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Generative AI at Work Q. J. Econ. (IF 11.1) Pub Date : 2025-02-04 Erik Brynjolfsson, Danielle Li, Lindsey Raymond
We study the staggered introduction of a generative AI–based conversational assistant using data from 5,172 customer-support agents. Access to AI assistance increases worker productivity, as measured by issues resolved per hour, by 15% on average, with substantial heterogeneity across workers. The effects vary significantly across different agents. Less experienced and lower-skilled workers improve
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Race to the Bottom: Competition and Quality in Science Q. J. Econ. (IF 11.1) Pub Date : 2025-02-04 Ryan Hill, Carolyn Stein
This paper investigates how competition to publish first and thereby establish priority impacts the quality of scientific research. We begin by developing a model where scientists decide whether and how long to work on a given project. When deciding how long they should let their projects mature, scientists trade off the marginal benefit of higher quality research against the marginal risk of being
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Wage Hysteresis and Entitlement Effects: The Persistent Impacts of a Temporary Overtime Policy Q. J. Econ. (IF 11.1) Pub Date : 2025-02-01 Simon Quach
This paper studies the unexpected retraction of a U.S. federal policy in 2016 that would have more than doubled the “overtime exemption threshold” from ${\$}$455 to ${\$}$913 per week and thereby grant overtime protection to an additional 20 percent of salaried workers. Although the policy was blocked by a federal court injunction a week before it was supposed to take effect, I show that it nevertheless
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Officer-Involved: The Media Language of Police Killings Q. J. Econ. (IF 11.1) Pub Date : 2025-01-25 Jonathan Moreno-Medina, Aurelie Ouss Patrick Bayer, Bocar A Ba
This paper examines language patterns in US television news coverage of police killings. We first document that the media use semantic structures—such as passive voice, nominalizations, and intransitive verbs—that obscure responsibility more often in cases of police killings than in cases of civilian killings. Through an online experiment, we demonstrate the significance of these semantic differences
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The Impact of Being Denied a Wanted Abortion on Women and Their Children Q. J. Econ. (IF 11.1) Pub Date : 2025-01-25 Juliana Londoño-Vélez, Estefanía Saravia
This paper examines the impact of denying a wanted abortion on women and children in Colombia using high-quality administrative microdata and credibly exogenous variation in abortion access. Women can seek legal abortions through a tutela, with cases randomly assigned to judges. Female judges are 20 p.p. (32%) less likely to deny abortion cases than male judges, and we use the judge’s sex as an instrument
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Exploitation Through Racialization Q. J. Econ. (IF 11.1) Pub Date : 2025-01-21 Dan McGee
I develop a model of the social construction of race. Racial categories emerge from labour conflict when elites privilege intrinsically irrelevant traits to divide workers against each other and extract workers’ surplus. I show that elites use colour to grant unequal rights and track these rights across generations because it is heritable, observable, and relatively immutable. Depending on the demographic
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“Something Works” in U.S. Jails: Misconduct and Recidivism Effects of the IGNITE Program Q. J. Econ. (IF 11.1) Pub Date : 2025-01-21 Marcella Alsan, Arkey Barnett, Peter Hull, Crystal S Yang
A longstanding and influential view in U.S. correctional policy is that “nothing works” when it comes to rehabilitating incarcerated individuals. We revisit this hypothesis by studying an innovative law-enforcement-led program launched in the county jail of Flint, Michigan: Inmate Growth Naturally and Intentionally Through Education (IGNITE). We develop an instrumental variable approach to estimate
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The Diffusion of New Technologies Q. J. Econ. (IF 11.1) Pub Date : 2025-01-18 Aakash Kalyani, Nicholas Bloom, Marcela Carvalho, Tarek Hassan, Josh Lerner, Ahmed Tahoun
We identify phrases associated with novel technologies using textual analysis of patents, job postings, and earnings calls, enabling us to identify four stylized facts on the diffusion of jobs relating to new technologies. First, the development of economically impactful new technologies is geographically highly concentrated, more so even than overall patenting: 56% of the most economically impactful
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The Earnings and Labor Supply of U.S. Physicians Q. J. Econ. (IF 11.1) Pub Date : 2025-01-14 Joshua D Gottlieb, Maria Polyakova, Kevin Rinz, Hugh Shiplett, Victoria Udalova
