Global Knowledge and Trade Flows: Theory and Measurement - Lind, Nelson; Ramondo, Natalia (National Bureau of Economic Research Working Paper Series, 2022)
We study the global innovation and diffusion of ideas by introducing trade into the model in Eaton and Kortum (1999) (EK). This extension allows us to use international trade flows and country-level factor costs to estimate both the intensity of innovation within countries over time and diffusion rates across countries. We find significant specialization across the globe: some countries have high innovation rates, while other countries rely on diffusion. Although innovation is correlated with economic growth, there are many high income countries that primarily produce using diffused ideas. Additionally, these patterns shift over time — we estimate that a wave of innovation began in China during the early-2000’s, reducing its reliance on diffused technology.
Author contact info: Nelson Lind Department of Economics Emory University 1602 Fishburne Drive Rich Bldg., 3rd Floor Atlanta, GA 30322-2240 E-Mail: nelslind@gmail.com Natalia Ramondo Boston University Department of Economics 270 Bay State Rd # 445 Boston, MA 02215 E-Mail: nramondo@bu.edu

The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery - Clemens, Michael A; Lewis, Ethan G (National Bureau of Economic Research Working Paper Series, 2022)
The U.S. limits work visas for low-skill jobs outside of agriculture, with a binding quota that firms access via a randomized lottery. We evaluate the marginal impact of the quota on firms entering the 2021 H-2B visa lottery using a novel survey and pre-analysis plan. Firms exogenously authorized to employ more immigrants significantly increase production (elasticity +0.16) with no decrease or an increase in U.S. employment (elasticity +0.10, statistically imprecise) across several pre-registered subsamples. The results imply very low substitutability of native for foreign labor in the policy-relevant occupations. Forensic analysis suggests similarly low substitutability of black-market labor.
Author contact info: Michael A. Clemens Dept. of Economics George Mason University 4400 University Dr., MSN 1B2 Fairfax, VA 22030 United States Tel: 7039934846 E-Mail: mcleme@gmu.edu Ethan G. Lewis Department of Economics Dartmouth College 6106 Rockefeller Hall Hanover, NH 03755 Tel: 603/646-2943 Fax: 603/646-2122 E-Mail: ethan.g.lewis@dartmouth.edu

Can Social Media Rhetoric Incite Hate Incidents? Evidence from Trump's "Chinese Virus" Tweets - Cao, Andy; Lindo, Jason M; Zhong, Jiee (National Bureau of Economic Research Working Paper Series, 2022)
We investigate whether Donald Trump's "Chinese Virus" tweets contributed to the rise of anti-Asian incidents. We find that the number of incidents spiked following Trump’s initial “Chinese Virus” tweets and the subsequent dramatic rise in internet search activity for the phrase. Difference-in-differences and event-study analyses leveraging spatial variation indicate that this spike in anti-Asian incidents was significantly more pronounced in counties that supported Donald Trump in the 2016 presidential election relative to those that supported Hillary Clinton. We estimate that anti-Asian incidents spiked by 4000 percent in Trump-supporting counties, over and above the spike observed in Clinton-supporting counties.
Author contact info: Andy Cao E-Mail: andycao@tamu.edu Jason M. Lindo School of Economics Georgia Institute of Technology Atlanta, GA 30332 E-Mail: jlindo@gatech.edu Jiee Zhong E-Mail: jieezhong@tamu.edu

Carbon Emissions Trading and Environmental Protection: International Evidence - Bai, Jennie; Ru, Hong (National Bureau of Economic Research Working Paper Series, 2022)
We study how the implementation of emissions trading systems (ETS) impacts emissions reductions and the usage of renewable energy using a panel sample of the largest 100 countries worldwide. Exploiting the cross-country variations in ETS implementations, we show that ETS adoption materially reduced greenhouse gas (carbon dioxide) emissions by 12.1% (18.1%). Moreover, ETSs reduced overall emissions by cutting fossil fuel usage, such as coal, by 23.70% while boosting the usage of renewable energy by 61.59%, on average. In contrast, the introduction of carbon taxes has a less effective impact on emissions reduction and fails to boost the usage of renewable energy.
Author contact info: Jennie Bai McDonough School of Business Georgetown University 3700 O Street, NW Washington, DC 20057 Tel: 202/687-5695 E-Mail: jennie.bai@georgetown.edu Hong Ru Massachusetts Institute of Technology 100 Main Street, E62-633 Cambridge,, MA 02142 USA E-Mail: ruhong@ntu.edu.sg

Oligopsony Power and Factor-Biased Technology Adoption - Rubens, Michael (National Bureau of Economic Research Working Paper Series, 2022)
I show that buyer power of firms could either increase or decrease their technology adoption, depending on the direction of technical change and on which input markets are imperfectly competitive. I examine this relationship empirically in a setting that features both concentrated labor markets and a large technology shock: the introduction of mechanical cutters in the 19th century Illinois coal mining industry. Using a model of production and labor supply which is estimated with mine-level data, I find that oligopsony power over skilled miners reduced the usage of cutting machines, an unskill-biased technology. However, it would have increased the usage of counterfactual skill-biased and Hicks-neutral technologies.
Author contact info: Michael Rubens E-Mail: rubens@econ.ucla.edu

Information Aggregation and Transmission in Strategic Networks - Kung, Fan-chin; Wang, Ping (National Bureau of Economic Research Working Paper Series, 2022)
Observing the increasingly important roles played by the creation and transmission of information and tacit knowledge, we construct an information-network model incorporating both information transmitters and information aggregators. Given information-processing roles in aggregation or transmission, we establish various general properties concerning the existence of a network equilibrium, its optimality and the patterns of equilibrium and optimal configuration. We then allow for endogenous choice of the information-processing roles. We prove the existence and show that, with sufficiently small link maintenance costs, the monocentric network with one aggregator connecting to all other agents as transmitters on a tree graph is the unique configuration. In general, a rich array of equilibrium configurations may emerge, including core-star, star-with-satellites and cycles. We further characterize an information-processing chain network with all information aggregators and transmitters linked along a chain and compute numerically the ranges of transmission decays and link costs within which a network equilibrium arises.
Author contact info: Fan-chin Kung Department of Economics East Carolina University Greenville, NC 27858 USA E-Mail: kungf@ecu.edu Ping Wang Department of Economics Washington University in St. Louis Campus Box 1208 One Brookings Drive St. Louis, MO 63130-4899 Tel: 314/935-5632 Fax: 314/935-4156 E-Mail: pingwang@wustl.edu

A North-South Model of Structural Change and Growth - Aristizabal-Ramirez, Maria; Leahy, John V; Tesar, Linda (National Bureau of Economic Research Working Paper Series, 2022)
This paper is motivated by a set of cross-country observations on growth, structural transformation, and investment rates in a large sample of countries. We observe a hump-shaped relationship between a country's investment rate and its level of development, both within countries over time and across countries. Advanced economies reach their investment peak at a higher level of income and at an earlier point in time relative to emerging markets. We also observe the familiar patterns of structural change (a decline in the agricultural share and an increase in the services share, both relative to manufacturing). The pace of change observed in the 1930 to 1980 period in advanced economies is remarkably similar to that in emerging markets since 1960. We develop a two-region model of the world economy in which regions are isolated from each other up to the point of capital market liberalization in the early 1990s. At that point, capital flows from advanced economies to emerging markets and accelerates the process of structural change in emerging markets. The majority of gains from financial liberalization accrue to emerging economies. We consider the impact of a “second wave” of liberalization when China fully opens its economy to capital inflows.
Author contact info: Maria Aristizabal-Ramirez Federal Reserve Board of Governors Washington DC, DC 20551 USA E-Mail: maria.aristizabal-ramirez@frb.gov John V. Leahy Department of Economics and Gerald R. Ford School of Public Policy University of Michigan 3308 Weill Hall 735 S. State St. #3308 Ann Arbor, MI 48109 Tel: 734/763-2599 E-Mail: jvleahy@umich.edu Linda Tesar Department of Economics University of Michigan Ann Arbor, MI 48109-1220 Tel: 734/763 6015 Fax: 734/764-2769 E-Mail: ltesar@umich.edu

U.S Electric Utility Adaptation to Natural Disasters Shocks and Green Power Mandates - Huang, Robert; Kahn, Matthew E (National Bureau of Economic Research Working Paper Series, 2022)
Access to electricity is a crucial determinant of quality of life and productivity. The United States has a highly reliable electricity grid, but it faces new resilience challenges posed by more intense natural disasters and ambitious green power requirements. Using a US electric utility panel dataset from 2013 to 2020, we document that natural disasters disrupt service, but utilities have made progress in adapting to such shocks. Over the last decade, utilities have faced a tradeoff between achieving local carbon mitigation goals and offering reliable power access. We discuss alternative approaches to attenuate this tradeoff.
Author contact info: Robert Huang Department of Economics University of Southern California 3620 South Vermont Ave. Kaprielian (KAP) Hall, 300 Los Angeles, CA 90089-0253 E-Mail: huangrob@usc.edu Matthew E. Kahn Department of Economics University of Southern California 3620 South Vermont Ave. Kaprielian (KAP) Hall, 300 Los Angeles, CA 90089-0253 E-Mail: kahnme@usc.edu

African Political Institutions and the Impact of Colonialism - Bolt, Jutta; Gardner, Leigh; Kohler, Jennifer; Paine, Jack; Robinson, James A (National Bureau of Economic Research Working Paper Series, 2022)
Conventional wisdom proposes deep historical roots for authoritarianism in Africa: either colonial “decentralized despotism” or enduring structural features. We present a new theoretical perspective. Africans sought autonomous local communities, which constrained precolonial rulers. Colonizers largely left constrained institutions in place given budget limitations. Innovation, where it occurred, typically scaled up councils rather than invented despotic chiefs. To test these implications, we compiled two original datasets that measure precolonial institutions and British colonial administrations around 1950 in 463 local government units. Although colonial institutions were authoritarian at the national level, most Native Authorities were constrained by some type of council and many local institutions lacked a singular ruler entirely. The form of Native Authority institutions and the composition of councils are strongly correlated with precolonial institutional forms. The persistence of institutional constraints at the local level suggests alternative channels through which colonial rule fostered postcolonial authoritarian regimes.
Author contact info: Jutta Bolt Faculty of Economics and Business PO Box 800 9700 AV Groningen, the Netherlands E-Mail: j.bolt@rug.nl Leigh Gardner Department of Economic History London School of Economics and Political Sciences London WC2A 2AE United Kingdom E-Mail: l.a.gardner@lse.ac.uk Jennifer Kohler Department of Economic History London School of Economics and Political Science London, WC2A 2AE United Kingdom E-Mail: j.kohler@lse.ac.uk Jack Paine Department of Political Science Emory University 327 Tarbutton Hall 1555 Dickey Drive Atlanta, GA 30322 E-Mail: jackpaine@emory.edu James A. Robinson University of Chicago Harris School of Public Policy and Department of Political Science 1307 East 60th Street Chicago, Illinois 60637 Tel: 617/496-2839 Fax: 617/495-0438 E-Mail: jamesrobinson@uchicago.edu

When Information Conflicts with Obligations: the Role of Motivated Cognition - Wang, Ao; Wang, Shaoda; Ye, Xiaoyang (National Bureau of Economic Research Working Paper Series, 2022)
We experimentally test how psychological motivations can impact the processing of purely objective information. We first document that, when the high-stakes College Entrance Exam is held in the month of Ramadan, Chinese Muslim students perform significantly worse. When asked about the impact of fasting, they severely underestimate the cost of taking the exam during Ramadan, even when presented with direct empirical evidence. In the experiment, we randomly offer students reading materials in which well-respected Muslim clerics explain that it is permissible to postpone the fast until after the exam. Consistent with an interpretation of motivated cognition, students who receive the material distort the statistics about the fasting cost significantly less, and become more accepting of delaying the fast for the exam.
Author contact info: Ao Wang Department of Economics Faculty of Arts and Social Sciences National University of Singapore AS2 #06-02, 1 Arts Link Singapore 117570 Singapore E-Mail: ao.wang@nus.edu.sg Shaoda Wang Harris School of Public Policy University of Chicago 1307 E. 60th Street office 2055 Chciago, IL 60637 Tel: 773-236-9614 E-Mail: shaoda@uchicago.edu Xiaoyang Ye 164 Angell St., Providence, RI 02912 United States E-Mail: xiaoyang.ye@brown.edu

Administrative Burdens and Child Medicaid and CHIP Enrollments - Arbogast, Iris; Chorniy, Anna; Currie, Janet (National Bureau of Economic Research Working Paper Series, 2022)
Following decades of increasing child access to public health insurance, pre-pandemic enrollments fell in many states after 2016 and the number of uninsured children increased. This study provides the first national, quantitative assessment of the role of administrative burdens in driving this drop in child health insurance coverage. In addition, we identify the demographic groups of children who were most affected. We show that regulations that increased administrative burdens placed on families reduced public health insurance coverage by a mean of 5.9% within six months following the implementation of these changes. Declines were largest for Hispanic children, children with non-citizen parents, and children whose parents reported that they did not speak English well. These reductions were separate from and in addition to enrollment declines among Hispanic children following the announcement of a new public charge rule in Sept. 2018.
Author contact info: Iris Arbogast E-Mail: irisarbogast@gmail.com Anna Chorniy Northwestern University 420 E. Superior St. 9-941 Chicago, IL 60611 USA E-Mail: anna.chorniy@northwestern.edu 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

Mechanics of Spatial Growth - Cai, Sheng; Caliendo, Lorenzo; Parro, Fernando; Xiang, Wei (National Bureau of Economic Research Working Paper Series, 2022)
We develop a dynamic spatial growth model to explore the role of trade and internal migration in the process of spatial development and aggregate growth. Growth is shaped by the best global and local ideas that contribute to the local stock of knowledge. Global ideas diffuse more to locations that are relatively more exposed to international trade. Local ideas are diffused across space when workers move to another location. We embed the diffusion of ideas through trade and migration into a multi-country, multi-region framework with international trade, forward-looking dynamic migration decisions, and endogenous capital accumulation. We apply our framework to study the role of initial conditions, international trade, and internal migration on China’s spatial development and aggregate growth during the 1990s and 2000s. We find that initial conditions across space, idea diffusion, and capital accumulation play an important role in understanding the process of spatial development and aggregate growth in China. Changes in international trade costs and mobility restrictions during the 1990s and 2000s also contribute to aggregate growth, with large heterogeneity across space.
Author contact info: Sheng Cai E-Mail: shengcai@cityu.edu.hk Lorenzo Caliendo Yale University School of Management 135 Prospect Street New Haven, CT 06520 Tel: 203/432-4069 E-Mail: lorenzo.caliendo@yale.edu Fernando Parro Pennsylvania State University Department of Economics University Park, PA 16801 Tel: 202/812-5314 E-Mail: fxp5102@psu.edu Wei Xiang E-Mail: wei.xiang@yale.edu

The Early County Business Pattern Files: 1946-1974 - Eckert, Fabian; Lam, Ka-leung; Mian, Atif R; Müller, Karsten; Schwalb, Rafael; Sufi, Amir (National Bureau of Economic Research Working Paper Series, 2022)
The County Business Pattern (“CBP”) files contain employment and establishment counts for detailed industry codes covering all counties in the United States. The contribution of this project is to digitize, clean, and prepare the CBP files from 1946-1974. We also apply the methods developed in Eckert, Fort, Schott, and Yang (2020a) to impute missing employment observations in the raw data. We provide three digital data products for public use: (1) the cleaned CBP files for each year, (2) a consolidated panel data set of employment and establishment counts for about 20 industries and all US counties, (3) estimates for suppressed employment counts for each year.
Author contact info: Fabian Eckert Department of Economics UC San Diego 9500 Gilman Dr La Jolla, CA 92093 E-Mail: f@fpeckert.me Ka-leung Lam E-Mail: jl88@princeton.edu Atif R. Mian Princeton University Bendheim Center For Finance 26 Prospect Avenue Princeton, NJ 08540 E-Mail: atif@princeton.edu Karsten Müller National University of Singapore 15 Kent Ridge Dr Singapore, 119245 E-Mail: kmueller@nus.edu.sg Rafael Schwalb Department of Economics Princeton University E-Mail: schwalb@princeton.edu Amir Sufi University of Chicago Booth School of Business 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-6148 Fax: 773/702-0458 E-Mail: amir.sufi@chicagobooth.edu

Global Fund Flows and Emerging Market Tail Risk - Chari, Anusha; Dilts Stedman, Karlye; Lundblad, Christian (National Bureau of Economic Research Working Paper Series, 2022)
Global risk and risk aversion shocks have distinct distributional impacts on emerging market capital flows and returns. In particular, we find salient consequences of these different global shocks for tail risk in emerging markets. Open-end mutual fund trading provides a key mechanism linking shocks facing global investors to extreme capital flow and return realizations. The effects are heterogeneous across asset classes and fund types. The limited discretion and higher conformity of passive fund investments linked to benchmarking amplify pass-through effects that engender abnormal co-movements in emerging market flows and returns.
Author contact info: Anusha Chari Department of Economics, CB #3305 University of North Carolina at Chapel Hill Chapel Hill, NC 27599 Tel: 919/966-5346 E-Mail: achari@unc.edu Karlye Dilts Stedman Federal Reserve Bank of Kansas City 1 Memorial Dr. Kansas City, MO 64108 E-Mail: karlye.stedman@kc.frb.org Christian Lundblad Department of Finance University of North Carolina at Chapel Hill Chapel Hill, NC 27599-3490 USA Tel: 919-962-8441 Fax: 707-371-7060 E-Mail: christian_lundblad@unc.edu

Selfish Corporations - Colonnelli, Emanuele; Gormsen, Niels Joachim; McQuade, Timothy (National Bureau of Economic Research Working Paper Series, 2022)
We study how perceptions of corporate responsibility influence policy preferences and the effectiveness of corporate communication when agents have imperfect memory recall. Using a new large-scale survey of U.S. citizens on their support for corporate bailouts, we first establish that the public demands corporations to behave better within society, a sentiment we label “big business discontent.” Using random variation in the order of survey sections and in the exposure to animated videos, we then show that priming respondents to think about corporate responsibility lowers the support for bailouts. This finding suggests that big business discontent influences policy preferences. Furthermore, we find that messages which paint a positive picture of corporate responsibility can “backfire,” as doing so brings attention to an aspect on which the public has negative views. In contrast, reframing corporate bailouts in terms of economic trade-offs increases support for the policy. We develop a memory-based model of decision-making and communication to rationalize these findings.
Author contact info: Emanuele Colonnelli Booth School of Business University of Chicago 5807 S Woodlawn Ave Chicago, IL 60637 E-Mail: emanuele.colonnelli@chicagobooth.edu Niels Joachim Gormsen Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 E-Mail: niels.gormsen@chicagobooth.edu Timothy McQuade Haas School of Business University of California, Berkeley Berkeley, CA 94720 E-Mail: tmcquade@haas.berkeley.edu

Representation and Extrapolation: Evidence from Clinical Trials - Alsan, Marcella; Durvasula, Maya; Gupta, Harsh; Schwartzstein, Joshua; Williams, Heidi L (National Bureau of Economic Research Working Paper Series, 2022)
This article examines the consequences and causes of low enrollment of Black patients in clinical trials. We develop a simple model of similarity-based extrapolation that predicts that evidence is more relevant for decision-making by physicians and patients when it is more representative of the group that is being treated. This generates the key result that the perceived benefit of a medicine for a group depends not only on the average benefit from a trial, but also on the share of patients from that group who were enrolled in the trial. In survey experiments, we find that physicians who care for Black patients are more willing to prescribe drugs tested in representative samples, an effect substantial enough to close observed gaps in the prescribing rates of new medicines. Black patients update more on drug efficacy when the sample that the drug is tested on is more representative, reducing Black-White patient gaps in beliefs about whether the drug will work as described. Despite these benefits of representative data, our framework and evidence suggest that those who have benefited more from past medical breakthroughs are less costly to enroll in the present, leading to persistence in who is represented in the evidence base.
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 Maya Durvasula Stanford University 579 Jane Stanford Way Stanford, CA 94305 E-Mail: mdurvas@stanford.edu Harsh Gupta E-Mail: hgupta13@stanford.edu Joshua Schwartzstein Baker Library 461 Harvard Business School Soldiers Field Boston, MA 02163 E-Mail: jschwartzstein@hbs.edu Heidi L. Williams Department of Economics 6106 Rockefeller Center, Office 328 Dartmouth College Hanover, NH 03755 Tel: 617-669-0577 E-Mail: heidi.lie.williams@dartmouth.edu

Instrumental Variables with Unordered Treatments: Theory and Evidence from Returns to Fields of Study - Heinesen, Eskil; Hvid, Christian; Kirkebøen, Lars Johannessen; Leuven, Edwin; Mogstad, Magne (National Bureau of Economic Research Working Paper Series, 2022)
We revisit the identification argument of Kirkeboen et al. (2016) who showed how one may combine instruments for multiple unordered treatments with information about individuals’ ranking of these treatments to achieve identification while allowing for both observed and unobserved heterogeneity in treatment effects. We show that the key assumptions underlying their identification argument have testable implications. We also provide a new characterization of the bias that may arise if these assumptions are violated. Taken together, these results allow researchers not only to test the underlying assumptions, but also to argue whether the bias from violation of these assumptions are likely to be economically meaningful. Guided and motivated by these results, we estimate and compare the earnings payoffs to post-secondary fields of study in Norway and Denmark. In each country, we apply the identification argument of Kirkeboen et al. (2016) to data on individuals' ranking of fields of study and field-specific instruments from discontinuities in the admission systems. We empirically examine whether and why the payoffs to fields of study differ across the two countries. We find strong cross-country correlation in the payoffs to fields of study, especially after removing fields with violations of the assumptions underlying the identification argument.
Author contact info: Eskil Heinesen E-Mail: esh@rff.dk Christian Hvid E-Mail: christian@hvids.eu Lars Johannessen Kirkebøen Research Department Statistics Norway E-Mail: kir@ssb.no Edwin Leuven Department of Economics University of Oslo and Statistics Norway Norway E-Mail: edwin.leuven@econ.uio.no Magne Mogstad Department of Economics University of Chicago 1126 East 59th Street Chicago, IL 60637 Tel: 773/702-3877 E-Mail: magne.mogstad@gmail.com

Differentiable State-Space Models and Hamiltonian Monte Carlo Estimation - Childers, David; Fernández-Villaverde, Jesús; Perla, Jesse; Rackauckas, Christopher; Wu, Peifan (National Bureau of Economic Research Working Paper Series, 2022)
We propose a methodology to take dynamic stochastic general equilibrium (DSGE) models to the data based on the combination of differentiable state-space models and the Hamiltonian Monte Carlo (HMC) sampler. First, we introduce a method for implicit automatic differentiation of perturbation solutions of DSGE models with respect to the model's parameters. We can use the resulting output for various tasks requiring gradients, such as building an HMC sampler, to estimate first- and second-order approximations of DSGE models. The availability of derivatives also enables a general filter-free method to estimate nonlinear, non-Gaussian DSGE models by sampling the joint likelihood of parameters and latent states. We show that the gradient-based joint likelihood sampling approach is superior in efficiency and robustness to standard Metropolis-Hastings samplers by estimating a canonical real business cycle model, a real small open economy model, and a medium-scale New Keynesian DSGE model.
Author contact info: David Childers Carnegie Mellon University Tepper School of Business E-Mail: dchilders@cmu.edu Jesús Fernández-Villaverde Department of Economics University of Pennsylvania The Ronald O. Perelman Center for Political Science and Economics 133 South 36th Street Suite 150 Philadelphia, PA 19104 E-Mail: jesusfv@econ.upenn.edu Jesse Perla Vancouver School of Economics University of British Columbia E-Mail: jesse.perla@ubc.ca Christopher Rackauckas E-Mail: accounts@chrisrackauckas.com Peifan Wu 500-745 Thurlow St Vancouver, BC V6E1V8 Canada E-Mail: wupeifan@gmail.com

Understanding Geographic Disparities in Mortality - Fletcher, Jason; Schwarz, Hans G; Engelman, Michal; Johnson, Norman; Hakes, Jahn; Palloni, Alberto (National Bureau of Economic Research Working Paper Series, 2022)
A rich literature shows that early life conditions shape later life outcomes, including health and migration events. However, analyses of geographic disparities in mortality outcomes focus almost exclusively on contemporaneously measured geographic place (e.g., state of residence at death), thereby potentially conflating the role of early life conditions, migration patterns, and effects of destinations. We use the newly available Mortality Disparities in American Communities (MDAC) dataset, which links respondents in the 2008 ACS to official death records and estimate consequential differences by method of aggregation; the mean absolute deviation of the difference in life expectancy at age 50 measured by state of birth versus state of residence is 0.58 (0.50) years for men and 0.40 (0.29) years for women. These differences are also spatially clustered, and we show that regional inequality in life expectancy is higher based on life expectancies by state of birth, implying that interstate migration mitigates baseline geographical inequality in mortality outcomes. Finally, we assess how state-specific features of in-migration, out-migration, and non-migration together shape measures of mortality disparities by state (of residence), further demonstrating the difficulty of clearly interpreting these widely used measures.
Author contact info: Jason Fletcher University of Wisconsin-Madison La Follette School of Public Affairs 1225 Observatory Drive Madison, WI 53706 E-Mail: jfletcher@lafollette.wisc.edu Hans G. Schwarz E-Mail: schwarz4@wisc.edu Michal Engelman E-Mail: mengelman@wisc.edu Norman Johnson U.S. Bureau of the Census E-Mail: norman.j.johnson@census.gov Jahn Hakes E-Mail: Jahn.K.Hakes@census.gov Alberto Palloni University of Wisconsin- Madison Madison, WI 53705 E-Mail: palloni@ssc.wisc.edu

Welfare Assessments with Heterogeneous Individuals - Dávila, Eduardo; Schaab, Andreas (National Bureau of Economic Research Working Paper Series, 2022)
This paper develops a new approach to make welfare assessments based on the notion of Dynamic Stochastic weights (DS-weights for short). For a large class of dynamic stochastic economies with heterogeneous individuals, we introduce an aggregate additive decomposition that satisfies desirable properties and that allows us to exactly decompose welfare assessments into four components: i) aggregate efficiency, ii) risk-sharing, iii) intertemporal-sharing, and iv) redistribution. We leverage DS-weights to i) revisit how welfarist (e.g., utilitarian) planners make interpersonal welfare comparisons and ii) formalize new welfare criteria that are exclusively based on one or several of the components that we identify.
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

What's My Employee Worth? The Effects of Salary Benchmarking - Cullen, Zoe B; Li, Shengwu; Perez-Truglia, Ricardo (National Bureau of Economic Research Working Paper Series, 2022)
Firms are allowed to use aggregate data on market salaries to set pay, a practice known as salary benchmarking. Using national payroll data, we study firms that gain access to a tool that reveals market benchmarks for each job title. Using a difference-indifferences design, we find that the benchmark information reduces salary dispersion by 25%. Thus, salary dispersion must stem partly from aggregate uncertainty about the salaries offered by other firms. Our model formalizes how salary dispersion can arise even in competitive labor markets for identical workers when such uncertainty exists, and we discuss implications for an ongoing policy debate.
Author contact info: Zoe B. Cullen Rock Center 210 Harvard Business School 60 N. Harvard Boston, MA 02163 Tel: 617/495-1867 E-Mail: zcullen@hbs.edu Shengwu Li Harvard University Department of Economics Littauer Center 1805 Cambridge Street Cambridge, MA 02138 E-Mail: shengwu_li@fas.harvard.edu Ricardo Perez-Truglia Haas School of Business University of California, Berkeley 545 Student Services Building #1900 Berkeley, CA 94720-1900 Tel: 617/875-4437 E-Mail: ricardotruglia@berkeley.edu

The Covid-19 Baby Bump: The Unexpected Increase in U.S. Fertility Rates in Response to the Pandemic - Bailey, Martha J; Currie, Janet; Schwandt, Hannes (National Bureau of Economic Research Working Paper Series, 2022)
We use natality microdata covering the universe of U.S. births for 2015-2021 and California births from 2015 through February 2023 to examine childbearing responses to the COVID-19 pandemic. We find that 60% of the 2020 decline in U.S. fertility rates was driven by sharp reductions in births to foreign-born mothers although births to this group comprised only 22% of all U.S. births in 2019. This decline started in January 2020. In contrast, the COVID-19 recession resulted in an overall “baby bump” among U.S.-born mothers which marked the first reversal in declining fertility rates since the Great Recession. Births to U.S.-born mothers fell by 31,000 in 2020 relative to a pre-pandemic trend but increased by 71,000 in 2021. The data for California suggest that U.S. births remained elevated through February 2023. The baby bump was most pronounced for first births and women under age 25, suggesting that the pandemic led some women to start families earlier. Above age 25, the baby bump was most pronounced for women ages 30-34 and women with a college education. The 2021-2022 baby bump is especially remarkable given the large declines in fertility rates that would have been projected by standard statistical models.
Author contact info: Martha J. Bailey University of California, Los Angeles Department of Economics Bunche Hall 315 Portola Plaza Los Angeles, CA 90095 E-Mail: marthabailey@ucla.edu 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 Hannes Schwandt School of Education and Social Policy Northwestern University 2120 Campus Drive Evanston, Il 60208 E-Mail: schwandt@northwestern.edu

Long Social Distancing - Barrero, Jose Maria; Bloom, Nicholas; Davis, Steven J (National Bureau of Economic Research Working Paper Series, 2022)
Many working-age Americans plan to continue some forms of social distancing after the COVID-19 pandemic ends. We uncover this long social distancing phenomenon in our monthly Survey of Working Arrangements and Attitudes. It is stronger among older persons, the less educated, and those who live with or care for persons at high risk from infectious diseases. Regression models fit to individual-level data suggest that social distancing lowered labor force participation by 2.4 percentage points in 2022, 1.2 points on an earnings-weighted basis. These effects are highly concentrated among persons with long COVID experiences or daily interactions with at-risk persons. When combined with simple equilibrium models, our results imply that the participation drag reduced U.S. output by $205 billion in 2022, shrank the college wage premium by 2.1 percentage points, and modestly steepened the cross-sectional age-wage profile. The social-distancing drag on participation diminished by an estimated 1.6 percentage points from February 2022 to April 2023. Drawing on self-assessed causal effects in a separate analysis, infection worries lowered participation by an estimated one percentage point as of late 2022.
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

Older Workers’ Employment and Social Security Spillovers through the Second Year of the COVID-19 Pandemic - Goda, Gopi Shah; Jackson, Emilie; Hersch Nicholas, Lauren; Stith, Sarah (National Bureau of Economic Research Working Paper Series, 2022)
The COVID-19 pandemic triggered a large and immediate drop in employment among US workers, along with major expansions of unemployment insurance and work from home. We use Current Population Survey and Social Security application data to study employment among older adults and their participation in disability and retirement insurance programs through the second year of the pandemic. We find ongoing improvements in employment outcomes among older workers in the labor force, along with sustained higher levels in the share no longer in the labor force during this period. Applications for Social Security disability benefits remain depressed, particularly for Supplemental Security Income. In models accounting for the expiration of expanded unemployment insurance, we find some evidence that the loss of these additional financial supports resulted in an increase in disability claiming. Social Security retirement benefit claiming is approximately 3 percent higher during the second year of the pandemic.
Author contact info: Gopi Shah Goda Stanford University SIEPR 366 Galvez St. Stanford, CA 94305 Tel: 650/736-0480 Fax: 650/723-8611 E-Mail: gopi.shah.goda@gmail.com Emilie Jackson Michigan State University 486 W. Circle Dr 25D Marshall-Adams Hall East Lansing, MI 48824 E-Mail: emiliej@msu.edu Lauren Hersch Nicholas University of Colorado School of Medicine 13080 E 19th Ave Aurora, CO 80045 E-Mail: lauren.h.nicholas@cuanschutz.edu Sarah Stith University of New Mexico Department of Economics 1915 Roma Ave. NE 1019 Albuquerque, NM 87131 E-Mail: sss1000000@gmail.com

Global Universal Basic Skills: Current Deficits and Implications for World Development - Gust, Sarah; Hanushek, Eric A; Woessmann, Ludger (National Bureau of Economic Research Working Paper Series, 2022)
How far is the world away from ensuring that every child obtains the basic skills needed to be competitive in a modern economy? And what would accomplishing this mean for world development? We provide new approaches for estimating the lack of basic skills that allow mapping achievement across countries of the world onto a common (PISA) scale. We then estimate the share of children not achieving basic skills for 159 countries that cover 98% of world population and 99% of world GDP. We find that at least two-thirds of the world’s youth do not reach basic skill levels, ranging from 24% in North America to 89% in South Asia and 94% in Sub-Saharan Africa. Our economic analysis suggests that the present value of lost world economic output due to missing the goal of global universal basic skills amounts to over $700 trillion over the remaining century, or 12% of discounted GDP.
Author contact info: Sarah Gust ifo Institute for Economic Research Poschingerstr. 5 81679 Munich, Germany E-Mail: gust@ifo.de Eric A. Hanushek Hoover Institution Stanford University Stanford, CA 94305-6010 Tel: 650/736-0942 Fax: 650/723-1687 E-Mail: hanushek@stanford.edu Ludger Woessmann University of Munich ifo Institute and CESifo Poschingerstr. 5 81679 Munich, Germany E-Mail: woessmann@ifo.de

Calculating the Costs and Benefits of Advance Preparations for Future Pandemics - Glennerster, Rachel; Snyder, Christopher M; Tan, Brandon Joel (National Bureau of Economic Research Working Paper Series, 2022)
While Covid-19 vaccines were developed and deployed with unprecedented speed, their widespread introduction could have been accelerated—saving millions of lives and trillions of dollars—had more vaccine capacity been available prior to the pandemic. Combining estimates of the frequency and intensity of pandemics with estimates of mortality, economic-output, and human-capital losses from pandemics of varying severities, we calculate that the present value of global social losses from the stream of future pandemics can be expected to be nearly $18 trillion—over $700 billion each year going forward. According to our model, a program spending $60 billion up front to expand production capacity and supply-chain inputs for vaccines and $5 billion annually thereafter would be sufficient to ensure production capacity to vaccinate 70% of the global population against a new virus within six months. The program would generate an expected net present value (NPV) gain of more than $500 billion over the status quo of delaying investment until a pandemic arrives. A program undertaken by the United States alone would generate an expected NPV gain of over $60 billion.
Author contact info: Rachel Glennerster Saieh Hall for Economics, Office 432 University of Chicago 5757 S University Avenue Chicago, IL 60637 Tel: 773/705-1480 E-Mail: rglennerster@uchicago.edu Christopher M. Snyder Department of Economics Dartmouth College 301 Rockefeller Hall Hanover, NH 03755 Tel: 603/646-0642 Fax: 603/646-2122 E-Mail: chris.snyder@dartmouth.edu Brandon Tan E-Mail: btan2@imf.org

