Economic Research Working Paper Series, 2023)
We study the macroeconomic effects of unemployment insurance (UI) benefit extensions in the United States at short and long durations. To do this, we develop a new state level dataset on trigger variables for UI extensions and a "UI benefit calculator" based on detailed legislative and administrative sources spanning five decades. Our identification approach exploits variation across states in the options governing the Extended Benefits program. We find that UI extensions during time periods when UI benefit durations are already long—such as in the Great Recession—have minimal effects. However, UI extensions when initial durations are shorter have substantial effects on the unemployment rate and the number of people receiving UI. Through the lens of a search-and-matching model, we show that our estimates are consistent with microeconomic estimates of the duration elasticity to UI, implying small general equilibrium effects of UI extensions.
Author contact info: Miguel Acosta Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue N.W. Washington, DC 20551 Tel: 619-807-2760 E-Mail: miguel.acosta@frb.gov Andreas I. Mueller The University of Texas at Austin Department of Economics 2225 Speedway Austin, TX 78712 Tel: 512/232-3894 E-Mail: andimueller@utexas.edu Emi Nakamura Department of Economics University of California, Berkeley 685 Evans Hall Berkeley, CA 94720 Tel: 510/643-2104 E-Mail: enakamura@berkeley.edu Jón Steinsson Department of Economics University of California, Berkeley 671 Evans Hall Berkeley, CA 94720 Tel: 510/642-3674 E-Mail: jsteinsson@berkeley.edu

The Shifting Reasons for Beveridge-Curve Shifts - Barlevy, Gadi; Faberman, R. Jason; Hobijn, Bart; Şahin, Ayşegül (National Bureau of Economic Research Working Paper Series, 2023)
We discuss how the relative importance of factors that contribute to movements of the U.S. Beveridge curve has changed from 1960 to 2023. We review these factors in the context of a simple flow analogy used to capture the main insights of search and matching theories of the labor market. Changes in inflow rates, related to demographics, accounted for Beveridge curve shifts between 1960 and 2000. A reduction in matching efficiency, that depressed unemployment outflows, shifted the curve outwards in the wake of the Great Recession. In contrast, the most recent shifts in the Beveridge curve appear driven by changes in the eagerness of workers to switch jobs. We argue that, while the Beveridge curve is a useful tool for relating unemployment and vacancies to inflation, the link between these labor market indicators and inflation depends on whether and why the Beveridge curve shifted. Therefore, a careful examination of the factors underlying movements in the Beveridge curve is essential for drawing policy conclusions from the joint behavior of unemployment and job openings.
Author contact info: Gadi Barlevy Economic Research Department Federal Reserve Bank of Chicago 230 South LaSalle Chicago, IL 60604 Tel: 312/322-6379 Fax: 312/322-2357 E-Mail: gbarlevy@frbchi.org Jason Faberman Economic Research Department Federal Reserve Bank of Chicago 230 S. LaSalle St. Chicago, IL 60604 Tel: (312) 322-5274 Fax: (312) 322-2357 E-Mail: jfaberman@frbchi.org Bart Hobijn Federal Reserve Bank of Chicago 230 S. LaSalle St. Chicago, IL 60604 E-Mail: bart.hobijn@barthobijn.net Ayşegül Şahin Department of Economics University of Texas at Austin 2225 Speedway Austin, TX 78712 Tel: 512/471-3664 E-Mail: aysegul.sahin@austin.utexas.edu

The Role of Repugnance in Markets: How the Jared Fogle Scandal Affected Patronage of Subway - Cawley, John; Eddelbuettel, Julia; Cunningham, Scott; Eisenberg, Matthew D; Mathios, Alan D; Avery, Rosemary J (National Bureau of Economic Research Working Paper Series, 2023)
Economics has long studied how consumers respond to the disclosure of information about firms. We study a case in which the disclosed information is unrelated to the product or firm leadership, but which could still potentially affect consumer patronage through the mechanism of repugnance, as described in Roth (2007). The information in this case concerns the arrest of Jared Fogle, the advertising pitchman for the Subway sandwich franchise, who was arrested in 2015 on charges of sex with a minor and child pornography. We study how the disclosure of this information, which was widely covered in the media, affected patronage of Subway. We estimate synthetic control models using data from a large nationwide survey of consumers regarding the restaurants they patronize. Despite the close and long-standing association of Jared Fogle with Subway, and heavy publicity of his crimes, we consistently fail to detect any effect of the Jared Fogle scandal on the probability of visiting a Subway restaurant. These results contrast with past studies of negative information disclosure, which tend to find negative impacts on sales, revenue, or stock price of the relevant companies. The absence of an effect in this case suggests that repugnance did not drive demand, and that consumers largely separated the offenses of a symbol of the firm from the products of the firm.
Author contact info: John Cawley 2312 MVR Hall Jeb E. Brooks School of Public Policy and Department of Economics Cornell University Ithaca, NY 14853 Tel: 607-255-0952 E-Mail: JHC38@cornell.edu Julia Eddelbuettel 14th Story St Harvard University Cambridge, MA 02138 USA E-Mail: julia_eddelbuettel@g.harvard.edu Scott Cunningham Baylor University Dept of Economics One Bear Place #98003 Waco, Texas 76798-8003 Waco, TX 76710 USA Tel: (254) 537-2239 E-Mail: scott_cunningham@baylor.edu Matthew D. Eisenberg Department of Health Policy and Management Johns Hopkins University 624 N Broadway Room 406 Baltimore, MD 21205 E-Mail: eisenberg@jhu.edu Alan D. Mathios Department of Economics Jeb E. Brooks School of Public Policy Cornell University Martha Van Renssellaer Hall Ithaca NY 14853 E-Mail: adm5@cornell.edu Rosemary J. Avery Jeb E. Brooks School of Public Policy Cornell University 2232 MVR Hall Ithaca, NY 14850 E-Mail: rja7@cornell.edu

The Political Economy of a “Miracle Cure”: The Case of Nebulized Ibuprofen and its Diffusion in Argentina - Calónico, Sebastian; Di Tella, Rafael; Lopez del Valle, Juan Cruz (National Bureau of Economic Research Working Paper Series, 2023)
We document the diffusion of nebulized ibuprofen in Argentina as a treatment for COVID-19. As the pandemic spread, this clinically unsupported drug reached thousands of patients, even some seriously ill, despite warnings by the regulator and medical societies. Detailed daily data on deliveries for all towns in one of the largest provinces suggests a role for “rational” forces in the adoption of a miracle cure: towns adopt it when neighbors that adopt it are successful in containing deaths (a learning effect), even after controlling for the average adoption of peers. Results from a survey are consistent with learning. They also reveal a large role of beliefs: subjects that are classified as “Right” are more likely adopt and to learn, while those that are “Skeptical” report an increase in their demand when primed with the regulator’s ban.
Author contact info: Sebastian Calónico Columbia University 722 West 168th Street 4th Floor New York, NY 10032 E-Mail: scalonico@gmail.com Rafael Di Tella Harvard Business School Soldiers Field Rd Boston, MA 02163 Tel: 617/495-6000 E-Mail: rditella@hbs.edu Juan Cruz Lopez del Valle Boston University Boston, MA 02215 E-Mail: jclopezdelvalle@gmail.com

Harmonizing the Yin and Yang: Gender Disparities in Subjective Well-Being after Retirement in China - Aslim, Erkmen G; Chou, Shin-Yi; Yu, Han (National Bureau of Economic Research Working Paper Series, 2023)
China’s distinctive demographic landscape, early retirement policies, and deeply ingrained gender norms provide a unique backdrop for investigating gender disparities in retirement and subjective well-being. Drawing upon data from the China Family Panel Studies and leveraging the variation around the pensionable age cutoff, we find substantial increases in retirement rates, surging by 19 percentage points for males and 13 percentage points for females in proximity to this age threshold. Notably, retirement manifests significant gender heterogeneity in its influence on life satisfaction, leading to an enhancement among males while not yielding statistically significant improvements among females. Furthermore, this study probes multiple dimensions of subjective well-being and objective health behaviors, laying bare gender disparities in health, behaviors, perceptions of income and social status, and confidence about the future. Males showcase improvements in healthy behaviors, report enhanced self-perceived health, perceive higher relative income and social status, and exude greater confidence about their future. In stark contrast, females show no statistically significant changes along these dimensions. In fact, they tend to engage in health-compromising behaviors, such as increased smoking, and exhibit higher rates of obesity. These findings underscore the imperative of recognizing gender disparities in the consequences of retirement on subjective well-being. They highlight the need for targeted policies aimed at enhancing social and economic opportunities for women, ultimately striving for greater gender equality in the post-retirement phase.
Author contact info: Erkmen G. Aslim Grand Valley State University 3120 L. William Seidman Center 50 Front Avenue SW. Grand Rapids, MI 49504 E-Mail: aslime@gvsu.edu Shin-Yi Chou Department of Economics College of Business and Economics Lehigh University 621 Taylor Street Bethlehem, PA 18015-3117 Tel: 610/758-3444 Fax: NA E-Mail: syc2@lehigh.edu Han Yu Department of Economics 419 Fogelman College of Business & Economics University of Memphis Memphis, TN 38152 United States E-Mail: han.yu@memphis.edu

Loans for the "Little Fellow:" Credit, Crisis, and Recovery in the Great Depression - Quincy, Sarah (National Bureau of Economic Research Working Paper Series, 2023)
This paper identifies how bank branching benefited local economies during the Great Depression. Using archival data and narrative evidence, I show how Bank of America's branch network in 1930s California created an internal capital market to diversify away local liquidity shortfalls, allowing it to maintain 49 percent higher credit growth from 1929 to 1933 than competing banking offices. The bank's presence caused smaller city property value contractions and stronger recoveries through 1940. Linked individual data show the bank’s proximity hastened the transition away from agricultural employment and towards human capital-intensive sectors in the 1930s, generating industrialization and higher wages.
Author contact info: Sarah Quincy Department of Economics Vanderbilt University 2301 Vanderbilt Place Nashville, TN 37235 E-Mail: sarah.quincy@vanderbilt.edu

Why Do Index Funds Have Market Power? Quantifying Frictions in the Index Fund Market - Brown, Zach Y; Egan, Mark L; Jeon, Jihye; Jin, Chuqing; Wu, Alex A (National Bureau of Economic Research Working Paper Series, 2023)
Index funds are one of the most common ways investors access financial markets and are perceived to be a transparent and low-cost alternative to active investment management. Despite these purported virtues of index fund investing and the introduction of new products and competitors, many funds remain expensive and fund managers appear to exercise substantial market power. Why do index funds have market power? We develop a novel quantitative dynamic model of demand for and supply of index funds. In the model, investors are subject to inertia, search frictions, and have heterogeneous preferences. These frictions on the demand side create market power for index fund managers, which fund managers can further exploit by price discriminating and charging higher expense ratios to retail investors. Our results suggest that the average expense ratios paid by retail investors are roughly 45% higher as a result of search frictions and are 40% higher as a result of inertia compared to the friction-less baseline. In our counterfactuals, we find an interaction between search frictions and inertia—inertia imposes higher (lower) costs on investors when search frictions are low (high).
Author contact info: Zach Y. Brown Department of Economics University of Michigan 611 Tappan Ave Ann Arbor, MI 48109 E-Mail: zachb@umich.edu Mark L. Egan Harvard Business School Baker Library 365 Soldiers Field Boston, MA 02163 Tel: 617/495-6823 E-Mail: megan@hbs.edu Jihye Jeon Boston University Department of Economics 270 Bay State Road Boston, MA 02215 E-Mail: jjeon@bu.edu Chuqing Jin 1, Esplanade de l'Université 31080 Toulouse Cedex 06 France E-Mail: chuqing.jin@tse-fr.eu Alex A. Wu Baker Library 420 Soldiers Field Boston, MA 02163 E-Mail: alex_wu@fas.harvard.edu

Living Up to Expectations: Central Bank Credibility, the Effectiveness of Forward Guidance, and Inflation Dynamics Post-Global Financial Crisis - Cole, Stephen; Martinez-Garcia, Enrique; Sims, Eric R (National Bureau of Economic Research Working Paper Series, 2023)
This paper studies the effectiveness of forward guidance when central banks have imperfect credibility. Exploiting unique survey-based measures of expected inflation, output growth, and interest rates, we estimate a small-scale New Keynesian model for the United States and other G7 countries plus Spain allowing for deviations from full information rational expectations. In our model, the key parameter that aggregates heterogeneous expectations captures the central bank's credibility and affects the overall effectiveness of forward guidance. We find that the central banks of the U.S., the U.K., Germany, and other major advanced economies have similar levels of credibility (albeit far from full credibility); however, Japan's central bank credibility is much lower. For each country, our measure of credibility has declined over time, making forward guidance less effective. In a counterfactual analysis, we document that inflation would have been significantly higher, and the zero lower bound on short-term interest rates much less of an issue, in the wake of the Global Financial Crisis had the public perceived central bank forward guidance statements to be perfectly credible. Moreover, inflation would have declined more, and somewhat faster, with perfect credibility in the wake of the inflation surge post-COVID-19.
Author contact info: Stephen Cole E-Mail: stephen.cole@marquette.edu Enrique Martinez-Garcia Federal Reserve Bank of Dallas 2200 N. Pearl Street Dallas, TX 75201 Tel: (214) 922-5262 Fax: (214) 922-5194 E-Mail: emg.economics@gmail.com Eric R. Sims Department of Economics University of Notre Dame 3060 Jenkins Nanovic Hall Notre Dame, IN 46556 Tel: 574/631-6309 Fax: 574/631-4783 E-Mail: esims1@nd.edu

The Corporatization of Independent Hospitals - Andreyeva, Elena; Gupta, Atul; Ishitani, Catherine E; Sylwestrzak, Malgorzata; Ukert, Benjamin (National Bureau of Economic Research Working Paper Series, 2023)
Between 2000 and 2020, the share of US hospital bed capacity under multi-unit firms (systems) increased from 58% to 81% – a rapid corporatization of a sector with $1.3 trillion in annual spend. However, little is known about how system ownership affects hospital profitability and quality. We combine novel, patient-level transaction price data from a large commercial insurer, Medicare claims, and New York hospital discharges between 2012 and 2018 to study changes at over 100 independent hospitals that transition to system ownership. The targets obtain differentially higher prices than a matched comparison group, but the operating cost reductions, primarily obtained by reducing employees in support functions, capital, and financing costs, are far greater and exhibit significant economies of scale with acquirer firm size. In contrast, we detect small and statistically insignificant effects on operating costs at 135 system-owned hospitals acquired by other systems, suggesting that the switch to system ownership is the key to achieving these savings. However, corporatization may worsen quality of care on some dimensions.
Author contact info: Elena Andreyeva E-Mail: andreyeva@tamu.edu Atul Gupta Wharton Health Care Management 3641 Locust Walk, CPC 306 Philadelphia, PA 19104 Tel: 215/573-9075 E-Mail: atulgup@wharton.upenn.edu Catherine E. Ishitani The Wharton School University of Pennsylvania E-Mail: catherineishitani@Gmail.com Malgorzata Sylwestrzak E-Mail: MSylwestrzak@humana.com Benjamin Ukert Department of Health Policy and Management Texas A&M University 212 Adriance Lab Rd College Station, TX 77843 E-Mail: bukert@tamu.edu

Is There Really an Inflation Tax? Not For the Middle Class and the Ultra-Wealthy - Wolff, Edward N (National Bureau of Economic Research Working Paper Series, 2023)
One hallmark of U.S. monetary policy since the early 1980s has been moderation in inflation (at least, until recently). How has this affected household well-being? The paper first develops a new model to address this issue. The inflation tax on income is defined as the difference between the nominal and real growth in income. This term is always negative (as long as inflation is positive). The inflation gain on household wealth is the revaluation resulting from asset price changes directly linked to inflation. This term can be positive or negative. The net inflation gain is the difference between the two, which can also be positive or negative. The empirical analysis covers years 1983 to 2019 on the basis of the Federal Reserve Board’s Survey of Consumer Finances (SCF) and historical inflation rates. It also looks at the sensitivity of the results to alternative inflation rates, and considers the effects of inflation on real wealth growth, wealth inequality, and the racial wealth gap. The results show that inflation boosted the real income of the middle wealth quintile by a staggering two thirds. In contrast, the bottom two wealth quintiles got clobbered by inflation, losing almost half of their real income. Inflation also boosted mean and especially median real wealth growth, reduced wealth inequality, and lowered the racial and ethnic wealth gap. Both the income and wealth results are magnified at higher (simulated) rates of inflation.
Author contact info: Edward N. Wolff Department of Economics New York University 19 W. 4th Street, 6th Floor New York, NY 10012 Tel: 212/998-8917 Fax: 212/995-4186 E-Mail: edward.wolff@nyu.edu

The Hidden Cost of Firearm Violence on Infants in Utero - Currie, Janet; Dursun, Bahadir; Hatch, Michael; Tekin, Erdal (National Bureau of Economic Research Working Paper Series, 2023)
Firearm violence is a critical public health crisis in the U.S., marked by a significant number of homicides involving firearms, including indiscriminate shootings in public spaces. This study investigates the largely unexplored impact of such violence on newborn health. We adopt two approaches. First, we analyze the 2002 'beltway sniper' attacks in the Washington DC metropolitan area, using administrative birth records with maternal residential addresses in Virginia. The beltway sniper attacks, a series of random shootings in the Washington DC metropolitan area, caused widespread terror and disruption over three weeks. Leveraging both spatial and temporal variation, we compare outcomes of children exposed to the attacks in utero due to timing or having a residential address near a shooting location to those who were not exposed. Second, we investigate the impact of in-utero exposure to mass shootings on infant health using restricted-access U.S. Vital Statistics Natality records between 2006 and 2019 and leveraging variation in the timing of mass shootings in counties with at least one shooting. We document substantial, previously overlooked costs on pregnant women and infants. Exposure to the beltway sniper attacks during pregnancy increased the likelihood of very low birthweight and very premature birth by 25%. The analysis of national mass shootings confirms these findings with slightly smaller effect sizes. These results emphasize the need to consider the broader impact of violence on vulnerable populations when assessing the cost of firearm violence. The estimates suggest additional costs of $155 million (2023 dollars) for the beltway sniper attacks and $75 million annually for mass shootings.
Author contact info: Janet Currie Department of Economics Center for Health and Wellbeing 185A Julis Romo Rabinowitz Building Princeton University Princeton, NJ 08544 Tel: 609-258-7393 E-Mail: jcurrie@princeton.edu Bahadir Dursun 5 Barrack Road Newcastle University Business School Newcastle on Tyne United Kingdom E-Mail: Bahadir.Dursun@newcastle.ac.uk Michael Hatch School of Public Affairs American University 4400 Massachusetts Avenue NW Washington, D.C. 20016-8070 United States E-Mail: mhatch@american.edu Erdal Tekin School of Public Affairs American University 4400 Massachusetts Avenue NW Washington, DC 20016-8070 Tel: (202) 885-6361 E-Mail: tekin@american.edu

Labor Market Impacts of Reducing Felony Convictions - Agan, Amanda Y; Garin, Andrew; Koustas, Dmitri K; Mas, Alexandre; Yang, Crystal (National Bureau of Economic Research Working Paper Series, 2023)
We study the labor market impacts of retroactively reducing felonies to misdemeanors in San Joaquin County, CA, where criminal justice agencies implemented Proposition 47 reductions in a quasi-random order, without requiring input or action from affected individuals. Linking records of reductions to administrative tax data, we find employment benefits for individuals who (likely) requested their reduction, consistent with selection, but no benefits among the larger subset of individuals whose records were reduced proactively. A field experiment notifying a subset of individuals about their proactive reduction also shows null results, implying that lack of awareness is unlikely to explain our findings.
Author contact info: Amanda Y. Agan Department of Economics Rutgers University 75 Hamilton Street New Brunswick, NJ 08901 E-Mail: amanda.agan@rutgers.edu Andrew Garin Heinz College Carnegie Mellon University 5000 Forbes Avenue Pittsburgh, PA 15213 Tel: 202/494-3361 E-Mail: agarin@andrew.cmu.edu Dmitri K. Koustas Harris Public Policy, University of Chicago 1307 E. 60th St. Room 3055 Chicago, IL 60605 Tel: 872.444.6901 E-Mail: dkoustas@uchicago.edu Alexandre Mas University of California, Berkeley Haas School of Business 2220 Piedmont Ave Berkeley, CA 94720 E-Mail: amas@berkeley.edu Crystal Yang Harvard Law School Griswold 301 Cambridge, MA 02138 Tel: 617/496-4477 E-Mail: cyang@law.harvard.edu

Contagion Effects of the Silicon Valley Bank Run - Choi, Dong Beom; Goldsmith-Pinkham, Paul; Yorulmazer, Tanju (National Bureau of Economic Research Working Paper Series, 2023)
This paper analyzes the contagion effects associated with the failure of Silicon Valley Bank (SVB) and identifies bank-specific vulnerabilities contributing to the subsequent declines in banks’ stock returns. We find that uninsured deposits, unrealized losses in held-to-maturity securities, bank size, and cash holdings had a significant impact, while better-quality assets or holdings of liquid securities did not help mitigate the negative spillovers. Interestingly, banks whose stocks performed worse post-SVB also experienced lower returns in the previous year, following Federal Reserve interest rate hikes. Stock investors appeared to anticipate risks associated with uninsured deposit reliance, but did not foresee the realization of implied losses. While mid-sized banks experienced particular stress immediately after the SVB failure, over time negative spillovers became widespread except for the largest banks.
Author contact info: Dong Beom Choi Seoul National University Business School 1 Gwanak-ro, Gwanak-gu Seoul Korea E-Mail: dong.choi@snu.ac.kr Paul Goldsmith-Pinkham Yale School of Management 165 Whitney Avenue New Haven, CT 06511 E-Mail: paulgp@gmail.com Tanju Yorulmazer Koç University Rumelifeneri Yolu, Sariyer 34450 Istanbul, TURKEY Turkey E-Mail: T.Yorulmazer@uva.nl

When Product Markets Become Collective Traps: The Case of Social Media - Bursztyn, Leonardo; Handel, Benjamin R; Jimenez, Rafael; Roth, Christopher (National Bureau of Economic Research Working Paper Series, 2023)
Individuals might experience negative utility from not consuming a popular product. For example, being inactive on social media can lead to social exclusion or not owning luxury brands can be associated with having a low social status. We show that, in the presence of such spillovers to non-users, standard measures that take aggregate consumption as given fail to appropriately capture welfare. We propose a new methodology to measure welfare that accounts for these consumption spillovers, which we apply to estimate the consumer surplus of two popular social media platforms, TikTok and Instagram. In large-scale, incentivized experiments with college students, we show that, while the standard welfare measure suggests a large and positive surplus, our measure accounting for consumption spillovers indicates a negative surplus, with a large share of active users deriving negative utility. We also shed light on the drivers of consumption spillovers to non-users in the case of social media and show that, in this setting, the “fear of missing out” plays an important role. Our framework and estimates highlight the possibility of product market traps, where large shares of consumers are trapped in an inefficient equilibrium and would prefer the product not to exist.
Author contact info: Leonardo Bursztyn Department of Economics University of Chicago 1126 E. 59th Street Chicago, IL 60637 E-Mail: bursztyn@g.uchicago.edu Benjamin R. Handel Department of Economics University of California, Berkeley 508-1 Evans Hall #3880 Berkeley, CA 94720 Tel: 609/240-5199 Fax: 510/642-6615 E-Mail: handel@berkeley.edu Rafael Jimenez-Duran Bocconi University Via Sarfatti 25 Milano Italy E-Mail: rafael.jimenez@unibocconi.it Christopher Roth Department of Economics University of Cologne Albertus-Magnus-Platz Cologne Germany E-Mail: cproth89@gmail.com

The Labor Demand and Labor Supply Channels of Monetary Policy - Graves, Sebastian; Huckfeldt, Christopher K; Swanson, Eric T (National Bureau of Economic Research Working Paper Series, 2023)
Monetary policy is conventionally understood to influence labor demand, with little effect on labor supply. We estimate the response of labor market flows to high-frequency changes in interest rates around FOMC announcements and Fed Chair speeches and find evidence that, in contrast to the consensus view, a contractionary monetary policy shock leads to a significant increase in labor supply: workers reduce the rate at which they quit jobs to non-employment, and non-employed individuals increase their job-seeking behavior. Holding such supply-driven labor market flows constant, the overall decline in employment from a contractionary monetary policy shock becomes twice as large.
Author contact info: Sebastian Graves International Finance Division Federal Reserve Board 20th St. & Constitution Ave., NW Washington, DC 20551 E-Mail: sebastian.h.graves@frb.gov Christopher K. Huckfeldt International Finance Division Federal Reserve Board 20th & Constitution Ave., NW Washington, DC 20551 E-Mail: chris.huckfeldt@gmail.com Eric T. Swanson Department of Economics University of California at Irvine 3151 Social Science Plaza Irvine, CA 92697-5100 Tel: 949/824-8305 E-Mail: eric.swanson@uci.edu

The Environmental Cost of Easy Credit: The Housing Channel - Adelino, Manuel; Robinson, David T (National Bureau of Economic Research Working Paper Series, 2023)
Heating, cooling, and powering the residential housing stock accounts for about one-fifth of total annual greenhouse gas emissions in the US. Home size is a key determinant of energy intensity. The average newly built single-family home is 50% larger than in the 1950s. Using distinct identification strategies spanning the last four decades of banking history, we show that more abundant credit increases average new home size. It also facilitates more construction but does not produce offsetting increases in home quality or durability. These results highlight potential environmental costs associated with monetary policies that expand access to credit.
Author contact info: Manuel Adelino Fuqua School of Business Duke University 100 Fuqua Drive Durham, NC 27708 Tel: 919/660-7981 E-Mail: manuel.adelino@duke.edu David T. Robinson Fuqua School of Business Duke University 100 Fuqua Drive Durham, NC 27708 Tel: 919/660-8023 Fax: 919/684-2818 E-Mail: davidr@duke.edu

Institutions, Comparative Advantage, and the Environment - Shapiro, Joseph S (National Bureau of Economic Research Working Paper Series, 2023)
This paper proposes that strong financial, judicial, and labor market institutions provide comparative advantage in clean industries, and thereby improve a country's environmental quality. Five complementary tests support this hypothesis. First, industries that depend on institutions are disproportionately clean. Second, strong institutions increase relative exports in clean industries, even conditional on environmental regulation and factor endowments. Third, an industry's complexity helps explain the link between institutions and clean goods. Fourth, a quantitative general equilibrium model indicates that strengthening a country's institutions decreases its pollution through relocating dirty industries abroad, though increases pollution in other countries. Fifth, cross-country differences in the composition of output between clean and dirty industries explain more of the global distribution of emissions than differences in the techniques used for production do. The comparative advantage that strong institutions provide in clean industries gives one under-explored reason why developing countries have relatively high pollution levels.
Author contact info: Joseph S. Shapiro University of California, Berkeley #3310 Berkeley, CA 94720 E-Mail: joseph.shapiro@berkeley.edu

The Turing Transformation: Artificial Intelligence, Intelligence Augmentation, and Skill Premiums - Agrawal, Ajay K; Gans, Joshua S; Goldfarb, Avi (National Bureau of Economic Research Working Paper Series, 2023)
We ask whether a technical objective of using human performance of tasks as a benchmark for AI performance will result in the negative outcomes highlighted in prior work in terms of jobs and inequality. Instead, we argue that task automation, especially when driven by AI advances, can enhance job prospects and potentially widen the scope for employment of many workers. The neglected mechanism we highlight is the potential for changes in the skill premium where AI automation of tasks exogenously improves the value of the skills of many workers, expands the pool of available workers to perform other tasks, and, in the process, increases labor income and potentially reduces inequality. We label this possibility the “Turing Transformation.” As such, we argue that AI researchers and policymakers should not focus on the technical aspects of AI applications and whether they are directed at automating human-performed tasks or not and, instead, focus on the outcomes of AI research. In so doing, our goal is not to diminish human-centric AI research as a laudable goal. Instead, we want to note that AI research that uses a human-task template with a goal to automate that task can often augment human performance of other tasks and whole jobs. The distributional effects of technology depend more on which workers have tasks that get automated than on the fact of automation per se.
Author contact info: Ajay K. Agrawal Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 Tel: 416/946-0203 Fax: 416/978-5433 E-Mail: ajay.agrawal@rotman.utoronto.ca Joshua S. Gans Rotman School of Management University of Toronto 105 St. George Street Toronto ON M5S 3E6 Tel: 416/978-3243 E-Mail: joshua.gans@rotman.utoronto.ca Avi Goldfarb Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 Tel: 416/946-8604 Fax: 416/978-5433 E-Mail: agoldfarb@rotman.utoronto.ca

A Framework for Detection, Measurement, and Welfare Analysis of Platform Bias - Reimers, Imke; Waldfogel, Joel (National Bureau of Economic Research Working Paper Series, 2023)
Regulators are responding to growing platform power with curbs on platforms' potentially biased exercise of power, creating urgent needs for both a workable definition of platform bias and ways to detect and measure it. We develop a simple equilibrium framework in which consumers choose among ranked alternatives, while the platform chooses product display ranks based on product characteristics and prices. We define the platform's ranks to be biased if they deliver outcomes that lie below the frontier that maximizes a weighted sum of seller and consumer surplus. This framework leads to two bias testing approaches, which we compare using Monte Carlo simulations, as well as data from Amazon, Expedia, and Spotify. We then illustrate the use of our structural framework directly, producing estimates of both platform bias and its welfare cost. The EU's Digital Services Act's provision for researcher data access would allow easy implementation of our approach in contexts important to policy makers.
Author contact info: Imke Reimers Cornell University Dyson School of Applied Economics and Management SC Johnson College of Business 351C Warren Hall Ithaca, New 14853 United States E-Mail: imke.reimers@gmail.com Joel Waldfogel Frederick R. Kappel Chair in Applied Economics 3-177 Carlson School of Management University of Minnesota 321 19th Avenue South Minneapolis, MN 55455 Tel: 612/626-7128 E-Mail: jwaldfog@umn.edu

Racial Differences in Parent Response to COVID Schooling Policies - Baum, Micah Y; Jacob, Brian (National Bureau of Economic Research Working Paper Series, 2023)
This paper examines whether school COVID-19 policies influenced enrollment differently by student age and race/ethnicity. Unlike much prior research, we (i) analyze enrollments for virtually the entire U.S. public school population for both the 2020-21 and 2021-22 school years, (ii) compare enrollment trends within districts in order to isolate subgroup heterogeneity from district characteristics, and (iii) account for district selection into preferred learning modes. Analyzing data on over 9,000 districts that serve more than 90% of public school students in the U.S., we find enrollment responses to COVID policies differed notably. We find that White enrollments declined more than Black, Hispanic, and Asian enrollments in districts that started the 2020-21 school year virtually, but in districts that started in-person the reverse was true: non-White enrollments declined more than White enrollments. Moreover, Black, Hispanic, and Asian families responded more than White families to higher COVID-19 death rates in the months preceding the start of the 2021 school year. In 2021-22, enrollment differences by the previous year’s learning mode persisted. Racial/ethnic differences did not vary by whether the district required masking in classrooms. These findings are consistent with the greater risk faced by communities of color during the pandemic and demonstrate an additional source of disparate impact from COVID policies.
Author contact info: Micah Y. Baum E-Mail: mybaum@umich.edu Brian Jacob Gerald R. Ford School of Public Policy University of Michigan 735 South State Street Ann Arbor, MI 48109 Tel: 734-615-6994 Fax: NA E-Mail: bajacob@umich.edu

Real Effects of Rollover Risk: Evidence from Hotels in Crisis - DeFusco, Anthony A; Nathanson, Charles G; Reher, Michael (National Bureau of Economic Research Working Paper Series, 2023)
We show how firms scheduled to roll over debt in a crisis strategically reduce operations, regardless of their liquidity constraints. Our research design utilizes contractual features of commercial mortgages that generate as-good-as-random variation in whether debt is scheduled to mature during a crisis or just before. Once the crisis begins, borrowers cut labor expenses and produce less output at properties collateralizing loans coming due during the crisis, especially high-leverage loans. These effects hold with owner fixed-effects, consistent with strategic default and not liquidity constraints as the dominant mechanism. A parsimonious model of debt overhang with rollover risk rationalizes these results.
Author contact info: Anthony A. DeFusco Wisconsin School of Business University of Wisconsin-Madison 975 University Avenue Office 5285 Madison, WI 53715 E-Mail: anthony.defusco@wisc.edu Charles G. Nathanson Kellogg School of Management Northwestern University 2211 Campus Drive, Room 4479 Evanston, IL 60208-0898 E-Mail: nathanson@kellogg.northwestern.edu Michael Reher University of California San Diego Rady School of Management 9500 Gilman Drive La Jolla, CA 92093 E-Mail: mreher@ucsd.edu

Chronicle of a Dollarization Foretold: Inflation and Exchange Rates Dynamics - Caravello, Tomás E; Martinez-Bruera, Pedro; Werning, Iván (National Bureau of Economic Research Working Paper Series, 2023)
We study the effects of an anticipated dollarization, announced today but planned to be implemented at some future date, in a simple open-economy model. Motivated by the profile of countries considering dollarization we make the following assumptions. First, the government faces a scarcity of dollars to pledge for the future conversion of domestic currency. Second, without dollarization monetary policy finances a deficit via seignorage. We focus on the pre-dollarization period. Our results are as follows. First, the announcement leads to a discrete devaluation on impact. Second, after this jump the devaluation rate also rises relative to the no dollarization benchmark. Finally, the devaluation and inflation rate may rises over time.
Author contact info: Tomás E. Caravello Department of Economics MIT 77 Massachusetts Ave Cambridge, MA 02139 E-Mail: tomasec@mit.edu Pedro Martinez-Bruera MIT Department of Economics 50 Memorial Drive Cambridge, MA 02142 United States E-Mail: pmbruera@mit.edu Iván Werning Department of Economics, E52-536 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/452-3662 Fax: 617/253-1330 E-Mail: iwerning@mit.edu

