Organizing for Collective Action: Olson Revisited - Battaglini, Marco; Palfrey, Thomas R (National Bureau of Economic Research Working Paper Series, 2023)
We study a standard collective action problem in which successful achievement of a group interest requires costly participation by some fraction of its members. How should we model the internal organization of these groups when there is asymmetric information about the preferences of their members? How effective should we expect it to be as we increase the group’s size n? We model it as an optimal honest and obedient communication mechanism and we show that for large n it can be implemented with a very simple mechanism that we call the Voluntary Based Organization. Two new results emerge from this analysis. Independently of the assumptions on the underlying technology, the limit probability of success in the best honest and obedient mechanism is the same as in an unorganized group, a result that is not generally true if obedience is omitted. An optimal organization, however, provides a key advantage: when the probability of success converges to zero, it does so at a much slower rate than in an unorganized group. Because of this, significant probabilities of success are achievable with simple honest and obedient organizations even in very large groups.
Author contact info: Marco Battaglini Department of Economics Uris Hall Cornell University Ithaca, NY 14850 Tel: 607-255-3052 E-Mail: battaglini@cornell.edu Thomas R. Palfrey Division of Humanities and Social Sciences 228-77 Caltech Pasadena, CA 91125 Tel: 626/395-4088 Fax: 626/432-1726 E-Mail: tpalfrey@gmail.com

Migration Restrictions Can Create Gender Inequality: The Story of China's Left-Behind Children - Gao, Xuwen; Liang, Wenquan; Mobarak, Ahmed Mushfiq; Song, Ran (National Bureau of Economic Research Working Paper Series, 2023)
About 11% of the Chinese population are rural-urban migrants with a rural hukou that severely restricts their children's access to urban schools. As a result, 69 million children are left behind in rural areas. We use two regression-discontinuity designs - based on school enrollment age cutoffs and a 2014 policy change that more severely restricted migrants' access to schooling - to document that migrants become discontinuously more likely to leave middle-school-aged daughters (but not sons) behind in poor rural areas without either parent present exactly when schooling becomes expensive and restricted. The effect is larger when the daughter has a male sibling. Migrant parents send significantly less remittances back to daughters than sons. Although China's hukou mobility restrictions are not gender-specific in intent, they have larger adverse effects on girls. Rural residents adjacent to cities that experience shocks to labor demand after China's accession to the WTO are more likely to separate from children to take advantage of new opportunities in cities. Those workers earn much more and advance economically, but longitudinal data reveals that their children complete fewer years of schooling, remain poor, and have worse mental and physical health later in life.
Author contact info: Xuwen Gao School of Public Affairs Zhejiang University Xihu District Hangzhou City Zhejiang, 310058 P.R. China E-Mail: xwgao@zju.edu.cn Wenquan Liang Jinan University No. 601 West Huangpu Road Tianhe District Guangzhou P.R. China Tel: +86 15216655378 E-Mail: liang.wenquan@jnu.edu.cn Ahmed Mushfiq Mobarak Yale University 165 Whitney Ave New Haven, CT 06520-8200 Tel: 203/432-5787 E-Mail: ahmed.mobarak@yale.edu Ran Song Yale-NUS College and Department of Economics National University of Singapore 16 #01-220 College Ave West Singapore, 138527 E-Mail: ran.song@yale-nus.edu.sg

Does the US have an Infrastructure Cost Problem? Evidence from the Interstate Highway System - Turner, Matthew; Mehrotra, Neil; Uribe, Juan Pablo (National Bureau of Economic Research Working Paper Series, 2023)
We pose the problem of managing the interstate as an optimal capital stock problem and define user cost as the charge per vehicle mile travelled that rationalizes observed investments in lane miles and pavement quality. We find that user cost is the sum of the opportunity cost of lane miles, pavement quality, and depreciation. Each depends on the price of lane miles and pavement quality. We estimate these prices and evaluate user cost. Despite large increases in the price of lane miles and pavement quality, user cost declines almost 50% from 1992-2008 due to lower interest rates and higher usage. Increased materials costs largely explain the increasing price of pavement quality, and we reject several common hypotheses for the increase in the price of lane miles.
Author contact info: Matthew Turner Department of Economics Brown University Box B Providence, RI 02912 Tel: 401/863-9331 E-Mail: matthew_turner@brown.edu Neil Mehrotra Research Department Federal Reserve Bank of Minneapolis 90 Hennepin Avenue Minneapolis, MN 55401 E-Mail: neil.mehrotra@mpls.frb.org Juan Pablo Uribe Cornerstone Research 699 Boylston Street, 5th Floor Boston, MA 02116-2836 E-Mail: jp.uribe@cornerstone.com

Long Covid in the United States - Blanchflower, David G; Bryson, Alex (National Bureau of Economic Research Working Paper Series, 2023)
Although yet to be clearly identified as a clinical condition, there is immense concern at the health and wellbeing consequences of long COVID. Using data collected from nearly half a million Americans in the period June 2022-December 2022 in the US Census Bureau’s Household Pulse Survey (HPS), we find 14 percent reported suffering long COVID at some point, half of whom reported it at the time of the survey. It peaks in midlife in the same way as negative affect. Ever having had long COVID is strongly associated with negative affect (anxiety, depression, worry and a lack of interest in things). The effect is larger among those who currently report long COVID, especially if they report severe symptoms. In contrast, those who report having had short COVID report higher wellbeing than those who report never having had COVID. Long COVID is also strongly associated with physical mobility problems, and with problems dressing and bathing. It is also associated with mental problems as indicated by recall and understanding difficulties. Again, the associations are strongest among those who currently report long COVID, while those who said they had had short COVID have fewer physical and mental problems than those who report never having had COVID. Vaccination is associated with lower negative affect, including among those who reported having had long COVID.
Author contact info: David G. Blanchflower Bruce V. Rauner Professor of Economics 6106 Rockefeller Hall Dartmouth College Hanover, NH 03755-3514 Tel: 603/646-2536 Fax: 603/646-2122 E-Mail: blanchflower@dartmouth.edu Alex Bryson Professor of Quantitative Social Science UCL Social Research Institute University College London 20 Bedford Way London WC1H 0AL London United Kingdom Tel: +44 7969179755 E-Mail: a.bryson@ucl.ac.uk

The Welfare Effect of Gender-Inclusive Intellectual Property Creation: Evidence from Books - Waldfogel, Joel (National Bureau of Economic Research Working Paper Series, 2023)
Women have traditionally participated in intellectual property creation at depressed rates relative to men. Book authorship is now an exception. In 1970, women published a third as many books as men. By 2020, women produced the majority of books. Adding new products can have significant welfare benefits, particularly when product quality is unpredictable. Using data on sales of 8.9 million individual titles at Amazon, 2018-2021, along with information on 200 million ratings of 1.8 million books by 800,000 Goodreads users, I develop measures of both the supply of new books by male and female authors, as well as their usage by heterogeneous consumers. I show that growth in female-authored books has delivered a roughly equal proportionate increase in the female-authored shares of consumption, book awards, and other measures of success, indicating both that the additional female-authored books are useful to consumers and that product quality is unpredictable. I calibrate a simple structural model of demand with unpredictable product quality to quantify the welfare benefit from the additional female-authored books. While revenue gains to female authors come partly at the expense of male authors, gains to consumers from inclusive innovation are experienced by a wide range of consumers.
Author contact info: 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

Obstetric Unit Closures and Racial/Ethnic Disparity in Health - Chatterji, Pinka; Ho, Chun-Yu; Wu, Xue (National Bureau of Economic Research Working Paper Series, 2023)
This paper examines whether loss of locally available hospital-based obstetric services affects racial/ethnic disparities in intrapartum care access and birth outcomes in rural areas of the US. To conduct causal inference, we combine difference-in-difference and propensity score matching methods to control for observable and time-invariant unobservable heterogeneity across counties. Using data from Vital Statistics birth certificate records from 2005-2018 from rural counties in the mainland US, our empirical analysis reaches several findings. Women in counties that lost obstetric services are more likely to receive intrapartum care outside their counties of residence and to deliver in an urban county compared to women in matched counties. Nonetheless, there are no consistent effects of obstetric unit closure on maternal and infant health in the full sample. Among Black mothers, however, obstetric unit closure is not associated with delivering in an urban county, and there is a more consistent pattern of negative effects of closure on infant health. Importantly, the adoption of scope-of-practice laws for certified nurse midwives, the adoption of telehealth payment parity laws and the ACA Medicaid expansions have implications for narrowing racial/ethnic disparities in health in response to obstetric unit closures.
Author contact info: Pinka Chatterji State University of New York at Albany Economics Department 1400 Washington Avenue Albany, NY 12222 Tel: 518/442-4746 E-Mail: pchatterji@albany.edu Chun-Yu Ho Economics Department State University of New York at Albany 1400 Washington Avenue Albany, NY 12222 E-Mail: cho@albany.edu Xue Wu E-Mail: Xue.Wu@ahrq.hhs.gov

Distortions, Producer Dynamics, and Aggregate Productivity: A General Equilibrium Analysis - Ayerst, Stephen; Brandt, Loren; Restuccia, Diego (National Bureau of Economic Research Working Paper Series, 2023)
The expansion in farm size is an important contributor to agricultural productivity in developed countries where more productive farms are larger, but in less developed economies the allocation of factor inputs to more productive farms is hindered. How do distortions to factor-input allocation affect farm dynamics and agricultural productivity? We develop a model of heterogeneous farms making cropping choices and investing in productivity improvements. We calibrate the model using detailed farm-level panel data from Vietnam, exploiting regional differences in agricultural institutions and outcomes. We focus on south Vietnam and quantify the effect of higher measured distortions in the North on farm choices and agricultural productivity. We find that the higher distortions in north Vietnam reduce agricultural productivity by 47%, accounting for 70% of the observed 2.5-fold difference between regions. Moreover, two-thirds of the productivity loss is driven by farms’ choice of lower productivity crops and reductions in productivity-enhancing investment, which more than doubles the productivity loss from static factor misallocation.
Author contact info: Stephen Ayerst International Monetary Fund 3001 11th ST NW Unit 3 Washington, DC 20001 E-Mail: stephen.b.ayerst@gmail.com Loren Brandt Department of Economics University of Toronto 150 St. George Street Toronto, ON M5S 3G7 CANADA Tel: (416) 978-4442 E-Mail: loren.brandt@utoronto.ca Diego Restuccia Department of Economics University of Toronto 150 St. George Street Toronto, ON M5S 3G7 Tel: 416/978-5114 Fax: 416/978-5519 E-Mail: diego.restuccia@utoronto.ca

Liquidity, Debt Denomination, and Currency Dominance - Coppola, Antonio; Krishnamurthy, Arvind; Xu, Chenzi (National Bureau of Economic Research Working Paper Series, 2023)
The international monetary system of the last four centuries has experienced the rise, persistence, and fall of specific currencies as the dominant unit of denomination in global debt contracts. We argue that a liquidity-based theory is necessary to explain this pattern. Firms issue debt that can be extinguished by trading their revenues for financial assets of the same denomination. When asset markets differ in their liquidity, as modeled via endogenous search frictions, firms optimally choose to denominate debt in the unit of the asset that is most liquid. Equilibria with a single dominant currency emerge from a positive feedback cycle whereby issuing in the more liquid denomination endogenously raises the benefits of that denomination. This feedback mechanism has historically been seeded by governments committed to the largest pool of liquid assets in the same denomination. Once a dominant currency emerges, the government hosting the currency endogenously invests more in the liquidity of its financial markets, leading to further entrenchment of that equilibrium. Our theory explains the historical experiences of the Dutch florin, the British pound sterling, the US dollar, and the transitions between them. We rationalize the current dollar-dominant international financial architecture and provide predictions about the potential rise of the Chinese renminbi.
Author contact info: Antonio Coppola Stanford University 655 Knight Way Stanford, CA 94305 E-Mail: acoppola@stanford.edu Arvind Krishnamurthy Stanford Graduate School of Business Stanford University 655 Knight Way Stanford, CA 94305 E-Mail: akris@stanford.edu Chenzi Xu Graduate of Business Stanford University 655 Knight Way Stanford, CA 94305 E-Mail: chenzixu@stanford.edu

The Impacts of Same and Opposite Gender Alumni Speakers on Interest in Economics - Patnaik, Arpita; Pauley, Gwyn C; Venator, Joanna; Wiswall, Matthew J (National Bureau of Economic Research Working Paper Series, 2023)
What is the impact of male and female alumni speaker interventions in introductory microeconomics courses on student interest in economics? Using student-level transcript data, we estimate the effect of speakers on future course-taking in models which use untreated lectures as control groups, including professor and semester fixed effects and student-level covariates. Alumni speakers increase intermediate economics course take-up by 2.1 percentage points (11%). Students are more responsive to same-gender speakers, with male speakers increasing men’s course take-up by 36% and female speakers increasing women’s course take-up by 40%, implying that the effect of alumni speakers is strongly gendered.
Author contact info: Arpita Patnaik Charles River Associates 200 Clarendon St Boston, MA 02116 E-Mail: patnaik3@wisc.edu Gwyn C. Pauley Department of Economics University of Wisconsin-Madison 1180 Observatory Drive Madison, WI 53706 E-Mail: gwyn.pauley@gmail.com Joanna Venator Department of Economics, Maloney Hall Boston College 140 Commonwealth Avenue Chestnut Hill, MA 02467 E-Mail: venator@bc.edu Matthew J. Wiswall Department of Economics University of Wisconsin-Madison 1180 Observatory Drive Madison, WI 53706 E-Mail: matt.wiswall@gmail.com

Ride-Sharing Markets Re-Equilibrate - Hall, Jonathan V; Horton, John J; Knoepfle, Daniel T (National Bureau of Economic Research Working Paper Series, 2023)
Following Uber-initiated fare increases, drivers make more money per trip and, initially, more per hour-worked. Drivers begin to work more hours. However, this increase in hours-worked—combined with a reduction in demand from a higher fare—has a business stealing effect, with drivers spending a smaller fraction of working hours transporting passengers. This market adjustment brings the hourly earnings rate back to about the rate that prevailed before the fare increase, in roughly two months. Passengers are partially compensated for higher prices by shorter wait times, but during the period covered by our data, fare increases likely reduced passenger welfare.
Author contact info: Jonathan Hall Uber Technologies E-Mail: jvh@uber.com John J. Horton Massachusetts Institute of Technology Sloan School of Management 100 Main St Cambridge, MA 02142 E-Mail: john.joseph.horton@gmail.com Daniel T. Knoepfle Uber Technologies E-Mail: knoepfle@gmail.com

Automating Automaticity: How the Context of Human Choice Affects the Extent of Algorithmic Bias - Agan, Amanda Y; Davenport, Diag; Ludwig, Jens; Mullainathan, Sendhil (National Bureau of Economic Research Working Paper Series, 2023)
Consumer choices are increasingly mediated by algorithms, which use data on those past choices to infer consumer preferences and then curate future choice sets. Behavioral economics suggests one reason these algorithms so often fail: choices can systematically deviate from preferences. For example, research shows that prejudice can arise not just from preferences and beliefs, but also from the context in which people choose. When people behave automatically, biases creep in; snap decisions are typically more prejudiced than slow, deliberate ones, and can lead to behaviors that users themselves do not consciously want or intend. As a result, algorithms trained on automatic behaviors can misunderstand the prejudice of users: the more automatic the behavior, the greater the error. We empirically test these ideas in a lab experiment, and find that more automatic behavior does indeed seem to lead to more biased algorithms. We then explore the large-scale consequences of this idea by carrying out algorithmic audits of Facebook in its two biggest markets, the US and India, focusing on two algorithms that differ in how users engage with them: News Feed (people interact with friends' posts fairly automatically) and People You May Know (people choose friends fairly deliberately). We find significant out-group bias in the News Feed algorithm (e.g., whites are less likely to be shown Black friends' posts, and Muslims less likely to be shown Hindu friends' posts), but no detectable bias in the PYMK algorithm. Together, these results suggest a need to rethink how large-scale algorithms use data on human behavior, especially in online contexts where so much of the measured behavior might be quite automatic.
Author contact info: Amanda Y. Agan Department of Economics Rutgers University 75 Hamilton Street New Brunswick, NJ 08901 E-Mail: amanda.agan@rutgers.edu Diag Davenport Robertson Hall 20 Prospect Ave Princeton, NJ 08540 USA E-Mail: diag@princeton.edu Jens Ludwig Harris School of Public Policy University of Chicago 1307 East 60th Street Chicago, IL 60637 Tel: 773/834-0811 E-Mail: jludwig@uchicago.edu Sendhil Mullainathan Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/834-2353 E-Mail: sendhil.mullainathan@gmail.com

Mutual Fund Flows and the Supply of Capital in Municipal Financing - Adelino, Manuel; Cheong, Sophia Chiyoung; Choi, Jaewon; Oh, Ji Yeol Jimmy (National Bureau of Economic Research Working Paper Series, 2023)
This paper identifies the impact of fluctuations in the supply of capital from mutual funds on municipal bond financing and makes three contributions to the literature. First, we develop an identification strategy based on the Morningstar rating methodology at the moment that funds reach 5 years in operation. This approach isolates supply-side effects that are orthogonal to both fund and issuer fundamentals and can be applied in a broad range of settings. Second, we show that exogeneous fund flows lead to more municipal bond issuances and raise bond prices, but only when funds, issuers, and underwriters are connected through existing relationships. This result highlights the role of relationship lending in the context of municipal bond financing. Third, our results suggest that municipal bond issuers exploit favorable financing conditions to issue bonds with shorter delays and lower transaction costs, such as non-general-obligation bonds that require no voter approval and non-green bonds. These frictions can limit the impact of capital-supply shocks on municipal financing.
Author contact info: Manuel Adelino Fuqua School of Business Duke University 100 Fuqua Drive Durham, NC 27708 Tel: 919/660-7981 E-Mail: manuel.adelino@duke.edu Sophia Chiyoung Cheong E-Mail: cheong90@gmail.com Jaewon Choi Department of Finance University of Illinois at Urbana-Champaign E-Mail: jaewchoi1203@gmail.com Ji Yeol Jimmy Oh 25-2 Sungkyunkwan-ro Jongno-gu Seoul 03063 Korea (South) E-Mail: jyjoh@skku.edu

The Nature of Long-Term Unemployment: Predictability, Heterogeneity and Selection - Mueller, Andreas I; Spinnewijn, Johannes (National Bureau of Economic Research Working Paper Series, 2023)
This paper studies the predictability of long-term unemployment (LTU) and analyzes its main determinants using rich administrative data in Sweden. Compared to using standard socio-demographic variables, the predictive power more than doubles when leveraging the rich data environment. The largest gains come from adding job seekers' employment history prior to becoming unemployed. Applying our prediction algorithm over the unemployment spell, we show that dynamic selection into LTU explains at least half of the observed decline in job finding. While the within-individual declines are small on average, we find substantial heterogeneity in the individual-level declines and thus reject the commonly used proportional hazard assumption. Applying our prediction algorithm over the business cycle, we find that the cyclicality in average LTU risk is not driven by composition but rather by within-individual cyclicality and that individual rankings are relatively persistent across years. Finally, we evaluate the implications of our findings for the value of targeting unemployment policies and how these change over the unemployment spell and the business cycle.
Author contact info: Andreas I. Mueller The University of Texas at Austin Department of Economics 2225 Speedway Austin, TX 78712 Tel: 512/232-3894 E-Mail: andimueller@utexas.edu Johannes Spinnewijn Department of Economics London School of Economics, Houghton Street London, WC2A 2AE E-Mail: J.Spinnewijn@lse.ac.uk

Relational Contracts: Recent Empirical Advancements and Open Questions - Macchiavello, Rocco; Morjaria, Ameet (National Bureau of Economic Research Working Paper Series, 2023)
Relational contracts - informal self-enforcing agreements sustained by repeated interactions - are ubiquitous both within and across organizational boundaries. This review highlights recent empirical contributions in selected areas. We begin by reviewing some recent work that explicitly takes the dynamic incentive compatibility constraints that underpin relational contract models to the data. We then discuss the relationship between relational contracting and firms' performance. We conclude pointing in directions that we consider to be particularly ripe for future work.
Author contact info: Rocco Macchiavello Management Department London School of Economics London United Kingdom E-Mail: R.Macchiavello@lse.ac.uk Ameet Morjaria Kellogg School of Management Northwestern University 2211 Campus Drive Evanston, IL 60208 E-Mail: a.morjaria@kellogg.northwestern.edu

The Slow Diffusion of Earnings Inequality - Sorkin, Isaac; Wallskog, Melanie (National Bureau of Economic Research Working Paper Series, 2023)
Over the last several decades, rising pay dispersion between firms accounts for the majority of the dramatic increase in earnings inequality in the United States. This paper shows that a distinct cross-cohort pattern drives this rise: newer cohorts of firms enter more dispersed and stay more dispersed throughout their lives. A similar cohort pattern drives a variety of other closely related facts: increases in worker sorting across firms on the basis of pay, education, and age, and increasing productivity dispersion across firms. We discuss two important implications. First, these cohort patterns suggest a link between changes in firm entry associated with the decline in business dynamism and the rise in earnings inequality. Second, cohort effects imply a slow diffusion of inequality: we expect inequality to continue to rise as older and more equal cohorts of firms are replaced by younger and more unequal cohorts. Back of the envelope calculations suggest that this momentum could be substantial with increases in between-firm inequality in the next two decades almost as large as in the last two.
Author contact info: Isaac Sorkin Department of Economics Stanford University 579 Jane Stanford Way Stanford, CA 94305 Tel: 608/440-0052 E-Mail: sorkin@stanford.edu Melanie Wallskog Fuqua School of Business Duke University 100 Fuqua Dr. Durham, NC 27708 United States Tel: 8122721037 E-Mail: melanie.wallskog@duke.edu

Similarities and Differences in the Adoption of General Purpose Technologies - Agrawal, Ajay K; Gans, Joshua S; Goldfarb, Avi (National Bureau of Economic Research Working Paper Series, 2023)
Economic models provide little insight into when the next big idea and its associated productivity dividend will come along. Once a general purpose technology (GPT) is identified, the economist’s toolkit does provide an understanding when firms will adopt a new technology and for what purpose. The focus of the literature has been on commonalities across each type of GPT. This focus is natural, given that the goal of the literature has been to identify generalizable insights across technologies. Broadly, this literature emphasizes heterogeneity in co-invention costs across firms. Each GPT, however, provides a distinct benefit. Steam provided a new power source. The internet facilitated communication. The differences between GPTs are important for understanding adoption patterns. Using the examples of the internet and artificial intelligence, we discuss how both co-invention costs and distinct benefits determine the adoption of technology. For both technologies, we demonstrate that discussions of the impact of a GPT on productivity and growth need to emphasize the benefits as well as the costs. The goal of this paper is therefore to link the literature on co-invention costs with an understanding of the distinct benefits of each GPT.
Author contact info: Ajay K. Agrawal Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 Tel: 416/946-0203 Fax: 416/978-5433 E-Mail: ajay.agrawal@rotman.utoronto.ca Joshua S. Gans Rotman School of Management University of Toronto 105 St. George Street Toronto ON M5S 3E6 Tel: 416/978-3243 E-Mail: joshua.gans@rotman.utoronto.ca Avi Goldfarb Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 Tel: 416/946-8604 Fax: 416/978-5433 E-Mail: agoldfarb@rotman.utoronto.ca

Government Audits - Cuneo, Martina; Leder-Luis, Jetson; Vannutelli, Silvia (National Bureau of Economic Research Working Paper Series, 2023)
Audits are a common mechanism used by governments to monitor public spending. In this paper, we discuss the effectiveness of auditing with theory and empirics. In our model, the value of audits depends on both the underlying presence of abuse and the government’s ability to observe it and enforce punishments, making auditing most effective in middling state-capacity environments. Consistent with this theory, we survey all the existing credibly causal studies and show that government audits seem to have positive effects mostly in middle-state-capacity environments like Brazil. We present new empirical evidence from American city governments, a high-capacity and low-impropriety environment. Using a previously unexplored threshold in federal audit rules and a dynamic regression discontinuity framework, we estimate the effects of these audits on American city finance and find no marginal effect of audits.
Author contact info: Martina Cuneo Department of Economics New York University E-Mail: mc9203@nyu.edu Jetson Leder-Luis Questrom School of Business Boston University 595 Commonwealth Avenue Boston, MA 02215 Tel: 914/844-9457 E-Mail: jetson@bu.edu Silvia Vannutelli Kellogg Global Hub Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 617/368-0475 E-Mail: silvia.vannutelli@northwestern.edu

Effects of Enhanced Legal Aid in Child Welfare: Evidence from a Randomized Trial of Mi Abogado - Cooper, Ryan; Doyle, Joseph J, Jr.; Hojman, Andrés P (National Bureau of Economic Research Working Paper Series, 2023)
Children spend years in foster care, and there are concerns that bureaucratic hurdles contribute to unnecessarily long stays. In a novel approach to policy making, the Chilean government randomized the introduction of a program aimed at reducing these delays in order to evaluate its effects on child well-being. Mi Abogado (My Lawyer) provides legal aid and social services to foster children living in institutions. Using administrative data linked across government registries, we find the program reduced the length of stay in foster care with no increase in subsequent placement, resulting in savings that are substantially greater than the cost of the program. The program also led to a reduction in criminal justice involvement and an improvement in school attendance. The results demonstrate that investment in the quality of foster care services can improve child well-being.
Author contact info: Ryan Cooper University of Chicago 5736 S University Ave Chicago, IL 60637 E-Mail: ryancooperb@uchicago.edu Joseph J. Doyle Jr. MIT Sloan School of Management 100 Main Street, E62-516 Cambridge, MA 02142 Tel: 617/452-3761 Fax: 617/258-6855 E-Mail: jjdoyle@mit.edu Andrés P. Hojman School of Government Pontificia Universidad Catolica de Chile Av. Libertador Bernardo O'Higgins 340 8331150 Santigo, Región Metropolitana Chile E-Mail: andreshojman@gmail.com

Behavioral Economics in Education Market Design: A Forward-Looking Review - Rees-Jones, Alex; Shorrer, Ran (National Bureau of Economic Research Working Paper Series, 2023)
The rational-choice framework for modeling matching markets has been tremendously useful in guiding the design of school-assignment systems. Despite this success, a large body of work documents deviations from the predictions of this framework that appear influenced by behavioral-economic phenomena. We review these findings and the body of behavioral theories that have been presented as possible explanations. Motivated by this literature, we lay out paths for behavioral economists to be directly useful to education market design.
Author contact info: Alex Rees-Jones University of Pennsylvania The Wharton School Department of Business Economics and Public Policy 3733 Spruce Street Philadelphia, PA 19104-6372 E-Mail: alre@wharton.upenn.edu Ran Shorrer Department of Economics The Pennsylvania State University Kern Building University Park, PA 16802 USA E-Mail: rshorrer@gmail.com

Cross-State Strategic Voting - Dahl, Gordon B; Engelberg, Joseph; Lu, Runjing; Mullins, William (National Bureau of Economic Research Working Paper Series, 2023)
We estimate 3% of the U.S. voter population is registered to vote in two states. Which state these double-registrants choose to vote in reflects incentives and costs, being more prevalent in swing states (higher incentive) and states which automatically send out mail-in ballots (lower cost). We call this behavior cross-state strategic voting (CSSV) and estimate there were 317,000 such votes in the 2020 presidential election. Because both Democrats and Republicans engaged in CSSV, the net effect was small, although it could matter in closer elections (e.g., Florida in 2000) or if one party increased CSSV relative to the other.
Author contact info: Gordon B. Dahl Department of Economics University of California, San Diego 9500 Gilman Drive #0508 La Jolla, CA 92093-0508 Tel: 858-822-0644 E-Mail: gdahl@ucsd.edu Joseph Engelberg Rady School of Management University of California at San Diego Otterson Hall, Room 4S154 9500 Gilman Drive #0553 LaJolla, CA 92093-0553 E-Mail: jengelberg@ucsd.edu Runjing Lu Alberta School of Business University of Alberta 11211 Saskatchewan Dr. NW Edmonton, Canada Canada E-Mail: runjing1@ualberta.ca William Mullins Rady School of Management University of California, San Diego 9500 Gilman Drive, MC 0553 La Jolla, CA 92093-0553 E-Mail: wmullins@ucsd.edu

State-Dependent Local Projections: Understanding Impulse Response Heterogeneity - Cloyne, James; Jordà, Òscar; Taylor, Alan M (National Bureau of Economic Research Working Paper Series, 2023)
An impulse response is the dynamic average effect of an intervention across horizons. We use the well-known Kitagawa-Blinder-Oaxaca decomposition to explore a response’s heterogeneity over time and over states of the economy. This can be implemented with a simple extension to the usual local projection specification that nevertheless keeps the model linear in parameters. Using our new decomposition-based approach, we show how to unpack heterogeneity in the fiscal multiplier, an object that at any point in time may depend on a number of potentially correlated factors, including existing economic conditions and the monetary response. In our application, the fiscal multiplier varies considerably with monetary policy: it can be as small as zero, or as large as 2, depending on the degree of monetary offset.
Author contact info: James Cloyne Department of Economics University of California, Davis One Shields Avenue Davis, CA 95616 E-Mail: jcloyne@ucdavis.edu Òscar Jordà Economic Research, MS 1130 Federal Reserve Bank of San Francisco San Francisco, CA 94105 E-Mail: oscar.jorda@gmail.com Alan M. Taylor Columbia University 1313 International Affairs 420 West 118th Street New York, NY 10027 E-Mail: amt2314@columbia.edu

Lottery-Based Evaluations of Early Education Programs: Opportunities and Challenges for Building the Next Generation of Evidence - Weiland, Christina; Unterman, Rebecca; Dynarski, Susan; Abenavoli, Rachel; Bloom, Howard; Braga, Breno; Faria, Ann-Marie; Greenberg, Erica H; Jacob, Brian; Arnold Lincove, Jane; Manship, Karen; McCormick, Meghan; et al. (National Bureau of Economic Research Working Paper Series, 2023)
Lottery-based identification strategies offer potential for generating the next generation of evidence on U.S. early education programs. Our collaborative network of five research teams applying this design in early education and methods experts has identified six challenges that need to be carefully considered in this next context: 1) available baseline covariates may not be very rich; 2) limited data on the counterfactual; 3) limited and inconsistent outcome data; 4) weakened internal validity due to attrition; 5) constrained external validity due to who competes for oversubscribed programs; and 6) difficulties answering site-level questions with child-level randomization. We offer potential solutions to these six challenges and concrete recommendations for the design of future lottery-based early education studies.
Author contact info: Christina Weiland University of Michigan School of Education 610 E. University Ave Ann Arbor, MI 48104 USA E-Mail: weilandc@umich.edu Rebecca Unterman MDRC 200 Vesey Street 23rd Floor New York, NY 10281-2103 USA E-Mail: Rebecca.Unterman@mdrc.org Susan Dynarski Harvard University Graduate School of Education 13 Appian Way Cambridge, MA 02138 Fax: NA E-Mail: susan_dynarski@harvard.edu Rachel Abenavoli New York University 82 Washington Square East New York, NY 10003 USA E-Mail: rachel.abenavoli@nyu.edu Howard Bloom MDRC 200 Vesey Street 23rd Floor New York, NY 10281-2103 USA E-Mail: howard.bloom@mdrc.org Breno Braga Urban Institute 500 L'Enfant Plaza SW Washington, DC 20024 E-Mail: bbraga@urban.org Ann-Marie Faria American Institutes for Research 1400 Crystal Drive, 10th Floor Arlington, VA 22202-3289 E-Mail: afaria@air.org Erica H. Greenberg Urban Institute 500 L'Enfant Plaza SW Washington, DC 20024 E-Mail: egreenberg@urban.org 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 Jane Arnold Lincove UMBC School of Public Policy 1000 Hilltop Cir Baltimore, MD 21250 E-Mail: jlincove@umbc.edu Karen Manship American Institutes for Research 100 Europa Dr., Suite 315 Chapel Hill, NC 27517 E-Mail: kmanship@air.org Meghan McCormick MDRC 200 Vesey Street 23rd Floor New York, NY 10281-2103 E-Mail: Meghan.McCormick@mdrc.org Luke Miratrix Harvard Graduate School of Education 13 Appian Way Cambridge, MA 02138 E-Mail: luke_miratrix@gse.harvard.edu Tomas E. Monarrez 10 N Independence Mall W Philadelphia, PA 19106 Tel: 2679907556 E-Mail: tomas.monarrez@phil.frb.org Pamela Morris-Perez New York University 82 Washington Square East New York, NY 10003 E-Mail: pam7@nyu.edu Anna Shapiro RAND Corporation 1200 S Hayes St. Arlington, VA 22202 E-Mail: ashapiro@rand.org Jon Valant Brookings Institution 1775 Massachusetts Ave NW Washington, DC 20036 E-Mail: JValant@brookings.edu Lindsay Weixler Tulane University 6823 St Charles Ave New Orleans, LA 70118 E-Mail: lweixler@tulane.edu

Behavior Mediates the Health Effects of Extreme Wildfire Smoke Events - Heft-Neal, Sam; Gould, Carlos F; Childs, Marissa; Kiang, Mathew V; Nadeau, Kari; Duggan, Mark; Bendavid, Eran; Burke, Marshall (National Bureau of Economic Research Working Paper Series, 2023)
Air pollution is known to negatively affect a range of health outcomes. Wildfire smoke is an increasingly important contributor to air pollution, yet extreme smoke events are highly salient and could induce behavioral responses that alter health impacts. We combine geolocated data covering the near universe of 127 million emergency department (ED) visits in California with estimates of daily surface wildfire smoke PM2.5 concentrations and quantify how increasingly acute wildfire smoke events affect ED visits. Low or moderate levels of ambient smoke increase total visits by 1-1.5% in the week following exposure, but extreme smoke days reduce total visits by 6-9%, relative to a day with no smoke. Reductions persist for at least a month. Declines during extreme exposures are driven by diagnoses not thought to be acutely impacted by pollution, including accidental injuries, and come disproportionately from less insured populations. In contrast, health outcomes with the strongest physiological link to short-term air pollution increase dramatically: ED visits for asthma, COPD, and cough all increase by 30-110% in the week after one extreme smoke day. Because low and moderate smoke days vastly outweigh extreme smoke days in our sample, we estimate that smoke exposure was responsible for roughly 3,000 additional ED visits per year in CA from 2006-2017.
Author contact info: Sam Heft-Neal Center on Food Security and the Environment Stanford University 473 Via Ortega Stanford, CA 94305 E-Mail: sheftneal@stanford.edu Carlos F. Gould 9515 Gilman Drive School of Public Health University of California San Diego La Jolla, CA 92093 E-Mail: cagould@ucsd.edu Marissa Childs Center for the Environment Harvard University E-Mail: mchilds@fas.harvard.edu Mathew Kiang E-Mail: mkiang@stanford.edu Kari Nadeau E-Mail: knadeau@hsph.harvard.edu Mark Duggan Stanford University Department of Economics 579 Jane Stanford Way Stanford, CA 94305-6072 E-Mail: mgduggan@stanford.edu Eran Bendavid Department of Medicine Stanford University E-Mail: ebd@stanford.edu Marshall Burke Doerr School of Sustainability Stanford University Stanford, CA 94305 E-Mail: mburke@stanford.edu