Two-way Fixed Effects and Differences-in-Differences Estimators with Several Treatments - de Chaisemartin, Clément; D'Haultfoeuille, Xavier (National Bureau of Economic Research Working Paper Series, 2022)
We study two-way-fixed-effects regressions (TWFE) with several treatment variables. Under a parallel trends assumption, we show that the coefficient on each treatment identifies a weighted sum of that treatment’s effect, with possibly negative weights, plus a weighted sum of the effects of the other treatments. Thus, those estimators are not robust to heterogeneous effects and may be contaminated by other treatments’ effects. We further show that omitting a treatment from the regression can actually reduce the estimator’s bias, unlike what would happen under constant treatment effects. We propose an alternative difference-in-differences estimator, robust to heterogeneous effects and immune to the contamination problem. In the application we consider, the TWFE regression identifies a highly non-convex combination of effects, with large contamination weights, and one of its coefficients significantly differs from our heterogeneity-robust estimator.
Author contact info: Clément de Chaisemartin Department of Economics University of California at Santa Barbara Santa Barbara, CA 93106 E-Mail: clementdechaisemartin@ucsb.edu Xavier D'Haultfoeuille CREST 5 avenue Henry Le Chatelier 91764 Palaiseau cedex FRANCE E-Mail: xavier.dhaultfoeuille@ensae.fr

The Effects of Racial Segregation on Intergenerational Mobility: Evidence from Historical Railroad Placement - Chyn, Eric; Haggag, Kareem; Stuart, Bryan A (National Bureau of Economic Research Working Paper Series, 2022)
This paper provides new evidence on the causal impacts of city-wide racial segregation on intergenerational mobility. We use an instrumental variable approach that relies on plausibly exogenous variation in segregation due to the arrangement of railroad tracks in the nineteenth century. Our analysis finds that higher segregation reduces upward mobility for Black children from households across the income distribution and White children from low-income households. Moreover, segregation lowers academic achievement while increasing incarceration and teenage birth rates. An analysis of mechanisms shows that segregation reduces government spending, weakens support for anti-poverty policies, and increases racially conservative attitudes for White residents.
Author contact info: Eric Chyn The University of Texas at Austin Department of Economics 2225 Speedway, Stop C3100 Austin, TX 78712-1690 E-Mail: eric.chyn@austin.utexas.edu Kareem Haggag Anderson School of Management University of California, Los Angeles Entrepreneurs Hall 110 Westwood Plaza Los Angeles, CA 90095-1481 E-Mail: kareem.haggag@anderson.ucla.edu Bryan A. Stuart Federal Reserve Bank of Philadelphia Research Department 10 Independence Mall Philadelphia, PA 19106 USA E-Mail: bryan.stuart@phil.frb.org

ESG Confusion and Stock Returns: Tackling the Problem of Noise - Berg, Florian; Koelbel, Julian F; Pavlova, Anna; Rigobon, Roberto (National Bureau of Economic Research Working Paper Series, 2022)
How does ESG (environmental, social, and governance) performance affect stock returns? Answering this question is difficult because existing measures of ESG perfor- mance — ESG ratings — are noisy and, therefore, standard regression estimates suffer from attenuation bias. To address the bias, we propose two noise-correction procedures, in which we instrument ESG ratings with ratings of other ESG rating agencies, as in the classical errors-in-variables problem. The corrected estimates demonstrate that the effect of ESG performance on stock returns is stronger than previously estimated: after correcting for attenuation bias, the coefficients increase on average by a factor of 2.6, implying an average noise-to-signal ratio of 61.7%. The attenuation bias is stable across horizons at which stock returns are measured. In simulations, our noise-correction pro- cedures outperform the standard approaches followed by practitioners such as averages or principal component analysis.
Author contact info: Florian Berg MIT Sloan School of Management E62-520100 Main Street E-Mail: fberg@mit.edu Julian F. Koelbel University of St. Gallen PLD-G 02 Plattenstr. 32 St. Gallen 9000 Switzerland E-Mail: julian.koelbel@unisg.ch Anna Pavlova London Business School Regents Park London NW1 4SA UK Tel: 617/253-7159 E-Mail: apavlova@london.edu Roberto Rigobon MIT Sloan School of Management 100 Main Street, E62-516 Cambridge, MA 02142 Tel: 617/258-8374 Fax: 617/258-6855 E-Mail: rigobon@mit.edu

Segmented Arbitrage - Siriwardane, Emil; Sunderam, Adi; Wallen, Jonathan L (National Bureau of Economic Research Working Paper Series, 2022)
We use arbitrage activity in equity, fixed income, and foreign exchange markets to characterize the frictions and constraints facing intermediaries. The average pairwise correlation between the 29 arbitrage spreads that we study is 21%. These low correlations are inconsistent with canonical intermediary asset pricing models. We show that at least two types of segmentation drive arbitrage dynamics. First, funding is segmented—certain trades rely on specific funding sources, making their arbitrage spreads sensitive to localized funding shocks. Second, balance sheets are segmented—intermediaries specialize in certain trades, so arbitrage spreads are sensitive to idiosyncratic balance sheet shocks.
Author contact info: Emil Siriwardane Harvard Business School Baker Library 261 Boston, MA 02163 Tel: 617/495-5512 E-Mail: esiriwardane@hbs.edu Adi Sunderam Harvard Business School Baker Library 359 Soldiers Field Boston, MA 02163 Tel: 617/495-6644 E-Mail: asunderam@hbs.edu Jonathan L. Wallen E-Mail: jwallen@hbs.edu

Electricity Retail Rate Design in a Decarbonized Economy: An Analysis of Time-Of-Use and Critical Peak Pricing - Schittekatte, Tim; Mallapragada, Dharik S; Joskow, Paul L; Schmalensee, Richard (National Bureau of Economic Research Working Paper Series, 2022)
Author contact info: Tim Schittekatte MIT Energy Initiative E19-306c 50 Ames Street Cambridge, MA 02142 E-Mail: schtim@mit.edu Dharik S. Mallapragada MIT Energy Initiative Building E19 MIT Cambridge, MA 02139 E-Mail: dharik@mit.edu Paul Joskow E-Mail: pjoskow@mit.edu Richard Schmalensee Massachusetts Institute of TechnologyAB - Currently, most U.S. electricity consumers pay a constant price per kWh consumed that accounts for most of their bill. Ongoing developments in the power system increase efficiency gains that can be made from exposing consumers to widely varying wholesale spot prices. Pure spot pricing is not popular; consumers (and politicians) value price predictability and bill stability. We focus on second-best alternatives: time-of-use (TOU) and critical peak pricing (CPP). We introduce alternative assessment criteria tailored to a context with increasing intraday shiftable loads. Using historical data from CAISO, ERCOT and ISO-NE, we find that out-of-sample daily Spearman rank correlations between TOU rates and spot prices can be relatively high (averaging 0.7-0.8), and simulations confirm that TOU rates can reasonably replicate efficient load-shifting incentives (up to 60-70% of the potential). Our analysis suggests that TOU rates, especially when complemented with CPP, can be considerably more socially valuable than previously estimated.

Can Pollution Cause Poverty? The Effects of Pollution on Educational, Health and Economic Outcomes - Persico, Claudia (National Bureau of Economic Research Working Paper Series, 2022)
Although pollution is widespread, there is little evidence about how it might harm children’s long run outcomes. Using the detailed, geocoded data that follows national representative cohorts of children born to the National Longitudinal Survey of Youth respondents over time, I compare siblings who were gestating before versus after a Toxic Release Inventory site opened or closed within one mile of their home. I find that children who were exposed prenatally to industrial pollution have lower wages, are more likely to be in poverty as adults, have fewer years of completed education, and are less likely to graduate high school.
Author contact info: Claudia Persico American University School of Public Affairs 4400 Massachusetts Ave NW Washington, DC 20016 Tel: 202/885-2719 E-Mail: cpersico@american.edu

Understanding the Strength of the Dollar - Jiang, Zhengyang; Richmond, Robert J; Zhang, Tony (National Bureau of Economic Research Working Paper Series, 2022)
We link the sustained appreciation of the U.S. dollar from 2011 to 2019 to international capital flows driven by primitive economic factors. We show that increases in foreign investors’ net savings, increases in U.S. monetary policy rates relative to the rest of the world, and shifts in investor demand for U.S. financial assets contributed approximately equally to the dollar’s appreciation. We then quantify the impact of potential future demand shifts for U.S. assets on the value of the dollar.
Author contact info: 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 Robert J. Richmond Stern School of Business New York University 44 W. 4th Street, 9-81 New York, NY 10012 Tel: 303/668-8773 E-Mail: rrichmon@stern.nyu.edu Tony Zhang Federal Reserve Board 20th Street and Constitution Avenue N.W. Washington, DC 20551 E-Mail: tony.zhang@frb.gov

Deposit and Credit Reallocation in a Banking Panic: The Role of State-Owned Banks - Acharya, Viral V; Das, Abhiman; Kulkarni, Nirupama; Mishra, Prachi; Prabhala, Nagpurnanand R (National Bureau of Economic Research Working Paper Series, 2022)
We study a bank run in India in which private bank branches experience sudden and considerable loss of deposits, which migrate to state-owned public sector banks (PSBs) that serve as safe havens. We trace the consequences of the deposit reallocation using granular bank-firm relationship and branch balance sheet data. The flight to safety is not a flight to quality. Lending shrinks and credit quality improves at the run banks but worsens at the PSBs receiving the flight-to-safety flows, especially the weaker ones. The resource reallocation is inefficient in the aggregate.
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 Abhiman Das Vastrapur Ahmedabad India E-Mail: abhiman@iima.ac.in Nirupama Kulkarni Research Director CAFRAL, Research Department Reserve Bank of India Main Building, Mezzanine Floor, Shahid Bhagat Singh Road, Fort, Mumbai 400 001 E-Mail: nirupama.kulkarni@gmail.com Prachi Mishra IMF Research Department 700 19th Street NW Washington, DC 20431 E-Mail: pmishra@imf.org Nagpurnanand R. Prabhala The Johns Hopkins Carey Business School 100 International Drive Baltimore, MD 21202 Tel: +1 410 234 4532 E-Mail: prabhala@jhu.edu

The Future of Global Economic Power - Benzell, Seth G; Kotlikoff, Laurence J; Kazakova, Maria; LaGarda, Guillermo; Nesterova, Kristina; Ye, Victor Yifan; Zubarev, Andrey (National Bureau of Economic Research Working Paper Series, 2022)
The global economy’s enormous region-specific demographic, technological, and fiscal changes raise five major questions. First, which regions will come to dominate the world economy? Second, will regional levels of per capita GDP converge? Third, will high saving rates in fast growing regions lead to a global capital glut? Fourth, does aging augur far higher tax rates in particular regions? Fifth, will automation materially influence development? This paper develops the Global Gaidar Model, a 17-region, 2-skills, 100-period, OLG model, to address these questions. The model is carefully calibrated to 2017 UN demographic and IMF fiscal data. Productivity growth and its interaction with demographic change are the main drivers of future economic power. Fiscal conditions and automation matter, but are secondary factors. Our baseline simulation, which sets future productivity based on each region’s long-term record, predicts China and India becoming the world’s largest two economies with 27.0 percent and 16.2 percent of 2100 world GDP, respectively. The respective end-of-century U.S. and Western European global GDP shares are just 12.3 percent and 11.9 percent. Our baseline also features an evolving global savings glut, major reductions in the world interest rate, substantial aging-related increases in tax rates, and permanent differences in regional living standards. Automation, captured by a rising capital share, makes little difference to our results. But assumed productivity growth does. If recent productivity continues and demographic projections prove accurate, India will account for one third of world output in 2100 and China for over one fifth. The U.S. output share will grow slightly, while that of other developed countries will shrink dramatically. Under more econometrically sophisticated, if seemingly less plausible projections, productivity growth in China and India dramatically slows leaving China’s plus India’s 2100 output share at only 16 percent, but, remarkably, Africa’s at an astounding 17 percent.
Author contact info: Seth G. Benzell Massachusetts Institute of Technology Initiative on the Digital Economy 100 Main Street Cambridge, MA 02142 E-Mail: sbenzell@mit.edu Laurence J. Kotlikoff Department of Economics Boston University 270 Bay State Road Boston, MA 02215 Tel: 617/353-4002 Fax: 617/353-4001 E-Mail: kotlikoff@gmail.com Maria Kazakova The Gaidar Institute for Economic Policy E-Mail: kazakova@iet.ru Guillermo LaGarda Inter-American Development Bank 1300 New York Avenue NW Washington, DC 20577 E-Mail: culagui@gmail.com Kristina Nesterova Russian Presidential Academy of National Economy and Public Administration E-Mail: christina.nesterova@gmail.com Victor Yifan Ye Boston University 270 Bay State Road Boston, MA 02215 Tel: 9197683548 E-Mail: victor@yifanye.com Andrey Zubarev The Russian Presidential Academy 82 Vernadskogo prosp Moscow Russian Federation E-Mail: Zubarev@ranepa.ru

The Dynamics of Large Inflation Surges - Blanco, Andrés; Ottonello, Pablo; Ranosova, Tereza (National Bureau of Economic Research Working Paper Series, 2022)
We empirically characterize episodes of large inflation surges that have been observed worldwide in the last three decades. We document four facts. (1) Inflation following surges tends to be persistent, with the duration of disinflation exceeding that of the initial inflation increase. (2) Surges are initially unexpected but followed by a gradual catch-up of average short-term expectations with realized inflation. (3) Long-term inflation expectations tend to exhibit mild increases that persist throughout disinflation. (4) Policy responses are characterized by hikes in nominal interest rates but no tightening of real rates or fiscal balances. Our findings highlight the challenges monetary authorities face in avoiding persistent inflation dynamics following large inflation surges.
Author contact info: Andrés Blanco 1000 Peachtree Street N.E. Atlanta, GA 30309 E-Mail: julioablanco84@gmail.com Pablo Ottonello Department of Economics University of Maryland Tydings Hall 7343 Preinkert Dr. College Park, MD 20742 E-Mail: ottonell@umd.edu Tereza Ranosova E-Mail: tereza.ranosova@bundesbank.de

Running Primary Deficits Forever in a Dynamically Efficient Economy: Feasibility and Optimality - Abel, Andrew B; Panageas, Stavros (National Bureau of Economic Research Working Paper Series, 2022)
Government debt can be rolled over forever without primary surpluses in some stochastic economies, including some economies that are dynamically efficient. In an overlapping-generations model with constant growth rate, g, of labor-augmenting productivity, and with shocks to the durability of capital, we show that along a balanced growth path, the maximum sustainable ratio of bonds to capital is attained when the riskfree interest rate, r[sub]f, equals g. Furthermore, this maximal ratio maximizes utility per capita along a balanced growth path and ensures that the economy is dynamically efficient.
Author contact info: Andrew B. Abel The Wharton School University of Pennsylvania 2315 Steinberg Hall - Dietrich Hall Philadelphia, PA 19104-6367 Tel: 215/898-4801 Fax: 215/573-7244 E-Mail: abel@wharton.upenn.edu Stavros Panageas Anderson School of Management University of California, Los Angeles 110 Westwood Plaza Los Angeles, CA 90095-1481 Tel: (773) 834 4711 E-Mail: stavros.panageas@anderson.ucla.edu

Mortality Effects of Healthcare Supply Shocks: Evidence Using Linked Deaths and Electronic Health Records - Ziedan, Engy; Simon, Kosali I; Wing, Coady (National Bureau of Economic Research Working Paper Series, 2022)
The contraction in health care consumption at the start of the pandemic provides insight into central economic questions of waste and productivity in the U.S. health care system. Using linked mortality and Electronic Medical Records, we compare people who had outpatient appointments scheduled for dates in 30 day periods immediately before and after the Covid-19 emergency declaration. Appointment cancellation rates were 77% higher for people with appointments in the shutdown period. Intent to treat estimates imply that having a scheduled appointment date right after the emergency declaration increased one-year mortality rates by 4 deaths per 10,000. Instrumental variable estimates suggest that a cancelled appointment increased one-year mortality by 29.7 deaths per 10,000 among compliers, implying that a 10% increase in health care appointments reduces mortality rates by 2.9%. The mortality effects are rooted in two mechanisms: a complier sub-population with high marginal benefits from care, and a cascade of delayed or missed follow-up care that lasted for about 3 months. Healthcare spending accounted for 19.7% of U.S. GDP in 2021, and controlling health spending is a major policy objective. Our results quantify health tradeoffs from cutting every-day non-emergency visits, illustrating the importance of cost-control efforts that differentiate between medical care with the largest and smallest benefits for patient health.
Author contact info: Engy Ziedan Department of Economics School of Liberal Arts Tulane University 206 Tilton Hall 6823 St. Charles Avenue New Orleans, LA 70118 E-Mail: eziedan@tulane.edu Kosali I. Simon O’Neill School of Public and Environmental Affairs Indiana University 1315 East Tenth Street Bloomington, IN 47405-1701 Tel: (812) 856-3850 E-Mail: simonkos@indiana.edu Coady Wing Indiana University 1315 E 10th St Bloomington, IN 47405 E-Mail: cwing@indiana.edu

Covid-19 Learning Loss and Recovery: Panel Data Evidence from India - Singh, Abhijeet; Romero, Mauricio; Muralidharan, Karthik (National Bureau of Economic Research Working Paper Series, 2022)
We use a panel survey of ~19,000 primary-school-aged children in rural Tamil Nadu to study ‘learning loss’ after COVID-19-induced school closures, and the pace of recovery after schools reopened. Students tested in December 2021 (18 months after school closures) displayed learning deficits of ~0.7σ standard deviations in math and ~0.34σ standard deviations in language compared to identically-aged students in the same villages in 2019. Two-thirds of this deficit was made up within 6 months after school reopening. Further, while learning loss was regressive, the recovery was progressive. A government-run after-school remediation program contributed ~24% of the cohort-level recovery, and likely aided the progressive recovery.
Author contact info: Abhijeet Singh Department of Economics Stockholm School of Economics Sveavagen 65 Stockholm Sweden E-Mail: abhijeetsingh1@gmail.com Mauricio Romero Centro de Investigacion Economica ITAM Rio Hoindo 1 Mexico City Mexico E-Mail: mtromero@itam.mx Karthik Muralidharan Department of Economics, 0508 University of California, San Diego 9500 Gilman Drive La Jolla, CA 92093-0508 Tel: 858/534-2425 Fax: 858/534-7040 E-Mail: kamurali@ucsd.edu

Impact Investing in Disadvantaged Urban Areas - Boulongne, Romain; Durand, Rodolphe; Flammer, Caroline (National Bureau of Economic Research Working Paper Series, 2022)
We examine whether impact investing is more effective in fostering business venture success and social impact when investments are directed toward ventures located in disadvantaged urban areas compared to similar investments directed toward ventures located outside these areas. We explore this question in the context of loans made to business ventures in French "banlieues" vs. "non-banlieues." We find that loans issued to banlieue ventures yield greater improvements in financial performance, as well as greater social impact in terms of the creation of local employment opportunities, quality jobs, and gender-equitable jobs. These results suggest that impact investors are able to contract with ventures of greater unrealized potential in banlieues, as banlieue ventures tend to be discriminated on the traditional loan market. This is corroborated in a controlled lab experiment in which participants--working professionals who are asked to act as loan officers--are randomly assigned to identical business ventures that only differ in their geographic location. We find that participants are indeed less likely to grant loans to banlieue ventures compared to non-banlieue ventures, despite the ventures being identical.
Author contact info: Romain Boulongne E-Mail: rboulongne@iese.edu Rodolphe Durand E-Mail: durand@hec.fr Caroline Flammer School of International and Public Affairs and Columbia Climate School Columbia University 420 West 118th Street, Office 1429 New York, NY 10026 E-Mail: caroline.flammer@columbia.edu

Direct and indirect effects of vaccines: Evidence from COVID-19 - Freedman, Seth M; Sacks, Daniel W; Simon, Kosali I; Wing, Coady (National Bureau of Economic Research Working Paper Series, 2022)
We estimate direct and indirect vaccine effectiveness, and assess how far the infection-reducing externality extends from the vaccinated, a key input to policy decisions. Our empirical strategy uses nearly universal microdata from a single state and relies on the six-month delay between 12- and 11 year-old COVID vaccine eligibility. Vaccination reduces cases by 80 percent, the direct effect. This protection spills over to close contacts, producing a household-level indirect effect about half as large as the direct effect. However, indirect effects do not extend to schoolmates. Our results highlight vaccine reach as an important aspect of policy towards infectious disease.
Author contact info: Seth M. Freedman School of Public and Environmental Affairs 1315 E. 10th St. Bloomington, IN 47405 US E-Mail: freedmas@indiana.edu Daniel W. Sacks 975 University Ave Madison, WI 53715 E-Mail: dan.sacks@wisc.edu Kosali I. Simon O’Neill School of Public and Environmental Affairs Indiana University 1315 East Tenth Street Bloomington, IN 47405-1701 Tel: (812) 856-3850 E-Mail: simonkos@indiana.edu Coady Wing Indiana University 1315 E 10th St Bloomington, IN 47405 E-Mail: cwing@indiana.edu

Measuring Welfare by Matching Households Across Time - Baqaee, David; Burstein, Ariel; Koike-Mori, Yasutaka (National Bureau of Economic Research Working Paper Series, 2022)
The money metric utility function is an essential tool for calculating welfare-relevant growth and inflation. We show how to recover it from repeated cross-sectional data without making parametric assumptions about preferences. We do this by solving the following recursive problem. Given compensated demand, we construct money metric utility by integration. Given money metric utility, we construct compensated demand by matching households over time whose money metric utility value is the same. We illustrate our method using household consumption survey data from the United Kingdom from 1974 to 2017 and find that real consumption calculated using official aggregate inflation statistics overstates money metric utility in 1974 pounds for the poorest households by around half a percent per year and understates it by around a third of a percentage point per year for the richest households. We extend our method to allow for missing or mismeasured prices, assuming preferences are separable between goods with well-measured prices and the rest. We discuss how our results change if the prices of some service sectors are mismeasured.
Author contact info: David Baqaee Department of Economics University of California, Los Angeles Bunche Hall Los Angeles, CA 90095 Tel: 323/499-8714 E-Mail: baqaee@econ.ucla.edu Ariel Burstein Department of Economics Bunche Hall 8365 Box 951477 UCLA Los Angeles, CA 90095-1477 Tel: 310/206-6732 Fax: 310/825-9528 E-Mail: arielb@econ.ucla.edu Yasutaka Koike-Mori University Village 3360 Sawtelle Blvd #305 3360 Sawtelle Blvd # 305 Los Angeles, CA 90066 United States Tel: 2132466016 E-Mail: yasutaka.koike.mori@gmail.com

Secrecy Rules and Exploratory Investment: Theory and Evidence from the Shale Boom - Covert, Thomas R; Sweeney, Richard L (National Bureau of Economic Research Working Paper Series, 2022)
We analyze how information disclosure policy affects investment efficiency in non-cooperative settings with information externalities. In a two-firm, two-period model, we characterize equilibrium behavior under policies which disclose whether investment returns exceed a predefined level. These policies include complete secrecy, in which players only observe rival actions, as well as full disclosure, in which players also perfectly observe rival returns. With less disclosure (higher disclosure thresholds), there is less free riding, but additional losses from incomplete information aggregation. We characterize the surplus maximizing disclosure threshold in this environment, and show how it depends on firms' patience. We then apply the model to the early years of the shale boom in Pennsylvania and West Virginia, which at the time were governed by complete secrecy and full disclosure, respectively. We find that full disclosure would have maximized surplus in both states, generating 49% and 160% more value than complete secrecy.
Author contact info: Thomas R. Covert Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 E-Mail: thomas.covert@chicagobooth.edu Richard L. Sweeney Economics Department Boston College Chestnut Hill, MA 02467 E-Mail: sweeneri@bc.edu

Nudging the Nudger: Performance Feedback and Organ Donor Registrations - House, Julian; Lacetera, Nicola; Macis, Mario; Mazar, Nina (National Bureau of Economic Research Working Paper Series, 2022)
In a pre-registered randomized controlled trial conducted over 2.5 years and involving nearly 700 customer-service representatives (CSRs) from a Canadian government service agency, we studied how providing CSRs with repeated performance feedback, with or without peer comparison, affected their subsequent organ donor registration rates. The feedback resulted in a 25% increase in daily signups compared to otherwise equivalent encouragements and reminders. Adding benchmark information about peer performance did not amplify or diminish this effect. We observed increased registration rates for both high and low performers. A post-intervention survey suggests that CSRs in all conditions found the information included in the treatments helpful and motivating, and that signing up organ donors makes their job more meaningful. Performance feedback with benchmark information was the most motivating and created the least pressure to perform, whereas feedback without benchmark increased perceived pressure.
Author contact info: Julian House Behavioural Insights Unit, Treasury Board Secretariat, Government of Ontario Toronto, ON M7A 1Y7 Canada E-Mail: Julian.House@ontario.ca Nicola Lacetera University of Toronto Institute for Management and Innovation 3359 Mississauga Road, Room KN 235 Mississauga, ON L5L 1C6 E-Mail: nicola.lacetera@utoronto.ca Mario Macis Johns Hopkins University Carey Business School 1717 Massachusetts Ave, Office 359 Washington, DC 20036 E-Mail: mmacis@jhu.edu Nina Mazar Boston University Questrom School of Business 595 Commonwealth Ave Boston, MA 02215 E-Mail: nina@ninamazar.com

Externalities of Policy-Induced Scrappage: The Case of Automotive Regulations - Forsythe, Connor R; Jha, Akshaya; Michalek, Jeremy J; Whitefoot, Kate S (National Bureau of Economic Research Working Paper Series, 2022)
Many transportation policies indirectly affect vehicle travel and resulting externalities by inducing changes in vehicle scrappage rates. We leverage the staggered removal of state-level safety inspection programs across the United States within an instrumental variables (IV) framework to produce the first estimates of the fleet-size elasticities of fleet travel distance and gasoline consumption. Our first-stage estimates indicate that the removal of safety inspections caused a 3-4% increase in fleet size on average. Our IV estimates of the fleet-size elasticities of fleet travel distance and gasoline consumption have 95% confidence sets that imply rejection of an assumption commonly used in prior analyses that these elasticities are equal to one. Calculations based on fleet-size elasticities of one result in substantial overestimates of the externality costs from increases in travel and fuel use from delays in scrappage due to the removal of safety inspections.
Author contact info: Connor R. Forsythe Carnegie Mellon University 5000 Forbes Ave Pittsburgh, PA 15213 E-Mail: cforsyth@andrew.cmu.edu Akshaya Jha H. John Heinz III College Carnegie Mellon University 4800 Forbes Avenue Pittsburgh, PA 15213 Tel: 608/347-2102 E-Mail: akshayaj@andrew.cmu.edu Jeremy J. Michalek Department of Engineering and Public Policy Department of Mechanical Engineering Carnegie Mellon University 5000 Forbes Avenue Pittsburgh, PA 15213 E-Mail: jmichalek@cmu.edu Kate S. Whitefoot Carnegie Mellon University 5000 Forbes Ave Pittsburgh, PA 15213 E-Mail: kwhitefoot@cmu.edu

How Is the US Pricing Carbon? How Could We Price Carbon? - Aldy, Joseph E; Burtraw, Dallas; Fischer, Carolyn; Fowlie, Meredith; Williams, Roberton C, III; Cropper, Maureen L (National Bureau of Economic Research Working Paper Series, 2022)
Author contact info: Joseph E. Aldy Harvard Kennedy School Ofer 403, Mailbox 114 79 JFK Street Cambridge, MA 02138 Tel: 617/496-7213 E-Mail: joseph_aldy@hks.harvard.edu Dallas Burtraw Resources for the Future 1616 P Street, NW Washington, DC 20036 E-Mail: burtraw@rff.org Carolyn Fischer World Bank Group 1818 H Street, NW Washington, DC 20433 E-Mail: cfischer2@worldbank.org Meredith Fowlie Department of Agricultural & Resource Economics University of California, Berkeley 301 Giannini Hall Berkeley, CA 94720-3310 Tel: 510/642-4820 Fax: 510/643-8911 E-Mail: fowlie@berkeley.edu Roberton C. Williams III Department of Agricultural and Resource Economics University of Maryland Symons Hall College Park, MD 20742 Tel: 301-405-1284 Fax: 301-314-9091 E-Mail: roberton@umd.edu Maureen L. Cropper University of MarylandAB - Economists have for decades recommended that carbon dioxide and other greenhouse gases be taxed—or otherwise priced—to provide incentives for their reduction. The United States does not have a federal carbon tax; however, many state and federal programs to reduce carbon emissions effectively price carbon—for example, through cap-and-trade systems or regulations. There are also programs that subsidize reductions in carbon emissions. At the 2022 meetings of the American Economic Association, the Society for Benefit-Cost Analysis brought together five well-known economists—Joe Aldy, Dallas Burtraw, Carolyn Fischer, Meredith Fowlie, and Rob Williams—to discuss how the United States does, in fact, price carbon and how it could price carbon. Maureen Cropper chaired the panel. This paper summarizes their remarks.

All Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatization - Howell, Sabrina T; Jang, Yeejin; Kim, Hyeik; Weisbach, Michael S (National Bureau of Economic Research Working Paper Series, 2022)
Infrastructure assets have undergone substantial privatization around the world in recent decades. How do these assets perform post-privatization? This paper examines global airports. Our central finding is that the type of ownership matters: Volume, efficiency, and quality improve substantially under private equity (PE) ownership—both following privatization and in subsequent transactions—but there is little evidence of improvement under non-PE private ownership. This remains the case for airports sold in auctions in which PE and non-PE firms bid, mitigating concerns about selection. PE owners invest in new physical capacity and appear to negotiate more effectively with airlines, especially in the presence of a state-owned flag carrier. Higher prices and more retail revenue increase net income, with no evidence of cost reductions or layoffs. We find that improvements are concentrated when there is a competing airport nearby, under longer-term leases, and when the local government is less corrupt. One explanation for the failure of non-PE private firms to outperform government ownership is that they tend to target more corrupt locations.
Author contact info: 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 Yeejin Jang University of New South Wales School of Banking & Finance E-Mail: y.jang@unsw.edu.au Hyeik Kim Alberta School of Business 2-32C Business Building Edmonton, Alberta T6G 2R6 University of Alberta E-Mail: hyeik@ualberta.ca Michael S. Weisbach Department of Finance Fisher College of Business The Ohio State University 2100 Neil Ave. Columbus, OH 43210 Tel: 614/292-3264 E-Mail: weisbach.2@osu.edu

Heterogenous Rates of Return on Homes and Other Real Estate: Do the Rich Do Better? Do Black Households Do Worse? - Wolff, Edward N (National Bureau of Economic Research Working Paper Series, 2022)
Recent work on wealth inequality based on the capitalization method wherein aggregate wealth totals are distributed in proportion to various forms of income like dividends has motivated a concern about whether rates of return on assets vary across the wealth distribution. In this study, I use a new data source, accrued capital gains on homes and other real estate as reported in the Survey of Consumer Finances. I find strong econometric evidence that returns on homes vary directly with wealth level and are considerably higher for the very wealthy compared to the middle class and lower wealth households. However, there is no evidence from the preferred specification that Black or Hispanic families receive lower returns on their property once controlling for factors such as years of occupancy and overall house price movements in the market. The number of years of occupancy is also a highly significant determinant of returns on homes. The effect is strongly negative because communities of residence become less desirable and real properties deteriorate physically over time, both factors reducing property values. Returns on individual homes are also strongly related to overall house price movements in the market, suggesting that timing the market is a key determinant.
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

Multidimensional Screening and Menu Design in Health Insurance Markets - Chade, Hector; Marone, Victoria R; Starc, Amanda; Swinkels, Jeroen (National Bureau of Economic Research Working Paper Series, 2022)
We study a general screening model that encompasses a health insurance market in which consumers have multiple dimensions of private information and a price-setting insurer (e.g., a monopolist or a social planner) offers vertically differentiated contracts. We combine theory and empirics to provide three novel results: (i) optimal menus satisfy intuitive conditions that generalize the literature on multidimensional screening and shed light on insurer incentives; (ii) the insurer's problem with an unlimited number of contracts is well-approximated with only a small set of contracts; and (iii) under an additional assumption, the problem becomes dramatically simpler and can be solved using familiar graphical analysis. Calibrated numerical simulations validate assumptions, quantify the differential incentives of a monopolist and a social planner, and evaluate common policy interventions in a monopoly market.
Author contact info: Hector Chade Department of Economics Arizona State University PO Box 879801 Tempe, AZ 85287-9801 E-Mail: hector.chade@asu.edu Victoria Marone University of Texas at Austin E-Mail: vrm5024@gmail.com Amanda Starc Kellogg School of Management Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 330/338-2067 E-Mail: amanda.starc@kellogg.northwestern.edu Jeroen Swinkels Kellogg School of Management Northwestern University 2211 Campus Drive Evanston, IL 60208 E-Mail: j-swinkels@kellogg.northwestern.edu

Coordination and Incumbency Advantage in Multi-Party Systems - Evidence from French Elections - Dano, Kevin; Ferlenga, Francesco; Galasso, Vincenzo; Le Pennec, Caroline; Pons, Vincent (National Bureau of Economic Research Working Paper Series, 2022)
In theory, free and fair elections can improve the selection of politicians and incentivize them to exert effort. In practice, incumbency advantage and coordination issues may lead to the (re)election of bad politicians. We ask whether these two forces compound each other. Using a regression discontinuity design in French two-round local and parliamentary elections, we find that winning an election increases candidates' chances to win the next election by 25.1 percentage points. Close winners are more likely to run again and more likely to win, conditional on running, than close losers. Incumbents personalize their campaign communication more and face fewer ideologically close competitors, indicating that parties coordinate more effectively on the winning side than on the losing side. A complementary RDD reveals that marginally qualifying for the runoff also enables candidates to rally new voters, but does not affect the number of competitors on their side. We conclude that party coordination and voters rallying candidates who won or gained visibility in an election both contribute to their success in future races, even absent any actual difference in quality with candidates on the losing side.
Author contact info: Kevin Dano University of California, Berkeley 530 Evans Hall Berkeley, CA 94720-3880 E-Mail: kdano@berkeley.edu Francesco Ferlenga Governor street 93 Providence, RI 02912 United States E-Mail: francesco_ferlenga@brown.edu Vincenzo Galasso Università Bocconi-IGIER Milano, Italy E-Mail: vincenzo.galasso@unibocconi.it Caroline Le Pennec HEC Montreal 3000 Chemin De La Cote-Sainte-Catherine Montreal, Quebec H3T 2A7 Canada E-Mail: caroline.le-pennec@hec.ca Vincent Pons Harvard Business School Morgan Hall 289 Soldiers Field Boston, MA 02163 Tel: 617/495-9329 E-Mail: vpons@hbs.edu

Inequality and Social Distancing during the Pandemic - Brown, Caitlin S; Ravallion, Martin (National Bureau of Economic Research Working Paper Series, 2022)
We study how pre-pandemic inequalities in America influenced social distancing over the course of the COVID-19 pandemic. Richer counties tended to see more protective mobility responses in the initial (pre-pharmaceutical) phase, but less protective responses later. Near linearity of this income effect implies that inequality between counties contributed very little to overall mobility reductions. By contrast, higher within-county inequality and/or poverty measures came with substantially larger attenuations to non-residential mobility at given average incomes. There were also significant effects of the county’s racial and age composition. Standard epidemiological covariates of contact rates were also relevant, controlling for the socioeconomic factors.
Author contact info: Caitlin S. Brown Department of Economics University of Manchester E-Mail: caitlin.brown@manchester.ac.uk Martin Ravallion E-Mail: N/A user is deceased

Does the Squeaky Wheel Get More Grease? The Direct and Indirect Effects of Citizen Participation on Environmental Governance in China - Buntaine, Mark; Greenstone, Michael; He, Guojun; Liu, Mengdi; Wang, Shaoda; Zhang, Bing (National Bureau of Economic Research Working Paper Series, 2022)
We conducted a nationwide field experiment in China to evaluate the direct and indirect impacts of assigning firms to public or private citizen appeals when they violate pollution standards. There are three main findings. First, public appeals to the regulator through social media substantially reduce violations and pollution emissions, while private appeals cause more modest environmental improvements. Second, public appeals appear to tilt regulators’ focus away from facilitating economic growth and toward avoiding pollution-induced public unrest. Third, pollution reductions by treated firms are not offset by control firms, based on randomly varying the proportion of treatment firms at the prefecture-level.
Author contact info: Mark Buntaine University of California, Santa Barbara E-Mail: buntaine@bren.ucsb.edu Michael Greenstone University of Chicago Department of Economics 1126 E. 59th Street Chicago, IL 60637 Tel: 773-702-8250 Fax: 773-702-8490 E-Mail: mgreenst@uchicago.edu Guojun He Faculty of Business and Economics University of Hong Kong Hong Kong 0000 Hong Kong E-Mail: guojun.he@gmail.com Mengdi Liu E-Mail: liumengdi@uibe.edu.cn Shaoda Wang Harris School of Public Policy University of Chicago 1307 E. 60th Street office 2055 Chciago, IL 60637 Tel: 773-236-9614 E-Mail: shaoda@uchicago.edu Bing Zhang E-Mail: zhangb@nju.edu.cn

Micro Propagation and Macro Aggregation - Baqaee, David; Rubbo, Elisa (National Bureau of Economic Research Working Paper Series, 2022)
This paper reviews a framework for studying the aggregation and propagation of microeconomic shocks in general equilibrium. We discuss the determinants of aggregate measures of real economic activity, like real GDP, real domestic absorption, and aggregate productivity in both efficient and inefficient environments. We also discuss how shocks from one set of producers are transmitted to other producers through prices and quantities. The framework we provide is amenable to generalization and can be used to study any collection of producers ranging from one isolated producer, to an industry consisting of heterogeneous producers, to an entire economy. We conclude with a brief survey of some of the applied questions that can be addressed using the analytical tools presented in this review and avenues for future work.
Author contact info: David Baqaee Department of Economics University of California, Los Angeles Bunche Hall Los Angeles, CA 90095 Tel: 323/499-8714 E-Mail: baqaee@econ.ucla.edu Elisa Rubbo Booth School of Business University of Chicago 5807 S. Woodlawn Avenue Chicago, IL 60637 E-Mail: elisarubbo@uchicago.edu

Inflation Expectations and Corporate Borrowing Decisions: New Causal Evidence - Ropele, Tiziano; Gorodnichenko, Yuriy; Coibion, Olivier (National Bureau of Economic Research Working Paper Series, 2022)
We match survey data of Italian firms that includes a repeated experiment in which information about inflation is randomly provided to firms over time with detailed credit data that covers the borrowing decisions of firms. This allows us to study how exogenous variation in inflation expectations causally affects the borrowing decisions of Italian firms. We document a number of new results. Firms with exogenously higher inflation expectations end up paying higher interest rates on average but do not change the overall demand of loans. Instead, we find a significant rebalancing of firms’ borrowing decisions away from lower-interest long-term loans and toward higher-interest short-term loans. In anticipation of rising future interest rates linked to higher expected inflation, firms also take on new long-term loans to pay down existing loans, thereby locking in interest rate savings. Firms that are relatively more knowledgeable about financial tools engage in the latter particularly strongly.
Author contact info: Tiziano Ropele Bank of Italy Economic Outlook and Monetary Policy Department Via Nazione, 91 00184 Roma Italy E-Mail: tiziano.ropele@bancaditalia.it 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

Searching for Customers, Finding Pollution - Bassi, Vittorio; Kahn, Matthew E; Lozano Gracia, Nancy; Porzio, Tommaso; Sorin, Jeanne (National Bureau of Economic Research Working Paper Series, 2022)
In developing countries, most manufacturing firms are small and located in high-density urban areas, often near congested streets. To study the determinants and implications of this location choice, we collect a novel firm survey and detailed air pollution measurements within Ugandan cities. We find that firms locate on the busiest roads searching for customer visibility, but in doing so they expose their workers to substantial pollution. This sorting pattern increases profits, but with severe health costs: if firms were randomly located across space, annual profits would decrease by $195 for the average firm, but its workers' life expectancy would increase by two months.
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 Matthew E. Kahn Department of Economics University of Southern California 3620 South Vermont Ave. Kaprielian (KAP) Hall, 300 Los Angeles, CA 90089-0253 E-Mail: kahnme@usc.edu Nancy Lozano Gracia E-Mail: nlozano@worldbank.org Tommaso Porzio Columbia Business School 3022 Broadway Uris Hall 824 New York, NY 10027 E-Mail: tommaso.porzio@columbia.edu Jeanne Sorin E-Mail: jsorin@uchicago.edu

Informationally Efficient Climate Policy: Designing Markets to Measure and Price Externalities - Lemoine, Derek (National Bureau of Economic Research Working Paper Series, 2022)
I study how policymakers can access and act on the information about climate change damages that is dispersed throughout the economy. I analyze a new dynamic deposit-refund instrument (called “carbon shares”). I show that there exists a limit-case rational expectations equilibrium in which it: i) efficiently prices emissions conditional on information, ii) efficiently incentivizes removal of past emissions conditional on information, and iii) efficiently aggregates dispersed information about the social cost of emissions. Conventional emission taxes generally succeed at only the first of these objectives. Rather than projecting damages in all future periods and all possible states of the world in order to calculate the optimal tax, the regulator here estimates damages as they are realized and empowers markets to perform price discovery about future damages.
Author contact info: Derek Lemoine Department of Economics University of Arizona McClelland Hall 401EE Tucson, AZ 85721 Tel: 520/621-2164 E-Mail: dlemoine@email.arizona.edu

Comparing the Effects of Policies for the Labor Market Integration of Refugees - Foged, Mette; Hasager, Linea; Peri, Giovanni (National Bureau of Economic Research Working Paper Series, 2022)
This paper estimates, within a common framework, the effects of four types of integration polices on the employment probability and earnings of refugees in Denmark during the last three decades. We first review the studies that use a credible identification strategy to evaluate the causal effects of these types of policies on the assimilation of refugees in developed countries. We then describe the dynamics of labor market outcomes of several cohorts of refugees in Denmark. To our knowledge, Denmark is the only country where the number and design of policy changes and the longitudinal individual data availability make such an analysis possible. Our analysis suggests that improved language training, combined with initial placement of refugees in strong labor markets, significantly improved their long-run labor market outcomes. On the contrary, cutting initial welfare payments and housing them near other refugees does not seem to improve their long-run outcomes. Active labor market policies focused on matching refugees with simple jobs in high demand occupations may have positive short-run effects, but we cannot yet assess their long-run effects.
Author contact info: Mette Foged Department of Economics Univertsity of Copenhagen Øster Farigmagsgade 5, building 26 1353 Copenhagen K Denmark E-Mail: Mette.Foged@econ.ku.dk Linea Hasager CReAM, Department of Economics University College London Drayton House, 30 Gordon Street London WC1H 0AX United Kingdom E-Mail: l.hasager@ucl.ac.uk Giovanni Peri Department of Economics University of California, Davis One Shields Avenue Davis, CA 95616 Tel: 530/752-3033 E-Mail: gperi@ucdavis.edu

The Effects of Income on the Economic Wellbeing of Families with Low Incomes: Evidence from the 2021 Expanded Child Tax Credit - Pilkauskas, Natasha; Michelmore, Katherine; Kovski, Nicole; Shaefer, H. Luke (National Bureau of Economic Research Working Paper Series, 2022)
We examine the effects of an unconditional cash transfer on the economic wellbeing (material hardship, ability to meet needs, money on hand, use of friends and family for assistance, and employment) of families and children with very low incomes. We use a parameterized difference-in-differences approach to study the impact of the 2021 temporary expansion of the Child Tax Credit (CTC), which provided monthly, unconditional cash payments to families with children from July to December 2021. The 2021 monthly CTC reduced the number of hardships families experienced, and in particular their food insecurity. We find some evidence that the credit reduced medical hardships, reduced reliance on friends and family for food, and improved respondents’ ability to pay utility bills. We also find no effects on any labor supply measures. Analyses that examine differences by racial/ethnic groups show that the effects are somewhat stronger for Black families than for Hispanic and White families, but the differences are not large.
Author contact info: Natasha Pilkauskas 735 S State St 48109-3091 Ann Arbor, MI 48109 E-Mail: npilkaus@umich.edu Katherine Michelmore Gerald R. Ford School of Public Policy University of Michigan 735 S State St Ann Arbor, MI 48109 E-Mail: kmichelm@umich.edu Nicole Kovski University of Michigan Gerald R. Ford School of Public Policy E-Mail: nkovski@umich.edu H. Luke Shaefer Gerald R Ford School of Public Policy University of Michigan 735 S State St Ann Arbor, MI 48109 USA E-Mail: lshaefer@umich.edu

The Impacts of COVID-19 on Racial Inequality in Business Earnings - Fairlie, Robert W (National Bureau of Economic Research Working Paper Series, 2022)
Many small businesses have closed, lost revenues, or downsized as a response to health and economic disruptions caused by COVID-19. But, were economic losses in the pandemic disproportionately felt by businesses owned by people of color? This paper provides the first study of the impacts of COVID-19 on racial inequality in business earnings. Pandemic-induced losses to business earnings in 2020 were 16-19 percent for all business owners. Racial inequality increased in the pandemic: Black business owners experienced larger negative impacts on business earnings of 12-14 percent relative to white business owners. Regression estimates for Latinx and Asian business owners reveal negative point estimates but the estimates are not statistically significant. Using Blinder-Oaxaca decompositions and a new pandemic-focused decomposition technique, I find that the industry concentrations of Black, Latinx, and Asian business owners placed each of these groups at a higher risk of experiencing disproportionate business earnings losses in the pandemic. Higher education levels among Asian business owners helped insulate them from larger losses from COVID-19. Finally, differential exposure to COVID case rates, business closure policies, and mask mandates did not contribute to racial inequality in business earnings losses.
Author contact info: Robert W. Fairlie Department of Public Policy University of California, Los Angeles P.O.Box 951656 Los Angeles, CA 90095 Tel: 831/459-3332 E-Mail: rfairlie@ucla.edu

Dust to Feed, Dust to Grey: The Effect of In-Utero Exposure to the Dust Bowl on Old-Age Longevity - Noghanibehambari, Hamid; Fletcher, Jason (National Bureau of Economic Research Working Paper Series, 2022)
Intensive agriculture and deep plowing resulted in top-soil erosion and dust storms during the 1930s. These effects have been shown to affect agricultural income and land values that persisted for years. Given the growing literature on the relevance of in-utero and early-life exposures, it is surprising that studies focusing on links between the Dust Bowl and later-life health find inconclusive and mixed results. This paper re-evaluates this literature and studies the long-term effects of in-utero and early-life exposure to top-soil erosion caused by the Dust Bowl of the 1930s on old-age longevity. Specifically, we employ Social Security Administration death records linked with the full-count 1940 census and implement event studies and difference-in-difference designs to compare the longevity of individuals in high/medium versus low top-soil erosion counties post-1930 versus pre-1930. We find intent-to-treat reductions in longevity of about 0.9 months for those born in high erosion counties post-1930. We show that these effects are not an artifact of preexisting trends in longevity. Additional analyses suggest the effects are more pronounced among children raised in farm households, females, and those with lower maternal education. We also provide suggestive evidence that reductions in adulthood income are a likely mechanism channel.
Author contact info: Hamid Noghanibehambari Marion St Clarksville, TN 37040-5164 United States Tel: 8066201812 E-Mail: noghanih@apsu.edu Jason Fletcher University of Wisconsin-Madison La Follette School of Public Affairs 1225 Observatory Drive Madison, WI 53706 E-Mail: jfletcher@lafollette.wisc.edu

A Horse Race of Monetary Policy Regimes: An Experimental Investigation - Kostyshyna, Olena; Petersen, Luba; Yang, Jing (National Bureau of Economic Research Working Paper Series, 2022)
We provide a comprehensive assessment of leading monetary policy frameworks away from and at the ELB. Inflation targeting, dual mandate, average inflation targeting under 4- and 10-period horizons, price level targeting, and nominal GDP level targeting are evaluated in a laboratory setting. Contrary to theoretical prediction with full information rational expectations, participants exhibit backward-looking expectations and, consequently, rate-targeting mandates outperform level targeting. More history dependence worsens macroeconomic stability. Inflation expectations are managed better when mandates are framed in terms of inflation rates than price levels. Central bank communication significantly improves the performance of price level targeting.
Author contact info: Olena Kostyshyna E-Mail: okostyshyna@bankofcanada.ca Luba Petersen Department of Economics Simon Fraser University 8888 University Drive Burnaby, BC V5A 1S6 E-Mail: lubap@sfu.ca Jing Yang Bank of Canada 234 Wellington Street Ottawa, ON, K1A 0G9 CANADA E-Mail: jyang@bank-banque-canada.ca

Comparing China REACH and the Jamaica Home Visiting Program - Zhou, Jin; Heckman, James J; Liu, Bei; Lu, Mai; Chang, Susan M; Grantham-McGregor, Sally (National Bureau of Economic Research Working Paper Series, 2022)
This paper summarizes empirical findings from a series of recent papers studying a replication of the Jamaica Reach Up and Learn home visiting program in China, China REACH. It collects more detailed information than is available on the original program. An analysis of it facilitates investigation of the skills generated by Jamaica Reach Up and Learn. We find evidence for dynamic complementarity for medium- and low-ability children. Children who start behind only slowly catch up. Able children are an exception. Most children master its goals for skill development, but the pace of learning varies greatly among children classified by ability. The program scales well. Costs per pupil are roughly $500 (2015 USD). At the same ages, treatment effect sizes and skill growth curves are comparable across the Jamaica and China REACH interventions, despite differences in scale and differences in cultural settings. We develop a method for comparing scores on different tests by anchoring comparisons on common items.
Author contact info: Jin Zhou Center for the Economics of Human Development University of Chicago 1126 East 59th Street Chicago, IL 60637 E-Mail: jzhou269@cityu.edu.hk 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 Bei Liu Floor 15, Tower A Imperial International Center No. 136, Andingmen Wai Avenue Dongcheng District Beijing, P.C. 100011 China E-Mail: liubei@cdrf.org.cn Mai Lu Floor 15, Tower A Imperial International Center No. 136, Andingmen Wai Avenue Dongcheng District Beijing, P.C. 100011 China E-Mail: lumai@cdrf.org.cn Susan M. Chang Caribbean Institute for Health Research The University of the West Indies Kingston, Jamaica E-Mail: susan.changlopez@uwimona.edu.jm Sally Grantham-McGregor University College London Gower Street London - WC1E 6BT E-Mail: sallymcgregor@yahoo.com

Automation and Polarization - Acemoglu, Daron; Loebbing, Jonas (National Bureau of Economic Research Working Paper Series, 2022)
We develop an assignment model of automation. Each of a continuum of tasks of variable complexity is assigned to either capital or one of a continuum of labor skills. We characterize conditions for interior automation, whereby tasks of intermediate complexity are assigned to capital. Interior automation arises when the most skilled workers have a comparative advantage in the most complex tasks relative to capital, and because the wages of the least skilled workers are sufficiently low relative to their productivity and the effective cost of capital in low-complexity tasks. Minimum wages and other sources of higher wages at the bottom make interior automation less likely. Starting with interior automation, a reduction in the cost of capital (or an increase in capital productivity) causes employment and wage polarization. Specifically, further automation pushes workers into tasks at the lower and upper ends of the task distribution. It also monotonically increases the skill premium above a skill threshold and reduces the skill premium below this threshold. Moreover, automation tends to reduce the real wage of workers with comparative advantage profiles close to that of capital. We show that large enough increases in capital productivity ultimately induce a transition to low-skill automation and qualitatively alter the effects of automation - thereafter inducing monotone increases in skill premia rather than wage polarization.
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 Jonas Loebbing LMU Munich Center for Economic Studies Schackstrasse 4 Munich 80539 Germany E-Mail: jonas.loebbing@econ.lmu.de

How to Run Surveys: A Guide to Creating Your Own Identifying Variation and Revealing the Invisible - Stantcheva, Stefanie (National Bureau of Economic Research Working Paper Series, 2022)
Surveys are an essential approach for eliciting otherwise invisible factors such as perceptions, knowledge and beliefs, attitudes, and reasoning. These factors are critical determinants of social, economic, and political outcomes. Surveys are not merely a research tool. They are also not only a way of collecting data. Instead, they involve creating the process that will generate the data. This allows the researcher to create their own identifying and controlled variation. Thanks to the rise of mobile technologies and platforms, surveys offer valuable opportunities to study either broadly representative samples or focus on specific groups. This paper offers guidance on the complete survey process, from the design of the questions and experiments to the recruitment of respondents and the collection of data to the analysis of survey responses. It covers issues related to the sampling process, selection and attrition, attention and carelessness, survey question design and measurement, response biases, and survey experiments.
Author contact info: Stefanie Stantcheva Department of Economics Littauer Center 232 Harvard University Cambridge, MA 02138 Tel: 617-496-2614 E-Mail: sstantcheva@fas.harvard.edu

Work From Home and the Office Real Estate Apocalypse - Gupta, Arpit; Mittal, Vrinda; Van Nieuwerburgh, Stijn (National Bureau of Economic Research Working Paper Series, 2022)
We study the impact of remote work on the commercial office sector. We document large shifts in lease revenues, office occupancy, lease renewal rates, lease durations, and market rents as firms shifted to remote work in the wake of the Covid-19 pandemic. We show that the pandemic has had large effects on both current and expected future cash flows for office buildings. Remote work also changes the risk premium on office real estate. We revalue the stock of New York City commercial office buildings taking into account pandemic-induced cash flow and discount rate effects. We find a 45% decline in office values in 2020 and 39% in the longer-run, the latter representing a $453 billion value destruction. Higher quality office buildings were somewhat buffered against these trends due to a flight to quality, while lower quality office buildings see much more dramatic swings. These valuation changes have repercussions for local public finances and financial sector stability.
Author contact info: Arpit Gupta E-Mail: arpit.gupta@stern.nyu.edu Vrinda Mittal McColl Building Chapel Hill, NC 27514 United States Tel: 6179090269 E-Mail: vrinda.mittal@gmail.com Stijn Van Nieuwerburgh Columbia University Graduate School of Business Kravis Hall, office 796 665 West 130th Street New York, NY 10027 E-Mail: svnieuwe@gsb.columbia.edu

Horses for Courses: Measuring Foreign Supply Chain Exposure - Baldwin, Richard; Freeman, Rebecca; Theodorakopoulos, Angelos (National Bureau of Economic Research Working Paper Series, 2022)
Perceptions of global supply chains (GSCs) have shifted in recent years from a positive to a more cautious view. Standard GSC measures have mostly not adapted to this change as they focus on participation in, rather than exposure to, foreign supply chains. This paper presents the tools necessary to track foreign GSC exposure, and introduces a systematic shocks approach to GSC indicator design. We use this to develop indicators that gauge the impact of a variety of foreign shocks. We argue that different indicators are appropriate to different questions and show that they can provide qualitatively different answers to the same foreign exposure question.
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 Rebecca Freeman Bank of England Threadneedle Street London EC2R 8AH United Kingdom E-Mail: rebecca.freeman@bankofengland.co.uk Angelos Theodorakopoulos Aston Business School Aston Triangle Birmingham B4 7ET United Kingdom E-Mail: a.theodorakopoulos2@aston.ac.uk

Global Trends in Income Inequality and Income Dynamics: New Insights from GRID - Guvenen, Fatih; Pistaferri, Luigi; Violante, Giovanni L (National Bureau of Economic Research Working Paper Series, 2022)
The Global Repository of Income Dynamics (GRID) is a new open-access, cross- country database that contains a wide range of micro statistics on income inequality, dynamics, and mobility. It has four key characteristics: it is built on micro panel data drawn from administrative records; it fully exploits the longitudinal dimension of the underlying datasets; it offers granular descriptions of income inequality and income dynamics for finely defined subpopulations; and it is designed from the ground up with the goals of harmonization and cross-country comparability. This paper introduces the database and presents a set of global trends in income inequality and income dynamics across the 13 countries that are currently in GRID. Our results are based on the statistics created for GRID by the 13 country teams who also contributed to this special issue with individual articles.
Author contact info: Fatih Guvenen Department of Economics University of Minnesota 4-101 Hanson Hall 1925 Fourth Street South Minneapolis, MN, 55455 Tel: 612-6250767 E-Mail: guvenen@umn.edu Luigi Pistaferri Department of Economics 579 Jane Stanford Way Stanford University Stanford, CA 94305-6072 Tel: 650/724-4904 Fax: 650/725-5702 E-Mail: pista@stanford.edu Giovanni L. Violante Department of Economics Princeton University Julis Romo Rabinowitz Building Princeton, NJ 08540 E-Mail: violante@princeton.edu

Are Immigrants more Left leaning than Natives? - Moriconi, Simone; Peri, Giovanni; Turati, Riccardo (National Bureau of Economic Research Working Paper Series, 2022)
We analyze whether second-generation immigrants have different political preferences relative to observationally identical children of citizens in the host countries. Using data on individual voting behavior in 22 European countries between 2001 and 2017, we characterize each vote on a left-right scale based on the ideological and policy positions of the party receiving the vote. In the first part of the paper, we characterize the size of the "left-wing bias" in the vote of second-generation immigrants after controlling for a large set of individual characteristics and origin and destination country fixed effects. We find a significant left-wing bias of second-generation immigrants, comparable in magnitude to the left-wing bias associated with living in urban (rather than rural) areas. We then show that this left-wing bias is associated with stronger preferences for inequality-reducing government intervention, internationalism and multiculturalism. We do not find that second-generation immigrants are biased towards or away from populist political agendas.
Author contact info: Simone Moriconi IÉSEG School of Management 1 parvis de La Defense 92044 Paris - La Defense Cedex France E-Mail: s.moriconi@ieseg.fr Giovanni Peri Department of Economics University of California, Davis One Shields Avenue Davis, CA 95616 Tel: 530/752-3033 E-Mail: gperi@ucdavis.edu Riccardo Turati UAB, Departamento de Economia Aplicada Edificio B2. Campus de la Universidad Autonoma de Barcelona Bellaterra, Barcelona 08193 Spain Tel: +34 935811628 E-Mail: riccardo.turati@uab.cat

War, Influenza, and U.S. Carbon Intensity. - Muller, Nicholas Z (National Bureau of Economic Research Working Paper Series, 2022)
Carbon intensity from fossil fuel use in the United States economy peaked in 1917. World War I ended, and the Spanish Flu pandemic broke out one year later in 1918. This paper contends that these events, coupled with associated turmoil in the domestic coal industry, were largely responsible for the turning point in carbon intensity. It is instructive to consider that geopolitics, labor markets, and public health at the time of peak carbon intensity bear relevance to the global economy from 2019 to the present. Interventions in markets intended to mitigate detrimental consequences of pandemic and war may induce ancillary impacts for long-run climate change and environmental quality.
Author contact info: Nicholas Z. Muller Department of Engineering, and Public Policy Tepper School of Business Carnegie Mellon University 4215 Tepper Quad 5000 Forbes Avenue Pittsburgh, PA 15213 Tel: 412-268-8121 E-Mail: nicholas.muller74@gmail.com

Know Your Customer: Informed Trading by Banks - Haselmann, Rainer; Leuz, Christian; Schreiber, Sebastian (National Bureau of Economic Research Working Paper Series, 2022)
This study analyzes information production and trading behavior of banks with lending relationships. We combine trade-by-trade supervisory data and credit-registry data to examine banks' proprietary trading in borrower stocks around a large number of corporate events. We find that relationship banks build up positive (negative) trading positions in the two weeks before events with positive (negative) news, even when these events are unscheduled, and unwind positions shortly after the event. This trading pattern is more pronounced when banks are likely to possess private information about their borrowers and cannot be explained by specialized expertise in certain industries or firms. The results suggest that banks' lending relationships inform their trading and underscore the potential for conflicts of interest in universal banking—a prominent concern in the regulatory debate for a long time. Our analysis also illustrates how combining large data sets can enhance the supervision of markets and financial institutions.
Author contact info: Rainer Haselmann Goethe Univeristy / SAFE Theodor Adorno Platz Frankfurt Germany E-Mail: haselmann@safe.uni-frankfurt.de Christian Leuz Booth School of Business University of Chicago 5807 S. Woodlawn Avenue Chicago, IL 60637-1610 Tel: 773/834-1996 Fax: 773-834-4585 E-Mail: cleuz@chicagobooth.edu Sebastian Schreiber Goethe Universitaet Frankfurt Frankfurt Germany E-Mail: schreiber@econ.uni-frankfurt.de

Assessing School District Decision-Making: Evidence from the COVID-19 Pandemic - Christian, Alvin; Jacob, Brian; Singleton, John D (National Bureau of Economic Research Working Paper Series, 2022)
The COVID-19 pandemic drew new attention to the role of school boards in the U.S. In this paper, we examine school districts’ choices of learning modality—whether and when to offer in-person, virtual, or hybrid instruction—over the course of the 2020-21 pandemic school year. The analysis takes advantage of granular weekly data on learning mode and COVID-19 cases for Ohio school districts. We show that districts respond on the margin to health risks: all else equal, a marginal increase in new cases reduces the probability that a district offers in-person instruction the next week. Moreover, this negative response is magnified when the district was in-person the prior week and attenuates in magnitude over the school year. These findings are consistent with districts learning from experience about the effect of in-person learning on disease transmission in schools. We also find evidence that districts are influenced by the decisions of their peers.
Author contact info: Alvin Christian Gerald R. Ford School of Public Policy University of Michigan Joan and Sanford Weill Hall 735 S. State Street Ann Arbor, MI 48109 E-Mail: alvinchr@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 John D. Singleton University of Rochester Department of Economics Harkness Hall Box 270156 Rochester, NY 14627 E-Mail: john.singleton@rochester.edu

A Tale of Tier 3 Cities - Rogoff, Kenneth S; Yang, Yuanchen (National Bureau of Economic Research Working Paper Series, 2022)
This paper provides new estimates of the housing stock, construction rates and price developments by city tier in China in order to understand where excess supply might be concentrated, and the implications of any significant contraction. We also update estimates of the size of China’s rapidly evolving real estate sector through 2021, allowing one to look at the initial impact of COVID-19, as well as extending the analysis to incorporate urban-expansion related infrastructure construction. We argue that China overall faces imbalances between supply and demand for housing stock, but the problem is significantly deeper in the generally smaller and lower income tier 3 cities, which nevertheless account for more than 60% of both China’s GDP and its housing stock.
Author contact info: Kenneth S. Rogoff Maurits C. Boas Professor of International Economics Economics Department Harvard University Littauer Center 216 Cambridge, MA 02138-3001 Tel: 617-495-4022 Fax: 617/495-7730 E-Mail: krogoff@harvard.edu Yuanchen Yang International Monetary Fund 700 19th Street Washington, DC 20431 E-Mail: yyang6@imf.org

Neoclassical Growth with Long-Term One-Sided Commitment Contracts - Krueger, Dirk; Uhlig, Harald (National Bureau of Economic Research Working Paper Series, 2022)
This paper characterizes the stationary equilibrium of a continuous-time neoclassical production economy with capital accumulation in which agents can insure against idiosyncratic income risk by trading agent-shock contingent assets, subject to limited commitment constraints that rule out selling these assets short. For a general N-state Poisson labor productivity process we characterize the optimal consumption-asset allocation, the stationary asset distribution as well as the aggregate supply of capital by the household sector. For the special case in which production is Cobb-Douglas, agent labor productivity takes two values, one of which is zero, and agents have log-utility, we solve the equilibrium interest rate, capital stock and the consumption distribution in closed form. The paper therefore provides a tractable alternative to the standard incomplete markets general equilibrium model as in Aiyagari (1994).
Author contact info: Dirk Krueger Economics Department University of Pennsylvania The Ronald O. Perelman Center 133 South 36th Street Philadelphia, PA 19104 Tel: 215/898-6691 Fax: 215/573-2057 E-Mail: dkrueger@econ.upenn.edu Harald Uhlig Dept. of Economics University of Chicago 1126 E 59th Street Chicago, IL 60637 Tel: 773/702-3702 Fax: 773/702-8490 E-Mail: huhlig@uchicago.edu

Culture Clash: Incompatible Reputation Mechanisms and Intergroup Conflict - Fouka, Vasiliki; Schläpfer, Alain (National Bureau of Economic Research Working Paper Series, 2022)
Under what conditions does intergroup contact lead to conflict? We provide a novel answer to this question by highlighting the role of reputation mechanisms in sustaining cooperation. Reputational concerns can deter defection in one-time interactions within a group, but the informational content of reputation can differ across groups. We consider two types of information. Punishment-based reputation (a "culture of honor") represents past sanctioning behavior of individuals, while a reputation based on image scoring captures past cooperative and uncooperative acts. While either type can successfully sustain cooperation within a group, we show theoretically that interactions of individuals from a punishment-based culture with those from a culture of image scoring can lead to widespread inter-group tensions. Mutual cooperation is a more likely outcome if both cultures use a similar reputation mechanism. We find empirical support for the model's predictions across phenomena related to the emergence of social tensions. Cross-cultural differences in the importance of retaliation predict patterns of host population discrimination against immigrants and variation in bilateral conflict across ethnic groups.
Author contact info: Vasiliki Fouka Stanford University Department of Political Science 616 Jane Stanford Way Stanford, CA 94305 Tel: 650/723-4862 E-Mail: vfouka@stanford.edu Alain Schläpfer Stanford University 616 Jane Stanford Way Stanford, CA 94305 E-Mail: alainsch@stanford.edu

Housing Dynamics: Theory Behind Empirics - Wang, Ping; Xie, Danyang (National Bureau of Economic Research Working Paper Series, 2022)
To fill the knowledge gap that previous studies ignore either housing or internal urban structure and to enable better fit with important stylized facts, we construct a two-sector optimal growth model of housing where housing is produced by land and housing structure/household durables. We explicitly model within-city locational choice. Housing services derive positive utility but are decayed away from the city center. Our model enables a full characterization of the dynamic paths of housing and housing and land prices. The model is then calibrated to fit part of the stylized facts: faster growth of housing structure/household durables than housing, faster growth of land prices than housing prices, and downward housing price and land rent gradients within a city. The calibrated model can then be used to predict the remaining untargeted part of stylized facts: a locationally steeper land rent gradient than the housing price gradient, relatively flatter housing quantity and price gradients in larger cities with flatter population gradients and moderate rise in the housing expenditure share. The calibrated model can be further used to yield additional insights on housing dynamics and spatial distribution. We find nonhomotheticities in housing preference and housing production are crucial for realistic model predictions.
Author contact info: Ping Wang Department of Economics Washington University in St. Louis Campus Box 1208 One Brookings Drive St. Louis, MO 63130-4899 Tel: 314/935-5632 Fax: 314/935-4156 E-Mail: pingwang@wustl.edu Danyang Xie Innovation, Policy and Entrepreneurship Thrust Society Hub HKUST (Guangzhou) Guangzhou, China E-Mail: dxie@hkust-gz.edu.cn

Urban-Biased Growth: A Macroeconomic Analysis - Eckert, Fabian; Ganapati, Sharat; Walsh, Conor (National Bureau of Economic Research Working Paper Series, 2022)
Since 1980, US wage growth has been fastest in large cities. Empirically, we show that most of this urban-biased growth reflects wage growth at large Business Services firms, which are also the most intensive users of information and communications technology (ICT) capital in the US economy. We provide an explicit economic mechanism whereby ICT is more complementary with labor at larger firms. Quantitatively, we find that with such a complementarity, the observed decline in ICT prices alone can account for most of the urban-biased growth, since Business Services firms in big cities tend to be large.
Author contact info: Fabian Eckert Department of Economics UC San Diego 9500 Gilman Dr La Jolla, CA 92093 E-Mail: f@fpeckert.me Sharat Ganapati Georgetown University Edward B. Bunn, S.J. Intercultural Center 37th and O Streets, NW Washington, DC 20057 Tel: 202/687-3047 E-Mail: sg1390@georgetown.edu Conor Walsh Columbia Business School 350 Kravis Hall 665 W 130th St New York, NY 10027 E-Mail: caw2226@columbia.edu

