What Determines Productivity?

By Chad Syverson

Journal of Economic Literature, June 2011

Economists have shown that large and persistent differences in productivity levels across businesses are ubiquitous. This finding has shaped research agendas in a number of fields, including (but not limited to) macroeconomics, industrial organization, l...

Contracts versus Salaries in Matching

By Federico Echenique

American Economic Review, February 2012

Firms and workers may sign complex contracts that govern many aspects of their interactions. I show that when firms regard contracts as substitutes, bargaining over contracts can be understood as bargaining only over wages. Substitutes is the assumption c...

Monetary Policy Analysis with Potentially Misspecified Models

By Marco Del Negro and Frank Schorfheide

American Economic Review, September 2009

Policy analysis with potentially misspecified dynamic stochastic general equilibrium (DSGE) models faces two challenges: estimation of parameters that are relevant for policy trade-offs, and treatment of the deviations from the cross-equation restricti...

Liberalized Trade and Worker-Firm Matching

By Carl Davidson, Fredrik Heyman, Steven Matusz, Fredrik Sjöholm, and Susan Chun Zhu

American Economic Review, May 2012

Recent theoretical analysis suggests that a reduction in the cost of exporting increases the degree of assortative matching between workers and firms in export-oriented industries. Changes that reduce the cost of imports have an ambiguous impact on matchi...

Optimal Progressive Labor Income Taxation and Education Subsidies When Education Decisions and Intergenerational Transfers Are Endogenous

By Dirk Krueger and Alexander Ludwig

American Economic Review, May 2013

We quantitatively characterize the optimal mix of progressive income taxes and education subsidies in a model with endogenous human capital formation, borrowing constraints, income risk and incomplete financial markets. In addition to the distortions of l...

Informal Employment in a Growing and Globalizing Low-Income Country

By Brian McCaig and Nina Pavcnik

American Economic Review, May 2015

We document several facts about workforce transitions from the informal to the formal sector in Vietnam, a fast growing, industrializing, and low-income country. First, younger workers, particularly migrants, are more likely to work in the formal sector a...

Revealed Preference, Rational Inattention, and Costly Information Acquisition

By Andrew Caplin and Mark Dean

American Economic Review, July 2015

Apparently mistaken decisions are ubiquitous. To what extent does this reflect irrationality, as opposed to a rational trade-off between the costs of information acquisition and the expected benefits of learning? We develop a revealed preference test that...

Wells, Water, and Welfare: The Impact of Access to Groundwater on Rural Poverty and Conflict

By Sheetal Sekhri

American Economic Journal: Applied Economics, July 2014

This paper evaluates the impact of access to groundwater on poverty using data from rural India. The estimation exploits the fact that the technology required to access groundwater changes exogenously due to constraints imposed by laws of physics at a dep...

Rents, Technical Change, and Risk Premia Accounting for Secular Trends in Interest Rates, Returns on Capital, Earning Yields, and Factor Shares

By Ricardo J. Caballero, Emmanuel Farhi, and Pierre-Olivier Gourinchas

American Economic Review, May 2017

The secular decline in safe interest rates since the early 1980s has been the subject of considerable attention. In this short paper, we argue that it is important to consider the evolution of safe real rates in conjunction with three other first-order ma...

Mentoring and Diversity

By Susan Athey, Christopher Avery, and Peter Zemsky

American Economic Review, September 2000

We study how diversity evolves at a firm with entry-level and upper-level employees who vary in ability and "type" (gender or ethnicity). The ability of entry-level employees is increased by mentoring. An employ receives more mentoring when more upper-lev...

House Prices and Marital Stability

By Martin Farnham, Lucie Schmidt, and Purvi Sevak

American Economic Review, May 2011

We investigate the effect of house price changes on divorce using data for 1991-2010 from the Current Population Survey and the Federal Housing Finance Agency. Our findings suggest that changing house prices significantly affect the share of a cohort that...

The Retirement Consumption Puzzle in China

By Hongbin Li, Xinzheng Shi, and Binzhen Wu

American Economic Review, May 2015

Using data from China's Urban Household Survey and exploiting China's mandatory retirement policy, we use the regression discontinuity approach to estimate the impact of retirement on household expenditures. Retirement reduces total non-durable expenditur...

Menstruation, Sanitary Products, and School Attendance: Evidence from a Randomized Evaluation

By Emily Oster and Rebecca Thornton

American Economic Journal: Applied Economics, January 2011

Policy-makers have cited menstruation and lack of sanitary products as barriers to girls' schooling. We evaluate these claims using a randomized evaluation of sanitary products provision to girls in Nepal. We report two findings. First, menstruation has ...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Winter 1994

Exporter Dynamics and Partial-Year Effects

By Andrew B. Bernard, Esther Ann Boler, Renzo Massari, Jose-Daniel Reyes, and Daria Taglioni

American Economic Review, October 2017

Two identical firms who start exporting in different months, one each in January and December, will report dramatically different exports for the first calendar year. This partial-year effect biases down first-year export levels and biases up first-year e...

How Risky Are Recessions for Top Earners?

By Fatih Guvenen, Greg Kaplan, and Jae Song

American Economic Review, May 2014

How sensitive to business cycles are the earnings of top earners? And, how does the business cycle sensitivity of top earners vary by industry? We use a confidential dataset on earnings histories of US males from the Social Security Administration. On ave...

Tenure in Office and Public Procurement

By Decio Coviello and Stefano Gagliarducci

American Economic Journal: Economic Policy, August 2017

We study the impact of politicians' tenure in office on the outcomes of public procurement using a dataset on Italian municipal governments. To identify a causal relation, we first compare elections where the incumbent mayor barely won or barely lost anot...

Estimating Risk Preferences from Deductible Choice

By Alma Cohen and Liran Einav

American Economic Review, June 2007

We develop a structural econometric model to estimate risk preferences from data on deductible choices in auto insurance contracts. We account for adverse selection by modeling unobserved heterogeneity in both risk (claim rate) and risk aversion. We fi...

Do Teenagers Respond to HIV Risk Information? Evidence from a Field Experiment in Kenya

By Pascaline Dupas

American Economic Journal: Applied Economics, January 2011

We use a randomized experiment to test whether and what information changes teenagers' sexual behavior in Kenya. Providing information on the relative risk of HIV infection by partner's age led to a 28 percent decrease in teen pregnancy, an objective prox...

Social Learning with Coarse Inference

By Antonio Guarino and Philippe Jehiel

American Economic Journal: Microeconomics, February 2013

We study social learning by boundedly rational agents. Agents take a decision in sequence, after observing their predecessors and a private signal. They are unable to make perfect inferences from their predecessors' decisions: they only understand the r...