Is government guiding the invisible hand at the top of the labor market? We use new administrative data to measure physicians’ earnings and estimate the influence of healthcare policies on these earnings, physicians’ labor supply, and allocation of talent. Combining the administrative registry of U.S. physicians with tax data, Medicare billing records, and survey responses, we find that physicians’
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When Did Growth Begin? New Estimates of Productivity Growth in England from 1250 to 1870 Q. J. Econ. (IF 11.1) Pub Date : 2024-12-27 Paul Bouscasse, Emi Nakamura, Jón Steinsson
We estimate productivity growth in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. Our estimates account for these Malthusian dynamics. We find that productivity growth was zero prior to 1600. Productivity growth began in 1600—almost a century before the Glorious Revolution. Thus, the onset of productivity growth preceded the
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The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments Q. J. Econ. (IF 11.1) Pub Date : 2024-12-27 Raymond Kluender, Neale Mahoney, Francis Wong, Wesley Yin
Two in five Americans have medical debt, nearly half of whom owe at least $2,500. Concerned by this burden, governments and private donors have undertaken large, high-profile efforts to relieve medical debt. We partnered with RIP Medical Debt (now Undue Medical Debt) to conduct two randomized experiments that relieved medical debt with a face value of $169 million for 83,401 people between 2018 and
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Believed Gender Differences in Social Preferences Q. J. Econ. (IF 11.1) Pub Date : 2024-12-18 Christine L Exley, Oliver P Hauser, Molly Moore, John-Henry Pezzuto
While there is a vast (and mixed) literature on gender differences in social preferences, little is known about believed gender differences in social preferences. Using data from 15 studies and 8,979 individuals, we find that women are believed to be more generous and more equality-oriented than men. This believed gender gap is robust across a wide range of contexts that vary in terms of strategic
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Cognitive Endurance as Human Capital Q. J. Econ. (IF 11.1) Pub Date : 2024-12-17 Christina Brown, Supreet Kaur, Geeta Kingdon, Heather Schofield
Schooling may build human capital not only by teaching academic skills, but by expanding the capacity for cognition itself. We focus specifically on cognitive endurance: the ability to sustain effortful mental activity over a continuous stretch of time. As motivation, we document that globally and in the US, the poor exhibit cognitive fatigue more quickly than the rich across field settings; they also
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Costs of Financing U.S. Federal Debt Under a Gold Standard: 1791-1933 Q. J. Econ. (IF 11.1) Pub Date : 2024-12-11 Jonathan Payne, Bálint Szőke, George Hall, Thomas J Sargent
From a new data set, we infer time series of term structures of yields on U.S. federal bonds during the gold standard era from 1791–1933 and use our estimates to reassess historical narratives about how the United States expanded its fiscal capacity. We show that U.S. debt carried a default risk premium until the end of the nineteenth century, when it started being priced as an alternative safe asset
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The Global Race for Talent: Brain Drain, Knowledge Transfer, and Growth Q. J. Econ. (IF 11.1) Pub Date : 2024-11-29 Marta Prato
How does inventors’ migration affect international talent allocation, knowledge diffusion, and productivity growth? To answer this question, I build a novel two-country innovation-led endogenous growth model, where heterogeneous inventors produce innovations, learn from others, and make dynamic migration and return decisions. Migrants interact with individuals at origin and destination, diffusing knowledge
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Putting Quantitative Models to the Test: an Application to the US-China Trade War Q. J. Econ. (IF 11.1) Pub Date : 2024-11-28 Rodrigo Adão, Arnaud Costinot, Dave Donaldson
The primary motivation behind quantitative work in international trade and many other fields is to shed light on the economic consequences of policy changes and other shocks. To help assess and potentially strengthen the credibility of such quantitative predictions we introduce an IV-based goodness-of-fit measure that provides the basis for testing causal predictions in arbitrary general-equilibrium
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Teacher Labor Market Policy and the Theory of the Second Best Q. J. Econ. (IF 11.1) Pub Date : 2024-11-28 Michael Bates, Michael Dinerstein, Andrew C Johnston, Isaac Sorkin
We estimate a matching model of teachers and elementary schools with rich data on teachers' applications and principals' ratings from a large, urban district in North Carolina. Both teachers’ and principals’ preferences deviate from those that would maximize the achievement of economically disadvantaged students: teachers prefer schools with fewer disadvantaged students, and principals' ratings are