Pediatric Drug Adherence and Parental Attention: Evidence from Comprehensive Claims Data - Feng, Josh; Higgins, Matthew J; Patel, Elena (National Bureau of Economic Research Working Paper Series, 2023)
We study how pediatric drug adherence responds to macroeconomic shocks, leveraging comprehensive U.S. claims data and the COVID-19 pandemic. For the youngest asthmatic children, adherence to prescriptions fell by 30 percent by the end of 2020, with smaller negative effects for older children. The effect is not driven by factors distinctive to COVID, including school closures and air quality. Rather, we find evidence consistent with parental attention playing a large quantitative role. Our findings speak to the role of non-monetary factors in determining an important pediatric health behavior and to the evolution of the pediatric health-parental income gradient.
Author contact info: Josh Feng David Eccles School of Business University of Utah 1731 E. Campus Center Dr Salt Lake City, UT 84112 United States Tel: 8012131745 E-Mail: josh.feng@eccles.utah.edu Matthew J. Higgins David Eccles School of Business University of Utah 1731 E Campus Center Drive Salt Lake City, UT 84112 E-Mail: matt.higgins@eccles.utah.edu Elena Patel David Eccles School of Business University of Utah 1731 E Campus Center Drive, Suite 3400 Salt Lake City, UT 84112 USA E-Mail: Elena.Patel@eccles.utah.edu

RIM-Based Value Premium and Factor Pricing Using Value-Price Divergence - Cong, Lin William; George, Nathan Darden; Wang, Guojun (National Bureau of Economic Research Working Paper Series, 2023)
We document that value-to-price, the ratio of Residual-Income-Model-based valuation to market price, subsumes the power of book-to-market ratio and many other value or quality measures in predicting stock returns. Long-short value-to-price portfolios hedge against momentum, revitalize the seemingly missing value premium over past decades, and generate significant returns after adjusting for common factors. The value-price-divergence (VPD) factor constructed from the average returns of these portfolios within small and big stocks is not spanned by these known factors. Max Sharpe ratio and constrained R-squared tests reveal that VPD is a better substitute for the traditional value factor and a four-factor model using the VPD, market, momentum, and size factors outperforms most extant benchmarks in explaining the cross-section of expected equity returns. The findings remain robust under alternative specifications of equity cost of capital.
Author contact info: Lin William Cong SC Johnson College of Business Cornell University Sage Hall Ithaca, NY 14853 Tel: 607/255-7859 E-Mail: will.cong@cornell.edu Nathan George E-Mail: ngeorge@berkeley.edu Guojun Wang Shanghai Normal University Business School E-Mail: gjwang@tongji.edu.cn

Cooling Externality of Large-Scale Irrigation - Braun, Thomas; Schlenker, Wolfram (National Bureau of Economic Research Working Paper Series, 2023)
We provide novel evidence that large-scale irrigation heterogeneously shifts the temperature distribution towards cooler temperatures during the months of the growing season relative to the rest of the year. We employ a triple-difference estimator using a 59-year-long panel of weather records paired with the fraction of a county that is irrigated in 393 counties over the Ogallala aquifer. Cooling-by-irrigation propagates downwind and reduces the upper tail of the temperature distribution by up to 3C (5F) during the month of August, which has positive externalities on downwind crop yields ($120 million per year) and temperature-induced excess mortality ($240 million per year) that are of equal magnitude as the direct benefits of irrigation by enhancing heat tolerance ($440 million per year). The observed cooling helps explain why the US has seen less warming, especially of very hot temperatures, than what climate models project. Our findings highlight that weather shocks in highly irrigated areas are not exogenous but are influenced by human responses in the form of irrigation.
Author contact info: Thomas Braun Columbia Universtity 420 West 118th St New York, NY 10027 Tel: 6468976892 E-Mail: tpb2128@columbia.edu Wolfram Schlenker School of International and Public Affairs (SIPA) Columbia University 420 West 118th St New York, NY 10027 Tel: 212/854-1806 Fax: 212/854-5765 E-Mail: wolfram.schlenker@columbia.edu

Unconditional Cash Transfers for Families with Children in the U.S.: A Scoping Review - Shah, Hema; Gennetian, Lisa A (National Bureau of Economic Research Working Paper Series, 2023)
Children represent the largest indirect beneficiaries of the U.S. social welfare system. Yet, many questions remain about the direct benefits of cash aid to children. The current understanding of the impacts of cash aid in the U.S. is drawn primarily from studies of in-kind benefits, tax credits, and conditional cash aid programs. A corresponding economics literature focuses on the labor supply responses of parents and the role of income, parenting skills, and early education as family investment mechanisms that reduce socioeconomic inequality in children’s well-being. In contrast to the U.S., dozens of low- to middle-income nations use direct cash aid—conditional or unconditional—as a central policy strategy, with demonstrated positive effects across a host of economic and health measures and selected aspects of children’s health and schooling. This paper reviews the economic research on U.S. safety net programs and cash aid to families with children and what existing studies reveal about its impacts on family investment mechanisms and children’s outcomes. We specifically highlight gaps in understanding the impacts of unconditional cash aid on children. We then review nine contemporary unconditional cash transfer programs and discuss their promise and limitations in filling the U.S.-based economic evidence gap about the impact of cash aid on children’s development.
Author contact info: Hema Shah Duke University Department of Economics 213 Social Sciences Building Durham, NC 27708 E-Mail: hema.shah@duke.edu Lisa A. Gennetian Sanford School of Public Policy Duke University 212 Rubenstein Hall 302 Towerview Road Durham, NC 27708 Tel: 919/613-9341 E-Mail: lisa.gennetian@duke.edu

Parental Education and Invention: The Finnish Enigma - Aghion, Philippe; Akcigit, Ufuk; Hyytinen, Ari; Toivanen, Otto (National Bureau of Economic Research Working Paper Series, 2023)
Why is invention strongly positively correlated with parental income not only in the US but also in Finland which displays low income inequality and high social mobility? Using data on 1.45M Finnish individuals and their parents, we find that: (i) the positive association between parental income and off-spring probability of inventing is greatly reduced when controlling for parental education; (ii) instrumenting for the parents having a MSc-degree using distance to nearest university reveals a large causal effect of parental education on offspring probability of inventing; and (iii) the causal effect of parental education has been markedly weakened by the introduction in the early 1970s of a comprehensive schooling reform.
Author contact info: Philippe Aghion College de France 3 Rue D'Ulm 75005 Paris FRANCE E-Mail: philippe.aghion@insead.edu Ufuk Akcigit Department of Economics University of Chicago 1126 East 59th Street Saieh Hall, Office 403 Chicago, IL 60637 E-Mail: uakcigit@uchicago.edu Ari Hyytinen Department of Finance and Economics Hanken School of Economics E-Mail: ari.hyytinen@hanken.fi Otto Toivanen Professor Otto Toivanen Department of Economics Aalto University School of Business Finland E-Mail: otto.toivanen@aalto.fi

Beware the Side Effects: Capital Controls, Trade, Misallocation and Welfare - Andreasen, Eugenia; Bauducco, Sofía; Dardati, Evangelina; Mendoza, Enrique G (National Bureau of Economic Research Working Paper Series, 2023)
We show that capital controls have large adverse effects on misallocation, exports and welfare using a dynamic Melitz-OLG model with heterogeneous firms, monopolistic competition, endogenous trade participation and collateral constraints. Static effects increase misallocation by reducing capital-labor ratios and rising firm prices, dynamic effects reduce it by incentivizing saving and delaying entry into export markets, and general equilibrium effects are ambiguous. Firms at the collateral constraint or at their optimal scale are barely affected but those in between are severely affected. Calibrated to the 1990s Chilean encaje, the model yields higher aggregate misallocation with larger effects on exporters and high-productivity firms. Social welfare falls and welfare of exporters falls significantly more. LTV regulation cuts credit by the same amount at sharply lower costs, because it spreads the burden of the cut more evenly. A panel data analysis of Chilean manufacturing firms yields strong evidence supporting the model's predictions.
Author contact info: Eugenia Andreasen Universidad de Chile Diagonal Paraguay 257 Santiago Chile E-Mail: eandreasen@fen.uchile.cl Sofía Bauducco Central Bank of Chile Agustinas 1180 Santiago Chile E-Mail: sbauducco@bcentral.cl Evangelina Dardati Av. Santa Clara 797 Huechuraba Santiago Chile E-Mail: edardati@gmail.com Enrique G. Mendoza Department of Economics University of Pennsylvania 3718 Locust Walk Philadelphia, PA 19104 Tel: 215-898-7701 E-Mail: egme@sas.upenn.edu

A Mother’s Voice: Impacts of Spousal Communication Training on Child Health Investments - Björkman-Nyqvist, Martina; Jayachandran, Seema; Zipfel, Celine P (National Bureau of Economic Research Working Paper Series, 2023)
Building on prior evidence that mothers often have a stronger preference for spending on children than fathers do, we use a randomized experiment to evaluate the impacts of a communication training program for mothers on child health in Uganda. The hypothesis is that the training will enable women to better convey their knowledge and preferences to their husbands and, thereby, boost investments in children's health. We find that the program increases spousal discussion about the family's health, nutrition, and finances. However, this does not increase overall adoption of health-promoting behaviors or improve child anthropometrics. One exception is that the communication training increases women's and children’s intake of protein-rich foods as well as household spending on these foods.
Author contact info: Martina Bjorkman-Nyqvist Sveavägen 65 SE-113 83 Stockholm Sweden E-Mail: Martina.Bjorkman.Nyqvist@hhs.se Seema Jayachandran Department of Economics Julis Romo Rabinowitz Building Princeton University Princeton, NJ 08544 E-Mail: jayachandran@princeton.edu Céline Zipfel Sveavägen 65 SE-113 83 Stockholm 11383 Sweden Tel: +46700399462 E-Mail: Celine.Zipfel@hhs.se

Optimal Monetary Policy with Heterogeneous Agents: Discretion, Commitment, and Timeless Policy - Dávila, Eduardo; Schaab, Andreas (National Bureau of Economic Research Working Paper Series, 2023)
This paper characterizes optimal monetary policy in a canonical heterogeneous-agent New Keynesian (HANK) model with wage rigidity. Under discretion, a utilitarian planner faces the incentive to redistribute towards indebted, high marginal utility households, which is a new source of inflationary bias. With commitment, i) zero inflation is the optimal long-run policy, ii) time-consistent policy requires both inflation and distributional penalties, and iii) the planner trades off aggregate stabilization against distributional considerations, so Divine Coincidence fails. We compute optimal stabilization policy in response to productivity, demand, and cost-push shocks using sequence-space methods, which we extend to Ramsey problems and welfare analysis.
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

Immigration, The Long-Term Care Workforce, and Elder Outcomes in the U.S. - Grabowski, David C; Gruber, Jonathan; McGarry, Brian (National Bureau of Economic Research Working Paper Series, 2023)
Although debates over immigration remain contentious, one important sector served heavily by immigrants faces a critical labor shortage: nursing homes. We merge a variety of data sets on immigration and nursing homes and use a shift-share instrumental variables analysis to assess the impact of increased immigration on nursing home staffing and care quality. We show that increased immigration significantly raises the staffing levels of nursing homes in the U.S., particularly in full time positions. We then show that this has an associated very positive effect on patient outcomes, particularly for those who are short stayers at nursing homes, and particularly for immigration of Hispanic staff.
Author contact info: David C. Grabowski Harvard University Department of Health Care Policy Harvard Medical School 180 Longwood Avenue Boston, MA 02115 E-Mail: grabowski@med.harvard.edu 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 Brian McGarry 601 Elmwood Ave Box MCH Rochester, New 14642 Tel: (585) 275-4617 E-Mail: brian_mcgarry@urmc.rochester.edu

A Tractable Income Process for Business Cycle Analysis - Guvenen, Fatih; McKay, Alisdair; Ryan, Conor B (National Bureau of Economic Research Working Paper Series, 2023)
We estimate an income process that is consistent with key facts on individual income risk and its variation over the business cycle. In particular, the estimated process generates income fluctuations that display (i) flat and acyclical variance, (ii) volatile and procyclical skewness, (iii) very high kurtosis, and (iv) a moderate rise in cross-sectional inequality over the life cycle, all consistent with the US data. Furthermore, the income process captures the predictable nature of business cycle income risk: income changes during a business cycle episode are partly predicted by income levels before that episode. The estimated process features a time-varying distribution of innovations as well as a factor structure for business cycle exposure. Incorporating the estimated process into a business cycle model adds only one state variable—as in the workhorse persistent-plus-transitory income process—making it a tractable option for modelers.
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 Alisdair McKay Federal Reserve Bank of Minneapolis 90 Hennepin Avenue Minneapolis, MN 55401 Tel: 612/204-5439 E-Mail: alisdair.mckay@gmail.com Conor B. Ryan Department of Economics Pennsylvania State University 505 Kern Building University Park, PA 16802 E-Mail: conor.ryan@psu.edu

Loose Monetary Policy and Financial Instability - Grimm, Maximilian; Jordà, Òscar; Schularick, Moritz; Taylor, Alan M (National Bureau of Economic Research Working Paper Series, 2023)
Do periods of persistently loose monetary policy increase financial fragility and the likelihood of a financial crisis? This is a central question for policymakers, yet the literature does not provide systematic empirical evidence about this link at the aggregate level. In this paper we fill this gap by analyzing long-run historical data. We find that when the stance of monetary policy is accommodative over an extended period, the likelihood of financial turmoil down the road increases considerably. We investigate the causal pathways that lead to this result and argue that credit creation and asset price overheating are important intermediating channels.
Author contact info: Maximilian Grimm University of Bonn Department of Economics Adenauerallee 24-42 53113 Bonn Germany E-Mail: maximilian-grimm@uni-bonn.de Òscar Jordà Economic Research, MS 1130 Federal Reserve Bank of San Francisco San Francisco, CA 94105 E-Mail: oscar.jorda@gmail.com Moritz Schularick Kiel Institute for the World Economy Kiellinie 66 24105 Kiel Germany E-Mail: moritz.schularick@ifw-kiel.de Alan M. Taylor Columbia University 1313 International Affairs 420 West 118th Street New York, NY 10027 E-Mail: amt2314@columbia.edu

Language Models and Cognitive Automation for Economic Research - Korinek, Anton (National Bureau of Economic Research Working Paper Series, 2023)
Large language models (LLMs) such as ChatGPT have the potential to revolutionize research in economics and other disciplines. I describe 25 use cases along six domains in which LLMs are starting to become useful as both research assistants and tutors: ideation, writing, background research, data analysis, coding, and mathematical derivations. I provide general instructions and demonstrate specific examples for how to take advantage of each of these, classifying the LLM capabilities from experimental to highly useful. I hypothesize that ongoing advances will improve the performance of LLMs across all of these domains, and that economic researchers who take advantage of LLMs to automate micro tasks will become significantly more productive. Finally, I speculate on the longer-term implications of cognitive automation via LLMs for economic research.
Author contact info: Anton Korinek Department of Economics University of Virginia Monroe Hall 246 248 McCormick Rd Charlottesville, VA 22904 E-Mail: anton@korinek.com

The Economic Opportunity Cost of Green Recovery Plans - Fitzgerald, Timothy; Mulligan, Casey B (National Bureau of Economic Research Working Paper Series, 2023)
Advocates in several countries have promoted a “green recovery” from the pandemic, with an emphasis on measures to address climate objectives. We evaluate proposals for the United States and find that as stated, ambitious plans to further cut emissions from transportation and electricity will require more inputs to produce the same outputs, resulting in recurring costs of up to $483 billion per year. We forecast that real GDP and consumption will be 2-3 percent less in the long run if policies are implemented as stated, underscoring the opportunity costs of achieving green objectives when resources might be more efficiently deployed.
Author contact info: Timothy Fitzgerald Rawls College of Business Texas Tech University 703 Flint Avenue Lubbock, TX 79409 Tel: 806-834-6472 E-Mail: timothy.fitzgerald@ttu.edu Casey B. Mulligan University of Chicago Department of Economics 1126 East 59th Street Chicago, IL 60637 Tel: 773/702-9017 Fax: 773/702-8490 E-Mail: c-mulligan@uchicago.edu

Estimating Causal Effects of Fertility on Life Course Outcomes: Evidence Using A Dyadic Genetic Instrumental Variable Approach - Zheng, Boyan; Lu, Qiongshi; Fletcher, Jason (National Bureau of Economic Research Working Paper Series, 2023)
The causal effects of fertility are a central focus in the social sciences, but the analysis is challenged by the endogeneity of fertility choices. Earlier work has proposed several “natural experiments” from twin births or gender composition of earlier births to assess whether having more children affects adults’ outcomes, though there are limitations to using rare (twins) and weak (gender composition) instrumental variables for fertility. This paper proposes a new “natural experiment” approach to assessing the causal effects of fertility by measuring the combination of couples’ genetics in predicting fertility—a dyadic genetic instrumental variable, where the key idea (exclusion restriction) is that the interactions of the couple’s genetics that shift the likelihood of fertility is unknown to the couples. We use a nationally representative sample of couples to examine the long-lasting effects of fertility on older adults’ life outcomes, including labor market outcomes, personality traits, and subjective wellbeing. We find that fertility reduces females’ extraversion and years of working and some evidence indicates that fertility reduces both males’ and females’ lifetime number of jobs worked.
Author contact info: Boyan Zheng E-Mail: bzheng9@wisc.edu Qiongshi Lu 425 Henry Mall #2104, Biotechnology Center Madison, WI 53706 USA E-Mail: qlu@biostat.wisc.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

Spatial Production Networks - Arkolakis, Costas; Huneeus, Federico; Miyauchi, Yuhei (National Bureau of Economic Research Working Paper Series, 2023)
We use new theory and data to study how firms endogenously form production networks across regions and countries. Supplier and buyer relationships form depending on firms' productivity and geographic location. We characterize the normative and positive properties of the spatial distribution of economic activity and welfare in general equilibrium. We calibrate the model using domestic and international firm-to-firm trade data from Chile. Both iceberg trade costs and search and matching frictions are important for aggregate trade flows and production networks. Endogenous formation of production networks leads to larger and more dispersed effects of international and intra-national trade cost shocks.
Author contact info: Costas Arkolakis Department of Economics Yale University, 87 Trumbull Street P.O. Box 208268 New Haven, CT 06520-8268 Tel: 203/432-3527 Fax: 203/432-6323 E-Mail: costas.arkolakis@yale.edu Federico Huneeus 419 Chapel Drive Box 90097 Economics Department Duke University Durham, NC 27708 United States Tel: 9196601800 E-Mail: federico.huneeus@duke.edu Yuhei Miyauchi Department of Economics, Room 412A 270 Bay State Road Boston University Boston, Mass 02215 United States Tel: 6177106907 E-Mail: miyauchi@bu.edu

Measuring Domestic Factor Content in Bilateral and Sectoral-Level Trade Flows - Wang, Zhi; Wei, Shang-Jin; Zhu, Kunfu (National Bureau of Economic Research Working Paper Series, 2023)
Measuring country origins of factor content in bilateral or sector-level exports is important to understand evolution of regional and global value chains and the roles of individual country-sectors in these chains. This paper proposes a method to distinguish between measures based on backward and forward linkages and between net and gross factor content. It is consistent with the System of National Account Standard and has the adding-up property. In comparison, these properties do not hold for the “hypothetical extraction method” proposed by Los et al. (2016). We show a number of examples involving disaggregated trade in which the two methods diverge.
Author contact info: Zhi Wang Schar School of Policy and Government George Mason Universty 3351 Fairfax Drive, MS 3B1, Alington, VA 22201 E-Mail: zwang36@gmu.edu Shang-Jin Wei Columbia Business School Columbia University Kravis Building Room 552 665 West 130th Street New York, New 10027 E-Mail: shangjin.wei@columbia.edu Kunfu Zhu School of Economics Renmin University of China Beijing 100872, CHINA E-Mail: kfzhu@ruc.edu.cn

Dynamic Pricing Regulation and Welfare in Insurance Markets - Aizawa, Naoki; Ko, Ami (National Bureau of Economic Research Working Paper Series, 2023)
While the traditional role of insurers is to provide protection against idiosyncratic risks of individuals, insurers themselves face substantial uncertainties due to aggregate shocks. To prevent insurers from passing through aggregate risks to consumers, governments have increasingly adopted dynamic pricing regulations that limit insurers' ability to change premiums over time. This paper develops and estimates an equilibrium model with dynamic pricing and firm entry and uses it to evaluate the design of dynamic pricing regulations in the U.S. long-term care insurance (LTCI) market. We find that stricter dynamic pricing regulation lowers social welfare as the benefit from improved premium stability is outweighed by the cost of reduced insurer participation. The welfare loss from stricter dynamic pricing regulation could be mitigated if the government also expands public LTCI through Medicaid.
Author contact info: Naoki Aizawa Department of Economics University of Wisconsin-Madison 1180 Observatory Drive Madison, WI 53706 E-Mail: naoki.aizawa@nber.org Ami Ko Georgetown University Department of Economics 3700 O st NW, ICC 557 Washington DC 20007 E-Mail: ami.ko@georgetown.edu

Direct and Spillover Effects of Provider Vaccination Facilitation - Cullen, Julie Berry; Humlum, Maria K; Suziedelyte, Agne; Thingholm, Peter Rønø (National Bureau of Economic Research Working Paper Series, 2023)
We explore physicians’ role in moderating compliance with recommended vaccinations. Using administrative data on the universe of Danish children and their healthcare providers, we first construct and validate a measure of providers’ propensities to comply with recommended vaccinations from birth to age 6 based on a two-way fixed effects model. We then show the measure meaningfully affects uptake of the Human Papillomavirus (HPV) vaccine among adolescent patients, and speeds recovery from a media-induced crisis to perceived HPV vaccine safety. Providers affect decisions beyond those of their own patients, influencing patients’ younger cousins’ uptake by one-fifth as much as own patients.
Author contact info: Julie Berry Cullen Department of Economics - 0508 University of California, San Diego 9500 Gilman Drive La Jolla, CA 92093-0508 Tel: 858/822-2056 Fax: 858/534-7040 E-Mail: jbcullen@ucsd.edu Maria K. Humlum Department of Economics and Business Economics Aarhus University Fuglesangs Allé 4 building 2622, 102a 8210 Aarhus V Denmark E-Mail: mhumlum@econ.au.dk Agne Suziedelyte City, University of London Department of Economics Northampton Square London EC1V 0HB U.K. E-Mail: agne.suziedelyte@city.ac.uk Peter R. Thingholm Department of Economics and Business Economics Aarhus University Fuglesangs Allé 4, 8210 Aarhus V Denmark E-Mail: peter.thingholm@gmail.com

The Effect of R&D on Quality, Productivity, and Welfare - Chan, Mons; Petrin, Amil; Warzynski, Frederic (National Bureau of Economic Research Working Paper Series, 2023)
In this paper we provide a methodology that jointly studies production and demand for multi-product firms using detailed firm-product level data from Denmark. We estimate marginal cost by combining production function estimation with a cost function that allows for quasi-fixed inputs. We use a discrete choice demand model that extends insights from Berry, Levinsohn and Pakes (1995) to obtain a measure of the demand shock (quality). We estimate the relationship between product (process) R&D and quality (efficiency), and find strong evidence that process innovation is related to higher efficiency, while product innovation is associated with higher product quality. We discuss the welfare implications of these two distinct innovation activities.
Author contact info: Mons Chan Queen's Unviersity Department of Economics 94 University Ave Kingston K7L 3N6 Canada E-Mail: mons.chan@queensu.ca Amil Petrin Department of Economics University of Minnesota 4-101 Hanson Hall Minneapolis, MN 55455 Tel: 612/625-0145 Fax: 612/624-0209 E-Mail: petrin@umn.edu Frederic Warzynski Aarhus University E-Mail: fwa@asb.dk

Inclusion and Democratization Through Web3 and DeFi? Initial Evidence from the Ethereum Ecosystem - Cong, Lin William; Tang, Ke; Wang, Yanxin; Zhao, Xi (National Bureau of Economic Research Working Paper Series, 2023)
Web3 and DeFi are widely advocated as innovations for greater financial inclusion and democratization. We assemble the most comprehensive dataset to date on the largest Web3 ecosystem and use large-scale computing to conduct an initial investigation. We describe Ethereum’s network structure, time trends, and distributions of transactions, mining, and ownership. Mining income and Ether ownership are concentrated in exchanges and a few individual nodes. Network activities evolve from peer-to-peer to user-DApps/DeFi interactions, with significantly more transactions by large players. Moreover, high percentage transaction fees, congestion-induced fluctuation of gas prices, suboptimal reserve setting, and large return volatility of tokens present particular challenges for small, poor, unsophisticated, and new nodes, not to mention that the high failure rates hurt all users. Finally, we present suggestive causal evidence that base-fee burning mechanisms (e.g., EIP-1559) and airdrop programs (e.g., OmiseGo Airdrop) facilitate inclusion through token monetary redistribution.
Author contact info: Lin William Cong SC Johnson College of Business Cornell University Sage Hall Ithaca, NY 14853 Tel: 607/255-7859 E-Mail: will.cong@cornell.edu Ke Tang Tsinghua University Beijing China E-Mail: ketang@tsinghua.edu.cn Yanxin Wang E-Mail: wyx980107@stu.xjtu.edu.cn Xi Zhao E-Mail: zhaoxi1@mail.xjtu.edu.cn

Donor Contracting Conditions and Public Procurement: Causal Evidence from Kenyan Electrification - Wolfram, Catherine; Miguel, Edward; Hsu, Eric; Berkouwer, Susanna B (National Bureau of Economic Research Working Paper Series, 2023)
There is limited causal evidence on the effects of different public procurement regulations on project quality and value-for-money for projects funded by national governments and foreign aid donors. This paper uses policy and experimental variation to study how two key contracting features—namely, contract bundling and monitoring—affect outcomes of a large economic development project. We leverage an unusual feature of Kenya’s nationwide electrification program: the quasi-random allocation of multilateral funding sources across nearby villages. African Development Bank (AfDB) projects used bundled contracts while the World Bank (WB) employed unbundled contracts together with strengthened inspections. To measure impacts, we collect on-the-ground engineering assessments, power quality data, household surveys, and analyze original contracts. The analysis suggests a stark trade-off: WB procedures delayed construction completion by 16 months relative to AfDB sites but improved construction quality by a sizeable 0.6 standard deviations. To disentangle the effects of contract bundling versus monitoring, we conducted randomized audits that enhanced monitoring. The audits improve household connectivity, network size, and voltage at AfDB sites, but have no impact at WB sites, suggesting monitoring and unbundling contracts may be substitutes. Given the apparent trade-off, we investigate how net benefits depend on policymaker time preferences and infrastructure longevity.
Author contact info: Catherine Wolfram Massachusetts Institute of Technology Sloan School of Management 100 Main St. Cambridge, MA 02142 E-Mail: cwolfram@mit.edu Edward Miguel Department of Economics University of California, Berkeley 530 Evans Hall #3880 Berkeley, CA 94720 Tel: 510/642-7162 Fax: 510/642-6615 E-Mail: emiguel@econ.berkeley.edu Eric Hsu 34 Hillhouse Ave New Haven, CT 06511 E-Mail: eric.hsu@yale.edu Susanna B. Berkouwer The Wharton School University of Pennsylvania 322 Vance Hall 3733 Spruce Street Philadelphia, PA 19104 E-Mail: sberkou@wharton.upenn.edu

Ideas Mobilize People: The Diffusion of Communist Ideology in China - Bai, Ying; Jia, Ruixue; Wang, Runnan (National Bureau of Economic Research Working Paper Series, 2023)
Can ideas mobilize people into collective action? We provide a positive answer to this question by studying how exposure to the Communist ideology shaped an individual’s choice to join the Chinese Communist Party (CCP) during the party’s formative stage. The individuals we focus on are cadets at the Whampoa Military Academy, who subsequently fought in 20th-century China’s most important wars. Our identification strategy exploits the locality-time-content variation in the circulation of the New Youth magazine—the major platform to promote Communism after the Treaty of Versailles in 1919—as well as the variation in an individual’s location over time. By comparing the Whampoa cadets living in a locality with post-1919 New Youth available against those who had lived in the same locality but missed this channel, we demonstrate that the former were significantly more likely to join the CCP. In future political struggles, those whose party choice was more influenced by this ideology channel were less likely to quit the CCP and more likely to sacrifice their lives. Additionally, we document that family background cannot predict the party choice of these political pioneers but social networks can complement ideology exposure.
Author contact info: Ying Bai Department of Economics, The Chinese University of Hong Kong Shatin, Hong Kong E-Mail: rickybai@gmail.com Ruixue Jia School of Global Policy and Strategy University of California at San Diego 9500 Gilman Drive #0519 La Jolla, CA 92093 Tel: 858/534-5969 E-Mail: ruixue.jia@gmail.com Runnan Wang Department of Economics The Chinese University of Hong Kong Shatin, Hong Kong E-Mail: rwang@link.cuhk.edu.hk

Unsupervised Machine Learning for Explainable Health Care Fraud Detection - Shekhar, Shubhranshu; Leder-Luis, Jetson; Akoglu, Leman (National Bureau of Economic Research Working Paper Series, 2023)
The US spends more than 4 trillion dollars per year on health care, largely conducted by private providers and reimbursed by insurers. A major concern in this system is overbilling, waste and fraud by providers, who face incentives to misreport on their claims in order to receive higher payments. In this work, we develop novel machine learning tools to identify providers that overbill insurers. Using large-scale claims data from Medicare, the US federal health insurance program for elderly adults and the disabled, we identify patterns consistent with fraud or overbilling among inpatient hospitalizations. Our proposed approach for fraud detection is fully unsupervised, not relying on any labeled training data, and is explainable to end users, providing reasoning and interpretable insights into the potentially suspicious behavior of the flagged providers. Data from the Department of Justice on providers facing anti-fraud lawsuits and case studies of suspicious providers validate our approach and findings. We also perform a post-analysis to understand hospital characteristics, those not used for detection but associate with a high suspiciousness score. Our method provides an 8-fold lift over random targeting, and can be used to guide investigations and auditing of suspicious providers for both public and private health insurance systems.
Author contact info: Shubhranshu Shekhar 415 South St Waltham, MA 02453 United States Tel: 4126260424 E-Mail: sshekhar@brandeis.edu Jetson Leder-Luis Questrom School of Business Boston University 595 Commonwealth Avenue Boston, MA 02215 Tel: 914/844-9457 E-Mail: jetson@bu.edu Leman Akoglu 2118C Hamburg Hall Pittsburgh, PA 15213 USA E-Mail: lakoglu@andrew.cmu.edu

Hobbesian Wars and Separation of Powers - Li, Weijia; Roland, Gérard; Xie, Yang (National Bureau of Economic Research Working Paper Series, 2023)
This paper formalizes the principle that persecution power of government may generate violent contests over it. We show that this principle yields a large set of theoretical insights on different separation-of-powers institutions that can help to preempt such contests under different socio-economic conditions. When socio-economic cohesion is low, the risk of contests can be eliminated only by individual veto against persecution. Moreover, such unanimity rule is resilient to autocratic shocks only when the chief executive does not control the legislative agenda, i.e., the executive and legislative branches are separate. When socio-economic cohesion is high, the risk of violent contests can be eliminated without individual veto, but only by a persecution-reviewing judiciary whose members cannot join the executive branch in the future, i.e., when the executive and judicial branches are separate. Our results shed light on the evolution of separation of powers in European history.
Author contact info: Weijia Li Department of Economics Monash University Caulfield East VIC 3145 Australia E-Mail: Weijia.Li@monash.edu Gérard Roland Department of Economics University of California, Berkeley 627 Evans Hall, #3880 Berkeley, CA 94720 Tel: 510/642-4321 Fax: 510/642-6615 E-Mail: groland@econ.berkeley.edu Yang Xie 900 University Avenue 4128 Sproul Hall Riverside, CA 92521 E-Mail: yang.xie@ucr.edu

Catching Up by ‘Deglobalizing’: Capital Account Policy and Economic Growth - Bergin, Paul; Choi, Woo Jin; Pyun, Ju H (National Bureau of Economic Research Working Paper Series, 2023)
While substantial empirical research has evaluated the question of whether capital account openness promotes economic growth, this paper finds empirical evidence for cases where the opposite is true—that a policy of capital controls can promote economic growth, when combined with a policy of reserve accumulation. Using panel data from 45 countries from 1985–2019, we find that capital controls combined with reserve accumulation—strategic capital account policy—contribute to growth in real GDP and TFP. This effect is stronger for emerging markets and prior to the global financial crisis. We show that the policy is strongly associated with enlarging the scale of the manufacturing sector and productivity, and is consistent with theories of learning-by-doing through exporting.
Author contact info: Paul Bergin Department of Economics University of California, Davis One Shields Ave. Davis, CA 95616 Tel: 530/752-8398 Fax: 530/752-9382 E-Mail: prbergin@ucdavis.edu Woo Jin Choi University of Seoul E-Mail: wooj.choi@gmail.com Ju H. Pyun Korea University Business School 145 Anam-Ro Seongbuk-Gu Seoul 02841 Korea E-Mail: jhpyun@korea.ac.kr

The Economics of Digital Privacy - Goldfarb, Avi; Que, Verina F (National Bureau of Economic Research Working Paper Series, 2023)
There has been increasing attention to privacy in the media and in regulatory discussions. This is a consequence of the increased usefulness of digital data. The literature has emphasized the benefits and costs of digital data flows to consumers and firms. The benefits arise in the form of data-driven innovation, higher quality products and services that match consumer needs, and increased profits. The costs relate to intrinsic and instrumental values of privacy. Under standard economic assumptions, this framing of a cost-benefit tradeoff might suggest little role for regulation beyond ensuring consumers are appropriately informed in a robust competitive environment. The empirical literature thus far has focused on this direct cost-benefit assessment, examining how privacy regulations have affected various market outcomes. However, an increasing body of theory work emphasizes externalities related to data flows. These externalities, both positive and negative, suggest benefits to the targeted regulation of digital privacy.
Author contact info: Avi Goldfarb Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 Tel: 416/946-8604 Fax: 416/978-5433 E-Mail: agoldfarb@rotman.utoronto.ca Verina F. Que Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 E-Mail: f.que@rotman.utoronto.ca