Imperfect Competition and Sanitation: Evidence from Randomized Auctions in Senegal - Houde, Jean-François; Johnson, Terence R; Lipscomb, Molly; Schechter, Laura A (National Bureau of Economic Research Working Paper Series, 2022)
We study the extent to which collusion can explain the under-provision of clean sanitation technologies in developing countries. Using desludging services in Dakar as a case-study, we document that prices are 66% higher in areas where prices are likely coordinated by a large trade association, compared to nearby neighborhoods supplied by unaffiliated companies. We then develop an experimental just-in-time auction platform with random variation in several design features aimed at learning about the extent of competition. Consistent with the collusion hypothesis, we find that most bidders systematically avoid competition by placing round bids and refusing to undercut rivals.
Author contact info: Jean-François Houde Department of Economics University of Wisconsin-Madison 1180 Observatory Dr Madison, WI 53706 E-Mail: houde@wisc.edu Terence R. Johnson University of Virginia School of Data Science 164C Elson Hall Charlottesville, VA 22903 E-Mail: trj2j@virginia.edu Molly Lipscomb University of Virginia 235 McCormick Ave Charlottesville, VA 22904 Tel: (303)956-6682 E-Mail: molly.lipscomb@virginia.edu Laura A. Schechter Department of Agricultural and Applied Economics University of Wisconsin, Madison 427 Lorch St. 334 Taylor Hall Madison, WI 53706 E-Mail: lschechter@wisc.edu

Listen to Her: Gender Differences in Information Diffusion within the Household - Fehr, Dietmar; Mollerstrom, Johanna; Perez-Truglia, Ricardo (National Bureau of Economic Research Working Paper Series, 2022)
We study how economic information diffuses within the household, leveraging an information-provision experiment with a representative sample of households from Germany. A random sample of household members received information on their household’s position in the income distribution. When provided with information directly, there are no gender differences in how individuals update their beliefs. However, we observe significant gender disparities in the diffusion of information within the household. Specifically, when only the husband receives the information, it influences the wife’s beliefs; however, when only the wife receives the information, it does not affect the husband’s beliefs.
Author contact info: Dietmar Fehr University of Heidelberg Bergheimer Str 58 Heidelberg 69115 Germany E-Mail: d7fehr@gmail.com Johanna Mollerstrom Vernon Smith Hall 5028 George Mason University 3434 Washington Blvd Arlington, VA 22201 E-Mail: jmollers@gmu.edu Ricardo Perez-Truglia Haas School of Business University of California, Berkeley 545 Student Services Building #1900 Berkeley, CA 94720-1900 Tel: 617/875-4437 E-Mail: ricardotruglia@berkeley.edu

Excess Death Rates for Republicans and Democrats During the COVID-19 Pandemic - Wallace, Jacob; Goldsmith-Pinkham, Paul; Schwartz, Jason L (National Bureau of Economic Research Working Paper Series, 2022)
Political affiliation has emerged as a potential risk factor for COVID-19, amid evidence that Republican-leaning counties have had higher COVID-19 death rates than Democrat- leaning counties and evidence of a link between political party affiliation and vaccination views. This study constructs an individual-level dataset with political affiliation and excess death rates during the COVID-19 pandemic via a linkage of 2017 voter registration in Ohio and Florida to mortality data from 2018 to 2021. We estimate substantially higher excess death rates for registered Republicans when compared to registered Democrats, with almost all of the difference concentrated in the period after vaccines were widely available in our study states. Overall, the excess death rate for Republicans was 5.4 percentage points (pp), or 76%, higher than the excess death rate for Democrats. Post- vaccines, the excess death rate gap between Republicans and Democrats widened from 1.6 pp (22% of the Democrat excess death rate) to 10.4 pp (153% of the Democrat excess death rate). The gap in excess death rates between Republicans and Democrats is concentrated in counties with low vaccination rates and only materializes after vaccines became widely available.
Author contact info: Jacob Wallace Yale School of Public Health Department of Health Policy and Management 60 College Street New Haven, CT 06520 E-Mail: jacob.wallace@yale.edu Paul Goldsmith-Pinkham Yale School of Management 165 Whitney Avenue New Haven, CT 06511 E-Mail: paulgp@gmail.com Jason L. Schwartz Yale School of Public Health 60 College Street New Haven, CT 06510 E-Mail: jason.l.schwartz@yale.edu

Culture in Historical Political Economy - Lowes, Sara (National Bureau of Economic Research Working Paper Series, 2022)
Culture – the set of socially transmitted values and beliefs held by individuals – has important implications for a wide variety of economic outcomes. Both the causes and consequences of culture have been the subject of work in Historical Political Economy. I first outline several theories on the origins, evolution, and transmission of culture. I then discuss various strategies for measuring culture. Finally, I review recent research in HPE that explores the origins of variation in culture and the economic consequences of culture.
Author contact info: Sara Lowes Department of Economics University of California at San Diego 9500 Gilman Drive La Jolla, CA 92093 E-Mail: slowes@ucsd.edu

Gender Gaps at the Academies - Card, David; DellaVigna, Stefano; Funk, Patricia; Iriberri, Nagore (National Bureau of Economic Research Working Paper Series, 2022)
Historically, a large majority of the newly elected members of the National Academy of Science (NAS) and the American Academy of Arts and Science (AAAS) were men. Within the past two decades, however, that situation has changed, and in the last 3 years women made up about 40 percent of the new members in both academies. We build lists of active scholars from publications in the top journals in three fields – Psychology, Mathematics and Economics – and develop a series of models to compare changes in the probability of selection of women as members of the NAS and AAAS from the 1960s to today, controlling for publications and citations. In the early years of our sample, women were less likely to be selected as members than men with similar records. By the 1990s, the selection process at both academies was approximately gender-neutral, conditional on publications and citations. In the past 20 years, however, a positive preference for female members has emerged and strengthened in all three fields. Currently, women are 3-15 times more likely to be selected as members of the AAAS and NAS than men with similar publication and citation records.
Author contact info: David Card Department of Economics 549 Evans Hall, #3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510/642-5222 Fax: 510/643-7042 E-Mail: card@econ.berkeley.edu Stefano DellaVigna University of California, Berkeley Department of Economics 549 Evans Hall #3880 Berkeley, CA 94720-3880 Tel: 510/643-0715 Fax: 510/642-6615 E-Mail: sdellavi@econ.berkeley.edu Patricia Funk Università della Svizzera italiana Via Giuseppe Buffi 13 6904 Lugano Switzerland E-Mail: patricia.funk@usi.ch Nagore Iriberri University of the Basque Country Av. Lehendakari Aguirre 83 Bilbao Spain E-Mail: nagore.iriberri@gmail.com

Kinship Structure and the Family: Evidence from the Matrilineal Belt - Lowes, Sara (National Bureau of Economic Research Working Paper Series, 2022)
Kinship structure varies across societies and may affect incentives for cooperation within the household. A key source of variation in kinship structure is whether lineage and inheritance are traced through women, as in matrilineal kinship systems, or men, as in patrilineal kinship systems. Anthropologists hypothesize that matrilineal kinship benefits women because they have greater support from their kin and husbands have less authority over their wives. However, these factors may reduce cooperation within the nuclear household. I test these hypotheses using a geographic regression discontinuity design along the matrilineal belt, which describes the distribution of matrilineal kinship across sub-Saharan Africa. Using over 50 DHS survey-waves with more than 400,000 respondents, I find that matrilineal women are less likely to believe domestic violence is justified, experience less domestic violence, and have greater autonomy in decision making – particularly in the ability to visit family and seek healthcare. Additionally, matrilineal kinship closes the education gap between male and female children, and matrilineal children experience health benefits. Using original survey and experimental data from couples along the matrilineal belt, I test how matrilineal kinship structure affects spousal cooperation. Matrilineal women contribute less to a public good with a spouse when it is easier to hide income. The results highlight how broader social structures shape women’s empowerment, investment in children, and cooperation in the household.
Author contact info: Sara Lowes Department of Economics University of California at San Diego 9500 Gilman Drive La Jolla, CA 92093 E-Mail: slowes@ucsd.edu

Buy Now, Pay Later Credit: User Characteristics and Effects on Spending Patterns - Di Maggio, Marco; Williams, Emily; Katz, Justin (National Bureau of Economic Research Working Paper Series, 2022)
Firms offering “buy now, pay later” (BNPL) point-of-sale installment loans with minimal underwriting and low interest have captured a growing fraction of the market for short-term unsecured consumer credit. We provide a detailed look into the US BNPL market by constructing a large panel of BNPL users from transaction-level data. We document characteristics of users and usage patterns, and use BNPL roll-out to provide new insights into consumer responses to unsecured credit access. BNPL access increases both total spending levels and the retail share in total spending, with magnitudes too large for standard intertemporal and static substitution effects to explain. These findings hold for consumers with and without inferred liquidity constraints. Our findings are more consistent with a “liquidity flypaper effect” where additional retail liquidity through BNPL “sticks where it hits”, than a standard lifecycle model with liquidity constraints.
Author contact info: Marco Di Maggio Harvard Business School Baker Library 265 Soldiers Field Boston, MA 02163 Tel: 617/495-6152 E-Mail: mdimaggio@hbs.edu Emily Williams Harvard Business School Baker Library 273 Soldiers Field Boston, MA 02163 Tel: 617-496-1734 E-Mail: ewilliams@hbs.edu Justin Katz 1805 Cambridge Street Cambridge, MA 02138 E-Mail: jkatz@g.harvard.edu

Three Criteria for Evaluating Social Programs - García, Jorge Luis; Heckman, James J (National Bureau of Economic Research Working Paper Series, 2022)
This paper examines the economic foundations of three criteria used for evaluating the costs and benefits of social programs. Some criteria do not consider the scale of programs or address the costs associated with programs that expand or contract the total government budget. A recent addition to the list of evaluation criteria--the marginal value of public funds (MVPF)--does not adopt a social optimality perspective. It evaluates the optimality of expenditures assuming a predetermined aggregate budget without considering the social costs of raising that budget.
Author contact info: 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 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

Trapped in the Trilemma: When Security Trumps Economics - Bordo, Michael D; James, Harold (National Bureau of Economic Research Working Paper Series, 2022)
This paper describes the challenges of globalization in terms of the logic underpinning four distinct policy constraints or “trilemmas” and their interrelationship; in particular the disturbances that arise from capital flows and the difficulties of adjusting monetary policies to a global monetary environment. These trilemmas intersect and interlock. The trilemmas are: 1. The traditional Macroeconomic trilemma between capital mobility, fixed exchange rates and monetary autonomy; 2. The International relations trilemma between capital mobility, sovereignty and international order; 3. The Political economy trilemma between capital mobility, democracy and sovereignty; 4. The Financial stability trilemma between capital mobility, financial stability and independent national policies. The four trilemmas offer a way to analyze how domestic monetary, financial, economic and political systems are interconnected within the international system that opens up vulnerabilities. They can be described as the impossible policy choices at the heart of globalization.
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 Harold James History Department and Woodrow Wilson School Princeton University Princeton NJ 08544 E-Mail: hjames@princeton.edu

Firming up Price Inflation - Bunn, Philip; Anayi, Lena S; Bloom, Nicholas; Mizen, Paul; Thwaites, Gregory; Yotzov, Ivan (National Bureau of Economic Research Working Paper Series, 2022)
We use data from a large panel survey of UK firms to analyze the economic drivers of price setting since the start of the Covid pandemic. Inflation responded asymmetrically to movements in demand. This helps to explain why inflation did not fall much during the negative initial pandemic demand shock. Energy prices and shortages of labor and materials account for most of the rise during the rebound. Inflation rates across firms have become more dispersed and skewed since the start of the pandemic. We find that average price inflation is positively correlated with the dispersion and skewness of the distribution. Finally, we also introduce a novel measure of subjective inflation uncertainty within firms and show how this has increased during the pandemic, continuing to rise in 2022 even as sales uncertainty dropped back.
Author contact info: Philip Bunn Bank of England Threadneedle Street London EC2R 8AH United Kingdom E-Mail: Philip.Bunn@bankofengland.co.uk Lena Anayi Bank of England Threadneedle Street London EC2R 8AH United Kingdom E-Mail: lena.anayi@bankofengland.co.uk 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 Paul Mizen School of Economics University of Nottingham University Park Nottingham NG7 2RD United Kingdom E-Mail: Paul.Mizen@nottingham.ac.uk Gregory Thwaites Department of Economics University of Nottingham Nottingham NG7 2QX United Kingdom E-Mail: gregorythwaites@gmail.com Ivan Yotzov Threadneedle Street London EC2R 8AH United Kingdom E-Mail: Ivan.Yotzov@bankofengland.co.uk

Zoning for Profits: How Public Finance Shapes Land Supply in China - He, Zhiguo; Nelson, Scott T; Su, Yang; Zhang, Anthony Lee; Zhang, Fudong (National Bureau of Economic Research Working Paper Series, 2022)
Public finance and real estate are uniquely intertwined in China, where local governments also serve as monopolist sellers of land. We shed new light on how land sale decisions and land prices depend on local governments’ financing objectives. First, we document the large (ten-fold) price premium paid for residential-zoned relative to industrial-zoned land and show this price premium can be explained by the greater future tax revenues generated by industrial land; the choice to sell land as industrial rather than residential generates an IRR of 7.70%, which is comparable to local governments’ cost of capital in bond markets. Second, local governments are sensitive to financing constraints: industrial land supply decreases with governments’ bond yields. Third, local governments’ land sales are sensitive to the intergovernmental tax sharing, such that industrial land sales increase with the share of taxes captured by local governments. Thus, shocks to local public finances can be expected to affect the Chinese real estate market and vice versa.
Author contact info: Zhiguo He Stanford University Graduate School of Business 655 Knight Way Stanford, CA 94305 E-Mail: hezhg@stanford.edu Scott T. Nelson University of Chicago E-Mail: Scott.Nelson@chicagobooth.edu Yang Su Business School Chinese University of Hong Kong Hong Kong, China E-Mail: yangsu@cuhk.edu.hk Anthony Lee Zhang University of Chicago Booth School of Business 5807 S Woodlawn Ave Chicago, IL 60637 E-Mail: anthony.zhang@chicagobooth.edu Fudong Zhang Tsinghua University PBC School of Finance E-Mail: zhangfd@pbcsf.tsinghua.edu.cn

Macroeconomic and Asset Pricing Effects of Supply Chain Disasters - Smirnyagin, Vladimir; Tsyvinski, Aleh (National Bureau of Economic Research Working Paper Series, 2022)
We build a general equilibrium production-based asset pricing model with heterogeneous firms that jointly accounts for firm-level and aggregate facts emphasized by the recent macroeconomic literature, and for important asset pricing moments. Using administrative firm-level data, we establish empirical properties of large negative idiosyncratic shocks and their evolution. We then demonstrate that these shocks play an important role for delivering both macroeconomic and asset pricing predictions. Finally, we combine our model with data on the universe of U.S. seaborne import since 2007, and establish the importance of supply chain disasters for the cross-section of asset prices.
Author contact info: Vladimir Smirnyagin Department of Economics Yale University Box 208268 New Haven, CT 06520-8268 E-Mail: vladimir.smirnyagin@yale.edu Aleh Tsyvinski Department of Economics Yale University Box 208268 New Haven, CT 06520-8268 E-Mail: a.tsyvinski@yale.edu

The U.S. Manufacturing Sector’s Response to Higher Electricity Prices: Evidence from State-Level Renewable Portfolio Standards - Wolverton, Ann; Shadbegian, Ronald; Gray, Wayne B (National Bureau of Economic Research Working Paper Series, 2022)
While several papers examine the effects of renewable portfolio standards (RPS) on electricity prices, they mainly rely on state-level data and there has been little research on how RPS policies affect manufacturing activity via their effect on electricity prices. Using plant-level data for the entire U.S. manufacturing sector and all electric utilities from 1992 – 2015, we jointly estimate the effect of RPS adoption and stringency on plant-level electricity prices and production decisions. To ensure that our results are not sensitive to possible pre-existing differences across manufacturing plants in RPS and non-RPS states, we implement coarsened exact covariate matching. Our results suggest that electricity prices for plants in RPS states averaged about 2% higher than in non-RPS states, notably lower than prior estimates based on state-level data. In response to these higher electricity prices, we estimate that plant electricity usage declined by 1.2% for all plants and 1.8% for energy-intensive plants, broadly consistent with published estimates of the elasticity of electricity demand for industrial users. We find smaller declines in output, employment, and hours worked (relative to the decline in electricity use). Finally, several key RPS policy design features that vary substantially from state-to-state produce heterogeneous effects on plant-level electricity prices.
Author contact info: Ann Wolverton National Center for Environmental Economics U.S. Environmental Protection Agency 1200 Pennsylvania Ave., NW MC 1809A Washington, DC 20460 E-Mail: wolverton.ann@epamail.epa.gov Ronald Shadbegian San Diego State University Department of Economics NH-314 5500 Campanile Drive San Diego, CA 92182 E-Mail: Ronshadbegian@gmail.com Wayne B. Gray Department of Economics Clark University 950 Main Street Worcester, MA 01610 Tel: 508/793-7693 Fax: 508/793-8849 E-Mail: WGRAY@CLARKU.EDU

Managing Public Portfolios - Aparisi de Lannoy, Leo R; Bhandari, Anmol; Evans, David; Golosov, Mikhail; Sargent, Thomas J (National Bureau of Economic Research Working Paper Series, 2022)
We develop a unified framework for optimally managing public portfolios for a class of macro-finance models that include widely-used specifications for households' risk and liquidity preferences, market structures for financial assets, and trading frictions. An optimal portfolio hedges fluctuations in interest rates, primary surpluses, liquidities and inequalities. It recognizes liquidity benefits that government debts provide and internalizes equilibrium effects of public policies on financial asset prices. We express an optimal portfolio in terms of statistics that are functions only of macro and financial market data. An application to the U.S. shows that hedging interest rate risk plays a dominant role in shaping an optimal maturity structure of government debt.
Author contact info: Leo R. Aparisi de Lannoy 5757 S University Ave Chicago, IL 60637 E-Mail: laparisidelannoy@uchicago.edu Anmol Bhandari Department of Economics University of Minnesota 1925 Fourth Street South Minneapolis, MN 55455 E-Mail: bhandari@umn.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 Thomas J. Sargent Department of Economics New York University 19 W. 4th Street, 6th Floor New York, NY 10012 Tel: 612/373-4383 Fax: 650/723-1687 E-Mail: thomas.sargent@nyu.edu

Racial Diversity in Private Capital Fundraising - Cassel, Johan; Lerner, Josh; Yimfor, Emmanuel (National Bureau of Economic Research Working Paper Series, 2022)
Black- and Hispanic-owned funds control a very modest share of assets in the private capital industry. We find that the sensitivity of follow-on fundraising to fund performance is greater for minority-owned groups, particularly for underperforming groups. We find little support for a number of explanations for these patterns: that minority fund valuations are overstated, that minority funds encounter difficulties in hiring personnel, or that deploying capital is more difficult for these funds. We do find that the ability of minority groups to raise capital increases during periods of high racial awareness and when the chief investment officer of local public pension plans and endowments are minorities. Together, the results support the hypothesis that the modest representation of Black and Hispanic-owned firms in private capital stems at least partially from the nature of investor demand, rather than the supply of fund managers.
Author contact info: Johan Cassel Owen Graduate School of Management Vanderbilt University 401 21st Ave S Nashville, TN 37203 United States Tel: 615-973-0608 E-Mail: johan.cassel@vanderbilt.edu Josh Lerner Harvard Business School Rock Center 214 Soldiers Field Boston, MA 02163 Tel: 617/495-6065 Fax: 617/496-7357 E-Mail: jlerner@hbs.edu Emmanuel Yimfor Columbia Business School Department of Finance Columbia University 665 W 130th St. New York, NY 10027 E-Mail: eay2121@columbia.edu

Family Bargaining with Altruism - Pollak, Robert A (National Bureau of Economic Research Working Paper Series, 2022)
The theoretical literature on bargaining ignores altruism and assumes that everyone is an egoist. Because the importance of altruism in the family is widely recognized, the egoism assumption is especially problematic in the economics of the family. This paper shows that incorporating altruism into cooperative bargaining models shrinks the set potential cooperative bargaining solutions. The analysis depends on the implications of altruism for Pareto efficiency and the implications of Pareto efficiency for potential cooperative bargaining solutions. The analysis here applies not only to Nash bargaining but to all cooperative bargaining models. For noncooperative bargaining, the analysis implies that any solution that lies outside the shrunken set of potential cooperative bargaining solutions is not Pareto efficient.
Author contact info: Robert A. Pollak Washington University in St. Louis Arts and Sciences and the Olin Business School Campus Box 1133 1 Brookings Drive St. Louis, MO 63130-4899 Tel: 314/935-4918 Fax: 314/935-6359 E-Mail: pollak@wustl.edu

Demand Stimulus as Social Policy - Auerbach, Alan J; Gorodnichenko, Yuriy; Murphy, Daniel (National Bureau of Economic Research Working Paper Series, 2022)
We exploit a panel of city-level data with rich demographic information to estimate the distributional effects of Department of Defense spending and its effects on a range of social outcomes. The income generated by defense spending accrues predominantly to households without a bachelor’s degree. These households as well as Black households tend to disproportionately benefit from this spending. Defense spending also promotes a range of beneficial social outcomes that are often targeted by government programs, including reductions in poverty, divorce rates, disability rates, and mortality rates, as well as increases in homeownership, health insurance rates, and occupational prestige. We compare the effects of defense spending with the effects of general demand shocks and explore reasons for the differential effects of the shocks.
Author contact info: Alan J. Auerbach Department of Economics 530 Evans Hall, #3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510/643-0711 Fax: 510/643-0413 E-Mail: auerbach@econ.berkeley.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 Daniel Murphy Darden School of Business University of Virginia Charlottesville, VA 22906 E-Mail: murphyd@darden.virginia.edu

Trade-ins and Transaction Costs in the Market for Used Business Jets - Hodgson, Charles (National Bureau of Economic Research Working Paper Series, 2022)
Manufacturers of durable goods can encourage consumers facing transaction costs to upgrade by accepting used units as trade-ins. These “buyback schemes” increase demand for new units, but increase the supply of used units if trade-ins are resold. In this paper, I investigate the equilibrium effects of buyback schemes in the market for business jets. I find that buyback increases demand for new units by 37% at fixed prices. However, in equilibrium this increase in sales is diminished by 38% due to substitution away from new jets among first time buyers. Because of this cannibalization, offering buyback is a dominant strategy for only 3 of the 6 major firms, with 3 firms offering buyback as a best response to other firms’ policies. I show that equilibrium buyback policies can change under counterfactual market structures: a simulated merger leads to a reduction in consumer welfare, 70% of which is due to a change in buyback policy.
Author contact info: Charles Hodgson Department of Economics Yale University 87 Trumbull Street New Haven, CT 06511 E-Mail: cbchodgson@gmail.com

Sparse Production Networks - Bernard, Andrew B; Zi, Yuan (National Bureau of Economic Research Working Paper Series, 2022)
Firm-to-firm connections in domestic and international production networks play a fundamental role in economic outcomes. Firm heterogeneity and the sparse nature of firm-to-firm connections implicitly discipline network structure. We find that a large group of well-established statistical relationships are not useful in improving our understanding of production networks. We propose an ``elementary" model for production networks based on random matching and firm heterogeneity and characterize the families of statistics and data generating processes that may raise underidentification concerns in more complex models. The elementary model is a useful benchmark in developing ``instructive" statistics and informing model construction and selection.
Author contact info: Andrew B. Bernard Tuck School of Business at Dartmouth 100 Tuck Hall Hanover, NH 03755 Tel: 603/646-0302 Fax: 603/646-0995 E-Mail: Andrew.B.Bernard@dartmouth.edu Yuan Zi Chemin Eugène-Rigot 2A Geneve 1202 Switzerland E-Mail: yuanzi.economics@gmail.com

Land Rental Markets: Experimental Evidence from Kenya - Acampora, Michelle; Casaburi, Lorenzo; Willis, Jack (National Bureau of Economic Research Working Paper Series, 2022)
Do land market frictions cause misallocation in agriculture? In a field experiment in Western Kenya, we randomly subsidize owners to rent out land. Transferring cultivation rights to renters increases output and value added on the plots, consistent with imperfect land markets and misallocation, and induced rentals persist after the subsidy ends. Additional analysis provides insights on the magnitude and nature of land frictions—which include search, risks, and learning—and on the sources of gains from trade—which include differences between owners and renters in crop choices, productivity, and financial market constraints, but not in labor constraints.
Author contact info: Michelle Acampora University of Zurich Department of Economics Schönberggasse 1, Room SOF- H20 8001 Zürich Switzerland E-Mail: michelle.acampora@econ.uzh.ch Lorenzo Casaburi University of Zurich, Department of Economics Schönberggasse 1, CH-8001, Zurich Switzerland Tel: 762961468 E-Mail: lorenzo.casaburi@econ.uzh.ch Jack Willis Department of Economics Columbia University 420 West 118th Street New York, NY 10027 Tel: 857/928-1494 E-Mail: jw3634@columbia.edu

Multinationals and Structural Transformation - Alviarez, Vanessa I; Chen,; Pandalai-Nayar, Nitya; Varela, Liliana; Yi, Kei-Mu; Zhang, Hongyong (National Bureau of Economic Research Working Paper Series, 2022)
We study the role of multinationals (MNCs) in facilitating firm-level and aggregate structural transformation. Using a stylized model of multinational production and trade, we show that an inward multinational liberalization in the manufacturing sector raises employment in host country firms, and decreases manufacturing employment, while also raising services employment, in the parent firms. We also show the conditions under which aggregate structural transformation occurs. We test the model's firm-level predictions by using confidential microdata from Japan. We study the response of Japanese MNC parents and of their affiliates in China to an exogenous change in China's openness to foreign direct investment (FDI). We find that in industries where inward FDI was encouraged, Japan MNC's affiliates in China experienced increases in their employment. We also find that MNC parents in the encouraged industries experienced decreases in home country manufacturing employment and increases in home country services and R&D employment. Finally, using microdata for several advanced and middle-income countries, we decompose the change in overall manufacturing employment shares into MNC and non-MNC components. We find a significant role for MNCs across all countries, suggesting the mechanism we highlight is an important global driver of structural transformation.
Author contact info: Vanessa I. Alviarez 1300 New York Ave NW Inter-American Development Bank Washington, Dist 20577 United States Tel: 2027630533 E-Mail: valviarezr@iadb.org Cheng Chen John E. Walker Department of Economics Wilbur O. and Ann Powers College of Business Clemson University Clemson, SC 29634 E-Mail: chencheng1983613@gmail.com Nitya Pandalai-Nayar Department of Economics University of Texas at Austin 3.142 BRB, 2225 Speedway Austin, TX 78713 Tel: 503/616-1616 E-Mail: npnayar@utexas.edu Liliana Varela Houghton Street Department of Finance London School of Economics London, WC2A 2AE United Kingdom E-Mail: L.V.Varela@lse.ac.uk Kei-Mu Yi Department of Economics University of Houston 3623 Cullen Blvd. Houston, TX 77204 Tel: 713/743-3331 Fax: 713/743-3798 E-Mail: yik.work@gmail.com Hongyong Zhang 11th floor, Annex, Ministry of Economy, Trade and Industry 1-3-1, Kasumigaseki, Chiyoda-ku, Tokyo Japan E-Mail: zhang-hong-yong@rieti.go.jp

Estimating Perceptions of the Relative COVID Risk of Different Social-Distancing Behaviors from Respondents' Pairwise Assessments - Heffetz, Ori; Rabin, Matthew (National Bureau of Economic Research Working Paper Series, 2022)
How do people compare bundles of social-distancing behaviors? During the COVID pandemic, we showed 676 online respondents in the US, UK, and Israel 30 pairs of brief videos of acquaintances meeting. We asked them to indicate which in each pair depicted greater risk of COVID infection. Their choices imply that on average respondents considered talking 14 minutes longer to be as risky as standing 1 foot closer, being indoors as standing 3 feet closer, and removing a properly worn mask by either party as standing 4–5 feet closer. We explore subpopulations and perceived nonlinear and interacted effects of combined behaviors.
Author contact info: 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 Matthew Rabin Department of Economics Littauer Center M-8 Harvard University Cambridge, MA 02138 Tel: 510/643-8622 E-Mail: MatthewRabin@fas.harvard.edu

Labor Supply and Occupational Choice - Erosa, Andrés; Fuster, Luisa; Kambourov, Gueorgui; Rogerson, Richard (National Bureau of Economic Research Working Paper Series, 2022)
We document a robust negative relationship between mean annual hours in an occupation and the dispersion of annual hours within that occupation. We study a unified model of occupational choice and labor supply that features heterogeneity across occupations in the return to working additional hours and show that it can match the key features of the data both qualitatively and quantitatively. Occupational choice in our model is shaped both by selection on comparative advantage and selection on tastes for leisure. Our quantitative work finds that the dominant source of differences in hours across occupations is selection on tastes for leisure.
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

Rising Markups or Changing Technology? - Foster, Lucia S; Haltiwanger, John C; Tuttle, Cody (National Bureau of Economic Research Working Paper Series, 2022)
Recent evidence suggests the U.S. business environment is changing, with rising market concentration and markups. The most prominent and extensive evidence backs out firm-level markups from the first-order conditions for variable factors. The markup is identified as the ratio of the variable factor’s output elasticity to its cost share of revenue. Our analysis starts from this indirect approach, but we exploit a long panel of manufacturing establishments to permit output elasticities to vary to a much greater extent - relative to the existing literature - across establishments within the same industry over time. With our more detailed estimates of output elasticities, the measured increase in markups is substantially dampened, if not eliminated, for U.S. manufacturing. As supporting evidence, we relate differences in the markups’ patterns to observable changes in technology (e.g., computer investment per worker, capital intensity, diversification to non-manufacturing) and find patterns in support of changing technology as the driver of those differences.
Author contact info: Lucia S. Foster US Bureau of the Census Washington, DC 20233 E-Mail: lucia.s.foster@census.gov John C. Haltiwanger Department of Economics University of Maryland College Park, MD 20742 Tel: 301/405-3504 Fax: 301/405-3542 E-Mail: haltiwan@econ.umd.edu Cody Tuttle University of Texas at Austin 2225 Speedway Bernard and Audre Rapoport Building Austin, TX 78705 E-Mail: cody.tuttle@utexas.edu

The Racial Wealth Gap, Financial Aid, and College Access - Levine, Phillip B; Ritter, Dubravka (National Bureau of Economic Research Working Paper Series, 2022)
We examine how the racial wealth gap interacts with financial aid in American higher education to generate a disparate impact on college access and outcomes. Retirement savings and home equity are excluded from the formula used to estimate the amount a family can afford to pay. All else equal, omitting those assets mechanically increases the financial aid available to families that hold them. White families are more likely to own those assets and in larger amounts. We document this issue and explore its relationship with observed differences in college attendance, types of institutions attended, degrees attained, and education debt using data from the Survey of Consumer Finances (SCF), the National Postsecondary Student Aid Study (NPSAS), and the Panel Study of Income Dynamics (PSID). We show that this treatment of assets provides an implicit subsidy worth thousands of dollars annually to students from families with above-median incomes. White students receive larger subsidies relative to Black students and Hispanic students with similar family incomes, and this gap in subsidies is associated with disadvantages in educational advancement and student loan levels. It may explain 10 percent to 15 percent of white students’ advantage in these outcomes relative to Black students and Hispanic students.
Author contact info: Phillip B. Levine Department of Economics Wellesley College 106 Central Street Wellesley, MA 02481 Tel: 781/283-2162 Fax: 781/283-2177 E-Mail: plevine@wellesley.edu Dubravka Ritter Consumer Finance Institute Federal Reserve Bank of Philadelphia 10 Independence Mall W Philadelphia, PA 19106 Tel: 215-519-6244 E-Mail: dubravka.ritter@phil.frb.org

Spatial Structural Change - Eckert, Fabian; Peters, Michael (National Bureau of Economic Research Working Paper Series, 2022)
Between 1880 and 1920, the US agricultural employment share fell from 50% to 25%. However, despite aggregate demand shifting away from their sector of specialization, rural labor markets saw faster wage growth and industrialization than non-agricultural parts of the US. We propose a spatial model of the structural transformation to analyze the link between aggregate structural change and local economic development. The calibrated model shows that rural areas adapted to the decline of the agricultural sector by adopting technologies already in use in urban locations. Without such catchup growth, economic development would have been urban-biased and spatial inequality would have increased.
Author contact info: Fabian Eckert Department of Economics UC San Diego 9500 Gilman Dr La Jolla, CA 92093 E-Mail: f@fpeckert.me Michael Peters Department of Economics Yale University 87 Trumbull Street New Haven, CT 06511 Tel: 203/436-8475 E-Mail: m.peters@yale.edu

Rebel Governance and Development: The Persistent Effects of Guerrillas in El Salvador - Bandiera, Antonella; Dinarte Diaz, Lelys I; Jimenez, Juan Miguel; Rozo, Sandra V; Sviatschi, Maria Micaela (National Bureau of Economic Research Working Paper Series, 2022)
How does rebel governance affect long-term development? Rebel forces have controlled territory and imposed their own institutions in many countries over the past decades affecting millions of people. We investigate the economic, social, and political consequences of temporary territorial control by guerrillas during the Salvadoran Civil War. During that time, guerrillas displaced state authorities and created informal institutions that encouraged autonomy and self-sufficiency. Using a spatial regression discontinuity design, we show that areas once under guerrilla control have experienced worse economic outcomes over the last 20 years than adjacent areas controlled by the state. In these areas, higher social capital coexists with negative economic consequences. The fact that rebel institutions developed as an alternative to the state generated mistrust of outsiders, and isolated these areas from the rest of the country, resulting in over-dependence on subsistence farming and disengagement from postwar governments. Results are larger in areas where rebel governance initiatives were stronger and do not revert despite increased postwar public investment in formerly guerrilla areas. This study shows that when non-state actors develop alternative governance institutions, these can prompt adverse development effects through lasting norms of distrust of out-groups.
Author contact info: Antonella Bandiera Department of Political Science ITAM E-Mail: antonella.bandiera@itam.mx Lelys I. Dinarte Diaz The World Bank Development Economics Research Group 1818 H Street NW Washington, DC 20433 E-Mail: ldinartediaz@worldbank.org Juan Miguel Jimenez Department of Economics University of British Columbia E-Mail: jmjimen@student.ubc.ca Sandra V. Rozo The World Bank Development Economics Research Group 1818 H Street NW Washington, DC 20433 E-Mail: sandrarozo@worldbank.org Maria Micaela Sviatschi Department of Economics Princeton University 128 Julis Romo Rabinowitz Princeton, NJ 08544 Tel: 917/628-5267 E-Mail: msviatschi@princeton.edu

