Reviving distressed communities

[Research Highlight]

September 09, 2020

Tim Bartik of the Upjohn Institute on how economic development policy is shortchanging poor regions.

Patronage and Selection in Public Sector Organizations

By Emanuele Colonnelli, Mounu Prem, and Edoardo Teso

American Economic Review, October 2020

In all modern bureaucracies, politicians retain some discretion in public employment decisions, which may lead to frictions in the selection process if political connections substitute for individual competence. Relying on detailed matched employer-employ...

E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India

By Abhijit Banerjee, Esther Duflo, Clément Imbert, Santhosh Mathew, and Rohini Pande

American Economic Journal: Applied Economics, October 2020

Can e-governance reforms improve government policy? By making information available on a real-time basis, information technologies may reduce the theft of public funds. We analyze a large field experiment and the nationwide scale-up of a reform to India's...

Job Displacement, Family Dynamics, and Spousal Labor Supply

By Martin Halla, Julia Schmieder, and Andrea Weber

American Economic Journal: Applied Economics, October 2020

We study the effectiveness of intrahousehold insurance among married couples when the husband loses his job due to a mass layoff or plant closure. Empirical results based on Austrian administrative data show that husbands suffer persistent employment and ...

The Migration Accelerator: Labor Mobility, Housing, and Demand

By Greg Howard

American Economic Journal: Macroeconomics, October 2020

What is the role of migration in regional evolutions? I document that within-US migration causes a reduction in the unemployment rate of the receiving city over several years. To establish this causal effect, I construct an instrument using out-migration ...

The rise of the service economy

[Research Highlight]

October 16, 2020

Structural changes are reshaping growth, interest rates, and investment in the world’s economies.

Importing polarization

[Research Highlight]

October 26, 2020

Professor Gordon Hanson discusses how competition from China has pushed some communities to the edges of the political spectrum.

Devotion and economic progress

[Research Highlight]

November 16, 2020

How does religious intensity affect development?

Changing Business Dynamism and Productivity: Shocks versus Responsiveness

By Ryan A. Decker, John Haltiwanger, Ron S. Jarmin, and Javier Miranda

American Economic Review, December 2020

The pace of job reallocation has declined in the United States in recent decades. We draw insight from canonical models of business dynamics in which reallocation can decline due to (i) lower dispersion of idiosyncratic shocks faced by businesses, or (ii)...

Job Seekers' Perceptions and Employment Prospects: Heterogeneity, Duration Dependence, and Bias

By Andreas I. Mueller, Johannes Spinnewijn, and Giorgio Topa

American Economic Review, January 2021

This paper uses job seekers' elicited beliefs about job finding to disentangle the sources of the decline in job-finding rates by duration of unemployment. We document that beliefs have strong predictive power for job finding, but are not revised downward...

The Labor Market Impact of Immigration: Job Creation versus Job Competition

By Christoph Albert

American Economic Journal: Macroeconomics, January 2021

This paper studies the labor market effects of both documented and undocumented immigration in a search model featuring nonrandom hiring. As immigrants accept lower wages, they are preferably chosen by firms and therefore have higher job finding rates tha...

The Elusive Employment Effect of the Minimum Wage

[Symposium: Minimum Wage]

By Alan Manning

Journal of Economic Perspectives, Winter 2021

It is hard to find a negative effect on the employment effect of rises in the minimum wage: the elusive employment effect. It is much easier to find an impact on wages. This paper argues the elusive employment effect is unlikely to be solved by better dat...

How Do Firms Respond to Minimum Wage Increases? Understanding the Relevance of Non-employment Margins

[Symposium: Minimum Wage]

By Jeffrey Clemens

Journal of Economic Perspectives, Winter 2021

This paper discusses non-employment margins through which firms may respond to minimum wage increases.  Margins of interest include evasion, output prices, noncash compensation, job attributes including effort requirements, the firm’s mix of low- and h...

The Rise of American Minimum Wages, 1912–1968

[Symposium: Minimum Wage]

By Price V. Fishback and Andrew J. Seltzer

Journal of Economic Perspectives, Winter 2021

This paper studies the judicial, political, and intellectual battles over minimum wages from the early state laws of the 1910s through the peak in the real federal minimum in 1968. Early laws were limited to women and children and were ruled unconstitutio...

City Limits: What Do Local-Area Minimum Wages Do?

[Symposium: Minimum Wage]

By Arindrajit Dube and Attila Lindner

Journal of Economic Perspectives, Winter 2021

Cities are increasingly setting their own minimum wages, and this trend has accelerated sharply in recent years. While in 2010 there were only three cities with their own minimum wages exceeding the state or federal standard, by 2020 there were 42. This n...

The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland

By Andreas Beerli, Jan Ruffner, Michael Siegenthaler, and Giovanni Peri

American Economic Review, March 2021

We study a reform that granted European cross-border workers free access to the Swiss labor market and had a stronger effect on regions close to the border. The greater availability of cross-border workers increased foreign employment substantially. Altho...

Job Displacement Insurance and (the Lack of) Consumption-Smoothing

By François Gerard and Joana Naritomi

American Economic Review, March 2021

We study the spending profile of workers who experience both a positive transitory income shock (lump-sum severance pay) and a negative permanent income shock (layoff ). Using de-identified expenditure and employment data from Brazil, we show that workers...

Trade Shocks and Labor Market Adjustment

By Ryan Kim and Jonathan Vogel

American Economic Review: Insights, March 2021

We develop a framework to analyze the impact of trade shocks on a range of labor market adjustment margins in economies with a large number of sectors and labor groups. We provide analytic results characterizing equilibria. We show that labor groups earni...

The unemployment insurance tax hangover

[Research Highlight]

February 25, 2021

A tax spike on companies after layoffs is discouraging them from rehiring when business turns around.

Unemployment Insurance Taxes and Labor Demand: Quasi-Experimental Evidence from Administrative Data

By Andrew C. Johnston

American Economic Journal: Economic Policy, February 2021

To finance unemployment insurance, states raise payroll tax rates on employers who engage in layoffs. Tax rates are, therefore, highest for firms after downturns, potentially hampering labor-market recovery. Using full-population, administrative records f...