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Do Financial Concerns Make Workers Less Productive? Q. J. Econ. (IF 11.1) Pub Date : 2024-11-28 Supreet Kaur, Sendhil Mullainathan, Suanna Oh, Frank Schilbach
Workers who are worried about their personal finances may find it hard to focus at work. If so, reducing financial concerns could increase productivity. We test this hypothesis in a sample of low-income Indian piece-rate manufacturing workers. We stagger when wages are paid out: some workers are paid earlier and receive a cash infusion while others remain liquidity constrained. The cash infusion leads
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A Cognitive View of Policing Q. J. Econ. (IF 11.1) Pub Date : 2024-11-22 Oeindrila Dube, Sandy Jo MacArthur, Anuj K Shah
What causes adverse policing outcomes, such as excessive uses of force and unnecessary arrests? Prevailing explanations focus on problematic officers or deficient regulations and oversight. We introduce an overlooked perspective. We suggest that the cognitive demands inherent in policing can undermine officer decision making. Unless officers are prepared for these demands, they may jump to conclusions
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A Welfare Analysis of Tax Audits Across the Income Distribution Q. J. Econ. (IF 11.1) Pub Date : 2024-11-09 William C Boning, Nathaniel Hendren, Ben Sprung-Keyser, Ellen Stuart
We estimate the returns to IRS audits of taxpayers across the income distribution. We find an additional $1 spent auditing taxpayers above the 90th income percentile yields more than $12 in revenue, while audits of below-median income taxpayers yield $5. We construct our estimates by drawing from comprehensive internal accounting information and audit-level enforcement logs. We begin by estimating
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War Reparations, Structural Change, and Intergenerational Mobility Q. J. Econ. (IF 11.1) Pub Date : 2024-10-30 Matti Mitrunen
From 1944 to 1952, largely agrarian Finland had to export, on average, 4% of its yearly GDP in industrial products to the Soviet Union as war reparations. To meet the reparation demands, the Finnish state needed to provide extensive temporary support to Soviet-assigned industries with insufficient production capacity. This article documents the long-term effects of this extensive and temporary industrial
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Reserves Were Not So Ample After All Q. J. Econ. (IF 11.1) Pub Date : 2024-10-27 Adam Copeland, Darrell Duffie, Yilin (David) Yang
We show that the likelihood of a liquidity crunch in wholesale U.S. dollar funding markets depends on levels of reserve balances at the financial institutions that are the most active intermediaries of these markets. Heightened risk of an imminent liquidity crunch is signaled by significant delays in intraday payments to these large financial institutions over the prior two weeks. Our study contributes
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LinkedOut? A Field Experiment on Discrimination in Job Network Formation Q. J. Econ. (IF 11.1) Pub Date : 2024-10-26 Yulia Evsyukova®, Felix Rusche®, Wladislaw Mill
We assess the impact of discrimination on Black individuals’ job networks across the United States using a two-stage field experiment with 400+ fictitious LinkedIn profiles. In the first stage, we vary race via AI-generated images only and find that Black profiles’ connection requests are 13% less likely to be accepted. Based on users’ CVs, we find widespread discrimination across social groups. In
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Trust at Scale: The Economic Limits of Cryptocurrencies and Blockchains Q. J. Econ. (IF 11.1) Pub Date : 2024-10-17 Eric Budish
Satoshi Nakamoto (2008) invented a new kind of economic system that does not need the support of government or rule of law. Trust and security instead arise from a combination of cryptography and economic incentives, all in a completely anonymous and decentralized system. This article shows that Nakamoto’s novel form of trust, while undeniably ingenious, is deeply economically limited. The core argument
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Overinference from Weak Signals and Underinference from Strong Signals Q. J. Econ. (IF 11.1) Pub Date : 2024-10-14 Ned Augenblick, Eben Lazarus, Michael Thaler
When people receive new information, sometimes they revise their beliefs too much, and sometimes too little. We show that a key driver of whether people overinfer or underinfer is the strength of the information. Based on a model in which people know which direction to update in, but not exactly how much to update, we hypothesize that people will overinfer from weak signals and underinfer from strong
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The Long-Run Impacts of Public Industrial Investment on Local Development and Economic Mobility: Evidence from World War II Q. J. Econ. (IF 11.1) Pub Date : 2024-10-12 Andrew Garin, Jonathan Rothbaum
