American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients RajChettyLittauer Center, Harvard U EmmanuelSaezU CA, Berkeley 1 31 We conducted a randomized experiment with 43,000 EITC recipients at H&R Block. Tax preparers gave simple, personalized information about the EITC schedule to half of their clients. We find no significant effects of information provision on earnings in the subsequent year in the full sample. Further exploration uncovers evidence of heterogeneous treatment effects on both self-employment income and wage earnings across the 1,461 tax preparers involved in the experiment. Providing information about tax incentives does not systematically effect earnings on average. However, tax preparers may influence their clients' earnings decisions by providing advice about how to respond to tax incentives. (JEL H23, H24, H26, J23, J31) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.1 10.1257/app.5.1.1 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article The Trouble with Boys: Social Influences and the Gender Gap in Disruptive Behavior MarianneBertrandU Chicago and IZA, Bonn JessicaPanNational U Singapore 32 64 This paper explores the importance of the home and school environments in explaining the gender gap in disruptive behavior. We document large differences in the gender gap across key features of the home environment -- boys do especially poorly in broken families. In contrast, we find little impact of the early school environment on noncognitive gaps. Differences in endowments explain a small part of boys' noncognitive deficit in single-mother families. More importantly, noncognitive returns to parental inputs differ markedly by gender. Broken families are associated with worse parental inputs, and boys' noncognitive development, unlike that of girls', appears extremely responsive to such inputs. (JEL I21, J12, J13, J16, Z13) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.32 10.1257/app.5.1.32 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Real Wage Inequality EnricoMorettiU CA, Berkeley 65 103 While nominal wage differences between skilled and unskilled workers have increased since 1980, college graduates have experienced larger increases in cost of living because they have increasingly concentrated in cities with high cost of housing. Using a city-specific CPI, I find that real wage differences between college and high school graduates have grown significantly less than nominal differences. Changes in the geographical location of different skill groups are to a significant degree driven by city-specific shifts in relative demand. I conclude that the increase in utility differences between skilled and unskilled workers since 1980 is smaller than previously thought based on nominal wage differences. (JEL J22, J23, J24, J31, R23, R31) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.65 10.1257/app.5.1.65 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Barriers to Household Risk Management: Evidence from India ShawnColeHarvard U XavierGineWorld Bank JeremyTobacmanU PA PetiaTopalovaIMF RobertTownsendMIT JamesVickeryFederal Reserve Bank of New York 104 35 Why do many households remain exposed to large exogenous sources of nonsystematic income risk? We use a series of randomized field experiments in rural India to test the importance of price and nonprice factors in the adoption of an innovative rainfall insurance product. Demand is significantly price sensitive, but widespread take-up would not be achieved even if the product offered a payout ratio comparable to US insurance contracts. We present evidence suggesting that lack of trust, liquidity constraints, and limited salience are significant nonprice frictions that constrain demand. We suggest possible contract design improvements to mitigate these frictions. (JEL D14, D81, O12, O13, O16, O18, Q12) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.104 10.1257/app.5.1.104 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Back on the Rails: Competition and Productivity in State-Owned Industry SanghamitraDas? KalaKrishnaPA State U and CESifo, Munich SergeyLychaginCentral European U, Budapest RohiniSomanathanDelhi School of Economics 136 62 We use a proprietary dataset on the floor-level operations at the largest rail mill in India to study the response of productivity to the threat of entry. Output per active shift increased by 28 percent over 3 years with minimal changes in physical capital and employment. By combining data on the timing of various training programs in the mill with shift-level variation in worker composition, we are able to attribute over half of the higher productivity to training specifically targeted toward improving rail output. Our work suggests high returns to knowledge-enhancing investment in emerging economies. (JEL D22, D24, J24, L23, L32, L61, O14) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.136 10.1257/app.5.1.136 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya PascalineDupasStanford U JonathanRobinsonU CA, Santa Cruz 163 92 Does limited access to formal savings services impede business growth in poor countries? To shed light on this question, we randomized access to noninterest-bearing bank accounts among two types of self-employed individuals in rural Kenya: market vendors (who are mostly women) and men working as bicycle taxi drivers. Despite large withdrawal fees, a substantial share of market women used the accounts, were able to save more, and increased their productive investment and private expenditures. We see no impact for bicycle taxi drivers. These results imply significant barriers to savings and investment for market women in our study context. (JEL D14, G21, J16, J23, O12, O14, O16) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.163 10.1257/app.5.1.163 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Cognitive Abilities and Household Financial Decision Making SumitAgarwalNational U Singapore BhashkarMazumderFederal Reserve Bank of Chicago 193 207 We analyze the effects of cognitive abilities on two examples of consumer financial decisions where suboptimal behavior is well defined. The first example features the optimal use of credit cards for convenience transactions after a balance transfer and the second involves a financial mistake on a home equity loan application. We find that consumers with higher overall test scores, and specifically those with higher math scores, are substantially less likely to make a financial mistake. These mistakes are generally not associated with nonmath test scores. (JEL D14, G21) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.193 10.1257/app.5.1.193 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Do Oil Windfalls Improve Living Standards? Evidence from Brazil FrancescoCaselliLondon School of Economics and Political Science GuyMichaelsLondon School of Economics and Political Science 208 38 We use variation in oil output among Brazilian municipalities to investigate the effects of resource windfalls on government behavior. Oil-rich municipalities experience increases in revenues and report corresponding increases in spending on public goods and services. However, survey data and administrative records indicate that social transfers, public good provision, infrastructure, and household income increase less (if at all) than one might expect given the higher reported spending. (JEL H41, H75, I31, O13, O15, O17, O18) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.208 10.1257/app.5.1.208 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Slum Clearance and Urban Renewal in the United States William J.CollinsVanderbilt U Katharine L.ShesterWashington and Lee U 239 73 We study the local effects of a federal program that helped cities clear areas for redevelopment, rehabilitate structures, complete city plans, and enforce building codes. We use an instrumental variable strategy to estimate the program's effects on city-level measures of income, property values, employment and poverty rates, and population. The estimated effects on income, property values, and population are positive and economically significant. They are not driven by changes in demographic composition. Estimated effects on poverty reduction and employment are positive but imprecise. The results are consistent with a model in which local productivity is enhanced. (JEL I32, N32, N92, R23, R38, R58) http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.239 10.1257/app.5.1.239 American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 5 1 January 2013 http://www.aeaweb.org/issue.php?journal=APP&volume=5&issue=1 Journal Article Front Matter i vi http://www.aeaweb.org/articles.php?doi=10.1257/app.5.1.i 10.1257/app.5.1.i