To Starve or to Stoke? Understanding Whether Divestment vs. Investment Can Steer (Green) Innovation - Pless, Jacquelyn (National Bureau of Economic Research Working Paper Series, 2023)
More than 1,500 organizations and investors representing over $40 trillion in assets have committed to fossil fuel divestment to combat climate change. Will it work? This chapter explores whether divestment might induce green innovation, a critical component of transitioning to a cleaner economy. Divestment could theoretically steer innovation by increasing the cost of capital for "dirty firms," but it is unclear whether the effects will be large enough to significantly reduce investment opportunities. I argue that continuing to invest in dirty industries could drive green innovation conditional on investors being socially-conscious and governing through "voice." This hinges upon understanding which firm strategies actually foster green innovation, though, and the commonly-used ESG indicators come with several limitations. I demonstrate how decomposing them and using alternative approaches to measuring environmental performance can improve investment, strategy, and management decision-making and policy design. I examine the relationship between 14 specific practices and whether large firms in 16 pollution-intensive sectors are on track for meeting the Paris Agreement emissions targets ("carbon performance"). I find no correlation between carbon performance and the most basic practices, like disclosing emissions, but a positive correlation for five more explicit strategies: setting long-term quantitative emissions targets, having a third party verify emissions data, incorporating environmental performance into executive remuneration policies, supporting governmental climate change efforts, and setting an internal price of carbon. I construct a new best practices score based on these results and find that it has a much higher correlation with carbon performance than some other composite measures.
Author contact info: Jacquelyn Pless MIT Sloan School of Management 100 Main Street Cambridge, MA 02142 United States E-Mail: jpless@mit.edu

The Impact of COVID-19 on Workers’ Expectations and Preferences for Remote Work - Chen, Yuting; Cortés, Patricia; Koşar, Gizem; Pan, Jessica; Zafar, Basit (National Bureau of Economic Research Working Paper Series, 2023)
We study how COVID-19 affected the prevalence, expectations, and attitudes toward remote work using specially designed surveys. The incidence of remote work remains higher than pre-pandemic levels and both men and women expect this to persist post-pandemic. Workers also report increased preference for remote work as a result of the pandemic. These changes are strongly correlated with individuals’ exposure to the pandemic induced work-from-home shock, indicating that experience with remote work during the pandemic likely shaped expectations and preferences toward WFH. The magnitude of the effects on preferences and expectations are similar across gender, marital status, and presence of children.
Author contact info: Yuting Chen E-Mail: yuting@bu.edu Patricia Cortés Questrom School of Business Boston University 595 Commonwealth Avenue Boston, MA 02215 Tel: 617/353-3646 E-Mail: pcortes@bu.edu Gizem Koşar Microeconomic Studies Federal Reserve Bank of New York 33 Liberty Street New York, NY 10045 E-Mail: gizem.kosar@gmail.com Jessica Pan Department of Economics National University of Singapore 1 Arts Link Singapore E-Mail: jesspan@nus.edu.sg Basit Zafar Department of Economics University of Michigan 611 Tappan Street Ann Arbor, Michigan 48109 E-Mail: basitak@gmail.com

Varying Impacts of Letters of Recommendation on College Admissions - Ben-Michael, Eli; Feller, Avi; Rothstein, Jesse (National Bureau of Economic Research Working Paper Series, 2023)
In a pilot program during the 2016-17 admissions cycle, the University of California, Berkeley invited many applicants for freshman admission to submit letters of recommendation. This proved controversial within the university, with concerns that this change would further disadvantage applicants from disadvantaged groups. To inform this debate, we use this pilot as the basis for an observational study of the impact of submitting letters of recommendation on subsequent admission, with the goal of estimating how impacts vary across pre-defined subgroups. Understanding this variation is challenging in an observational setting because estimated impacts reflect both actual treatment effect variation and differences in covariate balance across groups. To address this, we develop balancing weights that directly optimize for “local balance” within subgroups while maintaining global covariate balance between treated and control units. Applying this approach to the UC Berkeley pilot study yields excellent local and global balance, unlike more traditional weighting methods, which fail to balance covariates within subgroups. We find that the impact of letters of recommendation increases with applicant strength. However, we find little average difference for applicants from disadvantaged groups, although this result is more mixed. In the end, we conclude that soliciting letters of recommendation from a broader pool of applicants would not meaningfully change the composition of admitted undergraduates.
Author contact info: Eli Ben-Michael Carnegie Mellon University 4800 Forbes Ave Pittsburgh, PA 15213 Tel: 4122689108 E-Mail: ebenmichael@cmu.edu Avi Feller Goldman School of Public Policy & Department of Statistics University of California, Berkeley 2607 Hearst Avenue Berkeley, CA 94720 USA E-Mail: afeller@berkeley.edu Jesse Rothstein Goldman School of Public Policy and Department of Economics University of California, Berkeley 2607 Hearst Avenue #7320 Berkeley, CA 94720-7320 Tel: 510/495-0646 Fax: 510/643-9657 E-Mail: rothstein@berkeley.edu

How the Internet Changed the Market for Print Media - Bhuller, Manudeep; Havnes, Tarjei; McCauley, Jeremy; Mogstad, Magne (National Bureau of Economic Research Working Paper Series, 2023)
Combining comprehensive data from the Norwegian media market on newspaper circulation, readership, revenues, factor inputs, and product characteristics with plausibly exogenous variation in the availability and adoption of broadband internet, this paper provides causal evidence on how the internet affected the traditional print media market. Household adoption of broadband internet triggered large reductions in print readership and circulation and equally large increases in online news readership. Despite strong substitution from print to online news consumption, newspaper firms’ revenues fell by almost 30%. Newspaper firms responded by dramatically cutting costs, either by shedding labor inputs or by reducing the physical size of newspaper sheets, and in doing so avoided meaningful losses in profits. The printed newspaper product available to customers also changed, as newspapers shifted content away from tabloid to more serious news. This paper offers a case study on how an adverse technology shock transmits through firms with multiple margins of adjustment, and provides an explanation for the economic resilience of newspapers.
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 Tarjei Havnes E-Mail: tarjeiha@gmail.com Jeremy McCauley 3C4, Priory Road Complex Bristol BS8 1TU United Kingdom E-Mail: jeremymccauley@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

Frames, Incentives, and Education: Effectiveness of Interventions to Delay Public Pension Claiming - Glenzer, Franca; Michaud, Pierre-Carl; Staubli, Stefan (National Bureau of Economic Research Working Paper Series, 2023)
In many retirement income systems, people forgo a higher stream of public pension income by claiming early. We provide both survey-experimental and quasi-experimental evidence that the timing of public pension claiming is relatively inelastic to changes in financial incentives. Using the survey experiment, we evaluate the effect of two different educational interventions and different ways of framing the decision on the present value of participants' expected pension payments. While all three types of interventions induce delays, these interventions have heterogeneous financial consequences. Educating participants leads to claiming ages with higher pension wealth. In contrast, framing and financial incentives do not improve, and even worsen, financial outcomes. Understanding the impact of various policy tools on expected pension wealth is essential for designing policies to delay claiming.
Author contact info: Franca Glenzer E-Mail: franca.glenzer@hec.ca Pierre-Carl Michaud HEC Montréal 3000 Côte-Sainte-Catherine Road Montréal QC H3T 2A7 Tel: 514/340-6466 E-Mail: pierre-carl.michaud@hec.ca Stefan Staubli Department of Economics University of Calgary 2500 University Drive NW Calgary, AB T2N 1N4 Tel: 403/220-6180 E-Mail: sstaubli@ucalgary.ca

The Cyclicality of Births and Babies’ Health, Revisited: Evidence from Unemployment Insurance - Dettling, Lisa J; Kearney, Melissa Schettini (National Bureau of Economic Research Working Paper Series, 2023)
We revisit the cyclical nature of birth rates and infant health and investigate to what extent the relationship between aggregate labor market conditions and birth outcomes is mitigated by the consumption smoothing income assistance delivered through unemployment insurance (UI). We introduce a novel empirical test of standard neoclassical models of fertility that directly tests the prediction of opposite-signed income and intertemporal substitution effects of business cycles by examining the interaction of the aggregate unemployment rate with a measure of potential income replacement from UI. Our results show that as UI benefit generosity reaches 100 percent income replacement, there is no effect of the unemployment rate on fertility rates. This implies that the well-documented cyclical nature of fertility rates is about access to liquidity. We also provide novel evidence that infant health is countercyclical based on timing of conception, but procyclical based on time in utero. The negative relationship between the in utero aggregate unemployment rate and infant health also disappears when potential UI replacement rates reach 100 percent. Our results indicate that the social insurance provided by UI has a pro-natalist effect and improves babies’ health.
Author contact info: Lisa J. Dettling Federal Reserve Board of Governors 20th & Constitution Ave., NW Washington, DC 20551 E-Mail: Lisa.J.Dettling@frb.gov Melissa Schettini Kearney Department of Economics University of Maryland 3105 Tydings Hall College Park, MD 20742 Tel: 301/405-6202 E-Mail: kearney@umd.edu

Does School Choice Increase Crime? - Bibler, Andrew; Billings, Stephen B; Ross, Stephen (National Bureau of Economic Research Working Paper Series, 2023)
School choice lotteries are an important tool for allocating access to high-quality and oversubscribed public schools. While prior evidence suggests that winning a school lottery decreases adult criminality, there is little evidence for how school choice lotteries impact non-lottery students who are left behind at their neighborhood school. We leverage variation in actual lottery winners conditional on expected lottery winners to link the displacement of middle school peers to adult criminal outcomes. We find that non-applicant boys are more likely to be arrested as adults when applicants from their neighborhood win the school choice lottery. These effects are concentrated among boys who are at low risk of being arrested based on observables. Finally, we confirm evidence in the literature that students who win the lottery decrease adult criminality but show that after accounting for the negative impact on the students who forego the lottery, lotteries increase overall arrests and days incarcerated for young men.
Author contact info: Andrew Bibler 4505 S Maryland Pkwy Las Vegas, NV 89154 E-Mail: andrew.bibler@unlv.edu Stephen B. Billings University of Colorado Department of Finance Leeds School of Business Boulder, CO 80309 E-Mail: stephen.billings@colorado.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

On the Effectiveness of Foreign Exchange Reserves During the 2021-22 U.S. Monetary Tightening Cycle - Ahmed, Rashad; Aizenman, Joshua; Saadaoui, Jamel; Uddin, Gazi Salah (National Bureau of Economic Research Working Paper Series, 2023)
This paper examines whether the size of foreign exchange (FX) reserves can explain cross-country differences in foreign currency depreciation observed over the 2021-22 Federal Reserve monetary policy tightening that led to a sharp appreciation of the US dollar. Across a broad sample of countries, we document that an additional 10 percentage points of FX reserves/GDP held ex-ante were associated with 1.5 to 2 percent less exchange rate depreciation and this buffer effect was larger among less financially developed economies. Effects were more pronounced for large-reserve countries that sold reserves to intervene than for large-reserve countries that did not intervene, lending support to the presence of both balance sheet and intervention channels. Higher ex-ante policy rates were also associated with less depreciation especially among financially open economies. An analysis of daily currency movements following the June 2021 FOMC meeting corroborates these results. These findings suggest that FX reserves may promote monetary policy independence in the presence of global spillovers.
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 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 Jamel Saadaoui 46 Avenue de la Foret Noire Strasbourg 67000 France E-Mail: jamelsaadaoui@gmail.com Gazi Salah Uddin Department of Management and Engineering Linköping University Linköping 58183 Sweden E-Mail: gazi.salah.uddin@liu.se

Preferences for Firearms and Their Implications for Regulation - Moshary, Sarah; Shapiro, Bradley; Drango, Sara (National Bureau of Economic Research Working Paper Series, 2023)
This paper estimates consumer demand for firearms with the aim of predicting the likely impacts of firearm regulations on the number and types of guns in circulation. We first conduct a stated-choice-based conjoint analysis and estimate an individual-level demand model for firearms. We validate our estimates using aggregate moments from observational data. Next, we use our estimates to simulate changes in the number and types of guns in circulation under alternative regulations. Importantly, we find that bans or restrictions that specifically target “assault weapons” increase demand for handguns, which are associated with the vast majority of firearm-related violence. We provide distributions of consumer surplus under counterfactuals and discuss how those distributions could be useful for crafting policy.
Author contact info: Sarah Moshary Haas School of Business University of California Berkeley 2220 Piedmont Ave Berkeley, CA 94720 E-Mail: moshary@berkeley.edu Bradley Shapiro Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-9316 E-Mail: Bradley.Shapiro@chicagobooth.edu Sara Drango Booth School of Business University of Chicago E-Mail: sdrango97@gmail.com

Life After Death: A Field Experiment with Small Businesses on Information Frictions, Stigma, and Bankruptcy - Bernstein, Shai; Colonnelli, Emanuele; Hoffman, Mitchell; Iverson, Benjamin (National Bureau of Economic Research Working Paper Series, 2023)
In an RCT with US small businesses, we document that a large share of firms are not well-informed about bankruptcy. Many assume that bankruptcy necessarily entails the death of a business and do not know about Chapter 11, where debts are renegotiated so that the business can continue operating. Firms also exhibit bankruptcy-related stigma, believing that bankruptcy is embarrassing, a sign of failure, and a negative signal to employees and customers. Short educational videos that address information or stigma increase knowledge and decrease stigma, both immediately and durably over 4 months. Videos increase reported interest in using Chapter 11 bankruptcy and increase intended debt and investment. However, we do not observe long-term real effects. A survey of bankruptcy attorneys and judges points to entrepreneurs’ overconfidence and, to a lesser extent, excessive perceived legal fees as first-order frictions explaining the limited real impact of treatments that only address information and stigma.
Author contact info: Shai Bernstein Harvard Business School Soldiers Field Boston, MA 02163 Tel: 617-495-5053 E-Mail: sbernstein@hbs.edu Emanuele Colonnelli Booth School of Business University of Chicago 5807 S Woodlawn Ave Chicago, IL 60637 E-Mail: emanuele.colonnelli@chicagobooth.edu Mitchell Hoffman Department of Economics University of California, Santa Barbara 3016 North Hall Santa Barbara, CA 93106 E-Mail: hoffman2@ucsb.edu Benjamin Iverson Department of Finance Brigham Young University Provo, UT 84602 E-Mail: biverson@byu.edu

The Benefits of Revealing Race: Evidence from Minority-owned Local Businesses - Aneja, Abhay; Luca, Michael; Reshef, Oren (National Bureau of Economic Research Working Paper Series, 2023)
Is there latent demand to support Black-owned businesses? To explore, we analyze a new feature that made it easier to identify Black-owned restaurants on a large online platform. We find that labeling restaurants as “Black-owned” increased customer engagement and firm performance, as measured by online traffic, calls, orders, and in person visits. These effects are most pronounced in left-leaning areas characterized by lower bias against racial minorities, as measured by regional variation in voting patterns and IAT scores. Restaurants that receive the label also see an increase in the fraction of reviews that are left by White customers.
Author contact info: Abhay Aneja University of California at Berkeley School of Law 225 Bancroft Way Berkeley, CA 94720 E-Mail: aneja@berkeley.edu Michael Luca Harvard Business School Soldiers Field Boston, MA 02163 Tel: 617/495-8382 E-Mail: mluca@hbs.edu Oren Reshef Olin Business School Washington University in St. Louis E-Mail: oren@wustl.edu

Paying Moms to Stay Home: Short and Long Run Effects on Parents and Children - Gruber, Jonathan; Kosonen, Tuomas; Huttunen, Kristiina (National Bureau of Economic Research Working Paper Series, 2023)
We study the impacts of a policy designed to reward mothers who stay at home rather than join the labor force when their children are under age three. We use regional and over time variation to show that the Finnish Home Care Allowance (HCA) decreases maternal employment in both the short and long term. The effects are large enough for the existence of home care benefit system to explain the higher short-term child penalty in Finland than comparable nations. Home care benefits also negatively affect the early childhood cognitive test results of children, decrease the likelihood of choosing academic high school, and increase youth crimes. We confirm that the mechanism of action is changing work/home care arrangements by studying a day care fee reform that had the opposite effect of raising incentives to work – with corresponding opposite effects on mothers and children compared to HCA. Our findings suggest that shifting child care from the home to the market increases labor force participation and improves child outcomes.
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 Tuomas Kosonen VATT Institute for Economic Research Arkadiankatu 7, P.O.Box 1279 00101, Helsinki Finland E-Mail: Tuomas.kosonen@vatt.fi Kristiina Huttunen Department of Economics Aalto University School of Economics 00076 Aalto Finland E-Mail: kristiina.huttunen@aalto.fi

Customized Cash Transfers: Financial Lives and Cash-flow Preferences in Rural Kenya - Kansikas, Carolina; Mani, Anandi; Niehaus, Paul (National Bureau of Economic Research Working Paper Series, 2023)
We examine the preferences of low-income households in Kenya over the structure of unconditional cash transfers. We find, first, that most prefer lumpier transfers, and many prefer delayed receipt—unlike the structures typical of safety-net programs, but consistent with evidence on the financial challenges of poverty. Second, poverty itself affects preferences: a little more financial slack when deciding increases desired delay. Finally, financial slack pays back: some delay—aligning transfers better with the seasonal cycle—increases deliberation, income, and goal progress 1.5 years later. Adapting cash transfer design to recipients’ decision-making environment could improve their financial choices and outcomes.
Author contact info: Carolina Kansikas E-Mail: Carolina.Kansikas@warwick.ac.uk Anandi Mani University of Oxford E-Mail: anandi.mani@bsg.ox.ac.uk Paul Niehaus Department of Economics University of California, San Diego 9500 Gilman Drive #0508 La Jolla, CA 92093 Tel: 858/534-3190 Fax: 858/534-7040 E-Mail: pniehaus@ucsd.edu

Crowding in Private Quality: The Equilibrium Effects of Public Spending in Education - Andrabi, Tahir; Bau, Natalie; Das, Jishnu; Karachiwalla, Naureen; Khwaja, Asim Ijaz (National Bureau of Economic Research Working Paper Series, 2023)
We estimate the equilibrium effects of a public-school grant program administered through school councils in Pakistani villages with multiple public and private schools and clearly defined catchment boundaries. The program was randomized at the village-level, allowing us to estimate its causal impact on the market. Four years after the start of the program, test scores were 0.2 sd higher in public schools. We find evidence of an education multiplier: test scores in private schools were also 0.2 sd higher in treated markets. Consistent with standard models of product differentiation, the education multiplier is greater for those private schools that faced a greater threat to their market power. Accounting for private sector responses increases the program's cost-effectiveness by 85% and affects how a policymaker would target spending. Given that markets with several public and private schools are now pervasive in low- and middle-income countries, prudent policy requires us to account for private sector responses to public policy, both in their design and in their evaluation.
Author contact info: Tahir Andrabi Department of Economics Pomona College Claremont, CA 91711 E-Mail: tandrabi@pomona.edu Natalie Bau Department of Economics University of California at Los Angeles Bunche Hall 8283 315 Portola Plaza Los Angeles, CA 90095 E-Mail: nbau@g.ucla.edu Jishnu Das McCourt School of Public Policy Georgetown University 37th & O Street NW Washington, DC 20057 Tel: 202/687-0433 E-Mail: jishnu.das@georgetown.edu Naureen Karachiwalla International Food Policy Research Institute 1201 I Street NW Washington, DC 20005 Tel: 202-862-6476 E-Mail: N.Karachiwalla@cgiar.org Asim Ijaz Khwaja Harvard Kennedy School Harvard University 79 JFK Street Cambridge, MA 02138 Tel: 617/494-7790 Fax: 617/496-8753 E-Mail: asim_ijaz_khwaja@harvard.edu

The Impact of Vertical Integration on Physician Behavior and Healthcare Delivery: Evidence from Gastroenterology Practices - Saghafian, Soroush; Song, Lina D; Newhouse, Joseph P; Landrum, Mary Beth; Hsu, John (National Bureau of Economic Research Working Paper Series, 2023)
US healthcare is undergoing a period of substantial change, with many hospitals vertically integrating with physician practices. Such integration could improve quality by promoting care coordination, but could also worsen it by impacting care delivery. Evidence on how physicians alter their behavior from the changes in financial ownership and the incentive structures of the integrated organizations is scant. We examine Medicare patients treated by gastroenterologists, a specialty with a recent increase in vertical integration. Using a causal model and large-scale patient-level national panel data that include 2.6 million patient visits across 5,488 physicians, we examine changes in various measures of care delivery. We find that physicians significantly alter care processes (e.g., in using anesthesia with deep sedation) after they vertically integrate, and that patients' post-procedure complications increase substantially. We provide evidence that the financial incentive structure of the integrated practices is the main reason for the changes in physician behavior, since it discourages the integrated practices from allocating expensive resources to relatively unprofitable procedures. Although integration improves operational efficiency measured by physicians' throughput, it negatively affects quality and overall spending. We note some potential policy levers through which policymakers could mitigate the negative consequences of vertical integration.
Author contact info: Soroush Saghafian 79 JFK Street Mailbox 37 Cambridge, MA 02138 E-Mail: Soroush_Saghafian@hks.harvard.edu Lina Song E-Mail: linasong@nber.org Joseph P. Newhouse Division of Health Policy Research and Education Harvard University 180 Longwood Avenue Boston, MA 02115-5899 Tel: 617/432-1325 Fax: 617/432-3503 E-Mail: newhouse@hcp.med.harvard.edu Mary Beth Landrum Harvard Medical School Department of Health Care Policy 180 Longwood Avenue Boston, MA 02115-5899 Tel: (617) 432-2460 Fax: (617) 432-2563 E-Mail: landrum@hcp.med.harvard.edu John Hsu Institute for Health Policy Massachusetts General Hospital 50 Staniford Street Room 901B Boston, MA 02114 E-Mail: john.hsu@mgh.harvard.edu

Do Conflict of Interests Disclosures Work? Evidence from Citations in Medical Journals - Leuz, Christian; Malani, Anup; Muhn, Maximilian; Jakab, Laszlo (National Bureau of Economic Research Working Paper Series, 2023)
Financial ties between drug companies and medical researchers are thought to bias studies published in medical journals. To enable readers to account for such bias, most medical journals require authors to disclose potential conflicts of interest. We examine whether disclosure reduces article citations, indicating a discount. A challenge to estimating this effect is selection as drug companies may seek out higher quality authors. Our analysis confirms this positive association. Including observable controls for article and author quality attenuates but does not eliminate this relation. We perform three tests. First, we show that the positive association is weaker for review articles, which are more susceptible to bias. Second, we examine article recommendations to family physicians among articles that are a priori more homogenous in quality. We find a significantly negative association between disclosure and expert recommendations, consistent with discounting. Third, we conduct an analysis within author and article, exploiting journal policy changes that result in conflict disclosure by an author. We examine the effect of this disclosure on citations to a previously published article by the same author. This analysis reveals a negative citation effect. Overall, our evidence is consistent with the notion that other researchers discount articles with disclosed conflicts.
Author contact info: 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 Anup Malani University of Chicago Law School 1111 E. 60th Street Chicago, IL 60637 Tel: 773/702-9602 E-Mail: amalani@uchicago.edu Maximilian Muhn Chicago Booth 5807 S Woodlawn Ave. Chicago, IL 60637 United States E-Mail: maximilian.muhn@gmail.com Laszlo Jakab Analysis Group E-Mail: laszlo.jakab@analysisgroup.com

Harm Reduction: When Does It Improve Health, and When Does it Backfire? - Cawley, John; Dragone, Davide (National Bureau of Economic Research Working Paper Series, 2023)
Some harm reduction strategies encourage individuals to switch from a harmful addictive good to a less harmful addictive good; examples include e-cigarettes (substitutes for combustible cigarettes) and methadone and buprenorphine (substitutes for opioids). These have proven to be controversial. Advocates argue that people struggling with addiction benefit because they can switch to a less harmful substance, but opponents argue that this could encourage abstainers to begin using the harm-reduction method or even, eventually, the original addictive good. This paper builds on theories of addiction to model the introduction of a harm reduction method, and demonstrates the conditions under which each side is correct.
Author contact info: John Cawley 2312 MVR Hall Jeb E. Brooks School of Public Policy and Department of Economics Cornell University Ithaca, NY 14853 Tel: 607-255-0952 E-Mail: JHC38@cornell.edu Davide Dragone Dipartimento di Scienze Economiche Università di Bologna Piazza Scaravilli 2 40126, Bologna Italy E-Mail: davide.dragone@unibo.it

Which Firms Gain from Digital Advertising? Evidence from a Field Experiment - Dai, Weijia; Kim, Hyunjin; Luca, Michael (National Bureau of Economic Research Working Paper Series, 2023)
Measuring the returns of advertising opportunities continues to be a challenge for many businesses. We design and run a field experiment in collaboration with Yelp across 18,294 firms in the restaurant industry to understand which types of businesses gain more from digital advertising. We randomly assign 7,209 restaurants to freely receive Yelp’s standard ads package for three months. The scale of the experiment gives us a unique opportunity to assess the heterogeneity in advertising effectiveness across a variety of business attributes. We find that restaurants that receive advertising on Yelp observe on average a 7-19% increase in a wide range of purchase intention outcomes, as well as a 5% increase in customer reviews. We find that gains are heterogeneous across firms, with independent and higher-rated businesses observing larger gains, as well as those with more reviews and higher pre-experiment organic traffic.
Author contact info: Weijia Dai Krannert Building 403 W. State Street West Lafayette, IN 47907 E-Mail: daisy.w.dai@gmail.com Hyunjin Kim INSEAD Boulevard de Constance 77300 Fontainebleau France E-Mail: hyunjinvkim@gmail.com Michael Luca Harvard Business School Soldiers Field Boston, MA 02163 Tel: 617/495-8382 E-Mail: mluca@hbs.edu

New Institutional Economics and Cliometrics - Alston, Eric C; Alston, Lee J; Mueller, Bernardo (National Bureau of Economic Research Working Paper Series, 2023)
The New Institutional Economics (NIE) has its early roots in Cliometrics. Cliometrics began with a focus on using neoclassical theory to develop and test hypotheses in economic history. But empirical consideration of economic and political development within and across countries is limited, absent consideration of the institutional context. The NIE as applied in economic history first focused on the roles of transaction costs and property rights. From this micro-institutional perspective, the NIE expanded its focus to the role of institutions and norms on economic development as well as how economic forces along with political institutional variance influences outcomes both within and across countries. This involves considering both forces that impede and promote economic and political convergence across countries as well the forces that determine a transition to a new economic or political trajectory altogether. Testing for the determinants of economic and political development is plagued with omitted variables and endogeneity concerns, a constraint which has recently prompted scholars to draw on complexity theory to further supplement the NIE and Cliometrics.
Author contact info: Eric C. Alston 995 Regent Dr., UCB 457, Division of Finance Boulder, CO 80309 E-Mail: eric.alston@colorado.edu Lee J. Alston Department of Economics Wylie Hall Indiana University 100 South Woodlawn Avenue Bloomington, IN 47405 Tel: (812) 855 1021 Fax: (812) 855-3150 E-Mail: ljalston@iu.edu Bernardo Mueller Department of Economics University of Brasilia Brazil Tel: 55 61 98111-0349 E-Mail: bmueller@unb.br

Bitcoin Mining Meets Wall Street: A Study of Publicly Traded Crypto Mining Companies - Halaburda, Hanna; Yermack, David (National Bureau of Economic Research Working Paper Series, 2023)
This paper studies the operations and financial valuations of 13 cryptocurrency mining companies that are listed on the NASDAQ stock exchange and have facilities in North America. We find that miners using Texas wind power are offline more than other miners, in a more erratic pattern. Yet, despite having relatively low activity levels, these Texas miners are more profitable than those using more stable sources of energy such as hyrdo power or solar power, as reflected in significantly higher enterprise values. Our model shows that miners using sustainable energy may be more profitable than those using conventional sources, despite the shutdowns, as they benefit from extremely low prices when there is oversupply of sustainable energy (e.g., strong winds). The model also shows that it may be beneficial for the electric utility to offer miners compensation for curtailment of their activity when there is undersupply of energy (e.g. lack of wind), which we also observe in our sample. This compensation further increases profits of the miners. We find a negative and significant beta between crypto mining stocks and an index of electric utilities, suggesting that ownership of a crypto mining company might provide a useful channel for risk management in the electric power industry.
Author contact info: Hanna Halaburda Stern School of Business New York University 44 W 4th St. New York, NY 10012 E-Mail: hhalaburda@gmail.com David Yermack Stern School of Business New York University 44 West Fourth Street, Suite 9-160 New York, NY 10012 Tel: 212/998-0357 Fax: 212/995-4220 E-Mail: dyermack@stern.nyu.edu

Distorted Innovation: Does the Market Get the Direction of Technology Right? - Acemoglu, Daron (National Bureau of Economic Research Working Paper Series, 2023)
In the presence of markup differences, externalities and other social considerations, the equilibrium direction of innovation can be systematically distorted. This paper builds a simple model of endogenous technology, which generalizes existing comparative static results and characterizes potential distortions in the direction of innovation. I show that empirical findings across a number of different areas are consistent with this framework's predictions and I use data from several studies to estimate its key parameters. Combining these numbers with rough estimates of differential externalities and markups, I provide suggestive evidence that equilibrium distortions in the direction of technology can be substantial in the context of industrial automation, health care, and energy, and correcting these distortions could have sizable welfare benefits.
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

Back to the 1980s or Not? The Drivers of Inflation and Real Risks in Treasury Bonds - Pflueger, Carolin (National Bureau of Economic Research Working Paper Series, 2023)
I use nominal and real bond risks as new moments to discipline a New Keynesian asset pricing model, where supply shocks, demand shocks, and monetary policy are the fundamental drivers of inflation. Endogenously time-varying risk premia imply that nominal bond risks—as measured by their stock market beta—are a forward-looking indicator of stagflation risks. Calibrating the model separately for the 1980s and the 2000s, I show that positive nominal bond betas in the 1980s resulted from a “perfect storm” of supply shocks and a reactive monetary policy rule, but not from either supply shocks or monetary policy in isolation.
Author contact info: Carolin Pflueger University of Chicago Harris School of Public Policy 1307 E 60th St Chicago, IL 60637 E-Mail: cpflueger@uchicago.edu

Digital Hermits - Miklós-Thal, Jeanine; Goldfarb, Avi; Haviv, Avery M; Tucker, Catherine (National Bureau of Economic Research Working Paper Series, 2023)
When a user shares multi-dimensional data about themselves with a firm, the firm learns about the correlations of different dimensions of user data. We incorporate this type of learning into a model of a data market in which a firm acquires data from users with privacy concerns. User data is multi-dimensional, and each user can share no data, only non-sensitive data, or their full data with the firm. As the firm collects more data and becomes better at drawing inferences about a user’s privacy-sensitive data from their non-sensitive data, the share of new users who share no data (“digital hermits”) grows. At the same time, the share of new users who share their full data also grows. The model therefore predicts a polarization of users’ data sharing choices away from non-sensitive data sharing to no sharing and full sharing.
Author contact info: Jeanine Miklós-Thal University of Rochester - Simon School Carol Simon Hall 3-141 Rochester, NY 16427 E-Mail: jeanine.miklos-thal@simon.rochester.edu Avi Goldfarb Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 Tel: 416/946-8604 Fax: 416/978-5433 E-Mail: agoldfarb@rotman.utoronto.ca Avery M. Haviv 661 South Ave, Apt 403 Rochester, NY 14620 E-Mail: avery.haviv@simon.rochester.edu Catherine Tucker MIT Sloan School of Management 100 Main Street, E62-533 Cambridge, MA 02142 Tel: 617/252-1499 Fax: 617/258-7597 E-Mail: cetucker@mit.edu

Task Mismatch and Salary Penalties: Evidence from the Biomedical PhD Labor Market - Diethorn, Holden A; Marschke, Gerald R (National Bureau of Economic Research Working Paper Series, 2023)
We use the labor market for doctorates in the biomedical sciences, where career dislocation is common, as a case study of skill-task mismatch and its consequences. Using longitudinal, worker-level data on biomedical doctorates, we investigate mismatch as an explanation for the negative pecuniary returns to postdoc training. Our data contain unique worker-level job task information that allows us to compare the skills acquired in the years just after graduation to the tasks required in later employment. Our findings reveal a postdoc salary penalty when task mismatch is high, which is frequent, and a salary premium when skills align with tasks. Differences in accumulated task-specific human capital explain the between-sector heterogeneity in the returns to postdoctoral training, including the large and persistent salary penalties from postdoctoral training in industry, and the penalty overall. Task mismatch as a cost of pursuing risky careers in science and in other fields requiring large upfront investments in task-specific human capital has received little attention in the empirical labor literature.
Author contact info: Holden A. Diethorn 202 College Park Street Ascension Hall Gambier, OH 43022 E-Mail: holden.diethorn@gmail.com Gerald R. Marschke State University of New York at Albany Economics Department 1400 Washington Avenue Albany, NY 12222 E-Mail: gerald.marschke@gmail.com

Financial Crisis in a Socialist Setting: Impact on Political Behavior, Social Trust, and Economic Values - Abramitzky, Ran; Ben-Porath, Netanel; Lavy, Victor; Palgi, Michal (National Bureau of Economic Research Working Paper Series, 2023)
Research on the political and social impacts of financial crises has focused chiefly on free market economies, hindering our understanding of their effects in other settings. We exploit an episode of a financial crisis that hit the Israeli kibbutzim to study its impact in a socialist context. Contrary to findings in capitalistic economies, the crisis led to increased support of liberalized labor markets and reduced support for leftist political parties. These effects persisted in the long run, especially among the young. The crisis also reduced trust in leadership, but trust was restored shortly after agreements to settle the debt were signed, relieving the severity of the crisis. Our findings suggest that economic shocks may have different effects in a free market and socialist systems, in both cases leading individuals to question their current system.
Author contact info: Ran Abramitzky Department of Economics Stanford University 579 Jane Stanford Way Stanford, CA 94305 Tel: 650/723-9276 Fax: 650/725-5702 E-Mail: ranabr@stanford.edu Netanel Ben Porath E-Mail: netanelben-porath2028@u.northwestern.edu Victor Lavy Department of Economics University of Warwick Coventry, CV4 7AL United Kingdom Tel: 44(0) 24 7657 4158 E-Mail: v.lavy@warwick.ac.uk Michal Palgi The Institute for Research of the Kibbutz and the Cooperative Idea The University of Haifa Haifa, 3498838 Israel E-Mail: palgi@research.haifa.ac.il

