Dynastic Human Capital, Inequality, and Intergenerational Mobility

By Adrian Adermon, Mikael Lindahl, and Mårten Palme

American Economic Review, May 2021

We estimate long-run intergenerational persistence in human capital using information on outcomes for the extended family: the dynasty. A dataset including the entire Swedish population, linking four generations, allows us to identify parents' siblings an...

How Research Affects Policy: Experimental Evidence from 2,150 Brazilian Municipalities

By Jonas Hjort, Diana Moreira, Gautam Rao, and Juan Francisco Santini

American Economic Review, May 2021

Can research findings change political leaders' beliefs and policies? We use experiments with 2,150 Brazilian municipalities to measure mayors' demand for and response to research information. In one experiment, we find that mayors are willing to pay to l...

Stock Market Wealth and the Real Economy: A Local Labor Market Approach

By Gabriel Chodorow-Reich, Plamen T. Nenov, and Alp Simsek

American Economic Review, May 2021

We provide evidence of the stock market consumption wealth effect by using a local labor market analysis. An increase in local stock wealth driven by aggregate stock prices increases local employment and payroll in nontradable industries and in total, wit...

Five Facts about Beliefs and Portfolios

By Stefano Giglio, Matteo Maggiori, Johannes Stroebel, and Stephen Utkus

American Economic Review, May 2021

We study a newly designed survey administered to a large panel of wealthy retail investors. The survey elicits beliefs that are important for macroeconomics and finance, and matches respondents with administrative data on their portfolio composition, th...

Efficiency and Equity Impacts of Energy Subsidies

By Robert W. Hahn and Robert D. Metcalfe

American Economic Review, May 2021

Economic theory suggests that energy subsidies can lead to excessive consumption and environmental degradation. However, the precise impact of energy subsidies is not well understood. We analyze a large energy subsidy: the California Alternate Rates for E...

The Role of Behavioral Frictions in Health Insurance Marketplace Enrollment and Risk: Evidence from a Field Experiment

By Richard Domurat, Isaac Menashe, and Wesley Yin

American Economic Review, May 2021

We experimentally varied information mailed to 87,000 households in California's health insurance marketplace to study the role of frictions in insurance take-up. Reminders about the enrollment deadline raised enrollment by 1.3 pp (16 percent) in this t...

Front Matter

American Economic Journal: Economic Policy, May 2021

The Macroeconomic Effects of Income and Consumption Tax Changes

By Anh D. M. Nguyen, Luisanna Onnis, and Raffaele Rossi

American Economic Journal: Economic Policy, May 2021

This paper estimates the effects of exogenous changes in income and consumption taxes. The tax shocks are proxied with a narrative account of tax liability changes in the United Kingdom. Income tax cuts have large effects on GDP, private consumption, and ...

Do People Respond to the Mortgage Interest Deduction? Quasi-experimental Evidence from Denmark

By Jonathan Gruber, Amalie Jensen, and Henrik Kleven

American Economic Journal: Economic Policy, May 2021

Using a major reform that scaled back the mortgage interest deduction for middle- and high-income households in Denmark, we study how tax subsidies affect housing decisions. We present four main findings. First, the mortgage deduction has a precisely esti...

Thy Neighbor's Misfortune: Peer Effect on Consumption

By Sumit Agarwal, Wenlan Qian, and Xin Zou

American Economic Journal: Economic Policy, May 2021

Using a large, representative sample of credit and debit card transactions in Singapore, this paper studies the consumption response of individuals whose same-building neighbors experienced personal bankruptcy. The unique bankruptcy rules in Singapore sug...

The Costs of Corporate Tax Complexity

By Eric Zwick

American Economic Journal: Economic Policy, May 2021

Does tax code complexity alter corporate behavior? We investigate this question by studying the decision to claim refunds for tax losses. In a sample of 1.2 million observations from the population of corporate tax returns, only 37 percent of eligible fir...

Heterogeneous Workers and Federal Income Taxes in a Spatial Equilibrium

By Mark Colas and Kevin Hutchinson

American Economic Journal: Economic Policy, May 2021

We study the geographic incidence and efficiency of an income tax by estimating a spatial equilibrium model with heterogeneous workers. The US income tax shifts households out of high-productivity cities, leading to locational inefficiency of 0.25 percent...

Does the Individual Mandate Affect Insurance Coverage? Evidence from Tax Returns

By Ithai Z. Lurie, Daniel W. Sacks, and Bradley Heim

American Economic Journal: Economic Policy, May 2021

We estimate the effect of the ACA's individual mandate on insurance coverage using regression discontinuity and regression kink designs with tax return data. We have four key results. First, the actual penalty paid per uninsured month is less than half th...

Aid, China, and Growth: Evidence from a New Global Development Finance Dataset

By Axel Dreher, Andreas Fuchs, Bradley Parks, Austin Strange, and Michael J. Tierney

American Economic Journal: Economic Policy, May 2021

This article introduces a new dataset of official financing from China to 138 developing countries between 2000 and 2014. It investigates whether Chinese development finance affects economic growth in recipient countries. The results demonstrate that Chin...

Racial Divisions and Criminal Justice: Evidence from Southern State Courts

By Benjamin Feigenberg and Conrad Miller

American Economic Journal: Economic Policy, May 2021

The US criminal justice system is exceptionally punitive. We test whether racial heterogeneity is one cause, exploiting cross-jurisdiction variation in punishment severity in four Southern states. We estimate the causal effect of jurisdiction on arrest ou...

Emissions, Transmission, and the Environmental Value of Renewable Energy

By Harrison Fell, Daniel T. Kaffine, and Kevin Novan

American Economic Journal: Economic Policy, May 2021

We examine how transmission congestion alters the environmental benefits provided by renewable generation. Using hourly data from the Texas and midcontinent electricity markets, we find that relaxing transmission constraints between the wind-rich areas an...

The Role of Electoral Incentives for Policy Innovation: Evidence from the US Welfare Reform

By Andreas Bernecker, Pierre C. Boyer, and Christina Gathmann

American Economic Journal: Economic Policy, May 2021

How do governors' reelection motives affect policy experimentation? We develop a theoretical model of this situation, and then test the predictions in data on US state-level welfare reforms from 1978 to 2007. This period marked the most dramatic shift in ...

AEA Member Announcements: 2020 Report of the Ethics Committee and Considerations in Recommending Ethics Investigations

[News]

April 29, 2021

View member announcements from April 30, 2021.

Do School Spending Cuts Matter? Evidence from the Great Recession

By C. Kirabo Jackson, Cora Wigger, and Heyu Xiong

American Economic Journal: Economic Policy, May 2021

During the Great Recession, national public school per-pupil spending fell by roughly 7 percent and persisted beyond the recovery. The impact of such large and sustained education funding cuts is not well understood. To examine this, first, we document ...

Front Matter

Journal of Economic Perspectives, Spring 2021