Optimal Mortgage Refinancing with Inattention

By David Berger, Konstantin Milbradt, Fabrice Tourre, and Joseph Vavra

American Economic Review: Insights, December 2025

We build a model of optimal fixed-rate mortgage refinancing with fixed costs and inattention and derive a new sufficient statistic that can be used to measure inattention frictions from simple moments of the rate gap distribution. In the model, borrowers ...

The Consumer Welfare Effects of Online Ads: Evidence from a Nine-Year Experiment

By Erik Brynjolfsson, Avinash Collis, Daniel Deisenroth, Haritz Garro, Daley Kutzman, Asad Liaqat, and Nils Wernerfelt

American Economic Review: Insights, December 2025

Research on the effects of online advertising on consumer welfare is limited due to challenges in running large-scale field experiments. We analyze a long-running field experiment on Facebook in which a random subset of users received no ads in their news...

Race and Economic Well-Being in the United States

By Jean-Félix Brouillette, Charles I. Jones, and Peter J. Klenow

American Economic Review: Insights, December 2025

We construct a measure of consumption-equivalent welfare for Black and White Americans, which incorporates life expectancy, consumption, leisure, and inequality. Based on these factors, welfare for Black Americans was 40 percent of that for White American...

Electric Vehicles and the Energy Transition: Unintended Consequences of Time-of-Use Pricing

By Megan R. Bailey, David P. Brown, Erica Myers, Blake Shaffer, and Frank A. Wolak

American Economic Review: Insights, December 2025

The growth of electric vehicles (EVs) raises new challenges for electricity systems. We implement a field experiment to assess the effect of time-of-use (TOU) pricing and managed charging on EV charging behavior. We find that while TOU pricing is effectiv...

Long-Term and Lasting Impacts of Personal Initiative Training on Entrepreneurial Success

By Francisco Campos, Michael Frese, Leonardo Iacovone, Hillary C. Johnson, David McKenzie, and Mona Mensmann

American Economic Review: Insights, December 2025

A randomized experiment in Togo found that personal initiative training for small businesses resulted in large and significant impacts for both men and women after two years. We revisit these entrepreneurs after seven years and find long-lasting average i...

Front Matter

American Economic Review: Insights, December 2025

The Long-Term Effects of Cash Assistance

By David J. Price and Jae Song

American Economic Journal: Applied Economics

We investigate the long-term effects of cash assistance on beneficiaries and their children among participants in the Seattle-Denver Income Maintenance Experiment. Treated families in this randomized experiment received thousands of dollars in extra go...

All Roads Lead to Rome: Global Air Connectivity and Bilateral Trade

By Zheng Wang, Feicheng Wang, and Zhuo Zhou

American Economic Journal: Applied Economics

Using itinerary-level global air traffic data, this paper proposes a novel instrumental variable to estimate the effect of in-person interactions on bilateral trade. By exploiting exogenous variations in air connectivity that are driven by third-countr...

Impacts of Corporate Tax Cuts on Firms and Workers: Evidence from Small Businesses

By Yige Duan and Terry S. Moon

American Economic Journal: Economic Policy

This paper assesses the effects of corporate tax cuts on small firms and their workers. Following a reform in Quebec, Canada, firms receiving tax cuts expand and their workers' earnings increase com- pared to workers and firms without tax cuts. We esti...

CSWEP News: Feature Articles by Topic (1996-present)

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See twenty years of CSWEP News articles by topic

Front Matter

American Economic Review, December 2025

Supply, Demand, Institutions, and Firms: A Theory of Labor Market Sorting and the Wage Distribution

By Daniel Haanwinckel

American Economic Review, December 2025

This paper examines how workforce composition, labor demand, and minimum wage jointly determine wages through their effects on worker-task assignments, firm wage premiums, and firm-worker sorting. Using an estimated model of monopsonistic local labor mark...

Downward Rigidity in the Wage for New Hires

By Jonathon Hazell and Bledi Taska

American Economic Review, December 2025

Wage rigidity is an important explanation for unemployment fluctuations. In benchmark models wages for new hires are key, but there is limited evidence on this margin. We use wages posted on vacancies, with job and establishment information, to measure th...

Gender Differences in Financial Advice

By Tabea Bucher-Koenen, Andreas Hackethal, Johannes Koenen, and Christine Laudenbach

American Economic Review, December 2025

Based on data gathered from 27,000 real-world meetings between financial advisors and clients of a large German bank, we show that advisors offer more self-serving advice to women, while men are more likely to receive sales fee rebates and less likely to ...

A Goldilocks Theory of Fiscal Deficits

By Atif Mian, Ludwig Straub, and Amir Sufi

American Economic Review, December 2025

We develop a tractable framework for deficit and debt dynamics. A "free lunch" fiscal deficit—one that raises spending without higher future taxes—is sustainable without zero lower bound (ZLB) only when R < G − φ, where φ is the sensitivity of the...

Strategic Voting in Two-Party Legislative Elections

By Niall Hughes

American Economic Review, December 2025

I study multidistrict legislative elections with two parties and two binary dimensions of policy. Strategic voters focus on the dimension where their district is most likely to be pivotal in the legislature. Anticipating this, candidates select different ...

Firm Responses and Wage Effects of Foreign Demand Shocks with Fixed Labor Costs and Monopsony

By Emmanuel Dhyne, Ayumu Ken Kikkawa, Toshiaki Komatsu, Magne Mogstad, and Felix Tintelnot

American Economic Review, December 2025

We quantify the firm responses and real wage effects of foreign demand shocks. We use Belgian microdata to construct firm-specific measures of demand shocks, which capture that firms pass on foreign demand shocks to domestic suppliers. Our estimates of fi...

First-Generation Elite: The Role of School Social Networks

By Sarah Cattan, Kjell G. Salvanes, and Emma Tominey

American Economic Review, December 2025

High school students from non-elite backgrounds are less likely to have peers with elite-educated parents than their elite counterparts. This difference in social capital is a key driver of the high intergenerational persistence in elite education. We ide...

Incentive Complexity, Bounded Rationality, and Effort Provision

By Johannes Abeler, David Huffman, and Collin Raymond

American Economic Review, December 2025

Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded rationality can affect effort provision. This is because some attributes of the incentives become opaque; that is, workers do not take them ...

When Product Markets Become Collective Traps: The Case of Social Media

By Leonardo Bursztyn, Benjamin Handel, Rafael Jiménez-Durán, and Christopher Roth

American Economic Review, December 2025

Individuals might experience negative utility from not consuming a popular product. With such externalities to nonusers, standard consumer surplus measures, which take aggregate consumption as given, fail to appropriately capture consumer welfare. We prop...