Why Women Won - Goldin, Claudia (National Bureau of Economic Research Working Paper Series, 2023)
How, when, and why did women in the US obtain legal rights equal to men’s regarding the workplace, marriage, family, Social Security, criminal justice, credit markets, and other parts of the economy and society, decades after they gained the right to vote? The story begins with the civil rights movement and the somewhat fortuitous nature of the early and key women’s rights legislation. The women’s movement formed and pressed for further rights. Of the 155 critical moments in women’s rights history I’ve compiled from 1905 to 2023, 45% occurred between 1963 and 1973. The greatly increased employment of women, the formation of women’s rights associations, the belief that women’s votes mattered, and the unstinting efforts of various members of Congress were behind the advances. But women soon became splintered by marital status, employment, region, and religion far more than men. A substantial group of women emerged in the 1970s to oppose various rights for women, just as they did during the suffrage movement. They remain a potent force today.
Author contact info: Claudia Goldin Department of Economics 229 Littauer Harvard University Cambridge MA 02138 Tel: 617/613-1200 Fax: 617/613-1245 E-Mail: cgoldin@harvard.edu

Intergenerational Transmission of Inequality: Maternal Endowments, Investments, and Birth Outcomes - Eshaghnia, Sadegh; Heckman, James J (National Bureau of Economic Research Working Paper Series, 2023)
Newborn health is an important component in the chain of intergenerational transmission of disadvantage. This paper contributes to the literature on the determinants of health at birth in two ways. First, we analyze the role of maternal endowments and investments (education and smoking in pregnancy) on the probability of having a baby who is small for gestational age (SGA). We estimate both the total impact of maternal endowments on birth outcomes, and we also decompose it into a direct, “biological” effect and a “choice” effect, mediated by maternal behaviors. Second, we estimate the causal effects of maternal education and smoking in pregnancy, and investigate whether women endowed with different traits have different returns. We find that maternal cognition affects birth outcomes primarily through maternal education, that personality traits mainly operate by changing maternal smoking, and that the physical fitness of the mother has a direct, “biological” effect on SGA. We find significant heterogeneity in the effects of education and smoking along the distribution of maternal physical traits, suggesting that women with less healthy physical constitutions should be the primary target of prenatal interventions.
Author contact info: Sadegh Eshaghnia Center for the Economics of Human Development University of Chicago 1126 East 59th Street Chicago, IL 60637 E-Mail: eshaghnia@uchicago.edu James J. Heckman Center for the Economics of Human Development University of Chicago 1126 East 59th Street Chicago, IL 60637 Tel: 773/702-0634 Fax: 773/702-8490 E-Mail: jjh@uchicago.edu

Dynamics of the Long Term Housing Yield: Evidence from Natural Experiments - Bäcker-Peral, Verónica; Hazell, Jonathon; Mian, Atif R (National Bureau of Economic Research Working Paper Series, 2023)
Every month, a fraction of UK property leases are extended for another 90 years or more. We build a new dataset of thousands of these natural experiments from 2000 onwards to estimate the expected long term housing yield, y*. Starting from a level of 5.3%, y* starts to fall during the Great Recession, reaching a low of 2.8% in 2023. Real time data shows y* has not risen since 2021, despite rising shorter term yields. Cross-sectional estimates show that y* is higher in areas with more housing risk, and falls by more in areas with more inelastic housing supply.
Author contact info: Verónica Bäcker-Peral The Julis-Rabinowitz Center for Public Policy and Finance 216-1 Julis Romo Rabinowitz Building Princeton University Princeton, NJ 08544 United States E-Mail: veronicabp@princeton.edu Jonathon Hazell Department of Economics London School of Economics 32 Lincoln's Inn Fields United Kingdom E-Mail: jadhazell@gmail.com Atif R. Mian Princeton University Bendheim Center For Finance 26 Prospect Avenue Princeton, NJ 08540 E-Mail: atif@princeton.edu

The Effect of Childhood Environment on Political Behavior: Evidence from Young U.S. Movers, 1992–2021 - Brown, Jacob R; Cantoni, Enrico; Chinoy, Sahil; Koenen, Martin; Pons, Vincent (National Bureau of Economic Research Working Paper Series, 2023)
We ask how childhood environment shapes political behavior. We measure young voters’ participation and party affiliation in nationally comprehensive voter files and reconstruct their childhood location histories based on their parents’ addresses. We compare outcomes of individuals who moved between the same origin and destination counties but at different ages. Those who spend more time in the destination are more influenced by it: Growing up in a county where their peers are 10 percentage points more likely to become Republicans makes them 4.7 percentage points more likely to become Republican themselves upon entering the electorate. The effects are of similar magnitude for Democratic partisanship and turnout. These exposure effects are primarily driven by teenage years, and they persist but decay after the first election. They reflect both state-level factors and factors varying at a smaller scale such as peer effects.
Author contact info: Jacob R. Brown E-Mail: jbrown13@bu.edu Enrico Cantoni University of Bologna Department of Economics Piazza Scaravilli 2, Bologna Italy E-Mail: enrico.cantoni@unibo.it Sahil Chinoy E-Mail: schinoy@g.harvard.edu Martin Koenen Harvard University E-Mail: martin_koenen@fas.harvard.edu Vincent Pons Harvard Business School Morgan Hall 289 Soldiers Field Boston, MA 02163 Tel: 617/495-9329 E-Mail: vpons@hbs.edu

One Giant Leap: Emancipation and Aggregate Economic Gains - Hornbeck, Richard; Logan, Trevon (National Bureau of Economic Research Working Paper Series, 2023)
We re-characterize American slavery as inefficient, whereby emancipation generated substantial aggregate economic gains. Coercive labor markets were severely distorted, with the social marginal cost of labor substantially above its marginal benefit. Production during enslavement came at immense costs imposed upon enslaved people that reduced aggregate economic surplus, or the total value of output minus total costs incurred. The costs of enslavement are inherently difficult to quantify, which leads to a wide range of quantitative estimates, but we calculate that emancipation generated aggregate economic gains worth the equivalent of a 4% to 35% increase in US aggregate productivity (7 to 60 years of technological innovation). Emancipation decreased output but sparked dramatic aggregate economic gains by decreasing costs substantially more, illustrating the substantial potential for aggregate economic gains in the presence of severe misallocation.
Author contact info: Richard Hornbeck Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-8350 E-Mail: richard.hornbeck@chicagobooth.edu Trevon Logan The Ohio State University 410 Arps Hall 1945 N. High Street Columbus, OH 43210 Tel: 614-292-0762 Fax: 614-292-3906 E-Mail: logan.155@osu.edu

Managing to Learn - Beg, Sabrin A; Fitzpatrick, Anne E; Lucas, Adrienne (National Bureau of Economic Research Working Paper Series, 2023)
To improve public services, public sector managers must encourage reticent civil servants to enact effective reforms. We show through a randomized controlled trial that school principals, i.e., school mangers, can act as leaders to improve Instructional Management (0.3SD) and student learning (0.11SD) with existing systems and personnel. Additional management training improved People Management but not student test scores. Managerial enhancements and student test score gains persisted. Our findings resolve conflicting results regarding the role of management in public sector productivity and demonstrate how public sector managers can signal reform effectiveness through personal commitment, acting as leaders.
Author contact info: Sabrin A. Beg University of Delaware 418 Purnell Hall Newark, DE 19716 E-Mail: sabrin.beg@gmail.com Anne E. Fitzpatrick Department of Agricultural, Environmental, and Development Economics 250 Fyffe Road Columbus, OH 43210 USA E-Mail: fitzpatrick.88@osu.edu Adrienne Lucas Lerner College of Business and Economics University of Delaware 419 Purnell Hall Newark, DE 19716 Tel: 302/831-1901 Fax: 302/831-6968 E-Mail: alucas@udel.edu

Why Choose Career Technical Education? Disentangling Student Preferences from Program Availability - Jacob, Brian A; Ricks, Michael D (National Bureau of Economic Research Working Paper Series, 2023)
This paper presents the first evidence of how students make career technical education (CTE) course-taking decisions. Among the universe of Michigan high-schoolers we find large disparities in CTE access and participation by gender, race, and income. We decompose participation gaps between supply (access) and demand (preferences) with a simple discrete choice model. We find that student preferences for CTE content drive participation gaps by gender, inequities in access drive gaps by income, and school-level supply and demand factors combine to create the gaps by race. Policy simulations highlight the importance of accessible CTE delivery models within comprehensive high schools.
Author contact info: Brian Jacob Gerald R. Ford School of Public Policy University of Michigan 735 South State Street Ann Arbor, MI 48109 Tel: 734-615-6994 Fax: NA E-Mail: bajacob@umich.edu Michael Ricks HLN 525 H P.O. Box 880489 Lincoln, NE 68588-0489 E-Mail: mricks4@unl.edu

Fiscal Federalism and the Role of the Income Tax - Gordon, Roger H (National Bureau of Economic Research Working Paper Series, 2023)
This paper rethinks the design of the income tax by assuming that the objective of the tax is not to redistribute from rich to poor but instead to provide some insurance to individuals against the uncertainties they face in their future earnings, a motivation for the tax proposed in Buchanan (1976). The income tax provides insurance by collecting money on net from individuals to the extent they end up doing well to finance net transfers to them when they end up doing badly. Individuals differ in the amount of future risks they face. These heterogeneous tastes for insurance provide a rationale for states to offer heterogeneous tax/transfer programs, each state attracting a different clientele in the population. Given the ease of household migration, state tax policies generate fiscal externalities to other states. The paper explores as well possible Federal interventions to improve on the equilibrium choices states make for their tax policies.
Author contact info: Roger H. Gordon 8021 La Jolla Scenic Dr N La Jolla, CA 92037 E-Mail: rogordon@ucsd.edu

Carbon Taxes: Many Strengths but Key Weaknesses - Gordon, Roger H (National Bureau of Economic Research Working Paper Series, 2023)
There is a consensus among economists that a carbon tax is the best approach for addressing the effects of CO2 emissions on the global climate. However, past international agreements on climate change instead specify caps on emissions (a quantity target) for each country. This paper explores several advantages of such use of quantity targets. For one, if a country were to impose a carbon tax at a rate high enough to correct for global externalities, this rate would far exceed the rate in that country’s own self-interest. The result is an incentive to make use of other domestic government policies to encourage greater emissions, undercutting the intended abatement under a carbon tax. A quantity target instead by construction caps emissions. Second, the paper argues that a quantity target can better insure that global warming remains below two degrees Celsius, given the uncertainties faced regarding the response to any given carbon tax rate. Third, the set of quantity targets set for each country can more flexibly be adjusted to ensure that most countries benefit from participating in a global accord, while still allowing efficient patterns of abatement by giving countries credit for cross-border abatement efforts.
Author contact info: Roger H. Gordon 8021 La Jolla Scenic Dr N La Jolla, CA 92037 E-Mail: rogordon@ucsd.edu

No Revenge for Nerds? Evaluating the Careers of Ivy League Athletes - Amornsiripanitch, Natee; Gompers, Paul; Hu, George; Levinson, Will; Mukharlyamov, Vladimir (National Bureau of Economic Research Working Paper Series, 2023)
This paper compares the careers of Ivy League athletes to those of their non-athlete classmates. Combining team-level information on all Ivy League athletes from 1970 to 2021 with resume data for all Ivy League graduates, we examine both post-graduate education and career choices as well as career outcomes. In terms of industry choice, athletes are far more likely to go into business and Finance related jobs than their non-athlete classmates. In terms of advanced degrees, Ivy League athletes are more likely to get an MBA and to receive it from an elite program, although they are less likely to pursue an M.D., a Ph.D., or an advanced STEM degree. In terms of career outcomes, we find that Ivy League athletes outperform their non-athlete counterparts in the labor market. Athletes attain higher terminal wages and earn cumulatively more than non-athletes over the course of their careers controlling for school, graduation year, major, and first job. In addition, they attain more senior positions in the organizations they join. We also find that athletes from more socioeconomically diverse sports teams and from teams that have lower academic admissions thresholds have higher career outcomes than non-athletes. Collectively, our results suggest that non-academic human capital developed through athletic participation is valued in the labor market and may support the role that prior athletic achievement plays in admissions at elite colleges.
Author contact info: Natee Amornsiripanitch 10 N Independence Mall W Philadelphia, PA 19106 United States Tel: 4047919992 E-Mail: natee.amornsiripanitch@phil.frb.org Paul Gompers Harvard Business School Baker Library 263 Soldiers Field Boston, MA 02163 Tel: 617/495-6297 Fax: 617/496-8443 E-Mail: pgompers@hbs.edu George Hu Department of Economics Harvard University Cambridge, MA 02138 E-Mail: george_hu@g.harvard.edu Will Levinson Duke University Fuqua School of Business E-Mail: will.levinson@duke.edu Vladimir Mukharlyamov McDonough School of Business Georgetown University 3700 O St NW Washington, DC 20057 E-Mail: vladimir.mukharlyamov@georgetown.edu

Optimal Income Taxation and Charitable Giving - Kaplow, Louis (National Bureau of Economic Research Working Paper Series, 2023)
The philanthropic sector is highly consequential, particularly in the United States, and the most important policies directed toward this sector are tax policies. Yet most economic analysis of the optimal tax treatment of charitable giving is ad hoc, treating it as a subject unto itself. This article advances a different approach: integrating the tax treatment of charitable giving into the optimal income tax framework that has been developed over the past half century. The results supplement or overturn conventional wisdom. Notably, the analysis of revenue effects and the purported efficiency of subsidies to charitable giving is recast, focusing on the pertinent externalities rather than the direct revenue costs, which themselves are irrelevant in the basic case. Distributive concerns regarding donors are also misplaced because distributive effects can be offset by tax rate adjustments to the broader income tax and transfer system. These ideas are developed systematically, with an emphasis on intuition rather than technical formalism. The analysis also broadens and deepens the assessment of externalities from charitable giving, which are more numerous and heterogeneous than is generally recognized. Finally, refocusing our understanding of the optimal tax treatment of charitable giving identifies important subjects requiring further research.
Author contact info: Louis Kaplow Harvard University Hauser 322 Cambridge, MA 02138 Tel: 617/495-4101 Fax: 617/496-4880 E-Mail: meskridge@law.harvard.edu

Estimating Impact with Surveys versus Digital Traces: Evidence from Randomized Cash Transfers in Togo - Aiken, Emily; Bellue, Suzanne; Blumenstock, Joshua; Karlan, Dean; Udry, Christopher R (National Bureau of Economic Research Working Paper Series, 2023)
Do non-traditional digital trace data and traditional survey data yield similar estimates of the impact of a cash transfer program? In a randomized controlled trial of Togo’s COVID-19 Novissi program, endline survey data indicate positive treatment effects on beneficiary food security, mental health, and self-perceived economic status. However, impact estimates based on mobile phone data – processed with machine learning to predict beneficiary welfare – do not yield similar results, even though related data and methods do accurately predict wealth and consumption in prior cross-sectional analysis in Togo. This limitation likely arises from the underlying difficulty of using mobile phone data to predict short-term changes in wellbeing within a rural population with fairly homogeneous baseline levels of poverty. We discuss the implications of these results for using new digital data sources in impact evaluation.
Author contact info: Emily Aiken 102 South Hall University of California, Berkeley Berkeley, CA 94720 USA E-Mail: emilyaiken@berkeley.edu Suzanne Bellue E-Mail: suzanne.bellue@ensae.fr Joshua Blumenstock School of Information 102 South Hall University of California, Berkeley E-Mail: jblumenstock@berkeley.edu Dean Karlan Kellogg Global Hub Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 847/491-8706 E-Mail: dean.karlan@gmail.com Christopher R. Udry Northwestern University Department of Economics Weinberg College of Arts and Sciences 2211 Campus Drive #3247 Evanston, IL 60208 Tel: 203/432-3637 E-Mail: christopher.udry@northwestern.edu

Preparing for an Aging Africa: Data-Driven Priorities for Economic Research and Policy - Duhon, Madeline E; Miguel, Edward; Njuguna, Amos; Pinto Veizaga, Daniela; Walker, Michael W (National Bureau of Economic Research Working Paper Series, 2023)
The over-60 population in Sub-Saharan Africa is expected to grow rapidly in the coming decades, tripling between 2020 and 2050. Despite this explosive projected growth, few countries in the region have implemented policies designed to support older populations. Further, little research in economics has specifically examined aging in Sub-Saharan Africa, though many opportunities exist for economists to generate research evidence to inform the design of effective policies in this area. This paper combines insights from a cross-disciplinary review with original data analysis to characterize the challenges and opportunities facing older Sub-Saharan Africans in domains such as health and financial security. Informed by these findings, the paper identifies directions for future economic research and discusses how research evidence can inform the design of health care systems, pensions, and other public support programs to prepare for an aging Africa.
Author contact info: Madeline E. Duhon E-Mail: mduhon@berkeley.edu Edward Miguel Department of Economics University of California, Berkeley 530 Evans Hall #3880 Berkeley, CA 94720 Tel: 510/642-7162 Fax: 510/642-6615 E-Mail: emiguel@econ.berkeley.edu Amos Njuguna E-Mail: amnjuguna@usiu.ac.ke Daniela Pinto Veizaga Center for Data Science 60 5th Ave New York City, NY 10011 E-Mail: daniela.pinto@nyu.edu Michael W. Walker University of California, Berkeley Center for Effective Global Action 251 Giannini Hall Berkeley, CA 94720 E-Mail: mwwalker@berkeley.edu

Geographic Variation in Healthcare Utilization: The Role of Physicians - Badinski, Ivan; Finkelstein, Amy; Gentzkow, Matthew; Hull, Peter (National Bureau of Economic Research Working Paper Series, 2023)
We study the role of physicians in driving geographic variation of US healthcare utilization. We estimate a model that separates variation in average utilization of Medicare beneficiaries due to physicians, non-physician supply side factors, and patient demand. The model is identified by migration of patients and physicians across areas, as well as by variation in within-area matching. We find that physicians vary greatly in the intensity with which they treat otherwise similar patients, and that at least a third of geographic differences in healthcare utilization can be explained by differences in average physician treatment intensity. Conservatively, physicians are three times as important as non-physician supply-side factors in explaining geographic variation. Around three-fifths of physicians’ role comes from differences across areas in physician practice styles within the same specialty, while the other two-fifths reflects differences across areas in physician specialty mix.
Author contact info: Ivan Badinski E-Mail: ivan.badinsky@gmail.com Amy Finkelstein Department of Economics, E52-442 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/253-4149 Fax: 617/868-2742 E-Mail: afink@mit.edu Matthew Gentzkow Department of Economics Stanford University 579 Jane Stanford Way Stanford, CA 94305 Tel: 650/723-3721 Fax: 650/725-5702 E-Mail: gentzkow@stanford.edu Peter Hull Department of Economics Box B, Brown University Providence RI 02912 E-Mail: peter_hull@brown.edu

Secrets in Asset Purchases: Estimating the Unofficial Incomes of Officials - Deng, Yongheng; Wei, Shang-Jin; Wu, Jing; Zhang, Rongjie (National Bureau of Economic Research Working Paper Series, 2023)
The paper has been withdrawn at the request of the authors as a result of unanticipated changes in data access protocols.
Author contact info: Yongheng Deng Wisconsin School of Business 4110 Grainger Hall 975 University Ave Madison, WI 53706 Tel: (608) 262-4865 E-Mail: yongheng.deng@wisc.edu Shang-Jin Wei Columbia Business School Columbia University Kravis Building Room 552 665 West 130th Street New York, New 10027 E-Mail: shangjin.wei@columbia.edu Jing Wu Department of Construction Management and Hang Lung Center for Real Estate Tsinghua University China E-Mail: ireswujing@tsinghua.edu.cn Rongjie Zhang Department of Construction Management and Hang Lung Center for Real Estate Tsinghua University China E-Mail: zhangrj19@mails.tsinghua.edu.cn

Algorithmic Recommendations and Human Discretion - Angelova, Victoria; Dobbie, Will S; Yang, Crystal (National Bureau of Economic Research Working Paper Series, 2023)
Human decision-makers frequently override the recommendations generated by predictive algorithms, but it is unclear whether these discretionary overrides add valuable private information or reintroduce human biases and mistakes. We develop new quasi-experimental tools to measure the impact of human discretion over an algorithm on the accuracy of decisions, even when the outcome of interest is only selectively observed, in the context of bail decisions. We find that 90% of the judges in our setting underperform the algorithm when they make a discretionary override, with most making override decisions that are no better than random. Yet the remaining 10% of judges outperform the algorithm in terms of both accuracy and fairness when they make a discretionary override. We provide suggestive evidence on the behavior underlying these differences in judge performance, showing that the high-performing judges are more likely to use relevant private information and are less likely to overreact to highly salient events compared to the low-performing judges.
Author contact info: Victoria Angelova E-Mail: vangelova@g.harvard.edu Will S. Dobbie Harvard Kennedy School 79 John F. Kennedy St. Cambridge, MA 02138 E-Mail: willdobbie@gmail.com Crystal Yang Harvard Law School Griswold 301 Cambridge, MA 02138 Tel: 617/496-4477 E-Mail: cyang@law.harvard.edu

The Long-Term Effects of Income for At-Risk Infants: Evidence from Supplemental Security Income - Hawkins, Amelia A; Hollrah, Christopher A; Miller, Sarah; Wherry, Laura R; Aldana, Gloria; Wong, Mitchell D (National Bureau of Economic Research Working Paper Series, 2023)
This paper examines whether a generous cash intervention early in life can "undo" some of the long-term disadvantage associated with poor health at birth. We use new linkages between several large-scale administrative datasets to examine the short-, medium-, and long-term effects of providing low-income families with low birthweight infants support through the Supplemental Security Income (SSI) program. This program uses a birthweight cutoff at 1200 grams to determine eligibility. We find that families of infants born just below this cutoff experience a large increase in cash benefits totaling about 27% of family income in the first three years of the infant's life. These cash benefits persist at lower amounts through age 10. Eligible infants also experience a small but statistically significant increase in Medicaid enrollment during childhood. We examine whether this support affects health care use and mortality in infancy, educational performance in high school, post-secondary school attendance and college degree attainment, and earnings, public assistance use, and mortality in young adulthood for all infants born in California to low-income families whose birthweight puts them near the cutoff. We also examine whether these payments had spillover effects onto the older siblings of these infants who may have also benefited from the increase in family resources. Despite the comprehensive nature of this early life intervention, we detect no improvements in any of the study outcomes, nor do we find improvements among the older siblings of these infants. These null effects persist across several subgroups and alternative model specifications, and, for some outcomes, our estimates are precise enough to rule out published estimates of the effect of early life cash transfers in other settings.
Author contact info: Amelia A. Hawkins Lemberg Academic Center MS 021 Brandeis University 415 South Street Waltham, MA 02453 E-Mail: aaehawkins@brandeis.edu Christopher A. Hollrah E-Mail: chollrah@umich.edu Sarah Miller Ross School of Business University of Michigan 701 Tappan Street Ann Arbor, MI 48109 Tel: 734/647-6978 E-Mail: mille@umich.edu Laura Wherry Wagner Graduate School of Public Service New York University 295 Lafayette Street New York, NY 10012 Tel: 212/998-7444 E-Mail: laura.wherry@nyu.edu Gloria Aldana 4600 Silver Hill Road Suitland, MD 20746 E-Mail: gloria.g.aldana@census.gov Mitchell D. Wong David Geffen School of Medicine University of California, Los Angeles 855 Tiverton Dr Los Angeles, CA 90024 E-Mail: mitchellwong@mednet.ucla.edu

Bitcoin and Carbon Dioxide Emissions: Evidence from Daily Production Decisions - Papp, Anna; Almond, Douglas; Zhang, Shuang (National Bureau of Economic Research Working Paper Series, 2023)
Environmental externalities from cryptomining may be large, but have not been linked causally to mining incentives. We exploit daily variation in Bitcoin price as a natural experiment for an 86 megawatt coal-fired power plant with on-site cryptomining. We find that carbon emissions respond swiftly to mining incentives, with price elasticities of 0.69-0.71 in the short-run and 0.33-0.40 in the longer run. A $1 increase in Bitcoin price leads to $3.11-$6.79 in external damages from carbon emissions alone, well exceeding cryptomining’s value added (using a $190 social cost of carbon, but ignoring increased local air pollution). As cryptomining requires ever more computing power to mine a given number of blocks, our study highlights both the revitalization of US fossil assets and the potential value of financial industry accounting standards that incorporate cryptomining externalities.
Author contact info: Anna Papp School of International and Public Affairs Columbia University 420 West 118th Street New York, NY 10027 E-Mail: ap3907@columbia.edu Douglas Almond SIPA and Department of Economics Columbia University 420 West 118th Street New York, NY 10027 Tel: 212/854-3680 Fax: 212/854-3239 E-Mail: da2152@columbia.edu Shuang Zhang Department of Economics and Public Policy Imperial College London, England E-Mail: s.zhang@imperial.ac.uk

A Perturbational Approach for Approximating Heterogeneous Agent Models - Bhandari, Anmol; Bourany, Thomas; Evans, David; Golosov, Mikhail (National Bureau of Economic Research Working Paper Series, 2023)
We develop a perturbational technique to approximate equilibria of a wide class of discrete-time dynamic stochastic general equilibrium heterogeneous-agent models with complex state spaces, including multi-dimensional distributions of endogenous variables. We show that approximating policy functions and stochastic process that governs the distributional state to any order is equivalent to solving small systems of linear equations that characterize values of certain directional derivatives. We analytically derive the coefficients of these linear systems and show that they satisfy simple recursive relations, making their numerical implementation quick and efficient. Compared to existing state-of-the-art techniques, our method is faster in constructing first-order approximations and extends to higher orders, capturing the effects of risk that are ignored by many current methods. We illustrate how to apply our method to a broad set of questions such as impacts of first- and second-moment shocks, welfare effect of macroeconomic risk and stabilization policies, endogenous household portfolio formation, and transition dynamics in heterogeneous agent general equilibrium settings.
Author contact info: Anmol Bhandari Department of Economics University of Minnesota 1925 Fourth Street South Minneapolis, MN 55455 E-Mail: bhandari@umn.edu Thomas Bourany E-Mail: thomasbourany@uchicago.edu David Evans Economics Department University of Oregon E-Mail: devans@uoregon.edu Mikhail Golosov Department of Economics University of Chicago 1126 E. 59th Street Chicago, IL 60637 Tel: 773/702-6405 E-Mail: golosov@uchicago.edu

Obsolescence Rents: Teamsters, Truckers, and Impending Innovations - Cavounidis, Costas; Chai, Qingyuan; Lang, Kevin; Malhotra, Raghav (National Bureau of Economic Research Working Paper Series, 2023)
We consider large, permanent shocks to individual occupations whose arrival date is uncertain. We are motivated by the advent of self-driving trucks, which will dramatically reduce demand for truck drivers. Using a bare-bones overlapping generations model, we examine an occupation facing obsolescence. We show that workers must be compensated to enter the occupation - receiving what we dub obsolescence rents - with fewer and older workers remaining in the occupation. We investigate the market for teamsters at the dawn of the automotive truck as an á propos parallel to truckers themselves, as self-driving trucks crest the horizon. As widespread adoption of trucks drew nearer, the number of teamsters fell, the occupation became ‘grayer’, and teamster wages rose, as predicted by the model.
Author contact info: Costas Cavounidis Department of Economics Warwick University Coventry, CV4 7AL United Kingdom Tel: +44 2476528420 E-Mail: C.Cavounidis@warwick.ac.uk Qingyuan Chai Department of Economics Boston University 270 Bay State Road Boston, MA 02215 E-Mail: qchai@bu.edu Kevin Lang Department of Economics Boston University 270 Bay State Road Boston, MA 02215 Tel: 617/353-5694 Fax: 617/353-4001 E-Mail: lang@bu.edu Raghav Malhotra University of Leicester Department of Economics, Finance and Accounting 266 London Rd Leicester LE2 1RQ United Kingdom E-Mail: r.malhotra@leicester.ac.uk

Do Consumers Acquire Information Optimally? Experimental Evidence from Energy Efficiency - La Nauze, Andrea; Myers, Erica (National Bureau of Economic Research Working Paper Series, 2023)
We use an experiment to test whether consumers optimally acquire information on energy costs in appliance markets where, like many contexts, consumers are poorly informed and make mistakes despite freely-available information. We find consumers acquire information suboptimally; there is little correlation between the revealed utility gain from improved decision making due to information and willingness to pay for information. We compare two behavioral interventions to address consumer mistakes: a conventional subsidy for energy-efficient products and a non-traditional subsidy paying consumers to view information on energy costs. We show that paying for attention can target welfare improvements more effectively.
Author contact info: Andrea La Nauze Level 6, Colin Clark Building Brisbane, QLD 4072 Australia E-Mail: a.lanauze@uq.edu.au Erica Myers Department of Economics University of Calgary 414 Social Sciences Building 2500 University Drive NW Calgary, AB T2N 1N4 Canada E-Mail: erica.myers@ucalgary.ca

The Central Bank's Dilemma: Look Through Supply Shocks or Control Inflation Expectations? - Beaudry, Paul; Carter, Thomas J; Lahiri, Amartya (National Bureau of Economic Research Working Paper Series, 2023)
When countries are hit by supply shocks, central banks often face the dilemma of either looking through such shocks or reacting to them to ensure that inflation expectations remain anchored. In this paper, we propose a tractable framework to capture this dilemma and explore optimal policy under a range of assumptions on how expectations are formed, including a form of bounded rationality involving level-k thinking (LKT). Despite modelling LKT in a way that nests both adaptive and rational expectations as special cases, we show that the optimal policy under LKT is qualitatively different and involves abrupt pivots in the policy stance. In particular, it is optimal for the central bank to initially look through supply shocks until a threshold is reached, then pivot discontinuously to a more hawkish anti-inflationary stance. We find that such pivots can, if optimally executed, be compatible with soft landings in the sense that most (or even all) of the reduction in inflation occurs through re-anchoring of expectations rather than economic slack. We also discuss risks and why policy errors in terms of tightening too late or too slowly can be especially costly in such an environment.
Author contact info: Paul Beaudry Vancouver School of Economics, University of British Columbia 6000 Iona Drive Vancouver, V6T 1Z1 Canada Tel: 604/822-8624 Fax: 604/822-5915 E-Mail: Paul.Beaudry@ubc.ca Thomas J. Carter E-Mail: tcarter2@imf.org Amartya Lahiri Vancouver School of Economics University of British Columbia 6000 Iona Drive Vancouver, BC V6T 1Z1 CANADA Tel: 604-822-8606 E-Mail: amartyalahiri@gmail.com

Self-Employment Within the Firm - Bassi, Vittorio; Lee, Jung Hyuk; Peter, Alessandra; Porzio, Tommaso; Sen, Ritwika; Tugume, Esau (National Bureau of Economic Research Working Paper Series, 2023)
We collect time-use data for entrepreneurs and employees in a sample of 1,000 manufacturing firms in Uganda, representative of both small and large production units. We find that even the largest firms in this setting more closely resemble a collection of self-employed individuals sharing a production space than a modern firm in which labor is specialized. We interpret the evidence through an equilibrium model of occupational choice and task assignment within the firm. The estimated model shows that there are only small productivity gains from having talented entrepreneurs run large firms. As a result, given the currently used production technology, classic development interventions such as wage subsidies or capital grants would have muted effects on firm size and aggregate productivity.
Author contact info: Vittorio Bassi University of Southern California Department of Economics 3620 South Vermont Avenue, Kaprielian Hall Los Angeles, CA 90089 E-Mail: vbassi@usc.edu Jung Hyuk Lee E-Mail: leejungh@usc.edu Alessandra Peter Department of Economics New York University 19 W. 4th Street New York, NY 10012 Tel: 650/996-9474 E-Mail: alessandra.peter@nyu.edu Tommaso Porzio Columbia Business School 3022 Broadway Uris Hall 824 New York, NY 10027 E-Mail: tommaso.porzio@columbia.edu Ritwika Sen E-Mail: ritwika.sen@kellogg.northwestern.edu Esau Tugume E-Mail: tugume.esau@brac.net

Resilience in Vertical Supply Chains - Grossman, Gene M; Helpman, Elhanan; Sabal, Alejandro (National Bureau of Economic Research Working Paper Series, 2023)
Forward-looking investments determine the resilience of firms' supply chains. Such investments confer externalities on other firms in the production network. We compare the equilibrium and optimal allocations in a general equilibrium model with an arbitrary number of vertical production tiers. Our model features endogenous investments in resilience, endogenous formation of supply links, and sequential bargaining over quantities and payments between firms in successive tiers. We derive policies that implement the first-best allocation, allowing for subsidies to input purchases, network formation, and investments in resilience. The first-best policies depend only on production function parameters of the pertinent tier. When subsidies to transactions are infeasible, the second-best subsidies for resilience and network formation depend on production function parameters throughout the network, and subsidies are larger upstream than downstream whenever the bargaining weights of buyers are non-increasing along the chain.
Author contact info: Gene M. Grossman International Economics Section Department of Economics Princeton University Princeton, NJ 08544 Tel: 609/258-4823 Fax: 609/258-1374 E-Mail: grossman@princeton.edu Elhanan Helpman Department of Economics Harvard University 1875 Cambridge Street Cambridge, MA 02138 Tel: 617-495-4690 Fax: 617-495-7730 E-Mail: ehelpman@harvard.edu Alejandro Sabal Department of Economics Princeton University Princeton, NJ 08544 Tel: 6099558945 E-Mail: asb3@princeton.edu

Forest Fires: Why The Large Year-to-Year Variation in Forests Burned? - Apt, Jerome; Epple, Dennis; Sowell, Fallaw (National Bureau of Economic Research Working Paper Series, 2023)
Quantifying factors giving rise to temporal variation in forest fires is important for advancing scientific understanding and improving fire prevention. We demonstrate that eighty percent of the large year-to-year variation in forest area burned in California can be accounted for by variation in temperature, precipitation, housing construction, electricity transmission, and ocean surface temperatures in the North Atlantic, North Pacific, and Equatorial Pacific. California is of particular interest because of its large acreage burned and proximity of fires to human populations. We believe our model is the first unified treatment of climatic factors and human activities that affect forest area burned.
Author contact info: Jerome Apt Tepper School of Business Carnegie Mellon University 5000 Forbes Avenue Pittsburgh, PA 15213 USA E-Mail: japt@andrew.cmu.edu Dennis Epple Carnegie Mellon University Tepper School of Business Room 4126 Pittsburgh, PA 15213 Tel: 412/268-1536 E-Mail: epple@cmu.edu Fallaw Sowell Tepper School of Business -- rm 313 Carnegie Mellon University Pittsburgh, PA 15213 Tel: (412)-268-3769 E-Mail: fs0v@andrew.cmu.edu