Reversals and the Returns to Liquidity Provision - Dai, Wei; Medhat, Mamdouh; Novy-Marx, Robert; Rizova, Savina (National Bureau of Economic Research Working Paper Series, 2023)
Different aspects of liquidity impact the performance of short-run reversals in different ways, consistent with the predictions of microstructure models. Higher volatility is associated with faster, initially stronger reversals, while lower turnover is associated with more persistent, ultimately stronger reversals. These facts also hold outside the US and explain several seemingly disparate results in the literature.
Author contact info: Wei Dai Dimensional Fund Advisors E-Mail: wei.dai@dimensional.com Mamdouh Medhat Dimensional Fund Advisors E-Mail: mamdouh.medhat@dimensional.com Robert Novy-Marx Simon Graduate School of Business University of Rochester 305 Schlegel Hall Rochester, NY 14627 Tel: 773/834-7123 E-Mail: Robert.Novy-Marx@Simon.Rochester.edu Savina Rizova E-Mail: savina.rizova@dimensional.com

Missing Discussions: Institutional Constraints in the Islamic Political Tradition - Gitmez, A. Arda; Robinson, James A; Shadmehr, Mehdi (National Bureau of Economic Research Working Paper Series, 2023)
Institutional constraints to counter potential abuses in the use of political power have been viewed as essential to well functioning political institutions and good public policy outcomes in the Western World since the time of ancient Greece. A sophisticated intellectual tradition emerged to justify the need for such constraints. In this paper we identify a new puzzle: such an intellectual tradition did not exist in the Islamic world, even if the potential for abuse was recognized. We develop a model to explain why such ideas might not have emerged. We argue that this is due to the nature of Islamic law (the Sharia) being far more encompassing than Western law, making it easier for citizens to identify abuses of power and use collective action to discipline them. We study how the relative homogeneity and solidarity of Islamic society fortified this logic.
Author contact info: A. Arda Gitmez Bilkent University Department of Economics Ankara 06800 Turkey Tel: +90 312 290 1467 E-Mail: ardagitmez@gmail.com 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 Mehdi Shadmehr Department of Public Policy University of North Carolina at Chapel Hill Abernethy Hall, 131 S Columbia St Chapel Hill, NC 27514 United States Tel: 3057475896 E-Mail: mshadmeh@gmail.com

Growth and Risk: A View from International Trade - Krishna, Pravin; Levchenko, Andrei A; Ma, Lin; Maloney, William F (National Bureau of Economic Research Working Paper Series, 2023)
This paper studies the cross-country patterns of risky innovation and growth through the lens of international trade. We use a simple theoretical framework of risky quality upgrading by firms under varying levels of financial development to derive two predictions. First, the mean rate of quality growth and the corresponding cross-sectional variance of quality growth in a country are positively correlated. Second, both the mean and variance of quality changes are positively correlated with the country's level of financial development. We then test these two hypotheses using data on disaggregated (HS10) bilateral exports to the United States. The patterns in the data are consistent with the theory. The mean and the variance of quality growth are strongly positively correlated with each other. Countries with greater financial depth are systematically characterized by higher mean and higher variance in the growth of product quality. Our findings suggest a mean-variance trade-off in product quality improvements along the development path. Increases in financial depth do not imply lower variability of changes in the product space.
Author contact info: Pravin Krishna Johns Hopkins University 1717 Massachusetts Avenue, NW Room 741 Washington, DC 20036 Tel: 202/663 5733 Fax: 202/663 7718 E-Mail: Pravin_Krishna@jhu.edu Andrei A. Levchenko Department of Economics University of Michigan 611 Tappan Street Ann Arbor, MI 48109 Tel: 734/764-3296 E-Mail: alev@umich.edu Lin Ma 90 Stamford Rd, Singapore Room 5090, School of Economics, SMU Singapore, Sing 178903 Singapore E-Mail: linma@smu.edu.sg William F. Maloney The World Bank E-Mail: Wmaloney@worldbank.org

Florida (Un)Chained - Calomiris, Charles W; Jaremski, Matthew S (National Bureau of Economic Research Working Paper Series, 2023)
Excessively easy bank credit – visible in unusually small credit risk spreads and rapid loan growth – is often posited as a root cause of unsustainable asset price booms. This paper considers whether an increase in bank risk tolerance drove high loan growth that coincided with Florida’s land boom of the mid-1920s, the first Florida housing boom in which buyers from around the nation participated. Estimates suggest that an astounding 20 million lots were offered for sale in Florida at that time. Our detailed narrative and empirical evidence suggest that the facts do not require the assumption of increased risk appetite during the boom. We find that most Florida banks that failed were associated with the Manley-Anthony chain and did not exhibit increases in observable indicators of risk during the boom. Instead, their increases in risk mainly reflected hidden choices either to lend to bank insiders on a preferential basis or to fund other banks that were engaged in such risky and often fraudulent activities. Bank regulators seem to have been complicit in the hidden risk-taking. Even informed investors would have been left in the dark about the amount of risk that was growing in Florida.
Author contact info: Charles W. Calomiris Columbia Business School Kravis 1101 665 W 130th St. New York, NY 10027 Tel: 212/854-8748 Fax: 212/316-9219 E-Mail: cc374@columbia.edu Matthew S. Jaremski Utah State University Department of Economics and Finance 3565 Old Main Hill Logan, UT 84322 E-Mail: matthew.jaremski@usu.edu

Blockchain for Timely Transfer of Intellectual Property - Cai, Dongling; Qian, Yi; Nan, Ning (National Bureau of Economic Research Working Paper Series, 2023)
This article adopts a marketing perspective to examine how blockchain technology can facilitate innovation by streamlining the licensing process of intellectual property (IP). It notes that in the traditional world, there can be a tension between inventors and developers when it comes to licensing IP before a patent is granted. Developers need more information about the IP in order to estimate its value, while inventors are hesitant to disclose too much information for fear that developers will use it to develop and commercialize the IP without licensing it. The authors argue that blockchain's ability to create a transparent and secure record of the inventing process can alleviate these concerns. On the one hand, blockchain's traceability helps protect IP from infringement, encouraging inventors to disclose more information about their high-value IP. On the other hand, developers have more incentive to license IP rather than infringe on it because of the risk of punishment. The authors also suggest that the size of the community maintaining the blockchain is a crucial factor in ensuring the validity of the blockchain. They suggest that a community that is too large or too small would not be able to reach equilibrium. These findings provide insights into how blockchain can be used to improve the economics of IP.
Author contact info: Dongling Cai E-Mail: dongling.cai@uwaterloo.ca Yi Qian Sauder School of Business University of British Columbia 2053 Main Mall Vancouver, BC V6T 1Z2 Tel: 604/827-5154 E-Mail: yi.qian@sauder.ubc.ca Ning Nan 2053 Main Mall Vancouver, Brit V6T 1Z1 Canada E-Mail: Ning.nan@sauder.ubc.ca

Scaling Smart Contracts via Layer-2 Technologies: Some Empirical Evidence - Cong, Lin William; Hui, Xiang; Tucker, Catherine; Zhou, Luofeng (National Bureau of Economic Research Working Paper Series, 2023)
Blockchain-based smart contracts can potentially replace certain traditional contracts through decentralized enforcement and reduced transaction costs. However, scalability is a key bottleneck hindering their broader application and adoption, often leading to concentrated or exclusive networks. To avoid falling short of the original promise of the technology, firms actively explore "layer-2" methods for scaling. We provide some initial evidence on the economic implications of a layer-2 scaling solution, which moves information aggregation from on-chain to off-chain peer-to-peer networks. A parallel-system experiment allows clean identification because we observe the same unit in the treatment and control systems at the same time. We find that this scaling solution reduces operating costs by 76%, and importantly, leads to decentralization with lower market concentration and more participation, which in turn improves data accuracy. The findings provide initial evidence of how blockchain and smart contracting technologies evolve towards achieving decentralized and scalable trust.
Author contact info: Lin William Cong SC Johnson College of Business Cornell University Sage Hall Ithaca, NY 14853 Tel: 607/255-7859 E-Mail: will.cong@cornell.edu Xiang Hui E-Mail: hui@wustl.edu Catherine Tucker MIT Sloan School of Management 100 Main Street, E62-533 Cambridge, MA 02142 Tel: 617/252-1499 Fax: 617/258-7597 E-Mail: cetucker@mit.edu Luofeng Zhou E-Mail: lz2198@stern.nyu.edu

The Internet, Search Frictions and Aggregate Unemployment - Bhuller, Manudeep; Ferraro, Domenico; Kostøl, Andreas R; Vigtel, Trond C (National Bureau of Economic Research Working Paper Series, 2023)
How has the internet affected search and hiring, and what are the implications for aggregate unemployment? Answering these questions empirically has proven difficult due to selection in internet use and difficulty in measuring the search activities of both sides of the labor market. This paper overcomes these challenges by combining plausibly exogenous variation in the availability of high-speed internet in Norway with large-scale survey and administrative data on hiring firms, job seekers, and vacancies. Our empirical analysis shows that the internet expansion led more firms to recruit online and caused 9% shorter vacancy durations and 13% fewer unsuccessful hiring attempts. While the expansion increased job-finding rates by 2.4% and starting wages by 6% among the unemployed, we find no evidence of changes in job-to-job mobility or wage growth for employees. To interpret these findings, we develop and calibrate an equilibrium search model with endogenous job creation and destruction where workers decide how much search effort to exert on and off the job. Through the lens of the calibrated model, we find that better search technology is the main driving force behind our quasi-experimental evidence. Our calculations indicate that the steady-state unemployment rate fell by as much as 14% due to the broadband internet expansion.
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 Domenico Ferraro 501 E Orange St. Arizona State University W. P. Carey School of Business Department of Economics Tempe, AZ 85281 United States E-Mail: domenico.ferraro@asu.edu Andreas R. Kostøl Department of Economics Arizona State University 501 E Orange St Tempe, AZ 85281 E-Mail: andreas.r.kostol@gmail.com Trond C. Vigtel Statistics Norway Box 8131 0033 Oslo, Norway Norway E-Mail: trond.vigtel@ssb.no

Dynamic Inconsistency in Risky Choice: Evidence from the Lab and Field - Heimer, Rawley Z; Iliewa, Zwetelina; Imas, Alex; Weber, Martin (National Bureau of Economic Research Working Paper Series, 2023)
We document a robust dynamic inconsistency in risky choice. Using a unique brokerage dataset and a series of experiments, we compare people's initial risk-taking plans to their subsequent decisions. Across settings, people accept risk as part of a “loss-exit” strategy—planning to continue taking risk after gains and stopping after losses. Actual behavior deviates from initial strategies by cutting gains early and chasing losses. More people accept risk when offered a commitment to their initial strategy. Our results help reconcile seemingly contradictory findings on risk-taking in static versus dynamic contexts. We explore implications for theory and welfare.
Author contact info: Rawley Z. Heimer W.P. Carey School of Business Arizona State University P.O. Box 873906 Tempe, AZ 85287-3906 E-Mail: rawleyheimer@gmail.com Zwetelina Iliewa University of Bonn Adenauerallee 24-42 53113 Bonn Germany E-Mail: zwetelina.iliewa@uni-bonn.de Alex Imas Booth School of Business University of Chicago 5897 S. Woodlawn Avenue Chicago, IL 60637 Tel: 224/392-3669 E-Mail: alex.imas@chicagobooth.edu Martin Weber Lehrstuhl fur Allgemeine Finanzwirtschaft, insbes. Bankbetriebslehre Universitaet Mannheim 68131 Mannheim, GERMANY E-Mail: weber@bank.BWL.uni-mannheim.de

Societal Disruptions And Child Mental Health: Evidence From ADHD Diagnosis During The COVID-19 Pandemic - Freedman, Seth M; Marquardt, Kelli R; Salcedo, Dario; Simon, Kosali I; Wing, Coady (National Bureau of Economic Research Working Paper Series, 2023)
We study how the societal disruptions of the COVID-19 pandemic impacted diagnosis of a prevalent childhood mental health condition, Attention Deficit Hyperactivity Disorder (ADHD). Using both nationwide private health insurance claims and a single state’s comprehensive electronic health records, we compare children exposed to the pandemic to same aged children prior to the pandemic. We find the pandemic reduced new ADHD diagnoses by 8.6% among boys and 11.0% among girls nationwide through February 2021. We further show that higher levels of in-person schooling in Fall 2020 dampened the decline for girls but had no moderating effect for boys.
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 Kelli R. Marquardt Federal Reserve Bank of Chicago 230 S LaSalle St Chicago, IL 60604 E-Mail: kelli.r.marquardt@gmail.com Dario Salcedo Indiana University O'Neill School of Public and Environmental Affairs 1315 E 10th St Bloomington, IN 47405 USA E-Mail: djsalced@iu.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

Child Labor Standards in Regional Trade Agreements: Theory and Evidence - Abman, Ryan M; Lundberg, Clark C; McLaren, John; Ruta, Michele (National Bureau of Economic Research Working Paper Series, 2023)
We study the impact of child labor standards in Regional Trade Agreements (RTAs) on a variety of child labor market outcomes, including employment, education, and household inequality. We develop a stylized general equilibrium model of child labor in an economy open to international trade and consider the impact of RTAs with and without child labor bans. We empirically investigate the effects of these clauses in trade agreements in a broad international panel of 101 developing countries using harmonized survey microdata. Exploiting quasi-experimental methods to obtain plausibly causal estimates, we find that RTAs without child-labor bans lead to reductions in child employment and increases in school enrollment, particularly for older children aged 14--17. Child labor bans in RTAs perversely increase child employment among 14--17 year olds and decrease school enrollment for both young and older children. These effects appear to decrease inter-household income inequality through increased child earnings. Our findings are consistent with theoretical predictions from our model and the literature on child labor bans.
Author contact info: Ryan M. Abman Department of Economics San Diego State University Nasatir Hall 5500 Campanile Dr. San Diego, CA 92182 USA E-Mail: rabman@sdsu.edu Clark C. Lundberg Department of Economics San Diego State University Nasatir Hall 5500 Campanile Dr. San Diego, CA 92182 Tel: 4435643288 E-Mail: clundberg@sdsu.edu John McLaren Department of Economics University of Virginia P.O. Box 400182 Charlottesville, VA 22904-4182 Tel: 434/924-3994 Fax: 434/982-2904 E-Mail: jmclaren@virginia.edu Michele Ruta International Monetary Fund 700 19th Street NW Washington, DC 20431 E-Mail: mruta@imf.org

Bank Funding Risk, Reference Rates, and Credit Supply - Cooperman, Harry R; Duffie, Darrell; Luck, Stephan; Wang, Zachry Z; Yang, Yilin (National Bureau of Economic Research Working Paper Series, 2023)
Corporate credit lines are drawn more heavily when funding markets are more stressed. This covariance elevates expected bank funding costs. We show that credit supply is dampened by the associated debt-overhang cost to bank shareholders. Until 2022, this impact was reduced by linking the interest paid on lines to credit-sensitive reference rates such as LIBOR. We show that transition to risk-free reference rates may exacerbate this friction. The adverse impact on credit supply is offset if drawdowns are expected to be left on deposit at the same bank, which happened at some of the largest banks during the COVID recession.
Author contact info: Harry R. Cooperman Maiden Lane New York E-Mail: hcoop18@stanford.edu Darrell Duffie Graduate School of Business Stanford University Stanford, CA 94305-7298 Tel: 650/723-1976 Fax: 650/725-7979 E-Mail: duffie@stanford.edu Stephan Luck Federal Reserve Bank of New York 33 Liberty St New York, NY 10045 E-Mail: stephan.luck@ny.frb.org Zachry Z. Wang Stanford University E-Mail: zzwang28@stanford.edu Yilin Yang City University of Hong Kong 9-216, Lau Ming Wai Academic Building 83 Tat Chee Ave Kowloon Tong Hong Kong E-Mail: yiliyang@cityu.edu.hk

Inflationary Effects of Fiscal Support to Households and Firms - Hale, Galina; Leer, John C; Nechio, Fernanda (National Bureau of Economic Research Working Paper Series, 2023)
Fiscal support measures in response to the COVID-19 pandemic varied in their targeted beneficiaries. Relying on variability across 10 large economies, we study differences in the inflationary effects of fiscal support measures targeting consumers or businesses. Because conventional measures of real activity were distorted, we control for the underlying state of the real economy using households sentiment data. We find that fiscal support measures to consumers, but not firms, had inflationary effects that manifested 5 weeks following the announcement and peaked at 12 weeks. The magnitude of the effect was larger in an environment of improving consumer sentiment.
Author contact info: Galina Hale Department of Economics University of California, Santa Cruz Engineering 2, 1156 High Street Santa Cruz, CA 95064 E-Mail: gbhale@ucsc.edu John C. Leer Morning Consult 1025 F St NW Suite 800 Washington, DC 20004 USA E-Mail: jleer@morningconsult.com Fernanda Nechio Federal Reserve Bank of San Francisco 101 Market Street, MS 1130 San Francisco, CA 94105 Tel: (415)974-3258 Fax: (415)974-2168 E-Mail: fnechio@gmail.com

The Marginal Disutility from Corruption in Social Programs: Evidence from Program Administrators and Beneficiaries - Gaduh, Arya; Hanna, Rema; Olken, Benjamin A (National Bureau of Economic Research Working Paper Series, 2023)
Concerns about fraud in welfare programs common arguments worldwide against such programs. We conducted a survey experiment with over 28,000 welfare program administrators and over 19,000 beneficiaries in Indonesia to elicit the ‘marginal disutility from corruption,’ i.e., the trade-between more generous social assistance and losses due to corruption and fraud. Merely mentioning corruption reduced perceived program success, equivalent to distributing more than 20 percent less aid. However, respondents were not sensitive to the amount of corruption—respondents were willing to trade off $2 of additional losses for an additional $1 distributed to beneficiaries. Program administrators and beneficiaries had similar assessments.
Author contact info: Arya Gaduh Department of Economics University of Arkansas 402 Business Building Fayatteville, AR 72701 Tel: 479/575-8776 E-Mail: AGaduh@walton.uark.edu Rema Hanna Kennedy School of Government Harvard University 79 JFK Street Cambridge, MA 02138 Tel: 617/496-1140 Fax: 617/496-5747 E-Mail: Rema_Hanna@hks.harvard.edu Benjamin A. Olken Department of Economics, E52-542 MIT 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/588-1437 Fax: 617/868-2742 E-Mail: bolken@mit.edu

Trading Places: Mobility Responses of Native and Foreign-Born Adults to the China Trade Shock - Autor, David; Dorn, David; Hanson, Gordon H (National Bureau of Economic Research Working Paper Series, 2023)
Previous research finds that the greater geographic mobility of foreign than native-born workers following economic shocks helps to facilitate local labor market adjustment to shifting regional economic conditions. We examine the role that immigration may have played in enabling U.S. commuting zones to respond to manufacturing job loss caused by import competition from China. Although population headcounts of the foreign-born fell by more than those of the native-born in regions exposed to the China trade shock, the overall contribution of immigration to labor market adjustment in this episode was small. Because most U.S. immigrants arrived in the country after manufacturing regions were already mature, few took up jobs in industries that would later see increased import penetration from China. The foreign-born share of the working-age population in regions with high trade exposure was only three-fifths that in regions with low exposure. Immigration thus appears more likely to aid adjustment to cyclical shocks, in which job loss occurs in regions that had recent booms in hiring, rather than facilitating adjustment to secular regional decline, in which hiring booms occurred in the more distant past.
Author contact info: David Autor Department of Economics, E52-438 Massachusetts Institute of Technology 77 Massachusetts Avenue Cambridge, MA 02139 Tel: 617/258-7698 Fax: 617/253-1330 E-Mail: dautor@mit.edu David Dorn University of Zurich Department of Economics Schoenberggasse 1 CH-8001 Zurich - Switzerland Tel: +34 914290551 Fax: +34 914291056 E-Mail: david.dorn@econ.uzh.ch Gordon H. Hanson Harvard Kennedy School Harvard University 79 John F. Kennedy St. Cambridge, MA 02138 E-Mail: gordon_hanson@hks.harvard.edu

Peak-Hour Road Congestion Pricing: Experimental Evidence and Equilibrium Implications - Kreindler, Gabriel (National Bureau of Economic Research Working Paper Series, 2023)
Developing country megacities suffer from severe road traffic congestion, yet the level of congestion is not a direct measure of equilibrium inefficiency. I study the peak-hour traffic congestion equilibrium in Bangalore. To measure travel preferences, I use a model of departure time choice to design a field experiment with congestion pricing policies and implement it using precise GPS data. Commuter responses in the experiment reveal moderate schedule inflexibility and a high value of time. I then show that in Bangalore, traffic density has a moderate and linear impact on travel delay. My policy simulations with endogenous congestion indicate that optimal congestion charges would lead to a small reduction in travel times, and small commuter welfare gains. This result is driven primarily by the shape of the congestion externality. Overall, these results suggest limited commuter welfare benefits from peak-spreading traffic policies in cities like Bangalore.
Author contact info: Gabriel Kreindler Department of Economics Harvard University 1805 Cambridge Street Cambridge, MA 02138 E-Mail: gkreindler@fas.harvard.edu

Exposure to Economic Distress during Pregnancy and Birth Outcomes - Akbulut-Yuksel, Mevlude; Cilasun, Seyit M; Tekin, Erdal; Turan, Belgi (National Bureau of Economic Research Working Paper Series, 2023)
This paper uses the severe economic crisis in Turkey in 2008-2009 as a quasi-experiment to evaluate the impact of worsening economic conditions during pregnancy on birthweight. Using birth history data from the 2008 and 2013 waves of the Demographic Health Surveys, we find that the economic crisis resulted in decreased birthweight in Turkey, especially impacting infants born to mothers with lower educational levels. Furthermore, a procyclical relationship exists between provincial income levels and the birthweight of infants born to mothers with lower levels of education. However, this relationship is only statistically significant during the crisis period. These results highlight how economic constraints on mothers with lower socio-economic status during economic crises can negatively affect birth outcomes. Furthermore, we examine shifts in fertility behavior and find a decrease in childbirth rates during the crisis, particularly in economically disadvantaged provinces. In line with this decrease in fertility, we also observe a reduced propensity to seek an abortion during the crisis period. Overall, these findings underscore the importance of understanding how economic crises affect infant health and the need for targeted interventions to support vulnerable populations, as well as addressing underlying socio-economic disparities to mitigate their impact on infant well-being.
Author contact info: Mevlude Akbulut-Yuksel Department of Economics Dalhousie University PO Box 15000 6214 University Avenue Halifax, Nova Scotia B3H 4R2 CANADA E-Mail: mevlude@dal.ca Seyit M. Cilasun Department of Economics TED University Ziya Gokalp Cad., No.48 06420 Kolej Ankara TURKEY E-Mail: seyit.cilasun@tedu.edu.tr Erdal Tekin School of Public Affairs American University 4400 Massachusetts Avenue NW Washington, DC 20016-8070 Tel: (202) 885-6361 E-Mail: tekin@american.edu Belgi Turan Department of Economics TOBB University of Economics and Technology Sogutozu, Ankara TURKEY E-Mail: belgituran@etu.edu.tr

An 'Austrian' Model of Global Value Chains - Antràs, Pol (National Bureau of Economic Research Working Paper Series, 2023)
I develop a stylized model of multi-stage production in which the time length of each stage is endogenously determined. Letting the production process mature for a longer period of time increases labor productivity, but it comes at the cost of higher working capital needs for firms. Under autarky, countries with lower interest rates feature longer production processes, higher labor productivity, and higher wages. In a free trade equilibrium, countries with lower interest rates specialize in relatively ‘time intensive’ stages in global value chains (GVCs). Yet, if free trade brings about interest rate equalization, wages are also equalized and the pattern of trade is instead shaped by capital intensity and capital abundance, regardless of the time intensity of the various stages. Reductions in trade costs lead to patterns of specialization associated with higher amounts of vertical specialization in world trade. A worldwide decline in interest rates similarly fosters an increase in the share of GVC trade in world trade. The framework also sheds light on the role of trade credit and trade finance in shaping international specialization.
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

The Trickling Up of Excess Savings - Auclert, Adrien; Rognlie, Matthew; Straub, Ludwig (National Bureau of Economic Research Working Paper Series, 2023)
We provide a simple framework connecting the distribution of excess savings across households to the dynamics of aggregate demand. Deficit-financed fiscal transfers generate excess savings. The poorest households with the highest MPCs spend down their excess savings the fastest, increasing other households’ incomes and their excess savings. This leads to a long-lasting increase in aggregate demand until, ultimately, excess savings have “trickled up” to the richest savers with the lowest MPCs, raising wealth inequality.
Author contact info: Adrien Auclert Department of Economics Stanford University 579 Jane Stanford Way Stanford, CA 94305 E-Mail: aauclert@stanford.edu Matthew Rognlie Department of Economics Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 847/491-8215 E-Mail: matthew.rognlie@northwestern.edu Ludwig Straub Department of Economics Harvard University Littauer Center Cambridge, MA 02138 E-Mail: ludwigstraub@g.harvard.edu

The Market for CEOs: Evidence from Private Equity - Gompers, Paul A; Kaplan, Steven N; Mukharlyamov, Vladimir (National Bureau of Economic Research Working Paper Series, 2023)
Most research on the CEO labor market studies public company CEOs while largely ignoring CEOs in private equity (PE) funded companies. We fill this gap by studying the market for CEOs among U.S. companies purchased by PE firms in large leveraged buyout transactions. 71% of those companies hired new CEOs under PE ownership. More than 75% of the new CEOs are external hires with 67% being complete outsiders. These results are strikingly different from studies of public companies, particularly, Cziraki and Jenter (2022) who find that 72% of new CEOs in S&P 500 companies are internal promotions. The most recent experience of 67% of the outside CEOs was at a public company with almost 50% of external hires having some previous experience at an S&P 500 firm. We estimate the total compensation of buyout CEOs and find that it is much higher than that of CEOs of similarly sized public companies and slightly lower than that of S&P 500 CEOs. Overall, our results suggest that the broader market for CEOs is active and that, at least for PE funded portfolio companies, firm-specific human capital is relatively unimportant.
Author contact info: Paul Gompers Harvard Business School Baker Library 263 Soldiers Field Boston, MA 02163 Tel: 617/495-6297 Fax: 617/496-8443 E-Mail: pgompers@hbs.edu Steven N. Kaplan Booth School of Business The University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-4513 Fax: 773/702-0458 E-Mail: steven.kaplan@chicagobooth.edu Vladimir Mukharlyamov McDonough School of Business Georgetown University 3700 O St NW Washington, DC 20057 E-Mail: vladimir.mukharlyamov@georgetown.edu

Corporate Valuation: An Empirical Comparison of Discounting Methods - Hommel, Nicolas; Landier, Augustin; Thesmar, David (National Bureau of Economic Research Working Paper Series, 2023)
The key purpose of corporate finance is to provide methods to compute the value of projects. The baseline textbook recommendation is to use the Present Value (PV) formula of expected cash flows, with a discount rate based on the CAPM. In this paper, we ask what is, empirically, the best discounting method. To do this, we study listed firms, whose actual prices and expected cash flows can be observed. We compare different discounting approaches on their ability to predict actual market prices. We find that discounting based on expected returns (such as variants on the CAPM or multi-factor model), performs very poorly. Discounting with an Implied Cost of Capital (ICC), imputed from comparable firms, obtains much better results. In terms of pricing methods, significant, but small, improvements can be obtained by allowing, in a simple and actionable way, for a more flexible term structure of expected returns. We benchmark all of our results with flexible, purely statistical models of prices based on Random Forest algorithms. These models do barely better than NPV-based methods. Finally, we show that under standard assumptions about the production function, the value loss from using the CAPM can be sizable, of the order of 10%.
Author contact info: Nicolas Hommel Department of Economics Princeton University Princeton, NJ 08544 E-Mail: nhommel@princeton.edu Augustin Landier HEC Paris 1 rue de la libération 78351 Jouy en Josas Cedex France E-Mail: landier@hec.fr David Thesmar MIT Sloan School of Management 100 Main Street, E62-632 Cambridge, MA 02142 Tel: 617/225-9767 E-Mail: thesmar@mit.edu

A Theory of Fear of Floating - Bianchi, Javier; Coulibaly, Louphou (National Bureau of Economic Research Working Paper Series, 2023)
Many central banks whose exchange rate regimes are classified as flexible are reluctant to let the exchange rate fluctuate. This phenomenon is known as “fear of floating”. We present a simple theory in which fear of floating emerges as an optimal policy outcome. The key feature of the model is an occasionally binding borrowing constraint linked to the exchange rate that introduces a feedback loop between aggregate demand and credit conditions. Contrary to the Mundellian paradigm, we show that a depreciation can be contractionary, and letting the exchange rate float can expose the economy to self-fulfilling crises.
Author contact info: Javier Bianchi Federal Reserve Bank of Minneapolis 90 Hennepin Avenue Minneapolis, MN 55401 E-Mail: javieribianchi@gmail.com Louphou Coulibaly Department of Economics University of Wisconsin-Madison 1180 Observatory Drive Madison, WI 53706 E-Mail: lcoulibaly@wisc.edu

The Cost of Curbing Externalities with Market Power: Alcohol Regulations and Tax Alternatives - Conlon, Christopher; Rao, Nirupama L (National Bureau of Economic Research Working Paper Series, 2023)
Products with negative externalities are often subject to regulations that limit competition. The single-product case may suggest that it is irrelevant for aggregate welfare whether output is restricted via corrective taxes or limiting competition. However, when products are differentiated curbing consumption through market power can be costly. Firms with market power may not only reduce total quantity, but distort the purchase decisions of inframarginal consumers. We examine a common regulation known as post-and-hold (PH) used by a dozen states for the sale of alcoholic beverages. Theoretically, PH eliminates competitive incentives among wholesalers selling identical products. We assemble unique data on distilled spirits from Connecticut, including matched manufacturer and wholesaler prices, to evaluate the welfare consequences of PH. For similar levels of ethanol consumption, PH leads to substantially lower consumer welfare (and government revenue) compared to excise, sales or Ramsey taxes by distorting consumption choices away from high-quality/premium brands and towards low-quality brands. Replacing PH with volumetric or ethanol-based taxes could reduce consumption by over 9% without reducing consumer surplus, and increase tax revenues by over 300%.
Author contact info: Christopher Conlon Stern School of Business New York University 44 W. 4th St New York, NY 10012 Tel: 646/389-3895 E-Mail: cconlon@stern.nyu.edu Nirupama L. Rao Ross School of Business University of Michigan 701 Tappan Street, Room- R4312 Ann Arbor, MI 48109-1234 E-Mail: nirurao@umich.edu

Beyond Burnout: from Measuring to Forecasting - Blackburn, Bart; Chan, Tiffany; Cherot, Elizabeth; Freeman, Richard B; Hu, Xi; Matt, Eric; Rhodes, C. Aubrey (National Bureau of Economic Research Working Paper Series, 2023)
Burnout of physicians and other medical personnel is a major problem in the economics of healthcare systems, potentially costing billions of dollars. Knowledge of the determinants and costs of burnout at the organization level is sparse, making it difficult to assess the net benefits of interventions to reduce burnout at the level where arguably the greatest change can be affected. In this paper, we use data from a midsize healthcare organization with about 500 clinicians in 2021-22 to advance analysis of clinical burnout in two ways. First, we estimate the costs of clinician burnout beyond the widely studied losses due to turnover. Including hard-to-measure and potentially long-term costs that arise from reduced patient satisfaction and lower productivity of burnt-out clinicians at work, our analysis suggests a much higher cost of burnout per clinician than previous estimates that exclude these costs. Second, we use standard medical billing and administrative operating data to forecast turnover and productivity of clinicians to serve as an early warning system. Accurate estimates of both the cost of burnout now and of likely future costs should help decision-makers be proactive in their approach to solving the burnout crisis currently affecting the healthcare industry. While our empirical analysis relates to a particular healthcare organization, the framework for quantifying the costs of burnout can be used by other organizations to assess the cost-effectiveness of ameliorative policies.
Author contact info: Bart Blackburn Atalan Tech 24 School Street 2nd Floor Boston, MA 02108 USA E-Mail: bart@atalantech.com Tiffany Chan Atalan Tech 24 School Street 2nd Floor Boston, MA 02108 USA E-Mail: tiffany@atalantech.com Elizabeth Cherot March of Dimes 1550 Crystal Dr Suite 1300 Arlington, VA 22202 USA E-Mail: echerot@marchofdimes.org Richard B. Freeman NBER 1050 Massachusetts Avenue Cambridge, MA 02138 Tel: 617/868-3900 Fax: 617/868-2742 E-Mail: freeman@nber.org Xi Hu Labor & Worklife Program Harvard Law School 50 Church Street Cambridge, MA 02138 E-Mail: huxi99567@gmail.com Eric Matt Axia Women's Health 227 Laurel Rd #300 Voorhees Township, NJ 08043 USA E-Mail: eric.matt@axiawh.com C. Aubrey Rhodes Atalan Tech 24 School Street 2nd Floor Boston, MA 02108 USA E-Mail: aubrey@atalantech.com

Self-Preferencing at Amazon: Evidence from Search Rankings - Farronato, Chiara; Fradkin, Andrey; MacKay, Alexander (National Bureau of Economic Research Working Paper Series, 2023)
We study whether Amazon engages in self-preferencing on its marketplace by favoring its own brands (e.g., Amazon Basics) in search. To address this question, we collect new micro-level consumer search data using a custom browser extension installed by a panel of study participants. Using this methodology, we observe search positions, search behavior, and product characteristics. We find that Amazon branded products are indeed ranked higher than observably similar products in consumer search results. The prominence given to Amazon brands is 30% to 60% of the prominence granted to sponsored products.
Author contact info: Chiara Farronato Harvard Business School Morgan Hall 427 Soldiers Field Boston, MA 02163 Tel: 617/495-6542 E-Mail: cfarronato@hbs.edu Andrey Fradkin Questrom School of Business Boston University Rafik B. Hariri Building 595 Commonwealth Avenue Boston, MA 02215 E-Mail: fradkin@bu.edu Alexander MacKay Harvard Business School Morgan Hall 221 Soldiers Field Boston, MA 02163 E-Mail: amackay@hbs.edu