This article studies the long-run effects of government-led construction of manufacturing plants on the regions where they were built and on individuals from those regions. Specifically, we examine publicly financed plants built in dispersed locations outside of major urban centers for security reasons during the U.S. industrial mobilization for World War II. Wartime plant construction had large and
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Mandatory Notice of Layoff, Job Search, and Efficiency Q. J. Econ. (IF 11.1) Pub Date : 2024-10-04 Jonas Cederlöf, Peter Fredriksson, Arash Nekoei, David Seim
In all OECD countries, mandatory notice (MN) policies require firms to inform workers in advance of a layoff. In our theoretical framework, MN helps workers avoid unemployment and find better jobs by encouraging them to search for a new job while still employed, thereby increasing future production. The magnitude of this production gain depends on the relative effectiveness of search while employed
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Measuring and Mitigating Racial Disparities in Tax Audits Q. J. Econ. (IF 11.1) Pub Date : 2024-09-26 Hadi Elzayn, Evelyn Smith, Thomas Hertz, Cameron Guage, Arun Ramesh, Robin Fisher, Daniel E Ho, Jacob Goldin
Tax authorities around the world rely on audits to detect underreported tax liabilities and to verify that taxpayers qualify for the benefits they claim. We study differences in Internal Revenue Service audit rates between Black and non-Black taxpayers. Because neither we nor the IRS observe taxpayer race, we propose and use a novel partial identification strategy to estimate these differences. Despite
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Present Bias Amplifies the Household Balance-Sheet Channels of Macroeconomic Policy Q. J. Econ. (IF 11.1) Pub Date : 2024-09-09 Peter Maxted, David Laibson, Benjamin Moll
We study the effect of monetary and fiscal policy in a heterogeneous-agent model where households have present-biased time preferences and naive beliefs. The model features a liquid asset and illiquid home equity, which households can use as collateral for borrowing. Because present bias substantially increases households’ marginal propensity to consume (MPC), present bias increases the effect of fiscal
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Social Signaling and Childhood Immunization: A Field Experiment in Sierra Leone Q. J. Econ. (IF 11.1) Pub Date : 2024-08-30 Anne Karing
This article explores the use of social signaling as a policy tool to sustainably affect childhood immunization. In a 26-month field experiment with public clinics in Sierra Leone, I introduce a verifiable signal—in the form of color-coded bracelets—given to children upon timely completion of the first four or all five required vaccinations. Signals increase parents’ belief in the visibility of their
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Optimal Resilience in Multitier Supply Chains Q. J. Econ. (IF 11.1) Pub Date : 2024-08-11 Gene M Grossman, Elhanan Helpman, Alejandro Sabal
Forward-looking investments determine the resilience of firms’ supply chains. Such investments confer externalities on other firms in the production network. We compare the equilibrium and optimal allocations in a general equilibrium model with an arbitrary number of vertical production tiers. Our model features endogenous investments in protective capabilities, endogenous formation of supply links
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The Dynamics of Abusive Relationships Q. J. Econ. (IF 11.1) Pub Date : 2024-07-24 Abi Adams, Kristiina Huttunen, Emily Nix, Ning Zhang
Domestic abuse encompasses a range of damaging behaviors beyond physical violence, including economic and emotional abuse. We analyze the impact of cohabiting with an abusive partner on victims’ economic outcomes. In so doing, we highlight the systematic role of economic suppression in such relationships. Using Finnish administrative data and a matched-control event-study design, along with a within-individual
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Jim Crow and Black Economic Progress after Slavery Q. J. Econ. (IF 11.1) Pub Date : 2024-07-18 Lukas Althoff, Hugo Reichardt
This article studies the long-run effects of slavery and restrictive Jim Crow institutions on Black Americans’ economic outcomes. We track individual-level census records of each Black family from 1850 to 1940 and extend our analysis to neighborhood-level outcomes in 2000 and surname-based outcomes in 2023. We show that Black families whose ancestors were enslaved until the Civil War have considerably
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Using Divide-and-Conquer to Improve Tax Collection Q. J. Econ. (IF 11.1) Pub Date : 2024-06-27 Samuel Kapon, Lucia Del Carpio, Sylvain Chassang
Tax collection with limited enforcement capacity may be consistent with both high- and low-delinquency regimes: high delinquency reduces the effectiveness of threats, thereby reinforcing high delinquency. We explore the practical challenges of unraveling the high-delinquency equilibrium using a mechanism design insight known as divide-and-conquer. Our preferred mechanism takes the form of prioritized