Financial Aid and Social Mobility: Evidence from Colombia's Ser Pilo Paga - Londoño-Vélez, Juliana; Rodriguez, Catherine; Sanchez, Fabio; Álvarez-Arango, Luis E (National Bureau of Economic Research Working Paper Series, 2023)
The paper studies the impact of financial aid on long-term educational attainment and labor market outcomes in Colombia. In 2014, the government launched a large-scale and generous student loan program called "Ser Pilo Paga." It offered full tuition coverage to students admitted to one of 33 government-certified high-quality universities known for superior test scores, graduation rates, and per-student spending. Notably, completing a bachelor's degree converted the loan into a grant. To qualify, students must score in the top 10% of the standardized high school exit exam and have below-median household wealth. Using RD and DD methodologies, we use nationwide administrative microdata linking all high school test takers, postsecondary attendees, and formal workers to estimate impacts up to eight years after high school. Financial aid improves college enrollment, quality, and attainment, particularly in STEM-related fields. The earnings gains are substantial, growing, and driven partly by high-quality universities improving students' skills, as demonstrated by their performance on Colombia's college graduation exam. A welfare analysis using the MVPF yields over $4.8 per dollar of government spending. Lastly, the program narrowed socioeconomic gaps in college attainment, skill development, and earnings among academically similar students without adversely affecting non-recipients, thereby promoting equity and efficiency.
Author contact info: Juliana Londoño-Vélez Department of Economics University of California, Los Angeles Bunche Hall 8283 Los Angeles, CA 90095 E-Mail: j.londonovelez@econ.ucla.edu Catherine Rodriguez Calle 19 a No. 1-37 Este Bloque W Universidad de los Andes Bogotá, Colombia E-Mail: cathrodr@uniandes.edu.co Fabio Sanchez University of Los Andes Department of Economics Calle 19A # 1 – 37E Bogota Colombia E-Mail: fasanche@uniandes.edu.co Luis E. Álvarez-Arango E-Mail: larango@dnp.gov.co

Industrial Policy and the Great Divergence - Juhász, Réka; Steinwender, Claudia (National Bureau of Economic Research Working Paper Series, 2023)
We discuss recent work evaluating the role of the government in shaping the economy during the long 19th century, a practice we refer to as industrial policy. States deployed a vast variety of different policies aimed at, primarily, but not exclusively, fostering industrialization. A thin, but growing literature has started to evaluate the economic effects of these policies, but many questions remain open for study.
Author contact info: Réka Juhász Vancouver School of Economics University of British Colunbia 6000 Iona Driv Vancouver, BC V6T 1L4 E-Mail: reka.juhasz@ubc.ca Claudia Steinwender Ludwig Maximilian University of Munich Department of Economics Ludwigstr. 28 (Vgb.) Munich D-80539 Germany E-Mail: claudia.steinwender@econ.lmu.de

Aspiring to a Better Future: Can a Simple Psychological Intervention Reduce Poverty? - Orkin, Kate; Garlick, Rob; Mahmud, Mahreen; Sedlmayr, Richard; Haushofer, Johannes; Dercon, Stefan (National Bureau of Economic Research Working Paper Series, 2023)
How do aspirations influence investment decisions for people living in poverty? Does this change as peoples economic conditions improve? To answer these questions, we design a workshop teaching techniques to raise aspirations and plan to achieve them. We cross-randomise this with large unconditional cash transfers in a 415-village, 8,300-person, 1.5-year experiment in Kenya. The workshop substantially raises aspirations, investment, and living standards. But the workshop+cash produces similar effects to cash alone, potentially because cash raises aspirations. Thus, helping people living in poverty set higher aspirations can raise investment and living standards, but improving economic conditions can activate the same process.
Author contact info: Kate Orkin University of Oxford Blavatnik School of Government Walton Street Oxford, OX26GG United Kingdom E-Mail: kate.orkin@merton.ox.ac.uk Rob Garlick Duke Economics 213 Social Sciences Building Box 90097 Durham, NC 27708 USA E-Mail: rob.garlick@gmail.com Mahreen Mahmud 0.47 Streatham Court University of Exeter EXETER EX4 4PU United Kingdom Tel: 07907332767 E-Mail: mahreenm@gmail.com Richard Sedlmayr The Agency Fund E-Mail: richard@agency.fund Johannes Haushofer Department of Economics National University of Singapore 1 Arts Link AS2 #06-02 Singapore 117570 Singapore E-Mail: johannes.haushofer@nus.edu.sg Stefan Dercon Oxford University E-Mail: stefan.dercon@economics.ox.ac.uk

Sexual Harassment in Public Spaces and Police Patrols: Experimental Evidence from Urban India - Amaral, Sofia; Borker, Girija; Fiala, Nathan; Kumar, Anjani; Prakash, Nishith; Sviatschi, Maria Micaela (National Bureau of Economic Research Working Paper Series, 2023)
We conducted a randomized controlled trial to evaluate the impact of an innovative police patrol program on sexual harassment in public spaces in Hyderabad, India. In collaboration with the Hyderabad City Police, we randomized both exposure to police patrols and the visibility of officers by deploying both uniformed and undercover personnel to hotspots. We implemented a novel, high-frequency observation exercise to measure sexual harassment at 350 hotspots, where enumerators took note of all observed instances of sexual harassment and women’s responses in real time. We find that although police patrols had no impact on overall street harassment, the visible policing patrols reduced severe forms of harassment (forceful touching, intimidation) by 27 percent and reduced the likelihood of women leaving the hotspot due to sexual harassment. We uncovered the underlying mechanisms and found that both police visibility and officers’attitudes oward sexual harassment are key to understanding its incidence. While the performance of undercover officers was similar to that of uniformed officers, harassment did not decrease when undercover officers were on patrol. This suggests that the visibility of police officers is critical in deterring perpetrators. Additionally, using lab experiments we find that, on average, police officers were more tolerant of mild street harassment and less inclined to punish offenders in such cases. Correspondingly, we observed in uniformed hotspots a decline in all types of harassment only when assigned officers held stronger personal views on harassment.
Author contact info: Sofia Amaral The World Bank South Asia Gender Innovation Lab E-Mail: s.amaral@worldbank.org Girija Borker The World Bank E-Mail: gborker@worldbank.org Nathan Fiala University of Connecticut 1376 Storrs Rd Unit 4021 Storrs, CT 06269 E-Mail: nathan.fiala@uconn.edu Anjani Kumar Indian Police Service E-Mail: dgpts@outlook.com Nishith Prakash Northeastern University School of Public Policy and Urban Affairs 310 Renaissance Park 1135 Tremont St Boston, MA 02115 E-Mail: n.prakash@northeastern.edu Maria Micaela Sviatschi Department of Economics Princeton University 128 Julis Romo Rabinowitz Princeton, NJ 08544 Tel: 917/628-5267 E-Mail: msviatschi@princeton.edu

Effects of Universal and Unconditional Cash Transfers on Child Abuse and Neglect - Bullinger, Lindsey R; Packham, Analisa; Raissian, Kerri M (National Bureau of Economic Research Working Paper Series, 2023)
We estimate the effects of cash transfers on a severe measure of child welfare: maltreatment. To do so, we leverage year-to-year household variation from a universal and unconditional cash transfer, the Alaska Permanent Fund Dividend (PFD). Using linked individual-level administrative data on PFD payments and child maltreatment referrals, we show that an additional $1,000 to families in the first few months of a child's life reduces the likelihood that a child is referred to Child Protective Services by age three by 2.0 percentage points, or 10 percent, on average. Estimates indicate that additional cash transfers also reduce child mortality.
Author contact info: Lindsey R. Bullinger School of Public Policy 685 Cherry St. Atlanta, GA 30332 E-Mail: lrbullin@gatech.edu Analisa Packham Department of Economics Vanderbilt University 2301 Vanderbilt Place Nashville, TN 37235 E-Mail: analisa.packham@vanderbilt.edu Kerri M. Raissian 1800 Asylum Avenue, 4th Floor West Hartford, CT 06117 United States E-Mail: kerri.raissian@uconn.edu

Investigator Racial Diversity and Clinical Trial Participation - Alsan, Marcella; Campbell, Romaine A; Leister, Lukas; Ojo, Ayotomiwa (National Bureau of Economic Research Working Paper Series, 2023)
We investigate whether increased racial diversity of clinical trial principal investigators could increase the enrollment of Black patients, which currently lags population and disease-burden shares. We conducted a survey experiment in which respondents were shown a photo of a current NIH investigator in which race (Black/White) was randomized. Sex was also randomized as a relevant benchmark. Black respondents reported 0.35 standard deviation units higher interest in participating in a clinical study led by a race concordant investigator (a 12.6% increase). Sex concordance had no effect. Further analyses indicate that perceived trustworthiness and attractiveness are the most important factors explaining these results.
Author contact info: Marcella Alsan Kennedy School of Government Harvard University 79 John F. Kennedy St. Rubenstein Bldg R403 Cambridge, MA 02138 E-Mail: marcella_alsan@hks.harvard.edu Romaine A. Campbell Department of Economics Harvard University Cambridge, MA 02138 E-Mail: rcampbell@g.harvard.edu Lukas Leister Department of Economics and Business Universitat Pompeu Fabra Carrer de Ramon Trias Fargas, 25 08005 Barcelona Spain E-Mail: lukas.leister@upf.edu Ayotomiwa Ojo Department of Obstetrics and Gynecology Northwestern Memorial Hospital Northwestern University Chicago, IL 60611 E-Mail: ayotomiwa.ojo@nm.org

Unregulated Contaminants in Drinking Water: Evidence from PFAS and Housing Prices - Marcus, Michelle M; Mueller, Rosie (National Bureau of Economic Research Working Paper Series, 2023)
Our understanding of individuals’ response to information about unregulated contaminants is limited. We leverage the highly publicized social discovery of unregulated PFAS (per- and polyfluoroalkyl substances) contamination in public drinking water to study the impact of information about unregulated contaminants on housing prices. Using residential property transaction data, we employ a difference-in-differences research design and show that high profile media coverage about PFAS contamination significantly decreased property values of affected homes. We also find suggestive evidence of residential sorting that may have worsened environmental inequality.
Author contact info: Michelle M. Marcus Department of Economics Vanderbilt University 310 Calhoun Hall Nashville, TN 37240 Tel: 419/392-0361 E-Mail: michelle.marcus@vanderbilt.edu Rosie Mueller 345 Boyer Ave Walla Walla, WA 99362 United States Tel: 5095274914 E-Mail: muellerm@whitman.edu

The Refugee Advantage: English-Language Attainment in the Early Twentieth Century - Abramitzky, Ran; Boustan, Leah Platt; Catron, Peter; Connor, Dylan; Voigt, Rob (National Bureau of Economic Research Working Paper Series, 2023)
The United States has admitted more than 3 million refugees since 1980 through official refugee resettlement programs. Scholars attribute the success of refugee groups to governmental programs on assimilation and integration. Before 1948, however, refugees arrived without formal selection processes or federal support. We examine the integration of historical refugees using a large archive of recorded oral history interviews to understand linguistic attainment of migrants who arrived in the early twentieth century. Using fine-grained measures of vocabulary, syntax and accented speech, we find that refugee migrants achieved a greater depth of English vocabulary than did economic/family migrants, a finding that holds even when comparing migrants from the same country of origin or religious group. Our findings are consistent with the hypothesis that refugees had greater exposure to English or more incentive to learn, due to the conditions of their arrival and their inability to immediately return to their origin country.
Author contact info: Ran Abramitzky Department of Economics Stanford University 579 Jane Stanford Way Stanford, CA 94305 Tel: 650/723-9276 Fax: 650/725-5702 E-Mail: ranabr@stanford.edu Leah Platt Boustan Princeton University Industrial Relations Section Louis A. Simpson International Bldg. Princeton, NJ 08544 Tel: 609-258-7116 E-Mail: lboustan@princeton.edu Peter Catron University of Washington E-Mail: pcatro@nber.org Dylan Connor School of Geographical Sciences and Urban Planning Arizona State University Tempe, AZ 85282 Tel: 3107523771 E-Mail: dsconnor@asu.edu Rob Voigt Northwestern University E-Mail: robvoigt@northwestern.edu

Inequality and Business Cycles - Bilbiie, Florin O; Primiceri, Giorgio; Tambalotti, Andrea (National Bureau of Economic Research Working Paper Series, 2023)
We quantify the connection between inequality and business cycles in a medium-scale New Keynesian model with tractable household heterogeneity, estimated with aggregate and cross-sectional data. We find that inequality substantially amplifies cyclical fluctuations. The primary source of this amplification is cyclical precautionary saving behavior. Savers reduce their consumption to insure themselves against the idiosyncratic risk of large income drops, which rises in recessions.
Author contact info: Florin O. Bilbiie University of Cambridge Austin Robinson Building Sidgwick Avenue Cambridge CB3 9DD United Kingdom Tel: and CEPR E-Mail: florin.bilbiie@gmail.com Giorgio Primiceri Department of Economics Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 847/491-5395 Fax: 847/491-7001 E-Mail: g-primiceri@northwestern.edu Andrea Tambalotti E-Mail: a.tambalotti@gmail.com

Adjusting for Scale-Use Heterogeneity in Self-Reported Well-Being - Benjamin, Daniel J; Cooper, Kristen; Heffetz, Ori; Kimball, Miles S; Zhou, Jiannan (National Bureau of Economic Research Working Paper Series, 2023)
Analyses of self-reported-well-being (SWB) survey data may be confounded if people use response scales differently. We use calibration questions, designed to have the same objective answer across respondents, to measure dimensional (i.e., specific to an SWB dimension) and general (i.e., common across questions) scale-use heterogeneity. In a sample of ~3,350 MTurkers, we find substantial such heterogeneity that is correlated with demographics. We develop a theoretical framework and econometric approaches to quantify and adjust for this heterogeneity. We apply our new estimators in several standard SWB applications. Adjusting for general-scale-use heterogeneity changes results in some cases.
Author contact info: Daniel J. Benjamin University of California Los Angeles Anderson School of Management and David Geffen School of Medicine 110 Westwood Plaza Entrepreneurs Hall Suite C515 Los Angeles, CA 90095 E-Mail: daniel.benjamin@anderson.ucla.edu Kristen B. Cooper Gordon College 229 Jenks 255 Grapevine Road Wenham, MA 01984 E-Mail: kristen.cooper@gordon.edu Ori Heffetz S.C. Johnson Graduate School of Management Cornell University 324 Sage Hall Ithaca, NY 14853 Tel: 607/255-4668 E-Mail: oh33@cornell.edu Miles S. Kimball Economics Building University of Colorado Boulder 261 UCB #212 Boulder, CO 80302 Tel: 303/492-8295 Fax: 303/492-8960 E-Mail: miles.kimball@colorado.edu Jiannan Zhou Shandong University 27 Shanda South Road Jinan, Shandong 250100 China E-Mail: jiannan.zhou@icloud.com

From Happiness Data to Economic Conclusions - Benjamin, Daniel J; Cooper, Kristen; Heffetz, Ori; Kimball, Miles S (National Bureau of Economic Research Working Paper Series, 2023)
Happiness data—survey respondents’ self-reported well-being (SWB)—have become increasingly common in economics research, with recent calls to use them in policymaking. Researchers have used SWB data in novel ways, for example to learn about welfare or preferences when choice data are unavailable or difficult to interpret. Focusing on leading examples of this pioneering research, the first part of this review uses a simple theoretical framework to reverse-engineer some of the crucial assumptions that underlie existing applications. The second part discusses evidence bearing on these assumptions and provides practical advice to the agencies and institutions that generate SWB data, the researchers who use them, and the policymakers who may use the resulting research. While we advocate creative uses of SWB data in economics, we caution that their use in policy will likely require both additional data collection and further research to better understand the data.
Author contact info: Daniel J. Benjamin University of California Los Angeles Anderson School of Management and David Geffen School of Medicine 110 Westwood Plaza Entrepreneurs Hall Suite C515 Los Angeles, CA 90095 E-Mail: daniel.benjamin@anderson.ucla.edu Kristen B. Cooper Gordon College 229 Jenks 255 Grapevine Road Wenham, MA 01984 E-Mail: kristen.cooper@gordon.edu Ori Heffetz S.C. Johnson Graduate School of Management Cornell University 324 Sage Hall Ithaca, NY 14853 Tel: 607/255-4668 E-Mail: oh33@cornell.edu Miles S. Kimball Economics Building University of Colorado Boulder 261 UCB #212 Boulder, CO 80302 Tel: 303/492-8295 Fax: 303/492-8960 E-Mail: miles.kimball@colorado.edu

Time Preferences and Food Choice - Brownback, Andy; Imas, Alex; Kuhn, Michael A (National Bureau of Economic Research Working Paper Series, 2023)
Healthy food choices are a canonical example used to illustrate the importance of time preferences in behavioral economics. However, the literature lacks a direct demonstration that they are well-predicted by incentivized time preference measures. We offer direct evidence by combining a novel, two-question, incentivized time preference measurement with data from a field experiment that includes grocery purchases and consumption. Our present-focus measure is highly predictive of food choice, capturing a number of behaviors consistent with self-control problems, which provides direct evidence for the common assumption that important aspects of nutrition are driven by time preferences.
Author contact info: Andy Brownback University of Arkansas Business Building 423 Fayetteville, AR 72701 E-Mail: abrownback@walton.uark.edu Alex Imas Booth School of Business University of Chicago 5897 S. Woodlawn Avenue Chicago, IL 60637 Tel: 224/392-3669 E-Mail: alex.imas@chicagobooth.edu Michael A. Kuhn Department of Economics 1285 University of Oregon Eugene, OR 97403 E-Mail: mkuhn@uoregon.edu

The Minimum Wage and Inequality Between Groups - Blau, Francine D; Cohen, Isaac; Comey, Matthew L; Kahn, Lawrence; Boboshko, Nikolai (National Bureau of Economic Research Working Paper Series, 2023)
We use wage data from the Current Population Survey Merged Outgoing Rotation Group (CPS MORG) to study the effect of state and federal minimum wage policies on gender, race, and ethnic inequality throughout the wage distribution, focusing on lower-tail inequality between men and women, Blacks and Whites, and Hispanics and Whites. We use estimates from three empirical strategies — two reduced-form, one structural — to provide counterfactual simulations of between-group inequality over four key “epochs” of minimum wage policy changes since 1979. Declines in the real minimum wage during the 1980s slowed progress in narrowing between-group inequality during that period. Fairly muted shifts in national and state policies from 1989 to 1998 and 1998 to 2007 meant that the minimum wage was less important over those time spans. Since 2007, several states have opted for steep minimum wage hikes, which we find have especially improved Hispanics’ relative wages, both because they continue to earn low wages and because they reside disproportionately in those states. Finally, we make predictions about the effect of raising the federal minimum wage to $12. We find that a change of this magnitude would reduce existing between-group wage gaps below the 15th percentile by 25-50% and would therefore have an economically important impact on gender, racial, and ethnic inequality in the present day.
Author contact info: Francine D. Blau ILR School Cornell University 268 Ives Hall Ithaca, New York 14853-3901 Tel: 607/255-4381 Fax: 607/255-4496 E-Mail: fdb4@cornell.edu Isaac Cohen 109 Tower Road Uris Hall 473 Ithaca, NY 14850 E-Mail: ic345@cornell.edu Matthew L. Comey Ford House Office Building Room 502 Washington, DC 20515 Tel: 7034776152 E-Mail: Matthew.Comey@jct.gov Lawrence Kahn ILR School Cornell University 258 Ives Hall Ithaca, NY 14853 Tel: 607-255-0510 Fax: 607-255-4496 E-Mail: lmk12@cornell.edu Nikolai Boboshko 1405 El Camino Real Apt. 810 Redwood City, Cali 94063 United States Tel: 6078825823 E-Mail: nb562@cornell.edu

Centralization and Organization Reproduction: Ethnic Innovation in R&D Centers and Satellite Locations - Kerr, William R (National Bureau of Economic Research Working Paper Series, 2023)
We study the relationship between firm centralization and organizational reproduction in satellite locations. For decentralized firms, the ethnic compositions of inventors in satellite locations mostly resemble their host cities, with little link to the inventor composition of their parent firms' R&D headquarters. For highly centralized firms, by contrast, organizational reproduction has an explanatory power equal to half or more of the host city effect. Reproduction is strongest when a firm exhibits a hands-on approach to the satellite facility, such as cross-facility team collaboration or internal talent mobility.
Author contact info: William R. Kerr Harvard Business School Rock Center 212 Soldiers Field Boston, MA 02163 Tel: 617/496-7021 E-Mail: wkerr@hbs.edu

Economic Consequences of a Regime Change: Overview - Razin, Assaf; Sadka, Efraim (National Bureau of Economic Research Working Paper Series, 2023)
Regime changes toward autocracy typically reshape the judicial framework, effectively eroding the separation of powers and leading the nation toward an autocratic path. Recent instances of regime shift in Hungary, Poland, and Turkey offer templates of democratic erosion through manipulation and “democratic” means. Israel is in now amid a conflicting judicial overhaul. Whereas the manifestations of these patterns differ based on the distinct political, social, and historical contexts of each country, they invariably erode the Rule of Law and the democratic institutions. Their ideological stance sharply contrasts with the democratic norms upheld by major Western nations: the separation of powers, judicial autonomy, and the intricate web of political, civic, and social organizations cultivated since the Enlightenment. These century-old trends have been instrumental in fostering unprecedented prosperity. This paper overviews the economic consequences of regime changes from liberal democracy towards autocracy.
Author contact info: Assaf Razin Eitan Berglas School of Economics Tel Aviv University Tel Aviv 69978 ISRAEL Tel: 972/58-7900033 Fax: 972/3-640-9908 E-Mail: razin@tauex.tau.ac.il Efraim Sadka Tel Aviv University Eitan Berglas School of Economics P.O.B. 39040 Ramat Aviv, Tel Aviv, 69978, ISRAEL E-Mail: sadka@post.tau.ac.il

Bonus Question: Does Flexible Incentive Pay Dampen Unemployment Dynamics? - Gaur, Meghana; Grigsby, John R; Hazell, Jonathon; Ndiaye, Abdoulaye (National Bureau of Economic Research Working Paper Series, 2023)
We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage cyclicality from incentives does not dampen unemployment dynamics: the response of unemployment to shocks is first-order equivalent in an economy with flexible incentive pay and without bargaining, vis-á-vis an economy with rigid wages. Second, wage cyclicality from bargaining dampens unemployment dynamics through the standard mechanism. Third, our calibrated model suggests 46% of wage cyclicality in the data arises from incentives. A standard model without incentives calibrated to weakly procyclical wages, matches unemployment dynamics in our incentive pay model calibrated to strongly procyclical wages.
Author contact info: Meghana Gaur E-Mail: gaur.meghana@gmail.com John R. Grigsby Department of Economics and School of Public and International Affairs Princeton University Princeton, NJ 08544 Tel: 540/319-1889 E-Mail: jg6005@princeton.edu Jonathon Hazell Department of Economics London School of Economics 32 Lincoln's Inn Fields United Kingdom E-Mail: jadhazell@gmail.com Abdoulaye Ndiaye New York University 44 W 4th St Office 7-72 New York, NY 10012 United States Tel: 8572417251 E-Mail: andiaye@stern.nyu.edu

Private Actions in the Presence of Externalities: The Health Impacts of Reducing Air Pollution Peaks but not Ambient Exposure - Berkouwer, Susanna B; Dean, Joshua T (National Bureau of Economic Research Working Paper Series, 2023)
Extensive research has documented that elevated air pollution increases mortality and morbidity, with estimates reaching 8 million deaths per year. Many of the world’s one billion urban poor face both high ambient concentrations and even higher transient peaks. Should government interventions aimed at improving health prioritize reductions in ambient pollution—for example, regulating industrial emissions—or peak pollution? We conduct a field experiment studying the impacts of reducing a notorious source of peak air pollution exposure—biomass cooking—for three years in an urban environment with high ambient pollution. We collect personal, high-frequency particulate matter and carbon monoxide measurements and extensive quantitative and self-reported health measurements. Cooking increases peak PM2.5 exposure by 125 μg/m³ for the control group, but improved stove ownership reduces this by 52 μg/m³—a sizeable 42% reduction in peak cooking emissions. However, ambient pollution of 37.5 μg/m³ largely negates any impact on average air pollution exposure. The reduction in peak cooking emissions generates a 0.24 standard deviation reduction in short-term self-reported respiratory symptoms. However, we can rule out meaningful improvements in blood pressure, blood oxygen, and a wide array of self-reported diagnoses. Ambient air pollution dampens the health benefits from private technology adoption, and a government seeking to generate chronic health improvements will likely need to address negative externalities through environmental regulation. Still, despite the importance of ambient pollution, the $40 stove generates $86 in annual energy savings and reduces CO₂ emissions at $4.9 per ton when factoring in additionality rates, suggesting government subsidies would generate large societal benefits.
Author contact info: Susanna B. Berkouwer The Wharton School University of Pennsylvania 322 Vance Hall 3733 Spruce Street Philadelphia, PA 19104 E-Mail: sberkou@wharton.upenn.edu Joshua T. Dean University of Chicago Booth School of Business 5807 S Woodlawn Ave Chicago, IL 60637 E-Mail: joshua.dean@chicagobooth.edu

Credit Supply Shocks and Firm Dynamics: Evidence from Brazil - Bazzi, Samuel; Muendler, Marc-Andreas; Oliveira, Raquel F; Rauch, James E (National Bureau of Economic Research Working Paper Series, 2023)
We explore how financial constraints distort the entry decisions among otherwise productive entrepreneurs and limit growth of promising young firms. A model of liquidity-constrained entrepreneurs suggests that the easing of credit constraints can induce more entry of firms with greater long-run growth potential than the easing of conventional entry barriers would bring about. We explore this growth mechanism using a large-scale program to expand the supply of credit to small and medium enterprises in Brazil. Local credit supply shocks generate greater firm entry but also greater exit with no effect on short-run employment growth in the formal sector. However, credit expansions increase average capability among entering firms, which enter at larger size, survive longer, and grow faster. These firm dynamics are more pronounced in areas with weaker credit markets ex ante and consistent with local bank branches using cheap targeted credit lines to expand lending more broadly. Our findings provide new evidence on the general equilibrium effects of credit supply expansions.
Author contact info: Samuel Bazzi University of California, San Diego School of Global Policy and Strategy 9500 Gilman Drive, 0519 La Jolla, CA 92093 E-Mail: sbazzi@ucsd.edu Marc-Andreas Muendler Department of Economics, 0508 University of California, San Diego 9500 Gilman Drive La Jolla, CA 92093-0508 Tel: 858/534-4799 Fax: 858/534-7040 E-Mail: muendler@ucsd.edu Raquel F. Oliveira Central Bank of Brazil Departamento de Estudos e Pesquisas Av. Paulista, 1804 Bela Vista Sao Paulo, SP 01310-0922 Brazil E-Mail: raquel.oliveira@bcb.gov.br James E. Rauch Department of Economics University of California, San Diego La Jolla, CA 92093-0508 Tel: 858/534-2405 Fax: 858/534-7040 E-Mail: jrauch@ucsd.edu

Cash Transfers and Social Preferences of Children - Haushofer, Johannes; Larreboure, Magdalena; Lowes, Sara; Mait, Leon (National Bureau of Economic Research Working Paper Series, 2023)
We study the effects of an unconditional cash transfer program on social preferences of children. The program allocated $1,076 to randomly selected households in rural Kenya. We measure the social preferences of 4,022 children from 1,687 households with survey questions and incentivized behavioral games three years after the intervention. We distinguish between the direct effects on children of recipient households and the spillover effects on children of neighboring households. We do not find consistent evidence that children from treatment and spillover groups are more or less prosocial than children from the control group. Additionally, we find no persistent economic effects of the program. We find some evidence of reduced psychological well-being among adults and children in spillover households.
Author contact info: Johannes Haushofer Department of Economics National University of Singapore 1 Arts Link AS2 #06-02 Singapore 117570 Singapore E-Mail: johannes.haushofer@nus.edu.sg Magdalena Larreboure Harvard Kennedy School 79 John F. Kennedy Street Cambridge, MA 02138 United States E-Mail: mlarreboure@g.harvard.edu Sara Lowes Department of Economics University of California at San Diego 9500 Gilman Drive La Jolla, CA 92093 E-Mail: slowes@ucsd.edu Leon Mait Department of Psychology Princeton University Peretsman Scully Hall 526 Princeton, NJ 08540 E-Mail: lmait@princeton.edu

High-Dimensional Factor Models and the Factor Zoo - Lettau, Martin (National Bureau of Economic Research Working Paper Series, 2023)
This paper proposes a new approach to the “factor zoo” conundrum. Instead of applying dimension-reduction methods to a large set of portfolios obtained from sorts on characteristics, I construct factors that summarize the information in characteristics across assets and then sort assets into portfolios according to these “characteristic factors”. I estimate the model on a data set of mutual fund characteristics. Since the data set is 3-dimensional (characteristics of funds over time), characteristic factors are based on a tensor factor model (TFM) that is a generalization of 2-dimensional PCA. I find that parsimonious TFM captures over 90% of the variation in the data set. Pricing factors derived from the TFM have high Sharpe ratios and capture the cross-section of fund returns better than standard benchmark models.
Author contact info: Martin Lettau Haas School of Business University of California, Berkeley 545 Student Services Bldg. #1900 Berkeley, CA 94720-1900 Tel: 510/642-6349 Fax: 510/643-1412 E-Mail: lettau@haas.berkeley.edu

Science, Philanthropy, and American Leadership - Conn, Robert W; Cowhey, Peter F; Graff Zivin, Joshua S; Martin, Christopher L (National Bureau of Economic Research Working Paper Series, 2023)
Investments in the US Science, Technology, Engineering, Medicine and Innovation (STEMI) enterprise come from many different sectors and their combined effect crucially enhances the nation’s competitiveness. Philanthropy is an under-appreciated component of this ecosystem, providing $21.5 billion of research funding at universities and non-profits in 2021 or roughly 42% of the federal outlay at these institutions. In this paper, we argue that these decentralized and diverse set of philanthropic funders alter the incentives and behavior within the US research enterprise to make it more risk tolerant and more innovative than government or business funding alone would yield. It also enables significant innovation in the development of human capital in STEMI areas. We conclude with a comparison of the US research ecosystem to that of China to understand how the two systems differ, with a particular emphasis on the differentiating role that philanthropy may play in influencing the scientific and economic competitiveness of each nation.
Author contact info: Robert W. Conn 9500 Gilman Drive, MC 0519 La Jolla, CA 92093 USA E-Mail: rconn@ucsd.edu Peter F. Cowhey 9500 Gilman Drive, MC 0519 La Jolla, CA 92093 USA E-Mail: pcowhey@ucsd.edu Joshua S. Graff Zivin University of California, San Diego 9500 Gilman Drive, MC 0519 La Jolla, CA 92093-0519 Tel: 858/822-6438 E-Mail: jgraffzivin@ucsd.edu Christopher L. Martin 1 Sunningvale Lane Christchurch 8053 New Zealand E-Mail: chris.vela.science@gmail.com

Welfare Accounting - Dávila, Eduardo; Schaab, Andreas (National Bureau of Economic Research Working Paper Series, 2023)
This paper develops a welfare accounting decomposition that identifies and quantifies the ultimate origins of welfare gains and losses in general economies with heterogeneous individuals and disaggregated production. The decomposition---exclusively based on preferences and technologies---first separates efficiency from redistribution considerations. Efficiency comprises individual efficiency, which traces gains and losses to reallocating consumption and factor supply across individuals, and production efficiency, which captures allocative efficiency gains and losses due to adjusting intermediate inputs and factors, as well as technical efficiency gains and losses from primitive changes in technologies and factor endowments. Leveraging the decomposition, we characterize efficiency conditions in disaggregated production economies with heterogeneous individuals, extending classic efficiency results. In competitive economies, prices (and wedges) are directly informative about the welfare-relevant statistics that shape the welfare accounting decomposition, which allows us to characterize a generalized Hulten's theorem. We present several minimal examples and a rich application to monetary policy.
Author contact info: Eduardo Dávila Yale University Department of Economics 87 Trumbull Street New Haven, CT 06511 E-Mail: eduardo.davila@yale.edu Andreas Schaab Toulouse School of Economics Toulouse 31000 France E-Mail: as0146@princeton.edu

The International Monetary System and International Financial System as an Analogy to the Copernican Heliocentric system: A simple multi-layers network model with simultaneous regime changes - Bordo, Michael D; Bastidon, Cécile (National Bureau of Economic Research Working Paper Series, 2023)
The evolution of the IMS and IFS in the past several hundred years can be viewed through the lens of the Copernican heliocentric system developed over 500 years ago. We trace out the evolution across regimes of the IMS and IFS in terms of network representations of the Copernican system. We provide a simple, fully testable theoretical model whose assumptions are based on these representations. The IMS and IFS are described by a two-layer graph whose three key features (hub, core, distances) are affected by nonlinear joint regime changes linked to a technological, institutional, geopolitical and regulatory environment variable. We conclude with a discussion of some perspectives of the future of the international monetary and financial systems. Our analysis is based on economic history, theory and some resonant concepts from astrophysics.
Author contact info: Michael D. Bordo Department of Economics Rutgers University 75 Hamilton Street New Brunswick, NJ 08901 Tel: 732/822-7152 Fax: 732/932-7416 E-Mail: bordo@econ.rutgers.edu Cécile Bastidon LEAD, Université de Toulon Faculté des Sciences Economiques 70 Avenue Roger Devoucoux Toulon 83000 France E-Mail: bastidon@univ-tln.fr