Distinguishing Causes of Neighborhood Racial Change: A Nearest Neighbor Design - Bayer, Patrick; Casey, Marcus D; McCartney, W. Ben; Orellana-Li, John; Zhang, Calvin S (National Bureau of Economic Research Working Paper Series, 2022)
We study neighborhood choice using a novel research design that contrasts the move rate of homeowners who receive a new different-race neighbor immediately next-door versus slightly further away on the same block. This approach isolates a component of household preferences directly attributable to their neighbors’ identities. Both Black and White homeowners are more likely to move after receiving a new different-race neighbor. Results are robust to additional controls (e.g., income) and alternative research designs. We find evidence of heterogeneity in responses associated with income, density, and region, which has implications for understanding contemporary neighborhood racial change and the prospects for maintaining stable, integrated neighborhoods.
Author contact info: Patrick Bayer Department of Economics Duke University 213 Social Sciences Durham, NC 27708 Tel: 919/660-1832 E-Mail: patrick.bayer@duke.edu Marcus D. Casey Department of Economics University of Illinois at Chicago 601 South Morgan UH725 M/C144 Chicago, IL 60607 E-Mail: mcasey@uic.edu W. Ben McCartney University of Virginia Rouss Hall and Robertson Hall 140 Hospital Dr Charlottesville, VA 22903 E-Mail: mccartney.ben@gmail.com John Orellana-Li The Graduate Center City University of New York 365 5th Avenue New York, NY 10016 E-Mail: jorellana@gradcenter.cuny.edu Calvin S. Zhang Federal Reserve Bank of Philadelphia E-Mail: calvin.zhang@phil.frb.org

It Hurts To Ask - Bénabou, Roland; Jaroszewicz, Ania; Loewenstein, George (National Bureau of Economic Research Working Paper Series, 2022)
We analyze the offering, asking, and granting of help or other benefits as a three-stage game with bilateral private information between a person in need of help and a potential help-giver. Asking entails the risk of rejection, which can be painful: since unawareness of the need can no longer be an excuse, a refusal reveals that the person in need, or the relationship, is not valued very much. We show that a failure to ask can occur even when most helpers would help if told about the need, and that even though a greater need makes help both more valuable and more likely to be granted, it can reduce the propensity to ask. When potential helpers concerned about the recipient’s ask-shyness can make spontaneous offers, this can be a double-edged sword: offering reveals a more caring type and helps solve the failure-to-ask problem, but not offering reveals a not-so-caring one, and this itself deters asking. This discouragement effect can also generate a trap where those in need hope for an offer while willing helpers hope for an ask, resulting in significant inefficiencies.
Author contact info: Roland Bénabou Department of Economics & School of Public and International Affairs Princeton University Princeton, NJ 08544 Tel: 609/258-3672 Fax: 609/258-5533 E-Mail: rbenabou@princeton.edu Ania Jaroszewicz Harvard University E-Mail: ajaroszewicz@hbs.edu George Loewenstein Carnegie Mellon University E-Mail: gl20@andrew.cmu.edu

Global Monetary and Financial Spillovers: Evidence from a New Measure of Bundesbank Policy Shocks - Cloyne, James; Hürtgen, Patrick; Taylor, Alan M (National Bureau of Economic Research Working Paper Series, 2022)
Identifying exogenous variation in monetary policy is crucial for investigating central bank policy transmission. Using newly-collected archival real-time data utilized by the Central Bank Council of the German Bundesbank, we identify unexpected changes in German monetary policy from 580 policy meetings between 1974 and 1998. German monetary policy shocks produce conventional effects on the German domestic economy: activity, prices, and credit decline significantly following a monetary contraction. But given Germany’s central role in the European Monetary System (EMS), we can also shed light on debates about the international transmission of monetary policy and the relative importance of the U.S. Federal Reserve for the global cycle during these years. We find that Bundesbank policy spillovers were much stronger in major EMS economies with Deutschmark pegs than in non-EMS economies with floating exchange rates. Furthermore, compared to monetary spillovers from the U.S., German spillovers were comparable or even larger in magnitude for both pegs and floats.
Author contact info: James Cloyne Department of Economics University of California, Davis One Shields Avenue Davis, CA 95616 E-Mail: jcloyne@ucdavis.edu Patrick Hürtgen Deutsche Bundesbank Wilhelm-Epstein-Strasse 14 60431 Frankfurt am Main Germany E-Mail: patrick.huertgen@bundesbank.de Alan M. Taylor Columbia University 1313 International Affairs 420 West 118th Street New York, NY 10027 E-Mail: amt2314@columbia.edu

Is Social Protection a Luxury Good? - Lokshin, Michael; Ravallion, Martin; Torre, Iván (National Bureau of Economic Research Working Paper Series, 2022)
The claim that social protection is a luxury good—with a national income elasticity exceeding unity—has as been influential. The paper tests the “luxury good hypothesis” using newly-assembled data on social protection spending across countries since 1995, treating the pandemic period separately, as it entailed a large expansion in social protection efforts. While the mean income share devoted to social protection rises with income, this is attributable to multiple confounders, including relative prices, weak governance in low-income countries and access to information-communication technologies. Controlling for these, social protection is not a luxury good. This was also true during the pandemic.
Author contact info: Michael Lokshin World Bank 1818 H Street NW Washington, D.C. 20037 E-Mail: mlokshin@worldbank.org Martin Ravallion E-Mail: N/A user is deceased Iván Torre World Bank 1818 H St NW Washington, DC 20433 E-Mail: itorre@worldbank.org

Understanding Labor Market Discrimination Against Transgender People: Evidence from a Double List Experiment and a Survey - Aksoy, Billur; Carpenter, Christopher S; Sansone, Dario (National Bureau of Economic Research Working Paper Series, 2022)
Using a US nationally representative sample and a double list experiment designed to elicit views free from social desirability bias, we find that anti-transgender labor market attitudes are significantly underreported. After correcting for this concealment, we report that 73 percent of people would be comfortable with a transgender manager and 74 percent support employment non-discrimination protection for transgender people. We also show that respondents severely underestimate the population level of support for transgender individuals in the workplace, and we find that labor market support for transgender people is significantly lower than support for gay, lesbian, and bisexual people. Our results provide timely evidence on workplace-related views toward transgender people and help us better understand employment discrimination against them.
Author contact info: Billur Aksoy Department of Economics Rensselaer Polytechnic Institute 3404 Russell Sage Laboratory 110 8th Street Troy, NY 12180 E-Mail: aksoyb3@rpi.edu Christopher S. Carpenter Department of Economics Vanderbilt University VU Station B, Box #351819 2301 Vanderbilt Place Nashville, TN 37235 E-Mail: christopher.s.carpenter@vanderbilt.edu Dario Sansone Department of Economics University of Exeter Business School Streatham Court Rennes Drive Exeter, Devon EX4 4PU United Kingdom E-Mail: dario.sansone.economics@gmail.com

The Human Perils of Scaling Smart Technologies: Evidence from Field Experiments - Brandon, Alec; Clapp, Christopher M; List, John A; Metcalfe, Robert D; Price, Michael (National Bureau of Economic Research Working Paper Series, 2022)
Smart-home technologies have been heralded as an important way to increase energy conservation. While in vitro engineering estimates provide broad optimism, little has been done to explore whether such estimates scale beyond the lab. We estimate the causal impact of smart thermostats on energy use via two novel framed field experiments in which a random subset of treated households have a smart thermostat installed in their home. Examining 18 months of associated high-frequency data on household energy consumption, yielding more than 16 million hourly electricity and daily natural gas observations, we find little evidence that smart thermostats have a statistically or economically significant effect on energy use. We explore potential mechanisms using almost four million observations of system events including human interactions with their smart thermostat. Results indicate that user behavior dampens energy savings and explains the discrepancy between estimates from engineering models, which assume a perfectly compliant subject, and actual households, who are occupied by users acting in accord with behavioral economists’ conjectures. In this manner, our data document a keen threat to the scalability of new user-based technologies.
Author contact info: Alec Brandon Carey School of Business Johns Hopkins University 100 International Drive Baltimore, MD 21202 E-Mail: alec.brandon@gmail.com Christopher M. Clapp Harris School of Public Policy University of Chicago 1307 E. 60th St. Chicago, IL 60637 Tel: (773) 834-6132 E-Mail: cclapp@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 Robert D. Metcalfe Department of Economics University of Southern California Los Angeles, CA 90007 E-Mail: robert.metcalfe@usc.edu Michael K. Price Department of Economics, Finance, and Legal Studies The University of Alabama 250 Alston Hall Box 870224 Tuscaloosa, AL 35487 E-Mail: mkprice2@ua.edu

College Consumption Amenities, Academic Performance, and Donation Behavior - Hyman, Joshua M; McFarlin, Isaac, Jr. (National Bureau of Economic Research Working Paper Series, 2022)
Colleges compete to attract students by investing in amenities such as athletics, dormitories, and student activities. We examine the effect of student consumption of postsecondary amenities on academic achievement and future donation behavior in the context of Big-Time college sports. We resolve the selection issue using data from a large, public university with a highly-ranked men’s basketball team, where student season tickets are awarded by lottery. Game attendance has small negative effects on academic performance but no impact on donation behavior. Negative academic effects are concentrated at the bottom of the achievement distribution and driven by in-state students and students attending during seasons when the team reaches the postseason tournament. We uncover no evidence of spillover effects to roommates. Our results suggest that certain postsecondary amenities may hinder academic performance, with little upside from future giving.
Author contact info: Joshua M. Hyman Department of Economics Amherst College Amherst, MA 01002-5000 E-Mail: jhyman@amherst.edu Isaac McFarlin Jr. College of Education University of Florida 2-230D Norman Hall P.O. Box 117049 Gainesville, FL 32611 Tel: (352) 273-4330 E-Mail: isaacmcfarlin@gmail.com

Perceptions about Monetary Policy - Bauer, Michael D; Pflueger, Carolin; Sunderam, Adi (National Bureau of Economic Research Working Paper Series, 2022)
We estimate perceptions about the Fed's monetary policy rule from micro data on professional forecasters. The perceived rule varies significantly over time, with important consequences for monetary policy and bond markets. Over the monetary policy cycle, easings are perceived to be quick and surprising, while tightenings are perceived to be gradual and data-dependent. Consistent with the idea that forecasters learn about the policy rule from policy decisions, the perceived monetary policy rule responds to high-frequency monetary policy surprises. Variation in the perceived rule impacts financial markets, explaining changes in the sensitivity of interest rates to macroeconomic announcements and affecting risk premia on long-term Treasury bonds. It also helps explain forecast errors for the future federal funds rate. We interpret these findings through the lens of a model with forecaster heterogeneity and learning from observed policy decisions.
Author contact info: Michael D. Bauer 101 Market St San Francisco, CA 94105 USA Tel: +1-619-857-9156 E-Mail: michael.d.bauer@gmail.com Carolin Pflueger University of Chicago Harris School of Public Policy 1307 E 60th St Chicago, IL 60637 E-Mail: cpflueger@uchicago.edu Adi Sunderam Harvard Business School Baker Library 359 Soldiers Field Boston, MA 02163 Tel: 617/495-6644 E-Mail: asunderam@hbs.edu

Tail Risk in Production Networks - Dew-Becker, Ian (National Bureau of Economic Research Working Paper Series, 2022)
This paper describes the response of the economy to large shocks in a nonlinear production network. While arbitrary combinations of shocks can be studied, it focuses on a sector's tail centrality, which quantifies the effect of a large negative shock to the sector – a measure of the systemic risk of each sector. Tail centrality is theoretically and empirically very different from local centrality measures such as sales share – in a benchmark case, it is measured as a sector's average downstream closeness to final production. The paper then uses the results to analyze the determinants of total tail risk in the economy. Increases in interconnectedness in the presence of complementarity can simultaneously reduce the sensitivity of the economy to small shocks while increasing the sensitivity to large shocks. Tail risk is strongest in economies that display conditional granularity, where some sectors become highly influential following negative shocks.
Author contact info: Ian Dew-Becker Visiting University of Chicago 5256 N. Wayne Avenue Chicago, IL 60640 E-Mail: ian.dewbecker@gmail.com

Real-Time Forward-Looking Skewness over the Business Cycle - Dew-Becker, Ian (National Bureau of Economic Research Working Paper Series, 2022)
This paper measures option-implied skewness for individual firms and the overall stock market between 1980 and 2021, giving real-time measures of conditional micro and macro skewness. There are three key results: 1. Micro skewness is significantly procyclical, while macro skewness is acyclical; 2. Micro skewness leads the business cycle and is strongly linked to credit spreads, suggesting one potential causal channel; 3. Micro skewness is significantly, and not mechanically, correlated with macro volatility, implying that there is a common shock driving them both, which is also linked to the business cycle.
Author contact info: Ian Dew-Becker Visiting University of Chicago 5256 N. Wayne Avenue Chicago, IL 60640 E-Mail: ian.dewbecker@gmail.com

Effect of Macroprudential Policies on Sovereign Bond Markets: Evidence from the ASEAN-4 Countries - Aizenman, Joshua; Uddin, Gazi Salah.; Luo, Tianqi; Jayasekera, Ranadeva; Park, Donghyun (National Bureau of Economic Research Working Paper Series, 2022)
This paper examines whether prudential policies help to reduce sovereign bond vulnerability to global spillover risk in ASEAN-4 countries (Indonesia, Malaysia, the Philippines, and Thailand). We measure sovereign vulnerability within a risk connectedness network among sovereign bonds. The direct effect is that markets with tighter prudential policies have significantly smaller spillovers from the Treasury yield shocks of other regional and global economies. The sum of indirect and direct effects indicates that prudential policies reduce sovereign spillover risk in the long term. These findings suggest prudential policies have dual efficiency in sovereign risk regulation and Treasury internationalization.
Author contact info: Joshua Aizenman Economics and SIR University of Southern California University Park Los Angeles, CA 90089-0043 Tel: 213-740-4066 E-Mail: aizenman@usc.edu Gazi Salah Uddin Department of Management and Engineering Linköping University Linköping 58183 Sweden E-Mail: gazi.salah.uddin@liu.se Tianqi Luo Trinity Business School Trinity College Dublin Dublin Ireland E-Mail: luot@tcd.ie Ranadeva Jayasekera Trinity College Dublin Dublin Ireland E-Mail: jayasekr@tcd.ie Donghyun Park Economic Research and Development Impact Department Asian Development Bank Manila, Philippines Tel: (632) 632-5825/6385 Fax: (632) 636-2342 E-Mail: dpark@adb.org

Dollar Reserves and U.S. Yields: Identifying the Price Impact of Official Flows - Ahmed, Rashad; Rebucci, Alessandro (National Bureau of Economic Research Working Paper Series, 2022)
This paper shows that the price impact of foreign official (FO) purchases or sales of U.S. Treasuries (USTs) is about twice as large as previously reported in the literature once critical sources of endogeneity are addressed. We also show that prevailing estimates of this price impact suffer from omitted variable bias when foreign government bond yields and Federal Reserve policies are not controlled for. By exploiting changes in the volatility of FO flows and U.S. yields after the 2008 Global Financial Crisis, we identify a FO flow shock via heteroskedasticity in a structural VAR. We estimate that a $100B flow shock moves the 5-year, 10-year, and 30-year yields by more than 100 basis points on impact, compared to the 19-44 basis points range that we estimate by assuming FO flows are price inelastic and without controlling for foreign yields and Fed actions. Our findings suggest that FO sales of USTs played a critical role during the March 2020 episode of Treasury market turmoil and that even a small reduction in the Dollar's share of China's reserves could have a significant impact on U.S. long-term interest rates.
Author contact info: Rashad Ahmed Office of the Comptroller of the Currency U.S. Department of the Treasury E-Mail: rashad.ahmed@occ.treas.gov Alessandro Rebucci Johns Hopkins Carey Business School 100 International Drive Baltimore, MD 21202 Tel: 202/251-2106 E-Mail: arebucci@jhu.edu

Long-Run Trends in Long-Maturity Real Rates 1311-2021 - Rogoff, Kenneth S; Rossi, Barbara; Schmelzing, Paul (National Bureau of Economic Research Working Paper Series, 2022)
Taking advantage of key recent advances in long-run financial and economic data, this paper analyzes the statistical properties of global long-maturity real interest rates over the past seven centuries. In contrast to existing consensus, which has overwhelmingly concentrated on short samples for short-maturity rates, we find that long-maturity real interest rates across advanced economies are in fact trend stationary, and exhibit a persistent downward trend since the Renaissance. We investigate structural breaks in real interest rates over time using multiple statistical approaches, and find that only the Black Death and the "Trinity default" of 1557 appear as consistent inflection points in capital markets on both global and country levels. While a 1914 break is also suggested in multiple series (though less robust than existing literature would lead one to expect), the evidence for an inflection point in 1981 appears much weaker. We further examine trends in persistence, as well as commonly-invoked drivers of global real rates: exploiting significant data advances, we argue that historically, demographic and productivity factors appear to show no promising causal role, and in fact diverge from real interest rates over the long run.
Author contact info: Kenneth S. Rogoff Maurits C. Boas Professor of International Economics Economics Department Harvard University Littauer Center 216 Cambridge, MA 02138-3001 Tel: 617-495-4022 Fax: 617/495-7730 E-Mail: krogoff@harvard.edu Barbara Rossi CREI Universitat Pompeu Fabra Carrer Ramon Trias Fargas 25-27 08005 Barcelona, Spain Spain E-Mail: barbara.rossi@upf.edu Paul Schmelzing Carroll School of Management 140 Commonwealth Ave Chestnut Hill, MA 02467 USA E-Mail: paul.schmelzing@bc.edu

Fertility and the Education of African Parents and Children - Vogl, Tom (National Bureau of Economic Research Working Paper Series, 2022)
Sub-Saharan Africa exhibits higher fertility and lower education than other world regions. Economic and demographic theory posit that these phenomena are linked, with slow fertility decline connected to slow education growth among both adults and children. Using microdata from 33 African countries, this paper documents the co-evolution of adult education, fertility, and child education in female birth cohorts surrounding the onset of the region's fertility transition. Fertility change displays a robust negative relationship with the educational outcomes of adult women but a more nuanced relationship with the educational outcomes of children. As fertility declines, children's grade attainment rises, but their school enrollment does not. The divergence is partly explained by a split in how women's education relates to fertility and child education. Rising women's education predicts declining fertility and rising children's grade attainment, but it is less systematically linked to enrollment change.
Author contact info: Tom Vogl Department of Economics University of California at San Diego 9500 Gilman Drive La Jolla, CA 92093 Tel: 858/534-2230 E-Mail: tvogl@ucsd.edu

Exposure to Past Immigration Waves and Attitudes toward Newcomers - Gihleb, Rania; Giuntella, Osea; Stella, Luca (National Bureau of Economic Research Working Paper Series, 2022)
How does previous exposure to massive immigrant inflows affect concerns about current immigration and the integration of refugees? To answer this question, we investigate attitudes toward newcomers among natives and previous immigrants. In areas that in the 1990s received higher inflows of immigrants of German origin—so-called ethnic Germans—native Germans are more likely to believe that refugees are a resource for the economy and the culture, viewing them as an opportunity rather than a risk. Refugees living in these areas report better health and feel less exposed to xenophobia.
Author contact info: Rania Gihleb Department of Economics University of Pittsburgh 230 South Bouquet Street Pittsburgh, PA 15260 E-Mail: gihleb@pitt.edu Osea Giuntella Department of Economics University of Pittsburgh Posvar Hall Pittsburgh, PA 15260 E-Mail: osea.giuntella@gmail.com Luca Stella Freie Universität Berlin E-Mail: luca.stella@fu-berlin.de

Quantifying and Explaining the Decline in Public-School Teacher Retirement Benefits - Abashidze, Nino; Clark, Robert L; Craig, Lee A (National Bureau of Economic Research Working Paper Series, 2022)
In recent decades, many states have reduced future retirement benefits for newly hired teachers. We estimate that in 2020 the average initial monthly retirement benefit, for teachers retiring with 30 years of service, is 11.2 percent lower than that of teachers retiring in the same plan with the provisions that were in place in 2000, implying a lower annual benefit of over $3,000. We examine why state plans that cover only teachers, along with plans in which teachers are not included in Social Security, have made smaller reductions in the generosity of their pension benefits in recent decades.
Author contact info: Nino Abashidze Laramie, WY 82071 USA E-Mail: nabashid@uwyo.edu Robert L. Clark Poole College of Management Box 7229 North Carolina State University Raleigh, NC 27695 Tel: 919/515-4568 Fax: 919/515-6943 E-Mail: robert_clark@ncsu.edu Lee A. Craig Department of Economics North Carolina State University Raleigh, NC 27695-8110 Tel: 919/515-2870 Fax: 919/515-5613 E-Mail: lee_craig@ncsu.edu

What Drives Risky Prescription Opioid Use? Evidence from Migration - Finkelstein, Amy; Gentzkow, Matthew; Li, Dean; Williams, Heidi L (National Bureau of Economic Research Working Paper Series, 2022)
We investigate the role of person- and place-specific factors in the opioid epidemic by developing and estimating a dynamic model of risky prescription opioid use. We estimate the model using the relationship between cross-state migration and risky use among adults receiving federal disability insurance from 2006 to 2015. Event studies suggest that moving to a state with a 3.5 percentage point higher rate of risky use (roughly the difference between the 20th and 80th percentile states) increases the probability of risky use by 1.0 percentage point on-impact, followed by an additional increase of 0.30 percentage points per subsequent year. Model estimates imply large place effects in both the likelihood of transitioning to addiction and the availability of prescription opioids. A one standard deviation reduction in all place effects would have reduced risky use by two-thirds over our study period. Reductions in place effects on addiction have a larger cumulative effect than analogous reductions in place effects on availability. However, their relative efficacy is reversed in the first few years, suggesting a temporal tradeoff among policy options.
Author contact info: 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 Dean Li E-Mail: deanli@mit.edu Heidi L. Williams Department of Economics 6106 Rockefeller Center, Office 328 Dartmouth College Hanover, NH 03755 Tel: 617-669-0577 E-Mail: heidi.lie.williams@dartmouth.edu

Do the Retired Elderly in Europe Decumulate Their Wealth? The Importance of Bequest Motives, Precautionary Saving, Public Pensions, and Homeownership - Horioka, Charles Yuji; Ventura, Luigi (National Bureau of Economic Research Working Paper Series, 2022)
In this paper, we use micro data on a large number of European countries from the Survey of Health, Ageing and Retirement in Europe (SHARE) to examine the wealth accumulation (saving) behavior of the retired elderly in Europe. To summarize our main findings, we find that less than half of the retired elderly in Europe are decumulating their wealth and that the average wealth accumulation rate of the retired elderly in Europe is positive though relatively moderate (6.6% over a 3-year period). These findings strongly suggest that the Wealth Decumulation (or Retirement Saving) Puzzle (the tendency of the retired elderly to not decumulate their wealth or to decumulate their wealth more slowly than expected) applies in the case of Europe. Moreover, our regression results suggest that bequest motives, generous public pension systems, and the reluctance of retired elderly homeowners to sell or borrow against their owner-occupied housing are the primary explanations for the existence of the Wealth Decumulation Puzzle in Europe.
Author contact info: Charles Yuji Horioka Research Institute for Economics and Business Administration Kobe University 2-1, Rokkodai, Nada Kobe 657-8501 JAPAN Tel: +81-78-803-7270 Fax: +81-78-803-7059 E-Mail: horioka@rieb.kobe-u.ac.jp Luigi Ventura Department of Economics and Law Sapienza, University of Rome Rome Italy E-Mail: luigi.ventura@uniroma1.it

Choosing Who Chooses: Selection-Driven Targeting in Energy Rebate Programs - Ida, Takanori; Ishihara, Takunori; Ito, Koichiro; Kido, Daido; Kitagawa, Toru; Sakaguchi, Shosei; Sasaki, Shusaku (National Bureau of Economic Research Working Paper Series, 2022)
We develop an optimal policy assignment rule that integrates two distinctive approaches commonly used in economics—targeting by observables and targeting through self-selection. Our method can be used with experimental or quasi-experimental data to identify who should be treated, be untreated, and self-select to achieve a policymaker’s objective. Applying this method to a randomized controlled trial on a residential energy rebate program, we find that targeting that optimally exploits both observable data and self-selection outperforms conventional targeting. We highlight that the Local Average Treatment Effect (LATE) framework (Imbens and Angrist, 1994) can be used to investigate the mechanism in our approach. By estimating several key LATEs based on the random variation created by our experiment, we demonstrate how our method allows policymakers to identify whose self-selection would be valuable and harmful to social welfare.
Author contact info: Takanori Ida Graduate School of Economics Kyoto University Yoshida, Sakyo Kyoto 606-8501 Japan E-Mail: ida@econ.kyoto-u.ac.jp Takunori Ishihara E-Mail: ishihara.takunori@kuas.ac.jp Koichiro Ito Harris School of Public Policy University of Chicago 1155 East 60th St Chicago, IL 60637 Tel: 415-735-5224 E-Mail: ito@uchicago.edu Daido Kido 3-5-21 Midori Otaru, Hokk 047-8501 Japan E-Mail: dkido@res.otaru-uc.ac.jp Toru Kitagawa Department of Economics Brown University Box B Providence, RI 02912 E-Mail: toru_kitagawa@brown.edu Shosei Sakaguchi Faculty of Economics The University of Tokyo 7-3-1, Hongo Bunkyo-ku Tokyo 113-0033 Japan Tel: +81358417002 E-Mail: sakaguchi@e.u-tokyo.ac.jp Shusaku Sasaki E-Mail: ssasaki.econ@gmail.com

Expectations and the Neutrality of Interest Rates - Cochrane, John H (National Bureau of Economic Research Working Paper Series, 2022)
Our central banks set interest rates, and do not even pretend to control money supplies. How do interest rates affect inflation? We finally have a complete theory of inflation under interest rate targets and unconstrained liquidity. Its long-run properties mirror those of monetary theory: Inflation can be stable and determinate under interest rate targets, including a peg, analogous to a k-percent rule. The zero bound era is confirmatory evidence. Uncomfortably, stability means that higher interest rates eventually raise inflation, just as higher money growth eventually raises inflation. Sticky prices generate some short-run non-neutrality as well: Higher nominal interest rates can raise real rates and lower output. A model in which higher nominal interest rates temporarily lower inflation, without a change in fiscal policy, is a harder task. I exhibit one such model, but it paints a much more limited picture than standard beliefs. We either need a model with a stronger effect, or to accept that higher interest rates have limited power to lower inflation. Empirical understanding of how interest rates affect inflation without fiscal help is also a wide-open question.
Author contact info: John H. Cochrane Hoover Institution 434 Galvez Mall Stanford University Stanford, CA 94305-6010 Tel: 650 723 6708 E-Mail: john.cochrane@stanford.edu

Energy Efficiency Can Deliver for Climate Policy: Evidence from Machine Learning-Based Targeting - Christensen, Peter; Francisco, Paul; Myers, Erica; Shao, Hansen; Souza, Mateus (National Bureau of Economic Research Working Paper Series, 2022)
Building energy efficiency has been a cornerstone of greenhouse gas mitigation strategies for decades. However, impact evaluations have revealed that energy savings typically fall short of engineering model forecasts that currently guide funding decisions. This creates a resource allocation problem that impedes progress on climate change. Using data from the largest U.S. energy efficiency program, we demonstrate that a data-driven approach to predicting retrofit impacts based on previously realized outcomes is more accurate than the status quo engineering models. Targeting high-return interventions based on these predictions dramatically increases net social benefits, from $0.93 to $1.23 per dollar invested.
Author contact info: Peter Christensen Agriculture and Consumer Economics University of Illinois at Urbana-Champaign 1301 W. Gregory Urbana, IL 61801 E-Mail: pchrist@illinois.edu Paul Francisco 2111 South Oak Street Suite 106, MC 699 Champaign, IL E-Mail: pwf@illinois.edu 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 Hansen Shao 1301 W. Gregory Drive Urbana, IL 61801 E-Mail: hshao4@illinois.edu Mateus Souza University of Mannheim, Department of Economics L7, 3-5 Mannheim 68161 Germany E-Mail: mateus.souza@uni-mannheim.de

Advances in the Economic Theory of Cultural Transmission - Bisin, Alberto; Verdier, Thierry (National Bureau of Economic Research Working Paper Series, 2022)
In this paper we survey recent advances in the economic theory of cultural transmission. We highlight three main themes on which the literature has made great progress in the last ten years: the domain of traits subject to cultural transmission, the micro-foundations for the technology of transmission, and feedback effects between culture, institutions, and various socio-economic environments. We conclude suggesting interesting areas for future research.
Author contact info: Alberto Bisin Department of Economics New York University 19 West 4th Street, 5th Floor New York, NY 10012 Tel: 212/998-8916 Fax: 212/995-4186 E-Mail: alberto.bisin@nyu.edu Thierry Verdier PSE and Ecole des Ponts-Paris Tech and PUC-Rio 48 Boulevard Jourdan 75014 Paris, France E-Mail: verdier@pse.ens.fr

Housing Wealth and Online Consumer Behavior: Evidence from Xiong'an New Area in China - Fang, Hanming; Wang, Long; Yang, (National Bureau of Economic Research Working Paper Series, 2022)
We provide new evidence on the causal effects of housing wealth on consumer behavior. To overcome the empirical challenge of non-random housing wealth changes, we exploit the unexpected announcement of China's newest national-level new area—Xiong'an New Area—on April 1, 2017 as an exogenous shock to housing prices. We use a proprietary dataset of individual-level online consumption from the largest e-commerce company in China to measure various aspects of consumer behavior, such as consumption patterns, purchase hesitation, tolerance to unsatisfied products, and shirking (proxied by making online purchases during work hours). We explore the underlying mechanisms through which the housing shock affects consumer behavior; in particular, we attempt to disentangle the realizable and unrealizable housing wealth effects.
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 Long Wang School of Economics Fudan University 600 Guoquan Road Yangpu District Shanghai 200433 China Tel: 021-55665061 E-Mail: wanglong@fudan.edu.cn Zoe Yang CUHK Business School The Chinese University of Hong Kong 12 Chak Cheung Street Hong Kong Tel: 852-95328218 E-Mail: zoeyang@cuhk.edu.hk

Do Low-skilled Immigrants Improve Native Productivity but Worsen Local Amenities? Learning from the South Korean Experience - Kim, Hyejin; Lee, Jongkwan; Peri, Giovanni (National Bureau of Economic Research Working Paper Series, 2022)
In this study, we first evaluate the effect of a significant increase in low-skilled immigration in Korean municipalities from 2010-2015 on the internal migration of natives. Using Korean survey data we are able to distinguish between natives moving for work-related and non-work-related reasons. Using a change in immigration policy and the pre-existing networks of immigrants to construct an instrument for immigration across Korean municipalities, we find that locations experiencing significant low-skilled immigration attracted natives who moved for working purposes. However, these locations saw outflows of natives that moved for non-work-related reasons, such as due to housing and local amenities. We then estimate that immigration had positive effects on local firm creation and on native wages but reduced the quality of local amenities. It had small to no impact on local housing prices. These facts together suggest that immigration attracted natives who value labor income over local amenities but pushed out those who place a higher value on local amenities. Thus, immigration, while generating little net native migration, changed the composition of natives in Korean municipalities.
Author contact info: Hyejin Kim 45, Yongso-ro Nam-Gu Busan 48513 South Korea E-Mail: hyjnkm@pknu.ac.kr Jongkwan Lee School of Economics, Yonsei University 50 Yonsei-ro, Seodaemun-gu South Korea. Seoul 03722 South Korea Tel: +82-2-2123-5442 E-Mail: kwanlee84@gmail.com Giovanni Peri Department of Economics University of California, Davis One Shields Avenue Davis, CA 95616 Tel: 530/752-3033 E-Mail: gperi@ucdavis.edu

The Rise of Age-Friendly Jobs - Acemoglu, Daron; Mühlbach, Nicolaj Søndergaard; Scott, Andrew J (National Bureau of Economic Research Working Paper Series, 2022)
In 1990, one in five U.S. workers were aged over 50 years whereas today it is one in three. One possible explanation for this is that occupations have become more accommodating to the preferences of older workers. We explore this by constructing an “age-friendliness” index for occupations. We use Natural Language Processing to measure the degree of overlap between textual descriptions of occupations and characteristics which define age friendliness. Our index provides an approximation to rankings produced by survey participants and has predictive power for the occupational share of older workers. We find that between 1990 and 2020 around three quarters of occupations have seen their age-friendliness increase and employment in above-average age-friendly occupations has risen by 49 million. However, older workers have not benefited disproportionately from this rise, with substantial gains going to younger females and college graduates and with male non-college educated workers losing out the most. These findings point to the need to frame the rise of age-friendly jobs in the context of other labour market trends and imperfections. Purely age-based policies are insufficient given both heterogeneity amongst older workers as well as similarities between groups of older and younger workers. The latter is especially apparent in the overlapping appeal of specific occupational characteristics.
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 Nicolaj S. Mühlbach Department of Economics and Business Economics - CREATES Fuglesangs Allé 4 Aarhus V 8210 Denmark E-Mail: muhlbach@mit.edu Andrew Scott Department of Economics London Business School Sussex Place, London NW1 4SA, UK E-Mail: ascott@london.edu

Improved Transportation Networks Facilitate Adaptation to Pollution and Temperature Extremes - Barwick, Panle Jia; Donaldson, Dave; Li, Shanjun; Lin, Yatang; Rao, Deyu (National Bureau of Economic Research Working Paper Series, 2022)
The social costs of pollution and climate change hinge critically on humans’ ability to adapt. Based on transaction records from the world’s largest payment network, this research compiles daily travel flows and documents that China's rapid expansion of high-speed railways (HSR) facilitates the use of intercity travel as an effective adaptation strategy. Access to HSR reduces travelers' exposure to extreme air pollution and temperature by 7% and 10%, leading to substantial health benefits. These reductions are attributed to both contemporaneous responses to unexpected adverse conditions and also longer-horizon changes in travel patterns.
Author contact info: Panle Jia Barwick University of Wisconsin-Madison Department of Economics 1180 Observatory Dr Madison, WI 53706 E-Mail: panle.barwick@gmail.com Dave Donaldson Department of Economics, E52-554 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/253-4790 Fax: 617/253-1330 E-Mail: ddonald@mit.edu Shanjun Li Cornell University 405 Warren Hall Ithaca, NY 14853 Tel: 607/255-1832 E-Mail: SL2448@cornell.edu Yatang Lin Department of Economics Hong Kong University of Science and Technology NA Hong Kong, Hong Hong Kong E-Mail: yatang.lin@gmail.com Deyu Rao Department of Economics Hong Kong University of Science and Technology Hong Kong E-Mail: dyrao@ust.hk