The Stock Connect to China - He, Zhiguo; Wang, Yuehan; Zhu, Xiaoquan (National Bureau of Economic Research Working Paper Series, 2023)
As a bridge between Chinese mainland and international financial markets, the Stock Connect program allows investors on both sides to gain mutual access. By analyzing how cross-border flows respond to macro-related shocks, we show that compared with possibly homemade foreign investors, genuine foreign investors are more likely affected by the U.S. monetary shocks, the exchange rate risk, the U.S. market performance as well as the cross-market valuation disparity. The paper highlights the importance of profiling different groups of cross-border participants over market integration.
Author contact info: Zhiguo He Stanford University Graduate School of Business 655 Knight Way Stanford, CA 94305 E-Mail: hezhg@stanford.edu Yuehan Wang School of Finance Central University of Finance and Economics 39 South College Road Haidian District, Beijing P.R.China, 100081 E-Mail: wangyh@cufe.edu.cn Xiaoquan Zhu School of Banking and Finance University of International Business and Economics 10 Huixin East Street Chaoyang District, Beijing, P.R.China, 100029 E-Mail: xiaoquan.zhu@uibe.edu.cn

Quantifying the Inflationary Impact of Fiscal Stimulus Under Supply Constraints - di Giovanni, Julian; Kalemli-Özcan, Ṣebnem; Silva, Alvaro; Yildirim, Muhammed A (National Bureau of Economic Research Working Paper Series, 2023)
This paper builds on Baqaee and Farhi (2022) and di Giovanni et al. (2022) to quantify the contribution of fiscal policy on U.S. inflation over the Dec-2019 to June-2022 period. Model calibrations show that aggregate demand shocks explain roughly two-thirds of total model-based inflation, and that the fiscal stimulus contributed half or more of the total aggregate demand effect.
Author contact info: Julian di Giovanni Federal Reserve Bank of New York Research and Statistics Group 33 Liberty Street New York, NY 10045 E-Mail: juliandigiovanni@gmail.com 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 Alvaro Silva Department of Economics University of Maryland Tydings Hall 4118A College Park, MD 20742-7211 E-Mail: asilvub@umd.edu Muhammed A. Yildirim Koc University Rumelifeneri Yolu Sariyer Istanbul 34450 TURKEY E-Mail: yildirim@gmail.com

Real Exchange Rate and International Reserves in the Era of Financial Integration - Aizenman, Joshua; Ho, Sy-; Huynh, Luu Duc Toan; Saadaoui, Jamel; Uddin, Gazi Salah (National Bureau of Economic Research Working Paper Series, 2023)
The global financial crisis has brought increased attention to the consequences of international reserves holdings. In an era of high financial integration, we investigate the relationship between the real exchange rate and international reserves using nonlinear regressions and panel threshold regressions over 110 countries from 2001 to 2020. Our study shows the level of financial-institution development plays an essential role in explaining the buffer effect of international reserves. Countries with a low development of their financial institutions may manage the international reserves as a shield to deal with the negative consequences of terms-of-trade shocks on the real exchange rate. We also find the buffer effect is stronger in countries with intermediate levels of financial openness.
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 Sy-Hoa Ho E-Mail: hosyhoa1987@gmail.com Luu Duc Toan Huynh Queen Mary University of London London E1 4NS United Kingdom E-Mail: t.huynh@qmul.ac.uk Jamel Saadaoui 46 Avenue de la Foret Noire Strasbourg 67000 France E-Mail: jamelsaadaoui@gmail.com Gazi Salah Uddin Department of Management and Engineering Linköping University Linköping 58183 Sweden E-Mail: gazi.salah.uddin@liu.se

Measuring the Share of Imports in Final Consumption - Dhyne, Emmanuel; Kikkawa, Ayumu Ken; Mogstad, Magne; Tintelnot, Felix (National Bureau of Economic Research Working Paper Series, 2023)
We use Belgian data on domestic firm-to-firm transactions and ask how the measurement of the share of imports in final consumption is affected when one uses data recorded at higher levels of aggregation. We find that aggregating detailed firm-to-firm transaction data to the firm level and imposing homogeneity assumptions in the composition of firms’ input and output do not substantially affect the measurement of the share of imports in final consumption. However, using the national IO tables alone may understate the share of imports in final consumption and, thereby, the gains from trade.
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 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

The Effects of Competition on Physician Prescribing - Currie, Janet; Li, Anran; Schnell, Molly (National Bureau of Economic Research Working Paper Series, 2023)
We ask how competition influences the prescribing practices of physicians. Law changes granting nurse practitioners (NPs) the ability to prescribe controlled substances without physician collaboration or oversight generate exogenous variation in competition. In response, we find that general practice physicians (GPs) significantly increase their prescribing of controlled substances such as opioids and controlled anti-anxiety medications. GPs also increase their co-prescribing of opioids and benzodiazepines, a practice that goes against prescribing guidelines. These effects are more pronounced in areas with more NPs per GP at baseline, are concentrated in physician specialties that compete most directly with NPs, and are not observed for many non-controlled drug classes. Our findings are consistent with a simple model of physician behavior in which competition for patients leads physicians to move toward the preferences of marginal patients. These results demonstrate that more competition will not always lead to improvements in patient care and can instead lead to excessive service provision.
Author contact info: Janet Currie Department of Economics Center for Health and Wellbeing 185A Julis Romo Rabinowitz Building Princeton University Princeton, NJ 08544 Tel: 609-258-7393 E-Mail: jcurrie@princeton.edu Anran Li Department of Economics Northwestern University 2211 Campus Drive Evanston, IL 60208 E-Mail: lianran.ah@gmail.com Molly Schnell Department of Economics Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 651/253-3367 E-Mail: schnell@northwestern.edu

Measuring Returns to Experience Using Supervisor Ratings of Observed Performance: The Case of Classroom Teachers - Bell, Courtney A; James, Jessalynn K; Taylor, Eric S; Wyckoff, James (National Bureau of Economic Research Working Paper Series, 2023)
We study the returns to experience in teaching, estimated using supervisor ratings from classroom observations. We describe the assumptions required to interpret changes in observation ratings over time as the causal effect of experience on performance. We compare two difference-in-differences strategies: the two-way fixed effects estimator common in the literature, and an alternative which avoids potential bias arising from effect heterogeneity. Using data from Tennessee and Washington, DC, we show empirical tests relevant to assessing the identifying assumptions and substantive threats—e.g., leniency bias, manipulation, changes in incentives or job assignments—and find our estimates are robust to several threats.
Author contact info: Courtney A. Bell Wisconsin Center for Education Research University of Wisconsin-Madison 1025 West Johnson St, Suite 785C Madison, WI 53706 Tel: 608-263-2827 E-Mail: courtney.bell@wisc.edu Jessalynn K. James North Haven, CT 06473 E-Mail: jessalynn.james@tntp.org Eric S. Taylor Harvard Graduate School of Education Gutman Library 469 6 Appian Way Cambridge, MA 02138 Tel: 617/496-1232 E-Mail: eric_taylor@gse.harvard.edu James Wyckoff School of Education & Human Development Batten School of Public Policy University of Virginia Charlottesville, VA 22903-1226 United States Tel: 5184244019 E-Mail: wyckoff@virginia.edu

International Capital Flow Pressures and Global Factors - Goldberg, Linda S; Krogstrup, Signe (National Bureau of Economic Research Working Paper Series, 2023)
The risk sensitivity of international capital flow pressures is explored using a new Exchange Market Pressure index that combines pressures observed in exchange rate adjustments with model-based estimates of incipient pressures that are masked by foreign exchange interventions and policy rate adjustments. The sensitivity of capital flow pressures to risk sentiment including for so-called safe haven currencies, evolves over time, varies significantly across countries, and differs between normal time and extreme stress events. Across countries, risk sensitivities and safe haven status are associated with self-fulfilling exchange rate expectations and carry trade funding currencies. In contrast, association with more traditional macroeconomic country characteristics is weak.
Author contact info: Linda S. Goldberg Federal Reserve Bank-New York 33 Liberty Street New York, NY 10045 Tel: 212/720-2836 Fax: 212/720-6831 E-Mail: linda.goldberg@ny.frb.org Signe Krogstrup Danmarks Nationalbank Economics Department 1093 Copenhagen K Denmark E-Mail: skro@nationalbanken.dk

Algorithmic Writing Assistance on Jobseekers’ Resumes Increases Hires - Wiles, Emma; Munyikwa, Zanele T; Horton, John J (National Bureau of Economic Research Working Paper Series, 2023)
There is a strong association between writing quality in resumes for new labor market entrants and whether they are ultimately hired. We show this relationship is, at least partially, causal: in a field experiment in an online labor market with nearly half a million jobseekers, treated jobseekers received algorithmic writing assistance on their resumes. Treated jobseekers were hired 8% more often. Contrary to concerns that the assistance takes away a valuable signal, we find no evidence that employers were less satisfied. We present a model where better writing does not signal ability but helps employers ascertain ability, rationalizing our findings.
Author contact info: Emma Wiles Massachusetts Institute of Technology Sloan School of Management 100 Main St Cambridge, MA 02142 E-Mail: emmavani@mit.edu Zanele T. Munyikwa Massachusetts Institute of Technology Sloan School of Management 100 Main St Cambridge, MA 02142 United States Tel: 3028644727 E-Mail: zanele@mit.edu John J. Horton Massachusetts Institute of Technology Sloan School of Management 100 Main St Cambridge, MA 02142 E-Mail: john.joseph.horton@gmail.com

Reducing Administrative Barriers Increases Take-up of Subsidized Health Insurance Coverage: Evidence from a Field Experiment - Ericson, Keith Marzilli; Layton, Timothy J; McIntyre, Adrianna; Sacarny, Adam (National Bureau of Economic Research Working Paper Series, 2023)
Administrative barriers to social insurance program take-up are pervasive, including in subsidized health insurance. We conducted a randomized controlled trial with Massachusetts’ Affordable Care Act marketplace to reduce these barriers and other behavioral frictions. We find that a “check the box” streamlined enrollment intervention raises enrollment by 11%, more than personalized reminder letters (7.9% increase) or generic reminder letters (4.5% increase). Effects are concentrated among individuals eligible for zero-premium plans, who faced no further administrative burdens of setting up payments. Producing this enrollment effect through premium reduction would cost about $6 million in subsidies, highlighting the importance of these burdens.
Author contact info: Keith Marzilli Ericson Boston University Questrom School of Business 595 Commonwealth Avenue Boston, MA 02215 Tel: 617/353-4553 E-Mail: kericson@bu.edu Timothy Layton Harvard Medical School Department of Health Care Policy 180 Longwood Avenue Boston, MA 02115 Tel: 617/432-4465 E-Mail: layton@hcp.med.harvard.edu Adrianna McIntyre Harvard T.H. Chan School of Public Health Department of Health Policy and Management 677 Huntington Ave. Boston, MA 02115 E-Mail: amcintyre@hsph.harvard.edu Adam Sacarny Mailman School of Public Health Columbia University 722 West 168th Street New York, NY 10032 Tel: 914/715-0217 E-Mail: ajs2102@columbia.edu

Criminal Charges, Risk Assessment, and Violent Recidivism in Cases of Domestic Abuse - Black, Dan A; Grogger, Jeffrey; Kirchmaier, Tom; Sanders, Koen (National Bureau of Economic Research Working Paper Series, 2023)
Domestic abuse is a pervasive global problem. Here we analyze two approaches to reducing violent DA recidivism. One involves charging the perpetrator with a crime; the other provides protective services to the victim on the basis of a formal risk assessment carried out by the police. We use detailed administrative data to estimate the average effect of treatment on the treated using inverse propensity-score weighting (IPW). We then make use of causal forests to study heterogeneity in the estimated treatment effects. We find that pressing charges substantially reduces the likelihood of violent recidivism. The analysis also reveals substantial heterogeneity in the effect of pressing charges. In contrast, the risk-assessment process has no discernible effect.
Author contact info: Dan A. Black Harris School University of Chicago 1307 E. 60th St. Chicago, IL 60637 E-Mail: danblack@uchicago.edu Jeffrey Grogger University of Chicago Harris School of Public Policy 1307 E. 60th Street Chicago, IL. 60637 Tel: 773/542-3533 Fax: 773/702-0926 E-Mail: jgrogger@uchicago.edu Tom Kirchmaier Houghton Street London WC2A 2AE United Kingdom E-Mail: t.kirchmaier@lse.ac.uk Koen Sanders 32 Lincolns Inn Field Houghton Street London WC2A 2AE UK E-Mail: koen.sanders.001@gmail.com

Wildfire Influence on Recent US Pollution Trends - Burke, Marshall; Childs, Marissa L; De la Cuesta, Brandon; Qiu, Minghao; Li, Jessica; Gould, Carlos F; Heft-Neal, Sam; Wara, Michael (National Bureau of Economic Research Working Paper Series, 2023)
Steady improvements in ambient air quality in the US over the past several decades have led to large public health benefits, and the policies that helped drive these improvements are considered landmarks in successful environmental policymaking. However, recent trends in PM2.5 concentrations, a key pollutant, have stagnated or begun to reverse throughout much of the US. We quantify the contribution of wildfire smoke to these trends and find that since 2016, wildfire smoke has significantly slowed or reversed previous improvements in average annual PM2.5 concentrations in two-thirds of US states, eroding 23% of previous gains on average in those states (equivalent to 3.6 years of air quality progress) and over 50% in multiple western states. Smoke influence on trends in extreme PM2.5 concentrations is detectable by 2010 and is concentrated in a dozen western states. Wildfire-driven increases in ambient PM2.5 concentrations are unregulated under current air pollution law, and, absent additional intervention, wildfire's contribution to regional and national air quality trends is likely to grow as the climate continues to warm.
Author contact info: Marshall Burke Doerr School of Sustainability Stanford University Stanford, CA 94305 E-Mail: mburke@stanford.edu Marissa Childs Center for the Environment Harvard University E-Mail: mchilds@fas.harvard.edu Brandon De la Cuesta Stanford University SIEPR, Gunn Building Stanford, CA 94305 E-Mail: brandon.delacuesta@stanford.edu Minghao Qiu E-Mail: mhqiu@stanford.edu Jessica Li Department of Economics University of California, San Diego 9500 Gilman Dr. #0508 Mail Code: 0508 La Jolla, CA 92093 E-Mail: jel142@ucsd.edu Carlos F. Gould 9515 Gilman Drive School of Public Health University of California San Diego La Jolla, CA 92093 E-Mail: cagould@ucsd.edu Sam Heft-Neal Center on Food Security and the Environment Stanford University 473 Via Ortega Stanford, CA 94305 E-Mail: sheftneal@stanford.edu Michael Wara 473 Via Ortega Stanford, CA 94305 United States E-Mail: mwara@stanford.edu

Data Union and Regulation in a Data Economy - Cong, Lin William; Mayer, Simon (National Bureau of Economic Research Working Paper Series, 2023)
In a model of data-driven firm competition, data are jointly produced by users, buying firms’ services and contributing data, and firms, investing in data infrastructure and collection. Data collection improves services, benefiting users, but may reduce competition, harming users. Dispersed users do not internalize the impact of their data contribution on (i) service quality, (ii) competition, and (iii) firms’ investment incentives, causing inefficient data over- or underinvestment. Unlike data sharing, user privacy protection policies, or data markets, a data union — which coordinates users’ data contributions — or data trust — which intermediates data sales — can address these inefficiencies.
Author contact info: Lin William Cong SC Johnson College of Business Cornell University Sage Hall Ithaca, NY 14853 Tel: 607/255-7859 E-Mail: will.cong@cornell.edu Simon Mayer 6105 Spirit Street Apt # 570 Pittsburgh, PA 15206 United States Tel: 14124786964 E-Mail: simonmay@andrew.cmu.edu

Representation and Hesitancy in Population Health Research: Evidence from a COVID-19 Antibody Study - Dutz, Deniz; Greenstone, Michael; Hortaçsu, Ali; Lacouture, Santiago; Mogstad, Magne; Shaikh, Azeem M; Torgovitsky, Alexander; van Dijk, Winnie (National Bureau of Economic Research Working Paper Series, 2023)
We examine why minority and poor households are often underrepresented in studies that require active participation. Using data from a serological study with randomized participation incentives, we find large participation gaps by race and income when incentives are low, but not when incentives are high. We develop a framework for using randomized incentives to disentangle the roles of hesitancy and non-contact in driving the participation gaps, and find that hesitancy is the predominant factor. Hesitancy rates strongly correlate with hospitalization rates and COVID-19 risk, suggesting that individuals facing higher health risks may be underrepresented in studies with low incentives.
Author contact info: Deniz Dutz University of Chicago 1126 East 59th Street Chicago, IL 60637 E-Mail: deniz.dutz@gmail.com 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 Ali Hortaçsu Kenneth C. Griffin Department of Economics University of Chicago 1126 East 59th Street Chicago, IL 60637 Tel: 773/702-5841 E-Mail: hortacsu@uchicago.edu Santiago Lacouture 924 E 57th St Chicago, IL 60637 E-Mail: slacouture@uchicago.edu 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 Azeem Shaikh Department of Economics University of Chicago 1126 E. 59th Street Chicago IL 60637 E-Mail: amshaikh@uchicago.edu Alexander Torgovitsky University of Chicago 1126 E. 59th Street Chicago, IL 60637 E-Mail: atorgovitsky@gmail.com Winnie van Dijk Department of Economics Yale University 87 Trumbull Street, B228 New Haven, CT 06520 E-Mail: winnie.vandijk@yale.edu

Labor Supply Shocks and Capital Accumulation: The Short and Long Run Effects of the Refugee Crisis in Europe - Caliendo, Lorenzo; Opromolla, Luca David; Parro, Fernando; Sforza, Alessandro (National Bureau of Economic Research Working Paper Series, 2023)
European countries experienced a large increase in labor supply due to the influx of Ukrainian refugees after the 2022 Russia invasion. We study its dynamic effects in a spatial model with forward-looking households of different skills, trade, and endogenous capital accumulation. We find that real GDP increases in Europe in the long term, with large distributional effects across countries and skill groups. In the short run, an increase in the supply of labor strains the use of capital structures that takes time to build. Over time, countries that build capital structures increase output, resulting in potential long run benefits.
Author contact info: Lorenzo Caliendo Yale University School of Management 135 Prospect Street New Haven, CT 06520 Tel: 203/432-4069 E-Mail: lorenzo.caliendo@yale.edu Luca David Opromolla North Carolina State University Poole College of Management 2801 Founders Drive Raleigh, NC 27607 E-Mail: lopromo@ncsu.edu Fernando Parro Pennsylvania State University Department of Economics University Park, PA 16801 Tel: 202/812-5314 E-Mail: fxp5102@psu.edu Alessandro Sforza University of Bologna Department of Economics Italy E-Mail: alessandro.sforza3@unibo.it

Rationing Medicine Through Bureaucracy: Authorization Restrictions in Medicare - Brot-Goldberg, Zarek C; Burn, Samantha; Layton, Timothy; Vabson, Boris (National Bureau of Economic Research Working Paper Series, 2023)
High administrative costs in U.S. health care have provoked concern among policymakers over potential waste, but many of these costs are generated by managed care policies that trade off bureaucratic costs against reductions in moral hazard. We study this trade-off for prior authorization restriction policies in Medicare Part D, where low-income beneficiaries are randomly assigned to default plans. Beneficiaries who face restrictions on a drug reduce their use of it by 26.8%. Approximately half of marginal beneficiaries are diverted to another related drug, while the other half are diverted to no drug. These policies generated net financial savings, reducing drug spending by $96 per beneficiary-year (3.6% of drug spending), while only generating approximately $10 in paperwork costs. Revealed preference approaches suggest that the cost savings likely exceed beneficiaries’ willingness to pay for foregone drugs.
Author contact info: Zarek Brot-Goldberg University of Chicago Harris School of Public Policy 1307 E 60th St. Chicago, IL 60637 E-Mail: zarek@uchicago.edu Samantha Burn Harvard Medical School Department of Health Care Policy 180 Longwood Avenue Boston, MA 02115 E-Mail: sburn@g.harvard.edu Timothy Layton Harvard Medical School Department of Health Care Policy 180 Longwood Avenue Boston, MA 02115 Tel: 617/432-4465 E-Mail: layton@hcp.med.harvard.edu Boris Vabson Harvard Medical School Department of Health Care Policy 180 Longwood Avenue Boston, MA 02115 E-Mail: vabson@hcp.med.harvard.edu

More Roads or Public Transit? Insights from Measuring City-Center Accessibility - Conwell, Lucas J; Eckert, Fabian; Mobarak, Ahmed Mushfiq (National Bureau of Economic Research Working Paper Series, 2023)
We propose a theory-inspired measure of the accessibility of a city's center: the size of the surrounding area from which it can be reached within a specific time. Using publicly available optimal-routing software, we compute these "accessibility zones" for the 109 largest US and European cities, separately for cars and public transit commutes. Compared with European cities, US cities are half as accessible via public transit and twice as accessible via cars. Car accessibility zones are always larger than public transit zones, making US cities more accessible overall. However, US cities' car orientation comes at the cost of less green space, more congestion, and worse health and pollution externalities.
Author contact info: Lucas Conwell Department of Economics University College London, Drayton House 30 Gordon St. London WC1H 0AX UK Tel: 4232554741 E-Mail: l.conwell@ucl.ac.uk Fabian Eckert Department of Economics UC San Diego 9500 Gilman Dr La Jolla, CA 92093 E-Mail: f@fpeckert.me Ahmed Mushfiq Mobarak Yale University 165 Whitney Ave New Haven, CT 06520-8200 Tel: 203/432-5787 E-Mail: ahmed.mobarak@yale.edu

Investing in Influence: Investors, Portfolio Firms, and Political Giving - Bertrand, Marianne; Bombardini, Matilde; Fisman, Raymond; Trebbi, Francesco; Yegen, Eyub (National Bureau of Economic Research Working Paper Series, 2023)
Institutional ownership of U.S. corporations has increased ten-fold since 1950. We examine whether these new concentrated owners influence portfolio firms’ political activities, as a window into the larger question of whether institutional investors can wield their control to extract benefits from portfolio firms. We find that after the acquisition of a large stake, a firm’s political action committee (PAC) giving mirrors more closely that of the acquiring investment management company (in our preferred specification, a 31 percent increase in comovement). This pattern is observed for acquisitions driven by new index inclusions, which suggests that our findings result from a causal effect of acquisitions rather than other correlated shifts in political agendas. We argue that investors drive the convergence in giving - the effects are driven by more “partisan” investors, and we show that firms shift their giving more around acquisitions than investors do. Overall, our findings suggest that corporations’ political business strategies are likely dictated by broader considerations than simple profit, and modeling corporate influence should take into account how corporations are governed.
Author contact info: Marianne Bertrand Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/834-5943 Fax: 773/702-0458 E-Mail: marianne.bertrand@chicagobooth.edu Matilde Bombardini Business & Public Policy Group Haas School of Business University of California, Berkeley 2220 Piedmont Ave Berkeley, CA 94720 E-Mail: mbombardini@haas.berkeley.edu Raymond Fisman Department of Economics Boston University 270 Bay State Road, 304A Boston, MA 02215 Tel: 617-353-6821 E-Mail: rfisman@bu.edu Francesco Trebbi Haas School of Business University of California, Berkeley 2220 Piedmont Ave Berkeley, CA 94720 E-Mail: ftrebbi@berkeley.edu Eyub Yegen Hong Kong University of Science and Technology Lee Shau Kee Business Building Department of Finance Hong Kong Hong Kong E-Mail: yegen@ust.hk

The Economics of Cities: From Theory to Data - Redding, Stephen J (National Bureau of Economic Research Working Paper Series, 2023)
Economic activity is highly unevenly distributed within cities, as reflected in the concentration of economic functions in specific locations, such as finance in the Square Mile in London. The extent to which this concentration reflects natural advantages versus agglomeration forces is central to a range of public policy issues, including the impact of local taxation and transport infrastructure improvements. This paper reviews recent quantitative urban models, which incorporate both differences in natural advantages and agglomeration forces, and can be taken directly to observed data on cities. We show that these models can be used to estimate the strength of agglomeration forces and evaluate the impact of transportation infrastructure improvements on welfare and the spatial distribution of economic activity.
Author contact info: 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

Sprouting Cities: How Rural America Industrialized - Eckert, Fabian; Juneau, John; Peters, Michael (National Bureau of Economic Research Working Paper Series, 2023)
We study the joint process of urbanization and industrialization in the US economy between 1880 and 1940. We show that only a small share of aggregate industrialization is accounted for by the relocation of workers from remote rural areas to industrial hubs like Chicago or New York City. Instead, most sectoral shifts occurred within rural counties, dramatically transforming their sectoral structure. Most industrialization within counties occurred through the emergence of new "factory" cities with notably higher manufacturing shares rather than the expansion of incumbent cities. In contrast, today's shift towards services seems to benefit large incumbent cities the most.
Author contact info: Fabian Eckert Department of Economics UC San Diego 9500 Gilman Dr La Jolla, CA 92093 E-Mail: f@fpeckert.me John Juneau E-Mail: jjuneau@ucsd.edu Michael Peters Department of Economics Yale University 87 Trumbull Street New Haven, CT 06511 Tel: 203/436-8475 E-Mail: m.peters@yale.edu

Rationalizable Learning - Caplin, Andrew; Martin, Daniel J; Marx, Philip (National Bureau of Economic Research Working Paper Series, 2023)
The central question we address in this paper is: what can an analyst infer from choice data about what a decision maker has learned? The key constraint we impose, which is shared across models of Bayesian learning, is that any learning must be rationalizable. To implement this constraint, we introduce two conditions, one of which refines the mean preserving spread of Blackwell (1953) to take account for optimality, and the other of which generalizes the NIAC condition (Caplin and Dean 2015) and the NIAS condition (Caplin and Martin 2015) to allow for arbitrary learning. We apply our framework to show how identification of what was learned can be strengthened with additional assumptions on the form of Bayesian learning.
Author contact info: Andrew Caplin Department of Economics New York University 19 W. 4th Street, 6th Floor New York, NY 10012 Tel: 212/998-8950 Fax: 212/995-3932 E-Mail: andrew.caplin@nyu.edu Daniel J. Martin Northwestern University Kellogg School of Management 2211 Campus Drive Evanston, IL 60208 E-Mail: daniel@martinonline.org Philip Marx Department of Economics Louisiana State University 501 South Quad Dr. Baton Rouge, LA 70803 E-Mail: pmarx@lsu.edu

Do Technology Standards Induce Innovation in Environmental Technologies When Coordination is Important? - Gregoire-Zawilski, Myriam; Popp, David (National Bureau of Economic Research Working Paper Series, 2023)
If further decarbonization of electricity systems is to continue, a next generation of innovation in transformative grid modernization and renewables integration technologies will be needed. Few studies have investigated the policy determinants of innovation in this sector to glean insights on how government may support the development and deployment of these technologies. We argue that policies that were successful at supporting the first wave of renewables innovation may not be sufficient to produce similar results in the next wave of green innovation since those face higher coordination bottlenecks. We investigate the effects of interoperability standards - an instrument that may facilitate coordination - on patenting using smart grid as an example of a technology that has high interoperability requirements. We find that standards decrease patenting at the extensive and intensive margins, but these results vary across types of firms. We find that this negative effect is driven by large firms, whereas standards increase entry by firms without prior smart grid innovation experience. We interpret this result as an information effect: standards provide useful information to new entrants and may help diversify the range of players innovating in this space.
Author contact info: Myriam Gregoire-Zawilski Center for Policy Research Syracuse University Syracuse, NY 13244 E-Mail: mgregoir@syr.edu 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

Local Labor Market Impacts of the Energy Transition: Prospects and Policies - Hanson, Gordon H (National Bureau of Economic Research Working Paper Series, 2023)
Society’s transition toward more sustainable energy sources is well underway. But substantially reducing the use of fossil fuels to generate electricity, to power vehicles, and to manufacture the stuff of everyday life will profoundly disrupt the communities that currently dedicate themselves to carbon-intensive industries. In this paper, I consider the potential for adverse labor market consequences from the energy transition and the suitability of existing policies to counteract them. Top of mind in this discussion is to avoid repeating the painful adjustment to globalization and automation, which in recent decades brought concentrated job loss and long-lasting economic distress to local labor markets that had been specialized in manufacturing. I begin by mapping the spatial distribution of employment in fossil-fuel-intensive activities across US commuting zones from 2000 forward. Then, using the labor market consequences of the post-1980 decline of coal as a backdrop, I discuss policy options for easing adjustment to the energy transition, including letting market forces work, reinforcing the social safety net, and expanding place-based policies.
Author contact info: Gordon H. Hanson Harvard Kennedy School Harvard University 79 John F. Kennedy St. Cambridge, MA 02138 E-Mail: gordon_hanson@hks.harvard.edu

Changing the Odds: Student Achievement after Introduction of a Middle School Math Intervention - Betts, Julian R; Zau, Andrew C; Bachofer, Karen Volz; Polichar, Dina (National Bureau of Economic Research Working Paper Series, 2023)
The paper evaluates math performance at four high-need middle schools during a four-year intervention, which was designed to help math teachers diagnose students’ areas of need and to design lesson plans responsive to those needs. Before the intervention began, the researchers pre-selected four comparison schools by matching based on achievement and also on demographics. A difference-in-difference analysis finds a significant increase of about 0.11 standard deviation in test scores per year for students in the program schools. Supplementary event study and synthetic control analyses to detect year-by-year effects lack precision but are weakly suggestive of a smaller impact in year 1 than later years. A cost analysis considers the affordability of extending similar programs.
Author contact info: Julian Betts Department of Economics, 0508 University of California, San Diego 9500 Gilman Drive La Jolla, CA 92093-0508 Tel: 858/534-3369 Fax: 858/534-7040 E-Mail: jbetts@ucsd.edu Andrew Zau Department of Economics UCSD 9500 Gilman Drive La Jolla, CA 92093-0508 USA E-Mail: azau@ucsd.edu Karen Bachofer Department of Economics, UCSD 9500 Gilman Drive La Jolla, CA 92093-0508 USA E-Mail: karenbachofer@gmail.com Dina Polichar Dept. of Economics UC San Diego 9500 Gilman Drive La Jolla, CA 92093-0508 USA E-Mail: dpolichar@ucsd.edu

Connected Lending of Last Resort - Mitchener, Kris James; Monnet, Eric (National Bureau of Economic Research Working Paper Series, 2023)
Because of secrecy, little is known about the political economy of central bank lending. Utilizing a novel, hand-collected historical daily dataset on loans to commercial banks, we analyze how personal connections matter for lending of last resort, highlighting the importance of governance for this core function of central banks. We show that, when faced with a banking panic in November 1930, the Banque de France (BdF) lent selectively rather than broadly, providing substantially more liquidity to connected banks – those whose board members were BdF shareholders. The BdF’s selective lending policy failed to internalize a negative externality – that lending would be insufficient to arrest the panic and that distress via contagion would spillover to connected banks. Connected lending of last resort fueled the worst banking crisis in French history, caused an unprecedented government bailout of the central bank, and resulted in loss of shareholder control over the central bank.
Author contact info: Kris James Mitchener Department of Economics Leavey School of Business Santa Clara University Santa Clara, CA 95053 Tel: 408/554-4340 Fax: 408/554-2331 E-Mail: kmitchener@scu.edu Eric Monnet Paris School of Economics 48 Bd Jourdan 75014 Paris France E-Mail: eric.monnet@psemail.eu

A Survey of Private Debt Funds - Block, Joern; Jang, Young Soo; Kaplan, Steven N; Schulze, Anna (National Bureau of Economic Research Working Paper Series, 2023)
Despite its large and increasing size in the U.S. and Europe, there is relatively little research on the private debt (PD) market, particularly compared to the bank and syndicated loan markets. Accordingly, in this paper, we survey U.S. and European investors with private debt assets under management (AuM) of over $300 billion. These investors are primarily direct lending funds. We ask the general partners (GPs) how they source, select, and evaluate deals, how they think of private debt relative to bank and syndicated loan financing, how they monitor their investments, how they interact with private equity (PE) sponsors and how they view the future of the market. The respondents provide primarily cash flow-based loans and believe that they finance companies and leverage levels that banks would not fund. The direct lending funds target unlevered returns that appear high relative to their risk. They use leverage in their funds, but appreciably less than banks and collateralized loan obligation funds (CLOs). They use and negotiate for both financial and incurrence covenants to monitor their investments. The presence of PE sponsors helps them lend more and craft more effective covenants. U.S. and European funds are similar on many dimensions, but the European funds rely less on PE sponsors and compete more with banks. Overall, the private debt market is both different from, but shares characteristics with the bank loan and syndicated loan markets.
Author contact info: Joern Block E-Mail: block@uni-trier.de Young Soo Jang 801 S Financial Pl Chicago, IL 60605 United States E-Mail: yjang0@chicagobooth.edu Steven N. Kaplan Booth School of Business The University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-4513 Fax: 773/702-0458 E-Mail: steven.kaplan@chicagobooth.edu Anna Schulze E-Mail: schulzea@uni-trier.de

Bank Stress Testing, Human Capital Investment and Risk Management - Schneider, Thomas; Strahan, Philip; Yang, Jun (National Bureau of Economic Research Working Paper Series, 2023)
This paper studies banks’ investment in risk management practices following the Global Financial Crisis and the advent of stress testing. Banks that experienced greater losses during the Crisis exhibit stronger demand for risk management talents. Banks increase their demand for highly skilled stress test labor in anticipation of a test and following poor performance on a test. Following this higher demand, banks exhibit lower systematic risk and lower profitability. While stress testing has modernized banks’ internal risk management by spurring the acquisition of highly skilled risk management talent, recent changes to the tests could erode its efficacy.
Author contact info: Thomas Schneider Old Dominion University Norfolk, VA 23529 E-Mail: tischnei@odu.edu Philip Strahan Carroll School of Management 324B Fulton Hall Boston College Chestnut Hill, MA 02467 Tel: 617/552-6430 E-Mail: philip.strahan@bc.edu Jun Yang Mendoza College of Business University of Notre Dame Notre Dame, IN 46556 E-Mail: jyang23@nd.edu

Time Savings When Working from Home - Aksoy, Cevat Giray; Barrero, Jose Maria; Bloom, Nicholas; Davis, Steven J; Dolls, Mathias; Zarate, Pablo (National Bureau of Economic Research Working Paper Series, 2023)
We quantify the commute time savings associated with work from home, drawing on data for 27 countries. The average daily time savings when working from home is 72 minutes in our sample. We estimate that work from home saved about two hours per week per worker in 2021 and 2022, and that it will save about one hour per week per worker after the pandemic ends. Workers allocate 40 percent of their time savings to their jobs and about 11 percent to caregiving activities. People living with children allocate more of their time savings to caregiving.
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

