Public works in the city

[Research Highlight]

May 16, 2024

Do government employment programs boost the welfare of the urban poor in developing countries?

Employment and Earnings of Men at High Risk of Gun Violence

By Max Kapustin, Monica P. Bhatt, Sara B. Heller, Marianne Bertrand, and Christopher Blattman

AEA Papers and Proceedings, May 2024

Since Becker (1968), economists have modeled crime as resulting from higher returns to criminal activity than legal work. Yet contemporary employment data for people engaged in crime is scarce. We surveyed men at extreme risk of gun violence in Chicago ab...

The Effects of Unemployment Insurance Caseworkers on Job Search Effort

By Amelie Schiprowski, Julia Schmidtke, Johannes Schmieder, and Simon Trenkle

AEA Papers and Proceedings, May 2024

We combine a high-frequency survey on job search effort with administrative data on caseworker interactions from the German unemployment insurance system to estimate how the dynamics of search effort respond to caseworker meetings and vacancy referrals. M...

Risk Scores for Long-Term Unemployment and the Assignment to Job Search Counseling

By Sebastian Ernst, Andreas I. Mueller, and Johannes Spinnewijn

AEA Papers and Proceedings, May 2024

This paper analyses how risk profiling is used to assign unemployed job seekers to job search counseling in Flanders, Belgium. We compare algorithmic selection to self-selection and selection by job search counselors. We discuss practical challenges for t...

Employment Effects of Job Search Assistance for the Long-Term Unemployed

By Lionel Cottier, Yves Flückiger, Pierre Kempeneers, and Rafael Lalive

AEA Papers and Proceedings, May 2024

We analyze the effects of a job search assistance (JSA) program for the long-term unemployed. JSA increases employment in the first year after assignment by about 4 percentage points. However, averaged over five years, JSA decreases employment, albeit ins...

Heterogeneity in Corporate Tax Incidence by Worker Characteristics

By Patrick J. Kennedy, Christine L. Dobridge, Paul Landefeld, and Jacob Mortenson

AEA Papers and Proceedings, May 2024

We study how corporate tax incidence on worker earnings varies across worker characteristics: gender, age, and employment tenure. To do so, we examine effects of the corporate tax cuts introduced by the Tax Cuts and Jobs Act (TCJA), using data from federa...

A Simple Model of Corporate Tax Incidence

By Dustin Swonder and Damián Vergara

AEA Papers and Proceedings, May 2024

We analyze the incidence of a linear corporate tax using a simple and portable competitive general equilibrium model in which capital owners choose to invest either in domestic production or a foreign investment opportunity and workers make extensive marg...

The Influence of COVID-19 on Young Women's Labor Market Aspirations and Expectations in India

By S Anukriti, Catalina Herrera-Almanza, and Sophie Ochmann

AEA Papers and Proceedings, May 2024

Youth unemployment and gender gaps in labor market outcomes are key policy challenges across developing countries. Young job seekers may struggle to find jobs because of their biased beliefs and unrealistic aspirations about the labor market. We study whe...

What Explains Black Employment Dynamics?

By Karl David Boulware and Kenneth N. Kuttner

AEA Papers and Proceedings, May 2024

This paper investigates the proximate causes of excessively cyclical employment growth and persistently high unemployment among Black workers, relative to White workers. Using data from the Quarterly Workforce Indicators and Job-to-Job Flows, we find that...

The Slanted-L Phillips Curve

By Pierpaolo Benigno and Gauti B. Eggertsson

AEA Papers and Proceedings, May 2024

A slanted-L curve is well suited to represent the nonlinearity of the celebrated Phillips curve. We show this using cross-country data of major industrialized economies since 2009, including the inflationary surge of the 2020s. At high unemployment rates,...

Financial Access and Labor Market Outcomes: Evidence from Credit Lotteries

By Bernardus Van Doornik, Armando Gomes, David Schoenherr, and Janis Skrastins

American Economic Review, June 2024

We assess the employment and income effects of access to credit dedicated to investment in individual mobility by exploiting time-series variation in access to credit through lotteries for participants in a group-lending mechanism in Brazil. We find that ...

Labor Market Outcomes and Reforms in China

[Symposium: China's Economy]

By Xin Meng

Journal of Economic Perspectives, Fall 2012

Over the past few decades of economic reform, China's labor markets have been transformed to an increasingly market-driven system. China has two segregated economies: the rural and urban. Understanding the shifting nature of this divide is probably the k...

Organized Crime and Economic Growth: Evidence from Municipalities Infiltrated by the Mafia

By Alessandra Fenizia and Raffaele Saggio

American Economic Review, July 2024

This paper studies the long-run economic impact of dismissing city councils infiltrated by organized crime. Applying a matched difference-in-differences design to the universe of Italian social security records, we find that city council dismissals (CCDs)...

Asymmetric Reciprocity and the Cyclical Behavior of Wages, Effort, and Job Creation

By Marco Fongoni

American Economic Journal: Macroeconomics, July 2024

This paper develops a search and matching framework in which workers are characterized by asymmetric reference-dependent reciprocity and firms set wages by considering the effect that these can have on workers' effort and, therefore, on output. The cyclic...

Macroeconomic Frameworks: Reconciling Evidence and Model Predictions from Demand Shocks

By Alan J. Auerbach, Yuriy Gorodnichenko, and Daniel Murphy

American Economic Journal: Macroeconomics, July 2024

How do demand shocks affect the economy? We exploit detailed data on US defense spending to examine a large set of outcome variables in response to well-identified local demand shocks, jointly examining new outcomes (e.g., firm entry and housing rents) an...

Local Economic and Political Effects of Trade Deals: Evidence from NAFTA

By Jiwon Choi, Ilyana Kuziemko, Ebonya Washington, and Gavin Wright

American Economic Review, June 2024

Why have white, less-educated voters left the Democratic Party? We highlight the role of the 1994 North American Free Trade Agreement (NAFTA). In event-study analysis, we demonstrate that counties whose 1990 employment depended on industries vulnerable to...

The political consequences of NAFTA

[Research Highlight]

June 27, 2024

Jiwon Choi and Gavin Wright discuss the economic and political fallout of the North American Free Trade Agreement.

The distributional consequences of recessions

[Research Highlight]

July 15, 2024

How do local labor markets recover after economic shocks?

The Evolution of Local Labor Markets after Recessions

By Brad Hershbein and Bryan A. Stuart

American Economic Journal: Applied Economics, July 2024

This paper studies how US local labor markets respond to employment losses that occur during recessions. Following recessions from 1973 through 2009, we find areas that lose more jobs during the recession experience persistent relative declines in employm...

Why Didn't the College Premium Rise Everywhere? Employment Protection and On-the-Job Investment in Skills

By Matthias Doepke and Ruben Gaetani

American Economic Journal: Macroeconomics, July 2024

Why has the college wage premium risen rapidly in the United States since the 1980s but not in European economies such as Germany? We argue that differences in employment protection can account for much of the gap. We develop a model in which firms and wo...