Immigration, Employment Opportunities, and Criminal Behavior

By Matthew Freedman, Emily Owens, and Sarah Bohn

American Economic Journal: Economic Policy, May 2018

We take advantage of provisions of the Immigration Reform and Control Act of 1986 (IRCA), which granted legal resident status to long-time unauthorized residents but created new obstacles to employment for more recent immigrants, to explore how employment...

Life-Cycle Consumption Patterns at Older Ages in the United States and the United Kingdom: Can Medical Expenditures Explain the Difference?

By James Banks, Richard Blundell, Peter Levell, and James P. Smith

American Economic Journal: Economic Policy, August 2019

This paper documents significantly steeper declines in nondurable expenditures at older ages in the United Kingdom compared to the United States, in spite of income paths being similar. Several possible causes are explored, including different employment ...

When place matters most

[Research Highlight]

April 03, 2020

Moving to nicer neighborhoods has lasting effects on kids' outcomes, especially in their teenage years.

The Aging of the Baby Boomers: Demographics and Propagation of Tax Shocks

By Domenico Ferraro and Giuseppe Fiori

American Economic Journal: Macroeconomics, April 2020

We study how the changing demographic composition of the US labor force has affected the response of the unemployment rate to marginal tax rate shocks. Using narratively identified tax changes as proxies for structural shocks, we establish that the respon...

A Quantitative Theory of Information, Worker Flows, and Wage Dispersion

By Amanda M. Michaud

American Economic Journal: Macroeconomics, April 2018

Employer learning provides a link between wage and employment dynamics. Workers who are selectively terminated when their low productivity is revealed subsequently earn lower wages. If learning is asymmetric across employers, randomly separated high-produ...

Riddles and Models: A Review Essay on Michel De Vroey's A History of Macroeconomics from Keynes to Lucas and Beyond

By Costas Azariadis

Journal of Economic Literature, December 2018

This essay reviews Michel De Vroey's important new book on the history of macroeconomics, which extends to business cycles an earlier book by the same author on the history of involuntary unemployment. The review also offers a broader nontechnical surve...

Uninsured Unemployment Risk and Optimal Monetary Policy in a Zero-Liquidity Economy

By Edouard Challe

American Economic Journal: Macroeconomics, April 2020

I study optimal monetary policy in a sticky-price economy wherein households precautionary-save against uninsured, endogenous unemployment risk. In this economy greater unemployment risk raises desired savings, causing aggregate demand to fall and feed ...

Automation and New Tasks: How Technology Displaces and Reinstates Labor

[Symposium: Automation and Employment]

By Daron Acemoglu and Pascual Restrepo

Journal of Economic Perspectives, Spring 2019

We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks...

The Marginal Propensity to Consume over the Business Cycle

By Tal Gross, Matthew J. Notowidigdo, and Jialan Wang

American Economic Journal: Macroeconomics, April 2020

We estimate how the marginal propensity to consume (MPC) out of liquidity varies over the business cycle. Ten years after a Chapter 7 bankruptcy, the bankruptcy flag is removed from the filer's credit report, generating an increase in credit score. In the...

Clearing the Fog: The Predictive Power of Weather for Employment Reports and Their Asset Price Responses

By Daniel J. Wilson

American Economic Review: Insights, December 2019

This paper exploits vast granular data—with over one million county-month observations—to estimate a dynamic panel data model of weather's local employment effects. The fitted county model is then aggregated and used to generate in-sample and rolling ...

The Impacts of Industrial and Entrepreneurial Work on Income and Health: Experimental Evidence from Ethiopia

By Christopher Blattman and Stefan Dercon

American Economic Journal: Applied Economics, July 2018

Working with five Ethiopian firms, we randomized applicants to an industrial job offer, an "entrepreneurship" program of $300 plus business training, or control status. Industrial jobs offered more and steadier hours but low wages and risky conditions. Th...

Nominal Wage Rigidity in Village Labor Markets

By Supreet Kaur

American Economic Review, October 2019

This paper develops a new approach to test for downward wage rigidity by examining transitory shocks to labor demand (i.e., rainfall) across 600 Indian districts. Nominal wages rise during positive shocks but do not fall during droughts. In addition, tran...

Way Down in the Hole: Adaptation to Long-Term Water Loss in Rural India

By David Blakeslee, Ram Fishman, and Veena Srinivasan

American Economic Review, January 2020

Worsening environmental conditions threaten to undermine progress in reducing rural poverty. Little is known, however, about the prospects for farmer adaptations to mitigate this threat, in particular through opportunities for income diversification prese...

Payroll Taxes, Firm Behavior, and Rent Sharing: Evidence from a Young Workers' Tax Cut in Sweden

By Emmanuel Saez, Benjamin Schoefer, and David Seim

American Economic Review, May 2019

This paper uses administrative data to analyze a large employer-borne payroll tax rate cut for young workers in Sweden. We find no effect on net-of-tax wages of young treated workers relative to slightly older untreated workers, and a 2–3 percentage poi...

Retrospectives: Cost-Push and Demand-Pull Inflation: Milton Friedman and the "Cruel Dilemma"

By Johannes A. Schwarzer

Journal of Economic Perspectives, Winter 2018

This paper addresses two conflicting views in the 1950s and 1960s about the inflation-unemployment tradeoff as given by the Phillips curve. Many economists at this time emphasized the issue of a seemingly unavoidable inflationary pressure at or even bel...

The Arrival of Fast Internet and Employment in Africa

By Jonas Hjort and Jonas Poulsen

American Economic Review, March 2019

To show how fast Internet affects employment in Africa, we exploit the gradual arrival of submarine Internet cables on the coast and maps of the terrestrial cable network. Robust difference-in-differences estimates from 3 datasets, covering 12 countries, ...

Tax Policy and Local Labor Market Behavior

By Daniel G. Garrett, Eric Ohrn, and Juan Carlos Suárez Serrato

American Economic Review: Insights, March 2020

Since 2002, the US government has encouraged business investment using accelerated depreciation policies that significantly reduce investment costs. We provide the first in-depth analysis of this stimulus on employment and earnings. Our local labor market...

Trade-Induced Structural Change and the Skill Premium

By Javier Cravino and Sebastian Sotelo

American Economic Journal: Macroeconomics, July 2019

We study how international trade affects manufacturing employment and the relative wage of unskilled workers when goods and services are traded with different intensities. Manufacturing trade reduces manufacturing prices worldwide, which reduces manufactu...

The road to the Industrial Revolution

[Research Highlight]

April 14, 2020

How did infrastructure accelerate economic growth in the UK?

Corporate Income Tax, Legal Form of Organization, and Employment

By Daphne Chen, Shi Qi, and Don Schlagenhauf

American Economic Journal: Macroeconomics, October 2018

A dynamic stochastic occupational choice model with heterogeneous agents is developed to evaluate the impact of a corporate income tax reduction on employment. In this framework, the key margin is the endogenous entrepreneurial choice of legal form of org...