Political Social Learning: Short-Term Memory and Cycles of Polarization

By Gilat Levy and Ronny Razin

American Economic Review, February 2025

This paper investigates the effect of voters' short-term memory on political outcomes by considering politics as a collective learning process. We find that short-term memory may lead to cycles of polarization and consensus across parties' platforms. Foll...

The Benefits of Revealing Race: Evidence from Minority-Owned Local Businesses

By Abhay Aneja, Michael Luca, and Oren Reshef

American Economic Review, February 2025

Is there latent demand to support Black-owned businesses? We explore this question by analyzing a new feature that made it easier to identify Black-owned restaurants on an online platform. We find that labeling restaurants as minority-owned increased cust...

The Good Wife? Reputation Dynamics and Financial Decision-Making inside the Household

By Nina Buchmann, Pascaline Dupas, and Roberta Ziparo

American Economic Review, February 2025

We study reputation dynamics within the household in a setting where women regularly receive transfers from their husbands for household purchases. We propose a signaling model in which wives try to maintain a good reputation in the eyes of their husbands...

A Theory of Dynamic Inflation Targets

By Christopher Clayton and Andreas Schaab

American Economic Review, February 2025

Should central banks' inflation targets remain set in stone? We study a dynamic mechanism design problem between a government and a central bank. The central bank has persistent private information about structural shocks. Firms learn the state from the c...

Sticky Wages on the Layoff Margin

By Steven J. Davis and Pawel M. Krolikowski

American Economic Review, February 2025

We design and field an innovative survey of unemployment insurance (UI) recipients that yields new insights about wage stickiness on the layoff margin. A majority of UI recipients would accept pay cuts of 5–10 percent to save their jobs, and one-third w...

Empowering Adolescents to Transform Schools: Lessons from a Behavioral Targeting

By Sule Alan and Elif Kubilay

American Economic Review, February 2025

We test the effectiveness of a behavioral program grounded in the idea that status granting and self-persuasion might yield a robust behavioral change in disadvantaged adolescents. We enlist socially connected senior middle school students with high emoti...

Front Matter

American Economic Journal: Economic Policy, February 2025

The Long-Run Effects of California's Paid Family Leave Act on Women's Careers and Childbearing: New Evidence from a Regression Discontinuity Design and US Tax Data

By Martha Bailey, Tanya Byker, Elena Patel, and Shanthi Ramnath

American Economic Journal: Economic Policy, February 2025

We use administrative tax data to analyze the cumulative, long-run effects of California's 2004 Paid Family Leave Act (CPFL) on women's employment, earnings, and childbearing. A regression-discontinuity design exploits the sharp increase in the weeks of p...

Fighting Poverty One Family at a Time: Experimental Evidence from an Intervention with Holistic, Individualized, Wraparound Services

By William N. Evans, Shawna Kolka, James X. Sullivan, and Patrick S. Turner

American Economic Journal: Economic Policy, February 2025

Families in poverty face numerous barriers to establishing stable economic footing. This paper estimates experimental effects of a holistic, individualized wraparound service intervention for low-income individuals. The intervention includes a detailed as...

Fueling Alternatives: Gas Station Choice and the Implications for Electric Charging

By Jackson Dorsey, Ashley Langer, and Shaun McRae

American Economic Journal: Economic Policy, February 2025

This paper quantifies the value of electric vehicle (EV) charging networks and the marginal value of network speed and density. We estimate a model of gasoline drivers' refueling preferences and simulate how these potential future EV drivers value refueli...

The Great Recession and the Widening Income Gap between Alumni of Elite and Less Selective Universities

By Russell Weinstein

American Economic Journal: Economic Policy, February 2025

Using mobility report card data, I show the income gap between alumni of elite and less selective universities widened for cohorts graduating during the Great Recession. This is evident for mean and median incomes and access to high earning percentiles. R...

Mental Health Consequences of Correctional Sentencing

By Manudeep Bhuller, Laura Khoury, and Katrine V. Løken

American Economic Journal: Economic Policy, February 2025

Understanding whether and in what situations correctional sentencing improves or exacerbates defendants' mental health conditions is important for the design of criminal justice policies. We combine detailed Norwegian data on visits to health care profess...

Electronic Payment Technology and Tax Compliance: Evidence from Uruguay's Financial Inclusion Reform

By Anne Brockmeyer and Magaly Sáenz Somarriba

American Economic Journal: Economic Policy, February 2025

Does the digitization of transactions in an economy increase tax compliance? We study the effect of financial incentives on the adoption of electronic payment technology and on tax compliance by firms. Exploiting administrative data and policy variation f...

Who Bears the Burden of Local Taxes?

By Marius Brülhart, Jayson Danton, Raphaël Parchet, and Jörg Schläpfer

American Economic Journal: Economic Policy, February 2025

We study the distributional effects of local taxes. They turn out to be strikingly progressive. We calibrate a municipality-level structural model with quasi-experimental estimates of taxpayer mobility by family type. Households with children are found to...

The Negative Consequences of Loss-Framed Performance Incentives

By Lamar Pierce, Alex Rees-Jones, and Charlotte Blank

American Economic Journal: Economic Policy, February 2025

Behavioral economists have proposed that incentive contracts result in higher productivity when bonuses are "loss framed"—prepaid then clawed back if targets are unmet. We test this claim by randomizing the pre- or postpayment of sales bonuses at 294 ca...

Profit Taxation, R&D Spending, and Innovation

By Andreas Lichter, Max Löffler, Ingo E. Isphording, Thu-Van Nguyen, Felix Poege, and Sebastian Siegloch

American Economic Journal: Economic Policy, February 2025

We study how profit taxes affect establishments' R&D activities. Relying on detailed panel data of R&D-active firms in Germany over two decades, we exploit identifying variation induced by more than 10,000 municipal changes in the local business tax rate ...

Uncharted Waters: Effects of Maritime Emission Regulation

By Jamie Hansen-Lewis and Michelle Marcus

American Economic Journal: Economic Policy, February 2025

Maritime shipping emits as much fine particulate matter as half of global road traffic. We are the first to measure the consequences of US maritime emissions standards on air quality, human health, racial exposure disparities, and behavior. The introducti...

Spillover, Efficiency, and Equity Effects of Regional Firm Subsidies

By Sebastian Siegloch, Nils Wehrhöfer, and Tobias Etzel

American Economic Journal: Economic Policy, February 2025

We analyze the effects of a large place-based policy, subsidizing up to 50 percent of the investment costs of East German manufacturing plants. We show that a 1 percentage point decrease in subsidy rate leads to a 1 percent decrease in manufacturing emplo...

My Taxes Are Too Darn High: Why Do Households Protest Their Taxes?

By Brad Nathan, Ricardo Perez-Truglia, and Alejandro Zentner

American Economic Journal: Economic Policy, February 2025

In the United States and globally, taxpayers can file a protest to legally reduce their property taxes. While tax protests can provide a unique opportunity to study the (un)willingness to pay taxes, they have received little attention from researchers. Us...

The Impact of Provider Payments on Health Care Utilization of Low-Income Individuals: Evidence from Medicare and Medicaid

By Marika Cabral, Colleen Carey, and Sarah Miller

American Economic Journal: Economic Policy, February 2025

Provider payments are the key determinant of insurance generosity within many health insurance programs covering low-income populations. This paper analyzes a large, federally mandated provider payment increase for primary care services provided to low-in...