Drivers of Change: How Intra-household Preferences Shape Employment Responses to Gender Reform - Abou Daher, Chaza; Field, Erica M; Swanson, Kendal M; Vyborny, Kate H (National Bureau of Economic Research Working Paper Series, 2023)
Billions of women still face legal barriers to economic inclusion, yet it is unclear whether lifting these barriers is sufficient to enhance their economic participation. We conduct a field experiment to quantify the impact of a major legal reform - the lifting of the Saudi women's driving ban - on women's employment by randomizing rationed spaces in driver's training. Two years later, women in the treatment group are 61% more likely to drive, 19% more likely to leave the house unchaperoned, and 35% more likely to be employed. However, they are also 19% more likely to require permission to make purchases. These patterns vary systematically with marital status: although physical mobility increases for all women, treatment effects on employment are only observed among never-married and widowed women, who negotiate employment with their fathers. Married and divorced women with children, over whom husbands and ex-husbands have leverage, actually exit the labor force and experience decreased spending autonomy. We posit that these patterns reflect differences in male family members' support for women's employment. They provide evidence that men's resistance to wives' employment poses a binding constraint to female labor force participation when legal restrictions are relaxed, but also that men are more open to granting their daughters economic rights, as has been posited in the literature. The results underscore the importance of intra-household responses to gender reforms, which have the potential to counteract legal gains in women's freedoms, and help explain why potential economic gains from lifting discriminatory laws often go unrealized.
Author contact info: Chaza Abou Daher E-Mail: c.daher@alwathba.org Erica M. Field Department of Economics Duke University Social Sciences Building Box 90097 Durham, NC 27708 Tel: 919/660-1800 Fax: 919/684-8974 E-Mail: emf23@duke.edu Kendal M. Swanson Durham DURHAM, NC 27707 United States E-Mail: kendal.swanson@duke.edu Kate H. Vyborny Department of Economics 213 Social Sciences Building Duke University USA Box 90097, Durham, NC 27708-0097 E-Mail: kvyborny@gmail.com

Institutional Drift, Property Rights, and Economic Development: Evidence from Historical Treaties - Feir, Donn L; Gillezeau, Rob; Jones, Maggie E.C. (National Bureau of Economic Research Working Paper Series, 2023)
For nearly three centuries, Indigenous peoples within the borders of present-day Canada engaged in treaty-making with the British Crown and other European powers. These treaties regularly formed the colonial legal basis for access to Indigenous lands. However, treaties were not negotiated everywhere, including in regions subsequently settled by Europeans. Consequentially, there is substantial regional variation in the legal status of occupied lands, jurisdiction over natural resources, and state commitments to Indigenous nations. We study how these legal institutions have shaped the path of economic development in Indigenous communities. Using restricted-access census data, we show that historical treaties substantially lower income in Indigenous communities today. We argue that this results from the constitutional and legal recognition of Aboriginal rights and title, which have dramatically increased bargaining power and, consequently, income growth in non-treaty Indigenous communities.
Author contact info: Donn L. Feir Department of Economics University of Victoria PO Box 1700 STN CSC Victoria, BC V8W 2Y2 E-Mail: dfeir@uvic.ca Rob Gillezeau 105 St. George St. Rotman School of Management University of Toronto Toronto, ON M5S 3E6 Canada Tel: 2508575381 E-Mail: rob.gillezeau@utoronto.ca Maggie E.C. Jones Economics Department Emory University Rich Memorial Building 1602 Fishburne Drive Atlanta, GA 30322 Tel: 404-727-6364 E-Mail: maggie.ec.jones@gmail.com

Education Gradients in Parental Time Investment and Subjective Well-being - Kalil, Ariel; Mayer, Susan; Delgado, William; Gennetian, Lisa A (National Bureau of Economic Research Working Paper Series, 2023)
College-educated mothers spend substantially more time in intensive childcare than less educated mothers despite their higher opportunity cost of time and working more hours. Using data from the 2010–2013 and 2021 waves of the Well-being Module of the American Time Use Survey, we investigate this puzzle by testing the hypothesis that college-educated mothers enjoy childcare more. We find that among all mothers, spending time in childcare is associated with higher positive feelings compared to spending time in other activities. However, college-educated mothers experience no more positive feelings and no fewer negative feelings during intensive childcare than other mothers. Moreover, college-educated mothers report substantially fewer positive feelings for time spent in management activities and substantially more negative feelings for time spent in educational activities with their child. Findings are robust to controlling for a rich set of covariates, mother fixed effects, and simulations to account for selection into intensive childcare.
Author contact info: Ariel Kalil Harris School of Public Policy University of Chicago 1307 E. 60th Street Chicago, IL 60637 E-Mail: akalil@uchicago.edu Susan Mayer Harris School of Public Policy University of Chicago 1307 E. 60th Street Chicago, IL 60637 E-Mail: smayer@uchicago.edu William Delgado 621 Commonwealth Ave Boston, MA 02215 United States Tel: 7737010699 E-Mail: wdelgadophd@gmail.com Lisa A. Gennetian Sanford School of Public Policy Duke University 212 Rubenstein Hall 302 Towerview Road Durham, NC 27708 Tel: 919/613-9341 E-Mail: lisa.gennetian@duke.edu

Illiquid Lemon Markets and the Macroeconomy - Bierdel, Aimé; Drenik, Andres; Herreño, Juan; Ottonello, Pablo (National Bureau of Economic Research Working Paper Series, 2023)
We study the macroeconomic implications of asymmetric information in capital markets. We build a quantitative capital-accumulation model in which capital is traded in illiquid markets, with sellers having more information about capital quality than buyers. Asymmetric information distorts the terms of trade for sellers of high-quality capital, who list higher prices and are willing to accept lower trading probabilities to signal their type. Led by the model's predictions, we measure the distortions from asymmetric information by studying the relationship between listed prices and trading probabilities in a unique dataset of individual capital units listed for trade. By combining the empirical measurement with the model, we show that information asymmetries can play a quantitatively large role during economic crises when the degree of asymmetric information deteriorates.
Author contact info: Aimé Bierdel 420 West 118th Street New York, NY 10027 United States E-Mail: aime.bierdel@columbia.edu Andres Drenik Department of Economics University of Texas at Austin 2225 Speedway Austin, TX 78712 Tel: 512-471-8600 E-Mail: andres.drenik@austin.utexas.edu Juan Herreño Department of Economics University of California, San Diego 9500 Gilman Drive San Diego, CA 92122 USA Tel: 2029996287 E-Mail: jherrenolopera@ucsd.edu Pablo Ottonello Department of Economics University of Maryland Tydings Hall 7343 Preinkert Dr. College Park, MD 20742 E-Mail: ottonell@umd.edu

Minimum Lot Size Restrictions: Impacts on Urban Form and House Price at the Border - Gyourko, Joseph; McCulloch, Sean (National Bureau of Economic Research Working Paper Series, 2023)
We estimate the impact of more stringent minimum lot size restrictions across small border areas of neighboring communities using data from the Wharton Residential Land Use Regulatory Index (WRLURI) surveys. Economically meaningful effects are found on the built environment, not just house prices. Within 100 meters of the borders, housing density as reflected in the number of single family homes per acre is about 11% lower on average in the most restricted communities compared to the least restricted communities in terms of minimum lot sizes. Individual homes are bigger by about 80 square feet, an amount equal to about 4% of typical unit square footage. Lots are over 3,000 square feet larger in the most restricted compared to the least restricted communities’ border areas, an increase equal to 28% of the sample mean lot size. Hence, among the smaller number of homes that exist in the most regulated places, their physical structures are modestly bigger and they sit on appreciably larger lots. Finally, house prices are nearly $30,000 higher in the more regulated border areas compared to the least regulated border areas. This price impact can be accounted for by differences in house quality, structure and lot size specifically, on the two sides of a border.
Author contact info: Joseph Gyourko University of Pennsylvania The Wharton School of Business 3733 Spruce Street Room 448 Vance Hall Philadelphia, PA 19104-6302 E-Mail: gyourko@wharton.upenn.edu Sean E. McCulloch Blistein House, 57 Waterman Street Providence, RI 02906 United States E-Mail: sean_mcculloch@brown.edu

Impulse Response Functions for Self-Exciting Nonlinear Models - Francis, Neville; Owyang, Michael; Soques, Daniel F (National Bureau of Economic Research Working Paper Series, 2023)
We calculate impulse response functions from regime-switching models where the driving variable can respond to the shock. Two methods used to estimate the impulse responses in these models are generalized impulse response functions and local projections. Local projections depend on the observed switches in the data, while generalized impulse response functions rely on correctly specifying regime process. Using Monte Carlos with different misspecifications, we determine under what conditions either method is preferred. We then extend model-average impulse responses to this nonlinear environment and show that they generally perform better than either generalized impulse response functions and local projections. Finally, we apply these findings to the empirical estimation of regime-dependent fiscal multipliers and find multipliers less than one and generally small differences across different states of slack.
Author contact info: Neville Francis Department of Economics University of North Carolina Gardner Hall, CB#3305 Chapel Hill, NC 27599 Tel: 919/966-5327 E-Mail: nfrancis@unc.edu Michael Owyang Research Department Federal Reserve Bank of St. Louis P.O. Box 442 St. Louis, MO 63166-0442 E-Mail: Michael.T.Owyang@stls.frb.org Daniel F. Soques E-Mail: soquesd@uncw.edu

Structural Transformation and Value Change: The British Abolitionist Movement - Figueroa, Valentín; Fouka, Vasiliki (National Bureau of Economic Research Working Paper Series, 2023)
What drives change in a society’s values? From Marx to modernization theory, scholars have identified a connection between structural transformation and social change. To understand how changes in a society’s dominant mode of production affect its dominant values, we examine the case of the movement for the abolition of slavery in the late 18th and early 19th century Britain, one of history’s most well-known campaigns for social change, which coincided temporally with the Industrial Revolution. We argue that structural transformation alters the distribution of power in society and enables groups with distinct values and weak economic interest in the status quo to mobilize for change. Using data on anti-slavery petitions, membership in abolitionist groups, MP voting behavior in Parliament and economic activity, we show that support for abolition was strongly connected to manufacturing at the aggregate and individual level. We rely on biographical data and the analysis of parliamentary speeches to show that industrialists were relatively less reliant on income from slavery and were characterized by a universalist worldview that distinguished them from established elites. Together, our findings suggest that both values and economic interest play a role in driving social change.
Author contact info: Valentín Figueroa E-Mail: valentin.figueroa@uc.cl Vasiliki Fouka Stanford University Department of Political Science 616 Jane Stanford Way Stanford, CA 94305 Tel: 650/723-4862 E-Mail: vfouka@stanford.edu

Utility and Happiness - Kimball, Miles S; Willis, Robert J (National Bureau of Economic Research Working Paper Series, 2023)
Psychologists have developed effective survey methods of measuring how happy people feel at a given time. The relationship between how happy a person feels and utility is an unresolved question. Existing work in Economics either ignores happiness data or assumes that felt happiness is more or less the same thing as flow utility. The approach we propose in this paper steers a middle course between the two polar views that “happiness is irrelevant to Economics” and the view that “happiness is a sufficient statistic for utility.” We argue that felt happiness is not the same thing as flow utility, but that it does have a systematic relationship to utility. In particular, we propose that happiness is the sum of two components: (1) elation–or short-run happiness–which depends on recent news about lifetime utility and (2) baseline mood–or long-run happiness–which is a subutility function much like health, entertainment, or nutrition. In principle, all of the usual techniques of price theory apply to baseline mood, but the application of those techniques is complicated by the fact that many people may not know the true household production function for baseline mood. If this theory is on target, there are two reasons data on felt happiness is important for Economics. First, short-run happiness in response to news can give important information about preferences. Second, long-run happiness is important for economic welfare in the same way as other higher-order goods such as health, entertainment, or nutrition.
Author contact info: Miles S. Kimball Economics Building University of Colorado Boulder 261 UCB #212 Boulder, CO 80302 Tel: 303/492-8295 Fax: 303/492-8960 E-Mail: miles.kimball@colorado.edu Robert J. Willis Professor of Economics, Emeritus University of Michigan 1001 Laurel St. Apt. 323 San Carlos, CA 94070 E-Mail: rjwillis@isr.umich.edu

The Importance of a Helping Hand in Education and in Life - Gallego, Francisco; Oreopoulos, Philip; Spencer, Noah (National Bureau of Economic Research Working Paper Series, 2023)
This paper discusses the importance of incorporating personal assistance into interventions aimed at improving long-term education and labor market success. While existing research demonstrates the cost-effectiveness of low-touch behavioral nudges, this paper argues that the dynamic nature of human capital accumulation requires sustained habits over time. To foster better habits, social connections are critical for encouraging enduring effort and intrinsic motivation. The paper showcases examples from various stages of human capital accumulation, including early childhood, adolescence, and adulthood, in which interventions that incorporate personal assistance substantially out-perform less intensive nudges. We underscore the importance of interactive support, guidance, and motivation in facilitating significant progress and explore the challenges associated with implementing cost-effective policies to provide such assistance.
Author contact info: Francisco Gallego Instituto de Economía and Instituto para el Desarrollo Sustentable Pontificia Universidad Católica de Chile Av. Vicuña Mackenna 4860 Macul, Santiago Chile Tel: 56-2-354-4321 E-Mail: fgallego@puc.cl Philip Oreopoulos Department of Economics University of Toronto 150 St. George Street Toronto, ON M5S 3G7 E-Mail: philip.oreopoulos@utoronto.ca Noah Spencer Department of Economics University of Toronto 150 St. George Street Toronto, ON M5R 3G7 Canada E-Mail: noah.spencer@mail.utoronto.ca

Procurement and Infrastructure Costs - Liscow, Zachary; Nober, Will; Slattery, Cailin (National Bureau of Economic Research Working Paper Series, 2023)
Infrastructure costs in the United States are high and rising. The procurement process is one potential cost driver. In this paper we conduct a survey of procurement practices across the 50 states. We survey both employees at each state department of transportation (DOT) and the road builders that win contracts to build and maintain roads. With this survey we are able to create a new dataset of procurement rules and practices across the U.S. and understand what actors on the ground think drive costs. We then assemble a new dataset of project-level infrastructure costs. We correlate the survey practices with our new, detailed data on costs. We find that two important inputs in the procurement process appear to particularly drive costs: (1) the capacity of the DOT procuring the project and (2) the lack of competition in the market for government construction contracts.
Author contact info: Zachary Liscow E-Mail: liscow@gmail.com William H. Nober Columbia University 420 118th Street New York, NY 10027 E-Mail: whn2105@columbia.edu Cailin R. Slattery Business & Public Policy Group Haas School of Business University of California, Berkeley Berkeley, CA 94720 E-Mail: cailin.slattery@berkeley.edu

Going the Extra Mile: Farm Subsidies and Spatial Convergence in Agricultural Input Adoption - Kumar, Naresh; Kapoor, Rolly; Aggarwal, Shilpa; Jeong, Dahyeon; Park, David Sungho; Robinson, Jonathan; Spearot, Alan (National Bureau of Economic Research Working Paper Series, 2023)
Many countries subsidize agricultural inputs but require farmers to travel to retailers to access inputs, just as for normal purchases. What effect do travel costs have on subsidy take-up and input usage, particularly for remote farmers? We analyze Malawi's Farm Input Subsidy Program (FISP), and show that travel-cost-adjusted prices are substantially higher in remote areas. However, subsidy redemption is nearly universal. We make use of a policy change in 2017-19 which took centralized control of beneficiary selection and find that FISP eliminates the sizeable remoteness gradient that exists for non-beneficiaries. Our results demonstrate that subsidy programs may narrow spatial inequities.
Author contact info: Naresh Kumar E-Mail: nkumar18@worldbank.org Rolly Kapoor E-Mail: rokapoor@ucsc.edu Shilpa Aggarwal Indian School of Business Gachibowli, Hyderabad 500032 India E-Mail: shilpa_aggarwal@isb.edu Dahyeon Jeong World Bank E-Mail: dahyeonjeong@worldbank.org David Sungho Park 263 Namsejong-ro Sejong 30149 South Korea E-Mail: park@kdis.ac.kr Jonathan Robinson Department of Economics University of California, Santa Cruz 457 Engineering 2 Santa Cruz, CA 95064 Tel: 831/459-5618 Fax: 831/459-5077 E-Mail: jmrtwo@ucsc.edu Alan Spearot University of California, Santa Cruz Santa Cruz, CA 95064 E-Mail: acspearot@gmail.com

Technological Rivalry and Optimal Dynamic Policy in an Open Economy - Bai, Yan; Jin, Keyu; Lu, Dan (National Bureau of Economic Research Working Paper Series, 2023)
What are a country's policy options in the face of emerging technologies development in a global economy? To answer this question, we examine optimal dynamic policies in an open economy where technology is endogenously accumulated through R&D innovation. Our key insight is that a country has incentives to influence foreign innovation efforts across sectors and over time---giving rise to optimal policies even when the private innovation allocations are (Pareto) efficient. We derive explicit expressions for optimal taxes linked to both an intratemporal and an intertemporal motive to manipulate foreign technology. A country would want to levy higher tariffs in sectors in which it has a comparative advantage, at the same time invoking domestic innovation subsidies during transition. By contrast, optimal policies under exogenous technology call for uniform tariffs across sectors and no innovation policies.
Author contact info: Yan Bai Department of Economics University of Rochester 216 Harkness Hall Rochester, NY 14627 Tel: 585/275-4196 Fax: 585/256-2309 E-Mail: yanbai06@gmail.com Keyu Jin London School of Economics E-Mail: k.jin@lse.ac.uk Dan Lu Department of Economics 9/Fl., Esther Lee Building The Chinese University of Hong Kong E-Mail: danlyu@cuhk.edu.hk

Implications of the Decline in LGBT Rights for Population Mental Health: Evidence from Polish “LGBT-free zones” - Meyerhoefer, Chad; Xue, Bingjin; Poznańska, Anna (National Bureau of Economic Research Working Paper Series, 2023)
We investigate the consequences of anti-LGBT laws in Poland for suicide attempts and fatalities by applying border-area difference-in-differences models to county-level data. We find that annual suicide attempts increased by 16%, or 5 attempts per 100k capita, after the enactment of anti-LGBT statutes. This rise in suicide attempts was concentrated among men, and was associated with 11 additional suicides per 100k individuals aged 30-49. We also find an increase in suicide attempts in areas that deliberated, but subsequently rejected anti-LGBT resolutions, providing evidence that stigmatization of minority groups leads to declines in population mental health.
Author contact info: Chad Meyerhoefer College of Business Lehigh University Rauch Business Center 621 Taylor Street Bethlehem, PA 18015 Tel: 610/758-3445 Fax: 610/758-4677 E-Mail: chm308@lehigh.edu Bingjin Xue 10 Garrison Ave. Office 321 Durham, NH 03824 Tel: 6038623364 E-Mail: bingjin.xue@unh.edu Anna Poznańska Chocimska 24, 00-791 Warsaw Poland E-Mail: apoznanska@pzh.gov.pl

Moral Boundaries - Enke, Benjamin (National Bureau of Economic Research Working Paper Series, 2023)
This article reviews the growing economics literature that studies the politico-economic impacts of heterogeneity in moral boundaries across individuals and cultures. The so-called universalism-versus-particularism cleavage has emerged as a main organizing principle behind various salient features of contemporary political competition, including individual-level and spatial variation in voting, the realignment of rich liberals and poor conservatives, the internal structure of ideology, and the moral content of political messaging. A recurring theme is that the explanatory power of universalism for left-wing policy views and voting is considerably larger than that of traditional economic variables. Looking at the origins of heterogeneity in universalism, an emerging consensus is that cross-group variation is partly economically functional and reflects that morality evolved to support cooperation in economic production. This insight organizes much work on how kinship systems, market exposure, political institutions and ecology have shaped universalism through their impacts on the relative benefits of localized and impersonal interactions.
Author contact info: Benjamin Enke Department of Economics Harvard University Littauer M008 Cambridge, MA 02138 Tel: 617/496-5895 E-Mail: enke@fas.harvard.edu

Reluctant Entrepreneurs: Evidence from China’s SOE Reform - Fang, Hanming; Li, Ming; Wu, Zenan; Zhang, Yapei (National Bureau of Economic Research Working Paper Series, 2023)
We study the impact of state-owned enterprises (SOEs) on the quality of entrepreneurship in China. Using long series of firm registration and performance data, we document that the massive SOE downsizing in the late 1990s significantly improved the quality of entrepreneur- ship. Compared with entrepreneurs in other time periods, firms founded by the reluctant entrepreneurs induced by the SOE layoffs have better performances. To explain these results, we present a simple model of occupational choices where high-skilled individuals obtain a higher value than low-skilled individuals from the benefits offered by SOE jobs, leading them to select into the SOE sector in the pre SOE reform era. When the SOE sector was downsized, some high-skilled SOE employees were reluctantly unleashed into entrepreneurship. We also provide corroborating evidence for other implications of the model.
Author contact info: Hanming Fang Department of Economics Ronald O. Perelman Center for Political Science and Economics University of Pennsylvania 133 South 36th Street, Suite 150 Philadelphia, PA 19104 Tel: 215-898-7767 Fax: 215-573-2057 E-Mail: hanming.fang@econ.upenn.edu Ming Li School of Management and Economics Chinese University of Hong Kong, Shenzhen Longxiang Avenue 2001 Shenzhen, Guangdong China E-Mail: liming2020@cuhk.edu.cn Zenan Wu School of Economics Peking University Beijing, China E-Mail: zenan@pku.edu.cn Yapei Zhang ShanghaiTech University School of Entrepreneurship and Management Shanghai, China China E-Mail: zhangyp3@shanghaitech.edu.cn

The Effect of Multitasking on Educational Outcomes and Academic Dishonesty - Lavy, Victor (National Bureau of Economic Research Working Paper Series, 2023)
School authorities, universities, and employers often schedule multiple tests on the same day or week, causing overlapping exam preparation and a dense testing schedule. This multitask learning can be intense, under pressure, and challenge the student’s mental and physical perseverance. As a result, it can compromise performance relative to a more ‘relaxed’ schedule. This paper examines the consequences of multitasking for test scores and cheating in exams and its implications for the ability and gender cognitive gap. The empirical context is high-stakes exit exams in Israel, done at the end of high school. I leverage the empirical setting on two natural experiments to estimate the causal effect of this multitasking learning. The first exploits random variation in the number of weekly tests—the second hinges on days with multiple exams versus days with a single exam. The results show several important regularities. First, the number of exams in a day or a week harms test performance. Second, these effects are evidenced for high- and low-ability students, both boys and girls. They are much more extensive for immigrants than natives. Third, the harm of such multitasking is larger in tests later in the schedule, daily or weekly. Fourth, these effects are larger in tests of STEM subjects. Fifth, dense exam schedules increase the likelihood of students behaving dishonestly in exams.
Author contact info: Victor Lavy Department of Economics University of Warwick Coventry, CV4 7AL United Kingdom Tel: 44(0) 24 7657 4158 E-Mail: v.lavy@warwick.ac.uk

Monetary Policy and Innovation - Ma, Yueran; Zimmermann, Kaspar (National Bureau of Economic Research Working Paper Series, 2023)
We document that monetary policy has a substantial impact on innovation activities. After a tightening shock of 100 basis points, research and development (R&D) spending declines by about 1 to 3 percent and venture capital (VC) investment declines by about 25 percent in the following 1 to 3 years. Patenting in important technologies, as well as a patent-based aggregate innovation index, declines by up to 9 percent in the following 2 to 4 years. Based on previous estimates of the sensitivity of output to innovation activities, these magnitudes imply that output could be 1 percent lower after another 5 years. Monetary policy can influence innovation activities by changing aggregate demand and correspondingly the profitability of innovation, and by changing financial market conditions. Both channels appear relevant in the data. Our findings suggest that monetary policy may affect the productive capacity of the economy in the longer term, in addition to the well-recognized near-term effects on economic outcomes.
Author contact info: Yueran Ma Booth School of Business University of Chicago 5807 S. Woodlawn Avenue Chicago, IL 60637 Tel: E-Mail: Yueran.Ma@chicagobooth.edu Kaspar Zimmermann Adickesallee 32-34 Frankfurt am Main 60322 Germany E-Mail: kaspar.zimmermann@fs.de

You Can Lead a Horse to Water: Spatial Learning and Path Dependence in Consumer Search - Hodgson, Charles; Lewis, Gregory (National Bureau of Economic Research Working Paper Series, 2023)
We develop and estimate a model of consumer search with spatial learning. Consumers make inferences from previously searched objects to unsearched objects that are nearby in attribute space, generating path dependence in search sequences. The estimated model rationalizes patterns in data on online consumer search paths: search tends to converge to the chosen product in attribute space, and consumers take larger steps away from rarely purchased products. Eliminating spatial learning reduces consumer welfare by 13%: cross-product inferences allow consumers to locate better products in a shorter time. Spatial learning has important implications for product recommendations on retail platforms. We show that consumer welfare can be reduced by unrepresentative product recommendations and that consumer-optimal product recommendations depend both on consumer learning and competition between platforms.
Author contact info: Charles Hodgson Department of Economics Yale University 87 Trumbull Street New Haven, CT 06511 E-Mail: cbchodgson@gmail.com Gregory Lewis E-Mail: greglewis.work@gmail.com

Mobile Money, Interoperability, and Financial Inclusion - Brunnermeier, Markus K; Limodio, Nicola; Spadavecchia, Lorenzo (National Bureau of Economic Research Working Paper Series, 2023)
This paper investigates the tradeoff between competition and financial inclusion resulting from the vertical integration between mobile network and money operators. Joining newly assembled data on mobile money fees through the WayBack machine, with sources on network coverage and financials, we examine the staggering across African operators and countries of platform interoperability – a policy that promotes transactions and competition across mobile money operators. Our results show that interoperability benefits users by lowering mobile money fees and their dispersion across operators. However, these positive effects are offset by a decrease in mobile towers and network coverage, especially in rural and poor districts, which, in turn, leads to a lower financial inclusion. We note that combining interoperability with subsidies for rural telecommunications delivers lower fees without hurting coverage.
Author contact info: Markus K. Brunnermeier Princeton University Department of Economics Bendheim Center for Finance Princeton, NJ 08544 Tel: 609/258-4050 Fax: 609/258-0771 E-Mail: markus@princeton.edu Nicola Limodio Via Roentgen, 1 Milan 20136 Italy E-Mail: nicola.limodio@gmail.com Lorenzo Spadavecchia Viale Bligny, 12 Milan 20139 Italy Tel: 0039 3208922080 E-Mail: lorenzo.spadavecchia@unibocconi.it

Intergenerational Mobility of Daughters and Marital Sorting: New Evidence from Imperial China - Keller, Wolfgang; Shiue, Carol H (National Bureau of Economic Research Working Paper Series, 2023)
We study the role of marriage for women's intergenerational mobility during the Ming-Qing (1368-1911) period. Using status information based on the timing of marriage from family histories in Central China, already in the early 1500s it is the case that daughters from rich families attain higher status over their lifetime than daughters from poorer families. This intergenerational status persistence is partly due to marital sorting because daughters from high-status families tend to become the wives of sons who themselves come from rich families. Quantitatively, the correlation of 0.6 between the status of biological and in-law families means that marriage accounts for more than one third of total intergenerational status transmission, while not accounting for marriage overestimates mobility by more than 20 percent. Further underscoring the importance of marriage, typically the status of the in-law family plays a larger role for intergenerational status transmission than the child's biological grandparents. Over the period 1500 to 1900, the degree of marital sorting falls, as does intergenerational persistence. Lower investments in the marriage market to find a good match for a daughter go hand in hand with the fall in the returns to son education due to the decline of China's civil service examination.
Author contact info: Wolfgang Keller Department of Economics University of Colorado, Boulder Boulder, CO 80309-0256 Tel: 303/735 5507 Fax: 303/492 8960 E-Mail: Wolfgang.Keller@colorado.edu Carol H. Shiue Department of Economics University of Colorado at Boulder Boulder, CO 80309 E-Mail: carol.shiue@colorado.edu

High-Quality Early-Childhood Education at Scale: Evidence from a Multisite Randomized Trial - Dougan, William R; García, Jorge Luis; Polovnikov, Illia (National Bureau of Economic Research Working Paper Series, 2023)
We offer a new analysis of a large-scale trial of an early-childhood education program that targeted premature, low-birthweight children. This targeting heavily oversampled twins, whose outcomes differed significantly from singletons’. Singletons’ gains in short-term cognition and age-18 non-cognitive skills were comparable to those of the Perry Preschool and Carolina Abecedarian Projects, supporting those programs’ scalability. For twins, however, the program generated smaller positive short-term gains and negative age-18 impacts. These outcome differences arise from differences in parents’ response to the program. A household production model suggests that the possibility of jointly supplying parenting to twins helps explain those differences.
Author contact info: William R. Dougan John E. Walker Department of Economics Clemson University 318B Wilbur O. and Ann Powers Hall Clemson, SC 29634 E-Mail: douganw@clemson.edu Jorge Luis García John E. Walker Department of Economics Clemson University 309-C Wilbur O. and Ann Powers Hall Clemson, SC 29634 Tel: 864/656-3481 E-Mail: jlgarci@clemson.edu Illia Polovnikov 332B Campion Hall 140 Commonwealth Avenue Chestnut Hill, MA 02467 E-Mail: polovnik@bc.edu

The Reserve Supply Channel of Unconventional Monetary Policy - Diamond, William F; Jiang, Zhengyang; Ma, Yiming (National Bureau of Economic Research Working Paper Series, 2023)
We find that central bank reserves injected by QE crowd out bank lending. We estimate a structural model with cross-sectional instrumental variables for deposit and loan demand. Our results are determined by the elasticity of loan demand and the impact of reserve holdings on the cost of supplying loans. The reserves injected by QE raise loan rates by 8.2 basis points, and each dollar of reserves reduces bank lending by 8.1 cents. Our results imply that a large injection of central bank reserves has the unintended consequence of crowding out bank loans because of bank balance sheet costs.
Author contact info: William F. Diamond The Wharton School University of Pennsylvania 3620 Locust Walk Philadelphia, PA 19104 E-Mail: diamondw@wharton.upenn.edu Zhengyang Jiang Kellogg School of Management Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 847/491-2848 E-Mail: zhengyang.jiang@kellogg.northwestern.edu Yiming Ma Columbia University Columbia Business School E-Mail: ym2701@columbia.edu

Consumer Surveillance and Financial Fraud - Bian, Bo; Pagel, Michaela; Tang, Huan; Raval, Devesh (National Bureau of Economic Research Working Paper Series, 2023)
In today’s digital economy, firms near constantly collect, analyze, and profit from consumers’ personal information, which might expose consumers to financial fraud. We examine the effects of Apple’s App Tracking Transparency (ATT) policy, which significantly curtailed data collection and sharing on the iOS platform. Using zip code level variation in iOS user shares, we show that ATT substantially reduced fraud complaints. The effects are concentrated in complaints that have more relevant narratives and in complaints about companies engaging in intensive consumer surveillance and lacking data safeguards. Our evidence quantifies one of the main harms of lax privacy standards.
Author contact info: Bo Bian UBC Sauder School of Business 2053 Main Mall, Vancouver, BC V6T 1Z2 Vancouver Canada E-Mail: bo.bian@sauder.ubc.ca Michaela Pagel Washington University Olin Business School John Simon Hall 242 1 Brookings Drive St. Louis, MO 63130 E-Mail: mpagel@wustl.edu Huan Tang 3620 Locust Walk 2300 Steinberg-Dietrich Hall Philadelphia, PA 19104 United States Tel: (215) 898-7622 E-Mail: huan.ht.tang@gmail.com Devesh Raval Federal Trade Commission E-Mail: devesh.raval@gmail.com

Provider Payment Incentives: Evidence From The U.S. Hospice Industry - Coe, Norma; Rosenkranz, David A (National Bureau of Economic Research Working Paper Series, 2023)
Moral hazard and provider-induced demand may contribute to overutilization of scarce health care resources. The U.S. health care system includes several compensatory cost-containment mechanisms, but their effects depend on how patients and providers respond. We investigate hospice programs’ responses to a cap in the Medicare hospice benefit on their average annual payments per patient. We estimate their intensive margin responses to the cap by leveraging variation in cap-related financial incentives generated by the policy’s nonlinear design and the transition between fiscal years. We find that programs on track to exceed the cap in the last three months of a fiscal year raise their enrollment rates by 5.7% and their live discharge rates by 4.3% on average, reducing their cap liabilities. The marginal enrollees have longer average remaining lifetimes and are less likely to have been recently hospitalized. Their hospice spells are also more likely to be fragmented by subsequent live discharges. On the extensive margin, we find that cap liabilities are associated with terminations of Medicare provider certification numbers, suggesting that the cap impacts market structure. Current policy discussions about reducing the cap should consider its potential effect on market structure.
Author contact info: Norma Coe University of Pennsylvania Perelman School of Medicine Division of Medical Ethics and Health Policy 423 Guardian Drive Philadelphia, PA 19104 Tel: 215-746-0475 E-Mail: nbcoe@pennmedicine.upenn.edu David A. Rosenkranz E-Mail: darosenkranz@gmail.com

Can Patience Account for Subnational Differences in Student Achievement? Regional Analysis with Facebook Interests - Hanushek, Eric A; Kinne, Lavinia; Sancassani, Pietro; Woessmann, Ludger (National Bureau of Economic Research Working Paper Series, 2023)
Decisions to invest in human capital depend on people’s time preferences. We show that differences in patience are closely related to substantial subnational differences in educational achievement, leading to new perspectives on longstanding within-country disparities. We use social-media data – Facebook interests – to construct novel regional measures of patience within Italy and the United States. Patience is strongly positively associated with student achievement in both countries, accounting for two-thirds of the achievement variation across Italian regions and one-third across U.S. states. Results also hold for six other countries with more limited regional achievement data.
Author contact info: Eric A. Hanushek Hoover Institution Stanford University Stanford, CA 94305-6010 Tel: 650/736-0942 Fax: 650/723-1687 E-Mail: hanushek@stanford.edu Lavinia Kinne Mohrenstrasse 58 Berlin 10117 Germany E-Mail: lkinne@diw.de Pietro Sancassani ifo Center for the Economics of Education Poschingerstr. 5 81679 Munich Germany E-Mail: sancassani.pietro@gmail.com Ludger Woessmann University of Munich ifo Institute and CESifo Poschingerstr. 5 81679 Munich, Germany E-Mail: woessmann@ifo.de

