American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Journal Article Front Matter i vi http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.i 10.1257/app.4.3.i American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles Raising the Barcode Scanner: Technology and Productivity in the Retail Sector EmekBaskerU MO 1 27 Barcodes and barcode scanners transformed the grocery industry in the 1970s. I use store-level data from the 1972, 1977, and 1982 Census of Retail Trade, matched to data on store scanner installations, to estimate scanners' effect on labor productivity. I find that scanners increased a store's labor productivity, on average, by approximately 4.5 percent in the first few years. The effect was larger in stores carrying more packaged products, consistent with the presence of network externalities. Short-run gains were small relative to fixed costs, suggesting that the impediment to widespread adoption of the new technology was profitability, not coordination problems. (JEL J24, L24, L81, O33) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.1 10.1257/app.4.3.1 http://www.aeaweb.org/aej/app/data/2011-0202_data.zip http://www.aeaweb.org/aej/app/app/2011-0202_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles How Large Are the Effects from Temporary Changes in Family Environment: Evidence from a Child-Evacuation Program during World War II TorstenSantavirtaSOFI, Stockholm U 28 42 During World War II, some 50,000 Finnish children were evacuated to Sweden and placed in foster families. The evacuation scheme limited sharply the scope for selection into foster care based on background characteristics. A first-come first-served policy was applied where the children were assigned a running number and processed anonymously. Using register and survey data, I examine the extent to which the foster environment affected later life outcomes of the Finnish child evacuees. The results show that nurture, the socioeconomic environment at early stages of life, has important effects on schooling. (JEL I21, J13, J24, N34, N44) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.28 10.1257/app.4.3.28 http://www.aeaweb.org/aej/app/data/2010-0219_data.zip http://www.aeaweb.org/aej/app/app/2010-0219_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles Sweetening the Deal? Political Connections and Sugar Mills in India SandipSukhtankarDartmouth College 43 63 Political control of firms is prevalent across the world. Evidence suggests that firms profit from political connections, and politicians derive benefit from control over firms. This paper investigates an alternative mechanism through which politicians may benefit electorally from connected firms, examining sugar mills in India. I find evidence of embezzlement in politically controlled mills during election years, reflected in lower prices paid to farmers for cane. This result complements the literature on political cycles by demonstrating how campaign funds are raised rather than used. Politicians may recompense farmers upon getting elected, possibly explaining how they can get away with pilferage. (JEL D72, G34, L66, O13, O17, Q12, Q13) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.43 10.1257/app.4.3.43 http://www.aeaweb.org/aej/app/data/2011-0020_data.zip http://www.aeaweb.org/aej/app/app/2011-0020_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles Enforcement of Labor Regulation and Informality RitaAlmeidaIZA, Bonn and World Bank PedroCarneiroU College London and Institute for Fiscal Studies, London 64 89 Enforcement of labor regulations in the formal sector may drive workers to informality because they increase the costs of formal labor. But better compliance with mandated benefits makes it attractive to be a formal employee. We show that, in locations with frequent inspections, workers pay for mandated benefits by receiving lower wages. Wage rigidity prevents downward adjustment at the bottom of the wage distribution. As a result, lower paid formal sector jobs become attractive to some informal workers, inducing them to want to move to the formal sector. (JEL J31, J63, J88, K31, O15) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.64 10.1257/app.4.3.64 http://www.aeaweb.org/aej/app/data/2010-0283_data.zip http://www.aeaweb.org/aej/app/app/2010-0283_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles When They're Sixty-Four: Peer Effects and the Timing of Retirement Kristine M.BrownU IL Ron A.LascheverU IL 90 115 This paper examines the effect of peers on an individual's likelihood of retirement using an administrative dataset of all retirement-eligible Los Angeles teachers for the years 1998-2001. We use two large unexpected pension reforms that differentially impacted financial incentives within and across schools to construct an instrument for others' retirement decisions. Controlling for individual and school characteristics, we find that the retirement of an additional teacher in the previous year at the same school increases a teacher's own likelihood of retirement by 1.5-2 percentage points. We then explore some possible mechanisms through which this effect operates. (JEL H75, I21, J14, J26, J45) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.90 