China in Tax Havens - Clayton, Christopher; Coppola, Antonio; Dos Santos, Amanda; Maggiori, Matteo; Schreger, Jesse (National Bureau of Economic Research Working Paper Series, 2023)
We document the rise of China in offshore capital markets. Chinese firms use global tax havens to access foreign capital both in equity and bond markets. In the last twenty years, China's presence went from raising a negligible amount of capital in these markets to accounting for more than half of equity issuance and around a fifth of global corporate bonds outstanding in tax havens. Using rich micro data, we show that a range of Chinese firms, including both tech giants and SOEs, use these offshore centers. We conclude by discussing the macroeconomic and financial stability implications of these patterns.
Author contact info: Christopher Clayton Yale School of Management 165 Whitney Avenue P.O. Box 208200 New Haven, CT 06520-8200 E-Mail: christopherdclayton@gmail.com Antonio Coppola Stanford University 655 Knight Way Stanford, CA 94305 E-Mail: acoppola@stanford.edu Amanda Dos Santos Columbia University E-Mail: amanda.dossantos@gsb.columbia.edu Matteo Maggiori Stanford University Graduate School of Business 655 Knight Way Stanford, CA 94305 E-Mail: maggiori@stanford.edu Jesse Schreger Columbia Business School 665 W 130th St Kravis Hall, 551 New York, NY 10027 Tel: 212-851-0171 Fax: 212-662-8474 E-Mail: jesse.schreger@columbia.edu

New Measurement of Export Participation in U.S. Manufacturing - Boehm, Christoph; Flaaen, Aaron B; Pandalai-Nayar, Nitya (National Bureau of Economic Research Working Paper Series, 2023)
We measure export participation rates in the U.S. manufacturing sector using a new administrative dataset and compare them to participation rates constructed from the commonly used Census of Manufacturers (CM). Both at the establishment and firm level export participation rates are near 40 percent in the administrative data, almost twice as high as in the CM. The discrepancy appears to result predominantly from under-counting of small exporters in the CM. Our findings call for reconsidering the conventional wisdom that around 20 percent of manufacturing firms export.
Author contact info: Christoph Boehm Department of Economics University of Texas at Austin BRB 3.114 2225 Speedway Austin, TX 78712 Tel: 512/475-8531 E-Mail: chris.e.boehm@gmail.com Aaron B. Flaaen Federal Reserve Board of Governors 20th and C St. Washington DC. 20551 E-Mail: aaron.b.flaaen@frb.gov 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

Boomerang Children and Parental Retirement Outcomes - Seiter, Grant M; Lopez, Mary J; Slavov, Sita (National Bureau of Economic Research Working Paper Series, 2023)
As the share of U.S. adult children living with their parents increases, it is important to understand how children who “boomerang” back home impact their parents in their pre-retirement and post-retirement years. We use data from the Health and Retirement Study (HRS) to examine the effects of boomerang children on their parents’ labor market expectations and choices, as well as on their wealth, health, and life satisfaction. Event study analysis suggests that boomerang children return home due to short-term instabilities, such as negative shocks to marriage, income, and employment. We find that boomerang children are associated with a small increase in their parents’ subjective probability of working after age 65. However, there is no clear statistically significant evidence that they impact parents’ current or future labor market choices; nor is there any evidence that they affect parents’ wealth, health, or life satisfaction.
Author contact info: Grant M. Seiter Department of Economics University of Virginia P.O. Box 400182 Charlottesville, VA 22904-4182 E-Mail: seiterecon@gmail.com Mary Lopez Economics Department Occidental College 1600 Campus Road Los Angeles, CA 90041 E-Mail: mlopez@oxy.edu Sita Slavov Schar School of Policy and Government George Mason University 3351 Fairfax Drive, MS 3B1 Arlington, VA 22201 Tel: 703/993-3171 E-Mail: sslavov@gmu.edu

Ethnic Remoteness Reduces the Peace Dividend from Trade Access - Desmet, Klaus; Gomes, Joseph F (National Bureau of Economic Research Working Paper Series, 2023)
This paper shows that ethnically remote locations do not reap the full peace dividend from increased market access. Exploiting the staggered implementation of the US-initiated Africa Growth and Opportunity Act (AGOA) and using high-resolution data on ethnic composition and violent conflict for sub-Saharan Africa, our analysis finds that in the wake of improved trade access conflict declines less in locations that are ethnically remote from the rest of the country. We hypothesize that ethnic remoteness acts as a barrier that hampers participation in the global economy. Consistent with this hypothesis, satellite-based luminosity data show that the income gains from improved trade access are smaller in ethnically remote locations, and survey data indicate that ethnically more distant individuals do not benefit from the same positive income shocks when exposed to increased market access. These results underscore the importance of ethnic barriers when analyzing which locations and groups might be left behind by globalization.
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 Joseph F. Gomes Institute of Economic and Social Research (IRES) College L.H. Dupriez, 3 Place Montesquieu B-1348 L2.06.01 Louvain-la-Neuve Belgium E-Mail: joseph.gomes@uclouvain.be

Parameter Recovery Using Remotely Sensed Variables - Proctor, Jonathan; Carleton, Tamma; Sum, Sandy (National Bureau of Economic Research Working Paper Series, 2023)
Remotely sensed measurements and other machine learning predictions are increasingly used in place of direct observations in empirical analyses. Errors in such measures may bias parameter estimation, but it remains unclear how large such biases are or how to correct for them. We leverage a new benchmark dataset providing co-located ground truth observations and remotely sensed measurements for multiple variables across the contiguous U.S. to show that the common practice of using remotely sensed measurements without correction leads to biased parameter point estimates and standard errors across a diversity of empirical settings. More than three-quarters of the 95% confidence intervals we estimate using remotely sensed measurements do not contain the true coefficient of interest. These biases result from both classical measurement error and more structured measurement error, which we find is common in machine learning based remotely sensed measurements. We show that multiple imputation, a standard statistical imputation technique so far untested in this setting, effectively reduces bias and improves statistical coverage with only minor reductions in power in both simple linear regression and panel fixed effects frameworks. Our results demonstrate that multiple imputation is a generalizable and easily implementable method for correcting parameter estimates relying on remotely sensed variables.
Author contact info: Jonathan Proctor Harvard Center for the Environment 26 Oxford Street, 4th floor Cambridge, MA 02138 E-Mail: jproctor1@fas.harvard.edu Tamma Carleton Bren School of Environmental Science & Management University of California, Santa Barbara Santa Barbara, CA 93106 Tel: 415/816-7870 E-Mail: tcarleton@ucsb.edu Sandy Sum Bren School of Environmental Science & Management University of California, Santa Barbara Santa Barbara, CA 93106 E-Mail: sandysum@ucsb.edu

News Diffusion in Social Networks and Stock Market Reactions - Hirshleifer, David; Peng, Lin; Wang, Qiguang (National Bureau of Economic Research Working Paper Series, 2023)
We study how the social transmission of public news influences investors’ beliefs and securities markets. Using data on social networks, we find that earnings announcements from firms in higher-centrality counties generate stronger immediate price, volatility, and trading volume reactions. Post-announcement, such firms experience weaker price drift and faster volatility decay but higher and more persistent volume. These findings indicate that greater social connectedness promotes timely incorporation of news into prices, but also opinion divergence and excessive trading. We propose the social churning hypothesis, which is confirmed using granular data from StockTwits messages and household trading records.
Author contact info: David Hirshleifer Marshall School of Business University of Southern California 3670 Trousdale Pkwy Los Angeles, CA 90089 Tel: 213-740-6515 E-Mail: hirshlei@marshall.usc.edu Lin Peng Wasserman Department of Economics and Finance Baruch College City University of New York E-Mail: lin.peng@baruch.cuny.edu Qiguang Wang Wing Lung Bank Building, 34 Renfrew Road Kowloon Tong Hong Kong China E-Mail: qiguangw@hkbu.edu.hk

A Theory of Payments-Chain Crises - Bigio, Saki (National Bureau of Economic Research Working Paper Series, 2023)
This paper introduces an endogenous network of payments chains into a business cycle model. Agents order production in bilateral relations. Some payments are executed immediately. Other payments, chained payments, are delayed until other payments are executed. Because production starts only after orders are paid, chained payments induce production delays. In equilibrium, agents choose the amount of chained payments given interest rates and access to internal funds or credit lines. This choice determines the payments-chain network and aggregate total-factor productivity (TFP). The paper characterizes equilibrium dynamics and their innate inefficiencies. Agents internalize the direct costs of their payment delays, but do not internalize the costs induced onto others. This externality produces novel policy insights and rationalizes permanent reductions in TFP under excessive debt.
Author contact info: Saki Bigio Department of Economics University of California at Los Angeles 8283 Bunche Hall Box 951477 Los Angeles, CA 90095-1477 Tel: 917/455-6610 E-Mail: sbigio@econ.ucla.edu

Does Greater Public Scrutiny Hurt a Firm’s Performance? - Bennett, Benjamin; Stulz, René M; Wang, Zexi (National Bureau of Economic Research Working Paper Series, 2023)
Public attention to a firm may provide valuable monitoring, but it may also have a dark side by constraining management’s decisions and distracting it. We use inclusion in the S&P 500 index as a positive shock to public attention. Media coverage, Google searches, SEC downloads, SEC comment letters, shareholder proposals, analyst coverage, and lawsuits increase following inclusion. Post-inclusion performance falls and is negatively related to the increase in attention. Included firms’ investment and payout policies become more similar to those of index peers and the increase in similarity is positively related to the size of the attention increase.
Author contact info: Benjamin Bennett A.B. Freeman School of Business, Tulane University, McAlister Drive New Orleans, LA 70118 USA E-Mail: bbennett1@tulane.edu René M. Stulz The Ohio State University Fisher College of Business 806A Fisher Hall Columbus, OH 43210-1144 Tel: 614/292-1970 Fax: 614/292-2359 E-Mail: stulz@cob.osu.edu Zexi Wang Lancaster University, Management School Lancaster Lancaster LA1 4YX United Kingdom E-Mail: z.wang41@lancaster.ac.uk

The Potential Impact of Artificial Intelligence on Healthcare Spending - Sahni, Nikhil; Stein, George; Zemmel, Rodney; Cutler, David M (National Bureau of Economic Research Working Paper Series, 2023)
The potential of artificial intelligence (AI) to simplify existing healthcare processes and create new, more efficient ones is a major topic of discussion in the industry. Yet healthcare lags other industries in AI adoption. In this paper, we estimate that wider adoption of AI could lead to savings of 5 to 10 percent in US healthcare spending—roughly $200 billion to $360 billion annually in 2019 dollars. These estimates are based on specific AI-enabled use cases that employ today’s technologies, are attainable within the next five years, and would not sacrifice quality or access. These opportunities could also lead to nonfinancial benefits such as improved healthcare quality, increased access, better patient experience, and greater clinician satisfaction. We further present case studies and discuss how to overcome the challenges to AI deployments. We conclude with a review of recent market trends that may shift the AI adoption trajectory toward a more rapid pace.
Author contact info: Nikhil Sahni McKinsey & Company 280 Congress Street, Suite 1100 Boston, MA 02110 E-Mail: Nikhil_Sahni@mckinsey.com George Stein McKinsey & Company 1 Deforest Avenue, Suite 300 Summit, NJ 07901 E-Mail: George_Stein@mckinsey.com Rodney Zemmel McKinsey & Company 3 World Trade Center 175 Greenwich Street New York, NY 10007 E-Mail: rodney_zemmel@mckinsey.com David M. Cutler Department of Economics Harvard University 1875 Cambridge Street Cambridge, MA 02138 Tel: 617/496-5216 Fax: 617/496-8951 E-Mail: dcutler@harvard.edu

Market Incompleteness and Exchange Rate Spill-over - Jiang, Zhengyang (National Bureau of Economic Research Working Paper Series, 2023)
Financial variables in third countries explain a significant fraction of bilateral exchange rate movements, even after local variables and common factors are controlled for. This paper proposes an explanation of this exchange rate spill-over pattern based on market incompleteness, which arises when agents in different countries bear different exposures to foreign risks, while the asset space is not complete enough to hedge out these risks. This mechanism weakens the link between exchange rates and local fundamentals, and generates additional exchange rate variations and comovements. To study bilateral exchange rates, it is not sufficient to consider only the local conditions.
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

Deterrence or Backlash? Arrests and the Dynamics of Domestic Violence - Amaral, Sofia; Dahl, Gordon B; Endl-Geyer, Victoria; Hener, Timo; Rainer, Helmut (National Bureau of Economic Research Working Paper Series, 2023)
There is a vigorous debate on whether arrests for domestic violence (DV) will deter future abuse or create a retaliatory backlash. We study how arrests affect the dynamics of DV using administrative data for over 124,000 DV emergency calls (999 calls) for West Midlands, the second most populous county in England. We take advantage of conditional random assignment of officers to a case by call handlers, combined with systematic differences across police officers in their propensity to arrest suspected batterers. We find that an arrest reduces future DV calls in the ensuing year by 51%. This reduction is not driven by reduced reporting due to fear of retaliation, but instead a decline in repeat victimization. We reach this conclusion based on a threshold reporting model and its testable implications regarding (i) the severity of repeat DV calls and (ii) victim versus third-party reporting. Exploring mechanisms, we find that arrest virtually eliminates the large spike in re-victimization which occurs in the 48 hours after a call, consistent with arrest facilitating a cooling off period during a volatile, at-risk time. In the longer run, we estimate a sizeable deterrence effect. Substantiating this, arrest increases the probability an offender is charged with a crime. Our findings suggest that if the goal is to lower the number of domestic violence incidents, police should lower their threshold for arrest, not decriminalize domestic violence.
Author contact info: Sofia Amaral The World Bank South Asia Gender Innovation Lab E-Mail: s.amaral@worldbank.org Gordon B. Dahl Department of Economics University of California, San Diego 9500 Gilman Drive #0508 La Jolla, CA 92093-0508 Tel: 858-822-0644 E-Mail: gdahl@ucsd.edu Victoria Endl-Geyer ifo Institute Center for Labor and Demographic Economics Poschingerstraße 5 81679 Munich Germany E-Mail: endl-geyer@ifo.de Timo Hener Aarhus University Department of Economics and Business Economics Fuglesangs Alle 4 Aarhus Aarhus 8210 Denmark E-Mail: thener@econ.au.dk Helmut Rainer University of Munich Ludwigstrasse 28 80539 Munich Germany E-Mail: rainer@econ.lmu.de

Achieving Universal Health Insurance Coverage in the United States: Addressing Market Failures or Providing a Social Floor? - Baicker, Katherine; Chandra, Amitabh; Shepard, Mark (National Bureau of Economic Research Working Paper Series, 2023)
The United States spends substantially more on health care than most developed countries, yet leaves a greater share of the population uninsured. We suggest that incremental insurance expansions focused on addressing market failures will propagate inefficiencies and are not likely to facilitate active policy decisions that align with societal coverage goals. By instead defining a basic bundle of services that is publicly financed for all, while allowing individuals to purchase additional coverage, policymakers could both expand coverage and maintain incentives for innovation, fostering universal access to innovative care in an affordable system.
Author contact info: Katherine Baicker Provost’s Office, Levi Hall 5801 S. Ellis Ave Chicago, IL 60637 E-Mail: kbaicker@uchicago.edu Amitabh Chandra John F. Kennedy School of Government Harvard University 79 JFK Street Cambridge, MA 02138 Tel: 617/496-7356 E-Mail: amitabh_chandra@harvard.edu Mark Shepard Harvard Kennedy School Mailbox 114 79 JFK Street Cambridge, MA 02138 Tel: 617/496-5062 E-Mail: mark_shepard@hks.harvard.edu

Fixed and Variable Longevity Annuities in Defined Contribution Plans: Optimal Retirement Portfolios Taking Social Security into Account - Horneff, Vanya; Maurer, Raimond; Mitchell, Olivia S (National Bureau of Economic Research Working Paper Series, 2023)
This paper investigates retirees’ optimal purchases of fixed and variable longevity income annuities using their defined contribution (DC) plan assets and given their expected Social Security benefits. As an alternative, we also evaluate using plan assets to boost Social Security benefits through delayed claiming. We determine that including deferred income annuities in DC accounts is welfare enhancing for all sex/education groups examined. We also show that providing access to well-designed variable deferred annuities with some equity exposure further enhances retiree wellbeing, compared to having access only to fixed annuities. Nevertheless, for the least educated, delaying claiming Social Security is preferred, whereas the most educated benefit more from using accumulated DC plan assets to purchase deferred annuities.
Author contact info: Vanya Horneff Goethe University Frankfurt Finance Department Theodor-W. Adorno Platz 3 60323 Frankfurt Germany E-Mail: vhorneff@finance.uni-frankfurt.de Raimond Maurer Goethe University Frankfurt Finance Department Theodor-W. Adorno Platz 3 60323 Frankfurt am Main Germany E-Mail: maurer@finance.uni-frankfurt.de Olivia S. Mitchell University of Pennsylvania The Wharton School 3620 Locust Walk, St 3000 SH-DH Philadelphia, PA 19104-6302 Tel: 215-898-0424 E-Mail: mitchelo@wharton.upenn.edu

Predicting and Preventing Gun Violence: An Experimental Evaluation of READI Chicago - Bhatt, Monica P; Heller, Sara B; Kapustin, Max; Bertrand, Marianne; Blattman, Christopher (National Bureau of Economic Research Working Paper Series, 2023)
Gun violence is the most pressing public safety problem in American cities. We report results from a randomized controlled trial (N = 2, 456) of a community-researcher partnership called the Rapid Employment and Development Initiative (READI) Chicago. The program offered an 18-month job alongside cognitive behavioral therapy and other social support. Both algorithmic and human referral methods identified men with strikingly high scope for gun violence reduction: for every 100 people in the control group, there were 11 shooting and homicide victimizations during the 20-month outcome period. Fifty-five percent of the treatment group started programming, comparable to take-up rates in programs for people facing far lower mortality risk. After 20 months, there is no statistically significant change in an index combining three measures of serious violence, the study’s primary outcome. Yet there are signs that this program model has promise. One of the three measures, shooting and homicide arrests, declines 65 percent (p = 0.13 after multiple testing adjustment). Because shootings are so costly, READI generates estimated social savings between $182,000 and $916,000 per participant (p = 0.03), implying a benefit-cost ratio between 4:1 and 18:1. Moreover, participants referred by outreach workers—a pre-specified subgroup—show enormous declines in both arrests and victimizations for shootings and homicides (79 and 43 percent, respectively) that remain statistically significant even after multiple testing adjustments. These declines are concentrated among outreach referrals with higher predicted risk, suggesting that human and algorithmic targeting may work better together.
Author contact info: Monica P. Bhatt University of Chicago Crime and Education Labs 33 North LaSalle Street Suite 1600 Chicago, IL 60602 E-Mail: mbhatt@uchicago.edu Sara B. Heller University of Michigan Department of Economics 611 Tappan Street, Lorch Hall Room 238 Ann Arbor, MI 48109 E-Mail: sbheller@umich.edu Max Kapustin Department of Economics Brooks School of Public Policy Cornell University Martha Van Rensselaer Hall Ithaca, NY 14853 E-Mail: kapustin@cornell.edu Marianne Bertrand Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 Tel: 773/834-5943 Fax: 773/702-0458 E-Mail: marianne.bertrand@chicagobooth.edu Christopher Blattman Harris School of Public Policy The University of Chicago 1307 E 60th St Chicago, IL 60637 E-Mail: blattman@gmail.com

Mandatory Seatbelt Laws and Traffic Fatalities: A Reassessment - Anderson, D. Mark; Liang, Yang; Sabia, Joseph J (National Bureau of Economic Research Working Paper Series, 2023)
Using data from the Fatality Analysis Reporting System for the period 1983-1997, Cohen and Einav (Review of Economics and Statistics 2003; 85(4): 828–843) found that mandatory seatbelt laws were associated with a 4 to 6 percent reduction in traffic fatalities among motor vehicle occupants. After successfully replicating their two-way fixed effects estimates, we (1) add 22 years of data (1998-2019) to capture additional seatbelt policy variation and observe a longer post-treatment period, (2) employ the interaction-weighted estimator proposed by Sun and Abraham (2021) to address potential bias due to heterogeneous and dynamic treatment effects, and (3) estimate event-study models to investigate pre-treatment trends and explore lagged post-treatment effects. Consistent with Cohen and Einav (2003), our updated estimates show that primary seatbelt laws are associated with a 5 to 9 percent reduction in fatalities among motor vehicle occupants. Estimated effects of secondary seatbelt laws are smaller in magnitude and sensitive to model choice.
Author contact info: D. Mark Anderson Department of Agricultural Economics & Economics Montana State University P.O. Box 172920 Bozeman, MT 59717 Tel: 406/366-0921 E-Mail: dwight.anderson@montana.edu Yang Liang San Diego State University Department of Economics Center for Health Economics & Policy Studies 5500 Campanile Drive San Diego, CA 92182 E-Mail: yang.liang@sdsu.edu Joseph J. Sabia San Diego State University Department of Economics Center for Health Economics & Policy Studies 5500 Campanile Drive San Diego, CA 92182 E-Mail: jsabia@sdsu.edu

A Simple Rational Expectations Model of the Voltage Effect - Al-Ubaydli, Omar; Lai, Chien-Yu; List, John A (National Bureau of Economic Research Working Paper Series, 2023)
The “voltage effect” is defined as the tendency for a program’s efficacy to change when it is scaled up, which in most cases results in the absolute size of a program’s treatment effects to diminish when the program is scaled. Understanding the scaling problem and taking steps to diminish voltage drops are important because if left unaddressed, the scaling problem can weaken the public’s faith in science, and it can lead to a misallocation of public resources. There exists a growing literature illustrating the prevalence of the scaling problem, explaining its causes, and proposing countermeasures. This paper adds to the literature by providing a simple model of the scaling problem that is consistent with rational expectations by the key stakeholders. Our model highlights that asymmetric information is a key contributor to the voltage effect.
Author contact info: Omar Al-Ubaydli Department of Economics and Mercatus Center George Mason University E-Mail: omar@omar.ec Chien-Yu Lai The Department of Economics University of Chicago E. 59th Street Chicago, IL 60637 E-Mail: cylai@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

The Aggregate Effects of Global and Local Supply Chain Disruptions: 2020–2022 - Alessandria, George A; Khan, Shafaat Y; Khederlarian, Armen; Mix, Carter B; Ruhl, Kim J (National Bureau of Economic Research Working Paper Series, 2023)
We study the aggregate effects of supply-chain disruptions in the post-pandemic period in a heterogeneous-firm, general equilibrium model with input-output linkages and a rich set of supply chain frictions: uncertain shipping delays, fixed order costs, and storage costs. Firms optimally hold inventories that depend on the source of supply, domestic or imported. Increases in shipping times are contractionary, raise prices, and increase stockouts, particularly for goods intensive in delayed inputs. These effects are larger when inventories are already at low levels. We fit the model to the U.S. and global economies from 2020–2022 and estimate large aggregate effects of supply disruptions. Our model predicts that the boost in output from reducing delays will be smaller than the contraction from the waning effects of stimulus.
Author contact info: George A. Alessandria Department of Economics University of Rochester Harkness 204 Rochester, NY 14627 Tel: 585/275-3096 E-Mail: george.alessandria@rochester.edu Shafaat Y. Khan Department of Economics Syracuse University Syracuse, NY USA E-Mail: shafaatyar.k@gmail.com Armen Khederlarian Hunter College CUNY Department of Economics 695 Park Ave, HW1535 New York, NY 10065 E-Mail: armen.khederlarian@hunter.cuny.edu Carter B. Mix Division of International Finance Federal Reserve Board of Governors 20th & C St. NW Washington, DC 20551 E-Mail: carter.mix@gmail.com Kim J. Ruhl Department of Economics University of Wisconsin-Madison 7444 Social Science Building 1180 Observatory Drive Madison, WI 53706 E-Mail: ruhl2@wisc.edu

Suboptimal Household Investment and Information-Processing Frictions: Evidence from 529 College Savings Plans - Li, James J; Mitchell, Olivia S; Zhu, Christina (National Bureau of Economic Research Working Paper Series, 2023)
We use the 529 college savings plan setting to investigate whether and why households make suboptimal choices to invest in local assets. We estimate that 67% of open accounts between 2010 and 2020 were located suboptimally, due to the plans’ tax inefficiencies and high expenses. Over the accounts’ projected lifetimes, such investments yielded expected losses of 8% on average, or $13.4 billion in 2020 alone. We then investigate why suboptimal investment is so prevalent. Consistent with households’ lack of understanding of state-level tax benefits, we find that a meaningful proportion of households does not account for the potential tax benefits and costs of local versus nonlocal 529 investment. Household financial literacy and plan disclosure complexity appear to explain suboptimal investment patterns, which further supports the role of information-processing frictions. Our study presents novel evidence on individuals’ preferences for local assets and how information-processing frictions shape their investment decisions, reducing their financial well-being.
Author contact info: James Li E-Mail: jjli@wharton.upenn.edu Olivia S. Mitchell University of Pennsylvania The Wharton School 3620 Locust Walk, St 3000 SH-DH Philadelphia, PA 19104-6302 Tel: 215-898-0424 E-Mail: mitchelo@wharton.upenn.edu Christina Zhu 1320 Steinberg Hall-Dietrich Hall 3620 Locust Walk, Wharton School - University of Pennsylvania Philadelphia, PA 19104 USA E-Mail: chrzhu@wharton.upenn.edu

Like an Ink Blot on Paper: Testing the Diffusion Hypothesis of Mass Migration, Italy 1876-1920 - Spitzer, Yannay; Zimran, Ariell (National Bureau of Economic Research Working Paper Series, 2023)
To explain the evolution of mass migration from Italy (1876--1920), we introduce the diffusion hypothesis, which augments traditional models of migration by allowing the spatial diffusion of migration over social networks in the country of origin. We test and validate the predictions of this theory using a new and comprehensive municipality- and district-level panel of emigration data over four decades. Italian migration began in a few separate epicenters from which it expanded gradually over time in an orderly spatial movement that dominated local push factors. While the main patterns that we document are parsimoniously explained by the diffusion hypothesis, they are difficult to rationalize by alternative theories. Confirming the diffusion hypothesis in the Italian case suggests that networks may be far more important than is commonly understood in shaping other movements of mass migration and may shape them in ways that have not previously been understood.
Author contact info: Yannay Spitzer Department of Economics The Hebrew University of Jerusalem Mt. Scopus Jerusalem 9190501 Israel E-Mail: yannay.spitzer@mail.huji.ac.il Ariell Zimran Department of Economics Vanderbilt University 2301 Vanderbilt Place Nashville, TN 37235 Tel: 615/322-1529 E-Mail: ariell.zimran@vanderbilt.edu

The Health of Democracies During the Pandemic: Results from a Randomized Survey Experiment - Alsan, Marcella; Braghieri, Luca; Eichmeyer, Sarah; Kim, Minjeong Joyce; Stantcheva, Stefanie; Yang, David Y (National Bureau of Economic Research Working Paper Series, 2023)
Concerns have been raised about the “demise of democracy”, possibly accelerated by pandemic-related restrictions. Using a survey experiment involving 8,206 respondents from five Western democracies, we find that subjects randomly exposed to information regarding civil liberties infringements undertaken by China and South Korea to contain COVID-19 became less willing to sacrifice rights and more worried about their long-term-erosion. However, our treatment did not increase support for democratic procedures more generally, despite our prior evidence that pandemic-related health risks diminished such support. These results suggest that the start of the COVID-19 crisis was a particularly vulnerable time for democracies.
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 Luca Braghieri Department of Decision Sciences Bocconi University Via Roentgen, 1 (5th floor) 20136, Milano Italy E-Mail: luca.braghieri@unibocconi.it Sarah Eichmeyer Via Roberto Sarfatti 25 Milan 20100 Italy E-Mail: sarah.eichmeyer@unibocconi.it Minjeong Joyce Kim Department of Economics University of Michigan 238 Lorch Hall 611 Tappan Ave. Ann Arbor, MI 48109-1220 E-Mail: joycekim@umich.edu Stefanie Stantcheva Department of Economics Littauer Center 232 Harvard University Cambridge, MA 02138 Tel: 617-496-2614 E-Mail: sstantcheva@fas.harvard.edu David Y. Yang Department of Economics Harvard University Littauer Center M-31 Cambridge, MA 02138 E-Mail: davidyang@fas.harvard.edu

The Strange and Awful Path of Productivity in the U.S. Construction Sector - Goolsbee, Austan; Syverson, Chad (National Bureau of Economic Research Working Paper Series, 2023)
Aggregate data show a large and decades-long decline in construction sector productivity. This decline in such a large sector has had a material effect on secular productivity growth for the economy as a whole. Prior work has focused on the role of potential measurement problems in construction, particularly output deflators in the measurement of productivity. This paper brings some new evidence to bear on the industry’s measured productivity problems and suggests that measurement error is probably not the sole source of the stagnation. First, using measures of physical productivity in housing construction, productivity is falling or, at best, stagnant over multiple decades. Second, there has been a noticeable decline over time in the efficiency with which construction firms translate materials inputs into output, and a corresponding shift toward more value-added-intensive production. Third, using state-level data, we do not find evidence of patterns of within-industry reallocation that might be expected of efficiently operating input and output markets. States with more productive construction sectors do not see growth in their shares of total U.S. construction activity; if anything, their shares fall. This may point to frictions in these markets that slow or stop what is in many other markets an important channel for productivity growth.
Author contact info: Austan Goolsbee Booth School of Business University of Chicago 5807 S. Woodlawn Avenue Chicago, IL 60637 Tel: 773/702-5869 Fax: 773/702-0458 E-Mail: goolsbee@chicagobooth.edu Chad Syverson University of Chicago Booth School of Business 5807 S. Woodlawn Ave. Chicago, IL 60637 Tel: 773/702-7815 Fax: 773/702-8490 E-Mail: chad.syverson@chicagobooth.edu

Interest Rates and World Trade: An 'Austrian' Perspective - Antràs, Pol (National Bureau of Economic Research Working Paper Series, 2023)
This paper develops a framework to study the interplay between world trade and interest rates. The model incorporates an explicit notion of time and of production length, along the lines of the ‘Austrian’ tradition of Böhm-Bawerk (1889). Changes in the interest rate affect production lengths, labor productivity, and the financial costs of exporting. I decompose the response of the volume of world trade to changes in the interest rate into four components: (i) a labor productivity effect, (ii) a propensity to consume out of labor income effect, (iii) a temporal dimension of variable trade costs effect, and (iv) a selection into exporting effect.
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

Two Decades of Social Security Claiming - Slavov, Sita (National Bureau of Economic Research Working Paper Series, 2023)
Twenty years ago, the adjustment to monthly Social Security benefits for early or delayed claiming was, on average, roughly actuarially fair, although some subsets of individuals could gain from delay. Since then, delaying claiming has become much more attractive thanks to three factors: a more generous delayed retirement credit, improvements in mortality, and historically low real interest rates. In this article, I examine how these three factors influence optimal claiming behavior. I also discuss empirical patterns of claiming across individuals and over time, as well as explanations for these patterns. I argue that although many people appear to claim suboptimally early, this behavior may be changing as information spreads about the importance of the claiming decision. Finally, I discuss policy towards claiming and the impact that an increase in strategic claiming could have on Social Security’s finances.
Author contact info: Sita Slavov Schar School of Policy and Government George Mason University 3351 Fairfax Drive, MS 3B1 Arlington, VA 22201 Tel: 703/993-3171 E-Mail: sslavov@gmu.edu

Internalizing Externalities: Disclosure Regulation for Hydraulic Fracturing, Drilling Activity and Water Quality - Bonetti, Pietro; Leuz, Christian; Michelon, Giovanna (National Bureau of Economic Research Working Paper Series, 2023)
The rise of shale gas and tight oil development has triggered a major debate about hydraulic fracturing (HF). In an effort to mitigate risks from HF, especially with respect to water quality, many U.S. states have introduced disclosure mandates for HF wells and fracturing fluids. We use this setting to study whether targeting corporate activities that have dispersed environmental externalities with disclosure regulation to create public pressure reduces their environmental impact. We find significant improvements in water quality, examining salts that are considered signatures for HF impact, after the disclosure mandates are introduced. We document effects along the extensive and the intensive margin, though most of the improvement comes from the latter. Supporting this interpretation, we find that, after the disclosure mandates, operators pollute less per unit of production, use fewer toxic chemicals, and cause fewer spills and leaks of HF fluids and wastewater. We also show that disclosure enables public pressure and that this pressure facilitates internalization.
Author contact info: Pietro Bonetti E-Mail: pbonetti@iese.edu 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 Giovanna Michelon 15-19 Tyndalls Park Road Bristol BS8 1PQ United Kingdom E-Mail: giovanna.michelon@bristol.ac.uk

Feedback and Contagion through Distressed Competition - Chen, Hui; Dou, Winston Wei; Guo, Hongye; Ji, Yan (National Bureau of Economic Research Working Paper Series, 2023)
Firms tend to compete more aggressively in financial distress; this intensified competition, in turn, reduces profit margins, pushing themselves further into distress and adversely affecting their industry peers. To study such feedback and contagion effects, we incorporate strategic competition into a dynamic model with long-term defaultable debt, exploring various peer interactions like predation and price war. The feedback effect represents a novel source of financial distress costs associated with leverage, which helps explain the negative profitability-leverage relation across industries. Owing to the contagion effect, firms’ optimal leverage is often excessively high from an industry perspective, undermining the industry's financial stability.
Author contact info: Hui Chen MIT Sloan School of Management 77 Massachusetts Ave, E62-616 Cambridge, MA 02139 Tel: 617/324-3896 Fax: 617/258-6855 E-Mail: huichen@mit.edu Winston Wei Dou The Wharton School University of Pennsylvania 2318 Steinberg-Dietrich Hall 3620 Locust Walk Philadelphia, PA 19104 Tel: 215/746-0005 E-Mail: wdou@wharton.upenn.edu Hongye Guo 724 K. K. Leung Building University of Hong Kong E-Mail: silver.hongye.guo@gmail.com Yan Ji Room 5005, Department of Finance Lee Shau Kee Business Building Clear Water Bay, Kowloon Hong Kong Tel: (852)23588298 E-Mail: jiy@ust.hk

Opiates of the Masses? Deaths of Despair and the Decline of American Religion - Giles, Tyler; Hungerman, Daniel M; Oostrom, Tamar (National Bureau of Economic Research Working Paper Series, 2023)
In recent decades, death rates from poisonings, suicides, and alcoholic liver disease have dramatically increased in the United States. We show that these "deaths of despair" began to increase relative to trend in the early 1990s, that this increase was preceded by a decline in religious participation, and that both trends were driven by middle-aged white Americans. Using repeals of blue laws as a shock to religiosity, we confirm that religious practice has significant effects on these mortality rates. Our findings show that social factors such as organized religion can play an important role in understanding deaths of despair.
Author contact info: Tyler Giles 106 Central Street Pendleton East Hall Wellesley, MA 02481 USA E-Mail: tg105@wellesley.edu Daniel M. Hungerman Department of Economics University of Notre Dame 3056 Jenkins-Nanovic Halls Notre Dame, IN 46556-5602 Tel: 574/631-4495 Fax: 574/631-4783 E-Mail: dhungerm@nd.edu Tamar Oostrom Department of Economics The Ohio State University 1945 N High St Columbus, Ohio 43210 Tel: 540/319-1620 E-Mail: oostrom.1@osu.edu

