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...

An Experiment in Candidate Selection

By Katherine Casey, Abou Bakarr Kamara, and Niccoló F. Meriggi

American Economic Review, May 2021

Are ordinary citizens or political party leaders better positioned to select candidates? While the American primary system lets citizens choose, most democracies rely instead on party officials to appoint or nominate candidates. The consequences of these ...

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...

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...

Cross-Region Transfer Multipliers in a Monetary Union: Evidence from Social Security and Stimulus Payments

By Steven Pennings

American Economic Review, May 2021

US federal transfers to individuals are large, countercyclical, vary geographically, and are often credited with helping to stabilize regional economies. This paper estimates the short-run effects of these transfers using plausibly exogenous regional vari...

Retrospectives: How Joan Robinson and B. L. Hallward Named Monopsony

By Robert J. Thornton

Journal of Economic Perspectives, Spring 2004

The term "monopsony" was introduced by Joan Robinson in her 1932 classic The Economics of Imperfect Competition, although she gives credit to classics scholar B.L. Hallward of Cambridge for the actual coining of the term. Even though the term has become w...

Front Matter

American Economic Journal: Economic Policy, May 2021

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 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 ...

Unemployment Insurance Generosity and Aggregate Employment

By Christopher Boone, Arindrajit Dube, Lucas Goodman, and Ethan Kaplan

American Economic Journal: Economic Policy, May 2021

This paper examines the impact of unemployment insurance (UI ) on aggregate employment by exploiting cross-state variation in the maximum benefit duration during the Great Recession. Comparing adjacent counties located in neighboring states, there is no s...

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...

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...

Retail Prices in a City

By Alon Eizenberg, Saul Lach, and Merav Oren-Yiftach

American Economic Journal: Economic Policy, May 2021

This study examines grocery price differentials across neighborhoods in a large metropolitan area (the city of Jerusalem, Israel). Important variation in access to affordable grocery shopping is documented using CPI data on prices and neighborhood-level...

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...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Spring 2004

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...

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...

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 ...

Long-Term Contextual Effects in Education: Schools and Neighborhoods

By Jean-William Laliberté

American Economic Journal: Economic Policy, May 2021

This paper estimates the long-term impact of growing up in better neighborhoods and attending better schools on educational attainment. First, I use a spatial regression-discontinuity design to estimate school effects. Second, I study students who move ac...

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...