Complexity in Factor Pricing Models - Didisheim, Antoine; Ke, Shikun (Barry); Kelly, Bryan T; Malamud, Semyon (National Bureau of Economic Research Working Paper Series, 2023)
We theoretically characterize the behavior of machine learning asset pricing models. We prove that expected out-of-sample model performance—in terms of SDF Sharpe ratio and test asset pricing errors—is improving in model parameterization (or “complexity”). Our empirical findings verify the theoretically predicted “virtue of complexity” in the cross-section of stock returns. Models with an extremely large number of factors (more than the number of training observations or base assets) outperform simpler alternatives by a large margin.
Author contact info: Antoine Didisheim Extranef 251 University of Lausanne Lausanne, Swit 1015 Switzerland E-Mail: antoine.didisheim@unil.ch Shikun (Barry) Ke E-Mail: barry.ke@yale.edu Bryan T. Kelly Yale School of Management 165 Whitney Ave. New Haven, CT 06511 Tel: 203-432-2221 E-Mail: bryan.kelly@yale.edu Semyon Malamud Swiss Finance Institute @ EPFL Quartier UNIL-Dorigny, Extranef 213 CH - 1015 Lausanne Switzerland E-Mail: semyon.malamud@epfl.ch

Zero-Sum Thinking and the Roots of U.S. Political Divides - Chinoy, Sahil; Nunn, Nathan; Sequeira, Sandra; Stantcheva, Stefanie (National Bureau of Economic Research Working Paper Series, 2023)
We investigate the origins and implications of zero-sum thinking – the belief that gains for one individual or group tend to come at the cost of others. Using a new survey of a representative sample of 20,400 US residents, we measure zero-sum thinking, political preferences, policy views, and a rich array of ancestral information spanning four generations. We find that a more zero-sum mindset is strongly associated with more support for government redistribution, race- and gender-based affirmative action, and more restrictive immigration policies. Furthermore, zero-sum thinking can be traced back to the experiences of both the individual and their ancestors, encompassing factors such as the degree of intergenerational upward mobility they experienced, whether they immigrated to the United States or lived in a location with more immigrants, and whether they were enslaved or lived in a location with more enslavement.
Author contact info: Sahil Chinoy E-Mail: schinoy@g.harvard.edu Nathan Nunn Vancouver School of Economics University of British Columbia 6000 Iona Drive Vancouver, BC V6T 2E8 Canada E-Mail: nathan.nunn@ubc.ca Sandra Sequeira London School of Economics E-Mail: s.sequeira@lse.ac.uk Stefanie Stantcheva Department of Economics Littauer Center 232 Harvard University Cambridge, MA 02138 Tel: 617-496-2614 E-Mail: sstantcheva@fas.harvard.edu

Forward Return Expectations - Gandhi, Mihir; Gormsen, Niels Joachim; Lazarus, Eben (National Bureau of Economic Research Working Paper Series, 2023)
We measure investors’ short- and long-term stock-return expectations using both options and survey data. These expectations at different horizons reveal what investors think their own short-term expectations will be in the future, or forward return expectations. While contemporaneous short-term expectations are not countercyclical across all data sources, we find that forward expectations are consistently countercyclical, and excessively so: in bad times, forward expectations are higher than justified by investors’ own subsequent short-term return expectations. This excess volatility in forward expectations helps account for excess volatility in prices, inelastic demand for equities, and stylized facts about the equity term structure.
Author contact info: Mihir Gandhi E-Mail: mihir.a.gandhi@gmail.com Niels Joachim Gormsen Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 E-Mail: niels.gormsen@chicagobooth.edu Eben Lazarus 545 Student Services Building #1900 Berkeley, CA 94720-1900 E-Mail: lazarus@berkeley.edu

The Evolution of Work from Home - Barrero, Jose Maria; Bloom, Nicholas; Davis, Steven J (National Bureau of Economic Research Working Paper Series, 2023)
Full days worked at home account for 28 percent of paid workdays among Americans 20-64 years old, as of mid 2023, according to the Survey of Working Arrangements and Attitudes. That’s about four times the 2019 rate and ten times the rate in the mid-1990s that we estimate in time-use data. We first explain why the big shift to work from home has endured rather than reverting to pre-pandemic levels. We then consider how work-from-home rates vary by worker age, sex, education, parental status, industry and local population density, and why it is higher in the United States than other countries. We also discuss some implications of the big shift for pay, productivity, and the pace of innovation. Over the next five years, U.S. business executives anticipate modest increases in the share of fully remote jobs at their own companies and in the share of jobs with hybrid arrangements, whereby the employee splits the workweek between home and employer premises. Other factors that portend an enduring shift to work from home include the ongoing adaptation of managerial practices and further advances in technologies, products, and tools that support remote work.
Author contact info: Jose Maria Barrero Instituto Tecnologico Autonomo de Mexico Av. Camino a Santa Teresa #930 Col. Heroes de Padierna CP. 10700. Alc. Magdalena Contreras CDMX Mexico E-Mail: barsanjmb@gmail.com Nicholas Bloom Stanford University Department of Economics 579 Jane Stanford Way Stanford, CA 94305-6072 Tel: 650/725-3266 Fax: 650/725-5702 E-Mail: nbloom@stanford.edu Steven J. Davis Hoover Institution Stanford University 434 Galvez Mall Stanford, CA 94305 Tel: 773/251-1795 Fax: 773/834-0733 E-Mail: stevend5@stanford.edu

The State Capacity Ceiling on Tax Rates: Evidence from Randomized Tax Abatements in the DRC - Bergeron, Augustin; Tourek, Gabriel Z; Weigel, Jonathan L (National Bureau of Economic Research Working Paper Series, 2023)
This paper investigates how tax rates and tax enforcement jointly impact fiscal capacity in low-income countries. We study a policy experiment in the D.R. Congo that randomly assigned 38,028 property owners to the status quo tax rate or to a rate reduction. This variation in tax liabilities reveals that the status quo rate lies above the revenue-maximizing tax rate (RMTR). Reducing rates by about one-third would maximize government revenue by increasing tax compliance. We then exploit two sources of variation in enforcement — randomized enforcement letters and random assignment of tax collectors — to show that the RMTR increases with enforcement. Including an enforcement message on tax letters or replacing tax collectors in the bottom quartile of enforcement capacity with average collectors would raise the RMTR by about 40%. Tax rates and enforcement are thus complementary levers. Jointly optimizing tax rates and enforcement would lead to 10% higher revenue gains than optimizing them independently. These findings provide experimental evidence that low government enforcement capacity sets a binding ceiling on the revenue-maximizing tax rate in some developing countries, thereby demonstrating the value of increasing tax rates in tandem with enforcement to expand fiscal capacity.
Author contact info: Augustin Bergeron Department of Economics University of Southern California Kaprielian Hall Los Angeles, CA 90089 Tel: 857/928-5277 E-Mail: augustin.bergeron@usc.edu Gabriel Z. Tourek Department of Economics University of Pittsburgh Pittsburgh, PA 15260 E-Mail: gabriel.tourek@pitt.edu Jonathan L. Weigel Haas School of Business University of California, Berkeley Berkeley, CA 94720 E-Mail: jweigel@berkeley.edu

The Labor Market Consequences of Heat Exposure During Pregnancy - Gao, Xuwen; Song, Ran; Timmins, Christopher; Xia, Fang (National Bureau of Economic Research Working Paper Series, 2023)
We provide the first estimates of the negative impact of exposure to extremely high temperatures during pregnancy on mothers’ labor market outcomes. We employ individual-level survey data from China and leverage plausibly exogenous fluctuations in heat exposure within cities. The results demonstrate that exposure to extremely hot weather during pregnancy reduces women’s wages and labor supply later in life and increases the likelihood that they will work in an unskilled sector. The effects are stronger for heat exposure during the third gestational trimester. The mechanism for these results is that extreme temperature exposure during pregnancy undermines maternal health. Our analysis proposes a new channel through which extreme weather generates health and economic costs.
Author contact info: Xuwen Gao School of Public Affairs Zhejiang University Xihu District Hangzhou City Zhejiang, 310058 P.R. China E-Mail: xwgao@zju.edu.cn Ran Song Yale-NUS College and Department of Economics National University of Singapore 16 #01-220 College Ave West Singapore, 138527 E-Mail: ran.song@yale-nus.edu.sg Christopher Timmins Real Estate and Urban Land Economics Wisconsin School of Business 4291 Grainger Hall 975 University Avenue Madison, WI 53706 Tel: 919-357-0473 E-Mail: ctimmins@wisc.edu Fang Xia No.10, Huixin Dongjie Chaoyang District Beijing 100029 P.R. China E-Mail: xiafang@uibe.edu.cn

Heterogeneous Real Estate Agents and the Housing Cycle - Gilbukh, Sophia; Goldsmith-Pinkham, Paul (National Bureau of Economic Research Working Paper Series, 2023)
The real estate market is highly intermediated, with 90 percent of buyers and sellers hiring an agent to help them transact a house. However, low barriers to entry and fixed commission rates result in a market where inexperienced intermediaries have a large market share, especially following house price booms. Using rich micro-level data on 8.5 million listings and a novel instrumental variables research design, we first show that houses listed for sale by inexperienced real estate agents have a lower probability of selling, and this effect is strongest during the housing bust. We then study the aggregate implications of the distribution of agents' experience on housing market liquidity by building a dynamic entry and exit model of real estate agents with aggregate shocks. We find that 3.7 more listings would have been sold in a flexible commission equilibrium. It would require a six-fold increase in entry costs for real estate agents to achieve this level of liquidity within the fixed commission framework.
Author contact info: Sophia Gilbukh E-Mail: sophia.gilbukh@gmail.com Paul Goldsmith-Pinkham Yale School of Management 165 Whitney Avenue New Haven, CT 06511 E-Mail: paulgp@gmail.com

Selection into Financial Education and Effects on Portfolio Choice - Gemmo, Irina; Michaud, Pierre-Carl; Mitchell, Olivia S (National Bureau of Economic Research Working Paper Series, 2023)
To examine how financial education affects financial outcomes, one must evaluate whether and how sample selection may bias inferences regarding program impacts. Our incentivized experiment reveals how such selection influences estimated financial education effects. The more financially literate and those expecting higher gains pay more to purchase education, while those who consider themselves very financially literate pay less. Using portfolio allocation tasks, we show that the financial education increases portfolio efficiency and welfare by almost 20 and 3 percentage points, respectively. In our setting, selection does not greatly influence estimated program effects, comparing those participating and those who do not.
Author contact info: Irina Gemmo Assistant Professor Finance Department HEC Montreal Canada E-Mail: irina.gemmo@hec.ca Pierre-Carl Michaud HEC Montréal 3000 Côte-Sainte-Catherine Road Montréal QC H3T 2A7 Tel: 514/340-6466 E-Mail: pierre-carl.michaud@hec.ca Olivia S. Mitchell University of Pennsylvania The Wharton School 3620 Locust Walk, St 3000 SH-DH Philadelphia, PA 19104-6302 Tel: 215-898-0424 E-Mail: mitchelo@wharton.upenn.edu

Mistrust, Misperception, and Misunderstanding: Imperfect Information and Conflict Dynamics - Acemoglu, Daron; Wolitzky, Alexander (National Bureau of Economic Research Working Paper Series, 2023)
Building on theories of international relations, we analyze how mistrust (uncertainty about an adversary's preferences or capabilities), misperception (imperfect observation of an adversary's actions), and misunderstanding (non-degenerate higher-order beliefs) can lead to conflict and drive its dynamics. We develop our analysis in the context of three classic models: a one-shot security dilemma or spiral model; a repeated version of the security dilemma that allows for gradual learning about the opponent's type, as well as the possibility of conflict spirals, traps, and cycles; and a deterrence model. We relate these models to the empirical literature and to current and historical episodes of conflict.
Author contact info: Daron Acemoglu Department of Economics, E52-446 Massachusetts Institute of Technology 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/253-1927 Fax: 617/253-1330 E-Mail: daron@mit.edu Alexander Wolitzky Department of Economics Massachusetts Institute of Technology 50 Memorial Drive Cambridge, MA 02142-1347 E-Mail: wolitzky@mit.edu

Estimating the Effects of Government Spending Through the Production Network - Barattieri, Alessandro; Cacciatore, Matteo; Traum, Nora (National Bureau of Economic Research Working Paper Series, 2023)
We estimate the effects of government spending along the supply chain using disaggregated U.S. government procurement data. We first identify sectoral public spending shocks and combine them with input-output tables to measure upstream and downstream exposure through the production network. We then estimate panel local projections and find that sector-specific government purchases have sizable effects both in industries that receive procurement contracts and industries across the supply chain. Employment increases significantly in recipient industries and in sectors supplying intermediate inputs to these industries, while employment decreases downstream. The response of prices and wages suggest higher intermediate-input demand by recipient industries translates into higher intermediate-input prices across the network, accounting for the crowding out of downstream employment. We then estimate the aggregate implications of sectoral shocks and the influence of sectoral heterogeneity using a granular instrumental variable approach. Consistent with existing models, we find that aggregate effects are higher when recipient sectors are more downstream, have stickier prices, and when the government accounts for most of the recipient's total sales.
Author contact info: Alessandro Barattieri World Bank 1818 H st. NW Washington, DC 20433 United States E-Mail: abarattieri@worldbank.org Matteo Cacciatore HEC Montreal Institute of Applied Economics 3000 Côte-Sainte-Catherine Montreal, QC H3T 2A7 Tel: 514/340-1496 Fax: 514/340-6463 E-Mail: matteo.cacciatore@hec.ca Nora Traum HEC Montreal Institute of Applied Economics 3000, chemin de la Cote-Sainte-Catherine Montreal, Quebec H3T 2A7 Canada E-Mail: nora.traum@hec.ca

Generation Next: Experimentation with AI - Charness, Gary; Jabarian, Brian; List, John A (National Bureau of Economic Research Working Paper Series, 2023)
We investigate the potential for Large Language Models (LLMs) to enhance scientific practice within experimentation by identifying key areas, directions, and implications. First, we discuss how these models can improve experimental design, including improving the elicitation wording, coding experiments, and producing documentation. Second, we delve into the use of LLMs in experiment implementation, with an emphasis on bolstering causal inference through creating consistent experiences, improving instruction comprehension, and real-time monitoring of participant engagement. Third, we underscore the role of LLMs in analyzing experimental data, encompassing tasks like pre-processing, data cleaning, and assisting reviewers and replicators in examining studies. Each of these tasks improves the probability of reporting accurate findings. Lastly, we suggest a scientific governance framework that mitigates the potential risks of using LLMs in experimental research while amplifying their advantages. This could pave the way for open science opportunities and foster a culture of policy and industry experimentation at scale.
Author contact info: Gary Charness UC, Santa Barbara E-Mail: charness@econ.ucsb.edu Brian Jabarian The University of Chicago Booth School of Business 5807 S. Woodlawn Chicago, IL 60637 Tel: +13127022101 E-Mail: jabarian@uchicago.edu John A. List Department of Economics University of Chicago 1126 East 59th Chicago, IL 60637 Tel: 301/405-1288 Fax: 301/314-9091 E-Mail: jlist@uchicago.edu

Police Discretion and Public Safety - Gonçalves, Felipe M; Mello, Steven (National Bureau of Economic Research Working Paper Series, 2023)
We study the implications of police discretion for public safety. Highway patrol officers exercise discretion over fines by deviating from statutory fine rules. Relying on variation across officers in this discretionary behavior, we find that harsher sanctions reduce future traffic offending and crash involvement. We then show that officer discretion over sanctions decreases public safety by comparing observed reoffending rates with those in a counterfactual without discretion, estimated using an identification at infinity approach. About half the safety cost of discretion is due to officer decisions which result in harsh sanctions for motorists who are least deterred by them. We provide evidence that this officer behavior is attributable to a preference for allocating harsh fines to motorists with higher recidivism risk, who are also the least responsive to harsher sanctions.
Author contact info: Felipe M. Gonçalves Department of Economics University of California, Los Angeles 8283 Bunche Hall Los Angeles, CA 90095 E-Mail: fgoncalves@econ.ucla.edu Steven Mello Department of Economics Dartmouth College 6106 Rockefeller Hall Hanover, NH 03755 Tel: 603/661-5230 E-Mail: steve.mello@dartmouth.edu

Quantifying Lottery Choice Complexity - Enke, Benjamin; Shubatt, Cassidy (National Bureau of Economic Research Working Paper Series, 2023)
We develop interpretable, quantitative indices of the objective and subjective complexity of lottery choice problems that can be computed for any standard dataset. These indices capture the predicted error rate in identifying the lottery with the highest expected value, where the predictions are computed as convex combinations of choice set features. The most important complexity feature in the indices is a measure of the excess dissimilarity of the cumulative distribution functions of the lotteries in the set. Using our complexity indices, we study behavioral responses to complexity out-of-sample across one million decisions in 11,000 unique experimental choice problems. Complexity makes choices substantially noisier, which can generate systematic biases in revealed preference measures such as spurious risk aversion. These effects are very large, to the degree that complexity explains a larger fraction of estimated choice errors than proximity to indifference. Accounting for complexity in structural estimations improves model fit substantially.
Author contact info: Benjamin Enke Department of Economics Harvard University Littauer M008 Cambridge, MA 02138 Tel: 617/496-5895 E-Mail: enke@fas.harvard.edu Cassidy Shubatt Department of Economics Harvard University Littauer Center 1805 Cambridge Street Cambridge, MA 02138 E-Mail: cshubatt@g.harvard.edu

Exporting the Surveillance State via Trade in AI - Beraja, Martin; Kao, Andrew; Yang, David Y; Yuchtman, Noam (National Bureau of Economic Research Working Paper Series, 2023)
We document three facts about the global diffusion of surveillance AI technology, and in particular, the role played by China. First, China has a comparative advantage in this technology. It is substantially more likely to export surveillance AI than other countries, and particularly so as compared to other frontier technologies. Second, autocracies and weak democracies are more likely to import surveillance AI from China. This bias is not observed in AI imports from the US or in imports of other frontier technologies from China. Third, autocracies and weak democracies are especially more likely to import China’s surveillance AI in years of domestic unrest. Such imports coincide with declines in domestic institutional quality more broadly. To the extent that China may be exporting its surveillance state via trade in AI, this can enhance and beget more autocracies abroad. This possibility challenges the view that economic integration is necessarily associated with the diffusion of liberal institutions.
Author contact info: Martin Beraja Department of Economics, E52-504 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/258-6022 E-Mail: martinberaja@gmail.com Andrew Kao 1805 Cambridge Street Cambridge, MA 02138 USA E-Mail: andrewkao@fas.harvard.edu David Y. Yang Department of Economics Harvard University Littauer Center M-31 Cambridge, MA 02138 E-Mail: davidyang@fas.harvard.edu Noam Yuchtman University of Oxford Department of Economics Manor Rd Oxford OX1 3UQ United Kingdom E-Mail: noam.yuchtman@economics.ox.ac.uk

From Retributive to Restorative: An Alternative Approach to Justice - Adukia, Anjali; Feigenberg, Benjamin; Momeni, Fatemeh (National Bureau of Economic Research Working Paper Series, 2023)
School districts historically approached conflict-resolution from a zero-sum perspective: suspend students seen as disruptive and potentially harm them, or avoid suspensions and harm their classmates. Restorative practices (RP) -- focused on reparation and shared ownership of disciplinary justice -- are designed to avoid this trade-off by addressing undesirable behavior without imparting harm. This study examines Chicago Public Schools' adoption of RP. We identify decreased suspensions, improved school climate, and find no evidence of increased classroom disruption. We estimate a 19% decrease in arrests, including for violent offenses, with reduced arrests outside of school, providing evidence that RP substantively changed behavior.
Author contact info: Anjali Adukia Harris School of Public Policy The University of Chicago 1307 East 60th Street Chicago, IL 60637 E-Mail: adukia@uchicago.edu Benjamin Feigenberg Department of Economics University of Illinois at Chicago University Hall room 706 601 South Morgan Street Chicago, IL 60607 E-Mail: bfeigenb@uic.edu Fatemeh Momeni Crime and Education Labs University of Chicago 33 N LaSalle St. Chicago, IL 60602 E-Mail: fmomeni@uchicago.edu

Economic Decision-Making Skill Predicts Income in Two Countries - Caplin, Andrew; Deming, David J; Leth-Petersen, Søren; Weidmann, Ben (National Bureau of Economic Research Working Paper Series, 2023)
Jobs increasingly require good decision-making. Workers are valued not only for how much they can do, but also for their ability to decide what to do. In this paper we measure the ability to make good decisions about resource allocation, which we call economic decision-making skill. Our assessment requires an intuitive understanding of comparative advantage and is motivated by a model where decision-makers strategically acquire information about factor productivity under time and effort constraints. Economic decision-making skill strongly predicts labor earnings in representative samples of full-time workers in the U.S. and Denmark, conditional on education, IQ, numeracy, and other covariates. Economic decision-making skill is more valuable in management and other decision-intensive occupations.
Author contact info: Andrew Caplin Department of Economics New York University 19 W. 4th Street, 6th Floor New York, NY 10012 Tel: 212/998-8950 Fax: 212/995-3932 E-Mail: andrew.caplin@nyu.edu David J. Deming Harvard Kennedy School Malcolm Wiener Center for Social Policy 79 JFK St Cambridge, MA 02138 Tel: 617/496-4702 E-Mail: david_deming@harvard.edu Søren Leth-Petersen Department of Economics and CEBI University of Copenhagen Oster Farimagsgade 5 Building 26 DK-1353 Copenhagen K Denmark Tel: +45 35323084 E-Mail: Soren.Leth-Petersen@econ.ku.dk Ben Weidmann Harvard Kennedy School Malcolm Wiener Center for Social Policy 79 JFK St Cambridge, MA 02138 E-Mail: benweidmann@hks.harvard.edu

Externalities from Medical Innovation: Evidence from Organ Transplantation - Callison, Kevin; Darden, Michael E; Teltser, Keith F (National Bureau of Economic Research Working Paper Series, 2023)
We evaluate the introduction of direct-acting antiviral (DAA) therapy for Hepatitis C (HCV) on liver transplant allocation in the United States. We develop a model of listing and organ acceptance behavior for patients with both HCV-positive and HCV-negative end-stage liver disease. In the model, DAAs obviate the need for transplant for some HCV-positive patients, which shortens the waiting list, potentially benefiting HCV-negative registrants and inducing marginal HCV-negative patients to list. Using data from the universe of transplants between 2005 and 2019, we find that DAA availability resulted in an additional 5,682 liver transplants to HCV-negative recipients between 2014 and 2019, driven in part by a 37% average annual increase in HCV-negative waiting list registrations. Our estimates imply that DAAs generated $7.52 billion in positive externalities for HCV-negative patients during this period.
Author contact info: Kevin Callison Department of Health Policy and Management School of Public Health and Tropical Medicine Murphy Institute for Political Economy Tulane University 1440 Canal Street New Orleans, LA 70112 E-Mail: kcallison@tulane.edu Michael E. Darden Johns Hopkins University Carey Business School 555 Pennsylvania Ave. 20001 Washington, DC 20001 United States E-Mail: mdarden4@jhu.edu Keith F. Teltser Department of Economics Andrew Young School of Policy Studies Atlanta, GA 30303 Tel: 404-413-0276 E-Mail: kteltser@gsu.edu

Households' Response to the Wealth Effects of Inflation - Schnorpfeil, Philip; Weber, Michael; Hackethal, Andreas (National Bureau of Economic Research Working Paper Series, 2023)
We study the redistributive effects of inflation combining administrative bank data with an information provision experiment during an episode of historic inflation. On average, households are well-informed about prevailing inflation and are concerned about its impact on their wealth; yet, while many households know about inflation eroding nominal assets, most are unaware of nominal-debt erosion. Once they receive information on the debt-erosion channel, households update upwards their beliefs about nominal debt and their own real net wealth. These changes in beliefs causally affect actual consumption and hypothetical debt decisions. Our findings suggest that real wealth mediates the sensitivity of consumption to inflation once households are aware of the wealth effects of inflation.
Author contact info: Philip Schnorpfeil Goethe University Frankfurt House of Finance Theodor-W.-Adorno-Platz 3 60323 Frankfurt a. M. Germany E-Mail: schnorpfeil@finance.uni-frankfurt.de Michael Weber Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-1241 E-Mail: michael.weber@chicagobooth.edu Andreas Hackethal Goethe University Frankfurt House of Finance Theodor-W.-Adorno-Platz 3 60323 Frankfurt a. M. Germany E-Mail: hackethal@em.uni-frankfurt.de

Breakthroughs in Historical Record Linking Using Genealogy Data: The Census Tree Project - Buckles, Kasey; Haws, Adrian; Price, Joseph; Wilbert, Haley E.B. (National Bureau of Economic Research Working Paper Series, 2023)
The Census Tree is the largest-ever database of record links among the historical U.S. censuses, with over 700 million links for people living in the United States between 1850 and 1940. These high-quality links allow researchers in the social sciences and other disciplines to construct a longitudinal dataset that is highly representative of the population. In this paper, we describe our process for creating the Census Tree, beginning with a collection of over 317 million links contributed by the users of a free online genealogy platform. We then use these links as training data for a machine learning algorithm to make new matches, and incorporate other recent efforts to link the historical U.S. censuses. Finally, we introduce a procedure for filtering the links and adjudicating disagreements. Our complete Census Tree achieves match rates between adjacent censuses that are between 69 and 86% for men, and between 58 and 79% for women. The Census Tree includes women and Black Americans at unprecedented rates, containing 314 million links for the former and more than 41 million for the latter.
Author contact info: Kasey Buckles University of Notre Dame Department of Economics 3052 Jenkins-Nanovic Halls Notre Dame, IN 46556 E-Mail: kbuckles@nd.edu Adrian Haws Cornell University 434 Warren Hall Ithaca, NY 14853 E-Mail: aah226@cornell.edu Joseph Price Department of Economics Brigham Young University 2129 WVB Provo, UT 84602 Tel: 801/422-5296 Fax: 801/422-0194 E-Mail: joseph_price@byu.edu Haley E.B. Wilbert University of Notre Dame Department of Economics 3052 Jenkins-Nanovic Halls Notre Dame, IN 46556 E-Mail: hwilbert@nd.edu

The Digital Welfare of Nations: New Measures of Welfare Gains and Inequality - Brynjolfsson, Erik; Collis, Avinash; Liaqat, Asad; Kutzman, Daley; Garro, Haritz; Deisenroth, Daniel; Wernerfelt, Nils; Lee, Jae Joon (National Bureau of Economic Research Working Paper Series, 2023)
Digital goods can generate large benefits for consumers, but these benefits are largely unmeasured in the national accounts, including GDP and productivity. In this paper, we measure welfare gains from 10 popular digital goods across 13 countries by conducting large-scale incentivized online choice experiments on representative samples of nearly 40,000 people. We estimate that these goods—many of which are free to users—generate over $2.5 trillion in aggregate consumer welfare across these countries per year, which is roughly equivalent to 6% of their combined GDP. We find that lower-income individuals and lower-income countries obtain relatively larger welfare gains from these goods compared to higher-income individuals and countries. This suggests that digital goods may reduce inequality in welfare within and across countries by disproportionately benefiting lower-income groups.
Author contact info: Erik Brynjolfsson Stanford Digital Economy Laboratory 353 Jane Stanford Way, Office 136 Stanford, CA 94305 E-Mail: erik.brynjolfsson@gmail.com Avinash Collis Carnegie Mellon University Pittsburgh, PA E-Mail: avinash.collis@gmail.com Asad Liaqat Meta Platforms 1 Hacker Way Menlo Park, CA 94063 E-Mail: asadliaqat@meta.com Daley Kutzman E-Mail: dkutzman@meta.com Haritz Garro Meta 1 Hacker Way Menlo Park, CA 94025 E-Mail: haritz.garro@gmail.com Daniel Deisenroth Meta Platforms 1 Hacker Way Menlo Park, CA 94025 E-Mail: dbdeisenroth@meta.com Nils Wernerfelt Kellogg School of Management 2211 Campus Drive Evanston, IL 60208 E-Mail: nils.wernerfelt@gmail.com Jae Joon Lee Stanford Digital Economy Lab 353 Jane Stanford Way Stanford, CA 94305 E-Mail: jaejoonl@stanford.edu

The Intergenerational Transmission of Housing Wealth - Daysal, N. Meltem; Lovenheim, Michael F; Wasser, David N (National Bureau of Economic Research Working Paper Series, 2023)
Rising wealth inequality has spurred an increased interest in understanding how and why wealth is correlated across generations. We exploit plausibly exogenous variation in housing wealth driven by home price changes in different areas to isolate the causal impact of parental housing wealth during different childhood periods on children’s long-run wealth accumulation. Using population-level Danish administrative data, we find that 27% and 25% of each Krone of parental housing wealth change during early-childhood is transmitted to children’s overall and housing wealth in adulthood, respectively. The corresponding transmission rates for parental housing wealth changes during middle-childhood are 25% and 15%, with a transmission to non-housing wealth of 10%. There is little evidence of transmission of parental housing wealth changes that occur during the teenage years. Examining mechanisms, we find that parental housing wealth changes in early and middle-childhood lead to modest increases in adult children’s home ownership, educational attainment, and earnings. However, earnings and education can explain only 20-30% of the intergenerational transmission of parental wealth gains during these periods. We argue that the transmission of parental housing wealth changes in childhood are driven in large part by changes to unobserved household environment and parental behaviors that are passed on to children and shape their savings behavior in adulthood.
Author contact info: N. Meltem Daysal Department of Economics and CEBI University of Copenhagen Øster Farimagsgade 5 1353 Copenhagen Denmark E-Mail: meltem.daysal@econ.ku.dk Michael F. Lovenheim Brooks School of Public Policy ILR School, and Department of Economics Cornell University 271 Ives Hall Ithaca, NY 14853 E-Mail: mfl55@cornell.edu David N. Wasser 4600 Silver Hill Road Washington, DC 20233 E-Mail: david.n.wasser@census.gov

Incentivizing Innovation in Open Source: Evidence from the GitHub Sponsors Program - Conti, Annamaria; Gupta, Vansh; Guzman, Jorge; Roche, Maria P (National Bureau of Economic Research Working Paper Series, 2023)
Open source is key to innovation, but we know little about how to incentivize it. In this paper, we examine the impact of a program providing monetary incentives to motivate innovators to contribute to open source. The Sponsors program was introduced by GitHub in May 2019 and enabled organizations and individuals alike to reward developers for their open source work on the platform. To study this program, we collect fine-grained data on about 100,000 GitHub users, their activities, and sponsorship events. Using a difference-in-differences approach, we document two main effects. The first is that developers who opted into the program, which does not entail receiving a financial reward, increased their output after the program’s launch. The second is that the actual receipt of sponsorship has a long-lasting negative effect on innovation, as measured by new repository creation, regardless of the amount of money received. We estimate a similar decline in other community-oriented tasks, but not in coding effort. While the program’s net effect on users’ innovative output appears to be positive, our study shows that receiving an extrinsic reward may crowd out developers’ intrinsic motivation, diverting their effort away from community and service-oriented activities on open source.
Author contact info: Annamaria Conti IE Business School Calle de Maria de Molina, 31 Madrid 28006 Spain E-Mail: annamaria.conti@ie.edu Vansh Gupta 2 Leighton St Apt 613 Cambridge, MA 02141 United States Tel: 9176159773 E-Mail: vg224@cornell.edu Jorge Guzman Columbia Business School Kravis Hall, 975 655 W 130th St New York, NY 10027 E-Mail: jag2367@gsb.columbia.edu Maria P. Roche Morgan Hall Soldiers Field Boston, MA 02163 E-Mail: mroche@hbs.edu

Ending Pay for PBM Performance: Consequences for Prescription Drug Prices, Utilization, and Government Spending - Mulligan, Casey B (National Bureau of Economic Research Working Paper Series, 2023)
Proposed “delinking” legislation would prohibit Pharmacy Benefit Managers (PBMs) from being remunerated based on the rebates and discounts they negotiate for drug insurance plans serving Medicare beneficiaries. This policy would significantly change drug pricing and utilization and shift billions of dollars annually from patients and taxpayers to drug manufacturers and retail pharmacy companies. Annual federal spending on Medicare Part D premiums would increase $3 billion to $10 billion plus any concomitant increase in Medicare subsidies for out-of-pocket expenses. All of these consequences stem from the fact that PBMs are hired to obtain rebates and discounts but would no longer be compensated based on their results. The quantitative estimates utilize a large body of economic research showing how much “pay for performance” matters for economic outcomes. The price-theoretic models also account for various market frictions and imperfections including market power, coordination costs, tax distortions, and incomplete innovation incentives.
Author contact info: Casey B. Mulligan University of Chicago Department of Economics 1126 East 59th Street Chicago, IL 60637 Tel: 773/702-9017 Fax: 773/702-8490 E-Mail: c-mulligan@uchicago.edu

How Credible is the Credibility Revolution? - Lang, Kevin (National Bureau of Economic Research Working Paper Series, 2023)
When economists analyze a well-conducted RCT or natural experiment and find a statistically significant effect, they conclude the null of no effect is unlikely to be true. But how frequently is this conclusion warranted? The answer depends on the proportion of tested nulls that are true and the power of the tests. I model the distribution of t-statistics in leading economics journals. Using my preferred model, 65% of narrowly rejected null hypotheses and 41% of all rejected null hypotheses with |t|<10 are likely to be false rejections. For the null to have only a .05 probability of being true requires a t of 5.48.
Author contact info: Kevin Lang Department of Economics Boston University 270 Bay State Road Boston, MA 02215 Tel: 617/353-5694 Fax: 617/353-4001 E-Mail: lang@bu.edu

