Harnessing Deductions to Increase Tax Compliance and Formalization

By Albrecht Bohne and Jan Sebastian Nimczik

American Economic Journal: Economic Policy

We evaluate a tax reform in Ecuador that introduced generous deductions from personal income taxes (PIT), encouraging consumers to request receipts. The reform addresses tax evasion by targeting small self-employed businesses that mainly sell goods or s...

Front Matter

American Economic Review: Insights, September 2025

Quantifying Threshold Manipulation in the Presence of Rounding: The Case of Lead Monitoring in US Drinking Water

By Tihitina Andarge, Dalia Ghanem, David A. Keiser, and Gabriel E. Lade

American Economic Review: Insights, September 2025

Many laws and economic actions depend on thresholds. As a consequence, threshold manipulation is a common concern in a variety of settings. Existing methods for detecting and quantifying threshold manipulation assume a continuous counterfactual distributi...

A Theory of Fair CEO Pay

By Pierre Chaigneau, Alex Edmans, and Daniel Gottlieb

American Economic Review: Insights, September 2025

This paper studies executive pay with fairness concerns: If the CEO's wage falls below a perceived fair share of output, he suffers disutility that is increasing in the discrepancy. Fairness concerns do not always lead to fair wages; instead, the firm thr...

Exogenous Exits, Market Structure, and Equilibrium Contracts in Health Care

By Natalia Serna

American Economic Review: Insights, September 2025

This paper quantifies the causal effects of exogenous health insurer exits on contract structure and health care market outcomes, proposing market concentration as a likely mechanism for these effects. Leveraging the termination of the largest health insu...

Learning-by-Doing as a Propagation Mechanism

By Yongsung Chang, Joao F. Gomes, and Frank Schorfheide

American Economic Review, December 2002

This paper suggests that skill accumulation through past work experience, or "learning-by-doing" (LBD), can provide an important propagation mechanism in a dynamic stochastic general-equilibrium model, as the current labor supply affects future productivi...

Preferences for Firearms

By Sarah Moshary, Bradley T. Shapiro, and Sara Drango

American Economic Review: Insights, September 2025

This paper provides a critical input into crafting effective firearms policy: an understanding of consumer demand for guns. We estimate individual-level price sensitivity and substitution patterns across gun types using stated-choice experiments. We find ...

Discrimination in the Formation of Academic Networks: A Field Experiment on #EconTwitter

By Nicolás Ajzenman, Bruno Ferman, and Pedro C. Sant'Anna

American Economic Review: Insights, September 2025

This paper documents discrimination in the formation of professional networks among academic economists. We created 80 bot accounts that claim to be PhD students differing in three characteristics: gender (male or female), race (Black or White), and unive...

Interpreting TSLS Estimators in Information Provision Experiments

By Vod Vilfort and Whitney Zhang

American Economic Review: Insights, September 2025

In information provision experiments, researchers often estimate the causal effects of beliefs on actions using two-stage least squares (TSLS). This paper formalizes exclusion and monotonicity conditions that ensure that TSLS recovers a positive-weighted ...

Health Effects of Cousin Marriage: Evidence from US Genealogical Records

By Sam Il Myoung Hwang, Deaglan Jakob, and Munir Squires

American Economic Review: Insights, September 2025

Cousin marriage rates are high in many countries today. While previous studies have documented increased risks of infant and child mortality, we provide the first estimate of the effect of such marriages on life expectancy throughout adulthood. By studyin...

Consumer-Financed Fiscal Stimulus: Evidence from Digital Coupons in China

By Jing Ding, Lei Jiang, Lucy Msall, and Matthew J. Notowidigdo

American Economic Review: Insights, September 2025

In 2020, local governments in China began issuing digital coupons to stimulate spending in targeted categories such as restaurants and supermarkets. Using data from a large e-commerce platform and a bunching estimation approach, we find that the coupons c...

Responses to Extreme Temperatures: Migrant Networks and International Migration from El Salvador

By Ana Maria Ibáñez, Juliana Quigua, Maria Jimena Romero, and Andrea Velásquez

American Economic Journal: Economic Policy

We show that exposure to extreme temperatures significantly increases international migration from El Salvador, where nearly a quarter of the population lives in the United States. Extreme temperatures reduce corn yields, leading producers to decrease th...

Front Matter

American Economic Review, September 2025

Micro versus Macro Labor Supply Elasticities: The Role of Dynamic Returns to Effort

By Henrik Kleven, Claus Kreiner, Kristian Larsen, and Jakob Søgaard

American Economic Review, September 2025

We investigate long-run earnings responses to taxes in the presence of dynamic returns to effort. First, we develop a theoretical model of earnings determination with dynamic returns to effort. In this model, earnings responses are delayed and mediated by...

Social Value of Public Information

By Stephen Morris and Hyun Song Shin

American Economic Review, December 2002

What are the welfare effects of enhanced dissemination of public information through the media and disclosures by market participants with high public visibility? We examine the impact of public information in a setting where agents take actions appropria...

Moonshot: Public R&D and Growth

By Shawn Kantor and Alexander Whalley

American Economic Review, September 2025

We estimate the long-term effect of public R&D on growth in manufacturing by analyzing new data from the Cold War–era space race. We develop a novel empirical strategy that leverages US-Soviet rivalry in space technology to isolate windfall R&D spending...

Imperfect Competition and Rents in Labor and Product Markets: The Case of the Construction Industry

By Kory Kroft, Yao Luo, Magne Mogstad, and Bradley Setzler

American Economic Review, September 2025

We develop, identify, and estimate a model of imperfect competition in both labor and product markets. Our context is the US construction industry, where firms compete for workers, private market projects, and government procurements. Our empirical approa...

Nested Bundling

By Frank Yang

American Economic Review, September 2025

A nested bundling strategy creates menus in which more expensive bundles include all the goods of less expensive ones. We study when nested bundling is optimal and determine which nested menu is optimal, when consumers differ in one dimension. We define a...

Labor Market Power, Self-Employment, and Development

By Francesco Amodio, Pamela Medina, and Monica Morlacco

American Economic Review, September 2025

This paper shows that self-employment shapes labor market power in low-income countries, with implications for industrial development. Using Peruvian data, we find that wage-setting power increases with employer concentration but less so where self-employ...

Is Air Pollution Regulation Too Lenient? Evidence from US Offset Markets

By Joseph S. Shapiro and Reed Walker

American Economic Review, September 2025

We develop a framework to estimate the marginal cost of air pollution regulation and apply it to assess policy efficiency. We exploit a provision of the Clean Air Act that requires new plants to pay incumbent facilities to reduce emissions. This "offset" ...