American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Journal Article Front Matter i vi http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.i 10.1257/jep.25.3.i American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Symposia Why Economists Should Conduct Field Experiments and 14 Tips for Pulling One Off John A.ListU Chicago 3 16 In this introduction to the symposium, I first offer an overview of the spectrum of experimental methods in economics, from laboratory experiments to the field experiments that are the subject of this symposium. I then offer some thoughts about the potential gains from doing economic research using field experiments and my own mental checklist of 14 steps to improve the chances of carrying out an economics field experiment successfully. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.3 10.1257/jep.25.3.3 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Symposia Mechanism Experiments and Policy Evaluations JensLudwigU Chicago Jeffrey R.KlingUS Congressional Budget Office SendhilMullainathanHarvard U 17 38 Randomized controlled trials are increasingly used to evaluate policies. How can we make these experiments as useful as possible for policy purposes? We argue greater use should be made of experiments that identify the behavioral mechanisms that are central to clearly specified policy questions, what we call "mechanism experiments." These types of experiments can be of great policy value even if the intervention that is tested (or its setting) does not correspond exactly to any realistic policy option. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.17 10.1257/jep.25.3.17 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Symposia The Role of Theory in Field Experiments DavidCardU CA, Berkeley StefanoDellaVignaU CA, Berkeley UlrikeMalmendierU CA, Berkeley 39 62 We classify all published field experiments in five top economics journals from 1975 to 2010 according to how closely the experimental design and analysis are linked to economic theory. We find that the vast majority of field experiments (68 percent) are Descriptive studies that lack any explicit model; 18 percent are Single Model studies that test a single model-based hypothesis; 6 percent are Competing Models studies that test competing model-based hypotheses; and 8 percent are Parameter Estimation studies that estimate structural parameters in a completely specified model. We also classify laboratory experiments published in these journals over the same period and find that economic theory has played a more central role in the laboratory than in the field. Finally, we discuss in detail three sets of field experiments—on gift exchange, on charitable giving, and on negative income tax—that illustrate both the benefits and the potential costs of a tighter link between experimental design and theoretical underpinnings. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.39 10.1257/jep.25.3.39 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Symposia Field Experiments with Firms OrianaBandieraLondon School of Economics and Political Science IwanBarankayU PA ImranRasulU College London 63 82 We discuss how the use of field experiments sheds light on long-standing research questions relating to firm behavior. We present insights from two classes of experiments—within and across firms—and draw common lessons from both sets. Field experiments within firms generally aim to shed light on the nature of agency problems. Along these lines, we discuss how field experiments have provided new insights on shirking behavior and the provision of monetary and nonmonetary incentives. Field experiments across firms generally aim to uncover firms' binding constraints by exogenously varying the availability of key inputs such as labor, physical capital, and managerial capital. We conclude by discussing some of the practical issues researchers face when designing experiments and by highlighting areas for further research. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.63 10.1257/jep.25.3.63 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Symposia Economics and Emigration: Trillion-Dollar Bills on the Sidewalk? Michael A.ClemensCenter for Global Development, Washington, DC 83 106 What is the greatest single class of distortions in the global economy? One contender for this title is the tightly binding constraints on emigration from poor countries. Vast numbers of people in low-income countries want to emigrate from those countries but cannot. How large are the economic losses caused by barriers to emigration? Research on this question has been distinguished by its rarity and obscurity, but the few estimates we have should make economists' jaws hit their desks. The gains to eliminating migration barriers amount to large fractions of world GDP—one or two orders of magnitude larger than the gains from dropping all remaining restrictions on international flows of goods and capital. When it comes to policies that restrict emigration, there appear to be trillion-dollar bills on the sidewalk. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.83 10.1257/jep.25.3.83 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Symposia Eight Questions about Brain Drain JohnGibsonU Waikato DavidMcKenzieWorld Bank and BREAD, Duke U 107 28 The term "brain drain" dominates popular discourse on high-skilled migration, and for this reason, we use it in this article. However, as Harry Johnson noted, it is a loaded phrase implying serious loss. It is far from clear that such a loss actually occurs in practice; indeed, there is an increasing recognition of the possible benefits that skilled migration can offer both for migrants and for sending countries. This paper builds upon a recent wave of empirical research to answer eight key questions underlying much of the brain drain debate: 1) What is brain drain? 2) Why should economists care about it? 3) Is brain drain increasing? 4) Is there a positive relationship between skilled and unskilled migration? 5) What makes brain drain more likely? 6) Does brain gain exist? 