Economics and Measurement: New measures to model decision making - Almås, Ingvild; Attanasio, Orazio; Jervis, Pamela (National Bureau of Economic Research Working Paper Series, 2023)
Most empirical work in economics has considered only a narrow set of measures as meaningful and useful to characterize individual behavior, a restriction justified by the difficulties in collecting a wider set. However, this approach often forces the use of strong assumptions to estimate the parameters that inform individual behavior and identify causal links. In this paper, we argue that a more flexible and broader approach to measurement could be extremely useful and allow the estimation of richer and more realistic models that rest on weaker identifying assumptions. We argue that the design of measurement tools should interact with, and depend on, the models economists use. Measurement is not a substitute for rigorous theory, it is an important complement to it, and should be developed in parallel to it. We illustrate these arguments with a model of parental behavior estimated on pilot data that combines conventional measures with novel ones.
Author contact info: Ingvild Almås Institute for International Economic Studies Stockholm University SE-106 91 Stockholm Sweden E-Mail: Ingvild.Almas@nhh.no Orazio Attanasio Department of Economics Yale University 87 Trumbull Street New Haven, CT 06511 E-Mail: orazio.attanasio@yale.edu Pamela Jervis Department of Industrial Engineering University of Chile Beauchef 851 Santiago, Chile E-Mail: pjervisr@uchile.cl

Urban Renewal and Inequality: Evidence from Chicago's Public Housing Demolitions - Almagro, Milena; Chyn, Eric; Stuart, Bryan A (National Bureau of Economic Research Working Paper Series, 2023)
This paper studies one of the largest spatially targeted redevelopment efforts implemented in the United States: public housing demolitions sponsored by the HOPE VI program. Focusing on Chicago, we study welfare and racial disparities in the impacts of demolitions using a structural model that features a rich set of equilibrium responses. Our results indicate that demolitions had notably heterogeneous effects where welfare decreased for low-income minority households and increased for White households. Counterfactual simulations explore how housing policy mitigates negative effects of demolitions and suggest that increased public housing site redevelopment is the most effective policy for reducing racial inequality.
Author contact info: Milena Almagro Booth School of Business University of Chicago 5807 South Woodlawn Avenue Chicago, IL 60637 E-Mail: Milena.almagro@chicagobooth.edu 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 Bryan A. Stuart Federal Reserve Bank of Philadelphia Research Department 10 Independence Mall Philadelphia, PA 19106 USA E-Mail: bryan.stuart@phil.frb.org

Language Environment and Maternal Expectations: An Evaluation of the LENA Start Program - Cunha, Flavio; Gerdes, Marsha; Hu, Qinyou; Nihtianova, Snejana (National Bureau of Economic Research Working Paper Series, 2023)
Research documents that parental beliefs influence early investments in children, which, in turn, determine early human capital and, eventually, other skills children acquire in later stages of the lifecycle, such as literacy. Our paper reports the results of an experimental evaluation of the LENA Start Program, a group- and center-based parenting program that teaches the science of early language development, models verbal interaction behaviors with children, and provides objective feedback to improve the early language environment. The intervention changes parental beliefs and impacts the quantity and quality of parental linguistic input.
Author contact info: Flavio Cunha Department of Economics Rice University P.O. Box 1892 Houston, TX 77251-1892 Tel: 713-348-4875 E-Mail: flaviocunha@rice.edu Marsha Gerdes 3615 Civic Center Blvd Philadelphia, PA 19104 USA E-Mail: gerdes@chop.edu Qinyou Hu Department of Economics Rice University P.O. Box 1892 Houston, TX 77251-1892 E-Mail: qinyou.hu@rice.edu Snejana Nihtianova P.O. Box 1892 Houston, Texa 77251-1892 USA E-Mail: snejana.nihtianova@rice.edu

Willingness to Accept, Willingness to Pay, and Loss Aversion - Chapman, Jonathan; Dean, Mark; Ortoleva, Pietro; Snowberg, Erik; Camerer, Colin (National Bureau of Economic Research Working Paper Series, 2023)
We use four incentivized representative surveys to study the endowment effect for lotteries in 4,000 U.S. adults. We replicate the standard finding of an endowment effect—the divergence between Willingness to Accept (WTA) and Willingness to Pay (WTP), but document three new findings. First, we find little evidence that the endowment effect is related to loss aversion for risky prospects, counter to predictions of popular theories in economics. Second, WTA and WTP not only diverge, but are, at best, weakly correlated. Third, WTA and WTP strongly relate to other aspects of risk preferences. The structure of these behaviors points to different theories of the endowment effect.
Author contact info: Jonathan Chapman Department of Economics University of Bologna Bologna Italy E-Mail: jnchapman.econ@gmail.com Mark Dean Columbia University 420 W 118th Street New York, NY 10027 E-Mail: Mark.Dean@columbia.edu Pietro Ortoleva Department of Economics Princeton University Julis Romo Rabinowitz Princeton, NJ 08544 E-Mail: pietro.ortoleva@princeton.edu Erik Snowberg David Eccles School of Business University of Utah Salt Lake City, UT 84112-8914 E-Mail: Erik.Snowberg@ubc.ca Colin Camerer Division of the Humanities and Social Sciences California Institute of Technology 1200 E. California Blvd. MC 228-77 Pasadena, CA 91125 E-Mail: camerer@hss.caltech.edu

Water Treatment And Child Mortality: A Meta-Analysis And Cost-effectiveness Analysis - Kremer, Michael; Luby, Stephen P; Maertens, Ricardo; Tan, Brandon; Więcek, Witold (National Bureau of Economic Research Working Paper Series, 2023)
Randomized controlled trials (RCTs) of water treatment are typically powered to detect effects on caregiver-reported diarrhea but not child mortality, as detecting mortality effects requires prohibitively large sample sizes. Consequently, water treatment is seldom included in lists of cost-effective, evidence-backed child health interventions which are prioritized in health funding decisions. To increase statistical power, we conducted a systematic review and meta-analysis. We replicated search and selection criteria from previous meta-analyses of RCTs aimed at improving water quality to prevent diarrhea in low- or middle-income countries which included children under 5 years old. We identified 52 RCTs and then obtained child mortality data from each study for which these data were collected and available, contacting authors of the study where necessary; this resulted in 15 studies.Frequentist and Bayesian methods were used to estimate the effect of water treatment on child mortality among included studies. We estimated a mean cross-study reduction in the odds of all-cause under-5 mortality of about 30% (Peto odds ratio, OR, 0.72; 95% CI 0.55 to 0.92; Bayes OR 0.70; 95% CrI 0.49 to 0.93). The results were qualitatively similar under alternative modeling and data inclusion choices. Taking into account heterogeneity across studies, the expected reduction in a new implementation is 25%. We used the results to examine the cost-effectiveness of investing in water treatment for point-of-collection chlorine dispensers or a large-scale program providing coupons for free chlorine solution. We estimate a cost per expected DALY averted due to water treatment of around USD 40 for both, accounting for delivery costs. This is approximately 45 times lower than the widely used threshold of 1x GDP per capita per DALY averted.
Author contact info: 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 Stephen P. Luby Division of Infectious Diseases and Geographic Medicine Stanford University Palo Alto, CA 94034 E-Mail: sluby@stanford.edu Ricardo Maertens Amazon 515 Westlake Ave N Seattle, WA 98109 E-Mail: ricardo.maertens@gmail.com Brandon Tan E-Mail: btan2@imf.org Witold Więcek Development Innovation Lab University of Chicago E-Mail: witold.wiecek@gmail.com

An Anatomy of Crypto-Enabled Cybercrimes - Cong, Lin William; Harvey, Campbell R; Rabetti, Daniel; Wu, Zong-Yu (National Bureau of Economic Research Working Paper Series, 2023)
While the advent of cryptocurrencies and digital assets holds promise for improving and disrupting financial systems by offering cheap, quick, and secure transfer of value, it also opens up new payment channels for cybercrimes. A prerequisite to solving a problem is understanding the nature of the problem. Assembling a diverse set of public, proprietary, and hand-collected data, including dark web conversations in Russian, we conduct the first detailed anatomy of crypto-enabled cybercrimes and highlight relevant economic issues. Our analyses reveal that a few organized ransomware gangs dominate the space and have evolved into sophisticated corporate-like operations with physical offices, franchising, and affiliation programs. Their techniques have also become more aggressive over time, entailing multiple layers of extortion and reputation management. Blanket restrictions on cryptocurrency usage may prove ineffective in tackling crypto-enabled cybercrime and hinder innovations. Instead, blockchain transparency and digital footprints enable effective forensics for tracking, monitoring, and shutting down dominant cybercriminal organizations.
Author contact info: Lin William Cong SC Johnson College of Business Cornell University Sage Hall Ithaca, NY 14853 Tel: 607/255-7859 E-Mail: will.cong@cornell.edu Campbell R. Harvey Duke University Fuqua School of Business Durham, NC 27708-0120 Tel: 919/660-7768 Fax: 919/660-8030 E-Mail: cam.harvey@duke.edu Daniel Rabetti Cornell Fintech Initiative and Coller School of Management Tel Aviv University Tel Aviv, Israel, 6997801 Israel Tel: 972 549107234 E-Mail: rabetti@mail.tau.ac.il Zong-Yu Wu Fox It New York Netherlands E-Mail: w.zongyu@gmail.com

Where Are the Workers? From Great Resignation to Quiet Quitting - Lee, Dain; Park, Jinhyeok; Shin, Yongseok (National Bureau of Economic Research Working Paper Series, 2023)
To better understand the tight post-pandemic labor market in the US, we decompose the decline in aggregate hours worked into the extensive (fewer people working) and the intensive margin changes (workers working fewer hours). Although the pre-existing trend of lower labor force participation especially by young men without a bachelor's degree accounts for some of the decline in aggregate hours, the intensive margin accounts for more than half of the decline between 2019 and 2022. The decline in hours among workers was larger for men than women. Among men, the decline was larger for those with a bachelor's degree than those with less education, for prime-age workers than older workers, and also for those who already worked long hours and had high earnings. Workers' hours reduction can explain why the labor market is even tighter than what is expected at the current levels of unemployment and labor force participation.
Author contact info: Dain Lee Department of Economics Washington University in St. Louis One Brookings Drive St. Louis, MO 63130 E-Mail: dain.lee@wustl.edu Jinhyeok Park Washington University in St. Louis Department of Economics 1 Brookings Dr St. Louis, MO 63130 E-Mail: jinhyeok.park@wustl.edu Yongseok Shin Department of Economics Washington University in St. Louis One Brookings Drive St. Louis, MO 63130 Tel: 314/935-7138 Fax: 314/935-4156 E-Mail: yshin@wustl.edu

Unstable Prosperity: How Globalization Made the World Economy More Volatile - Mendoza, Enrique G; Quadrini, Vincenzo (National Bureau of Economic Research Working Paper Series, 2023)
The sharp, secular decline in the world real interest rate of the past thirty years suggests that the surge in global demand for financial assets outpaced the growth in their supply. We argue that this phenomenon was driven by: (i) faster growth in emerging markets, (ii) changes in the financial structure of both emerging and advanced economies, and (iii) changes in demand and supply of public debt issued by advanced economies. We then show that the low-interest-rate environment made the world economy more vulnerable to financial crises. These findings are the quantitative predictions of a two-region model in which privately-issued financial assets (i.e., inside money) provide productive services but can be defaulted on.
Author contact info: Enrique G. Mendoza Department of Economics University of Pennsylvania 3718 Locust Walk Philadelphia, PA 19104 Tel: 215-898-7701 E-Mail: egme@sas.upenn.edu Vincenzo Quadrini Department of Finance and Business Economics Marshall School of Business University of Southern California 701 Exposition Boulevard Los Angeles, CA 90089 Tel: 213/740-6521 Fax: 213/740-6650 E-Mail: quadrini@usc.edu

The Unintended Consequences of Test-Based Remediation - Figlio, David N; Özek, Umut (National Bureau of Economic Research Working Paper Series, 2023)
School systems around the world use achievement tests to assign students to schools, classes, and instructional resources, including remediation. Using a regression discontinuity design, we study a Florida policy that places middle school students who score below a proficiency cutoff into remedial classes. Students scoring below the cutoff receive more educational resources, but they are also placed in classes that are more segregated by race, socio-economic status, and prior achievement. Increased tracking occurs not only in the remedial subject, but also in other core subjects. These tracking effects are significantly larger and more likely to persist beyond the year of remediation for Black students.
Author contact info: David N. Figlio University of Rochester 220 Hutchinson Road Rochester, NY 14611 E-Mail: david.figlio@rochester.edu Umut Özek RAND Corporation 1200 S Hayes Street Arlington, VA 22202 Tel: 7034131100x5155 E-Mail: uozek@rand.org

International Spillover Effects of Air Pollution: Evidence from Mortality and Health Data - Heo, Seonmin Will; Ito, Koichiro; Kotamarthi, Rao (National Bureau of Economic Research Working Paper Series, 2023)
We study the international spillover effects of air pollution by developing a framework that integrates recent advances in atmospheric science into econometric estimation with microdata on mortality and health. Combining transboundary particle trajectory data with the universe of individual-level mortality and emergency room visit data in South Korea, we find that transboundary air pollution from China significantly increases mortality and morbidity in South Korea. Using these estimates, we show that a recent Chinese environmental policy “war on pollution” generated a substantial international spillover benefit. Finally, we examine China’s strategic pollution reductions and provide their implications for the potential Coasian bargaining.
Author contact info: Seonmin W. Heo 2127 North Hall University of California Santa Barbara, CA 93106 Tel: 312-843-4158 E-Mail: sheo@ucsb.edu 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 Rao Kotamarthi E-Mail: vrkotamarthi@anl.gov

Franchise Value, Intangibles, and Tobin’s Q - Chiu, Wan-Chien; Jagannathan, Ravi; Tseng, Kevin (National Bureau of Economic Research Working Paper Series, 2023)
We decompose the difference between a firm’s market and book values into two components: intangible assets that can be created by competing firms through SG&A/R&D expenditures, and the residual denoted as franchise value (FV). The estimated parameters in the model for creating intangible assets by capitalizing R&D/SG&A expenditures vary significantly across industries. Consistent with FV being a measure of economic rents and quasi-rents, ceteris paribus, higher FV firms face fewer product market threats, have higher markups, and their investments are less sensitive to their total Tobin’s Q. In contrast, firms with higher capitalized intangible assets, face higher product market threats.
Author contact info: Wan-Chien Chiu Department Of Quantitative Finance National Tsing Hua University Room 613, Tsmc Building, No. 101, Section 2, Kuang-Fu Rd East District Hsinchu 30013 Taiwan Tel: +10922451283 E-Mail: wan-chien.chiu@mx.nthu.edu.tw Ravi Jagannathan Kellogg Graduate School of Management Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 847/491-8338 Fax: 847/491-5719 E-Mail: rjaganna@kellogg.northwestern.edu Kevin Tseng College of Management National Taiwan University Building II, College of Management 811 No.1, Sec. 4, Roosevelt Rd. Taipei City Taiwan E-Mail: kevintseng@ntu.edu.tw

Price Destabilizing Speculation: The Role of Strategic Limit Orders - Banerjee, Suman; Jagannathan, Ravi; Wang, Kai (National Bureau of Economic Research Working Paper Series, 2023)
Using a two-period model of a commodity market with a large number of atomistic consumers and two strategic sellers, we show that a speculator with access to storage can lower the market price while buying and raise the price while selling by clever use of limit, stop-loss, and market orders. The speculator profits from it. This creates price volatility even though there is no demand or supply uncertainty, and all market participants act rationally. Prices are more volatile when the speculator has access to free disposal. Such speculative activity makes the strategic sellers worse off and consumers better off. Our results are robust to introducing demand uncertainty, having more than one large speculator, and more than two strategic sellers. When there are multiple strategic sellers consumers can be worse off.
Author contact info: Suman Banerjee Stevens Institute of Technology Castle Point on Hudson Hoboken, NJ 07030 Tel: (201) 216 3689 E-Mail: sbanerj2@stevens.edu Ravi Jagannathan Kellogg Graduate School of Management Northwestern University 2211 Campus Drive Evanston, IL 60208 Tel: 847/491-8338 Fax: 847/491-5719 E-Mail: rjaganna@kellogg.northwestern.edu Kai Wang Kellogg School of Management Northwestern University 2211 Campus Dr Evanston, IL 60208 E-Mail: kai.wang2@kellogg.northwestern.edu

Reducing Bullying: Evidence from a Parental Involvement Program on Empathy Education - Cunha, Flavio; Hu, Qinyou; Xia, Yiming; Zhao, Naibao (National Bureau of Economic Research Working Paper Series, 2023)
According to UNESCO, one-third of the world’s youths are victims of bullying, which deteriorates academic performance and mental health, and increases suicide ideation and the risk of committing suicide. This paper analyzes a four-month parent-directed intervention designed to foster empathy in middle schoolers in China. Our implementation and evaluation study enrolled 2,246 seventh and eighth graders and their parents, whom we assigned, at the classroom level, to the control or intervention condition randomly. We measured, before and after the intervention, parental investments, children’s empathy, and self-reported bullying perpetration and victimization incidents. Our analyses show that the intervention increased investments and empathy and reduced bullying incidents. In addition, we measured costs and found that it costs $12.50 for our intervention to reduce one bullying incident. Our study offers a scalable and low-cost strategy that can inform public policy on bullying prevention in other similar settings.
Author contact info: Flavio Cunha Department of Economics Rice University P.O. Box 1892 Houston, TX 77251-1892 Tel: 713-348-4875 E-Mail: flaviocunha@rice.edu Qinyou Hu Department of Economics Rice University P.O. Box 1892 Houston, TX 77251-1892 E-Mail: qinyou.hu@rice.edu Yiming Xia 55 Guanghuacun St. Qingyang District Chengdu, Sich 610074 China E-Mail: xiaym@swufe.edu.cn Naibao Zhao Research Institute of Economics and Management Southwestern University of Finance and Economics 55 Guanghuacun St, Qingyang District Chengdu 610074 China Tel: +86 (28) 8709 9030 E-Mail: nzhao@swufe.edu.cn

Too Many Managers: The Strategic Use of Titles to Avoid Overtime Payments - Cohen, Lauren; Gurun, Umit; Ozel, N. Bugra (National Bureau of Economic Research Working Paper Series, 2023)
We find widespread evidence of firms appearing to engage in overtime payment avoidance by exploiting a federal law that allows them to side-step doing so for “managers” who are paid above a pre-defined salary threshold. We show that listings for managerial positions just above the federal regulatory threshold exhibit an almost five-fold increase, including listings of managerial positions such as “Directors of First Impression,” whose jobs are otherwise equivalent to non-managerial employees (in this case, a front desk clerk). Overtime avoidance is more pronounced when firms have stronger bargaining power and employees have weaker rights. Moreover, it is more pronounced for firms with financial constraints, as well as when there are weaker external local labor options. Lastly, the results are stronger in occupations with more volatility in labor demand, when there is more uncertainty in labor scheduling, and for occupations in low-wage industries that are penalized more often for overtime violations. Our results suggest a broad usage of overtime avoidance using job titles across industries, locations and over time - if anything becoming stronger through the present day. Moreover, the wages avoided are substantial - we estimate that firms avoid roughly 13.5% in overtime expenses for each strategic “manager” hired during our sample period.
Author contact info: Lauren Cohen Harvard Business School Baker Library 279 Soldiers Field Boston, MA 02163 Tel: 617/495-3888 E-Mail: lcohen@hbs.edu Umit Gurun University of Texas at Dallas School of Management 800 W Campbell Rd. SM41 Richardson, TX 75080 E-Mail: umit.gurun@utdallas.edu N. Bugra Ozel University of Texas at Dallas School of Management 800 W Campbell Rd. SM 41 Richardson, TX 75080 Tel: 972-883-5051 E-Mail: naim.ozel@utdallas.edu

Biased Memory and Perceptions of Self-Control - Sial, Afras Y; Sydnor, Justin R; Taubinsky, Dmitry (National Bureau of Economic Research Working Paper Series, 2023)
Using data from a field experiment on exercise, we analyze the relationship between imperfect memory and people's awareness of their limited self-control. We find that people overestimate past gym attendance, and that larger overestimation of past attendance is associated with (i) more overestimation of future attendance, (ii) a lower willingness to pay to motivate higher future gym attendance, and (iii) a smaller gap between goal and forecasted attendance. We organize these facts with a structural model of quasi-hyperbolic discounting and naivete, estimating that people with more biased memories are more naive about their time inconsistency, but not more time-inconsistent.
Author contact info: Afras Y. Sial 530 Evans Hall Berkeley, CA 94720-3880 United States E-Mail: afras@berkeley.edu Justin R. Sydnor Wisconsin School of Business, ASRMI Department University of Wisconsin-Madison 975 University Avenue, Room 5287 Madison, WI 53726 Tel: 608/263-2138 E-Mail: jsydnor@bus.wisc.edu Dmitry Taubinsky University of California, Berkeley Department of Economics 530 Evans Hall #3880 Berkeley, CA 94720-3880 E-Mail: dmitry.taubinsky@berkeley.edu

The Impact of Privatization: Evidence from the Hospital Sector - Duggan, Mark; Gupta, Atul; Jackson, Emilie; Templeton, Zachary S (National Bureau of Economic Research Working Paper Series, 2023)
Privatization has been shown to increase growth and profitability of public firms. However, effects on consumers are understudied. We study potential trade-offs in the US hospital sector where public control declined by 42% over 1983–2019. Private operators may improve hospitals’ financial performance, but a focus on profitability may adversely affect access to care for certain patients. Using national data across all hospitals and patients, we study 258 hospital privatizations over the 2000–2018 period. Private operators improve profitability so that hospitals generate a modest surplus, primarily by increasing mean revenue per patient. However, this is partly achieved by differentially reducing the intake of low-income Medicaid patients, who are typically less profitable than other groups due to lower reimbursement rates. While other patients appear to be absorbed by neighboring hospitals, Medicaid patients experience an aggregate decline in utilization at the market-level, which we interpret as a decline in access to care. Hospital privatization therefore partially offsets the benefits of providing publicly funded health insurance through Medicaid, and our estimates imply it is quantitatively important. The aggregate decline in Medicaid volume is detected only in more concentrated hospital markets, suggesting market power is a key driver.
Author contact info: Mark Duggan Stanford University Department of Economics 579 Jane Stanford Way Stanford, CA 94305-6072 E-Mail: mgduggan@stanford.edu Atul Gupta Wharton Health Care Management 3641 Locust Walk, CPC 306 Philadelphia, PA 19104 Tel: 215/573-9075 E-Mail: atulgup@wharton.upenn.edu Emilie Jackson Michigan State University 486 W. Circle Dr 25D Marshall-Adams Hall East Lansing, MI 48824 E-Mail: emiliej@msu.edu Zachary S. Templeton University of Pennsylvania Wharton Health Care Management 3641 Locust Walk, CPC Philadelphia, PA 19104 E-Mail: zacharyt@wharton.upenn.edu

Monopsony, Job Tasks, and Labor Market Concentration - Dodini, Samuel; Lovenheim, Michael F; Salvanes, Kjell G; Willén, Alexander (National Bureau of Economic Research Working Paper Series, 2023)
This paper extends the literature on monopsony and labor market concentration by taking a task-based approach and estimating the causal effect of concentration in the demand for skills on labor market outcomes. The prior literature has focused on industry and occupation concentration and likely overstates the degree of monopsony power, since worker skills are substitutable across different firms, occupations, and industries. Exploiting linked employer-employee data that cover the universe of Norwegian workers over time, we find that our job task-based measure shows lower degrees of concentration than the conventional industry-and occupation-based measures. We also find that the gender gap in concentration is substantially larger using this measure. Exploiting mass layoffs and establishment closures as exogenous shocks to local labor demand, we show that workers who experience a mass separation have substantially worse subsequent labor market outcomes when they are in more concentrated labor markets defined by skill clusters. Our results point to the existence of employer market power in the economy that is driven by the concentration of skill demand across firms.
Author contact info: Samuel Dodini Department of Economics Norwegian School of Economics Helleveien 30 5045 Bergen Norway Tel: +47 45515929 E-Mail: samuel.dodini@nhh.no Michael F. Lovenheim Brooks School of Public Policy ILR School, and Department of Economics Cornell University 271 Ives Hall Ithaca, NY 14853 E-Mail: mfl55@cornell.edu Kjell G. Salvanes Department of Economics Norwegian School of Economics Hellev. 30, N-5035 Bergen Norway E-Mail: kjell.salvanes@nhh.no Alexander Willén Department of Economics Norwegian School of Economics Helleveien 30 5045 Bergen Norway E-Mail: alexander.willen@nhh.no

The Beta-Delta-DELTA Sweet Spot - Laibson, David; Maxted, Peter (National Bureau of Economic Research Working Paper Series, 2023)
When solving discrete-time consumption models with present-biased time preferences, backwards induction generates equilibria that are non-robust in the sense that policy functions are often sensitive to parameter choices, including the modeler's choice of the time-step. The current paper identifies a range of "sweet-spot" time-steps that (i) contains the psychologically relevant present bias horizons, and, (ii) generates numerically indistinguishable (i.e., robust) policy functions. This sweet spot includes both a computationally feasible range of discrete-time cases and the limiting continuous-time case (Harris and Laibson, 2013). Accordingly, researchers modeling present bias in buffer stock models can choose either discrete-time cases calibrated to be in the sweet spot or the analytically tractable continuous-time case; these approaches yield essentially identical policy functions.
Author contact info: David Laibson Department of Economics Littauer M-12 Harvard University Cambridge, MA 02138 Tel: 617/496-3402 Fax: 617/495-8570 E-Mail: dlaibson@gmail.com Peter Maxted Haas School of Business University of California Berkeley E-Mail: maxted@haas.berkeley.edu

Why Did Gender Wage Convergence in the United States Stall? - Blair, Peter Q; Posmanick, Benjamin (National Bureau of Economic Research Working Paper Series, 2023)
During the 1980s, the wage gap between white women and white men in the US declined by approximately 1 percentage point per year. In the decades since, the rate of gender wage convergence has stalled to less than one-third of its previous value. An outstanding puzzle in economics is "why did gender wage convergence in the US stall?" Using an event study design that exploits the timing of state and federal family-leave policies, we show that the introduction of the policies can explain 94% of the reduction in the rate of gender wage convergence that is unaccounted for after controlling for changes in observable characteristics of workers. If gender wage convergence had continued at the pre-family leave rate, wage parity between white women and white men would have been achieved as early as 2017.
Author contact info: Peter Q. Blair Harvard University Graduate School of Education 407 Gutman Library Cambridge, MA 02138 Tel: 617-458-6010 E-Mail: peter_blair@gse.harvard.edu Benjamin Posmanick E-Mail: bposmani@sbu.edu

Information Cascades and Threshold Implementation: Theory and An Application to Crowdfunding - Cong, Lin William; Xiao, Yizhou (National Bureau of Economic Research Working Paper Series, 2023)
Economic interactions, such as crowdfunding, often involve sequential actions, observational learning, and contingent project implementation. We incorporate all-or-nothing thresholds in a canonical model of information cascades. Early supporters effectively delegate their decisions to a "gatekeeper," resulting in uni-directional cascades without herding on rejections. Project proposers consequently can charge higher prices. Proposal feasibility, project selection, and information aggregation all improve, even when agents can wait. Equilibrium outcomes depend on the crowd size, and project implementation and information aggregation achieve efficiency in the large-crowd limit. Our key insights remain robust under thresholds in dollar amounts, alternative equilibrium selection, among other model extensions.
Author contact info: Lin William Cong SC Johnson College of Business Cornell University Sage Hall Ithaca, NY 14853 Tel: 607/255-7859 E-Mail: will.cong@cornell.edu Yizhou Xiao Chinese University of Hong Kong CUHK Business School Room 1238, 12/F, Cheng Yu Tung Building 12 Chak Cheung Street, Shatin Hong Kong E-Mail: yizhou@cuhk.edu.hk

The Fiscal Consequences of Missing an Inflation Target - Andreolli, Michele; Rey, Hélène (National Bureau of Economic Research Working Paper Series, 2023)
The European Central Bank is unique in setting monetary policy for several sovereign states with heterogeneous debt levels and different maturity structures. The monetary-fiscal nexus is central to the functioning of the euro area. We focus on one particular aspect of that nexus, the effect the reliability of the European Central Bank's monetary policy on public finances. We show that when the ECB misses its inflation target this has large heterogeneous fiscal consequences for Euro Area countries. For comparison we also estimate the fiscal consequences of the Federal Reserve and the Bank of England missing their inflation targets. They are also sizeable.
Author contact info: Michele Andreolli E-Mail: andreoll@bc.edu Hélène Rey London Business School Regents Park London NW1 4SA United Kingdom Tel: 44 2070008412 E-Mail: hrey@london.edu

Revisiting the Connection Between State Medicaid Expansions and Adult Mortality - Courtemanche, Charles J; Jones, Jordan W; Koumpias, Antonios M; Zapata, Daniela (National Bureau of Economic Research Working Paper Series, 2023)
This paper examines the impact of Medicaid expansions to parents and childless adults on adult mortality. Specifically, we evaluate the long-run effects of eight state Medicaid expansions from 1994 through 2005 on all-cause, healthcare-amenable, non-healthcare-amenable, and HIV-related mortality rates using state-level data. We utilize the synthetic control method to estimate effects for each treated state separately and the generalized synthetic control method to estimate average effects across all treated states. Using a 5% significance level, we find no evidence that Medicaid expansions affect any of the outcomes in any of the treated states or all of them combined. Moreover, there is no clear pattern in the signs of the estimated treatment effects. These findings imply that evidence that pre-ACA Medicaid expansions to adults saved lives is not as clear as previously suggested.
Author contact info: Charles J. Courtemanche Department of Economics Gatton College of Business and Economics University of Kentucky Lexington, KY 40506-0034 Tel: (859) 323-7990 Fax: (859) 323-1920 E-Mail: courtemanche@uky.edu Jordan W. Jones USDA Economic Research Service 805 Pennsylvania Avenue Kansas City, MO 64105 E-Mail: Jordan.Jones2@usda.gov Antonios M. Koumpias Department of Social Sciences University of Michigan-Dearborn 4901 Evergreen Rd SSB 2300 Dearborn, MI 48128 Tel: 313-593-5096 Fax: 313-593-5645 E-Mail: koumpias@umich.edu Daniela Zapata American Institutes for Research 1325 G Street NW Suite 900 Washington, DC 20005 E-Mail: dzapata@air.org

Target Retirement Fund: A Variant on Target Date Funds that uses Deferred Life Annuities rather than Bonds to Reduce Risk as Retirement Approaches - Shoven, John B; Walton, Daniel B (National Bureau of Economic Research Working Paper Series, 2023)
This paper evaluates a new variant of the popular target date funds used in employer-based retirement savings plans. We call this new variant a “target retirement plan.” Instead of increasing the allocation to bond funds as retirement approaches, a target retirement fund gradually purchases deferred life annuities beginning at age 50. In the particular straw model target retirement fund examined in the paper, the defined contribution participant makes deferred life annuity purchases at ages 50, 52, 54, 56, 58, 60 and 62. We compare how a target retirement fund participant would fare compared with someone who stays with a traditional TDF until retirement and then buys an immediate life annuity. We examine 1,000 possible 30-year futures for stock returns, bond fund returns and Treasury interest rates. The main result from this paper is that buying a retirement annuity in advance (by accumulating deferred life annuities) is superior to sticking with a Target Date Fund until retirement and then buying an immediate annuity in most scenarios of future stock returns, interest rates and bond returns.
Author contact info: John B. Shoven Department of Economics Stanford University Landau Economics Building 579 Jane Stanford Way Stanford, CA 94305 Tel: 650/723-3273 E-Mail: shoven@stanford.edu Daniel B. Walton Uber Technologies, Inc. 1191 2nd Avenue #1200 Seattle, WA 98101 E-Mail: dbw.econ@gmail.com

Man vs. Machine: Technological Promise and Political Limits of Automated Regulation Enforcement - Browne, Oliver; Gazze, Ludovica; Greenstone, Michael; Rostapshova, Olga (National Bureau of Economic Research Working Paper Series, 2023)
New technologies allow perfect detection of environmental violations at near-zero marginal cost, but take-up is low. We conducted a field experiment to evaluate enforcement of water conservation rules with smart meters in Fresno, CA. Households were randomly assigned combinations of enforcement method (automated or in-person inspections) and fines. Automated enforcement increased households’ punishment rates from 0.1 to 14%, decreased summer water use by 3%, and reduced violations by 17%, while higher fine levels had little effect. However, automated enforcement also increased customer complaints by 1,102%, ultimately causing its cancellation and highlighting that political considerations limit technological solutions to enforcement challenges.
Author contact info: Oliver Browne Berkeley Research Group E-Mail: obrowne@thinkbrg.com Ludovica Gazze Department of Economics University of Warwick United Kingdom E-Mail: Ludovica.Gazze@warwick.ac.uk 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 Olga Rostapshova University of Chicago Energy & Environment Lab E-Mail: oro@uchicago.edu

The Dynamics of Networks and Homophily - Jackson, Matthew O; Nei, Stephen M; Snowberg, Erik; Yariv, Leeat (National Bureau of Economic Research Working Paper Series, 2022)
We examine friendships and study partnerships among university students over several years. At the aggregate level, connections increase over time, but homophily on gender and ethnicity is relatively constant across time, university residences, and different network layers. At the individual level, homophilous tendencies are persistent across time and network layers. Furthermore, we see assortativity in homophilous tendencies. There is weaker, albeit significant, homophily over malleable characteristics---risk preferences, altruism, study habits, and so on. We find little evidence of assimilation over those characteristics. We also document the nuanced impact of network connections on changes in Grade Point Average.
Author contact info: Matthew O. Jackson Department of Economics Stanford University Stanford, CA 94305-6072 Tel: 650 723 3544 E-Mail: jacksonm@stanford.edu Stephen M. Nei Department of Economics University of Exeter Business School Exeter EX4 4PU UK E-Mail: s.m.nei@exeter.ac.uk Erik Snowberg David Eccles School of Business University of Utah Salt Lake City, UT 84112-8914 E-Mail: Erik.Snowberg@ubc.ca Leeat Yariv Department of Economics Princeton University Julis Romo Rabinowitz Princeton, NJ 08544 Tel: 609/258-4021 E-Mail: lyariv@princeton.edu