Partial Identification of Personalized Treatment Response with Trial-reported Analyses of Binary Subgroups - Li, Sheyu; Litvin, Valentyn; Manski, Charles F (National Bureau of Economic Research Working Paper Series, 2022)
Medical journals have adhered to a reporting practice that seriously limits the usefulness of published trial findings. Medical decision makers commonly observe many patient covariates and seek to use this information to personalize treatment choices. Yet standard summaries of trial findings only partition subjects into broad subgroups, typically into binary categories. Given this reporting practice, we study the problem of inference on long mean treatment outcomes E[y(t)|x], where t is a treatment, y(t) is a treatment outcome, and the covariate vector x has length K, each component being a binary variable. The available data are estimates of {E[y(t)|xk = 0], E[y(t)|xk = 1], P(xk)}, k = 1, . . . , K reported in journal articles. We show that reported trial findings partially identify {E[y(t)|x], P(x)}. Illustrative computations demonstrate that the summaries of trial findings in journal articles may imply only wide bounds on long mean outcomes. One can realistically tighten inferences if one can combine reported trial findings with credible assumptions having identifying power, such as bounded-variation assumptions.
Author contact info: Sheyu Li Department of Endocrinology and Metabolism West China Hospital Sichuan China E-Mail: lisheyu@gmail.com Valentyn Litvin Department of Economics Northwestern University Evanston, IL 60208 USA E-Mail: valentynlitvin@u.northwestern.edu Charles F. Manski Department of Economics Northwestern University 2211 Campus Drive Evanston, IL 60208-2600 Tel: 847/491-8223 Fax: 847/491-7001 E-Mail: cfmanski@northwestern.edu

Explanations for the Decline in Spending at Older Ages - Rohwedder, Susann; Hurd, Michael D; Hudomiet, Péter (National Bureau of Economic Research Working Paper Series, 2022)
We use new data from the 2019 wave of the Consumption and Activities Mail Survey to help interpret the observed decline in spending as individuals age. At one extreme, forward-looking individuals optimally chose the decline; at the other, myopic individuals overspent and were forced to reduce spending because they had run out of wealth. Which interpretation is correct has important implications for the measurement of economic preparation for retirement. According to their own assessments, the fraction of respondents feeling financially constrained is lower at advanced ages, and the fraction satisfied with their economic situation is considerably higher at older ages than at ages near retirement. An important mechanism reconciling the evidence of reduced spending and greater economic satisfaction at older ages may be that individuals’ enjoyment of several activities declines with worsening health, widowing, and increasing age, leading to a lessening desire to spend on them. We find strong support for this hypothesis. Nonetheless, close to 20% of those older than 80 report not being satisfied with their financial situation, pointing to heterogeneity in economic security.
Author contact info: Susann Rohwedder RAND 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407 Tel: 310-393 0411,ext. 7885 Fax: 310-451-6923 E-Mail: susannr@rand.org Michael D. Hurd RAND Corporation 1776 Main Street Santa Monica, CA 90407 Tel: 310/451-6945 Fax: 310/451-6923 E-Mail: mhurd@rand.org Péter Hudomiet Rand Corporation 1776 Main Street Santa Monica, CA 90407 Tel: 310-393-0411, x7469 E-Mail: hudomiet@rand.org

A Framework for Economic Growth with Capital-Embodied Technical Change - Jones, Benjamin F; Liu, Xiaojie (National Bureau of Economic Research Working Paper Series, 2022)
Technological advance is often embodied in capital inputs. This paper develops a model where capital innovations occur on two margins: (1) vertically, where a capital input becomes more productive at a given task; and (2) horizontally, where a capital input replaces labor at a given task. These two forms of technological advance engage in a macroeconomic “tug of war” when capital and labor have less than a unitary elasticity of substitution, and the resulting framework can meet numerous macroeconomic regularities. First, it can produce a balanced growth path and satisfy the Uzawa Growth Theorem—even though all technological progress occurs in capital inputs. Second, it can produce intuitive macroeconomic dynamics, adding perspectives on the apparent productivity slowdown and declining labor share of income. Third, it can produce rich industry dynamics and inform structural change, including declining GDP shares of agriculture and manufacturing, sectoral bottlenecks, the role of general purpose technologies, and the limited macroeconomic impacts of computing. Overall, this tractable framework can help resolve puzzling tensions between micro-level observations of technological advance and macroeconomic features of economic growth.
Author contact info: Benjamin Jones Northwestern University Kellogg School of Management Department of Management and Strategy 2211 Campus Drive Evanston, IL 60208 Tel: 847/491-3177 Fax: 847/467-1777 E-Mail: bjones@kellogg.northwestern.edu Xiaojie Liu 545 N McClurg Ct Chicago, IL 60611 United States Tel: 8728069278 E-Mail: xiaojie.liu@kellogg.northwestern.edu

Monetary Policy and the Short-Rate Disconnect in Emerging Economies - De Leo, Pierre; Gopinath, Gita; Kalemli-Özcan, Ṣebnem (National Bureau of Economic Research Working Paper Series, 2022)
We document that emerging market central banks adhere to Taylor-type rules and lower their policy rates when economic activity slows down, including as a response to U.S. monetary policy tightening. This suggests a countercyclical monetary policy stance. However, in contrast to advanced economies, short-term market rates do not move in tandem with policy rates. Market rates, if anything, tend to increase during recessions. We present evidence that this disconnect between policy rates and market rates can be significantly explained by fluctuations in dollar funding premia that get transmitted into local market rates through the banking sector that relies on foreign funding. Our findings shed light on the challenges to transmission and effectiveness of monetary policy in emerging economies.
Author contact info: Pierre De Leo 4118E Tydings Hall University of Maryland College Park, MD 20742 United States E-Mail: deleop@umd.edu Gita Gopinath International Monetary Fund 700 19th St. NW Washington, DC 20431 Tel: 617/495-8161 Fax: 617/495-7730 E-Mail: ggopinath@imf.org Ṣebnem Kalemli-Özcan Department of Economics University of Maryland Tydings Hall 4118D College Park, MD 20742-7211 Tel: 301/405-3266 E-Mail: kalemli@econ.umd.edu

A Model of the Gold Standard - Fernández-Villaverde, Jesús; Sanches, Daniel (National Bureau of Economic Research Working Paper Series, 2022)
The gold standard emerged as the international monetary system by the end of the 19th century. We formally study its properties in a micro-founded model and find that the scarcity of the world gold stock not only results in a suboptimal output of goods that are purchased with money but also subjects the domestic economy of a country to external shocks. The creation of inside money in the form of private credit instruments adds to the money supply, usually resulting in a Pareto improvement, but opens the door to the international transmission of banking crises. These properties of the gold standard can explain the limited adherence by peripheral countries because of the potential risks to their economies. We argue that the gold standard can be sustainable at the core but not at the periphery.
Author contact info: Jesús Fernández-Villaverde Department of Economics University of Pennsylvania The Ronald O. Perelman Center for Political Science and Economics 133 South 36th Street Suite 150 Philadelphia, PA 19104 E-Mail: jesusfv@econ.upenn.edu Daniel Sanches Federal Reserve Bank of Philadelphia Ten Independence Mall Philadelphia, PA 19106-1574 E-Mail: Daniel.Sanches@phil.frb.org

Racial and Ethnic Disparities in Retirement Outcomes: Impacts of Outreach - Viceisza, Angelino; Calhoun, Amaia; Lee, Gabriella J.O. (National Bureau of Economic Research Working Paper Series, 2022)
We review select literature on racial and ethnic disparities in retirement outcomes in the United States and the impact of outreach on such outcomes. First, there are significant disparities in retirement outcomes, reflecting a long history of racism and structural barriers. Second, there is comparatively little work on the differential impact of retirement outreach across race and ethnicity. Future work should consider designing interventions that cater to the needs of specific demographic groups, for example, by embracing the fact that Blacks, Hispanics, and Whites acquire retirement information from different sources. Future work should incorporate behavioral insights, particularly from prior interventions, and innovate on methodologies for data collection, linking, and analysis.
Author contact info: Angelino Viceisza Spelman College Amaia Calhoun 350 Spelman Lane SW Atlanta, GA 30314 USA E-Mail: acalhou9@spelman.edu Gabriella J.O. Lee Spelman College 350 Spelman Lane SW Atlanta, GA 30314 E-Mail: gabriellalee@spelman.edu

Looking Backward, Innovating Forward: A Theory of Competitive Cascades - Lim, Kevin; Trefler, Daniel; Yu, Miaojie (National Bureau of Economic Research Working Paper Series, 2022)
Innovation depends on exporting and, in particular, on scale and competition in export markets. We develop a theory featuring (1) quality-segmented markets, (2) step-by-step innovation that moves firms forward along the quality ladder, and (3) escape-the-competition motives for innovation. We derive four predictions about the impact on innovation of scale and competition: a firm with a large and less-competitive quality segment ahead or forward of it will have strong incentives to innovate into this profitable segment, while a firm with a small and more-competitive quality segment behind it will also have strong incentives to innovate for fear of facing firms in this segment in the future. We take these predictions to Chinese firm-level data during a period of explosive export growth (2000-2006). Using information about scale and competition by quality segment in China's export markets, we confirm all four hypotheses. By implication, and unlike in standard CES models, the impact of trade on innovation depends critically on how it drives scale and competition in high- versus low-quality segments.
Author contact info: Kevin Lim University of Toronto 150 St George Street Suite 323 Toronto, ON M5S3G7 Canada Tel: 4169460851 E-Mail: kvn.lim@utoronto.ca Daniel Trefler Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 Tel: 416/946-7945 Fax: 416/978-5433 E-Mail: dtrefler@rotman.utoronto.ca Miaojie Yu Office of the President Liaoning University Shenyang, Liaoning Province, China China E-Mail: mjyu@nsd.pku.edu.cn

Road Maintenance and Local Economic Development: Evidence from Indonesia’s Highways - Gertler, Paul; Gonzalez-Navarro, Marco; Gracner, Tadeja; Rothenberg, Alexander D (National Bureau of Economic Research Working Paper Series, 2022)
This paper estimates the local welfare impacts of highway maintenance investments. We instrument road quality exploiting Indonesia’s two-step budgeting process for allocating funding to local road authorities. Using comprehensive data on road quality from 1990-2007, we find evidence that better roads help manufacturers create new jobs, enabling worker transitions out of informal employment, and increasing labor income. Road quality also changes the cost of living, reducing perishable food prices but also raising housing prices. We estimate the elasticity of household welfare with respect to road quality to be 0.09 and the benefit/cost ratio for road maintenance investments to be 1.8.
Author contact info: Paul Gertler Haas School of Business University of California, Berkeley Berkeley, CA 94720 Tel: 510/642-1418 E-Mail: gertler@haas.berkeley.edu Marco Gonzalez-Navarro Department of Agricultural and Resource Economics University of California, Berkeley 207 Giannini Hall Berkeley, CA 94720-3310 E-Mail: marcog@berkeley.edu Tadeja Gracner RAND Corporation 1776 Main St. Santa Monica, CA 90401 E-Mail: tgracner@rand.org Alexander D. Rothenberg Syracuse University 426 Eggers Hall Syracuse, NY 13244-102 E-Mail: adrothen@syr.edu

KFstar and Portfolio Inflows: A Focus on Latin America - Burger, John D; Warnock, Francis E; Warnock, Veronica Cacdac (National Bureau of Economic Research Working Paper Series, 2022)
Latin American portfolio inflows show a strong tendency to revert to a natural level, KF*, over medium-run horizons. Deviations of actual flows from KF* provide policymakers with a real-time predictor of future flows, sudden stops and vulnerability to global shocks. Analysis of short-run deviations of flows from KF* reveals heterogeneous drivers: commodity prices for Brazil, Chile, and Mexico; risk tolerance for Argentina, Costa Rica, and Peru.
Author contact info: John D. Burger Loyola University Maryland 4501 N. Charles Street Baltimore MD 21210-2699 E-Mail: jburger@loyola.edu Francis E. Warnock Darden Business School University of Virginia Charlottesville, VA 22906-6550 Tel: 434/924-6076 Fax: 434/243-8945 E-Mail: warnockf@darden.virginia.edu Veronica Cacdac Warnock Darden Business School University of Virginia Box 6550 Charlottesville, VA 22906-6550 Tel: 434-243-2342 E-Mail: vwarnock@virginia.edu

Climate Risks and FDI - Gu, Grace Weishi; Hale, Galina (National Bureau of Economic Research Working Paper Series, 2022)
Climate-related risks have increased in recent decades, both in terms of the frequency of extreme weather events (physical risk) and implementation of climate-change mitigation policies (transition risk). This paper explores whether multinational firms react to such risks by altering their presence in countries that are more affected. We measure this by examining foreign direct investment (FDI) dynamics at different levels of aggregation as well as at firm level. We propose a theoretical framework for firm production location choice that explicitly incorporates transition and physical risks. The model predicts a reduction in FDI resulting from both physical and transition risks but an ambiguous interaction effect of these risks with emission productivity of the firm. In an extensive empirical analysis we find some support for model predictions, but overall we do not find consistent evidence for statistically significant effects of physical and transition risks on FDI. However, firm-level evidence suggests that firms that are more exposed to climate risks react more negatively to physical climate risk following Paris Climate Accord. We also find that FDI outflows following extreme weather events from affected countries are smaller for industries with higher emission productivity. Our theory and empirical results point to the importance of accounting for heterogeneity in emission productivity when analyzing effects of climate risks.
Author contact info: Grace Weishi Gu Economics Department University of California - Santa Cruz 463 Engineering 2 1156 High Street Santa Cruz, CA 95064 E-Mail: grace.gu@ucsc.edu Galina Hale Department of Economics University of California, Santa Cruz Engineering 2, 1156 High Street Santa Cruz, CA 95064 E-Mail: gbhale@ucsc.edu

Slavery and the British Industrial Revolution - Heblich, Stephan; Redding, Stephen J; Voth, Hans-Joachim (National Bureau of Economic Research Working Paper Series, 2022)
We provide theory and evidence on the contribution of slavery wealth to Britain’s economic development prior to the abolition of slavery in 1833. We combine data on individual slaveholders from compensation records, an exogenous source of variation in slavery wealth from weather-induced shocks to mortality of the enslaved during the middle passage, and a quantitative spatial model. Exogenous increases in slavery wealth reduce the agricultural employment share, increase the manufacturing employment share, raise the number of cotton mills, and increase property values. Quantifying our model, we find that slavery wealth raises aggregate income by the equivalent of around a decade of economic growth, and increases local income in places with the greatest involvement in slavery by more than 40 percent.
Author contact info: Stephan Heblich Munk School of Global Affairs and Public Policy University of Toronto 1 Devonshire Place Toronto, ON M5S 3K7 E-Mail: stephan.heblich@utoronto.ca Stephen J. Redding Department of Economics & School of Public and International Affairs Princeton University Princeton, NJ 08544 Tel: 609/258-4016 Fax: 609/258-6419 E-Mail: reddings@princeton.edu Hans-Joachim Voth Department of Economics U of Zurich Schoeneberggasse 1 CH-8001, Zurich Switzerland E-Mail: joachimvoth@gmail.com

Global Sourcing and Multinational Activity: A Unified Approach - Antràs, Pol; Fadeev, Evgenii; Fort, Teresa C; Tintelnot, Felix (National Bureau of Economic Research Working Paper Series, 2022)
Multinational firms (MNEs) accounted for 42 percent of US manufacturing employment, 87 percent of US imports, and 84 of US exports in 2007. Despite their disproportionate share of global trade, MNEs’ input sourcing and final-good production decisions are often studied separately. Using newly merged data on firms’ trade and FDI activity by country, we show that US MNEs are more likely to import not only from the countries in which they have affiliates, but also from other countries within their affiliates’ region. We rationalize these patterns in a unified framework in which firms jointly determine the countries in which to produce final goods, and the countries from which to source inputs. The model generates a new source of scale economies that arises because a firm incurs a country-specific fixed cost that allows all its assembly plants to source inputs from that country. This shared fixed cost across plants creates interdependencies between firms’ assembly and sourcing locations, and leads to non-monotonic responses in third markets to bilateral trade cost changes.
Author contact info: Pol Antràs Department of Economics Harvard University 1805 Cambridge Street Littauer Center 210 Cambridge, MA 02138 Tel: 617/495-1236 Fax: 617/495-8570 E-Mail: pantras@fas.harvard.edu Evgenii Fadeev Fuqua School of Business 100 Fuqua Drive Durham, NC 27708 E-Mail: evgenii.fadeev@duke.edu Teresa C. Fort Tuck School of Business Dartmouth College 100 Tuck Hall Hanover, NH 03755 Tel: 603/646-8963 E-Mail: teresa.fort@tuck.dartmouth.edu Felix Tintelnot Kenneth C. Griffin Department of Economics University of Chicago 5757 South University Avenue Chicago, IL 60637 Tel: 773/702-5403 E-Mail: felix.tintelnot@gmail.com

Information Frictions and Employee Sorting Between Startups - Bryan, Kevin A; Hoffman, Mitchell; Sariri, Amir (National Bureau of Economic Research Working Paper Series, 2022)
Would workers apply to better firms if they were more informed about firm quality? Collaborating with 26 science-based startups, we create a custom job board and invite business school alumni to apply. The job board randomizes across applicants to show coarse expert ratings of all startups’ science and/or business model quality. Making ratings visible strongly reallocates applications toward higher-rated firms. This reallocation holds restricting to high-quality workers. Treatments operate in part by shifting worker beliefs about firms’ right-tail outcomes. Despite these benefits, workers make post-treatment bets indicating highly overoptimistic beliefs about startup success, suggesting a problem of broader informational deficits.
Author contact info: Kevin A. Bryan University of Toronto Canada E-Mail: kevincure@gmail.com Mitchell Hoffman Department of Economics University of California, Santa Barbara 3016 North Hall Santa Barbara, CA 93106 E-Mail: hoffman2@ucsb.edu Amir Sariri Purdue University 403 W. State Street West Lafayette, IN 47907 E-Mail: asaririk@gmail.com

Auditing the Prescription Drug Consumer Price Index in a Changing Marketplace - Frank, Richard G; Hicks, Andrew L; Berndt, Ernst R (National Bureau of Economic Research Working Paper Series, 2022)
The Bureau of Labor Statistics' Prescription Drug Consumer Price Index (CPI-Rx) has been the focus of considerable controversy in recent years. The CPI-Rx limits its sampling frame to transactions in retail outpatient outlets, and excludes prescription pharmaceuticals dispensed in hospitals, physician/clinic outpatient facilities, and nursing homes. Thus the CPI-Rx overlooks the increasingly important specialty pharmaceuticals dispensed in hospitals, outpatient clinics, and physician offices, whose transactions are instead captured in the overall hospital or professional services component of the medical CPI. Specialty drugs now account for 55% of all U.S. drug spending, double the amount of a decade earlier. To the extent specialty drug growth differs from that of traditional pharmaceuticals, the CPI-Rx could provide an inaccurate measure of overall drug price inflation. Using data from the IBM MarketScan database for the years 2010-2019 and IQVIA-designated specialty drugs, we estimate that by not sampling specialty drugs in non-retail settings, the CPI-Rx has understated overall U.S. prescription drug price inflation by just under 75 basis points annually. We discuss implications for health care policy, and suggest the BLS examine the feasibility of publishing an overall pharmaceutical price index incorporating both traditional and specialty pharmaceuticals dispensed in retail and non-retail settings.
Author contact info: Richard G. Frank The Brookings Institution 1775 Massachusetts Avenue NW Washington, DC 20036 E-Mail: RFrank@brookings.edu Andrew L. Hicks Harvard Medical School 180 Longwood Avenue Boston, MA 02115 E-Mail: hicks@hcp.med.harvard.edu Ernst R. Berndt MIT Sloan School of Management 100 Main Street, E62-533 Cambridge, MA 02142 E-Mail: eberndt@mit.edu

Foreign Demand Shocks to Production Networks: Firm Responses and Worker Impacts - Dhyne, Emmanuel; Kikkawa, Ayumu Ken; Komatsu, Toshiaki; Mogstad, Magne; Tintelnot, Felix (National Bureau of Economic Research Working Paper Series, 2022)
We quantify and explain the firm responses and worker impacts of foreign demand shocks to domestic production networks. To capture that firms can be indirectly exposed to such shocks by buying from or selling to domestic firms that import or export, we use Belgian data with information on both domestic firm-to-firm sales and foreign trade transactions. Our estimates of firm responses suggest that Belgian firms pass on a large share of a foreign demand shock to their domestic suppliers, face upward-sloping labor supply curves, and have sizable fixed overhead costs in labor. Motivated and guided by these findings, we develop and estimate an equilibrium model that allows us to study how idiosyncratic and aggregate changes in foreign demand propagate through a small open economy and affect firms and workers. Our results suggest that the way the labor market is typically modeled in existing research on foreign demand shocks—with no fixed costs and perfectly elastic labor supply—would grossly understate the decline in real wages due to an increase in foreign tariffs.
Author contact info: Emmanuel Dhyne National Bank of Belgium Boulevard de Berlaimont, 14 1000 Brussels Belgium E-Mail: emmanuel.dhyne@nbb.be Ken Kikkawa Sauder School of Business University of British Columbia 2053 Main Mall Vancouver, BC V6T 1Z2 Canada E-Mail: ken.kikkawa@sauder.ubc.ca Toshiaki Komatsu Kenneth C. Griffin Department of Economics University of Chicago 5757 South University Avenue Chicago, IL 60637 E-Mail: komatsu.econ@gmail.com Magne Mogstad Department of Economics University of Chicago 1126 East 59th Street Chicago, IL 60637 Tel: 773/702-3877 E-Mail: magne.mogstad@gmail.com Felix Tintelnot Kenneth C. Griffin Department of Economics University of Chicago 5757 South University Avenue Chicago, IL 60637 Tel: 773/702-5403 E-Mail: felix.tintelnot@gmail.com

Working from Home Around the World - Aksoy, Cevat Giray; Barrero, Jose Maria; Bloom, Nicholas; Davis, Steven J; Dolls, Mathias; Zarate, Pablo (National Bureau of Economic Research Working Paper Series, 2022)
The pandemic triggered a large, lasting shift to work from home (WFH). To study this shift, we survey full-time workers who finished primary school in 27 countries as of mid 2021 and early 2022. Our cross-country comparisons control for age, gender, education, and industry and treat the U.S. mean as the baseline. We find, first, that WFH averages 1.5 days per week in our sample, ranging widely across countries. Second, employers plan an average of 0.7 WFH days per week after the pandemic, but workers want 1.7 days. Third, employees value the option to WFH 2-3 days per week at 5 percent of pay, on average, with higher valuations for women, people with children and those with longer commutes. Fourth, most employees were favorably surprised by their WFH productivity during the pandemic. Fifth, looking across individuals, employer plans for WFH levels after the pandemic rise strongly with WFH productivity surprises during the pandemic. Sixth, looking across countries, planned WFH levels rise with the cumulative stringency of government-mandated lockdowns during the pandemic. We draw on these results to explain the big shift to WFH and to consider some implications for workers, organization, cities, and the pace of innovation.
Author contact info: Cevat Giray Aksoy European Bank for Reconstruction and Development 5 Bank Street London E14 4BG Europe E-Mail: aksoyc@ebrd.com 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 Mathias Dolls ifo Institute Poschingerstraße 5 81679 Munich Germany Tel: +49(0)89/9224-1227 Fax: +49(0)89/985369 E-Mail: dolls@ifo.de Pablo Zarate Princeton University Department of Economics Princeton, NJ 08540 E-Mail: pzarate@princeton.edu

Is Physical Climate Risk Priced? Evidence from Regional Variation in Exposure to Heat Stress - Acharya, Viral V; Johnson, Timothy; Sundaresan, Suresh; Tomunen, Tuomas (National Bureau of Economic Research Working Paper Series, 2022)
We exploit regional variations in exposure to heat stress to study if physical climate risk is priced in municipal and corporate bonds as well as in equity markets. We find that local exposure to damages related to heat stress equaling 1% of GDP is associated with municipal bond yield spreads that are higher by around 15 basis points per annum (bps), the effect being larger for longer-term, revenue-only and lower-rated bonds, and arising mainly from the expected increase in energy expenditures and decrease in labor productivity. Among S&P 500 companies, one standard deviation increase in exposure to heat stress is associated with yield spreads that are higher by around 40 bps for sub-investment grade corporate bonds, with little effect for investment grade bond spreads, and with conditional expected returns on stocks that are higher by around 45 bps. These results are (i) observed robustly only starting in 2013–15, (ii) mostly absent for physical risks other than exposure to heat stress, and (iii) consistent with the class of macroeconomic models where climate change has a direct and large negative impact on aggregate consumption.
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 Timothy Johnson Gies College of Business University of Illinois 343E Wohlers Hall 1206 South Sixth Street Champaign, IL 61820 Tel: 217-333-4089 E-Mail: tcj@illinois.edu Suresh Sundaresan Columbia Business School 3022 Broadway New York, NY 10027 E-Mail: ms122@columbia.edu Tuomas Tomunen Boston College Carroll School of Management 140 Commonwealth Avenue Chestnut Hill, MA 02467 E-Mail: tuomas.tomunen@bc.edu

Gender and Race in Entrepreneurial Finance - Ewens, Michael (National Bureau of Economic Research Working Paper Series, 2022)
Economic frictions pervade the founding, financing, growing, and exiting of high-growth entrepreneurial firms. This article considers one friction that currently affects a small, but important, set of entrepreneurs: racial and gender discrimination. I first collect facts from a large empirical literature that show clear gender and race gaps in participation and financing of startups. Female founders manage 16-25% of all startups, while Black entrepreneurs rarely exceed 3% of the startup population. Conditioning on startups that successfully raise external finance has little impact on these gaps. The complexity of the entrepreneurial process presents several opportunities for discrimination to manifest itself and produce this gap. The article details the major discrimination theories and the empirical methods used to test for their presence. It then provides an extensive review of a growing empirical literature in entrepreneurial finance that tests these models. The pattern of evidence reveals a nuanced and incomplete story about bias, information asymmetry, and differential treatment of underrepresented founders. The article ends with an extensive set of research ideas motivated by the gaps in the entrepreneurship literature and recent developments in theory and measurement of discrimination.
Author contact info: Michael Ewens Columbia Business School 665 W 130th St Henry Kravis Hall, 732 New York, NY 10027 E-Mail: me2731@columbia.edu

Robustness Checks in Structural Analysis - Catherine, Sylvain; Ebrahimian, Mehran; Sraer, David; Thesmar, David (National Bureau of Economic Research Working Paper Series, 2022)
Robustness checks, such as adding controls or sample splits, are a standard feature of reduced-form empirical research. Because of computational costs of reestimating alternative models, they are much less common in structural research using simulation-based methods. We propose a simple methodology to bypass this computational cost. Our approach is based on estimating a flexible approximation of the relation between moments and parameters. It provides a computationally cheap way to run the potentially large number of structural estimations required for such robustness checks. We demonstrate the validity and usefulness of this methodology in the context of two standard applications in economics and finance: (1) dynamic corporate finance (2) portfolio choice over the life cycle.
Author contact info: Sylvain Catherine Wharton, Finance Department Steinberg-Dietrich Hall 3620 Locust Walk, Philadelphia, PA 19104 E-Mail: sylvain.sc.catherine@gmail.com Mehran Ebrahimian Department of Finance Stockholm School of Economics Sveavägen 65 Box 6501 SE-113 83 Stockholm Sweden E-Mail: mehran.ebrahimian@hhs.se David Sraer Haas School of Business University of California, Berkeley 545 Student Services Building Berkeley, CA 94720-1900 E-Mail: sraer@berkeley.edu David Thesmar MIT Sloan School of Management 100 Main Street, E62-632 Cambridge, MA 02142 Tel: 617/225-9767 E-Mail: thesmar@mit.edu

The Midlife Crisis - Giuntella, Osea; McManus, Sally; Mujcic, Redzo; Oswald, Andrew J; Powdthavee, Nattavudh; Tohamy, Ahmed (National Bureau of Economic Research Working Paper Series, 2022)
This paper documents a longitudinal crisis of midlife among the inhabitants of rich nations. Yet middle-aged citizens in our data sets are close to their peak earnings, have typically experienced little or no illness, reside in some of the safest countries in the world, and live in the most prosperous era in human history. This is paradoxical and troubling. The finding is consistent, however, with the prediction – one little-known to economists – of Elliott Jaques (1965). Our analysis does not rest on elementary cross-sectional analysis. Instead the paper uses panel and through-time data on, in total, approximately 500,000 individuals. It checks that the key results are not due to cohort effects. Nor do we rely on simple life-satisfaction measures. The paper shows that there are approximately quadratic hill-shaped patterns in data on midlife suicide, sleeping problems, alcohol dependence, concentration difficulties, memory problems, intense job strain, disabling headaches, suicidal feelings, and extreme depression. We believe the seriousness of this societal problem has not been grasped by the affluent world’s policy-makers.
Author contact info: Osea Giuntella Department of Economics University of Pittsburgh Posvar Hall Pittsburgh, PA 15260 E-Mail: osea.giuntella@gmail.com Sally McManus Northampton Square London EC1V 0HB United Kingdom E-Mail: sally.mcmanus@city.ac.uk Redzo Mujcic The University Of Warwick Scarman Rd Coventry CV4 7AL United Kingdom Tel: +44 024 765 28961 E-Mail: Redzo.Mujcic@wbs.ac.uk Andrew J. Oswald Department of Economics and also CAGE Research Center University of Warwick Coventry CV4 7AL England Tel: 44-01203-5235 Fax: 44-01203-5230 E-Mail: a.j.oswald@warwick.ac.uk Nattavudh Powdthavee 50 Nanyang Ave Singapore 639798 Singapore E-Mail: nick.powdthavee@ntu.edu.sg Ahmed Tohamy University of Oxford Nuffield College New Road Oxford OX1 1NF United Kingdom Tel: +447340229354 E-Mail: ahmed.tohamy@nuffield.ox.ac.uk

Power and Dignity in the Low-Wage Labor Market: Theory and Evidence from Wal-Mart Workers - Dube, Arindrajit; Naidu, Suresh; Reich, Adam D (National Bureau of Economic Research Working Paper Series, 2022)
We measure workers’ preferences for wages and non-wage amenities at America’s largest employer, Walmart, using targeted survey experiments. We find that workers have an economically significant willingness to pay for “dignity at work". Consistent with the presence of monopsony power, we estimate hypothetical quit elasticities similar to recent estimates from the literature. We document significant complementarities between wages and non-wage amenities, suggesting that measures of monopsony that do not account for amenities may be biased. We find that workers at low dignity jobs have higher quit elasticities, but lower bargaining elasticities, relative to workers at high dignity jobs. Finally, we use cross-state variation in the bite of Walmart’s 2014 corporate minimum wage to estimate the effects of the minimum wage on both workplace dignity and other amenities. We find no evidence that non-wage amenities are reduced in response to a higher minimum wage, consistent with wage-amenity complementarity and labor market power.
Author contact info: Arindrajit Dube Department of Economics University of Massachusetts Crotty Hall 412 N. Pleasant Street Amherst, MA 01002 Tel: 413/545-2012 E-Mail: adube@econs.umass.edu Suresh Naidu Columbia University 420 West 118th Street New York, NY 10027 Tel: 212/854-3213 E-Mail: sn2430@columbia.edu Adam D. Reich Department of Sociology 501 Knox Hall 606 West 122nd Street, 5th Floor, Suite 501 New York, NY 10027 USA E-Mail: ar3237@columbia.edu

The Effects of Off-label Drug Use on Disability and Medical Expenditure - Blankart, Katharina E; Lichtenberg, Frank R (National Bureau of Economic Research Working Paper Series, 2022)
Does using prescription drugs off-label increase disability and medical expenditure? This paper uses a unique dataset to evaluate off-label vs. on-label drug use in the US non-institutionalized population. Patients using drugs off-label have on average $515 higher medical expenditure and work-loss cost. Pharmaceutical innovation has direct and indirect effects on off-label drug use. Market size is indicative of the fraction of treatments used off-label. Our findings have implications for regulation and welfare. We address endogeneity issues by demonstrating that patients with higher disease severity do not experience higher off-label uses and by controlling for unobserved individual and condition effects.
Author contact info: Katharina E. Blankart Murtenstrasse 10 Bern 3008 Switzerland E-Mail: katharina.blankart@bfh.ch Frank R. Lichtenberg Columbia University Kravis Hall 522 665 West 130th Street New York, NY 10027 Tel: 212/854-4408 E-Mail: frl1@columbia.edu

Exhaustive or Exhausting? Evidence on Respondent Fatigue in Long Surveys - Jeong, Dahyeon; Aggarwal, Shilpa; Robinson, Jonathan; Kumar, Naresh; Spearot, Alan; Park, David Sungho (National Bureau of Economic Research Working Paper Series, 2022)
Living standards measurement surveys require sustained attention for several hours. We quantify survey fatigue by randomizing the order of questions in 2-3 hour-long in-person surveys. An additional hour of survey time increases the probability that a respondent skips a question by 10-64%. Because skips are more common, the total monetary value of aggregated categories such as assets or expenditures declines as the survey goes on, and this effect is sizeable for some categories: for example, an extra hour of survey time lowers food expenditures by 25%. We find similar effect sizes within phone surveys in which respondents were already familiar with questions, suggesting that cognitive burden may be a key driver of survey fatigue.
Author contact info: Dahyeon Jeong World Bank E-Mail: dahyeonjeong@worldbank.org Shilpa Aggarwal Indian School of Business Gachibowli, Hyderabad 500032 India E-Mail: shilpa_aggarwal@isb.edu 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 Naresh Kumar E-Mail: nkumar18@worldbank.org Alan Spearot University of California, Santa Cruz Santa Cruz, CA 95064 E-Mail: acspearot@gmail.com David Sungho Park 263 Namsejong-ro Sejong 30149 South Korea E-Mail: park@kdis.ac.kr

