Strategic Policy Choice in State-Level Regulation: The EPA's Clean Power Plan

By James B. Bushnell, Stephen P. Holland, Jonathan E. Hughes, and Christopher R. Knittel

American Economic Journal: Economic Policy, May 2017

The EPA's Clean Power Plan sets goals for CO2 emissions rate reductions by 2030 that vary substantially across states. States can choose the regulatory mechanism they use and whether or not to join with other states in implementing their goals....

When Discounts Raise Costs: The Effect of Copay Coupons on Generic Utilization

By Leemore Dafny, Christopher Ody, and Matt Schmitt

American Economic Journal: Economic Policy, May 2017

Branded pharmaceutical manufacturers frequently offer "copay coupons" that insulate consumers from cost-sharing, thereby undermining insurers' ability to influence drug utilization. We study the impact of copay coupons on branded drugs first facing generi...

The Effect of Public Insurance Coverage for Childless Adults on Labor Supply

By Laura Dague, Thomas DeLeire, and Lindsey Leininger

American Economic Journal: Economic Policy, May 2017

This study provides plausibly causal estimates of the effect of public insurance coverage on the employment of non-elderly, nondisabled adults without dependent children ("childless adults"). We take advantage of the sudden imposition of an enrollment cap...

College on the Cheap: Consequences of Community College Tuition Reductions

By Jeffrey T. Denning

American Economic Journal: Economic Policy, May 2017

This paper examines the effects of community college tuition on college enrollment. I exploit quasi-experimental variation from discounts for community college tuition in Texas that were expanded over time and across geography for identification. Communit...

Do Output Contractions Cause Investment in Fiscal Capacity?

By Christian Gillitzer

American Economic Journal: Economic Policy, May 2017

This paper shows that an economic slump can induce a government to invest in fiscal capacity. Large negative income shocks stress the revenue-raising capability of narrow tax bases, making an increase in tax base breadth desirable relative to its fixed im...

Illegal Immigration, State Law, and Deterrence

By Mark Hoekstra and Sandra Orozco-Aleman

American Economic Journal: Economic Policy, May 2017

A critical immigration policy question is whether state and federal policy can deter undocumented workers from entering the United States. We examine whether Arizona SB 1070, arguably the most restrictive and controversial state immigration law ever passe...

Are State Governments Roadblocks to Federal Stimulus? Evidence on the Flypaper Effect of Highway Grants in the 2009 Recovery Act

By Sylvain Leduc and Daniel Wilson

American Economic Journal: Economic Policy, May 2017

This paper examines how state governments adjusted spending in response to the large temporary increase in federal highway grants under the 2009 American Recovery and Reinvestment Act (ARRA). The mechanism used to apportion ARRA highway grants to states a...

Manipulation of Procurement Contracts: Evidence from the Introduction of Discretionary Thresholds

By Ján Palguta and Filip Pertold

American Economic Journal: Economic Policy, May 2017

We present evidence of how policies that create opportunities to avoid open competition in procurement lead to the manipulation of procurement values. We exploit a policy reform in which public bodies were given the autonomy to preselect potential contrac...

Can Hiring Quotas Work? The Effect of the Nitaqat Program on the Saudi Private Sector

By Jennifer R. Peck

American Economic Journal: Economic Policy, May 2017

This paper studies the effects of quota-based labor regulations on firms in the context of Saudi Arabia's Nitaqat program, which imposed quotas for Saudi hiring at private firms. I use a comprehensive firm-level administrative dataset and exploit kinks in...

The Role of Government Reimbursement in Drug Shortages

By Ali Yurukoglu, Eli Liebman, and David B. Ridley

American Economic Journal: Economic Policy, May 2017

Beginning in the mid-2000s, the incidence of drug shortages rose, especially for generic injectable drugs such as anesthetics and chemotherapy treatments. We examine whether reimbursement changes contributed to the shortages, focusing on a reduction in Me...

Front Matter

Journal of Economic Perspectives, Spring 2017

The State of Applied Econometrics: Causality and Policy Evaluation

[Symposium: Recent Ideas in Econometrics]

By Susan Athey and Guido W. Imbens

Journal of Economic Perspectives, Spring 2017

In this paper, we discuss recent developments in econometrics that we view as important for empirical researchers working on policy evaluation questions. We focus on three main areas, in each case, highlighting recommendations for applied work. First, we ...

The Use of Structural Models in Econometrics

[Symposium: Recent Ideas in Econometrics]

By Hamish Low and Costas Meghir

Journal of Economic Perspectives, Spring 2017

This paper discusses the role of structural economic models in empirical analysis and policy design. The central payoff of a structural econometric model is that it allows an empirical researcher to go beyond the conclusions of a more conventional empiric...

Twenty Years of Time Series Econometrics in Ten Pictures

[Symposium: Recent Ideas in Econometrics]

By James H. Stock and Mark W. Watson

Journal of Economic Perspectives, Spring 2017

This review tells the story of the past 20 years of time series econometrics through ten pictures. These pictures illustrate six broad areas of progress in time series econometrics: estimation of dynamic causal effects; estimation of dynamic structural mo...

Machine Learning: An Applied Econometric Approach

[Symposium: Recent Ideas in Econometrics]

By Sendhil Mullainathan and Jann Spiess

Journal of Economic Perspectives, Spring 2017

Machines are increasingly doing "intelligent" things. Face recognition algorithms use a large dataset of photos labeled as having a face or not to estimate a function that predicts the presence y of a face from pixels x. This similarity ...

Identification and Asymptotic Approximations: Three Examples of Progress in Econometric Theory

[Symposium: Recent Ideas in Econometrics]

By James L. Powell

Journal of Economic Perspectives, Spring 2017

In empirical economics, the size and quality of datasets and computational power has grown substantially, along with the size and complexity of the econometric models and the population parameters of interest. With more and better data, it is natural to...

Undergraduate Econometrics Instruction: Through Our Classes, Darkly

[Symposium: Recent Ideas in Econometrics]

By Joshua D. Angrist and Jörn-Steffen Pischke

Journal of Economic Perspectives, Spring 2017

The past half-century has seen economic research become increasingly empirical, while the nature of empirical economic research has also changed. In the 1960s and 1970s, an empirical economist's typical mission was to "explain" economic variables like wag...

Underestimating the Real Growth of GDP, Personal Income, and Productivity

[Symposium: Are Measures of Economic Growth Biased?]

By Martin Feldstein

Journal of Economic Perspectives, Spring 2017

Economists have long recognized that changes in the quality of existing goods and services, along with the introduction of new goods and services, can raise grave difficulties in measuring changes in the real output of the economy. But despite the attenti...

Challenges to Mismeasurement Explanations for the US Productivity Slowdown

[Symposium: Are Measures of Economic Growth Biased?]

By Chad Syverson

Journal of Economic Perspectives, Spring 2017

The United States has been experiencing a slowdown in measured labor productivity growth since 2004. A number of commentators and researchers have suggested that this slowdown is at least in part illusory because real output data have failed to capture ...

How Government Statistics Adjust for Potential Biases from Quality Change and New Goods in an Age of Digital Technologies: A View from the Trenches

[Symposium: Are Measures of Economic Growth Biased?]

By Erica L. Groshen, Brian C. Moyer, Ana M. Aizcorbe, Ralph Bradley, and David M. Friedman

Journal of Economic Perspectives, Spring 2017

A key economic indicator is real output. To get this right, we need to measure accurately both the value of nominal GDP (done by Bureau of Economic Analaysis) and key price indexes (done mostly by Bureau of Labor Statisticcs). All of us have worked on the...