Disparities in Pollution Capitalization Rates: The Role of Direct and Systemic Discrimination - Graff Zivin, Joshua S; Singer, Gregor (National Bureau of Economic Research Working Paper Series, 2022)
We examine how exogenous changes in exposure to air pollution over the past two decades have altered the disparities in home values between Black and White homeowners. We find that air quality capitalization rates are significantly lower for Black homeowners. In fact, they are so much lower that, despite secular reductions in the Black-White pollution exposure gap, disparities in housing values have increased during this period. An exploration of mechanisms suggests that roughly one-quarter of this difference is the result of direct discrimination while the remaining three-quarters can be attributed to systemic discrimination through differential access to complementary amenities.
Author contact info: Joshua S. Graff Zivin University of California, San Diego 9500 Gilman Drive, MC 0519 La Jolla, CA 92093-0519 Tel: 858/822-6438 E-Mail: jgraffzivin@ucsd.edu Gregor Singer London School of Economics, Grantham Research Institute Houghton Street London WC2A 2AE United Kingdom E-Mail: g.a.singer@lse.ac.uk

The Effects of Recreational Marijuana Legalization on Employment and Earnings - Dave, Dhaval M; Liang, Yang; Muratori, Caterina; Sabia, Joseph J (National Bureau of Economic Research Working Paper Series, 2022)
Despite nearly 70 percent of the American public supporting legalization of recreational marijuana, opponents argue that increased marijuana use may diminish motivation, impede cognitive function, and harm health, each of which could adversely affect adults’ economic wellbeing. This study is the first to explore the impacts of recreational marijuana laws (RMLs) on employment and wages. Difference-in-differences estimates show little evidence that RMLs adversely affect labor market outcomes among most working-age individuals. Rather, our estimates show that RML adoption is associated with an increase in agricultural employment, consistent with the opening of a new licit market. A causal interpretation of our findings is supported by (1) event-study analyses using dynamic difference-in-differences estimates designed to expunge bias due to heterogeneous and dynamic treatment effects, and (2) alternative policy estimates generated using a synthetic control design.
Author contact info: Dhaval M. Dave Bentley University Department of Economics 175 Forest Street, AAC 195 Waltham, MA 02452-4705 E-Mail: ddave@bentley.edu Yang Liang San Diego State University Department of Economics Center for Health Economics & Policy Studies 5500 Campanile Drive San Diego, CA 92182 E-Mail: yang.liang@sdsu.edu Caterina Muratori San Diego State University Center for Health Economics & Policy Studies 5500 Campanile Drive San Diego, CA 92182 E-Mail: cmuratori@sdsu.edu Joseph J. Sabia San Diego State University Department of Economics Center for Health Economics & Policy Studies 5500 Campanile Drive San Diego, CA 92182 E-Mail: jsabia@sdsu.edu

Fundamentally Reforming the DI System: Evidence from German Notch Cohorts - Fischer, Bjoern; Geyer, Johannes Micha; Ziebarth, Nicolas R (National Bureau of Economic Research Working Paper Series, 2022)
This paper studies a 2001 reform that abolished public occupational disability insurance (ODI) for German cohorts born after 1960. The first part shows a causal reduction in overall DI inflows by more than 30% in the long-run. The second part studies interaction effects with the private individual risk-rated ODI market. Representative data provide little evidence for significant overall increases in private ODI take-up. A general equilibrium model featuring the social safety net, asymmetric information and administrative costs explain weak private-public market interactions as well as stylized facts about take-up such as gradients by income and health. It also simulates policies.
Author contact info: Bjoern Fischer E-Mail: bjoern.fischer@zew.de Johannes Geyer Deutsches Institut für Wirtschaftsforschung Mohrenstraße 58 10117 Berlin Germany E-Mail: jgeyer@diw.de Nicolas R. Ziebarth ZEW Mannheim D-68161, Mannheim Germany E-Mail: nicolas.ziebarth@zew.de

Changes in International Immigration and Internal Native Mobility after Covid-19 in the US - Peri, Giovanni; Zaiour, Reem (National Bureau of Economic Research Working Paper Series, 2022)
From the beginning of the Covid-19 pandemic to late 2021, international immigration flows to the US decreased significantly. We document the timing and the characteristics of these significant changes in flows, their evolution until late 2022 and their geographic and sector distribution. We consider, in a similar way, changes in internal native mobility in the US, before and after Covid-19. We then connect cross-state native mobility to foreign immigration, the emergence of remote-work options, and changes in labor demand, before and after Covid. In spite of the large changes in labor markets and international migration, we do not measure any significant changes in native internal mobility. Then, using a panel regression and a shift-share IV, we find that the post-Covid drop in immigration and differential increase in remote-work options across sectors and states were not associated with changes in natives' cross-state mobility. We discuss possible implications of the decline in immigration and low native mobility on unfilled jobs in local labor markets.
Author contact info: Giovanni Peri Department of Economics University of California, Davis One Shields Avenue Davis, CA 95616 Tel: 530/752-3033 E-Mail: gperi@ucdavis.edu Reem Zaiour Department of Economics University of California, Davis One Shields Avenue SSH 1266 Davis, CA 95616 USA E-Mail: rzaiour@ucdavis.edu

Getting on the Map: The Impact of Online Listings on Business Performance - Luca, Michael; Nagaraj, Abhishek; Subramani, Gauri (National Bureau of Economic Research Working Paper Series, 2022)
We evaluate the extent to which small businesses maintain an online presence, looking at restaurant listings on a major online review platform. While the majority of restaurants have an online presence, we find that roughly 18 percent in our sample have no presence as of the end of 2017, despite being able to list their business for free. Using temporal variation in a restaurant's online presence as well as a natural experiment arising from a data acquisition that led over a thousand businesses to be added to the platform, we find that maintaining an online presence is valuable for small businesses. Establishing an online presence leads to a 5% revenue increase. Using data on customer reviews post-add, we explore potential channels that could explain why restaurants continue to remain offline despite potential benefits from digital representation. Consistent with models of voluntary disclosure, we find that businesses that had stayed offline until the acquisition ended up having lower ratings, on average, than those that added themselves or were added by customers.
Author contact info: Michael Luca Harvard Business School Soldiers Field Boston, MA 02163 Tel: 617/495-8382 E-Mail: mluca@hbs.edu Abhishek Nagaraj Haas School of Business University of California, Berkeley 2220 Piedmont Ave Berkeley, CA 94720 E-Mail: nagaraj@berkeley.edu Gauri Subramani Lehigh University Rauch Business Center 621 Taylor Street Bethlehem, PA 18015 E-Mail: gsubramani@lehigh.edu

Estimating Gravity from the Short to the Long Run: A Simple Solution to the 'International Elasticity Puzzle' - Anderson, James E; Yotov, Yoto V (National Bureau of Economic Research Working Paper Series, 2022)
We propose a simple and flexible reduced-form econometric approach to estimate gravity models in the short and the long run. The theoretical lens for interpreting our methods amends the canonical Lucas-Prescott adjustment formulation to allow for time-interval-varying depreciation-cum-adjustment. A time-varying trade elasticity in the structural gravity model is implied. Our methods explain the 'international elasticity puzzle,' the discrepancy between trade elasticity estimates from the trade literature and the international real business cycle literature. The same theory-motivated estimating equation applied to the same data generates a distribution of trade elasticity estimates that vary from 0.4 in the short run to 4.8 in the long run. The results offer support for some existing theories of dynamic adjustment in trade costs and imply that the long-run equilibrium in our sample is reached in about 16 to 17 years.
Author contact info: James E. Anderson Department of Economics Boston College Chestnut Hill, MA 02467 Tel: 617/552-3691 Fax: 617/552-2308 E-Mail: james.anderson.1@bc.edu Yoto V. Yotov School of Economics Drexel University Philadelphia, PA 19104 E-Mail: yotov@drexel.edu

Dividend Taxation and Firm Performance with Heterogeneous Payout Responses - Bilicka, Katarzyna A; Guceri, Irem; Koumanakos, Evangelos (National Bureau of Economic Research Working Paper Series, 2022)
We analyze the short and long-run performance of firms that were differentially affected by a new tax on dividends in the lead-up to the Global Financial Crisis. We use exogenous policy variation for firms with different legal statuses and financial year-end dates to causally identify the policy impact. Consistent with intertemporal tax arbitrage, immediately-affected firms significantly reduce payouts. At a time of severe liquidity shortage, the average firm uses the undistributed cash to pay back debt. In the long run, the allocation of undistributed cash to investment, retained earnings, and debt repayment predicts growth and the likelihood of bankruptcy.
Author contact info: Katarzyna A. Bilicka Jon M Huntsman School of Business 3500 Old Main Hill Utah State University Logan, UT 84322 E-Mail: kat.bilicka@usu.edu Irem Guceri Blavatnik School of Government Radcliffe Observatory Quarter Woodstock Road Oxford OX2 6GG United Kingdom E-Mail: irem.guceri@bsg.ox.ac.uk Evangelos Koumanakos Hellenic Open University School of Social Sciences Parodos Aristotelous 18 Patra Greece E-Mail: koumanakos@eap.gr

Non-parametric Gravity - Anderson, James E (National Bureau of Economic Research Working Paper Series, 2022)
Non-parametric gravity as deﬁned in this paper encompasses previous parametric forms. The model generates non-parametric suﬃcient statistics for arbitrage gains from trade and terms of trade, and a non-parametric elasticity of terms of trade with respect to supply. For world manufacturing trade 2000-2014, China’s gains rose 2%yearly and terms of trade fell 8.3%. US gains fell 2% yearly and terms of trade rose 5.5%. Counterfactual industrial policy that raises US 2014 world sales share by 1% lowers US gains per unit 0.72%, leaving a surplus of 0.28%. A novel minimum distance estimator generates the CES trade elasticity required.
Author contact info: James E. Anderson Department of Economics Boston College Chestnut Hill, MA 02467 Tel: 617/552-3691 Fax: 617/552-2308 E-Mail: james.anderson.1@bc.edu

Negotiations of Oil and Gas Auxiliary Lease Clauses: Evidence from Pennsylvania’s Marcellus Shale - Harleman, Max; Manohar, Pramod; Hill, Elaine L (National Bureau of Economic Research Working Paper Series, 2022)
Oil and gas lease negotiations provide mineral owners the opportunity to negotiate for both compensation and auxiliary clauses that may protect their health and properties. We use optical character recognition to assemble a novel dataset of compensation and specific clauses in nearly 60,000 leases signed in the Marcellus Shale Play of Pennsylvania. We leverage the dataset to produce three main findings. First, contrary to the standard utility maximization model, we find a positive relationship between compensation and clauses. Second, we find that as development of the shale play progressed over time, compensation rose and leases became more likely to contain environmentally protective clauses. Third, we find that compensation and the presence of clauses have a weak relationship with the geologic productivity of nearby wells. Together, our findings indicate that oil and gas firms simultaneously make concessions by raising compensation and approving clauses, but these concessions do not depend on geologic productivity. This suggests that some mineral owners, such as those that are high-income or from more socially organized communities, have the skills or resources to negotiate for more favorable leases all-around and point to similar environmental justice concerns identified in other shale plays.
Author contact info: Max Harleman Department of Government and Sociology 410 West Greene Street Campus Box 18 Milledgeville, GA 31061 E-Mail: max.harleman@gcsu.edu Pramod Manohar University of Rochester Department of Economics Rochester, NY 14642 E-Mail: pmanoha2@u.rochester.edu Elaine L. Hill Department of Public Health Sciences Department of Economics University of Rochester 265 Crittenden Boulevard Rochester, NY 14642 E-Mail: elaine_hill@urmc.rochester.edu

Growing the Efficient Frontier on Panel Trees - Cong, Lin William; Feng, Guanhao; He, Jingyu; He, Xin (National Bureau of Economic Research Working Paper Series, 2022)
We develop a new class of tree-based models (P-Trees) for analyzing (unbalanced) panel data using economically guided, global (instead of local) split criteria that guard against overfitting while preserving sparsity and interpretability. To generalize security sorting and better estimate the efficient frontier, we grow a P-Tree top-down to split the cross section of asset returns to construct test assets and re-cover the stochastic discount factor under the mean-variance efficient framework, visualizing (asymmetric) nonlinear interactions among firm characteristics. When applied to U.S. equities, boosted (multi-factor) P-Trees significantly advance the efficient frontier relative to those constructed with established factors and common test assets. P-Tree test assets are diversified and exhibit significant unexplained alphas against benchmark models. The unified P-Tree factors outperform most known observable and latent factor models in pricing cross-sectional returns, delivering transparent and effective trading strategies. Beyond asset pricing, our framework offers a more interpretable and computationally efficient alternative to recent machine learning and AI models for analyzing panel data through goal-oriented, high-dimensional clustering.
Author contact info: Lin William Cong SC Johnson College of Business Cornell University Sage Hall Ithaca, NY 14853 Tel: 607/255-7859 E-Mail: will.cong@cornell.edu Guanhao Feng City University of Hong Kong 83 Tat Chee Avenue Hong Kong, China E-Mail: gavin.feng@cityu.edu.hk Jingyu He City University of Hong Kong 83 Tat Chee Avenue Kowloon Tong Hong Kong, China E-Mail: jingyuhe@cityu.edu.hk Xin He College of Finance and Statistics Hunan University Changsha, China E-Mail: xinh@hnu.edu.cn

Picture This: Social Distance and the Mistreatment of Migrant Workers - Barsbai, Toman; Bartos, Vojtech; Licuanan, Victoria; Steinmayr, Andreas; Tiongson, Erwin; Yang, Dean (National Bureau of Economic Research Working Paper Series, 2022)
International migrant workers are vulnerable to abuses by their employers. We implemented a randomized controlled trial of an intervention to reduce mistreatment of Filipino women working as domestic workers (DWs) by their household employers in Hong Kong and Saudi Arabia. The intervention -- encouraging DWs to show their employers a photo of their family while providing a small gift when starting employment -- caused DWs to experience less mistreatment, have higher satisfaction with the employer, and be more likely to stay with the employer. DWs' families in the Philippines also come to view international labor migration more positively, while they generally remain unaware of the intervention. An online experiment with potential employers in Hong Kong and the Middle East suggests that a mechanism behind the treatment effect is a reduction in the employer's perceived social distance from the employee.
Author contact info: Toman Barsbai School of Economics Priory Road Complex Bristol UK E-Mail: toman.barsbai@bristol.ac.uk Vojtech Bartos Via Festa del Perdono 7 Milano 20122 Italy Tel: 00393756594811 E-Mail: vojtech.bartos@unimi.it Victoria Licuanan 123 Paseo de Roxas Legazpi Village Makati 1229 Metro Manila Philippines E-Mail: vlicuanan.aim@gmail.com Andreas Steinmayr Department of Economics University of Innsbruck Universitätsstraße 15 A-6020 Innsbruck Austria E-Mail: andreas.steinmayr@uibk.ac.at Erwin Tiongson Walsh School of Foreign Service Georgetown University Washington, DC 20057 E-Mail: ert@georgetown.edu Dean Yang University of Michigan Department of Economics and Gerald R. Ford School of Public Policy 735 S. State Street, Room 3316 Ann Arbor, MI 48109 Tel: 734/764-6158 Fax: 734/763-9181 E-Mail: deanyang@umich.edu

Gains from Product Variety: Evidence from a Large Digital Platform - Brynjolfsson, Erik; Chen, Long; Gao, Xijie (National Bureau of Economic Research Working Paper Series, 2022)
E-commerce sales have grown rapidly worldwide, massively increasing the availability of new products. We examine data from the largest digital platform in China and find that the number of book titles almost doubled, prices fell somewhat, and most new books are sold to consumers with unusual tastes. Demand for these niche products was significantly more inelastic than that of mass products. Embedding the estimates of demand elasticity into a two-segment CES framework, we find the welfare gain from increased variety was about 40 times the gain from lower prices and that rural consumers enjoyed the largest gains.
Author contact info: Erik Brynjolfsson Stanford Digital Economy Laboratory 353 Jane Stanford Way, Office 136 Stanford, CA 94305 E-Mail: erik.brynjolfsson@gmail.com Long Chen Luohan Academy Hangzhou China E-Mail: chenlong.chl@luohanacademy.com Xijie Gao Hangzhou Zhejiang Province China E-Mail: xijie.gxj@luohanacademy.com

The Coal Transition and Its Implications for Health and Housing Values - Fraenkel, Rebecca; Graff Zivin, Joshua S; Krumholz, Sam D (National Bureau of Economic Research Working Paper Series, 2022)
During the past fifteen years, more than 30% of US coal plants have had at least one coal-fired generator close. We utilize this natural experiment to estimate the effect of coal plant exposure on mortality and house values. Using a difference-in-differences design, we find that, despite the fact that most of this coal generation is replaced with natural gas generation, individuals in counties whose population centroid is within 30 miles of a plant that closes at least one coal-fired unit experience large health effects following shutdown. While these health improvements appear to capitalize into housing values, they only do so for homes within 15 miles of the plant and only when the retirement is complete rather than partial. Taken together, these results underscore the importance of subjective perceptions in shaping market-mediated price effects with far-reaching implications for the literature.
Author contact info: Rebecca Fraenkel University of California San Diego E-Mail: rfraenkel@ucsd.edu Joshua S. Graff Zivin University of California, San Diego 9500 Gilman Drive, MC 0519 La Jolla, CA 92093-0519 Tel: 858/822-6438 E-Mail: jgraffzivin@ucsd.edu Sam D. Krumholz Antitrust Division Department of Justice 450 Fifth Street, NW Washington, DC 20530 Tel: 9174461055 Fax: 9174461055 E-Mail: samuel.krumholz@usdoj.gov

The Economic Approach to Political Borders - Spolaore, Enrico (National Bureau of Economic Research Working Paper Series, 2022)
This paper overviews theoretical and empirical studies of political borders from an economic perspective. It reviews theories of the number and size of nations focused on the trade-off between economies of scale in public-good provision and heterogeneity of preferences over public policies as well as on the factors affecting this trade-off, such as democratization, international openness, and conflict. It also reviews theories of political integration and disintegration focused on economic inequality, redistribution policies, and the geographical distribution of resources. Finally, the paper discusses recent empirical studies that shed light on the relations among heterogeneity, conflict, and borders. This line of research is part of a growing literature on the interplay between cultural variables and economic and political outcomes.
Author contact info: Enrico Spolaore Department of Economics Tufts University Joyce Cummings Center 177 College Avenue Medford, MA 02155 Tel: 617/627-4068 Fax: 617/627-3917 E-Mail: enrico.spolaore@tufts.edu

The Sweet Life: The Long-Term Effects of a Sugar-Rich Early Childhood - Gertler, Paul; Gracner, Tadeja (National Bureau of Economic Research Working Paper Series, 2022)
We show that sugar-rich diet early in life has large adverse effects on the health and economic well-being of adults more than fifty years later. Excessive sugar intake early in life led to higher prevalence of chronic inflammation, diabetes, elevated cholesterol and arthritis. It also decreased post-secondary schooling, having a skilled occupation, and accumulating above median wealth. We identified elevated sugar consumption across lifespan as a likely pathway of impact. Exploiting the end of the post-WWII rationing of sugar and sweets in 1953 in the United Kingdom, we used a regression discontinuity design to identify these effects.
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 Tadeja Gracner RAND Corporation 1776 Main St. Santa Monica, CA 90401 E-Mail: tgracner@rand.org

Making the (Letter) Grade: The Incentive Effects of Mandatory Pass/Fail Courses - Butcher, Kristin; McEwan, Patrick; Weerapana, Akila (National Bureau of Economic Research Working Paper Series, 2022)
In Fall 2014, Wellesley College began mandating pass/fail grading for courses taken by first-year, first-semester students, although instructors continued to record letter grades. We identify the causal effect of the policy on course choice and performance, using a regression-discontinuity-in-time design. Students shifted to lower-grading STEM courses in the first semester, but did not increase their engagement with STEM in later semesters. Letter grades of first-semester students declined by 0.13 grade points, or 23% of a standard deviation. We evaluate causal channels of the grade effect—including sorting into lower-grading STEM courses and declining instructional quality—and conclude that the effect is consistent with declining student effort.
Author contact info: Kristin F. Butcher Department of Economics Wellesley College 106 Central Street Wellesley, MA 02481 Tel: 781/283-2179 Fax: 781/283-2177 E-Mail: kbutcher@wellesley.edu Patrick McEwan Department of Economics Wellesley College 106 Central St. Wellesley, MA 02481 E-Mail: pmcewan@wellesley.edu Akila Weerapana Dept. of Economics Wellesley College Wellesley, MA 02481 E-Mail: aweerapa@wellesley.edu

The Contribution of High-Skilled Immigrants to Innovation in the United States - Bernstein, Shai; Diamond, Rebecca; Jiranaphawiboon, Abhisit; McQuade, Timothy; Pousada, Beatriz (National Bureau of Economic Research Working Paper Series, 2022)
We characterize the contribution of immigrants to US innovation, both through their direct productivity as well as through their indirect spillover effects on their native collaborators. To do so, we link patent records to a database containing the first five digits of more than 230 million of Social Security Numbers (SSN). By combining this part of the SSN together with year of birth, we identify whether individuals are immigrants based on the age at which their Social Security Number is assigned. We find immigrants represent 16 percent of all US inventors, but produced 23 percent of total innovation output, as measured by number of patents, patent citations, and the economic value of these patents. Immigrant inventors are more likely to rely on foreign technologies, to collaborate with foreign inventors, and to be cited in foreign markets, thus contributing to the importation and diffusion of ideas across borders. Using an identification strategy that exploits premature inventor deaths, we find that immigrant inventors create especially strong positive externalities on the innovation production of their collaborators, while natives have a much weaker impact. A simple decomposition illustrates that immigrants are responsible for 36% of aggregate innovation, two-thirds of which is due to their innovation externalities on their native-born collaborators.
Author contact info: Shai Bernstein Harvard Business School Soldiers Field Boston, MA 02163 Tel: 617-495-5053 E-Mail: sbernstein@hbs.edu Rebecca Diamond Graduate School of Business Stanford University 655 Knight Way Stanford, CA 94305 Tel: 650/497-4684 E-Mail: diamondr@stanford.edu Abhisit Jiranaphawiboon E-Mail: ajirana@stanford.edu Timothy McQuade Haas School of Business University of California, Berkeley Berkeley, CA 94720 E-Mail: tmcquade@haas.berkeley.edu Beatriz Pousada Stanford Department of Economics Stanford, CA 94305 E-Mail: bpousada@stanford.edu

Leverage and Stablecoin Pegs - Gorton, Gary B; Klee, Elizabeth C; Ross, Chase P; Ross, Sharon Y; Vardoulakis, Alexandros P (National Bureau of Economic Research Working Paper Series, 2022)
Money is debt that circulates with no questions asked. Stablecoins are a new form of private money that circulate with many questions asked. We show how stablecoins can maintain a constant price even though they face run risk and pay no interest. Stablecoin holders are indirectly compensated for stablecoin run risk because they can lend the coins to levered traders. Levered traders are willing to pay a premium to borrow stablecoins when speculative demand is strong. Therefore, the stablecoin can support a $1 peg even with higher levels of run risk.
Author contact info: Gary B. Gorton Yale School of Management 135 Prospect Street P.O. Box 208200 New Haven, CT 06520-8200 Fax: 203/432-8931 E-Mail: Gary.Gorton@yale.edu Elizabeth Klee Mail Stop 85 Federal Reserve Board 20th and C Streets NW Washington, DC 20551 E-Mail: elizabeth.c.klee@frb.gov Chase P. Ross E-Mail: chase.p.ross@frb.gov Sharon Y. Ross Board of Governors of the Federal Reserve System Constitution Ave NW &, 20th St NW Washington, DC 20551 E-Mail: sharon.y.ross@frb.gov Alexandros P. Vardoulakis Board of Governors of the Federal Reserve System Constitution Ave NW &, 20th St NW, Wash 20551 E-Mail: alexandros.vardoulakis@frb.gov

In-Person Schooling and Youth Suicide: Evidence from School Calendars and Pandemic School Closures - Hansen, Benjamin; Sabia, Joseph J; Schaller, Jessamyn (National Bureau of Economic Research Working Paper Series, 2022)
This study explores the effect of in-person schooling on youth suicide. We document three key findings. First, using data from the National Vital Statistics System from 1990-2019, we document the historical association between teen suicides and the school calendar. We show that suicides among 12-to-18-year-olds are highest during months of the school year and lowest during summer months (June through August) and also establish that areas with schools starting in early August experience increases in teen suicides in August, while areas with schools starting in September don’t see youth suicides rise until September. Second, we show that this seasonal pattern dramatically changed in 2020. Teen suicides plummeted in March 2020, when the COVID-19 pandemic began in the U.S. and remained low throughout the summer before rising in Fall 2020 when many K-12 schools returned to in-person instruction. Third, using county-level variation in school reopenings in Fall 2020 and Spring 2021—proxied by anonymized SafeGraph smartphone data on elementary and secondary school foot traffic—we find that returning from online to in-person schooling was associated with a 12-to-18 percent increase teen suicides. This result is robust to controls for seasonal effects and general lockdown effects (proxied by restaurant and bar foot traffic), and survives falsification tests using suicides among young adults ages 19-to-25. Auxiliary analyses using Google Trends queries and the Youth Risk Behavior Survey suggests that bullying victimization may be an important mechanism.
Author contact info: Benjamin Hansen Department of Economics 1285 University of Oregon Eugene, OR 97403 Tel: 541/357-8395 E-Mail: bchansen@uoregon.edu Joseph J. Sabia San Diego State University Department of Economics Center for Health Economics & Policy Studies 5500 Campanile Drive San Diego, CA 92182 E-Mail: jsabia@sdsu.edu Jessamyn Schaller Robert Day School of Economics and Finance Claremont McKenna College 500 E Ninth St Claremont, CA 91711 Tel: 530-574-4105 E-Mail: jschaller@cmc.edu

Liquid Democracy. Two Experiments on Delegation in Voting - Campbell, Joseph; Casella, Alessandra; de Lara, Lucas; Mooers, Victoria R; Ravindran, Dilip (National Bureau of Economic Research Working Paper Series, 2022)
Under Liquid Democracy (LD), decisions are taken by referendum, but voters are allowed to delegate their votes to other voters. Theory shows that in common interest problems where experts are correctly identified, the outcome can be superior to simple majority voting. However, even when experts are correctly identified, delegation must be used sparely because it reduces the variety of independent information sources. We report the results of two experiments, each studying two treatments: in one treatment, participants have the option of delegating to better informed individuals; in the second, participants can choose to abstain. The first experiment follows a tightly controlled design planned for the lab; the second is a perceptual task run online where information about signals’ precision is ambiguous. The two designs are very different, but the experiments reach the same result: in both, delegation rates are unexpectedly high and higher than abstention rates, and LD underperforms relative to both universal voting and abstention.
Author contact info: Joseph Campbell Department of Economics Columbia University 420 West 118th Street New York, NY 10027 E-Mail: joseph.campbell@columbia.edu Alessandra Casella Department of Economics Columbia University 420 West 118 Street New York, NY 10027 Tel: 212/854-2459 Fax: 212/854-8059 E-Mail: ac186@columbia.edu Lucas de Lara Columbia University 420 West 118 Street New York, NY 10027 E-Mail: lpd2122@columbia.edu Victoria R. Mooers Department of Economics Columbia University 420 West 118 Street New York, NY 10027 E-Mail: v.mooers@columbia.edu Dilip Ravindran Humboldt University of Berlin Department of Economics Berlin Germany E-Mail: dilip.ravindran@hu-berlin.de

Risk Management and the Autonomy of Labor - Dambaur, Andreas J; Ericson, Keith Marzilli; Jaspersen, Johannes G; Zoller, Sandra (National Bureau of Economic Research Working Paper Series, 2022)
Foresightful workers can take actions to reduce their exposure to risk in labor markets, but existing evidence on narrow bracketing suggests that individuals might not optimally integrate risk reduction decisions with subsequent labor decisions. In an online labor market, we vary the level of worker autonomy when transcribing a set of documents and measure the willingness to do preventative tasks to reduce the expected total task length. If workers integrate their risk management decisions with subsequent labor effort, the high-autonomy group should be more likely to engage in prevention, since they can adjust their work to accommodate the preventative effort. In contrast, if workers narrowly bracket the decision, it should not be affected by autonomy. We find that workers in the high autonomy condition are more likely to undertake prevention, consistent with an integrated view of risk management and later labor decisions. Our results have implications for designing effective incentive systems, particularly in times of the gig-economy and rising popularity of working from home.
Author contact info: Andreas J. Dambaur Ludwig-Maximilians-Universität of Munich School of Management E-Mail: Andreas.Dambaur@lmu.de Keith Marzilli Ericson Boston University Questrom School of Business 595 Commonwealth Avenue Boston, MA 02215 Tel: 617/353-4553 E-Mail: kericson@bu.edu Johannes G. Jaspersen Ludwig-Maximilians-Universität of Munich Schackstr. 4 80539 Munich Germany E-Mail: jaspersen@lmu.de Sandra Zoller E-Mail: sandra_zoller@iptiq.com

Domestic Violence and the Mental Health and Well-being of Victims and Their Children - Bhuller, Manudeep; Dahl, Gordon B; Løken, Katrine V; Mogstad, Magne (National Bureau of Economic Research Working Paper Series, 2022)
Almost one third of women worldwide report some form of physical or sexual violence by a partner in their lifetime, yet little is known about the mental health and well-being effects for either victims or their children. We study the costs associated with domestic violence (DV) in the context of Norway, where we can link offenders to victims and their children over time. Our difference-in-differences framework uses those who will be victimized in the future as controls. We find that a DV report involving the police is associated with large changes in the home environment, including marital dissolution and a corresponding decline in financial resources. A DV report increases mental health visits by 35% for victims and by 19% for their children in the year of the event, effects which taper off over time for the victim, but not for children. Victims also experience more doctor visits, lower employment, reduced earnings and a higher use of disability insurance while their children are more likely to receive child protective services and commit a crime. Using a complementary RD design, we find that a DV report results in declines both in children’s test scores and completion of the first year of high school.
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 Gordon B. Dahl Department of Economics University of California, San Diego 9500 Gilman Drive #0508 La Jolla, CA 92093-0508 Tel: 858-822-0644 E-Mail: gdahl@ucsd.edu Katrine V. Løken Department of Economics Norwegian School of Economics Helleveien 30 5045 Bergen Norway E-Mail: katrine.loken@nhh.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

The Impact of Direct-to-Consumer Advertising on Outpatient Care Utilization - Eisenberg, Matthew D; Rabideau, Brendan; Alpert, Abby E; Avery, Rosemary J; Niederdeppe, Jeff; Sood, Neeraj (National Bureau of Economic Research Working Paper Series, 2022)
There is much debate about the effects of pharmaceutical direct to consumer advertising (DTCA) on health care use. In this paper, we inform this debate by examining the effects of DTCA on office visits, as well as treatment courses resulting from those visits, for five common chronic conditions (hypertension, hyperlipidemia, diabetes, depression, and osteoporosis). In particular, we examine whether office visits result in use of drug therapy and/or continued office visits over time. We test these questions by combining data on pharmaceutical advertising from Nielsen with claims data from 40 large national employers, covering 18 million person-years. We analyze a non-elderly population by exploiting plausibly exogenous variation in advertising exposure across areas due to the implementation of Medicare prescription drug coverage which led to larger increases in advertising in areas with high elderly share of population compared to low elderly share areas. We find that advertising increases the number of office visits for the non-elderly for the advertised condition. We also find substantial spillovers -- a large share of the increased office visits from advertising are associated with use of non-advertised generic drugs or do not result in use of any drugs. Finally, we find that the increase in office visits due to DTCA is associated with continued engagement with a physician through multiple consecutive follow up visits over time.
Author contact info: Matthew D. Eisenberg Department of Health Policy and Management Johns Hopkins University 624 N Broadway Room 406 Baltimore, MD 21205 E-Mail: eisenberg@jhu.edu Brendan Rabideau Department of Health Policy and Management Johns Hopkins Bloomberg School of Public Health Baltimore, MD E-Mail: rabideaub@gmail.com Abby E. Alpert The Wharton School University of Pennsylvania 3641 Locust Walk Philadelphia, PA 19104 Tel: 215/746-3174 E-Mail: alpertab@wharton.upenn.edu Rosemary J. Avery Jeb E. Brooks School of Public Policy Cornell University 2232 MVR Hall Ithaca, NY 14850 E-Mail: rja7@cornell.edu Jeff Niederdeppe Jeb E. Brooks School of Public Policy and Department of Communication Cornell University Ithaca, NY E-Mail: jdn56@cornell.edu Neeraj Sood Schaeffer Center for Health Policy and Economics Sol Price School of Public Policy University of Southern California University Park Campus Los Angeles CA 90089 Tel: 310/393-0411 Fax: 310/260-8156 E-Mail: nsood@healthpolicy.usc.edu

The Insurance Implications of Government Student Loan Repayment Schemes - Gervais, Martin; Liu, Qian; Lochner, Lance (National Bureau of Economic Research Working Paper Series, 2022)
We use new administrative data that links detailed information on Canadian student loan recipients with their repayment and income histories from the Canada Student Loans Program (CSLP), income tax filings, and post-secondary schooling records to measure the extent to which student borrowers adjust loan repayments to insure against income variation. Several mechanisms are available for students to adjust loan repayments in response to income fluctuations: formal, like CSLP's Repayment Assistance Plan; and informal, such as delinquency or default. Borrowers can also make larger payments than required should they experience unexpectedly high income. Indeed, loan payments are shown to increase in income, more so in early years and for individuals with higher initial debt. More formally, we estimate that on average, an unexpected $1,000 change in year-over-year income is associated with a $30 change in loan payment: from a $50 change the year after graduation, declining to a $20 change 5 years after graduation. Loan repayments are also used to absorb income variation that is more permanent in nature: for borrowers whose income is consistently below or above expected income at graduation, the magnitude of average repayment adjustment is similar to the average yearly response.
Author contact info: Martin Gervais University of Georgia B453 Amos Hall Athens, GA 30602 E-Mail: martin.gervais@uga.edu Qian Liu Department of Economics Brock University 1812 Sir Isaac Brock Way St. Catherines, ON L2S 3A1 Canada E-Mail: qliu@brocku.ca Lance Lochner Department of Economics Faculty of Social Science Western University 1151 Richmond Street, North London, ON N6A 5C2 Tel: 519/661-2111 ext. 85281 Fax: 519/661-3666 E-Mail: llochner@uwo.ca