Wage and Earnings Inequality Between and Within Occupations: The Role of Labor Supply - Erosa, Andrés; Fuster, Luisa; Kambourov, Gueorgui; Rogerson, Richard (National Bureau of Economic Research Working Paper Series, 2023)
We document systematic differences in wage and earnings inequality between and within occupations and show that these differences are intimately related to systematic differences in labor supply across occupations. We then develop a variant of a Roy model in which earnings are a non-linear function of hours, with the extent of this non-linearity differing across occupations. In our theory, the interplay between heterogeneity in tastes for leisure and occupational differences in non-linearities affects the sorting of workers. Moreover, this interplay is crucial to account for the facts on the distributions of hours, wages, and earnings within and across occupations.
Author contact info: Andrés Erosa Universidad Carlos III de Madrid Department of Economics Calle Madrid 126, 28903 Getafe, Madrid Spain E-Mail: aerosa@eco.uc3m.es Luisa Fuster Universidad Carlos III de Madrid Department of Economics Calle Madrid 126, 28903 Getafe, Madrid Spain E-Mail: lfuster@eco.uc3m.es Gueorgui Kambourov Department of Economics University of Toronto 150 St. George Street Toronto, ON M5S 3G7 CANADA Tel: 905/569-4895 Fax: 905/569-4325 E-Mail: g.kambourov@utoronto.ca Richard Rogerson Department of Economics JRR Building Room 292 Princeton University Princeton, NJ 08544 Tel: 609-258-4839 Fax: 609-258-5349 E-Mail: rdr@princeton.edu

Portfolio Management in Private Equity - Brown, Gregory W; Fei, Celine Yue; Robinson, David T (National Bureau of Economic Research Working Paper Series, 2023)
General Partners (GPs) in private equity face a trade-off between focusing their skills and effort on fewer investments to earn higher returns, or investing more broadly to reduce risk through diversification. Using a novel, deal-level dataset of 5,925 global investments from 1999 to 2016, we show that these portfolio considerations are important for understanding fund-level private equity returns. The largest investments in PE funds typically have the lowest returns on average, but are also the least risky. Returns and risk are both increasing in industry or geographic concentration. And while GP-specific return variation (e.g., skill) only accounts for 4%-6% of the total return variation of a typical investment, it accounts for around 40% of the return variation at the fund level. These findings show that GPs use portfolio construction, and not just deal selection, to seek risk-adjusted fund-level returns.
Author contact info: Gregory Brown University of North Carolina at Chapel Hill Kenan-Flagler Business School CB 3440 Kenan Center #301 Chapel Hill, NC 27599 USA Tel: 9199629250 E-Mail: gregwbrown@unc.edu Celine Y. Fei 300 Kenan Center Drive, Kenan Center Chapel Hill, NORT 27599 United States E-Mail: Celine_Fei@kenan-flagler.unc.edu David T. Robinson Fuqua School of Business Duke University 100 Fuqua Drive Durham, NC 27708 Tel: 919/660-8023 Fax: 919/684-2818 E-Mail: davidr@duke.edu

Zero-Sum Thinking, the Evolution of Effort-Suppressing Beliefs, and Economic Development - Carvalho, Jean-Paul; Bergeron, Augustin; Henrich, Joseph; Nunn, Nathan; Weigel, Jonathan L (National Bureau of Economic Research Working Paper Series, 2023)
We study the evolution of belief systems that suppress productive effort. These include concerns about the envy of others, beliefs in the importance of luck for success, disdain for competitive effort, and traditional beliefs in witchcraft. We show that such demotivating beliefs can evolve when interactions are zero-sum in nature, i.e., gains for one individual tend to come at the expense of others. Within a population, our model predicts a divergence between material and subjective payoffs, with material welfare being hump-shaped and subjective well-being being decreasing in demotivating beliefs. Across societies, our model predicts a positive relationship between zero-sum thinking and demotivating beliefs and a negative relationship between zero-sum thinking (or demotivating beliefs) and both material welfare and subjective well-being. We test the model's predictions using data from two samples in the Democratic Republic of Congo and from the World Values Survey. In the DRC, we find a positive relationship between zero-sum thinking and the presence of demotivating beliefs, such as concerns about envy and beliefs in witchcraft. Globally, zero-sum thinking is associated with skepticism about the importance of hard work for success, lower income, less educational attainment, less financial security, and lower life satisfaction. Comparing individuals in the same zero-sum environment, we observe the divergence between material outcomes and subjective well-being predicted by our model.
Author contact info: Jean-Paul Carvalho Department of Economics University of Oxford Manor Road Bldg Manor Road Oxford OX1 3UQ United Kingdom E-Mail: jean-paul.carvalho@economics.ox.ac.uk Augustin Bergeron Department of Economics University of Southern California Kaprielian Hall Los Angeles, CA 90089 Tel: 857/928-5277 E-Mail: augustin.bergeron@usc.edu Joseph Henrich Department of Human Evolutionary Biology Harvard University 11 Divinity Ave Cambridge, MA 02138 E-Mail: joseph.henrich@gmail.com Nathan Nunn Vancouver School of Economics University of British Columbia 6000 Iona Drive Vancouver, BC V6T 2E8 Canada E-Mail: nathan.nunn@ubc.ca Jonathan L. Weigel Haas School of Business University of California, Berkeley Berkeley, CA 94720 E-Mail: jweigel@berkeley.edu

A Theory of Trade Policy Transitions - Bowen, Renee; Broz, J. Lawrence; Rosendorff, B. Peter (National Bureau of Economic Research Working Paper Series, 2023)
Trade policy is set by domestic political bargaining between globalists and protectionists, representing owners of factors specific to export and import-competing sectors respectively. Consistent with the post-Civil War Era of Restriction, protectionists implement high tariffs when status quo tariffs are low. When status quo tariffs are high, reciprocal free trade combined with domestic transfers to protectionists are implemented, explaining the 1930s Era of Reciprocity with Re- distribution. Consensus emerges for Retreat from free trade when imports are high and domestic transfers are low, suggesting that US protectionist turn in the late 2010s was in part due to low levels of social transfers.
Author contact info: Renee Bowen Department of Economics and School of Global Policy and Strategy University of California, San Diego 9500 Gilman Dr. #0519 La Jolla, CA 92093-0519 Tel: 858/534-9980 E-Mail: trbowen@ucsd.edu J. Lawrence Broz Department of Political Science University of California, San Diego 9500 Gilman Dr. #0521 La Jolla, CA 92093-0521 Tel: 8588225750 E-Mail: jlbroz@ucsd.edu B. Peter Rosendorff Wilf Family Department of Politics New York University 19 West 4th Street, Second Floor New York, NY 10012 E-Mail: peter.rosendorff@nyu.edu

Global Supply Chains: The Looming “Great Reallocation” - Alfaro, Laura; Chor, Davin (National Bureau of Economic Research Working Paper Series, 2023)
Global supply chains have come under unprecedented stress as a result of US-China trade tensions, the Covid-19 pandemic, and geopolitical shocks. We document shifts in the pattern of US participation in global value chains over the last four decades, in terms of partner countries, products, and modes, with a focus on the last five years (2017-2022). The available data point to a looming “great reallocation” in supply chain activity: Direct US sourcing from China has decreased, with low-wage locations (principally: Vietnam) and nearshoring/friendshoring alternatives (notably: Mexico) gaining in import share. The production line positioning of the US’ imports has also become more upstream, which is indicative of some reshoring of production stages. We sound several cautionary notes over the policies that have set this reallocation in motion: It is unclear if these measures will reduce US dependence on supply chains linked to China, and there are moreover already signs that prices of imports from Vietnam and Mexico are on the rise.
Author contact info: Laura Alfaro Harvard Business School Morgan Hall 263 Soldiers Field Boston, MA 02163 Tel: 617/495-7981 Fax: 617/496-5985 E-Mail: lalfaro@hbs.edu Davin Chor Tuck School of Business Dartmouth College 100 Tuck Mall Hanover, NH 03755 Tel: 603/646-9835 E-Mail: davin.chor@dartmouth.edu

Limits to Competition: Strategies for Promoting Jurisdictional Cooperation - Agrawal, David R (National Bureau of Economic Research Working Paper Series, 2023)
Inefficiencies from tax competition may result in governments seeking to limit fiscal competition via tax treaties, harmonization, minimum tax rates, or interjurisdictional cooperation. I propose a general model applicable to studying many types of taxing instruments, which allows for the comparison of various policy responses to promote jurisdictional cooperation. Comparing across policies, the model suggests a clear revenue dominance of partial harmonization among a subset of jurisdictions. Minimum tax rates revenue-dominate complete harmonization, but fail to raise revenues as much as partial harmonization. A selective review of the empirical literature identifies evidence consistent with the predictions of the theoretical model. The framework sketched in this paper can be further enriched by researchers seeking to determine the welfare effects of policy responses to interjurisdictional competition.
Author contact info: David R. Agrawal University of Kentucky Martin School of Public Policy 433 Patterson Office Tower Lexington, KY 40506-0027 Tel: 859-257-8608 E-Mail: dragrawal@uky.edu

Large Shocks Travel Fast - Cavallo, Alberto; Lippi, Francesco; Miyahara, Ken (National Bureau of Economic Research Working Paper Series, 2023)
We leverage the inflation upswing of 2022 and various granular datasets to identify robust price-setting patterns following a large supply shock. We show that the frequency of price changes increases dramatically after a large shock. We set up a parsimonious New Keynesian model and calibrate it to fit the steady-state data before the shock. The model features a significant component of state-dependent decisions, implying that large cost shocks incite firms to react more swiftly than usual, resulting in a rapid pass-through to prices -- large shocks travel fast. Understanding this feature is crucial for interpreting recent inflation dynamics.
Author contact info: Alberto Cavallo Harvard Business School Morgan Hall 287 Soldiers Field Boston, MA 02163 Tel: 617-495-6099 Fax: 617-496-5994 E-Mail: acavallo@hbs.edu Francesco Lippi Luiss University E-Mail: francescolippi@gmail.com Ken Miyahara E-Mail: kmiyahara1106@gmail.com

Quantifying Climate Change Loss and Damage Consistent with a Social Cost of Greenhouse Gases - Burke, Marshall; Zahid, Mustafa; Diffenbaugh, Noah; Hsiang, Solomon M (National Bureau of Economic Research Working Paper Series, 2023)
Climate change is generating demonstrable harm around the world. Political and legal efforts have sought to associate climate impacts with specific emissions, including in recent international policy discussion of Loss and Damage (L&D). However, no quantitative definition of L&D exists, nor does there exist a framework for linking specific emissions to specific damages. Here we develop such a framework, linking it explicitly to recent efforts to calculate the social cost of carbon dioxide (SC-CO2), and demonstrate its use in a variety of applications. We calculate that future damages from past emissions, one component of L&D, are at least an order of magnitude larger than historical damages from the same emissions, a more commonly discussed component of L&D: 1 ton of CO2 emitted in 1990 causes $4 in global cumulative discounted damages by 2020 and an additional $327 in discounted damages through 2100 (2% discount rate). These estimates of past and future damages from marginal emissions can be used to calculate L&D for a range of specific emitting activities: for instance, an individual taking one long-haul flight every year for the past decade will generate ~$5500 in damages through 2100, the emissions associated with multiple oil majors between 1988-2015 have already caused $50-200B of cumulative global economic damage by 2020, and CO2 emissions in the US since 1990 have caused ~$2T in global damage through 2020, with India ($293B) and Brazil ($167B) being harmed the most. Carbon removal offers an alternative to transfer payments for settling L&D, but we show that it becomes increasingly ineffective in limiting damages as the delay between emission and recapture increases.
Author contact info: Marshall Burke Doerr School of Sustainability Stanford University Stanford, CA 94305 E-Mail: mburke@stanford.edu Mustafa Zahid E-Mail: mhzahid@stanford.edu Noah Diffenbaugh E-Mail: diffenbaugh@stanford.edu Solomon M. Hsiang Goldman School of Public Policy University of California, Berkeley 2607 Hearst Avenue Berkeley, CA 94720-7320 Tel: 510-643-5751 E-Mail: shsiang@berkeley.edu

Climate Change, Directed Innovation, and Energy Transition: The Long-run Consequences of the Shale Gas Revolution - Acemoglu, Daron; Aghion, Philippe; Barrage, Lint; Hémous, David (National Bureau of Economic Research Working Paper Series, 2023)
We investigate the short- and long-term effects of a natural gas boom in an economy where energy can be produced with coal, natural gas, or clean sources and the direction of technology is endogenous. In the short run, a natural gas boom reduces carbon emissions by inducing substitution away from coal. Yet, the natural gas boom discourages innovation directed at clean energy, which delays and can even permanently prevent the energy transition to zero carbon. We formalize and quantitatively evaluate these forces using a benchmark model of directed technical change for the energy sector. Quantitatively, the technology response to the shale gas boom results in a significant increase in emissions as the US economy is pushed into a “fossil-fuel trap” where long-run innovations shift away from renewables. Overall, the shale gas boom reduces our measure of social welfare under laissez-faire, whereas, combined with carbon taxes and more generous green subsidies, it could have increased welfare substantially.
Author contact info: Daron Acemoglu Department of Economics, E52-446 Massachusetts Institute of Technology 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/253-1927 Fax: 617/253-1330 E-Mail: daron@mit.edu Philippe Aghion College de France 3 Rue D'Ulm 75005 Paris FRANCE E-Mail: philippe.aghion@insead.edu Lint Barrage ETH Zurich D-MTEC Chair of Energy and Climate Economics Zurichbergstrasse 18 8092 Zurich Switzerland E-Mail: lbarrage@ethz.ch David Hémous University of Zurich Schönberggasse 1 8001 Zürich, Switzerland E-Mail: david.hemous@econ.uzh.ch

Composite Sorting - Boerma, Job; Tsyvinski, Aleh; Wang, Ruodu; Zhang, Zhenyuan (National Bureau of Economic Research Working Paper Series, 2023)
We propose a new sorting framework: composite sorting. Composite sorting comprises of (1) distinct worker types assigned to the same occupation, and (2) a given worker type simultaneously being part of both positive and negative sorting. Composite sorting arises when fixed investments mitigate variable costs of mismatch. We completely characterize optimal sorting and additionally show it is more positive when mismatch costs are less concave. We then characterize equilibrium wages. Wages have a regional hierarchical structure − relative wages depend solely on sorting within skill groups. Quantitatively, composite sorting can generate a sizable portion of within-occupations wage dispersion in the US.
Author contact info: Job Boerma University of Wisconsin-Madison Department of Economics 7432 Social Sciences Bldg 1180 Observatory Drive Madison, WI 53706 E-Mail: job.boerma@wisc.edu Aleh Tsyvinski Department of Economics Yale University Box 208268 New Haven, CT 06520-8268 E-Mail: a.tsyvinski@yale.edu Ruodu Wang E-Mail: ruodu.wang@uwaterloo.ca Zhenyuan Zhang E-Mail: zzy@stanford.edu

'We Are Not Guinea Pigs’: The Effects of Disclosure of Medical Misconduct on Vaccine Compliance - Archibong, Belinda; Annan, Francis (National Bureau of Economic Research Working Paper Series, 2023)
In 1996, following an epidemic, Pfizer tested a new drug on 200 children in Muslim Nigeria. 11 children died while others were disabled. We study the effects of the disclosure, in 2000, of the deaths of Muslim children in the Pfizer trials on vaccine compliance among Muslim mothers. Muslim mothers reduced routine vaccination of children born after the 2000 disclosure. The effect was stronger for educated mothers and mothers residing in minority Muslim neighborhoods. The disclosure did not affect other health-seeking behavior of mothers. The results illustrate the potential spillover effects of perceived medical malpractice on future vaccine hesitancy.
Author contact info: Belinda Archibong Department of Economics Columbia University 3009 Broadway New York, NY 10027 Tel: 212/854-8952 E-Mail: ba2207@columbia.edu Francis Annan Department of Agricultural and Resource Economics University of California, Berkeley 207 Giannini Hall #3310 Berkeley, CA 94720-3310 E-Mail: fannan@berkeley.edu

The Importance of Sound Monetary Policy: Some Lessons for Today from Canada’s Experience with Floating Exchange Rates Since 1950 - Bordo, Michael D; Siklos, Pierre (National Bureau of Economic Research Working Paper Series, 2023)
In this paper we revisit the Canadian experience with floating exchange rates since 1950. Canada was a pioneer in successfully adopting a floating exchange rate during the Bretton Woods pegged exchange rate regime. Since then, most advanced countries have followed the Canadian example. A key finding of our paper based on historical narrative and econometric analysis is that economic performance under floating depended on its monetary policy performance as Milton Friedman originally argued in his seminal 1953 article. Canadian monetary policy achieved low and stable inflation once it adopted inflation targeting as a nominal anchor. Also, as Friedman argued, Canada’s floating exchange rate provided it with a modicum of insulation from external shocks, especially commodity price shocks that influenced both the level and volatility of the real exchange rate over the past three decades. The Canadian experience with floating (along with that of other small open economies such as Australia, New Zealand and Sweden) and inflation targeting became a model for the conduct of monetary policy in emerging countries.
Author contact info: Michael D. Bordo Department of Economics Rutgers University 75 Hamilton Street New Brunswick, NJ 08901 Tel: 732/822-7152 Fax: 732/932-7416 E-Mail: bordo@econ.rutgers.edu Pierre Siklos Wilfrid Laurier University 75 University Ave Waterloo, ON, CANADA, N2L 3C5 E-Mail: psiklos@wlu.ca

Contexts of Convenience: Generalizing from Published Evaluations of School Finance Policies - Handel, Danielle V; Hanushek, Eric A (National Bureau of Economic Research Working Paper Series, 2023)
Recent attention to the causal identification of spending impacts provides improved estimates of spending outcomes in a variety of circumstances, but the estimates are substantially different across studies. Half of the variation in estimated funding impact on test scores and over three-quarters of the variation of impacts on school attainment reflect differences in the true parameters across study contexts. Unfortunately, inability to describe the circumstances underlying effective school spending impedes any attempts to generalize from the extant results to new policy situations. The evidence indicates that how funds are used is crucial to the outcomes but such factors as targeting of funds or court interventions fail to explain the existing pattern of results.
Author contact info: Danielle V. Handel SIEPR Stanford University Stanford, CA 94305 E-Mail: dvhandel@stanford.edu Eric A. Hanushek Hoover Institution Stanford University Stanford, CA 94305-6010 Tel: 650/736-0942 Fax: 650/723-1687 E-Mail: hanushek@stanford.edu

Price Discrimination and Mortgage Choice - Coen, Jamie; Kashyap, Anil K; Rostom, May (National Bureau of Economic Research Working Paper Series, 2023)
We characterize the large number of mortgage offers for which people qualify in the United Kingdom. Very few pick the cheapest option, nonetheless the one selected is not usually noticeably more expensive. A few borrowers make very expensive choices. These are most common when the menu they face has many expensive options, and are most likely for high loan-to-value and loan-to-income borrowers. Young people and first-time buyers are more prone to making expensive choices. The dispersion in the mortgage menu is consistent with banks price discriminating for borrowers who might pick poorly, while competing for others who shop more effectively.
Author contact info: Jamie Coen Imperial College Business School Exhibition Road Business School Building, South Kensington Campus London, UK SW7 2AZ London SW72AZ United Kingdom E-Mail: w.coen@imperial.ac.uk Anil K Kashyap Booth School of Business University of Chicago 5807 S. Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-7260 Fax: 773/702-0458 E-Mail: anil.kashyap@chicagobooth.edu May Rostom Bank of England Threadneedle Street London EC2R 8AH UK E-Mail: may.rostom@bankofengland.co.uk

A Cognitive View of Policing - Dube, Oeindrila; MacArthur, Sandy Jo; Shah, Anuj K (National Bureau of Economic Research Working Paper Series, 2023)
What causes adverse policing outcomes, such as excessive uses of force and unnecessary arrests? Prevailing explanations focus on problematic officers or deficient regulations and oversight. Here, we introduce a new, overlooked perspective. We suggest that the cognitive demands inherent in policing can undermine officer decision-making. Unless officers are prepared for these demands, they may jump to conclusions too quickly without fully considering alternative ways of seeing a situation. This can lead to adverse policing outcomes. To test this perspective, we created a new training that teaches officers to more deliberately consider different ways of interpreting the situations they encounter. We evaluated this training using a randomized controlled trial with 2,070 officers from the Chicago Police Department. In a series of lab assessments, we find that treated officers were significantly more likely to consider a wider range of evidence and develop more explanations for subjects' actions. Critically, we also find that training affected officer performance in the field, leading to reductions in uses of force, discretionary arrests, and arrests of Black civilians. Meanwhile, officer activity levels remained unchanged, and trained officers were less likely to be injured on duty. Our results highlight the value of considering the cognitive aspects of policing and demonstrate the power of using behaviorally informed approaches to improve officer decision-making and policing outcomes.
Author contact info: Oeindrila Dube University of Chicago Harris School of Public Policy 1307 E 60th St Chicago, IL 60637 E-Mail: odube@uchicago.edu Sandy Jo MacArthur 692 Languid Lane Simi Valley, CA 93065 US E-Mail: sandyjo.macarthur@gmail.com Anuj K. Shah University of Chicago Booth School of Business 5807 South Woodlawn Avenue Chicago, IL 60637 E-Mail: anuj.shah@chicagobooth.edu

Game, Sweat, Match: Temperature and Elite Worker Productivity - Burke, Marshall; Tanutama, Vincent; Heft-Neal, Sam; Hino, Miyuki; Lobell, David (National Bureau of Economic Research Working Paper Series, 2023)
The effect of hot temperatures on labor productivity is thought to be a key channel through which a warming climate will impact the economy, and these impacts could help explain broader observed relationships between temperature and economic output. Yet for many workers and jobs, especially the high-wage service-economy work that constitutes a large share of total economic output in wealthy nations, productivity is hard to measure and thus climate impacts hard to quantify. We study a high-wage job where individual productivity is readily observable: professional tennis. Using 15 years of data on 177 thousand tennis matches merged to hourly temperature data, we study the effects of temperature on tennis performance in contemporaneous and future matches. Variation in player birthplace and residence allows us to study whether players adapt to heat, and data from betting markets allows us to evaluate whether markets price climate risk. We find that hot temperatures increase contemporaneous errors and retirements, and reduce win probability in the subsequent match. In percentage terms, estimated effects on earnings are smaller than lower-wage settings studied in existing literature. By most measures, top players are less affected by hot temperatures. Most tennis betting markets appear to accurately price climate risk, and temperature impacts do not appear to offer profitable arbitrage opportunities.
Author contact info: Marshall Burke Doerr School of Sustainability Stanford University Stanford, CA 94305 E-Mail: mburke@stanford.edu Vincent Tanutama E-Mail: vincent.tanutama@gmail.com Sam Heft-Neal Center on Food Security and the Environment Stanford University 473 Via Ortega Stanford, CA 94305 E-Mail: sheftneal@stanford.edu Miyuki Hino University of North Carolina at Chapel Hill E-Mail: mhino@unc.edu David Lobell Stanford University Department of Environmental Earth System Science Y2E2 Bldg - MC4205, 473 Via Ortega, room 367 Stanford, CA 94305 E-Mail: dlobell@stanford.edu

The Child Penalty Atlas - Kleven, Henrik; Landais, Camille; Leite-Mariante, Gabriel (National Bureau of Economic Research Working Paper Series, 2023)
This paper builds a world atlas of child penalties in employment based on micro data from 134 countries. The estimation of child penalties is based on pseudo-event studies of first child birth using cross-sectional data. The pseudo-event studies are validated against true event studies using panel data for a subset of countries. Most countries display clear and sizable child penalties: men and women follow parallel trends before parenthood, but diverge sharply and persistently after parenthood. While this pattern is pervasive, there is enormous variation in the magnitude of the effects across different regions of the world. The fraction of gender inequality explained by child penalties varies systematically with economic development and proxies for structural transformation. At low levels of development, child penalties represent a minuscule fraction of gender inequality. But as economies develop — incomes rise and the labor market transitions from subsistence agriculture to salaried work in industry and services — child penalties take over as the dominant driver of gender inequality. The relationship between child penalties and development is validated using historical data from current high-income countries, back to the 1700s for some countries. Finally, because parenthood is often tied to marriage, we also investigate the existence of marriage penalties in female employment. In general, women experience both marriage and child penalties, but their relative importance depends on the level of development. The development process is associated with a substitution from marriage penalties to child penalties, with the former gradually converging to zero.
Author contact info: Henrik Kleven Department of Economics Princeton University 238 Julis Romo Rabinowitz Building Princeton, NJ 08544 Tel: 609/986-6890 E-Mail: kleven@princeton.edu Camille Landais Department of Economics London School of Economics Houghton Street London WC2A 2AE United Kingdom E-Mail: c.landais@lse.ac.uk Gabriel Leite-Mariante Department of Economics London School of Economics Houghton Street London WC2A 2AE United Kingdom E-Mail: G.Leite-Mariante@lse.ac.uk

The Outlook for Long-Term Economic Growth - Jones, Charles I (National Bureau of Economic Research Working Paper Series, 2023)
What are the prospects for economic growth in the United States and other advanced countries over the next several decades? U.S. growth for the past 150 years has been surprisingly stable at 2% per year. Growth theory reveals that in the long run, growth in living standards is determined by growth in the worldwide number of people searching for ideas. At the same time, a growth accounting exercise for the United States since the 1950s suggests that many other factors have temporarily contributed to growth, including rising educational attainment and a rising investment rate in ideas. But these forces are inherently temporary, implying that growth rates could slow in the future. This prediction is reinforced by declining population growth throughout the world. In contrast, other forces could potentially sustain or even increase growth. The emergence of countries such as China and India provides large numbers of people who could search for ideas. Improvements in the allocation of talent --- for example, the rise of women inventors --- and increased automation through artificial intelligence are other potential tailwinds.
Author contact info: Charles I. Jones Graduate School of Business Stanford University 655 Knight Way Stanford, CA 94305-4800 Tel: 650/725-9265 Fax: 650/725-0468 E-Mail: chad.jones@stanford.edu

Stress Testing Structural Models of Unobserved Heterogeneity: Robust Inference on Optimal Nonlinear Pricing - Bodoh-Creed, Aaron L; Hickman, Brent R; List, John A; Muir, Ian; Sun, Gregory K (National Bureau of Economic Research Working Paper Series, 2023)
We propose a suite of tools for empirical market design in adverse-selection settings where point identification based on exogenous price variation is hampered by multi-dimensional unobserved heterogeneity. Despite significant data limitations, we are able to derive informative bounds on counterfactual consumer demand under out-of-sample price changes. These bounds arise because empirically plausible DGPs must respect the Law of Demand and the observed shift(s) in aggregate demand resulting from a known exogenous price change(s). The bounds facilitate robust policy prescriptions using rich, internal data sources similar to those available in many real- world settings, including our empirical application to rideshare demand. Our partial identification approach enables viable, welfare-improving, nonlinear pricing design while achieving robustness against worst-case deviations from baseline model assumptions. As a side benefit, our framework also provides novel insights into optimal experimental design for pricing RCTs.
Author contact info: Aaron L. Bodoh-Creed Amazon, Inc E-Mail: abodoh.creed@gmail.com Brent R. Hickman Olin Business School Washington University in Saint Louis One Brookings Drive, Campus Box #1133 Saint Louis, MO 63130 USA E-Mail: no email available John A. List Department of Economics University of Chicago 1126 East 59th Chicago, IL 60637 Tel: 301/405-1288 Fax: 301/314-9091 E-Mail: jlist@uchicago.edu Ian Muir Walmart E-Mail: muir.ian.m@gmail.com Gregory K. Sun E-Mail: greg.s@wustl.edu

Regulatory Arbitrage or Random Errors? Implications of Race Prediction Algorithms in Fair Lending Analysis - Greenwald, Daniel; Howell, Sabrina T; Li, Cangyuan; Yimfor, Emmanuel (National Bureau of Economic Research Working Paper Series, 2023)
When race is not directly observed, regulators and analysts commonly predict it using algorithms based on last name and address. In small business lending—where regulators assess fair lending law compliance using the Bayesian Improved Surname Geocoding (BISG) algorithm—we document large prediction errors among Black Americans. The errors bias measured racial disparities in loan approval rates downward by 43%, with greater bias for traditional vs. fintech lenders. Regulation using self-identified race would increase lending to Black borrowers, but also shift lending toward affluent areas because errors correlate with socioeconomics. Overall, using race proxies in policymaking and research presents challenges.
Author contact info: Daniel Greenwald Kaufman Management Center 44 West Fourth Street, Office 9-97 United States New York, NY 10012 Tel: 917-921-3557 E-Mail: dlg340@stern.nyu.edu Sabrina T. Howell NYU Stern School of Business KMC 9-93 44 West 4th Street New York, NY 10012 E-Mail: showell@stern.nyu.edu Cangyuan Li E-Mail: cl4220@stern.nyu.edu Emmanuel Yimfor Columbia Business School Department of Finance Columbia University 665 W 130th St. New York, NY 10027 E-Mail: eay2121@columbia.edu

Committing to Grow: Privatizations and Firm Dynamics in East Germany - Akcigit, Ufuk; Alp, Harun; Diegmann, André; Serrano-Velarde, Nicolas (National Bureau of Economic Research Working Paper Series, 2023)
This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment growth rate, a 14% points higher annual productivity growth, and a 3.6% points higher probability of exit for firms with binding employment targets. Our calibrated model further demonstrates that without these targets, aggregate employment would have been 15% lower after 10 years. Additionally, an alternative policy of productivity investment subsidies proved costly and less effective in the short term.
Author contact info: Ufuk Akcigit Department of Economics University of Chicago 1126 East 59th Street Saieh Hall, Office 403 Chicago, IL 60637 E-Mail: uakcigit@uchicago.edu Harun Alp 20th St & C St NW, Washington, DC 20551 Washington, DC 20551 E-Mail: harun.alp@frb.gov André Diegmann Halle Institute for Economic Research (IWH) Kleine Märkerstraße 8 D-06108 Halle (Saale) Halle (Saale), LS 06108 Germany E-Mail: andre.diegmann@iwh-halle.de Nicolas Serrano-Velarde Bocconi University Via Roentgen 1 20135 Milan Italy Tel: 00390258365851 E-Mail: nicolas.serranovelarde@unibocconi.it

Keep Calm and Bank On: Panic-Driven Bank Runs and the Role of Public Communication - Sandri, Damiano; Grigoli, Francesco; Gorodnichenko, Yuriy; Coibion, Olivier (National Bureau of Economic Research Working Paper Series, 2023)
Using a survey with information treatments conducted in the aftermath of SVB’s collapse, we study households’ perspectives on bank stability, the potential for panic-driven bank runs, and the role of public communication. When informed about SVB’s collapse, households become more likely to withdraw deposits, due to both a higher perceived risk of bank failure and higher expected losses on deposits in case of bank failure. Leveraging hypothetical questions and the exogenous variation in beliefs generated by the information treatments, we show that households reallocate deposit withdrawals primarily into other banks and cash, with little passthrough into spending. Information about FDIC insurance and communication about bank stability by the Federal Reserve can reassure depositors, while communication from political leaders only influences their electoral base.
Author contact info: Damiano Sandri Bank for International Settlements Centralbahnplatz 2 4051 Basel Switzerland E-Mail: damiano.sandri@bis.org Francesco Grigoli Georgetown University 600 New Jersey Ave. Washington, DC 20001 E-Mail: fg427@georgetown.edu Yuriy Gorodnichenko Department of Economics 530 Evans Hall #3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510/643-0720 Fax: 510/642-6615 E-Mail: ygorodni@econ.berkeley.edu Olivier Coibion Department of Economics University of Texas at Austin 2225 Speedway Austin, TX 78712 E-Mail: ocoibion@gmail.com

Encouraging Preventative Care to Manage Chronic Disease at Scale - Boone, Claire E; Celhay, Pablo A; Gertler, Paul; Gracner, Tadeja (National Bureau of Economic Research Working Paper Series, 2023)
We study how reminding high-risk patients with chronic disease of their upcoming primary care appointments impacts their health care and behaviors. We leverage a natural experiment in Chile’s public healthcare system that sent reminders before preventative care appointments to over 300,000 patients with type 2 diabetes and hypertension across 315 public primary care clinics between 2013 and 2018. Employing both a difference-in-differences and instrumental variables approach on national administrative patient-level data, we show that reminders increased preventative care visits, which led to more health screenings and improved medication adherence. In this at-scale program, we find substantial variation in implementation fidelity across clinics, which, once accounted for increases our estimates by over a third. Reminders also increased hospitalizations and reduced in-hospital mortality, suggesting an improvement in timely care-seeking behavior among high-risk patients. Our findings inform healthcare settings where patients must first visit their primary care provider for approval before undergoing tests, receiving medication prescriptions, or getting referrals to other specialists. Through intervening at the first step in the cascade of care, we find that a simple intervention like reminders can have large and meaningful downstream effects.
Author contact info: Claire Boone 5807 S Woodlawn Ave Chicago, IL 60637 E-Mail: claireboone@uchicago.edu Pablo A. Celhay School of Government and Economics Institute Pontificia Universidad Católica de Chile Avda. Vicuña Mackenna 4860 Macul, Santiago Chile E-Mail: pacelhay@uc.cl Paul Gertler Haas School of Business University of California, Berkeley Berkeley, CA 94720 Tel: 510/642-1418 E-Mail: gertler@haas.berkeley.edu Tadeja Gracner RAND Corporation 1776 Main St. Santa Monica, CA 90401 E-Mail: tgracner@rand.org

The Fast, the Slow, and the Congested: Urban Transportation in Rich and Poor Countries - Akbar, Prottoy A; Couture, Victor; Duranton, Gilles; Storeygard, Adam (National Bureau of Economic Research Working Paper Series, 2023)
We assemble a new global database on motor vehicle travel speed in over 1,200 large cities in 152 countries. We then estimate comparable city-level indices of travel speed and congestion. Most of the variation in urban travel speed is across countries, not within. National income per capita explains most of this cross-country variation in speed. In rich countries, urban travel is roughly 50% faster than in poor countries. To investigate the link between economic development and mobility, we develop an urban model with endogenous travel, road infrastructure, and land area. The model provides an exact decomposition of how city size, infrastructure, and topography contribute to explaining why urban travel is faster in richer countries. We find that richer countries are faster, mainly because their cities have more major roads and wider land areas. These effects operate by increasing uncongested speed, not by reducing congestion.
Author contact info: Prottoy A. Akbar Ekonominaukio 1 Espoo Finland E-Mail: prottoy.akbar@aalto.fi Victor Couture 6000 Iona Dr. Vancouver School of Economics, UBC Vancouver, British Columbia, CANADA E-Mail: victor.couture@ubc.ca Gilles Duranton E-Mail: duranton@wharton.upenn.edu Adam Storeygard Department of Economics Tufts University 177 College Avenue Medford, MA 02115 Tel: 617/627-6653 E-Mail: Adam.storeygard@tufts.edu

