Generational Differences in Managing Personal Finances

By Bruce Carlin, Arna Olafsson, and Michaela Pagel

AEA Papers and Proceedings, May 2019

In this article, we provide a descriptive account of how people from different generations vary in their use of financial management technology, their access credit markets, and how they finance consumption and incur financial costs and penalties. We use ...

Student Debt and Labor Market Outcomes

By Gerald Eric Daniels Jr. and Andria Smythe

AEA Papers and Proceedings, May 2019

We study the impact of student debt on various labor market outcomes, namely, income, hourly wages, and hours worked. Using the NLSY97 and a difference-in-difference approach, we find statistically significant differences in labor market outcomes for indi...

What Do Big Data Tell Us about Why People Take Gig Economy Jobs?

By Dmitri K. Koustas

AEA Papers and Proceedings, May 2019

The gig economy is widely regarded to be a source of secondary or temporary income, but little is known about economic activity outside of the gig economy. Using data from a large, online personal finance application, I document the evolution of non-gig i...

Debt Traps? Market Vendors and Moneylender Debt in India and the Philippines

By Dean Karlan, Sendhil Mullainathan, and Benjamin N. Roth

American Economic Review: Insights, June 2019

A debt trap occurs when someone takes on a high-interest-rate loan and is barely able to pay back the interest, and thus perpetually finds themselves in debt (often by refinancing). Studying such practices is important for understanding financial decision...

The Effect of House Prices on Household Borrowing: A New Approach

By James Cloyne, Kilian Huber, Ethan Ilzetzki, and Henrik Kleven

American Economic Review, June 2019

We investigate the effect of house prices on household borrowing using administrative mortgage data from the United Kingdom and a new empirical approach. The data contain household-level information on house prices and borrowing in a panel of homeowners, ...

Review of Books on Student Loans

By Christopher Avery

Journal of Economic Literature, June 2019

This essay reviews three recent books on the causes and consequences of student debt. In addition to increases in college tuition and fees, supply and resource constraints both contribute to the growing phenomenon of default: degree completion rates are r...

Medium- and Long-Term Educational Consequences of Alternative Conditional Cash Transfer Designs: Experimental Evidence from Colombia

By Felipe Barrera-Osorio, Leigh L. Linden, and Juan E. Saavedra

American Economic Journal: Applied Economics, July 2019

In 2005 the city of Bogota, Colombia, introduced three conditional cash transfer programs for secondary schooling, randomly assigning socioeconomically disadvantaged students to different payment structures. We show, through administrative data, that forc...

Consumer Spending during Unemployment: Positive and Normative Implications

By Peter Ganong and Pascal Noel

American Economic Review, July 2019

Using de-identified bank account data, we show that spending drops sharply at the large and predictable decrease in income arising from the exhaustion of unemployment insurance (UI) benefits. We use the high-frequency response to a predictable income decl...

Disability Benefits, Consumption Insurance, and Household Labor Supply

By David Autor, Andreas Kostøl, Magne Mogstad, and Bradley Setzler

American Economic Review, July 2019

There is no evaluation of the consequences of Disability Insurance (DI) receipt that captures the effects on households' net income and consumption expenditure, family labor supply, or benefits from other programs. Combining detailed register data from ...

Life-Cycle Consumption Patterns at Older Ages in the United States and the United Kingdom: Can Medical Expenditures Explain the Difference?

By James Banks, Richard Blundell, Peter Levell, and James P. Smith

American Economic Journal: Economic Policy, August 2019

This paper documents significantly steeper declines in nondurable expenditures at older ages in the United Kingdom compared to the United States, in spite of income paths being similar. Several possible causes are explored, including different employment ...

Liquidity Constraints of the Middle Class

By Jeffrey R. Campbell and Zvi Hercowitz

American Economic Journal: Economic Policy, August 2019

Existing evidence from US middle class households shows that their MPCs out of tax rebates greatly exceed the PIH's prediction and are weakly related to their liquid assets. The standard precautionary-saving model predicts the first fact but counterfactua...

Do the Rich Get Richer in the Stock Market? Evidence from India

By John Y. Campbell, Tarun Ramadorai, and Benjamin Ranish

American Economic Review: Insights, September 2019

We use data on Indian stock portfolios to show that return heterogeneity is the primary contributor to increasing inequality of wealth held in risky assets by Indian individual investors. Return heterogeneity increases equity wealth inequality through two...

Reported Effects versus Revealed-Preference Estimates: Evidence from the Propensity to Spend Tax Rebates

By Jonathan A. Parker and Nicholas S. Souleles

American Economic Review: Insights, December 2019

We evaluate the consistency of two methods for estimating the effect of an economic policy: (i) asking people how the policy caused them to change their behavior (reported effects) and (ii) inferring this change using data on behavior and differences in t...

Leverage and Deepening Business-Cycle Skewness

By Henrik Jensen, Ivan Petrella, Søren Hove Ravn, and Emiliano Santoro

American Economic Journal: Macroeconomics, January 2020

We document that the United States and other G7 economies have been characterized by an increasingly negative business-cycle asymmetry over the last three decades. This finding can be explained by the concurrent increase in the financial leverage of house...

Financial Education versus Costly Counseling: How to Dissuade Borrowers from Choosing Risky Mortgages?

By Sumit Agarwal, Gene Amromin, Itzhak Ben-David, Souphala Chomsisengphet, and Douglas D. Evanoff

American Economic Journal: Economic Policy, February 2020

This paper explores the effects of mandatory third-party review of mortgage contracts on consumer choice. The study is based on a legislative pilot carried out in Illinois in 2006, under which mortgage counseling was triggered by applicant credit scores o...

Economic History and Modern India: Redefining the Link

[Symposium: India]

By Tirthankar Roy

Journal of Economic Perspectives, Summer 2002

This paper argues that to restore the link between economic history and modern India, a different narrative of Indian economic history is needed. An exclusive focus on colonialism as the driver of India's economic history misses those continuities that ar...

Corporate Earnings: Facts and Fiction

[Symposium: Enron and Conflict of Interest]

By Baruch Lev

Journal of Economic Perspectives, Spring 2003

Manipulated earnings played a central role in the slew of corporate scandals which surfaced during the last three years. This article focuses on the vulnerability of earnings to manipulation by managers: it surveys the empirical record of manipulation, th...

Corporate Conflicts of Interest

[Symposium: Enron and Conflict of Interest]

By Joel S. Demski

Journal of Economic Perspectives, Spring 2003

This paper surveys conflicts of interest in the corporate governance arena, with emphasis on auditors, boards of directors, analysts and investment bankers, regulators, management, attorneys and investors. Enron provides a host of examples as well. I stre...

The European Union: A Politically Incorrect View

[Symposium: The Transformation of Europe]

By Alberto Alesina and Roberto Perotti

Journal of Economic Perspectives, Fall 2004

In this paper, we present our view of the recent evolution of European integration. We first briefly describe the main features of the institution and decision making process in the European Union, with particular attention to the debate between federalis...

Oil and the Macroeconomy Since the 1970s

By Robert B. Barsky and Lutz Kilian

Journal of Economic Perspectives, Fall 2004

Increases in oil prices have been held responsible for recessions, periods of excessive inflation, reduced productivity and lower economic growth. In this paper, we review the arguments supporting such views. First, we highlight some of the conceptual dif...