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Perceptions About Monetary Policy Q. J. Econ. (IF 11.1) Pub Date : 2024-06-26 Michael D Bauer, Carolin E Pflueger, Adi Sunderam
We estimate perceptions about the Federal Reserve’s monetary policy rule from panel data on professional forecasts of interest rates and macroeconomic conditions. The perceived dependence of the federal funds rate on economic conditions varies substantially over time, in particular over the monetary policy cycle. Forecasters update their perceptions about the Fed’s policy rule in response to monetary
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Evolution vs. Creationism in the Classroom: The Lasting Effects of Science Education Q. J. Econ. (IF 11.1) Pub Date : 2024-06-14 Benjamin W Arold
Anti-scientific attitudes can impose substantial costs on societies. Can schools be an important agent in mitigating the propagation of such attitudes? This article investigates the effect of the content of science education on anti-scientific attitudes, knowledge, and choices. The analysis exploits staggered reforms that reduce or expand the coverage of evolution theory in U.S. state science education
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Stories, Statistics, and Memory Q. J. Econ. (IF 11.1) Pub Date : 2024-06-12 Thomas Graeber, Christopher Roth, Florian Zimmermann
For many decisions, we encounter relevant information over the course of days, months, or years. We consume such information in various forms, including stories (qualitative content about individual instances) and statistics (quantitative data about collections of observations). This article proposes that information type—story versus statistic—shapes selective memory. In controlled experiments, we
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The Lifetime Impacts of the New Deal's Youth Employment Program Q. J. Econ. (IF 11.1) Pub Date : 2024-06-09 Anna Aizer, Nancy Early, Shari Eli, Guido Imbens, Keyoung Lee, Adriana Lleras-Muney, Alexander Strand
We study the lifetime effects of the first and largest American youth employment and training program in the United States—the Civilian Conservation Corps (CCC), 1933–1942. We match newly digitized enrollee records to census, World War II enlistment, Social Security, and death records. We find that longer service in the CCC led to improvements in height, health status, longevity, geographic mobility
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Global Firms in Large Devaluations Q. J. Econ. (IF 11.1) Pub Date : 2024-05-31 Joaquin Blaum
I investigate the consequences of firms’ joint import and export decisions in the context of large devaluations. I provide empirical evidence that large devaluations are characterized by an increase in the aggregate share of imported inputs in total input spending and by reallocation of resources toward import-intensive firms, contrary to what standard quantitative trade models predict. These facts
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Identifying Prediction Mistakes in Observational Data Q. J. Econ. (IF 11.1) Pub Date : 2024-05-28 Ashesh Rambachan
Decision makers, such as doctors, judges, and managers, make consequential choices based on predictions of unknown outcomes. Do these decision makers make systematic prediction mistakes based on the available information? If so, in what ways are their predictions systematically biased? In this article, I characterize conditions under which systematic prediction mistakes can be identified in empirical
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Crowding in Private Quality: The Equilibrium Effects of Public Spending in Education Q. J. Econ. (IF 11.1) Pub Date : 2024-05-09 Tahir Andrabi, Natalie Bau, Jishnu Das, Naureen Karachiwalla, Asim Ijaz Khwaja
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 standard deviations
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The Health Costs of Cost Sharing Q. J. Econ. (IF 11.1) Pub Date : 2024-05-04 Amitabh Chandra, Evan Flack, Ziad Obermeyer
What happens when patients suddenly stop their medications? We study the health consequences of drug interruptions caused by large, abrupt, and arbitrary changes in price. Medicare’s prescription drug benefit as-if-randomly assigns 65-year-olds a drug budget as a function of their birth month, beyond which out-of-pocket costs suddenly increase. Those facing smaller budgets consume fewer drugs and die
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The Mortgage Piggy Bank: Building Wealth Through Amortization Q. J. Econ. (IF 11.1) Pub Date : 2024-04-20 Asaf Bernstein, Peter Koudijs
In 2013, the Dutch government mandated that new conforming mortgages must fully amortize. Within a difference-in-differences design, we estimate that the marginal wealth accumulation from amortization is close to one, even five years later. Households purchasing after the reform primarily cut consumption and leisure over other savings, leading to a rise in wealth. This holds if we use life events to