The Limits of Educational Attainment in Mitigating Occupational Segregation Between Black and White Workers - Jardina, Ashley; Blair, Peter Q; Heck, Justin; Debroy, Papia (National Bureau of Economic Research Working Paper Series, 2023)
Past work has documented significant occupational segregation between Black and white workers in the U.S. labor force. Little work, however, has examined racial occupational segregation in recent years or by levels of education and then at the intersection of education and race. In this paper, we contribute to this literature by calculating a dissimilarity index to examine racial occupational segregation between 1980 and 2019, comparing Black and white workers with and without bachelor’s degrees and by developing a Monte Carlo simulation, where we compare the observed levels of segregation to predicted levels of racial occupational segregation by education under race-neutral conditions. First, we find that considerable racial occupation segregation in the labor market persists today regardless of educational attainment and that observed segregation is substantially higher than would be expected at random, conditional on educational attainment, gender, and geography. We compare the types of occupations in which Black and white workers are disproportionately situated, and we show that this segregation has significant consequences for wage inequality between Black and white workers with and without four-year degrees. Overall, our results show that racial occupational desegregation has stalled in the past two decades despite rising educational attainment amongst Black workers.
Author contact info: Ashley Jardina University of Virginia E-Mail: ajardina@gmail.com Peter Q. Blair Harvard University Graduate School of Education 407 Gutman Library Cambridge, MA 02138 Tel: 617-458-6010 E-Mail: peter_blair@gse.harvard.edu Justin Heck Opportunity@Work 1100 Connecticut Ave NW Suite 430 Washington, DC 20036 E-Mail: justin@opportunityatwork.org Papia Debroy Opportunity@Work E-Mail: papia@opportunityatwork.org

Target Date Funds as Asset Market Stabilizers: Evidence from the Pandemic - Parker, Jonathan A; Sun, Yang (National Bureau of Economic Research Working Paper Series, 2023)
Target Date Funds (TDFs) provide retirement investors, many of whom are unsophisticated or inattentive, with age-appropriate exposures to different asset classes like stocks and bonds. To maintain exposures, TDFs trade actively against market returns, buying stock funds when the stock market does poorly, and selling when the market does well (Parker, Schoar, and Sun, 2023). This paper shows that trading by TDFs was a significant stabilizing force in US equity markets during the unprecedented economic volatility of the COVID-19 pandemic period. Specifically, TDFs – now comprising a quarter of all 401(k) plan assets – caused significant contrarian investment flows across asset classes, flows that were not undone by enrollment of TDF investors or by discretionary actions by TDF managers. Mutual funds with large ownership by TDFs had more stable funding through the pandemic, and stocks that had greater indirect ownership by TDFs had lower co-movement with the market and lower volatility during the pandemic period.
Author contact info: Jonathan A. Parker MIT Sloan School of Management 100 Main Street, E62-642 Cambridge, MA 02142-1347 Tel: 617-253-7218 E-Mail: JAParker@MIT.edu Yang Sun Brandeis International Business School 415 South Street MS032 Waltham, MA 02453 Tel: 781-736-4708 E-Mail: yangs@brandeis.edu

Reformulating Index Insurance to Protect Women’s Assets and Well-being: Evidence from Pastoralist Communities in Kenya - Arteaga, Julian; Carter, Michael; Hobbs, Andrew (National Bureau of Economic Research Working Paper Series, 2023)
The novel insurance contracts for crop losses and livestock mortality that have been developed in low income countries typically protect against shocks in the male sphere of economic activity. Often overlooked are women, the particularities of their indirect exposure to this risk, and their socially constructed responsibility to manage family well-being. To fill this lacuna, this paper studies the effect of a low-cost intervention that reformulates a livestock insurance contract so that it directly addresses women’s risk and is sold in units that are commensurate with women’s expenditure responsibilities. We measure the effect of this contractual reformulation using a randomized trial amongst pastoralist communities in Kenya. Twenty-four percent of previously subsidized households that received the novel contractual formulation purchased insurance (without subsidy), compared to only 13% of previously subsidized households offered insurance under the standard male-risk formulation. Households that had not received prior insurance subsidies purchased no insurance, irrespective of the framing. Protecting women, their assets and those who depend on them will require a combination of smart subsidies and gender-intentional insurance contract design.
Author contact info: Julian Arteaga E-Mail: jgarteaga@ucdavis.edu Michael Carter Department of Agricultural and Resource Economics University of California, Davis One Shields Avenue Davis, CA 95616 Tel: 530/752-4672 Fax: 530/752-5614 E-Mail: mrcarter@ucdavis.edu Andrew Hobbs Department of Economics 2130 Fulton St San Francisco, CA 94117 USA E-Mail: ahobbs@usfca.edu

The Value of Communication for Mental Health - Annan, Francis; Archibong, Belinda (National Bureau of Economic Research Working Paper Series, 2023)
Mental health disorders account for a significant share of the overall global disease burden. The economic losses from such disorders are staggeringly large, particularly in low-income countries, where people are faced with several unexpected shocks. We test whether improved communication can mitigate such mental health disorders. Partnering with a major telecommunications company, we implement low-cost communication interventions that provide mobile calling credits to a nationally representative set of low-income adults in Ghana during the COVID-19 pandemic. Individuals’ inability to make unexpected calls, need to borrow SOS airtime, and to seek digital loans decreased significantly relative to a control group. As a result, the programs led to a significant decrease in mental distress (-9.8%), the likelihood of severe mental distress by -2.3 percentage points (a quarter of the mean prevalence), and domestic violence, with null impact on consumption expenditure. The effects are stronger for monthly mobile credits than a lump-sum. We present evidence that improvements in both business-related services and social inclusion and/or protection are relevant explanations. Simple cost-benefit analysis shows that providing communication credit to low-income adults is a cost-effective policy for improving mental health. Communication – the ability to stay connected – meaningfully improves mental well-being and interventions about communication are particularly valuable when implemented as many installments.
Author contact info: Francis Annan Department of Agricultural and Resource Economics University of California, Berkeley 207 Giannini Hall #3310 Berkeley, CA 94720-3310 E-Mail: fannan@berkeley.edu Belinda Archibong Department of Economics Columbia University 3009 Broadway New York, NY 10027 Tel: 212/854-8952 E-Mail: ba2207@columbia.edu

Prison Labor: The Price of Prisons and the Lasting Effects of Incarceration - Archibong, Belinda; Obikili, Nonso (National Bureau of Economic Research Working Paper Series, 2023)
Institutions of justice, like prisons, can be used to serve economic and other extrajudicial interests, with lasting deleterious effects. We study the effects on incarceration when prisoners are primarily used as a source of labor using evidence from British colonial Nigeria. We digitized 65 years of archival records on prisons from 1920 to 1995 and provide new estimates on the value of colonial prison labor and the effects of labor demand shocks on incarceration. We find that prison labor was economically valuable to the colonial regime, making up a significant share of colonial public works expenditure. Positive economic shocks increased incarceration rates over the colonial period. This result is reversed in the postcolonial period, where prison labor is not a notable feature of state public finance. We document a significant reduction in present-day trust in legal institutions, such as the police, in areas with high historical exposure to colonial imprisonment; the resulting reduction in trust is specific to legal institutions.
Author contact info: Belinda Archibong Department of Economics Columbia University 3009 Broadway New York, NY 10027 Tel: 212/854-8952 E-Mail: ba2207@columbia.edu Nonso Obikili 617/618 Diplomatic Drive Resident Coordinators Office Abuja, FCT Nigeria Tel: 2348094574471 E-Mail: me@nonsoobikili.com

Voting Choice - Malenko, Andrey; Malenko, Nadya (National Bureau of Economic Research Working Paper Series, 2023)
Traditionally, fund managers cast votes on behalf of investors whose capital they manage. Recently, this system has come under intense debate given the growing concentration of voting power among a few asset managers and disagreements over environmental and social issues. Major fund managers now offer their investors a choice: delegate their votes to the fund or cast votes themselves ("voting choice"). This paper develops a theory of delegation of voting rights and studies the implications of voting choice for investor welfare. If the reason for offering voting choice is that investors have different preferences, then investors may retain their voting rights excessively, inefficiently prioritizing their private preferences over information. As a result, investors on aggregate are not always better off if voting choice is offered to them. In contrast, if the reason for offering voting choice is that investors have information about the proposal that the fund manager does not have, then voting choice is generally efficient, increasing investor welfare. However, if information collection is costly, voting choice may lead to coordination failure, resulting in less informed voting outcomes.
Author contact info: Andrey Malenko 140 Commonwealth Ave Carroll School of Management, Boston College Chestnut Hill, MA 02467 Tel: 8572344706 E-Mail: malenkoa@bc.edu Nadya Malenko 140 Commonwealth Avenue Carroll School of Management Boston College Chestnut Hill, MA 02467 E-Mail: malenko@bc.edu

Judging Banks’ Risk by the Profits They Report - Meiselman, Ben S; Nagel, Stefan; Purnanandam, Amiyatosh (National Bureau of Economic Research Working Paper Series, 2023)
In competitive capital markets, risky debt claims that offer high yields in good times have high systematic risk exposure in bad times. We apply this idea to bank risk measurement. We find that banks with high accounting return on equity (ROE) prior to a crisis have higher systematic tail risk exposure during the crisis. Proximate causes of crises differ, but the predictive power of ROE is pervasive, including during the financial crisis of 2007–2010 and the recent crisis triggered by the collapse of Silicon Valley Bank. ROE predicts systematic tail risk much better than conventional measures based on risk-weighted assets.
Author contact info: Ben S. Meiselman U.S. Department of the Treasury 1500 Pennsylvania Avenue NW Washington, DC 20220 E-Mail: benmeiselman@gmail.com Stefan Nagel University of Chicago Booth School of Business 5807 South Woodlawn Avenue Chicago, IL 60637 E-Mail: stefan.nagel@chicagobooth.edu Amiyatosh Purnanandam University of Michigan Ross School of Business R5453, 701 Tappan Street Ann Arbor, MI 48109 E-Mail: amiyatos@umich.edu

The Effect of Immigration Policy on Founding Location Choice: Evidence from Canada's Start-up Visa Program - Lee, Saerom (Ronnie); Glennon, Britta (National Bureau of Economic Research Working Paper Series, 2023)
To spur entrepreneurship and economic growth, an increasing number of countries have introduced immigration policies that provide visas to skilled entrepreneurs. This paper investigates whether these policies influence the founding location choice of immigrant founders, by leveraging the introduction of Canada's Start-up Visa Program in 2013. We demonstrate that this immigration policy increased the likelihood that U.S.-based immigrants have a start-up in Canada by 69%. Our results show that Asian immigrants (who have a higher representation in Canada than in the U.S.) are disproportionately more likely to migrate to Canada to start their businesses, whereas Hispanic immigrants (who have a smaller representation in Canada than in the U.S.) are less inclined to do so. We also find that this propensity varies with the size of co-ethnic immigrant communities in the origin location. Overall, our study unveils the importance of immigration policies in determining founding location choice and has important implications for countries competing for global talent.
Author contact info: Saerom (Ronnie) Lee The Wharton School University of Pennsylvania 3620 Locust Walk Philadelphia, PA 19104 E-Mail: saeroms@wharton.upenn.edu Britta Glennon E-Mail: bglennon@wharton.upenn.edu

Corporate Social Responsibility and Voting over Public Goods - Samwick, Andrew A; Wang, Sophie (National Bureau of Economic Research Working Paper Series, 2023)
This paper analyzes the impact of corporate social responsibility (CSR) on the total provision of public goods in a framework in which consumers who may make such voluntary contributions to public goods via CSR are also voters who decide on the level of taxes to finance publicly provided public goods. The main result indicates that, relative to an economy in which all public goods are publicly financed, the introduction of CSR lowers the total amount of public goods, as voters rationally anticipate that higher CSR will partially offset the consequences of lower public funding. The results offer a cautionary tale about the promotion of CSR in an economy with heterogeneous preferences for the public good.
Author contact info: Andrew A. Samwick 6106 Rockefeller Hall Department of Economics Dartmouth College Hanover, NH 03755-3514 Tel: 603/646-2893 Fax: 603/646-2122 E-Mail: andrew.samwick@dartmouth.edu Sophie Wang E-Mail: sophie.wang32@gmail.com

Hidden Figures: Uncovering Quantities Behind Zeros with Econometrics - Basu, Anirban (National Bureau of Economic Research Working Paper Series, 2023)
This chapter reviews the econometric approaches typically used to deal with the spike of zeros when modeling non-negative outcomes such as expenditures, income, or consumption.
Author contact info: Anirban Basu The CHOICE Institute Departments of Pharmacy, Health Services, and Economics University of Washington, Seattle 1959 NE Pacific St., Box - 357660 Seattle, WA 98195 Tel: 206/616-2986 Fax: 206/543-3964 E-Mail: basua@uw.edu

How People Use Statistics - Bordalo, Pedro; Conlon, John J; Gennaioli, Nicola; Kwon, Spencer Yongwook; Shleifer, Andrei (National Bureau of Economic Research Working Paper Series, 2023)
We document two new facts about the distributions of answers in famous statistical problems: they are i) multi-modal and ii) unstable with respect to irrelevant changes in the problem. We offer a model in which, when solving a problem, people represent each hypothesis by attending “bottom up” to its salient features while neglecting other, potentially more relevant, ones. Only the statistics associated with salient features are used, others are neglected. The model unifies biases in judgments about i.i.d. draws, such as the Gambler’s Fallacy and insensitivity to sample size, with biases in inference such as under- and overreaction and insensitivity to the weight of evidence. The model makes predictions about how changes in the salience of specific features should jointly shape the prevalence of these biases and measured attention to features, but also create entirely new biases. We test and confirm these predictions experimentally. Bottom-up attention to features emerges as a unifying framework for biases conventionally explained using a variety of stable heuristics or distortions of the Bayes rule.
Author contact info: Pedro Bordalo Saïd Business School University of Oxford Park End Street Oxford, OX1 1HP United Kingdom E-Mail: pedro.bordalo@sbs.ox.ac.uk John J. Conlon Harvard University 1805 Cambridge St Cambridge, MA 02138 E-Mail: johnconlon@g.harvard.edu Nicola Gennaioli Department of Finance Università Bocconi Via Roentgen 1 20136 Milan, Italy E-Mail: nicola.gennaioli@unibocconi.it Spencer Yongwook Kwon Department of Economics Brown University Providence, RI 02906 United States E-Mail: spencer.y.kwon@gmail.com Andrei Shleifer Department of Economics Harvard University Littauer Center M-9 Cambridge, MA 02138 Tel: 617/495-5046 Fax: 617/496-1708 E-Mail: ashleifer@harvard.edu

Show Me the Money! Incentives and Nudges to Shift Electric Vehicle Charge Timing - Bailey, Megan R; Brown, David P; Shaffer, Blake C; Wolak, Frank A (National Bureau of Economic Research Working Paper Series, 2023)
We use a field experiment to measure the effectiveness of financial incentives and moral suasion “nudges” to shift the timing of electric vehicle (EV) charging. We find EV owners respond strongly to financial incentives, while nudges have no statistically discernible effect. When financial incentives are removed, charge timing reverts to pre-intervention behavior, showing no evidence of habit formation and reinforcing our finding that “money matters”. Our charge price responsiveness estimate is an order of magnitude larger than typical household electricity consumption elasticities. This result highlights the greater flexibility of EV charging over other forms of residential electricity demand.
Author contact info: Megan R. Bailey 2500 University Drive NW Scurfield Hall SH 123 Calgary, AB T2H 1N4 Canada Tel: 6616183020 E-Mail: megan.bailey@ucalgary.ca David P. Brown University of Alberta E-Mail: dpbrown@ualberta.ca Blake C. Shaffer University of Calgary E-Mail: blake.shaffer@ucalgary.ca Frank A. Wolak Department of Economics Stanford University Stanford, CA 94305-6072 Tel: 650/723-3944 Fax: 650/725-5702 E-Mail: wolak@zia.stanford.edu

Welfare Estimates of Shifting Peak Travel - Hahn, Robert W; Metcalfe, Robert D; Tam, Eddy (National Bureau of Economic Research Working Paper Series, 2023)
We develop novel estimates of peak and off-peak price elasticities for urban mass transit demand in San Francisco using a large natural experiment with 3.6 million trip sessions and a natural field experiment that both have exogenous price subsidies. We then estimate the welfare impacts for these price subsidies using a sufficient statistics approach. Our analysis suggests that off-peak subsidies can increase welfare, but the positive effects are reduced when consumers take the decisions of others into account compared to when they do not. We also find a large variation in the welfare impacts of shifting travel to different periods, which is explained by differences in demand and congestion characteristics. Finally, we show that the targeting of subsidies can increase welfare, but need not do so if the regulator does not have accurate information on demand.
Author contact info: Robert W. Hahn University of Oxford E-Mail: robert.hahn@smithschool.ox.ac.uk Robert D. Metcalfe Department of Economics University of Southern California Los Angeles, CA 90007 E-Mail: robert.metcalfe@usc.edu Eddy Tam London London United Kingdom E-Mail: eddy.hftam@gmail.com

Retirement Consumption and Pension Design - Kolsrud, Jonas; Landais, Camille; Reck, Daniel; Spinnewijn, Johannes (National Bureau of Economic Research Working Paper Series, 2023)
This paper analyzes consumption to evaluate the distributional effects of pension reforms. Using Swedish administrative data, we show that on average workers who retire earlier consume less while retired and experience larger drops in consumption around retirement. Interpreted via a theoretical model, these findings imply that reforms incentivizing later retirement incur a substantial consumption-smoothing cost. Turning to other features of pension policy, we find that reforms that redistribute based on early-career labor supply would have opposite-signed redistributive effects, while differentiating on wealth may help to target pension benefits toward those who are vulnerable to larger drops in consumption around retirement.
Author contact info: Jonas Kolsrud Department of Economics and Statistics Linnaeus University 351 95 Växjö Sweden E-Mail: jonas.kolsrud@lnu.se Camille Landais Department of Economics London School of Economics Houghton Street London WC2A 2AE United Kingdom E-Mail: c.landais@lse.ac.uk Daniel Reck University of Maryland Department of Economics Tydings Hall 7343 Preinkert Dr College Park, MD 20742 E-Mail: dreck@umd.edu Johannes Spinnewijn Department of Economics London School of Economics, Houghton Street London, WC2A 2AE E-Mail: J.Spinnewijn@lse.ac.uk

Are Software Automation and Teleworkers Substitutes? Preliminary Evidence from Japan - Baldwin, Richard; Okubo, Toshihiro (National Bureau of Economic Research Working Paper Series, 2023)
Digital technology is reshaping workplaces by enabling spatial separation of offices, known as telework, or remote intelligence (RI), and by facilitating automation of service sector tasks via artificial intelligence (AI). This paper is a first attempt to empirically investigate whether AI and RI are complements or substitutes in the service sector. It uses a worker-level panel of surveys collected from around 10,000 workers from pre-COVID-19 pandemic to late 2022, we find preliminary evidence that suggests that AI and RI are complements rather than substitutes. The evidence comes first from the positive correlation of investments in AI-promoting and RI-promoting software at the firm and worker level, and second from the positive correlation of workers' expectations regarding telework and software automation. The evidence is far from definitive but suggests that the complement-substitution question is a fruitful line for future research.
Author contact info: Richard Baldwin International Institute for Management Development Ch. de Bellerive 23 CH-1001, Lausanne Switzerland Tel: 41-21-618-0111 E-Mail: richard.baldwin@imd.org Toshihiro Okubo Keio University 2-15-45 Mita Minato-ku Tokyo Japan E-Mail: okubo@econ.keio.ac.jp

Do PCI Facility Openings Differentially Affect AMI Patients by Individual Race and Community Segregation? - Hsia, Renee Y; Shen, Yu-Chu (National Bureau of Economic Research Working Paper Series, 2023)
Percutaneous coronary intervention facility openings may have differential effects on treatment and health outcomes for Black versus White patients in residentially segregated versus integrated communities. This study looked at changes in patient treatment and health outcomes (same-day PCI, PCI during hospitalization, 30-day mortality, and 1-year mortality) after the opening of a PCI facility within a 15-minute drive of a community. Findings show that Black patients in integrated communities experienced the greatest benefits after a PCI opening for every outcome examined. Healthcare stakeholders may be able to use this data to prioritize PCI openings in communities that will derive the greatest benefits
Author contact info: Renee Y. Hsia SFGH Medical Center 1001 Potrero Avenue San Francisco, CA 94110 E-Mail: Renee.Hsia@emergency.ucsf.edu Yu-Chu Shen Department of Defense Management Naval Postgraduate School 555 Dyer Road Monterey, CA 93943 Tel: 831/656-2951 E-Mail: yshen@nber.org

Supporting Women’s Livelihoods at Scale: Evidence from a Nationwide Multi-Faceted Program - Botea, Ioana; Brudevold-Newman, Andrew; Goldstein, Markus; Low, Corinne; Roberts, Gareth (National Bureau of Economic Research Working Paper Series, 2023)
The success of multi-faceted “graduation” programs at reducing poverty raises three questions: can the impacts of these programs be maintained when implemented by governments at scale, will positive effects be offset by negative spillovers, and can bundled programs be streamlined without losing im- pact? We find that a nationwide livelihood program implemented by the government of Zambia yielded consumption and earnings increases comparable to graduation programs, without negative economic spillovers on non-beneficiaries. However, the effects were entirely driven by the asset transfer portion of the bundled intervention, indicating a streamlined package could be a promising poverty alleviation strategy for developing-country governments.
Author contact info: Ioana Botea E-Mail: ibotea@worldbank.org Andrew Brudevold-Newman 1307 Emerson St NW Washington, DC 20011 E-Mail: abrudevoldnewman@worldbank.org Markus Goldstein E-Mail: markusgold@gmail.com Corinne Low The Wharton School University of Pennsylvania 318 Vance Hall Philadelphia, PA 19104 Tel: 215/898-0928 E-Mail: corlow@wharton.upenn.edu Gareth Roberts E-Mail: garethrobertsza@gmail.com

Sex, Power, and Adolescence: Intimate Partner Violence and Sexual Behaviors - Shah, Manisha; Seager, Jennifer; Montalvao, Joao; Goldstein, Markus (National Bureau of Economic Research Working Paper Series, 2023)
Adolescents in Sub-Saharan Africa have some of the highest rates of intimate partner violence across the globe. This paper evaluates the impact of a randomized controlled trial that offers females a goal setting activity to improve their sexual and reproductive health outcomes and offers their male partners a soccer intervention, which educates and inspires young men to make better sexual and reproductive health choices. Both interventions reduce female reports of intimate partner violence. Impacts are larger among females who were already sexually active at baseline. We develop a model to understand the mechanisms at play. The soccer intervention improves male attitudes around violence and risky sexual behaviors. Females in the goal setting arm take more control of their sexual and reproductive health by exiting violent relationships. Both of these mechanisms drive reductions in IPV.
Author contact info: Manisha Shah Goldman School of Public Policy University of California, Berkeley 2607 Hearst Ave, MC #7320 Berkeley, CA 94720-7320 Tel: (510) 642-5653 Fax: (510) 643-9657 E-Mail: ManishaShah@berkeley.edu Jennifer Seager Department of Global Health George Washington University Milken Institute School of Public Health 950 New Hampshire Ave, NW, 4th Floor Washington, DC 20052 E-Mail: jseager@gwu.edu Joao Montalvao World Bank Washington DC USA E-Mail: jmontalvao@worldbank.org Markus Goldstein E-Mail: markusgold@gmail.com

Which Mexicans Are White? Enumerator-Assigned Race in the 1930 Census and the Socioeconomic Integration of Mexican Americans - Duncan, Brian; Trejo, Stephen J (National Bureau of Economic Research Working Paper Series, 2023)
The authors explore unique complete-count data from the 1930 Census in which a respondent’s race was assigned by enumerators and “Mexican” was one of the possible responses. Census enumerators frequently and selectively assigned a non-Mexican race—predominantly “white”—to U.S.-born individuals of Mexican ancestry. As a result, using enumerator-assigned race to identify Mexican Americans misses a sizeable fraction of the relevant population and significantly understates this group’s socioeconomic attainment. The propensity for Census enumerators to identify Mexican Americans as white varied enormously across U.S. counties, and this variation is strongly associated with both the educational attainment of U.S.-born Mexican Americans observed in the 1940 Census and the amount of return migration by Mexican immigrants during the 1930s. As such, this variation may help to identify local environments that were more favorable for the integration of Mexican Americans.
Author contact info: Brian Duncan Department of Economics University of Colorado Denver Campus Box 181 P.O. Box 173364 Denver, CO 80217-3364 E-Mail: brian.duncan@ucdenver.edu Stephen J. Trejo Department of Economics University of Texas at Austin 2225 Speedway Stop C3100 Austin, TX 78712 Tel: 512/475-8512 Fax: 512/471-3510 E-Mail: trejo@austin.utexas.edu

Innovation Market Failures and the Design of New Climate Policy Instruments - Armitage, Sarah C; Bakhtian, Noël; Jaffe, Adam B (National Bureau of Economic Research Working Paper Series, 2023)
Moving beyond the combination of adoption subsidies, standards, and (albeit limited) attempts at carbon pricing that largely characterized US climate policy over the past decade, recent climate-related legislation has transformed not only the scale of US climate activities but also the policy mechanisms adopted. Newly scaled policy instruments—including demonstration projects, loan guarantees, green banks, and regional technology hubs—are motivated not only by unpriced carbon externalities but also by innovation market failures. This paper maps the economics literature on innovation market failures and other frictions to the stated goals of these policy instruments, with the goal of focusing discussions about how to implement these policies as effectively as possible. The paper also discusses how program evaluation can help to illuminate which market failures are most relevant in a particular context and which policy instruments are most targeted to them.
Author contact info: Sarah C. Armitage Boston University Questrom School of Business Rafik B. Hariri Building 595 Commonwealth Avenue Boston, MA 02215 E-Mail: armitage@bu.edu Noël Bakhtian E-Mail: nmb@alumni.stanford.edu Adam B. Jaffe 188 Brookline Avenue Apartment 26A Boston, MA 02215 Tel: 857-277-9927 E-Mail: adam.jaffe@motu.org.nz

Tax Credits for Clean Electricity: The Distributional Impacts of Supply-Push Policies in the Power Sector - Brown, Maxwell L; Becker, Jon M; Carbone, Jared; Goforth, Teagan; McFarland, James; Nock, Destenie; Pitman, Kristina; Steinberg, Daniel C (National Bureau of Economic Research Working Paper Series, 2023)
We evaluate distributional and efficiency consequences of the bulk power clean electricity tax credits authorized by the 2022 Inflation Reduction Act. To do so, we link detailed electricity capacity expansion, computable general equilibrium, data-rich microsimulation, and air pollution models to estimate the policy incidence in terms of economic welfare and health impacts across a wide range of demographic groups. We evaluate the tradeoff between policy efficiency and income progressivity by comparing the tax credits to cap-and-trade policies that vary revenue recycling approaches. Under the scenarios analyzed the bulk power tax credits lead to increased clean electricity technology deployment resulting in a reallocation of capital from elsewhere in the economy, higher prices for capital and other goods, lower power prices, and lower emissions. The tax credits yield progressive outcomes for both economic welfare and health impacts. The health benefits exceed total policy costs and provide greater benefits for low-income and historically-marginalized households given the coincidence of household and emission source locations.
Author contact info: Maxwell L. Brown Colorado School of Mines Engineering Hall Golden, CO 80401 E-Mail: maxbrown@mines.edu Jon M. Becker National Renewable Energy Laboratory 15013 Denver West Parkway Golden, CO 80401 E-Mail: Jon.Becker@nrel.gov Jared Carbone Colorado School of Mines Department of Economics, Golden, CO 80401 Tel: 403.220.4094 Fax: 403.282.5262 E-Mail: jcarbone@mines.edu Teagan Goforth E-Mail: tgoforth@cmu.edu James McFarland Environmental Protection Agency 1200 Pennsylvania Avenue, NW Washington, DC 20460 E-Mail: McFarland.james@epa.gov Destenie Nock E-Mail: dnock@cmu.edu Kristina Pitman National Renewable Energy Laboratory 15013 Denver West Parkway Golden, CO 80401 E-Mail: Kristina.Avery@nrel.gov Daniel C. Steinberg National Renewable Energy Laboratory 15013 Denver West Parkway Golden, CO 80401 E-Mail: Daniel.Steinberg@nrel.gov

What Predicts the Growth of Small Firms? Evidence from Tanzanian Commercial Loan Data - Ellis, Mia; Kinnan, Cynthia; McMillan, Margaret S; Shaukat, Sarah (National Bureau of Economic Research Working Paper Series, 2023)
Not all firms have equal capacity to absorb productive credit. Identifying those with higher potential may have large consequences for productivity. We collect detailed survey data on small- and medium-sized Tanzanian firms who borrow from a large commercial bank, which in turn raises funds via international capital markets. Using machine learning methods to identify predictors of loan growth, we document, first, that we achieve high rates of predictive power. Second, “soft” information (entrepreneurs’ motivations for entrepreneurship and constraints faced) has predictive power over and above administrative data (sector, age, etc.). Third, there is a different and larger set of predictors for women than men, consistent with greater barriers to efficient capital allocation among female entrepreneurs.
Author contact info: Mia Ellis IFPRI 1201 Eye Street Washington, DC 20005 E-Mail: m.ellis@cgiar.org Cynthia Kinnan Department of Economics Tufts University 177 College Ave #620 Medford, MA 02155 E-Mail: cynthia.kinnan@tufts.edu Margaret S. McMillan Tufts University Department of Economics 177 College Ave #669 Medford, MA 02155 E-Mail: margaret.mcmillan@tufts.edu Sarah Shaukat Department of Economics and Fletcher School Tufts University 177 College Ave #652 Medford, MA 02155 E-Mail: sarah.shaukat@tufts.edu

Political Sentiment and Innovation: Evidence from Patenters - Engelberg, Joseph; Lu, Runjing; Mullins, William; Townsend, Richard R (National Bureau of Economic Research Working Paper Series, 2023)
We document political sentiment effects on US inventors. Democratic inventors are more likely to patent (relative to Republicans) after the 2008 election of Obama but less likely after the 2016 election of Trump. These effects are 2-3 times as strong among politically active partisans and are present even within firms over time. Patenting by immigrant inventors (relative to non-immigrants) also falls following Trump’s election. Finally, we show partisan concentration by technology class and firm. This concentration aggregates up to more patenting in Democrat-dominated technologies (e.g., Biotechnology) compared to Republican-dominated technologies (e.g., Weapons) following the 2008 election of Obama.
Author contact info: Joseph Engelberg Rady School of Management University of California at San Diego Otterson Hall, Room 4S154 9500 Gilman Drive #0553 LaJolla, CA 92093-0553 E-Mail: jengelberg@ucsd.edu Runjing Lu Alberta School of Business University of Alberta 11211 Saskatchewan Dr. NW Edmonton, Canada Canada E-Mail: runjing1@ualberta.ca William Mullins Rady School of Management University of California, San Diego 9500 Gilman Drive, MC 0553 La Jolla, CA 92093-0553 E-Mail: wmullins@ucsd.edu Richard R. Townsend Rady School of Management University of California at San Diego 9500 Gilman Drive La Jolla, CA 92093 Tel: 858/246-1632 E-Mail: rrtownsend@ucsd.edu

Greed? Profits, Inflation, and Aggregate Demand - Bilbiie, Florin O; Känzig, Diego R (National Bureau of Economic Research Working Paper Series, 2023)
We investigate the interplay of corporate profits and income distribution in shaping inflation and aggregate demand within the New Keynesian framework. We derive an analytical condition for profits to be procyclical and inflationary. The profit cyclicality is a key determinant of the model’s propagation properties under household heterogeneity, but for aggregate-demand fluctuations to be amplified by heterogeneity, profits have to be countercyclical—an implication at odds with the data. When adding capital investment, there can be aggregate-demand amplification under procyclical profits but it works through an investment channel and not profits, inconsistent with the narrative attributing inflation to corporate greed.
Author contact info: Florin O. Bilbiie University of Cambridge Austin Robinson Building Sidgwick Avenue Cambridge CB3 9DD United Kingdom Tel: and CEPR E-Mail: florin.bilbiie@gmail.com Diego R. Känzig Department of Economics Northwestern University Kellogg Global Hub 2211 Campus Drive Evanston, IL 60208 E-Mail: dkaenzig@northwestern.edu

Protests - Cantoni, Davide; Kao, Andrew; Yang, David Y; Yuchtman, Noam (National Bureau of Economic Research Working Paper Series, 2023)
Citizens have long taken to the streets to demand change, expressing political views that may otherwise be suppressed. Protests have produced change at local, national, and international scales, including spectacular moments of political and social transformation. We document five new empirical patterns describing 1.2 million protest events across 218 countries between 1980 and 2020. First, autocracies and weak democracies experienced a trend break in protests during the Arab Spring. Second, protest movements also rose in importance following the Arab Spring. Third, protest movements geographically diffuse over time, spiking to their peak, before falling off. Fourth, a country’s year-to-year economic performance is not strongly correlated with protests; individual values are predictive of protest participation. Fifth, the US, China, and Russia are the most over-represented countries by their share of academic studies. We discuss each pattern’s connections to the existing literature and anticipate paths for future work.
Author contact info: Davide Cantoni Seminar für Wirtschaftsgeschichte University of Munich 80539 Munich Germany E-Mail: davide.cantoni@econ.lmu.de Andrew Kao 1805 Cambridge Street Cambridge, MA 02138 USA E-Mail: andrewkao@fas.harvard.edu David Y. Yang Department of Economics Harvard University Littauer Center M-31 Cambridge, MA 02138 E-Mail: davidyang@fas.harvard.edu Noam Yuchtman University of Oxford Department of Economics Manor Rd Oxford OX1 3UQ United Kingdom E-Mail: noam.yuchtman@economics.ox.ac.uk