The Social Tax: Redistributive Pressure and Labor Supply - Carranza, Eliana; Donald, Aletheia; Grosset, Florian; Kaur, Supreet (National Bureau of Economic Research Working Paper Series, 2022)
In low-income communities, pressure to share income with others may disincentivize work, distorting labor supply. We document that across countries, social groups that undertake more interpersonal transfers work fewer hours. Using a field experiment, we enable piece-rate factory workers in Côte d’Ivoire to shield income using blocked savings accounts over 3-9 months. Workers may only deposit earnings increases, relative to baseline, mitigating income effects on labor supply. We vary whether the offered account is private or known to the worker’s network, altering the likelihood of transfer requests against saved income. When accounts are private, take-up is substantively higher (60% vs. 14%). Offering private accounts sharply increases labor supply—raising work attendance by 10% and earnings by 11%. Outgoing transfers do not decline, indicating no loss in redistribution. Our estimates imply a 9-14% social tax rate. The welfare benefits of informal redistribution may come at a cost, depressing labor supply and productivity.
Author contact info: Eliana Carranza The World Bank 1818 H St NW Washington, DC 20433 E-Mail: ecarranza@worldbank.org Aletheia Donald The World Bank 1818 H St NW Washington, DC 20433 E-Mail: adonald@worldbank.org Florian Grosset Columbia University 420 West 118 Street New York, NY 10027 E-Mail: f.grosset@columbia.edu Supreet Kaur Department of Economics University of California, Berkeley Evans Hall Berkeley, CA 94720 E-Mail: supreet@berkeley.edu

Facts and Fantasies about Wage Setting and Collective Bargaining - Bhuller, Manudeep; Moene, Karl O; Mogstad, Magne; Vestad, Ola L (National Bureau of Economic Research Working Paper Series, 2022)
In this article, we document and discuss salient features of collective bargaining systems in the OECD countries, with the goal of debunking some misconceptions and myths and revitalizing the general interest in wage setting and collective bargaining. We hope that such an interest may help close the gap between how economists tend to model wage setting and how wages are actually set. Canonical models of competitive labor markets, monopsony, and search and matching all assume a decentralized wage setting where individual firms and workers determine wages. In most advanced economies, however, it is common that firms or employer associations bargain with unions over wages, producing collective bargaining systems. We show that the characteristics of these systems vary in important ways across advanced economies, with regards to both the scope and the structure of collective bargaining.
Author contact info: Manudeep Bhuller University of Oslo Department of Economics Post Box 1095 Blindern 0317 Oslo Norway E-Mail: manudeep.bhuller@econ.uio.no Karl O. Moene Department of Economics University of Oslo Pb 1095 Blindern 0317 Oslo Norway E-Mail: k.o.moene@econ.uio.no Magne Mogstad Department of Economics University of Chicago 1126 East 59th Street Chicago, IL 60637 Tel: 773/702-3877 E-Mail: magne.mogstad@gmail.com Ola L. Vestad Research Department Statistics Norway Postboks 2633 St. Hanshaugen 0131 Oslo Norway E-Mail: ola.vestad@ssb.no

Health and Safety vs. Freedom of Contract: The Tortured Path of Wage and Hours Limits Through the State Legislatures and the Courts - Fishback, Price V (National Bureau of Economic Research Working Paper Series, 2022)
The paper examines changes in wage and hour labor regulation between 1898 and 1938. Many see the 1905 Lochner Supreme Court decision striking down hours limits for men as the beginning of 30 years in which labor regulation was stymied by the doctrine of “freedom of contract.” That issue played a role but judges often weighed it against safety issues. As a result, hours limits for men in dangerous industries were found to be constitutional. The debates over minimum wages for women also centered on these issues. These laws passed muster in state supreme courts and initially at the U.S. Supreme Court. In 1923 a majority of Supreme Court judges emphasized freedom of contract in declaring a female minimum wage unconstitutional. Seeing close votes and substantial turnover of judges on the Supreme Court, many states continued promulgating advisory minimums and passed new laws. Ultimately, turnover on the Court and a renewed emphasis on the role of minimum wages in ensuring health and safety of women and children during the Depression led the Court to declare minimums for women constitutional. This opened the door for federal minimum wage legislation for all workers.
Author contact info: Price V. Fishback Department of Economics University of Arizona Tucson, AZ 85721 Tel: 520/621-4421 Fax: 520/621-8450 E-Mail: pfishback@eller.arizona.edu

The Impacts of Covid-19 Illnesses on Workers - Goda, Gopi Shah; Soltas, Evan J (National Bureau of Economic Research Working Paper Series, 2022)
We show that Covid-19 illnesses persistently reduce labor supply. Using an event study, we estimate that workers with week-long Covid-19 work absences are 7 percentage points less likely to be in the labor force one year later compared to otherwise-similar workers who do not miss a week of work for health reasons. Our estimates suggest Covid-19 illnesses have reduced the U.S. labor force by approximately 500,000 people (0.2 percent of adults) and imply an average forgone earnings per Covid-19 absence of at least $9,000, about 90 percent of which reflects lost labor supply beyond the initial absence week.
Author contact info: Gopi Shah Goda Stanford University SIEPR 366 Galvez St. Stanford, CA 94305 Tel: 650/736-0480 Fax: 650/723-8611 E-Mail: gopi.shah.goda@gmail.com Evan J. Soltas MIT Department of Economics 77 Massachusetts Avenue E52-300 Massachusetts Cambridge, MA 02139 United States Tel: 7328654570 E-Mail: esoltas@mit.edu

Bargaining in the Shadow of Uncertainty - Agranov, Marina; Eraslan, Hülya; Tergiman, Chloe (National Bureau of Economic Research Working Paper Series, 2022)
We experimentally study unanimity and majority voting rules in multilateral bargaining environments with stochastic future surplus. In these settings, reaching agreement when expected future surplus is sufficiently higher than the current surplus is inefficient. Theoretically, such inefficiencies never arise under unanimity rule but can arise under majority rule as players try to avoid endogenous risk of being excluded from the winning coalitions in the future. We find strong support for this prediction both when the unanimity rule is predicted to lead to more delays, and when both rules should lead to identical levels of delays. We also find that there are more delays than predicted under the majority rule. Using data from conversations among the bargainers and the type of proposals that are implemented, we find that these deviations arise as a result of more egalitarian sharing than predicted by theory, and therefore, lower risk of being excluded from the winning coalitions in the future.
Author contact info: Marina Agranov Division of Humanities and Social Sciences California Institute of Technology 228-77 Caltech Pasadena, CA 91125 Tel: 626/395-3559 E-Mail: magranov@hss.caltech.edu Hülya Eraslan Department of Economics MS-22 Rice University P.O. Box 1892 Houston, TX 77251-1892 Tel: 713/348-3453 E-Mail: eraslan@rice.edu Chloe Tergiman Smeal College of Business Penn State University E-Mail: cjt16@psu.edu

Multiple Price Lists for Willingness to Pay Elicitation - Jack, Kelsey; McDermott, Kathryn; Sautmann, Anja (National Bureau of Economic Research Working Paper Series, 2022)
Multiple price lists are a convenient tool to elicit willingness to pay (WTP) in surveys and experiments, but choice patterns such as “multiple switching” and “never switching” indicate high error rates. Existing measurement approaches often do not provide accurate standard errors and cannot correct for bias due to framing and order effects. We propose to combine a randomization approach with a random-effects latent utility model to detect bias and account for error. Data from a choice experiment in South Africa shows that significant order effects exist which, if uncorrected, would lead to distorted conclusions about subjects’ preferences. We provide templates to create a multiple price list survey instrument in SurveyCTO and analyze the resulting data using our proposed methods.
Author contact info: Kelsey Jack University of California, Santa Barbara 2400 Bren Hall Santa Barbara, CA 93106-5131 E-Mail: kelseyjack@ucsb.edu Kathryn McDermott Civic Centre, 12 Hertzog Boulevard Cape Town, NA NA South Africa E-Mail: kathryn.mcdermott@capetown.gov.za Anja Sautmann 1818 H Street NW 400 Main Street Washington, DC 20433 USA E-Mail: asautmann@worldbank.org

Judicial Independence, Local Protectionism, and Economic Integration: Evidence from China - Liu, Ernest; Lu, Yi; Peng, Wenwei; Wang, Shaoda (National Bureau of Economic Research Working Paper Series, 2022)
We show that judicial independence can reduce local protectionism and foster cross-regional economic integration. We exploit a judicial independence reform in China with staggered roll-out since 2014. The reform removed local governments’ control over local courts’ financial and personnel decisions, thereby substantially improving local courts’ independence. Combining novel data on the universes of civil lawsuits and business registration records, we show that local defendants’ rate of winning court cases against non-local plaintiffs declined by 7.0% after the reform. The effect is mainly driven by improvements in the quality of judicial decisions and is more salient for politically connected local defendants. Over time, the reduction in local protectionism encouraged smaller non-local firms to file lawsuits against larger local firms. Using the shareholding network extracted from business registration records, we find that the decline in local protectionism could attract 8.4% more inward investment flows into reformed localities. This has the potential to increase China’s GDP by 2.3% when the judicial independence reform is implemented nationwide.
Author contact info: Ernest Liu Department of Economics Princeton University 20 Washington Road Princeton, NJ 08540 E-Mail: ernestliu@princeton.edu Yi Lu School of Economics and Management Tsinghua University Beijing, China, 100084 E-Mail: luyi@sem.tsinghua.edu.cn Wenwei Peng E-Mail: wpengad@connect.ust.hk Shaoda Wang Harris School of Public Policy University of Chicago 1307 E. 60th Street office 2055 Chciago, IL 60637 Tel: 773-236-9614 E-Mail: shaoda@uchicago.edu

International College Students' Impact on the US Skilled Labor Supply - Beine, Michel; Peri, Giovanni; Raux, Morgan (National Bureau of Economic Research Working Paper Series, 2022)
US universities have attracted hundreds of thousands of international students each year for the last decade. Some of these remain in the US after graduating and contribute to the high skilled labor supply in US labor markets. In this paper, we identify and estimate by how much one more international master’s (or bachelor’s) student increases the skilled labor supply of the US in the short-run. To estimate this "transition rate" we implement an instrumental variable estimation using quasi-random variation in the tuition charged to international students by public US universities in the year that they likely started their studies. We find that attracting an additional international student to a US university increases the local labor supply by about 0.23 employees for master’s students and about 0.11 for bachelor’s students. These averages conceal an important difference. While non-STEM bachelor’s and master’s students had negligible transition rates into US employment, STEM Master students have had significant transition rates around 0.2, especially after the 2008 reform of Optional Practical Training for STEM graduates.
Author contact info: Michel Beine E-Mail: michel.beine@uni.lu Giovanni Peri Department of Economics University of California, Davis One Shields Avenue Davis, CA 95616 Tel: 530/752-3033 E-Mail: gperi@ucdavis.edu Morgan Raux E-Mail: morgan.raux@uni.lu

Depression and Loneliness Among the Elderly Poor - Banerjee, Abhijit; Duflo, Esther; Grela, Erin; McKelway, Madeline; Schilbach, Frank; Sharma, Garima; Vaidyanathan, Girija (National Bureau of Economic Research Working Paper Series, 2022)
The mental health of the elderly in low- and middle-income countries (LMICs) is a largely neglected subject, both by policy and research. We combine data from the health and retirement family of surveys in seven LMICs (plus the US) to document that depressive symptoms among those aged 55 and above are more prevalent in those countries and increase sharply with age. Depressive symptoms in one survey wave are associated with a greater decline in functional abilities and higher probability of death in the next wave. Using data from a panel survey we conducted in Tamil Nadu with a focus on elderly living alone, we document that social isolation, poverty, and health challenges are three of the leading correlates of depression. We discuss potential policy interventions in these three domains, including some results from our randomized control trials in the Tamil Nadu sample.
Author contact info: Abhijit Banerjee Department of Economics, E52-540 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/253-8855 Fax: 617/253-1330 E-Mail: banerjee@mit.edu Esther Duflo Department of Economics, E52-544 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/258-7013 E-Mail: eduflo@mit.edu Erin Grela E-Mail: grela@mit.edu Madeline McKelway E-Mail: madeline.d.mckelway@dartmouth.edu Frank Schilbach MIT Department of Economics, E52-560 The Morris and Sophie Chang Building 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/715-2969 Fax: 617/253-1330 E-Mail: fschilb@mit.edu Garima Sharma 20 Washington Rd Princeton, NJ 08540 United States Tel: 6173354213 E-Mail: garimasharma@princeton.edu Girija Vaidyanathan E-Mail: gigiv_40@yahoo.com

The Impact of Female Teachers on Female Students' Lifetime Well-Being - Card, David; Domnisoru, Ciprian; Sanders, Seth G; Taylor, Lowell; Udalova, Victoria (National Bureau of Economic Research Working Paper Series, 2022)
It is widely believed that female students benefit from being taught by female teachers, particularly when those teachers serve as counter-stereotypical role models. We study education in rural areas of the US circa 1940--a setting in which there were few professional female exemplars other than teachers--and find that female students were more successful when their primary-school teachers were disproportionately female. Impacts are lifelong: female students taught by female teachers were more likely to move up the educational ladder by completing high school and attending college, and had higher lifetime family income and increased longevity.
Author contact info: David Card Department of Economics 549 Evans Hall, #3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510/642-5222 Fax: 510/643-7042 E-Mail: card@econ.berkeley.edu Ciprian Domnisoru Aalto University School of Business Department of Economics Espoo, FI 00076 Finland E-Mail: ciprian.domnisoru@aalto.fi Seth G. Sanders Department of Economics and Industrial and Labor Relations School Cornell University Ithaca, NY 14853 E-Mail: seth.sanders@cornell.edu Lowell Taylor Carnegie Mellon University H. John Heinz III College 5000 Forbes Avenue Pittsburgh, PA 15213 Tel: 412/268-3278 E-Mail: lt20@andrew.cmu.edu Victoria Udalova U.S. Census Bureau 4600 Silver Hill Road Washingon, DC 20233 E-Mail: victoria.m.udalova@census.gov

If You Build it, Will They Vaccinate? The Impact of COVID-19 Vaccine Sites on Vaccination Rates and Outcomes - Brownstein, John; Cantor, Jonathan H; Rader, Benjamin; Simon, Kosali I; Whaley, Christopher M (National Bureau of Economic Research Working Paper Series, 2022)
Safe and effective vaccines have vastly reduced the lethality of the COVID-19 pandemic worldwide, but disparities exist in vaccine take-up. Although the out-of-pocket price is set to zero in the U.S., time (information gathering, signing up, transportation and waiting) and misinformation costs still apply. To understand the extent to which geographic access impacts COVID-19 vaccination take-up rates and COVID-19 health outcomes, we leverage exogenous, pre-existing variation in locations of retail pharmacies participating the U.S. federal government’s vaccine distribution program through which over 40% of US vaccine doses were administered. We use unique data on nearly all COVID-19 vaccine administrations in 2021. We find that the presence of a participating retail pharmacy vaccination site in a county leads to an approximately 26% increase in the per-capita number of doses administered, possibly indicating that proximity and familiarity play a substantial role in vaccine take-up decisions. Increases in county-level per capita participating retail pharmacies lead to an increase in COVID-19 vaccination rates and a decline in the number of new COVID-19 cases, hospitalizations, and deaths, with substantial heterogeneity based on county rurality, political leanings, income, and race composition. The relationship we estimate suggests that averting one COVID-19 case, hospitalization, and death requires approximately 25, 200, and 1,500 county-level vaccine total doses, respectively. These results imply a 9,500% to 22,500% economic return on the full costs of COVID-19 vaccination. Overall, our findings add to understanding vaccine take-up decisions for the design of COVID era and other public health interventions.
Author contact info: John Brownstein Children's Hospital Boston 677 Huntington Avenue Boston, MA 02115 E-Mail: John.Brownstein@childrens.harvard.edu Jonathan H. Cantor RAND Corporation 1776 Main Street Santa Monica, CA 90401 E-Mail: jcantor@rand.org Benjamin Rader Boston Children's Hospital 677 Huntington Avenue Boston, MA 02138 E-Mail: Benjamin.Rader@childrens.harvard.edu Kosali I. Simon O’Neill School of Public and Environmental Affairs Indiana University 1315 East Tenth Street Bloomington, IN 47405-1701 Tel: (812) 856-3850 E-Mail: simonkos@indiana.edu Christopher M. Whaley Brown University 121 South Main Street Providence, RI 02912 United States E-Mail: christopher_whaley@brown.edu

Is Secessionism Mostly About Income or Identity? A Global Analysis of 3,003 Subnational Regions - Desmet, Klaus; Ortuño-Ortín, Ignacio; Özak, Ömer (National Bureau of Economic Research Working Paper Series, 2022)
This paper analyzes whether the propensity to secede by subnational regions responds mostly to differences in income per capita or to distinct identities. We explore this question in a quantitative political economy model where people's willingness to finance a public good depends on their income and identity. Using high-resolution economic and linguistic data for the entire globe, we predict the propensity to secede of 3,003 subnational regions in 173 countries. We validate the model-based predictions with data on secessionist movements, state fragility, regional autonomy, and conflict, as well as with an application to the dissolution of the Soviet Union. Counterfactual analysis strongly suggests that identity trumps income in determining a region's propensity to secede. Removing identity differences reduces the average support for secession from 7.5% to 0.6% of the population.
Author contact info: Klaus Desmet Department of Economics and Cox School of Business Southern Methodist University 3300 Dyer, Suite 301 Dallas, TX 75205 Tel: 214/768-2689 E-Mail: kdesmet@smu.edu Ignacio Ortuño-Ortín Department of Economics Universidad Carlos III 28903 Getafe Madrid Spain E-Mail: iortuno@eco.uc3m.es Omer Ozak 3300 Dyer St, Suite 301R Box 0496 3300 Dyer Street Suite 301, Umphrey Lee Center Box 0496 Dallas, TX 75275 United States Tel: 2147682755 Fax: 214-768-1821 E-Mail: ozak.smu@gmail.com

Team Incentives and Lower Ability Workers: An Experimental Study on Real-Effort Tasks - Freeman, Richard B; Pan, Xiaofei; Yang, Xiaolan; Ye, Maoliang (National Bureau of Economic Research Working Paper Series, 2022)
Team incentives are important in many compensation systems that pay workers according to the output of their team as well as to their own output, with team bonuses often depending on whether the team meets or exceeds specified thresholds. Yet little is known about how team members with different abilities respond to compensation rules and thresholds. We contrast the performance of lower ability participants and higher ability participants in an experiment with three distribution schemes – equal sharing, piece rate sharing, and tournament style winner-takes-all – in settings with and without a team threshold. Workers randomly assigned to equal sharing had higher productivity than those assigned to winner-takes-all and had similar productivity to workers in piece-rate scheme. Output under equal sharing was boosted by the higher productivity of less able workers, possibly motivated by a desire to avoid guilt feelings about letting down their partners, per models of guilt aversion. Given a choice of distribution schemes, participants selected piece rate over equal sharing and favored both of these over winner-takes-all; in addition, a team threshold induced more concern about cooperation and thus greater preference for equal sharing. The findings suggest that organizations with teams of workers with varying abilities are likely to do better if the organization can consider lower ability workers’ responsiveness to sharing in rewards, e.g., to have an equal sharing component in its compensation system when they are strongly guilt averse.
Author contact info: Richard B. Freeman NBER 1050 Massachusetts Avenue Cambridge, MA 02138 Tel: 617/868-3900 Fax: 617/868-2742 E-Mail: freeman@nber.org Xiaofei Pan Bryant University Department of Economics 1150 Douglas Pike Smithfield, RI 02917 U.S.A E-Mail: xpan@bryant.edu Xiaolan Yang Shanghai International Studies University School of Business Management 1550 Wenxiang Rd, Songjiang District Shanghai 201613 China E-Mail: yangxiaolan@shisu.edu.cn Maoliang Ye College of Business Southern University of Science and Technology Shenzhen China 518055 E-Mail: maoliang.ye@gmail.com

Race and Redistribution in the United States: An Experimental Analysis - Akesson, Jesper; Hahn, Robert W; Metcalfe, Robert D; Rasooly, Itzhak (National Bureau of Economic Research Working Paper Series, 2022)
Scholars have suggested that White American support for welfare is related to beliefs about the racial composition of welfare recipients. While a host of observational studies lend credence to this view, it has not yet been tested using the tools of randomized inference. In this study, we do this by conducting two incentive-compatible experiments (n = 9,775) in which different participants are randomly given different signals about the share of welfare recipients who identify as Black and White. Our analysis yields four main findings. First, 86% of respondents greatly overestimate the share of welfare recipients who are Black, with the average respondent overestimating this by almost a factor of two. Second, White support for welfare is inversely related to the proportion of welfare recipients who are Black—a causal claim that we establish using treatment assignment as an instrument for beliefs about the racial composition of welfare recipients. Third, just making White participants think about the racial composition of welfare recipients reduces their support for welfare. Fourth, providing White respondents with accurate information about the racial composition of welfare recipients (relative to not receiving any information) does not significantly influence their support for welfare.
Author contact info: Jesper Akesson The Behavioralist United Kingdom E-Mail: jesper@thebehaviouralist.com 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 Itzhak Rasooly University of Oxford United Kingdom E-Mail: itzhak.rasooly@economics.ox.ac.uk

Price Spillovers and Specialization in health Care: The Case of Children's Hospitals - McCarthy, Ian; Raval, Mehul V (National Bureau of Economic Research Working Paper Series, 2022)
Specialty hospitals tend to negotiate higher commercial insurance payments, even for relatively routine procedures with comparable clinical quality across hospital types. How specialty hospitals can maintain such a price premium remains an open question. In this paper, we examine a potential (horizontal) differentiation effect in which patients perceive specialty hospitals as sufficiently distinct from other hospitals, so that specialty hospitals effectively compete in a separate market from general acute care hospitals. We estimate this effect in the context of routine pediatric procedures offered by both specialty children’s hospitals as well as general acute care hospitals, and we find strong empirical evidence of a differentiation effect in which specialty children’s hospitals appear largely immune to competitive forces from non-children’s hospitals.
Author contact info: Ian McCarthy Department of Economics Emory University Rich Memorial Building, Room 319 Atlanta, GA 30322 Tel: 404/727-8808 E-Mail: immccar@emory.edu Mehul V. Raval Ann & Robert H Lurie Children's Hospital of Chicago 225 E Chicago Avenue Box 63 Chicago, Illi 60611 United States E-Mail: mraval@luriechildrens.org

Place Effects and Geographic Inequality in Health at Birth - Chyn, Eric; Shenhav, Na'ama (National Bureau of Economic Research Working Paper Series, 2022)
This paper uses birth records from California and mothers who move to quantify the absolute and relative importance of birth location in early-life health. Using a model that includes mother and location fixed effects, we find that moving from a below- to an above-median birth weight location leads to a 19-gram increase in average birth weight. These causal place effects explain 16 percent of geographic variation in birth weight, with family-specific factors accounting for the remaining 84 percent. Place effects are more influential for children of non-college-educated mothers, and are most strongly correlated with local levels of pollution. The improvement in birth weight from moving to a higher-quality area compares favorably to policies that target maternal health, and could have a small, lasting effect on long-run outcomes.
Author contact info: Eric Chyn The University of Texas at Austin Department of Economics 2225 Speedway, Stop C3100 Austin, TX 78712-1690 E-Mail: eric.chyn@austin.utexas.edu Na'ama Shenhav Department of Economics Dartmouth College 6106 Rockefeller Hall Hanover, NH 03755 E-Mail: naama.s@gmail.com

Blue Spoons: Sparking Communication About Appropriate Technology Use - Chandrasekhar, Arun G; Duflo, Esther; Kremer, Michael; F. Pugliese, João; Robinson, Jonathan; Schilbach, Frank (National Bureau of Economic Research Working Paper Series, 2022)
An enduring puzzle regarding technology adoption in developing countries is that new technologies often diffuse slowly through the social network. Two of the key predictions of the canonical epidemiological model of technology diffusion are that forums to share information and higher returns to technology should both spur social transmission. We design a large-scale experiment to test these predictions among farmers in Western Kenya, and we fail to find support for either. However, in the same context, we introduce a technology that diffuses very fast: a simple kitchen spoon (painted in blue) to measure out how much fertilizer to use. We develop a model that explains both the failure of the standard approaches and the surprising success of this new technology. The core idea of the model is that not all information is reliable, and farmers are reluctant to develop a reputation of passing along false information. The model and data suggest that there is value in developing simple, transparent technologies to facilitate communication.
Author contact info: Arun G. Chandrasekhar Department of Economics Stanford University 579 Jane Stanford Way Stanford, CA 94305 E-Mail: arungc@stanford.edu Esther Duflo Department of Economics, E52-544 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/258-7013 E-Mail: eduflo@mit.edu Michael Kremer University of Chicago Department of Economics 1126 E. 59th St. Chicago, IL 60637 Tel: 773/702-6710 Fax: 773/702-8490 E-Mail: kremermr@uchicago.edu Joao F. Pugliese Department of Economics Stanford University 579 Jane Stanford Way Stanford, CA 94305 E-Mail: jfpugli@stanford.edu 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 Frank Schilbach MIT Department of Economics, E52-560 The Morris and Sophie Chang Building 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/715-2969 Fax: 617/253-1330 E-Mail: fschilb@mit.edu

How Can Asset Prices Value Exchange Rate Wedges? - Lewis, Karen K; Liu, Edith (National Bureau of Economic Research Working Paper Series, 2022)
When available financial securities allow investors to optimally diversify risk across countries, standard theory implies that exchange rates should reflect this behavior. However, exchange rates observed in the data deviate from these predictions. In this paper, we develop a framework to value the welfare costs of these exchange rate wedges, as disciplined by asset returns. This framework applies to a general class of asset pricing and exchange rate models. We further decompose the value of these wedges into components, showing that the ability of goods markets to respond to financial markets through exchange rate adjustment has significant implications for welfare.
Author contact info: Karen K. Lewis Department of Finance, Wharton School 2300 SHDH University of Pennsylvania Philadelphia, PA 19104-6367 Tel: 215/898-7637 Fax: 215/898-6200 E-Mail: lewisk@wharton.upenn.edu Edith Liu Federal Reserve Board of Governors 20st & Constitution Ave NW Washington, DC 20551 Tel: 2024523913 E-Mail: edith.x.liu@frb.gov

The Geography of Job Tasks - Atalay, Enghin; Sotelo, Sebastian; Tannenbaum, Daniel I (National Bureau of Economic Research Working Paper Series, 2022)
We introduce new measurement tools to understand the sources of earnings differences across space. Based on the natural language employers use in job vacancy text, we develop granular measures of job tasks and of worker specialization. We find that jobs in larger commuting zones involve greater interpersonal interactions and have higher computer software requirements. Between 10 and 50 percent of task and technology variation between large and small commuting zones exists within occupations. Further, workers in larger markets are more specialized within occupations. Tasks, technologies, and worker specialization account for a substantial portion of the market size premium even within occupations.
Author contact info: Enghin Atalay Federal Reserve Bank of Philadelphia 10 N. Independence Mall West Philadelphia, PA 19106 E-Mail: atalayecon@gmail.com Sebastian Sotelo Department of Economics University of Michigan 611 Tappan Ave Ann Arbor, MI 48109 Tel: 734/615-0177 E-Mail: ssotelo@umich.edu Daniel I. Tannenbaum Department of Economics University of Nebraska – Lincoln HLH 525 B P.O. Box 880489 Lincoln, NE 68588 Tel: 402-472-2120 E-Mail: dtannenbaum@unl.edu

Using Administrative Data to Impute Income Non-Response in Household Surveys - Smith, V. Kerry; Welsh, Michael P; Carson, Richard; Presser, Stanley (National Bureau of Economic Research Working Paper Series, 2022)
Income is simultaneously one of the most important variables used by economists and the variable most likely to be missing due to item non-response. While observations that are missing income responses are often dropped from analyses, such treatment is usually inappropriate. More appropriate solutions rely on imputation based on either covariates (e.g., age and education) measured in the survey or on spatial estimates (most often for zip codes) from the American Community Survey. We describe a new spatially-based alternative using publicly available Internal Revenue Service tax data that allows estimates of zip code’s income distribution.
Author contact info: V. Kerry Smith 6132 E Kings Ave Scottsdale, AZ 85254 Tel: 480-562-0176 E-Mail: kerry.smith@asu.edu Michael P. Welsh 1598 Venice Lane Longmont, Colo 80503 USA E-Mail: welsh@mailbag.com Richard T. Carson Department of Economics University of California, San Diego ECON 323 9500 Gilman Dr. #0508 La Jolla, CA 92093-0508 E-Mail: rcarson@ucsd.edu Stanley Presser Department of Sociology and Joint Program in Survey Methodology 1218 LeFrak Hall Joint Program in Survey Methodology College Park, MD 20742 E-Mail: spresser@socy.umd.edu

Zoomers and Boomers: Asset Prices and Intergenerational Inequality - Farmer, Leland; Farmer, Roger (National Bureau of Economic Research Working Paper Series, 2022)
We construct a perpetual youth DSGE model with aggregate uncertainty in which there are dynamically complete markets and agents have Epstein-Zin preferences. We prove that, when endowments have a realistic hump-shaped age-profile, our model has three steady-state equilibria. One of these equilibria is dynamically inefficient and displays real price indeterminacy. We estimate the parameters of our model and we find that a fourth-order approximation around the indeterminate steady-state provides the best fit to U.S. data. Our work interprets the large and persistent generational inequality that has been observed in western economies over the past century as the result of uninsurable income shocks to birth cohorts.
Author contact info: Leland E. Farmer Department of Economics College and Graduate School of Arts & Science University of Virginia PO Box 400182 Charlottesville, VA 22904-418 E-Mail: lefarmer@virginia.edu Roger Farmer UCLA Department of Economics Box 951477 Los Angeles, CA 90095-1477 Tel: 310/825-6547 Fax: 310/825-9528 E-Mail: rfarmer@econ.ucla.edu

Foreign Reserves Management and Original Sin - Devereux, Michael B; Wu, Steve Pak Yeung (National Bureau of Economic Research Working Paper Series, 2022)
This paper studies the interaction between foreign exchange reserves and the currency composition of sovereign debt in emerging countries. Focusing on inflation targeting countries, we find that holdings of foreign reserves are associated with higher local currency sovereign debt, an exchange rate which is less sensitive to global shocks, and a lower exchange rate risk premium in local currency sovereign spreads. We rationalize these findings within a financially constrained model of a small open economy. The Sovereign values local currency debt as a hedge against endowment risk, but since the exchange rate tends to depreciate in times of global downturns, risk averse international investors charge an additional currency risk premium on this debt. When a country optimally uses foreign reserves to lean against the wind in response to global shocks, this dampens the response of the exchange rate, providing insurance for the global investor. By reducing the risk premium on local currency debt, foreign exchange reserves therefore facilitate a higher share of local currency debt in the sovereign portfolio. Quantitatively, we find the welfare benefits for the sovereign from optimal foreign reserves management can be very large.
Author contact info: Michael B. Devereux Department of Economics University of British Columbia 997-1873 East Mall Vancouver, BC V6T 1Z1 Tel: 604/822-2542 Fax: 604/822-5915 E-Mail: mbdevereux@gmail.com Steve P.Y. Wu Department of Economics University of California - San Diego 9500 Gilman Drive #0508 La Jolla, CA 92093-0508 United States of America E-Mail: steve.py.wu@gmail.com

Cognitive Imprecision and Stake-Dependent Risk Attitudes - Khaw, Mel Win; Li, Ziang; Woodford, Michael (National Bureau of Economic Research Working Paper Series, 2022)
In an experiment that elicits subjects’ willingness to pay (WTP) for the outcome of a lottery, we document a systematic effect of stake sizes on the magnitude and sign of the relative risk premium, and find that there is a log-linear relationship between the monetary payoff of the lottery and WTP, conditional on the probability of the payoff and its sign. We account quantitatively for this relationship, and the way in which it varies with both the probability and sign of the lottery payoff, in a model in which all departures from risk-neutral bidding are attributed to an optimal adaptation of bidding behavior to the presence of cognitive noise. Moreover, the cognitive noise required by our hypothesis is consistent with patterns of bias and variability in judgments about numerical magnitudes and probabilities that have been observed in other contexts. We thus provide foundations for the kind of nonlinear distortions in lottery valuation posited by prospect theory, that we believe can provide an interpretation for the observed instability across contexts of estimated prospect-theoretic parameters.
Author contact info: Mel Win Khaw Microsoft Corporation 1 Microsoft Way Redmond, WA 98052 E-Mail: melwinkhaw@gmail.com Ziang Li Department of Economics Princeton University Julis Romo Rabinowitz Building Princeton, NJ 08544 U.S. E-Mail: ziang.li@princeton.edu Michael Woodford Department of Economics Columbia University 420 W. 118th Street New York, NY 10027 Tel: 212/854-1094 Fax: 212-854-8059 E-Mail: mw2230@columbia.edu

Place-Based Productivity and Costs in Science - Gruber, Jonathan; Johnson, Simon; Moretti, Enrico (National Bureau of Economic Research Working Paper Series, 2022)
Cities with a larger concentration of scientists have been shown to be more productive places for additional scientists to do Research and Development. At the same time, these urban areas tend to be associated with higher costs of doing research, in terms of both wages and land. While the literature on the benefits of agglomeration economies is extensive, it offers no direct evidence of how productivity gains from agglomeration compare with higher costs of production. This paper aims to shed light on the balance between local productivity and local costs in science. Using a novel dataset, we estimate place-based costs of carrying out R&D in each US metro area and assess how these place-based costs vary with the density of scientists in each area. We then compare these costs with estimates of the corresponding productivity benefits of more scientist density from Moretti (2021). Adding more scientists to a city increases both productivity and production costs, but the rise in productivity is larger than the rise in production costs. In particular, each 10% rise in the stock of scientists is associated with a 0.11% rise in costs and a 0.67% rise in productivity. This implies that firms moving from cities with a small agglomeration of scientists to cities with a large agglomeration of scientists experience productivity gains that are 6 times larger than the increase in production costs. This finding is consistent with the increased concentration of R&D activity observed over the past 30 years. However, while the productivity estimate has only modest non-linearities, the cost estimates suggest much larger non-linearities as the concentration of scientists increases. For the most concentrated R&D cities, the difference between productivity gains and cost increases is close to zero.
Author contact info: Jonathan Gruber Department of Economics, E52-434 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/253-8892 Fax: 617/253-1330 E-Mail: gruberj@mit.edu Simon Johnson MIT Sloan School of Management 100 Main Street, E52-562 Cambridge, MA 02142 Tel: 617/290-9618 Fax: 617/253-2660 E-Mail: sjohnson@mit.edu Enrico Moretti University of California, Berkeley Department of Economics 549 Evans Hall Berkeley, CA 94720-3880 Tel: 510/642 6649 Fax: 510/643 7042 E-Mail: moretti@econ.berkeley.edu