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The Ant and the Grasshopper: Seasonality and the Invention of Agriculture Q. J. Econ. (IF 11.1) Pub Date : 2024-04-20 Andrea Matranga
The Neolithic revolution saw the independent development of agriculture among at least seven unconnected hunter-gatherer populations. I propose that the rapid spread of agricultural techniques resulted from increased climatic seasonality causing hunter-gatherers to adopt a sedentary lifestyle and store food for the season of scarcity. Their newfound sedentary lifestyle and storage habits facilitated
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Understanding Markets with Socially Responsible Consumers Q. J. Econ. (IF 11.1) Pub Date : 2024-03-19 Marc Kaufmann, Peter Andre, Botond Kőszegi
Many consumers care about climate change and other externalities associated with their purchases. We analyze the behavior and market effects of such “socially responsible consumers” in three parts. First, we develop a flexible theoretical framework to study competitive equilibria with rational consequentialist consumers. In violation of price taking, equilibrium feedback nontrivially dampens the impact
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New Frontiers: The Origins and Content of New Work, 1940–2018 Q. J. Econ. (IF 11.1) Pub Date : 2024-03-15 David Autor, Caroline Chin, Anna Salomons, Bryan Seegmiller
We answer three core questions about the hypothesized role of newly emerging job categories (“new work”) in counterbalancing the erosive effect of task-displacing automation on labor demand: what is the substantive content of new work, where does it come from, and what effect does it have on labor demand? We construct a novel database spanning eight decades of new job titles linked to U.S. Census microdata
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Discrimination in Multiphase Systems: Evidence from Child Protection Q. J. Econ. (IF 11.1) Pub Date : 2024-02-29 E Jason Baron, Joseph J Doyle, Natalia Emanuel, Peter Hull, Joseph Ryan
We develop empirical tools for studying discrimination in multiphase systems and apply them to the setting of foster care placement by child protective services. Leveraging the quasi-random assignment of two sets of decision-makers—initial hotline call screeners and subsequent investigators—we study how unwarranted racial disparities arise and propagate through this system. Using a sample of over 200
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How the 1963 Equal Pay Act and 1964 Civil Rights Act Shaped the Gender Gap in Pay Q. J. Econ. (IF 11.1) Pub Date : 2024-02-29 Martha J Bailey, Thomas Helgerman, Bryan A Stuart
In the 1960s, two landmark statutes—the Equal Pay and Civil Rights Acts—targeted the long-standing practice of employment discrimination against U.S. women. For the next 15 years, the gender gap in median earnings among full-time, full-year workers changed little, leading many scholars to conclude that the legislation was ineffectual. This article revisits this conclusion using two research designs
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Answering the Call of Automation: How the Labor Market Adjusted to Mechanizing Telephone Operation Q. J. Econ. (IF 11.1) Pub Date : 2024-02-22 James Feigenbaum, Daniel P Gross
In the early 1900s, telephone operation was among the most common jobs for American women, and telephone operators were ubiquitous. Between 1920 and 1940, AT&T undertook one of the largest automation investments in modern history, replacing operators with mechanical switching technology in over half of the U.S. telephone network. Using variation across U.S. cities in the timing of adoption, we study
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The Role of the Ask Gap in Gender Pay Inequality Q. J. Econ. (IF 11.1) Pub Date : 2024-02-17 Nina Roussille
The gender ask gap measures the extent to which women ask for lower salaries than comparable men. This article studies its role in generating wage inequality, using novel data from an online recruitment platform for full-time engineering jobs: Hired.com. To use the platform, job candidates must post an ask salary, stating how much they want to make in their next job. Firms then apply to candidates
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Digital Collateral Q. J. Econ. (IF 11.1) Pub Date : 2024-01-23 Paul Gertler, Brett Green, Catherine Wolfram
A new form of secured lending using “digital collateral” has recently emerged, most prominently in low- and middle-income countries. Digital collateral relies on lockout technology, which allows the lender to temporarily disable the flow value of the collateral to the borrower without physically repossessing it. We explore this new form of credit in a model and a field experiment using school-fee loans
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Worker Beliefs About Outside Options Q. J. Econ. (IF 11.1) Pub Date : 2024-01-11 Simon Jäger, Christopher Roth, Nina Roussille, Benjamin Schoefer