CEO Gender Bias in the Formation of Firm-to-Firm Transactions - Izumi, Yutaro; Shigeoka, Hitoshi; Yagasaki, Masayuki (National Bureau of Economic Research Working Paper Series, 2023)
While female CEOs are under-represented, the barriers they face in the business environment remain poorly understood. This study investigates the influence of gender bias in forming CEOs’ business networks. Using transaction data of 1 million Japanese firms, we find that CEOs of the same gender significantly trade more than those of the opposite gender, mostly driven by small- and medium-sized firms in which CEOs presumably have a strong involvement in transactions. As most CEOs are male, such same-gender bias reduces the trading opportunities for females relative to male CEOs. Regarding mechanisms, our survey reveals both the existence of barriers that impede male CEOs from becoming acquainted with female CEOs and the tendency for male CEOs to prefer interacting with male CEOs over female CEOs.
Author contact info: Yutaro Izumi National Graduate Institute for Policy Studies 7-22-1 Roppongi Minato-ku Tokyo 106-8677 Japan E-Mail: y-izumi@grips.ac.jp Hitoshi Shigeoka Department of Economics Simon Fraser University 8888 University Drive, WMC 4653 Burnaby, BC V5A 1S6 Tel: 778/782-5348 E-Mail: hitoshi_shigeoka@sfu.ca Masayuki Yagasaki 27-1 Kawauchi Aoba-ku Sendai-shi 980-8576 Japan E-Mail: yagamasajp@gmail.com

Clean Growth - Arkolakis, Costas; Walsh, Conor (National Bureau of Economic Research Working Paper Series, 2023)
We provide a spatial theory of clean growth to assess the global impact of the rise of renewable energy. We model the details of the combined production and transmission network of electricity (“the grid”) that determine the supply and losses of energy in space. The local rate of clean energy adoption depends on learning-by-doing, the global electricity and trade network, and regional comparative advantage in renewable resources. We use the model to measure the aggregate and spatial implications of clean growth. We find that the world’s power system is likely to be dominated by renewables by 2040 in a range of scenarios, with substantial welfare gains, even in the absence of policy. Incorporating policy, we find that the US Inflation Reduction Act significantly accelerates renewable uptake, and generates substantial economic benefits. In addition, planned grid improvements lower prices substantially in many areas of the US, justifying their cost of construction.
Author contact info: Costas Arkolakis Department of Economics Yale University, 87 Trumbull Street P.O. Box 208268 New Haven, CT 06520-8268 Tel: 203/432-3527 Fax: 203/432-6323 E-Mail: costas.arkolakis@yale.edu Conor Walsh Columbia Business School 350 Kravis Hall 665 W 130th St New York, NY 10027 E-Mail: caw2226@columbia.edu

Managing Mental Accounts: Payment Cards and Consumption Expenditures - Gelman, Michael; Roussanov, Nikolai (National Bureau of Economic Research Working Paper Series, 2023)
Does mental accounting matter for total consumption expenditures? We exploit a unique setting in which individuals exogenously received a new credit card, without requesting one. Using random variation in the time of receipt we show that individuals temporarily increase total consumption expenditure by making purchases with the new card without reducing spending on the others. We do not observe a corresponding increase in indebtedness. Total consumption expenditure rises even for the least liquidity-constrained individuals. The evidence is consistent with consumers treating methods of payment as nonfungible budget categories, as suggested by models of mental accounting and narrow bracketing.
Author contact info: Michael Gelman 42 Amstel Ave Newark, DE 19716 United States Tel: 3028317087 E-Mail: gelmanm@udel.edu Nikolai Roussanov University of Pennsylvania 2400 Steinberg-Dietrich Hall 3620 Locust Walk Philadelphia, PA 19104-6367 Tel: 215/746-0004 Fax: 215/898-6200 E-Mail: nroussan@wharton.upenn.edu

An Experimental Evaluation of Deferred Acceptance: Evidence from Over 100 Army Officer Labor Markets - Davis, Jonathan M.V.; Greenberg, Kyle; Jones, Damon (National Bureau of Economic Research Working Paper Series, 2023)
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. Army’s annual many-to-one marketplace that matches 10,000 officers to units. Officers and jobs are partitioned into over 100 distinct markets, our unit of randomization. Matching with DA reduced officers’ attrition in their first year in their new match by 16.7 percent, but we can rule out more than a 10 percent reduction in attrition by the end of their second year. Matching with DA had precise zero effects on performance evaluations and promotions. Although matching with DA increased truthful preference reporting by a statistically significant 10 percent, many officers matched by DA misreport their true preferences. We present new evidence suggesting that communication and coordination of preferences may limit the benefits of DA in matching markets where each side actively ranks the other.
Author contact info: Jonathan M.V. Davis University of Oregon Department of Economics 516 PLC 1415 Kincaid Street Eugene, OR 97403 Tel: 513-478-4109 E-Mail: jdavis5@uoregon.edu Kyle Greenberg U.S. Military Academy at West Point Department of Social Sciences West Point, NY 10996 E-Mail: kyle.greenberg@westpoint.edu Damon Jones Harris School of Public Policy University of Chicago 1307 E 60th Street Chicago, IL 60637 Tel: 650/736-8571 E-Mail: damonjones@uchicago.edu

Psychosocial Constraints, Impact Heterogeneity and Spillovers in a Multifaceted Graduation Program in Kenya - Zheng, Geyi; Carter, Michael; Jensen, Nathan; Krovetz, Laurel (National Bureau of Economic Research Working Paper Series, 2023)
Poverty reduction programs modeled on BRAC's graduation approach build up both tangible productive assets and intangible psychosocial assets such as self-confidence and the aspiration for upward mobility. The goal of this paper is to better understand how psychosocial factors operate and shape the impact of graduation programs. After deriving a set of hypotheses about the impacts of psychosocial constraints from a dynamic optimization model of the choice between a low income, casual wage-labor occupation and a higher earning entrepreneurial activity, this paper exploits a randomized controlled trial of a graduation program implemented in the pastoralist regions of Northern Kenya. Key empirical findings include that the estimated highly favorable average treatment effects disguise substantial heterogeneity, with beneficiaries who began with severe depressive symptoms gaining little from the program. The RCT's saturation design also allows us to identify substantial spillover effects onto the asset accumulation of women who were not enrolled in the graduation program. Spillovers are also estimated to positively affect non-beneficiary women's preference for upward economic mobility, providing a plausible explanation for their accumulation of capital despite no direct support from the graduation program. The paper draws out the implications of these findings for the cost-effective design and implementation of graduation programs.
Author contact info: Geyi Zheng Department of Agricultural & Resource Economics Social Sciences & Humanities Building 1 Shields Avenue Univeristy of California Davis, CA 95616 USA E-Mail: gyzheng@ucdavis.edu Michael Carter Department of Agricultural and Resource Economics University of California, Davis One Shields Avenue Davis, CA 95616 Tel: 530/752-4672 Fax: 530/752-5614 E-Mail: mrcarter@ucdavis.edu Nathan Jensen E-Mail: njensen@ed.ac.uk Laurel Krovetz Warren Hall Cornell University Ithaca, NY 14853 USA E-Mail: lk436@cornell.edu

Firm Export Dynamics in Interdependent Markets - Alfaro-Urena, Alonso; Castro-Vincenzi, Juanma; Fanelli, Sebastian; Morales, Eduardo (National Bureau of Economic Research Working Paper Series, 2023)
We estimate a model of firm export dynamics featuring cross-country complementarities. The firm decides where to export by solving a dynamic combinatorial discrete choice problem, for which we develop a solution algorithm that overcomes the computational challenges inherent to the large dimensionality of its state space and choice set. According to our estimated model, firms enjoy cost reductions when exporting to countries geographically or linguistically close to each other, or that share deep trade agreements. Countries, especially small ones, sharing these traits with attractive destinations receive significantly more exports than in the absence of complementarities.
Author contact info: Alonso Alfaro-Urena Central Bank of Costa Rica Costa Rica E-Mail: alfaroua@bccr.fi.cr Juanma Castro-Vincenzi Department of Economics Harvard University 1805 Cambridge Street Littauer Center 211 Cambridge, Mass 02138 E-Mail: jcastrovincenzi@fas.harvard.edu Sebastian Fanelli CEMFI E-Mail: fanelli@cemfi.es Eduardo Morales Department of Economics Princeton University 291 Julis Romo Rabinowitz Building Princeton, NJ 08544 Tel: 617/308-7662 E-Mail: ecmorale@princeton.edu

From Addiction to Aggression: The Spillover Effects of Opioid Policies on Intimate Partner Violence - Dave, Dhaval M; Erten, Bilge; Keskin, Pinar; Zhang, Shuo (National Bureau of Economic Research Working Paper Series, 2023)
We provide the first study of the downstream effects of a key supply-side intervention – the abuse-deterrent reformulation of a widely-diverted opioid, OxyContin – on intimate partner violence (IPV), the most common form of violence experienced by women. Leveraging administrative data on victim-reported incidents to law enforcement, combined with quasi-experimental methods, we find robust evidence that the reformulation significantly reduced IPV exposure for women. This overall decline, however, masks heterogeneity across subpopulations, and a notable uptick in heroin-involved IPV, underscoring the importance of identifying populations at high risk of substitution to illicit opioids and moderating this risk with evidence-based policies.
Author contact info: Dhaval M. Dave Bentley University Department of Economics 175 Forest Street, AAC 195 Waltham, MA 02452-4705 E-Mail: ddave@bentley.edu Bilge Erten Northeastern University Economics Department Boston, MA 02115 b.erten@northeastern.edu E-Mail: erten.bilge@gmail.com Pinar Keskin Department of Economics Wellesley College 106 Central Street Wellesley, MA 02481 pkeskin@wellesley.edu E-Mail: pkeskin@wellesley.edu Shuo Zhang Department of Economics Northeastern University 43 Leon Street, 312A Lake Hall Boston, MA 02115 USA E-Mail: s.zhang@northeastern.edu

Distributional Equity in the Employment and Wage Impacts of Energy Transitions - Gilbert, Ben; Gagarin, Hannah; Hoen, Ben (National Bureau of Economic Research Working Paper Series, 2023)
We use restricted-access, geocoded data on the near-universe of workers in 23 U.S. states in order to quantify the impact of wind energy development on local earnings and employment, by race, ethnicity, sex, and educational attainment. We find the largest relative impacts for workers without a high school education, or workers with a college education, in addition to other systematic differences across sub-populations. We compare these results to estimates using county aggregates of the worker-level data, such as can be obtained using publicly available data. We find that (a) county-level estimates are dramatically dampened relative to geocoded worker-level estimates, and (b) the degree of bias differs by sub-population such that qualitative comparisons of impacts are not consistent using restricted-access data versus county-level data for most sub-populations. We discuss implications for achieving equity goals within energy transition policies.
Author contact info: Ben Gilbert Colorado School of Mines 1500 Illinois St Golden, CO 80401 E-Mail: bgilbert@mines.edu Hannah Gagarin E-Mail: hrgagar@sandia.gov Ben Hoen Electricity Markets and Policy Group Lawrence Berkeley National Laboratory E-Mail: bhoen@lbl.gov

Biased Surveys - Gemmi, Luca; Valchev, Rosen (National Bureau of Economic Research Working Paper Series, 2023)
We find evidence suggesting that surveys of professional forecasters are biased by strategic incentives. First, we find that individual forecasts overreact to idiosyncratic information but underreact to common information. Second, we show that this bias is not present in forecasts data that is not subject to strategic incentives. We show that our evidence is consistent with a model of strategic diversification incentives in forecast reporting. Our results caution against the use of surveys of forecasts as a direct measure of expectations, as this would overestimate the likely deviations from rational expectations, the information precision and the degree of disagreement.
Author contact info: Luca Gemmi E-Mail: luca.gemmi@unil.ch Rosen Valchev Department of Economics Boston College 140 Commonwealth Avenue Chestnut Hill, MA 02467 E-Mail: valchevr@gmail.com

Market Response to Racial Uprisings - Ba, Bocar A; Rivera, Roman; Whitefield, Alexander (National Bureau of Economic Research Working Paper Series, 2023)
Do investors anticipate that demands for racial equity will impact companies? We explore this question in the context of the Black Lives Matter (BLM) movement—the largest racially motivated protest movement in U.S. history—and its effect on the U.S. policing industry using a novel dataset on publicly traded firms contracting with the police. It is unclear whether the BLM uprisings were likely to increase or decrease market valuations of firms contracting heavily with police because of the increased interest in reforming the police, fears over rising crime, and pushes to “defund the police”. We find, in contrast to the predictions of economics experts we surveyed, that in the three weeks following incidents triggering BLM uprisings, policing firms experienced a stock price increase of seven percentage points relative to the stock prices of nonpolicing firms in similar industries. In particular, firms producing surveillance technology and police accountability tools experienced higher returns following BLM activism–related events. Furthermore, policing firms’ fundamentals, such as sales, improved after the murder of George Floyd, suggesting that policing firms’ future performances bore out investors' positive expectations following incidents triggering BLM uprisings. Our research shows how—despite BLM’s calls to reduce investment in policing and explore alternative public safety approaches—the financial market has translated high-profile violence against Black civilians and calls for systemic change into shareholder gains and additional revenues for police suppliers.
Author contact info: Bocar A. Ba Department of Economics Duke University 213 Social Sciences Durham, NC 27708 E-Mail: bocar.ba@duke.edu Roman Rivera E-Mail: rgrivera@berkeley.edu Alexander Whitefield E-Mail: whalex@wharton.upenn.edu

Incorporating Micro Data into Differentiated Products Demand Estimation with PyBLP - Conlon, Christopher; Gortmaker, Jeff (National Bureau of Economic Research Working Paper Series, 2023)
We provide a general framework for incorporating many types of micro data from summary statistics to full surveys of selected consumers into Berry, Levinsohn, and Pakes (1995)-style estimates of differentiated products demand systems. We extend best practices for BLP estimation in Conlon and Gortmaker (2020) to the case with micro data and implement them in our open-source package PyBLP. Monte Carlo experiments and empirical examples suggest that incorporating micro data can substantially improve the finite sample performance of the BLP estimator, particularly when using well-targeted summary statistics or "optimal micro moments" that we derive and show how to compute.
Author contact info: Christopher Conlon Stern School of Business New York University 44 W. 4th St New York, NY 10012 Tel: 646/389-3895 E-Mail: cconlon@stern.nyu.edu Jeff Gortmaker Harvard Business School Boston, MA 02163 E-Mail: jgortmaker@g.harvard.edu

Who (Actually) Gets the Farm? Intergenerational Farm Succession in the United States - Haws, Adrian; Just, David R; Price, Joseph (National Bureau of Economic Research Working Paper Series, 2023)
We link census records for millions of farm children to identify owner-operators of the family farm in adulthood, providing the first population-level evidence on intergenerational farm transfers. Using our panel of U.S. census data from 1900 to 1940, our analysis supports the primogeniture hypothesis that oldest sons are more likely to inherit the family farm. Daughters are rarely observed as successors. We find that the birth order relationship among sons is relatively small and is only present for the subset of families with parents who are working age when they first have a successor, indicating that they had a succession plan. In families without an early successor, adult children who are tenant farmers or are not in an urban area are more likely to later inherit their family’s farm. Tenancy and rural residence are much more predictive of succession than is birth order. Thus, unplanned succession may primarily benefit underresourced farmers. With fewer than one-fifth of farm families having a child successor, the slow growth in succession as parents reach retirement age and life expectancy suggests the importance of identifying a successor early.
Author contact info: Adrian Haws Cornell University 434 Warren Hall Ithaca, NY 14853 E-Mail: aah226@cornell.edu David R. Just Cornell University 210C Warren Hall Ithaca, NY 14850 E-Mail: drj3@cornell.edu Joseph Price Department of Economics Brigham Young University 2129 WVB Provo, UT 84602 Tel: 801/422-5296 Fax: 801/422-0194 E-Mail: joseph_price@byu.edu

The Macroeconomic Effects of the Federal Reserve's Conventional and Unconventional Monetary Policies - Swanson, Eric T (National Bureau of Economic Research Working Paper Series, 2023)
I separately identify and estimate the effects of the Federal Reserve’s federal funds rate, forward guidance, and large-scale asset purchase (LSAP) policies on the U.S. economy. I extend the high-frequency identification strategy of Bauer and Swanson (2023b) for monetary policy VARs by allowing each of the above policies to have possibly different economic effects. I follow Swanson (2021) and Swanson and Jayawickrema (2023) to separately identify federal funds rate, forward guidance, and LSAP components of monetary policy announcements using high-frequency interest rate changes around FOMC announcements, post- FOMC press conferences, FOMC meeting minutes releases, and speeches and testimony by the Fed Chair and Vice Chair. I find that changes in the federal funds rate have had the most powerful effects on the U.S. economy, followed by forward guidance and, lastly, LSAPs.
Author contact info: Eric T. Swanson Department of Economics University of California at Irvine 3151 Social Science Plaza Irvine, CA 92697-5100 Tel: 949/824-8305 E-Mail: eric.swanson@uci.edu

Supply Chain Adjustments to Tariff Shocks: Evidence from Firm Trade Linkages in the 2018-2019 U.S. Trade War - Handley, Kyle; Kamal, Fariha; Monarch, Ryan (National Bureau of Economic Research Working Paper Series, 2023)
We use the 2018-2019 U.S. trade war to examine how supply chains adjustments to a tariff cost shock affect imports and exports. Using confidential firm-trade linked data, we show that the decline in imports of tariffed goods was driven by discontinuations of U.S. buyer–foreign supplier relationships, reduced formation of new relationships, and exits by U.S. firms from import markets altogether. However, tariffed products where imports were concentrated in fewer suppliers had a smaller decline in import growth. We then construct measures of export exposure to import tariffs by linking tariffs paid by importing firms to their exported products. We find that the most exposed products had lower exports in 2018-2019, with most of the impact occurring in 2019.
Author contact info: Kyle Handley University of California, San Diego School of Global Policy and Strategy La Jolla, CA 92093 E-Mail: khandley@ucsd.edu Fariha Kamal U.S. Bureau of the Census 4600 Silver Hill Road Washington, D.C 20233 E-Mail: fariha.kamal@census.gov Ryan Monarch Syracuse University Department of Economics 110 Eggers Hall Syracuse, NY 13244-1020 E-Mail: rpmonarc@syr.edu

Automatic Enrollment with a 12% Default Contribution Rate - Beshears, John; Guo, Ruofei; Laibson, David; Madrian, Brigitte C; Choi, James J (National Bureau of Economic Research Working Paper Series, 2023)
We study a retirement savings plan with a default contribution rate of 12% of income, which is much higher than previously studied defaults. Twenty-five percent of employees had not opted out of this default 12 months after hire; a literature review finds that the corresponding fraction in plans with lower defaults is approximately one-half. Because only contributions above 12% were matched by the employer, 12% was likely to be a suboptimal contribution rate for employees. Employees who remained at the 12% default contribution rate had average income that was approximately one-third lower than would be predicted from the relationship between salaries and contribution rates among employees who were not at 12%. Defaults may influence low-income employees more strongly in part because these employees face higher psychological barriers to active decision making.
Author contact info: John Beshears Harvard Business School Baker Library 439 Soldiers Field Boston, MA 02163 E-Mail: jbeshears@hbs.edu Ruofei Guo E-Mail: ruofei.guo@kellogg.northwestern.edu David Laibson Department of Economics Littauer M-12 Harvard University Cambridge, MA 02138 Tel: 617/496-3402 Fax: 617/495-8570 E-Mail: dlaibson@gmail.com Brigitte C. Madrian 730 B N. Eldon Tanner Building Brigham Young University Provo, UT 84602-3113 E-Mail: brigitte_madrian@byu.edu James J. Choi Yale School of Management 165 Whitney Avenue P.O. Box 208200 New Haven, CT 06520-8200 E-Mail: james.choi@yale.edu

An Import(ant) Price of Brexit Uncertainty - Graziano, Alejandro G; Handley, Kyle; Limão, Nuno (National Bureau of Economic Research Working Paper Series, 2023)
We estimate the impact of trade policy uncertainty (TPU) on CES import price indices, focusing on the implications of Britain’s exit from the European Union (Brexit). Our analysis reveals that an increase in the probability of Brexit increases U.K. import price indices by raising the prices of existing products and by reducing product variety from the E.U. We find evidence that the risk of higher import protection from the 2016 referendum increased current import price indices by more than 10%. This amounted to a 2 log point increase in manufactured goods prices and a 0.6 log point decrease in consumers’ real income.
Author contact info: Alejandro G. Graziano Room B35 Sir Clive Granger Building University Park Nottingham NG7 2RD United Kingdom Tel: +44 0115 95 14297 E-Mail: alejandro.graziano@nottingham.ac.uk Kyle Handley University of California, San Diego School of Global Policy and Strategy La Jolla, CA 92093 E-Mail: khandley@ucsd.edu Nuno Limão Georgetown University ICC Building Washington, DC 20557 E-Mail: nuno.limao@georgetown.edu

Global Capital Allocation - Florez-Orrego, Sergio; Maggiori, Matteo; Schreger, Jesse; Sun, Ziwen; Tinda, Serdil (National Bureau of Economic Research Working Paper Series, 2023)
We survey the literature on global capital allocation. We begin by reviewing the rise of cross-border investment, the shift towards portfolio investment, and the literature focusing on aggregate patterns in multilateral and bilateral positions. We then turn to the recent literature that uses micro-data to document patterns in global capital allocations. We focus on the importance of the currency of denomination of assets in international portfolios and the role that tax havens and offshore financial centers play in intermediating global capital. We conclude with directions for future research in this area.
Author contact info: Sergio Florez-Orrego E-Mail: saf9215@nyu.edu Matteo Maggiori Stanford University Graduate School of Business 655 Knight Way Stanford, CA 94305 E-Mail: maggiori@stanford.edu Jesse Schreger Columbia Business School 665 W 130th St Kravis Hall, 551 New York, NY 10027 Tel: 212-851-0171 Fax: 212-662-8474 E-Mail: jesse.schreger@columbia.edu Ziwen Sun E-Mail: ziwensun@stanford.edu Serdil Tinda E-Mail: serdil@stanford.edu

Women and the Econometrics of Family Trees - Espín-Sánchez, José-Antonio; Ferrie, Joseph P; Vickers, Christopher (National Bureau of Economic Research Working Paper Series, 2023)
We present an econometric structure for the analysis of intergenerational mobility that integrates non-linearities, the role of maternal-side effects and the impact of grandparents. We show how previously estimated models are special cases of this general framework and what specific assumptions each embeds. Our analysis of linked U. S. data 1900-40 reveals the extent to which inadequate consideration of assortative mating and the impact of mothers produces misleading conclusions.
Author contact info: José-Antonio Espín-Sánchez Department of Economics Yale University Box 208269 New Haven, CT 06520-8269 E-Mail: jose-antonio.espin-sanchez@yale.edu Joseph P. Ferrie Department of Economics Northwestern University 2001 Sheridan Road Evanston, IL 60208-2600 Tel: 847/491-8210 Fax: 847/491-7001 E-Mail: ferrie@northwestern.edu Christopher Vickers Auburn University Auburn, AL 36832 Tel: 334-844-7828 E-Mail: czvickers@auburn.edu

Antitrust Enforcement Increases Economic Activity - Babina, Tania; Barkai, Simcha; Jeffers, Jessica; Karger, Ezra; Volkova, Ekaterina (National Bureau of Economic Research Working Paper Series, 2023)
We hand-collect and standardize information describing all 3,055 antitrust lawsuits brought by the Department of Justice (DOJ) between 1971 and 2018. Using restricted establishment-level microdata from the U.S. Census, we compare the economic outcomes of a non-tradable industry in states targeted by DOJ antitrust lawsuits to outcomes of the same industry in other states that were not targeted. We document that DOJ antitrust enforcement actions permanently increase employment by 5.4% and business formation by 4.1%. Using an event-study design, we find (1) a sharp increase in payroll that exceeds the increase in employment, meaning that DOJ antitrust enforcement increases average wages, (2) an economically smaller increase in sales that is statistically insignificant, and (3) a precise increase in the labor share. While we cannot separately measure the quantity and price of output, the increase in production inputs (employment), together with a proportionally smaller increase in sales, strongly suggests that these DOJ antitrust enforcement actions increase the quantity of output and simultaneously decrease the price of output. Our results show that government antitrust enforcement leads to persistently higher levels of economic activity in targeted industries.
Author contact info: Tania Babina Columbia Business School Kravis Hall 742 665 W 130th St New York, NY 10027 E-Mail: tania.babina@gsb.columbia.edu Simcha Barkai Boston College E-Mail: barkai@bc.edu Jessica Jeffers E-Mail: jeffers@hec.fr Ezra Karger Federal Reserve Bank of Chicago 230 South LaSalle Street Chicago, IL 60604 E-Mail: karger@uchicago.edu Ekaterina Volkova 198 Berkeley St Parkville, VIC, 3053 Australia E-Mail: orhahog@gmail.com

The Zero-Beta Interest Rate - Di Tella, Sebastian; Hébert, Benjamin M; Kurlat, Pablo; Wang, Qitong (National Bureau of Economic Research Working Paper Series, 2023)
We use equity returns to construct a time-varying measure of the interest rate that we call the zero-beta rate: the expected return of a stock portfolio orthogonal to the stochastic discount factor. The zero-beta rate is high and volatile. In contrast to safe rates, the zero-beta rate fits the aggregate consumption Euler equation remarkably well, both unconditionally and conditional on monetary shocks, and can explain the level and volatility of asset prices. We claim that the zero-beta rate is the correct intertemporal price.
Author contact info: Sebastian Di Tella Stanford University Graduate School of Business 655 Knight Way Stanford, CA 94305 Tel: 650/725-8767 E-Mail: sditella@stanford.edu Benjamin M. Hébert Graduate School of Business Stanford University 655 Knight Way Stanford, CA 94305 Tel: 617/869-8502 E-Mail: bhebert@stanford.edu Pablo Kurlat University of Southern California Kaprielian Hall 3620 Vermont Ave Los Angeles, CA 90089 E-Mail: kurlat@usc.edu Qitong Wang Department of Economics 3620 South Vermont Ave. Kaprielian (KAP) Hall, 300 Los Angeles, CA 90089-0253 USA E-Mail: qitongwa@usc.edu

The Impact of Bretton Woods International Capital Controls on the Global Economy and the Value of Geopolitical Stability: A General Equilibrium Analysis - Ohanian, Lee E; Restrepo-Echavarria, Paulina; Van Patten, Diana; Wright, Mark L.J. (National Bureau of Economic Research Working Paper Series, 2023)
This paper quantifies the positive and normative impact of Bretton Woods capital controls on global and regional economic activity. A three-region DSGE capital flows accounting framework consisting of the U.S., Western Europe, and the Rest of the World (ROW) is developed to quantify capital controls and evaluate their impact on the world economy. We find these controls had large effects. Counterfactual analysis show world output would have been 0:5 percent higher had there been perfect capital mobility, with substantial capital flowing from the ROW to the U.S. Bretton Woods capital controls raised welfare substantially in the ROW, but at the expense of much lower U.S. welfare. Given the U.S.’s goal of keeping capital within these countries to preserve their stability during this period, we interpret lower U.S. welfare due to Bretton Woods as the implicit value the U.S. placed on preserving geopolitical stability in ally countries during the Cold War.
Author contact info: Lee E. Ohanian 8283 Bunche Hall UCLA, Department of Economics Box 951477 Los Angeles, CA 90095 Tel: 310/825-0979 Fax: 310/825-9528 E-Mail: ohanian@econ.ucla.edu Paulina Restrepo-Echavarria 4 E Villa Ave St Louis, MO 63132 E-Mail: paulinares@gmail.com Diana Van Patten Yale School of Management 165 Whitney Avenue New Haven, CT 06511 Tel: 310/902-5529 E-Mail: diana.vanpatten@yale.edu Mark L.J. Wright Federal Reserve Bank of St Louis P.O. Box 442 St Louis, Miss 63166-0442 United States E-Mail: Mark.Wright@stls.frb.org

Do Cops Know Who to Stop? Assessing Optimizing Models of Police Behavior with a Natural Experiment - Abrams, David; Fang, Hanming; Goonetilleke, Priyanka (National Bureau of Economic Research Working Paper Series, 2023)
The standard economic model of police stops implies that the contraband hit rate should rise when the number of stops or searches per officer falls, ceteris paribus. We provide empirical corroboration of such optimizing models of police behavior by examining changes in stops and frisks around two extraordinary events of 2020: the COVID-19 pandemic onset and the nationwide protests following the killing of George Floyd. We find that hit rates from pedestrian and vehicle stops generally rose as stops and frisks fell dramatically. Using detailed data, we are able to rule out a number of alternative explanations, including changes in street population, crime, police allocation, and policing intensity. We find mixed evidence about the changes in racial disparities, and evidence that police stops do not decrease crime, at least in the short run. The results are robust to a number of different specifications. Our findings provide quantitative estimates that can contribute to the important goals of improving and reforming policing.
Author contact info: David Abrams Carey Law School University of Pennsylvania 3501 Sansom Street Philadelphia, PA 19104 E-Mail: dabrams@law.upenn.edu Hanming Fang Department of Economics Ronald O. Perelman Center for Political Science and Economics University of Pennsylvania 133 South 36th Street, Suite 150 Philadelphia, PA 19104 Tel: 215-898-7767 Fax: 215-573-2057 E-Mail: hanming.fang@econ.upenn.edu Priyanka Goonetilleke Department of Economics University of Pennsylvania 133 S 36th St Perelman Center for Political Science and Economics Philadelphia, PA 19104 United States E-Mail: goonep@sas.upenn.edu

“Invisible Killer”: Seasonal Allergies and Accidents - Akesaka, Mika; Shigeoka, Hitoshi (National Bureau of Economic Research Working Paper Series, 2023)
Although at least 400 million people suffer from seasonal allergies worldwide, the adverse effects of pollen on “non-health” outcomes, such as cognition and productivity, are relatively understudied. Using ambulance archives from Japan, we demonstrate that high pollen days are associated with increased accidents and injuries—one of the most extreme consequences of cognitive impairment. We find some evidence of avoidance behavior in buying allergy products but limited evidence in curtailing outdoor activity, implying that the cognitive risk of pollen exposure is discounted. Our results suggest that policymakers may wish to consider programs to raise public awareness of the risk and promote behavioral change.
Author contact info: Mika Akesaka 2-1, Rokkodai Nada Kobe 6578501 Japan E-Mail: mika_akesaka@rieb.kobe-u.ac.jp Hitoshi Shigeoka Department of Economics Simon Fraser University 8888 University Drive, WMC 4653 Burnaby, BC V5A 1S6 Tel: 778/782-5348 E-Mail: hitoshi_shigeoka@sfu.ca

Causal Effects of Renewable Portfolio Standards on Renewable Investments and Generation: The Role of Heterogeneity and Dynamics - Deschenes, Olivier; Malloy, Christopher; McDonald, Gavin G (National Bureau of Economic Research Working Paper Series, 2023)
Despite a 30-year long history, Renewable Portfolio Standards (RPS) remain controversial and debates continue to surround their efficacy in leading the low-carbon transition in the electricity sector. Contributing to the ongoing debates is the lack of definitive causal evidence on their impact on investments in renewable capacity and generation. This paper provides the most detailed analysis to date of the impact of RPSs on renewable electricity capacity investments and on generation. We use state-level data from 1990-2019 and recent econometric methods designed to address dynamic and heterogeneous treatment effects in a staggered adoption panel data design. We find that, on average, RPS policies increase wind generation capacity by 600-1200 MW, a 44% increase, but have no significant effect on investments in solar capacity. Additionally, we demonstrate that RPSs have slow dynamic effects: most of the capacity additions occur 5 years after RPS implementation. Estimates for wind and solar electricity generation mimic those for capacity investments. We also find similar results using an alternate treatment definition that allows states to meet their RPS requirements with pre-existing renewable generation and renewable generation from nearby states.
Author contact info: Olivier Deschenes Department of Economics 2127 North Hall University of California, Santa Barbara Santa Barbara, CA 93106 Tel: 805/893-5617 Fax: 805/893-8830 E-Mail: olivier@econ.ucsb.edu Christopher Malloy Department of Economics 308 Cate Center Dr Cate 1, Room 158 Norman, OK 73072 E-Mail: christopher.malloy-1@ou.edu Gavin G. McDonald Marine Science Institute Bren School of Environmental Science & Management Marine Science Institute, Bldg. 520 Santa Barbara, CA 93106 E-Mail: gmcdonald@bren.ucsb.edu

Inventor Gender and Patent Undercitation: Evidence from Causal Text Estimation - Hochberg, Yael; Kakhbod, Ali; Li, Peiyao; Sachdeva, Kunal (National Bureau of Economic Research Working Paper Series, 2023)
Implementing a state-of-the-art machine learning technique for causal identification from text data (C-TEXT), we document that patents authored by female inventors are under-cited relative to those authored by males. Relative to what the same patent would be predicted to receive had the lead inventor instead been male, patents with a female lead inventor receive 10% fewer citations. Patents with male lead inventors tend to undercite past patents with female lead inventors, while patent examiners of both genders appear to be more even-handed in the citations they add to patent applications. For female inventors, market-based measures of patent value load significantly on the citation counts that would be predicted by C-TEXT, but do not load significantly on actual forward citations. The under-recognition of female-authored patents likely has implications for the allocation of talent in the economy.
Author contact info: Yael Hochberg Jones Graduate School of Business Rice University 6100 Main Street, MS-531 McNair Hall Room 331 Houston, TX 77005 E-Mail: hochberg@rice.edu Ali Kakhbod Haas School of Business University of California, Berkeley 2220 Piedmont Ave Berkeley, CA 94720 E-Mail: akakhbod@berkeley.edu Peiyao Li 2220 Piedmont Ave Berkeley, CA 94720 United States E-Mail: ojhfklsjhl@berkeley.edu Kunal Sachdeva Rice University 6100 Main Street McNair Hall Houston, TX 77005 United States Tel: 9175140576 E-Mail: kunal.sachdeva@rice.edu