7) Do high-skilled workers remit, invest, and share knowledge back home? 8) What do we know about the fiscal and production externalities of brain drain? http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.107 10.1257/jep.25.3.107 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Symposia Migrant Remittances DeanYangU MI and BREAD, Duke U 129 52 This article is about the economics of migrant remittances sent to developing countries. I review the overall magnitude of remittances and what current research reveals about the motivations for migrant remittances and what effects they have. I discuss field experimental evidence on migrant desires for control over the uses of their remittances. I highlight some key distinctive characteristics of remittances—such as their high frequency and relatively small individual magnitudes—as well as recent experimental evidence on the effect of reductions in remittance transaction fees, and outline a research agenda on the microeconomics of remittance decision making. Finally, I discuss what the future holds for remittances, considering aggregate trends but also approaches likely to be taken by international development agencies, national governments, the private sector, and academic economists. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.129 10.1257/jep.25.3.129 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Articles Killing Me Softly: The Fetal Origins Hypothesis DouglasAlmondColumbia U JanetCurriePrinceton U 153 72 In the epidemiological literature, the fetal origins hypothesis associated with David J. Barker posits that chronic, degenerative conditions of adult health, including heart disease and type 2 diabetes, may be triggered by circumstances decades earlier, particularly, by in utero nutrition. Economists have expanded on this hypothesis, investigating a broader range of fetal shocks and circumstances and have found a wealth of later-life impacts on outcomes including test scores, educational attainment, and income, along with health. In the process, they have provided some of the most credible observational evidence in support of the hypothesis. The magnitude of the impacts is generally large. Thus, the fetal origins hypothesis has not only survived contact with economics, but has flourished. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.153 10.1257/jep.25.3.153 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Articles Internal Migration in the United States RavenMolloyFederal Reserve Board Christopher L.SmithFederal Reserve Board AbigailWozniakU Notre Dame and IZA, Bonn 173 96 This paper examines the history of internal migration in the United States since the 1980s. By most measures, internal migration in the United States is at a 30-year low. The widespread decline in migration rates across a large number of subpopulations suggests that broad-based economic forces are likely responsible for the decrease. An obvious question is the extent to which the recent housing market contraction and the recession may have caused this downward trend in migration: after all, relocation activity often involves both housing market activity and changes in employment. However, we find relatively small roles for both of these cyclical factors. While we will suggest a few other possible explanations for the recent decrease in migration, the puzzle remains. Finally, we compare U.S. migration to other developed countries. Despite the steady decline in U.S. migration, the commonly held belief that Americans are more mobile than their European counterparts still appears to hold true. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.173 10.1257/jep.25.3.173 http://www.aeaweb.org/jep/app/2503_molloy_app.pdf American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Articles Esther Duflo: 2010 John Bates Clark Medalist ChristopherUdryYale U 197 216 Esther Duflo, winner of the 2010 John Bates Clark Medal, has made extraordinary contributions to development economics. She exemplifies and has played a vital role in the renaissance of development economics over the past decade. She has erected and inspired a research apparatus all over the developing world that integrates large-scale field experiments with economic theory to yield important insights for development policy and our understanding of behavior and institutions in developing countries. I'll divide my discussion of Esther's work into four categories: educational production, the economic lives of the poor, women as decisionmakers, and a broad category of market and policy failures. I will then offer some thoughts on Esther's role as a scholar-activist. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.197 10.1257/jep.25.3.197 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Features Retrospectives: Hume on Money, Commerce, and the Science of Economics MargaretSchabasU British Columbia CarlWennerlindBarnard College, Columbia U 217 30 David Hume (1711-1776) is arguably the most esteemed philosopher to have written in the English language. During his lifetime, however, Hume was as well if not better known for his contributions to political economy, particularly for the essays published as the Political Discourses (1752). Hume left his mark on the economic thought of the physiocrats, the classical economists, and the American Federalists. Adam Smith, who met Hume circa 1750, was his closest friend and interlocutor for some 25 years. Among modern economists, Hume's essays on money and trade have informed theorists of both Keynesian and Monetarist persuasions. In this essay, we begin by discussing Hume's monetary economics, and then spell out his theory of economic development, noting his qualified enthusiasm for the modern commercial system. We end with an assessment of his views on the scientific standing of economics, specifically his counterintuitive argument that economics could be epistemologically superior to physics. http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.217 10.1257/jep.25.3.217 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Features Recommendations for Further Reading TimothyTaylorMacalester College 231 38 http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.231 10.1257/jep.25.3.231 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Features Correspondence: David H. Autor and Bruno S. Frey 239 240 http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.239 10.1257/jep.25.3.239 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 25 3 Summer 2011 http://www.aeaweb.org/issue.php?journal=JEP&volume=25&issue=3 Features Notes 241 244 http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.3.241 10.1257/jep.25.3.241