Environmental Economics, Regulation, and Innovation - Greaker, Mads; Popp, David (National Bureau of Economic Research Working Paper Series, 2022)
This paper provides a primer on the economics of environmental innovation. Our intention is not to write a pure review paper, but to also provide an up-to-date textbook treatment on the issue. Thus, we start by defining the marginal costs of both emissions and of emissions abatement. We then analyze theoretically how innovation may affect marginal abatement costs. We also cover the different modelling choices with respect to how the innovation process is represented mathematically and how different environmental policy measures could affect environmental innovation. Our theoretical propositions are all illustrated with examples from the empirical literature. A special emphasis is placed on the recent literature on directed technical change and the potential impact of government intervention in the research and development choices of private firms.
Author contact info: Mads Greaker Oslo Business School Oslo Metropolitan University Pilestredet 35, 0166 Oslo Norway E-Mail: madsg@oslomet.no David Popp Department of Public Administration and International Affairs Syracuse University The Maxwell School 426 Eggers Hall Syracuse, NY 13244-1020 Tel: 315/443-2482 Fax: 315/443-1081 E-Mail: dcpopp@maxwell.syr.edu

Passing the Message: Peer Outreach about COVID-19 Precautions in Zambia - Burlando, Alfredo; Chintagunta, Pradeep; Goldberg, Jessica; Graboyes, Melissa; Hangoma, Peter; Karlan, Dean; Macis, Mario; Prina, Silvia (National Bureau of Economic Research Working Paper Series, 2022)
During public health emergencies, spreading accurate information and increasing adherence to recommended behaviors is vital for communal welfare. However, uncertainty, mistrust, and misinformation can slow the adoption of best practices. Preexisting social networks can amplify and endorse information from authorities, and technology makes peer-to-peer messaging scalable and fast. Using text messages and small cash incentives, we test a peer-based information campaign to encourage adherence to recommended COVID-19-related health behaviors in Zambia. Individuals respond favorably to the suggestion to pass messages to peers; however, financial incentives neither increase the dissemination of messages nor cause changes in health behaviors.
Author contact info: Alfredo Burlando E-Mail: burlando@uoregon.edu Pradeep Chintagunta University of Chicago Booth School of Business Chicago, IL E-Mail: pradeep.chintagunta@ChicagoBooth.edu Jessica Goldberg Department of Economics University of Maryland 3115C Tydings Hall College Park, MD 20742 Tel: 301/405-3559 E-Mail: jagold@umd.edu Melissa Graboyes 1585 E 13th Ave Eugene, OR 97403 United States E-Mail: graboyes@uoregon.edu Peter Hangoma Department of Health Policy and Management University of Zambia Lusaka, Zambia E-Mail: peterhangoma555@gmail.com Dean Karlan Kellogg Global Hub Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 847/491-8706 E-Mail: dean.karlan@gmail.com Mario Macis Johns Hopkins University Carey Business School 1717 Massachusetts Ave, Office 359 Washington, DC 20036 E-Mail: mmacis@jhu.edu Silvia Prina Department of Economics Northeastern University 360 Huntington Avenue Boston, MA 02115 E-Mail: s.prina@northeastern.edu

Optimal Assignment of Bureaucrats: Evidence from Randomly Assigned Tax Collectors in the DRC - Bergeron, Augustin; Bessone, Pedro; Kabeya Kabeya, John; Tourek, Gabriel Z; Weigel, Jonathan L (National Bureau of Economic Research Working Paper Series, 2022)
The assignment of workers to tasks and teams is a key margin of firm productivity and a potential source of state effectiveness. This paper investigates whether a low-capacity state can increase its tax revenue by optimally assigning its tax collectors. We study the two-stage random assignment of property tax collectors into teams and to neighborhoods in a large Congolese city. The optimal assignment involves positive assortative matching on both dimensions: high (low) ability collectors should be paired together, and high (low) ability teams should be paired with high (low) payment propensity households. Positive assortative matching stems from complementarities in collector-to-collector and collector-to-household match types. We provide evidence that these complementarities reflect in part high-ability collectors exerting greater effort when matched with other high-ability collectors. According to our estimates, implementing the optimal assignment would increase tax compliance by 2.94 percentage points and revenue by 26% relative to the status quo (random) assignment. Alternative policies, such as replacing low-ability collectors with new ones of average ability or increasing collectors’ performance wages, are likely incapable of achieving a similar revenue increase.
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 Pedro Bessone Applied Scientist Uber Technologies San Francisco, CA 94103 Tel: 8572180237 E-Mail: pedrobtepedino@gmail.com John Kabeya Kabeya Direction Générale des Recettes du Kasai Central (DGRKAC) Kananga, Kasai-Central, DRC E-Mail: johnkabeya82@gmail.com 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

Intergenerational Transmission of Family Influence - Eshaghnia, Sadegh; Heckman, James J; Landersø, Rasmus; Qureshi, Rafeh (National Bureau of Economic Research Working Paper Series, 2022)
This paper studies intergenerational mobility—the transmission of family influence. We develop and estimate measures of lifetime resources (income and wealth) motivated by economic theory that account for generational differences in life-cycle trajectories, uncertainty, and credit constraints. These measures of lifetime resources allow us to estimate the transmission of welfare and lifetime resources at different stages of the life cycle. We compare these measures with traditional ones such as wage income and disposable income measured over narrow windows of age that are used to proxy lifetime wealth. The performance of proxy measures is poor. Parents’ expected lifetime resources are stronger predictors of many important child outcomes (including children’s own expected lifetime resources and education) than the income measures traditionally used in the literature on social mobility. Changes in patterns of educational attainment across generations explain most of the intergenerational change in life-cycle dynamics. While relative mobility is overstated by the traditional income measures, absolute upward mobility is understated. Recent generations have higher welfare and are better off compared to their parents.
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 Rasmus Landersø Rockwool Foundation Research Unit Ny Kongensgade 6 Copenhagen 1472 Danmark Tel: 20704429 E-Mail: rl@rff.dk Rafeh Qureshi Center for the Economics of Human Development University of Chicago 1126 East 59th Street Chicago, IL 60637 E-Mail: rqureshi@wisc.edu

Microequity and Mutuality: Experimental Evidence on Credit with Performance-Contingent Repayment - Cordaro, Francesco; Fafchamps, Marcel; Mayer, Colin; Meki, Muhammad; Quinn, Simon; Roll, Kate (National Bureau of Economic Research Working Paper Series, 2022)
We conduct the first field experiment of a performance-contingent microfinance contract. A large food multinational wishes to help micro-distributors in its supply chain with the financing of a productive asset. Working with the firm in Kenya, we compare asset financing under a traditional debt contract to three alternatives: (i) a novel equity-like financing contract, (ii) a hybrid debt-equity contract, and (iii) an index-insurance financing contract. Experimental results reveal large positive impacts from the contractual innovations. These findings demonstrate the economic appeal of microfinance contracts that leverage improved observability of performance to achieve a greater sharing of risk and reward.
Author contact info: Francesco Cordaro Economics of Mutuality Solutions SA Maison de la Paix, Chemin Eugène-Rigot 2 1202 Genève, Switzerland E-Mail: francesco.cordaro@eom.org Marcel Fafchamps Freeman Spogli Institute Stanford University 616 Jane Stanford Way Stanford, CA 94305 Tel: 650/497-4602 E-Mail: fafchamp@stanford.edu Colin Mayer Said Business School University of Oxford Park End Street Oxford OX1 1HP, UK Tel: 44-1865-288919 Fax: 44-1865-288805 E-Mail: colin.mayer@sbs.ox.ac.uk Muhammad Meki Oxford Department of International Development University of Oxford E-Mail: muhammad.meki@qeh.ox.ac.uk Simon Quinn Exhibition Road London SW7 2AZ UK E-Mail: simon.quinn@imperial.ac.uk Kate Roll Institute for Innovation and Public Purpose University College London London United Kingdom E-Mail: k.roll@ucl.ac.uk

Everybody’s Talkin’ at Me: Levels of Majority Language Acquisition by Minority Language Speakers - Brock, William; Chen, Bo; Durlauf, Steven N; Weber, Shlomo (National Bureau of Economic Research Working Paper Series, 2022)
Immigrants in economies with a dominant native language exhibit substantial heterogeneities in language acquisition of the majority language. We model partial equilibrium language acquisition as an equilibrium phenomenon. We consider an environment where heterogeneous agents from various minority groups choose whether to acquire a majority language fully, partially, or not at all. Different acquisition decisions confer different communicative benefits and incur different costs. We offer an equilibrium characterization of language acquisition strategies and find that partial acquisition can arise as an equilibrium behavior. We also show that a language equilibrium may exhibit insufficient learning relative to the social optimum. In addition, we provide a local stability analysis of steady state language equilibria. Finally, we discuss econometric implementation of the language acquisition model and establish identification conditions.
Author contact info: William Brock Department of Economics University of Wisconsin 1180 Observatory Drive Madison, WI 53706-1393 E-Mail: wbrock@ssc.wisc.edu Bo Chen 3300 Dyer Street Suite 301, Umphrey Lee Center Department of Economics Southern Methodist University Dallas, Texa 75275-0235 USA Tel: 1-214-768-2715 E-Mail: bochen@mail.smu.edu Steven N. Durlauf University of Chicago Harris School of Public Policy 1307 E. 60th Street Chicago, IL 60637 E-Mail: durlauf@gmail.com Shlomo Weber Department of Economics Southern Methodist University Dallas, TX 75275-0235 E-Mail: sweber@mail.smu.edu

Infinite Debt Rollover in Stochastic Economies - Kocherlakota, Narayana R (National Bureau of Economic Research Working Paper Series, 2022)
This paper shows that there is more scope for a borrower to engage in a sustainable infinite debt rollover (a “Ponzi scheme”) when interest/growth rates are stochastic. In this context, I prove that the relevant “r vs. g” comparison uses the yield r_{long} to an infinite-maturity zero-coupon bond. I show that r_{long} is lower than the (risk-neutral) expectation of the short-term yield when it is variable, and that r_{long} is close to the minimal realization of the short-term yield when it is highly persistent. The paper applies these results to illustrative heterogeneous agent dynamic stochastic general equilibrium models to obtain weak sufficient conditions for the existence of public debt bubbles.
Author contact info: Narayana R. Kocherlakota Department of Economics University of Rochester 238B Harkness Hall P.O. Box 270156 Rochester, NY 14627 E-Mail: nkocherl@ur.rochester.edu

Industry Choice and within Industry Earnings Effects - Brunner, Eric; Dougherty, Shaun; Ross, Stephen (National Bureau of Economic Research Working Paper Series, 2022)
We examine the effect of attending stand-alone technical high schools on the industry of employment and within industry earnings premiums using a regression discontinuity design. We study the universe of students that applied to the Connecticut Technical Education and Career System (CTECS) between 2006 and 2011. CTECS admission shifts male applicants towards higher paying industries that align with CTECS programs of study, but has a much more modest impact on the industry of employment for female applicants. Further, key industry effects observed for females shift these applicants towards lower paying industries. Surprisingly, overall industry earnings premiums and treatment effects of CTECS on earnings premiums are similar for female applicants in traditionally male dominated industries like manufacturing and construction. However, female representation in these industries is too small to contribute substantially to female earnings in aggregate. For male applicants, mechanism analyses show that treatment effects in manufacturing and construction depend in part on work experience while in high school and as a young adult. Alternatively, in professional and office support industries, treatment effects on earnings arise through selection of students with high 8th grade tests scores into these industries because they offer a higher direct return to cognitive skills.
Author contact info: Eric Brunner Department of Public Policy University of Connecticut 10 Prospect Street, 4th Floor Hartford, CT 06103 E-Mail: eric.brunner1@gmail.com Shaun Dougherty Harvard University E-Mail: shaun.dougherty@bc.edu Stephen Ross Department of Economics University of Connecticut 341 Mansfield Road, Unit 1063 Storrs, CT 06269-1063 Tel: 860/486-3533 E-Mail: stephen.l.ross@uconn.edu

Welfare Reform and the Quality of Young Children's Home Environments - Kalil, Ariel; Corman, Hope; Dave, Dhaval M; Schwartz-Soicher, Ofira; Reichman, Nancy (National Bureau of Economic Research Working Paper Series, 2022)
This study investigates effects of welfare reform in the U.S., a major policy shift that increased employment of low-income mothers and reliance on their own earnings instead of cash assistance through the welfare system, on the quality of the home environments they provide for their preschool-age children. Using empirical methods designed to identify plausibly causal effects, we estimate effects of welfare reform on validated survey and observational measures of maternal behaviors that support children’s cognitive skills and emotional adjustment and material goods that parents purchase to stimulate their children’s skill development. The results suggest that welfare reform did not affect the amount of time and material resources mothers devoted to cognitively stimulating activities with their young children but was significantly associated with approximately 0.3–0.4 standard deviation lower scores on provision of emotional support, with stronger effects for mothers with low human capital. The findings provide evidence that maternal work incentives as implemented by welfare reform came at a cost to children in the form of lower quality parenting and underscore the importance of considering quality, and not just quantity, in assessing the effects of maternal work incentive policies on parenting and children’s home environments.
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 Hope Corman National Bureau of Economic Research 39 Broadway Suite 1620 New York, NY 10006-3052 Tel: 609/895-5559 Fax: 609/896-5387 E-Mail: corman@rider.edu Dhaval M. Dave Bentley University Department of Economics 175 Forest Street, AAC 195 Waltham, MA 02452-4705 E-Mail: ddave@bentley.edu Ofira Schwartz-Soicher Princeton University Donald Stokes Library Princeton, US 08544 US Tel: 609-258-0459 E-Mail: oschwart@princeton.edu Nancy Reichman Rutgers University Robert Wood Johnson Medical School Department of Pediatrics Child Health Institute of New Jersey 89 French St., Room 3272 New Brunswick, NJ 08903 Tel: 732-235-7977 E-Mail: reichmne@rutgers.edu

The Impacts of Crises on the Trilemma Configurations - Aizenman, Joshua; Chinn, Menzie D; Ito, Hiro (National Bureau of Economic Research Working Paper Series, 2022)
The “monetary trilemma” – the hypothesis that full monetary policy autonomy, exchange rate stability, and financial openness cannot simultaneously be achieved – has long been studied. Recently, holding international reserves (IR) has become an important policy instrument, insuring against liquidity shortages. We find that countries’ policy mixes are diverse, and have varied over time, sometimes in response to crises. We illustrate how the policy combinations changed drastically after the Asian Financial Crisis (AFC). In contrast, the Global Financial Crisis did not lead to a drastic change in the policy arrangements. We find that countries that faced large terms of trade shocks or negative economic growth during the crisis increased IR holding, post-AFC. Countries that had negative growth during the crisis also tended to pursue greater exchange rate flexibility and financial openness. This finding is true for commodity, but not manufactured goods, exporters. Countries with large current account deficits tend to be more sensitive to economic growth at the time of the AFC. Countries that are under IMF stabilization programs or those with sovereign wealth funds tended to hold more IR. In general, countries increased their IR holdings after the GFC, but did not otherwise respond concurrently to crisis conditions.
Author contact info: Joshua Aizenman Economics and SIR University of Southern California University Park Los Angeles, CA 90089-0043 Tel: 213-740-4066 E-Mail: aizenman@usc.edu Menzie D. Chinn Department of Economics University of Wisconsin-Madison 1180 Observatory Drive Madison, WI 53706 Tel: 608/262-7397 Fax: 608/262-2033 E-Mail: mchinn@lafollette.wisc.edu Hiro Ito Portland State University 15787 NW Hackney Dr. Portland, OR 97229 Tel: 5039613168 E-Mail: ito@pdx.edu

A Helping Hand Goes a Long Way: Long-Term Effects of Counselling and Support to Workfare Program Participants - Bobonis, Gustavo J; Bonikowska, Aneta; Oreopoulos, Philip; Riddell, W. Craig; Ryan, Steven P (National Bureau of Economic Research Working Paper Series, 2022)
We study the long-run impacts of the Canada Self-Sufficiency Project (SSP) Plus program, which randomly offered intensive employment support services for up to three years to long-term welfare recipients eligible for temporary work subsidies. We examine whether this intervention – aiming to address both economic and psycho-social barriers faced by the poor in finding and retaining desirable employment – led to long-run changes in individuals’ socioeconomic trajectories. We link study participants to their federal tax and employer-employee matched records for up to 20 years after random assignment. The intensive services treatment led to a 20-27 percent increase in participants’ annual earnings over the 20-year period, or approximately 26,000 CAD in present discounted real 2010 terms. As possible mechanisms, individuals experience increases in full-time employment throughout the first decade post-intervention, a greater retention of jobs in higher paying firms, and an improvement in non-cognitive skills.
Author contact info: Gustavo J. Bobonis 300 Roxton Road University of Toronto 150 St. George St., Room 304 Toronto, Onta M5S 3G7 Canada Tel: 4169465299 E-Mail: gustavo.bobonis@utoronto.ca Aneta Bonikowska Social Analysis and Modelling Division Statistics Canada 100 Tunney's Pasture Driveway Ottawa, ON K1A 0T6 CANADA Tel: 613-864-0571 E-Mail: aneta.bonikowska@canada.ca Philip Oreopoulos Department of Economics University of Toronto 150 St. George Street Toronto, ON M5S 3G7 E-Mail: philip.oreopoulos@utoronto.ca W. Craig Riddell Vancouver School of Economics University of British Columbia 6000 Iona Drive Vancouver, BC V6T 1L4 Canada Tel: 604-822-2106 Fax: 604-822-5915 E-Mail: craig.riddell@ubc.ca Steven P. Ryan University of Toronto 150 St. George Street Toronto, ON M4S 3G7 Canada E-Mail: steven.ryan@mail.utoronto.ca

The Effect of College and University Endowments on Financial Aid, Admissions, and Student Composition - Bulman, George (National Bureau of Economic Research Working Paper Series, 2022)
This paper examines how private college and university endowments affect financial aid, admissions selectivity, and the economic and racial composition of incoming students. Because endowment levels are a function of expenditures and alumni giving, which are endogenous to the outcomes of interest, the design exploits changes in endowments stemming from variation in investment returns over time and across peer institutions. Estimates reveal that growing endowments generate large and persistent increases in spending overall and for instruction, student services, and administration in particular. However, wealthier colleges and universities do not increase the number of students they serve or the fraction of students receiving aid, and only modestly increase the generosity of aid packages. Instead, these institutions offset higher freshman yield rates by becoming more selective and enrolling fewer low-income students and students of color. Overall, colleges and universities appear to use greater endowment wealth to increase spending and to become more selective, resulting in higher institutional rankings, but do not increase the size or diversity of their student bodies. The results are important in light of the preferential tax treatment of endowments and interest in increasing access to elite postsecondary education for underserved populations.
Author contact info: George Bulman Department of Economics University of California, Santa Cruz 1156 High Street Santa Cruz, CA 95064 Tel: 650/521-1603 E-Mail: gbulman@ucsc.edu

Investing in Lending Technology: IT Spending in Banking - He, Zhiguo; Jiang, Sheila; Xu, Douglas; Yin, Xiao (National Bureau of Economic Research Working Paper Series, 2022)
Banks’ lending technology hinges on their handling of soft and hard information in dealing with different types of credit demand. Through assembling a novel dataset on banks’ investment in information technologies (IT), this paper provides concrete empirical evidence on how banks adapt their lending technologies. We find investment in communication IT is associated with improving banks’ ability to produce and transmit soft information, while investment in software IT helps enhance banks’ hard information processing capacity. We exploit policies that affect geographic regions differentially to show causally that banks respond to an increased demand for small business credit (mortgage refinance) by increasing their spending on communication (software) IT spending. We also find that the entry of fintech induces commercial banks to increase their investment in IT—more so in the software IT category.
Author contact info: Zhiguo He Stanford University Graduate School of Business 655 Knight Way Stanford, CA 94305 E-Mail: hezhg@stanford.edu Sheila Jiang Department of Finance and Real Estate Warrington College of Business University of Florida P.O. Box 117168 Gainesville, FL 32611 Tel: (352) 392-4668 E-Mail: Sheila.Jiang@warrington.ufl.edu Douglas Xu University of Florida Warrington College of Business 1454 Union Rd Stuzin Hall 315 Gainesville, FL 32611 Tel: 3123911257 E-Mail: douglas.xu@warrington.ufl.edu Xiao Yin 30 Gordon St, London Drayton House London WC1H 0AX UK Tel: +447909106790 E-Mail: xiao.yin@ucl.ac.uk

Free-Riding Yankees: Canada and the Panama Canal - Galiani, Sebastian; Jaramillo, Luis F; Uribe-Castro, Mateo (National Bureau of Economic Research Working Paper Series, 2022)
We study the impact of the Panama Canal on the development of Canada’s manufacturing sector in the years from 1900 to 1939. Using newly digitized county-level data from the Census of Manufactures and a market-access approach, we exploit the plausibly exogenous nature of this historical episode to study how changes in transportation costs influence the location of economic activity and productivity dynamics. Our reduced-form estimates show that lowered shipping costs led to greater market integration of marginally productive Canadian counties with key markets both inside and outside of Canada. This development permitted the reallocation of production activity to places whose production levels had been inefficiently low before the Canal opened. A shift from the 25th to the 75th percentile in terms of gains in market access brought about by the opening of the Canal led to a 9% increase in manufacturing revenues and input expenditures. Productivity rose by 13%. These effects persist when general equilibrium effects are considered: the closure of the Canal in 1939 would have resulted in economic losses equivalent to 1.86% of GDP, chiefly as a result of the restriction of the country’s access to international markets. Altogether, these results suggest that the Canal substantially altered the economic geography of the Western Hemisphere in the first half of the twentieth century.
Author contact info: Sebastian Galiani Department of Economics University of Maryland 3105 Tydings Hall College Park, MD 20742 Tel: 301/405-3518 E-Mail: sgaliani@umd.edu Luis F. Jaramillo Department of Economics University of Maryland 3105 Tydings Hall College Park, MD 20742 E-Mail: luis.jaramillo@gmail.com Mateo Uribe-Castro Calle 19A #1e-37 Edificio W, Facultad de Economia Bogota Colombia E-Mail: m.uribecastro@uniandes.edu.co

Growth Elasticities of Poverty Reduction - Ravallion, Martin (National Bureau of Economic Research Working Paper Series, 2022)
Thirty years ago, Nanak Kakwani provided elegant nonparametric formulae for the point elasticities of measures of poverty with respect to changes in the mean of the distribution of income, thus analytically linking the poverty measures to key macroeconomic aggregates. Numerous insights are found in Kakwani’s elasticities. However, the literature on poverty and growth since then has revealed that the impacts of economic growth on poverty, as observed in practice, can be substantially lower than suggested by Kakwani’s elasticities; the reasons include rising inequality, measurement errors, discrepancies between surveys and national accounts, and changing ideas about what “poverty” means in specific contexts. Nor should Kakwani’s elasticities be treated as structural parameters. Rather, they can vary over time and place, and in systematic ways that merit closer attention.
Author contact info: Martin Ravallion E-Mail: N/A user is deceased

Automation After the Assembly Line: Computerized Machine Tools, Employment and Productivity in the United States - Boustan, Leah Platt; Choi, Jiwon; Clingingsmith, David (National Bureau of Economic Research Working Paper Series, 2022)
Since the 1970s, computerized machine tools have been replacing semi-skilled manufacturing workers, contributing to factory automation. We build a novel measure of exposure to computer numerical control (CNC) based on initial variation in tool types across industries and differential shifts toward CNC technology by tool type over time. Industries more exposed to CNC increased capital investment and experienced higher labor productivity. Total employment rose, with gains for college-educated workers and abstract tasks compensating for losses of less-educated workers and routine tasks. Employment gains were strongest for unionized jobs. Workers in exposed industries returned to school and relevant degree programs expanded.
Author contact info: 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 Jiwon Choi Department of Economics Lemberg Academic Center MS 021 Brandeis University 415 South Street Waltham, MA 02453 United States Tel: 2022886149 E-Mail: choij@brandeis.edu David Clingingsmith Dept. of Economics Case Western Reserve University 10900 Euclid Ave. Cleveland, OH 44106 E-Mail: david.clingingsmith@case.edu

The Steering Incentives of Gatekeepers in the Telecommunications Industry - McManus, Brian; Nevo, Aviv; Nolan, Zachary; Williams, Jonathan W (National Bureau of Economic Research Working Paper Series, 2022)
We study trade-offs faced by multiple-system operators (MSOs), the gatekeepers in the provision of internet service, when setting prices and quality for internet access and TV service. In response to improvements in over-the-top video (OTT), MSOs choose between accommodating OTT to share in the surplus it provides consumers, or steering consumers towards TV. We augment the standard mixed bundling model to show that in some cases MSOs have incentives to steer consumers towards TV, but that these incentives vary with the available pricing tools. We then estimate the distribution of model parameters using household panel data on subscription choices and internet usage. Our estimates imply that if MSOs can set different prices for different internet content, under many cost circumstances MSOs discount the OTT usage price. Furthermore, we find that the ability to charge prices based on internet usage strengthens the MSOs' incentive to improve OTT quality.
Author contact info: Brian McManus Department of Economics CB 3305 University of North Carolina Chapel Hill, NC 27599 E-Mail: mcmanusb@unc.edu Aviv Nevo Department of Economics The Ronald O. Perelman Center for Political Science and Economics 133 South 36th Street, Room 617 Philadelphia, PA 19104 E-Mail: anevo@wharton.upenn.edu Zachary Nolan Department of Business Administration Lerner College of Business & Economics 115 Lerner Hall 20 Orchard Rd Newark, DE 19716 E-Mail: zach.nolan@gmail.com Jonathan W. Williams Department of Economics 107 Gardner Hall, CB 3305 University of North Carolina Chapel Hill, NC 27599-3305 E-Mail: jonwms@unc.edu

Assessing External Validity in Practice - Galiani, Sebastian; Quistorff, Brian (National Bureau of Economic Research Working Paper Series, 2022)
We review, from a practical standpoint, the evolving literature on assessing external validity (EV) of estimated treatment effects. We review existing EV measures, and focus on methods that permit multiple datasets (Hotz et al., 2005). We outline criteria for practical usage, evaluate the existing approaches, and identify a gap in potential methods. Our practical considerations motivate a novel method utilizing the Group Lasso (Yuan and Lin, 2006) to estimate a tractable regression-based model of the conditional average treatment effect (CATE). This approach can perform better when settings have differing covariate distributions and allows for easily extrapolating the average treatment effect to new settings. We apply these measures to a set of identical field experiments upgrading slum dwellings in three different countries (Galiani et al., 2017).
Author contact info: Sebastian Galiani Department of Economics University of Maryland 3105 Tydings Hall College Park, MD 20742 Tel: 301/405-3518 E-Mail: sgaliani@umd.edu Brian Quistorff E-Mail: brian-work@quistorff.com

Boomerang College Kids: Unemployment, Job Mismatch and Coresidence - Albanesi, Stefania; Gihleb, Rania; Zhang, Ning (National Bureau of Economic Research Working Paper Series, 2022)
Labor market outcomes for young college graduates have deteriorated substantially in the last twenty five years, and more of them are residing with their parents. The unemployment rate at 23-27 year old for the 1996 college graduation cohort was 9%, whereas it rose to 12% for the 2013 graduation cohort. While only 25% of the 1996 cohort lived with their parents, 31% for the 2013 cohort chose this option. Our hypothesis is that the declining availability of ‘matched jobs’ that require a college degree is a key factor behind these developments. Using a structurally estimated model of child-parent decisions, in which coresidence improves college graduates' quality of job matches, we find that lower matched job arrival rates explain two thirds of the rise in unemployment and coresidence between the 2013 and 1996 graduation cohorts. Rising wage dispersion is also important for the increase in unemployment, while declining parental income, rising student loan balances and higher rental costs only play a marginal role.
Author contact info: Stefania Albanesi Miami Herbert Business School University of Miami 5250 University Drive Coral Gables, FL 33146 E-Mail: stefania.albanesi@gmail.com Rania Gihleb Department of Economics University of Pittsburgh 230 South Bouquet Street Pittsburgh, PA 15260 E-Mail: gihleb@pitt.edu Ning Zhang Department of Economics The Chinese University of Hong Kong Esther Lee Building The Chinese University of Hong Kong Hong Kong China Tel: +85246767966 E-Mail: ning.zhang@cuhk.edu.hk

Top Wealth in America: A Reexamination - Saez, Emmanuel; Zucman, Gabriel (National Bureau of Economic Research Working Paper Series, 2022)
Recent estimates of US top wealth shares obtained by capitalizing income tax returns (Saez and Zucman, 2020; Smith, Zidar and Zwick, 2022) are close in both levels and trends except for the top 0.01% where a large discrepancy remains. We examine this difference and, using public data, quantify three main issues in Smith et al. (2022). First, Securities and Exchange Commission data at the shareholder firm level show that billionaires' equity wealth is underestimated by a factor of 2.1. Second, interest-bearing assets at the top are under-estimated by a factor of 1.6, because of an extrapolation from a small and unrepresentative sample of investment funds. We quantify this issue using mandatory filings of US hedge funds. Third, issues involving tiered partnerships and the measurement of business profits suggest that large S-corporations are undervalued by a factor of 1.2 and top-owned partnerships by up to 2.2. After incorporating these results, the top 0.01% wealth share of Smith et al. (2022) is close to the one found in Saez and Zucman (2020) and estimates of US wealth inequality are reconciled.
Author contact info: Emmanuel Saez Department of Economics University of California, Berkeley 530 Evans Hall #3880 Berkeley, CA 94720 Tel: 510/642-4631 Fax: 510/642-6615 E-Mail: saez@econ.berkeley.edu Gabriel Zucman Department of Economics University of California, Berkeley 530 Evans Hall, #3880 Berkeley, CA 94720 E-Mail: zucman@berkeley.edu

Popular Personal Financial Advice versus the Professors - Choi, James J (National Bureau of Economic Research Working Paper Series, 2022)
I survey the advice given by the fifty most popular personal finance books and compare it to the prescriptions of normative academic economic models. Popular advice frequently departs from normative principles derived from economic theory, which should motivate new hypotheses about why households make the financial choices they do, as well as what financial choices households should make. Popular advice is sometimes driven by fallacies, but it tries to take into account the limited willpower individuals have to stick to a financial plan, and its recommended actions are often easily computable by ordinary individuals. I cover advice on savings rates, the advisability of being a wealthy hand-to-mouth consumer, asset allocation, non-mortgage debt management, simultaneous holding of high-interest debt and low-interest savings, and mortgage choices.
Author contact info: 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

The Small Open Economy in a Generalized Gravity Model - Demidova, Svetlana; Naito, Takumi; Rodríguez-Clare, Andrés (National Bureau of Economic Research Working Paper Series, 2022)
To provide sharp answers to basic questions in international trade, a standard approach is to focus on a small open economy (SOE). Whereas the classic tradition is to define a SOE as an economy that takes world prices as given, in the modern trade literature a SOE is defined instead as one that takes foreign-good prices and export demand schedules as given. In this paper we develop a generalized gravity model that nests all of its standard microfoundations (e.g., Armington and Melitz-Pareto) and show how to take the limit so that an economy that becomes infinitesimally small behaves like a SOE. We then show how the resulting model of a SOE can be used to understand comparative statics and the optimal tariff in a way that is robust across the different microfoundations consistent with the gravity model.
Author contact info: Svetlana Demidova Department of Economics McMaster University Canada E-Mail: demidov@mcmaster.ca Takumi Naito Waseda University 1-6-1 Nishiwaseda Shinjuku-ku, Tokyo 169-8050 Japan E-Mail: tnaito@waseda.jp Andrés Rodríguez-Clare University of California at Berkeley Department of Economics Berkeley, CA 94720-3880 E-Mail: arc@berkeley.edu

Vote Early and Vote Often? Detecting Electoral Fraud from the Timing of 19th Century Elections - Ferlenga, Francesco; Knight, Brian G (National Bureau of Economic Research Working Paper Series, 2022)
This paper develops a new approach to detecting electoral fraud. Our context involves repeaters, individuals voting in multiple states in the U.S. during 19th Century Congressional Elections. Given high travel times, and the associated difficulties of voting in multiple states on the same day, we exploit the staggered introduction of holding federal elections on the first Tuesday after the first Monday in November (1T1M). The key finding is that county-level turnout rates fell when the closest neighboring state coordinated on 1T1M. This result is consistent with 1T1M adoption making repeating more difficult. In terms of mechanisms, the pattern is stronger in states that had not yet adopted the secret ballot, consistent with the secret ballot itself reducing voter fraud. The pattern is also driven by smaller population counties, consistent with repeaters particularly inflating turnout rates in these places.
Author contact info: Francesco Ferlenga Governor street 93 Providence, RI 02912 United States E-Mail: francesco_ferlenga@brown.edu Brian G. Knight Brown University Department of Economics, Box B 64 Waterman Street Providence, RI 02912 Tel: 401/863-1584 Fax: 401/863-1970 E-Mail: Brian_Knight@brown.edu

The First Sale Doctrine and the Digital Challenge to Public Libraries - Reimers, Imke C; Waldfogel, Joel (National Bureau of Economic Research Working Paper Series, 2022)
Libraries have traditionally provided free communal access to books, facilitated by the first sale doctrine's (FSD) guarantee that libraries may purchase physical books at consumer prices. Increasingly restrictive ebook access terms may imperil libraries, and we compare the welfare cost of higher ebook prices to the welfare benefit of the FSD's guarantee of low physical book prices for libraries and their patrons. Using data on over 8,000 library systems for 2013-2019, we measure the impacts of physical and electronic holdings on the respective formats' circulation. We then build a structural model of the library market, and we rationalize the status quo book holdings with a librarian utility function that attaches higher weights to electronic circulation. While higher counterfactual ebook prices would induce libraries to substitute physical for electronic holdings, this would have little effect on patron CS because of consumer willingness to substitute. By contrast, higher physical book prices, as would prevail absent the first sale doctrine, reduce CS by almost ten times as much as an analogous ebook price increase.
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