Standard labor market models assume that workers hold accurate beliefs about the external wage distribution, and hence their outside options with other employers. We test this assumption by comparing German workers’ beliefs about outside options with objective benchmarks. First, we find that workers wrongly anchor their beliefs about outside options on their current wage: workers that would experience
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Machine Learning as a Tool for Hypothesis Generation Q. J. Econ. (IF 11.1) Pub Date : 2024-01-11 Jens Ludwig, Sendhil Mullainathan
While hypothesis testing is a highly formalized activity, hypothesis generation remains largely informal. We propose a systematic procedure to generate novel hypotheses about human behavior, which uses the capacity of machine learning algorithms to notice patterns people might not. We illustrate the procedure with a concrete application: judge decisions about whom to jail. We begin with a striking
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Logs with Zeros? Some Problems and Solutions Q. J. Econ. (IF 11.1) Pub Date : 2023-12-12 Jiafeng Chen, Jonathan Roth
When studying an outcome Y that is weakly positive but can equal zero (e.g. earnings), researchers frequently estimate an average treatment effect (ATE) for a “log-like” transformation that behaves like log (Y) for large Y but is defined at zero (e.g. log (1 + Y), $\operatorname{arcsinh}(Y)$). We argue that ATEs for log-like transformations should not be interpreted as approximating percentage effects
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How Americans Respond to Idiosyncratic and Exogenous Changes in Household Wealth and Unearned Income Q. J. Econ. (IF 11.1) Pub Date : 2023-10-24 Mikhail Golosov, Michael Graber, Magne Mogstad, David Novgorodsky
We study how Americans respond to idiosyncratic and exogenous changes in household wealth and unearned income. Our analyses combine administrative data on U.S. lottery winners with an event study design. We first examine individual and household earnings responses to these windfall gains, finding significant and sizable wealth and income effects. On average, an extra dollar of unearned income in a
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The Impact of Public School Choice: Evidence from Los Angeles’ Zones of Choice Q. J. Econ. (IF 11.1) Pub Date : 2023-10-11 Christopher Campos, Caitlin Kearns
Does a school district that expands school choice provide better outcomes for students than a neighborhood-based assignment system? This paper studies the Zones of Choice (ZOC) program, a school choice initiative of the Los Angeles Unified School District (LAUSD) that created small high school markets in some neighborhoods but left attendance zone boundaries in place throughout the rest of the district
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THE ECONOMIC IMPACTS OF COVID-19: EVIDENCE FROM A NEW PUBLIC DATABASE BUILT USING PRIVATE SECTOR DATA. Q. J. Econ. (IF 11.1) Pub Date : 2023-10-04 Raj Chetty,John N Friedman,Michael Stepner,
We build a publicly available database that tracks economic activity in the United States at a granular level in real time using anonymized data from private companies. We report weekly statistics on consumer spending, business revenues, job postings, and employment rates disaggregated by county, sector, and income group. Using the publicly available data, we show how the COVID-19 pandemic affected
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A Retrieved-Context Theory of Financial Decisions Q. J. Econ. (IF 11.1) Pub Date : 2023-10-02 Jessica A Wachter, Michael Jacob Kahana
Studies of human memory indicate that features of an event evoke memories of prior associated contextual states, which in turn become associated with the current event’s features. This retrieved-context mechanism allows the remote past to influence the present, even as agents gradually update their beliefs about their environment. We apply a version of retrieved-context theory, drawn from the literature
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Organizational Structure and Pricing: Evidence from a Large U.S. Airline Q. J. Econ. (IF 11.1) Pub Date : 2023-09-28 Ali Hortaçsu, Olivia R Natan, Hayden Parsley, Timothy Schwieg, Kevin R Williams
Firms facing complex objectives often decompose the problems they face, delegating different parts of the decision to distinct subunits. Using comprehensive data and internal models from a large U.S. airline, we establish that airline pricing is not well approximated by a model of the firm as a unitary decision-maker. We show that observed prices, however, can be rationalized by accounting for organizational
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Monitoring for Waste: Evidence from Medicare Audits Q. J. Econ. (IF 11.1) Pub Date : 2023-09-27 Maggie Shi
This paper examines the tradeoffs of monitoring for wasteful public spending. By penalizing unnecessary spending, monitoring improves the quality of public expenditure and incentivizes firms to invest in compliance technology. I study a large Medicare program that monitored for unnecessary health care spending and consider its effect on government savings, provider behavior, and patient health. Every