10.1257/app.4.3.90 http://www.aeaweb.org/aej/app/data/2011-0132_data.zip http://www.aeaweb.org/aej/app/app/2011-0132_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles The Economic Benefits of Pharmaceutical Innovations: The Case of Cox-2 Inhibitors Craig L.GarthwaiteNorthwestern U 116 37 Despite dramatic improvements in medical technology, little attention has been paid to the role of these innovations in improving economic outcomes. This study estimates the labor supply effects of Cox-2 inhibitors, a widely prescribed class of pharmaceuticals used for the treatment of chronic pain and inflammation and primarily marketed under the brand names Vioxx, Celebrex, and Bextra. This paper exploits the removal of Vioxx from the market in 2004 as an exogenous change in drug use. This removal was associated with a 0.35 percentage point decrease in overall labor force participation and $19 billion in lost wages. (JEL I12, J22, L65, O31). http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.116 10.1257/app.4.3.116 http://www.aeaweb.org/aej/app/data/2010-0292_data.zip American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles High Unemployment Yet Few Small Firms: The Role of Centralized Bargaining in South Africa Jeremy R.MagruderU CA, Berkeley 138 66 South Africa has very high unemployment, yet few adults work informally in small firms. This paper tests whether centralized bargaining, by which unionized large firms extend arbitration agreements to nonunionized smaller firms, contributes to this problem. While local labor market characteristics influence the location of these agreements, their coverage is spatially discontinuous, allowing identification by spatial regression discontinuity. Centralized bargaining agreements are found to decrease employment in an industry by 8-13 percent, with losses concentrated among small firms. These effects are not explained by resettlement to uncovered areas, and are robust to a wide variety of controls for unobserved heterogeneity. (JEL J52, K31, L25, O14, O15) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.138 10.1257/app.4.3.138 http://www.aeaweb.org/aej/app/data/2011-0027_data.zip http://www.aeaweb.org/aej/app/app/2011-0027_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles Drug Innovations and Welfare Measures Computed from Market Demand: The Case of Anti-cholesterol Drugs AbeDunnUS Bureau of Economic Analysis 167 89 The pharmaceutical industry is characterized as having substantial investment in R&D and a large number of new product introductions, which poses special problems for price measurement caused by the quality of drug products changing over time. This paper applies recent demand estimation techniques to individual-level data to construct a constant-quality price index for anti-cholesterol drugs. Although the average price for anti-cholesterol drugs does not change over the sample period, I find that the constant-quality price index drops by 27 percent, a pace more in line with our expectations in such a dynamic segment of the industry. (JEL C43, L11, L65, O31) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.167 10.1257/app.4.3.167 http://www.aeaweb.org/aej/app/data/2010-0350_data.zip http://www.aeaweb.org/aej/app/app/2010-0350_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles Expansions in Maternity Leave Coverage and Children's Long-Term Outcomes ChristianDustmannU College London UtaSchonbergU College London 190 224 This paper evaluates the impact of three major expansions in maternity leave coverage in Germany on children's long-run outcomes. To identify the causal impact of the reforms, we use a difference-indifference design that compares outcomes of children born shortly before and shortly after a change in maternity leave legislation in years of policy changes, and in years when no changes have taken place. We find no support for the hypothesis that the expansions in leave coverage improved children's outcomes, despite a strong impact on mothers' return to work behavior after childbirth. (JEL J13, J16, J22, J32) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.190 10.1257/app.4.3.190 http://www.aeaweb.org/aej/app/data/2011-0105_data.zip American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 4 3 July 2012 http://www.aeaweb.org/issue.php?journal=APP&volume=4&issue=3 Articles The Opt-In Revolution? Contraception and the Gender Gap in Wages Martha J.BaileyU MI BradHershbeinU MI Amalia R.MillerU VA 225 54 Decades of research on the US gender gap in wages describes its correlates, but little is known about why women changed their career paths in the 1960s and 1970s. This paper explores the role of "the Pill" in altering women's human capital investments and its ultimate implications for life-cycle wages. Using state-by-birthcohort variation in legal access, we show that younger access to the Pill conferred an 8 percent hourly wage premium by age 50. Our estimates imply that the Pill can account for 10 percent of the convergence of the gender gap in the 1980s and 30 percent in the 1990s. (JEL J13, J16, J31, J71, J24) http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.225 10.1257/app.4.3.225 http://www.aeaweb.org/aej/app/app/2010-0279_app.zip