Increasing the Cost of Informal Employment: Evidence from Mexico

By Brenda Samaniego de la Parra and León Fernández Bujanda

American Economic Journal: Applied Economics, January 2024

We estimate the effect of increasing the cost of informal jobs on formal firms' and workers' outcomes. We combine administrative records and household surveys and exploit exogenous variation in the cost of informality generated by over 480,000 random work...

Reversing the Resource Curse: Foreign Corruption Regulation and the Local Economic Benefits of Resource Extraction

By Hans B. Christensen, Mark Maffett, and Thomas Rauter

American Economic Journal: Applied Economics, January 2024

We examine how foreign corruption regulation affects the economic benefits communities receive from extraction activities in the resource-rich areas of Africa. After a mid-2000s increase in enforcement of the US Foreign Corrupt Practices Act (FCPA), night...

Wage Rigidity and Employment Outcomes: Evidence from Administrative Data

By Gabriel Ehrlich and Joshua Montes

American Economic Journal: Macroeconomics, January 2024

This paper examines the relationship between downward nominal wage rigidity and employment outcomes using linked employer-employee data. Wage rigidity prevents 27.1 percent of counterfactual wage cuts, with a standard deviation of 19.2 percent across esta...

A Congestion Theory of Unemployment Fluctuations

By Yusuf Mercan, Benjamin Schoefer, and Petr Sedláček

American Economic Journal: Macroeconomics, January 2024

We propose a theory of unemployment fluctuations in which new hires and incumbent workers are imperfect substitutes. Hence, attempts to hire away the unemployed during recessions diminish the marginal product of new hires, discouraging job creation. This ...

The Impact of Extending Employment Protection to Agency Workers on Firms

By Alejandro Micco and Pablo Muñoz

American Economic Journal: Macroeconomics, January 2024

We study the impact of a reform that extended employment protection to temporary agency workers. Using a difference-in-difference research design, we show that plants more exposed to the regulation experienced a decrease in revenues and total employment, ...

Firms' Precautionary Savings and Employment during a Credit Crisis

By Davide Melcangi

American Economic Journal: Macroeconomics, January 2024

Can the macroeconomic effects of credit supply shocks be large even when a small share of firms is credit constrained? I use UK firm-level accounting data to discipline a heterogeneous-firm model where the interaction between real and financial frictions ...

Assessing the Stabilizing Effects of Unemployment Benefit Extensions

By Alexey Gorn and Antonella Trigari

American Economic Journal: Macroeconomics, January 2024

We study the stabilizing role of benefit extensions. We develop a tractable quantitative model with heterogeneous agents, search frictions, and nominal rigidities. The model allows for a stabilizing aggregate demand channel and a destabilizing labor marke...

Scarred Consumption

By Ulrike Malmendier and Leslie Sheng Shen

American Economic Journal: Macroeconomics, January 2024

We show that prior lifetime experiences can "scar" consumers. Consumers who have lived through times of unemployment exhibit persistent pessimism about their future financial situation and spend significantly less years later, controlling for income, empl...

New Perspectives on the Economics of Mental Health

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New Perspectives on the Economics of Mental Health Grand Hyatt, Texas Ballroom Salon E Chair: Janet Currie (Princeton University) Authors: Maya Rossin-Slater (Stanford University), Molly Kathleen Schnell (Northwestern University) (presenting), Hannes Schwandt (Northwestern University), Janet Currie (Princeton University) (presenting), W. Bentley MacLeod (Princeton University and NBER), Linda Ouyang (Princeton University), Gabriella Conti (University College London) (presenting), Sören Kliem (Criminological Research Institute of Lower Saxony), Malte Sandner (Institute for Employment Research) Discussants: Prashant Bhardawaj (University of California-San Diego), Amitabh Chandra (Harvard University), Janet Currie (Princeton University)

Increasing the Retirement Age: Policy Effects and Underlying Mechanisms

By Simon Rabaté, Egbert Jongen, and Tilbe Atav

American Economic Journal: Economic Policy, February 2024

We study the effects of increasing the statutory retirement age (SRA) in the Netherlands, using regression discontinuity design and administrative data on the universe of the population. We find clear and large employment effects of the reform. A simple m...

State Taxation of Nonresident Income and the Location of Work

By David R. Agrawal and Kenneth Tester

American Economic Journal: Economic Policy, February 2024

Prior studies show that taxes matter for the residential locations of high-income earners. But states raise a significant share of revenue from nonresidents. Using variation in state tax rates, we provide causal evidence on the effect of the net-of-tax ra...

Job Training and Job Search Assistance Policies in Developing Countries

By Eliana Carranza and David McKenzie

Journal of Economic Perspectives, Winter 2024

Governments around the developing world face pressure to intervene actively to help jobseekers find employment. Two of the most common policies used are job training, based on the idea that many of those seeking jobs lack the skills employers want, and ...

America, Jump-Started: World War II R&D and the Takeoff of the US Innovation System

By Daniel P. Gross and Bhaven N. Sampat

American Economic Review, December 2023

During World War II, the US government's Office of Scientific Research and Development (OSRD) supported one of the largest public investments in applied R&D in US history. Using data on all OSRD-funded invention, we show this shock had a formative impact ...

Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Comment

By Alexander G. James and Brock Smith

American Economic Review, June 2020

Feyrer, Mansur, and Sacerdote (2017) estimates the spatial dispersion of the effects of the recent shale-energy boom by unconditionally regressing income and employment on energy production at various levels of geographic aggregation. However, producing c...

Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution

By James Feyrer, Erin T. Mansur, and Bruce Sacerdote

American Economic Review, April 2017

We track the geographic and temporal propagation of local economic shocks from new oil and gas production generated by hydrofracturing. Each million dollars of new production produces $80,000 in wage income and $132,000 in royalty and business income with...

Can Financial Incentives to Firms Improve Apprenticeship Training? Experimental Evidence from Ghana

By Gabriel Brown, Morgan Hardy, Isaac Mbiti, Jamie McCasland, and Isabelle Salcher

American Economic Review: Insights, March 2024

We use a field experiment to test whether financial incentives can improve the quality of apprenticeship training. Trainers (firm owners) in the treatment group participated in a tournament incentive scheme where they received a payment based on their app...

The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications

By Olivier Coibion, Yuriy Gorodnichenko, and Gee Hee Hong

American Economic Review, March 2015

We study the cyclical properties of sales, regular price changes, and average prices paid by consumers ("effective" prices) using data on prices and quantities sold for numerous retailers across many US metropolitan areas. Inflation in the effective price...

SongYi Paik on agricultural minimum wages

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How do minimum wages affect agricultural labor markets?

What's behind Her Smile? Health, Looks, and Self-Esteem

By Francisco A. Gallego, Cristian Larroulet Philippi, and Andrea Repetto

American Economic Journal: Applied Economics, April 2024

This paper examines how improving dental health affects economic, social, and psychological outcomes. In a randomized experiment, we provide a low-income group free dental care, including prostheses, and find significant and persistent impacts on men's an...

The Employment Effects of Ethnic Politics

By Francesco Amodio, Giorgio Chiovelli, and Sebastian Hohmann

American Economic Journal: Applied Economics, April 2024

We study the labor market consequences of ethnic politics in African democracies. Using subnational georeferenced data from 15 countries from 1996 to 2017, we compare individuals from ethnicities linked to parties at the margin of electing a representativ...