Information Frictions and Skill Signaling in the Youth Labor Market

By Sara B. Heller and Judd B. Kessler

American Economic Journal: Economic Policy, November 2024

This paper provides evidence that information frictions limit the labor market trajectories of US youth. We provide credible skill signals—recommendation letters based on supervisor feedback—to a random subset of 43,409 participants in New York's summ...

Origins of the 40-hour workweek

[Research Highlight]

November 01, 2024

How did workweek restrictions instituted during the Great Depression impact US labor markets?

Labor Market Effects of Workweek Restrictions: Evidence from the Great Depression

By Price Fishback, Chris Vickers, and Nicolas L. Ziebarth

American Economic Journal: Macroeconomics, October 2024

We study the effects of restrictions on the length of the workweek under the President's Reemployment Agreement (PRA) of July 1933 and the National Industrial Recovery Act. We construct a model in which the equilibrium without such a workweek restriction ...

Assessing the Effects of the 2017 Tax Cut and Jobs Act

[Research Highlight]

November 19, 2024

Eric Zwick discusses the impact of the TCJA on the tax code and the economy.

The Impact of Criminal Financial Sanctions: A Multistate Analysis of Survey and Administrative Data

By Keith Finlay, Matthew Gross, Carl Lieberman, Elizabeth Luh, and Michael Mueller-Smith

American Economic Review: Insights, December 2024

We estimate the impact of financial sanctions in the US criminal justice system, leveraging nine natural experiments in a regression discontinuity design framework across a diverse range of enforcement levels ($17–$6,000) and institutional environments....

Loans for the "Little Fellow": Credit, Crisis, and Recovery in the Great Depression

By Sarah Quincy

American Economic Review, December 2024

This paper identifies how bank branching benefited local economies during the Great Depression. Using archival data and narrative evidence, I show how Bank of America's branch network in 1930s California created an internal capital market that diversified...

The process of state building and long-run growth

[Research Highlight]

December 03, 2024

How did administrative reforms initiated during the French Revolution shape economic development over time?

2024 in Research Highlights

[Research Highlight]

December 17, 2024

Economists addressed issues related to economics publishing, congestion effects, bank runs, and more.

Singles, Couples, and Their Labor Supply: Long-Run Trends and Short-Run Fluctuations

By Jonna Olsson

American Economic Journal: Macroeconomics, January 2025

Women's increased involvement in the economy has been an important change in labor markets during the past century. I show that a macroeconomic model taking into account gender and household composition in an otherwise parsimonious off-the-shelf setting c...

From Blue- to Steel-Collar Jobs: The Decline in Employment Gaps?

By Benjamin Lerch

American Economic Journal: Macroeconomics, January 2025

I investigate how the introduction of industrial robots is shaping the demographic composition of the US labor force between 1993 and 2014. I find that robots decreased employment of men and women by 3.7 and 1.6 percentage points, contributing to the secu...

Estimating Hysteresis Effects

By Francesco Furlanetto, Antoine Lepetit, Ørjan Robstad, Juan Rubio-Ramírez, and Pål Ulvedal

American Economic Journal: Macroeconomics, January 2025

In this paper we identify demand shocks that can have a permanent effect on output through hysteresis effects. We call these shocks permanent demand shocks. They are found to be quantitatively important in the United States, in particular in samples start...

Rational Inattention and the Business Cycle Effects of Productivity and News Shocks

By Bartosz Maćkowiak and Mirko Wiederholt

American Economic Journal: Macroeconomics, January 2025

We solve a real business cycle model with rational inattention (an RI-RBC model). In the RI-RBC model, the growth rates of employment, investment, and output are about as persistent as in the data, with an amount of inattention consistent with survey data...

Sticky Wages on the Layoff Margin

By Steven J. Davis and Pawel M. Krolikowski

American Economic Review, February 2025

We design and field an innovative survey of unemployment insurance (UI) recipients that yields new insights about wage stickiness on the layoff margin. A majority of UI recipients would accept pay cuts of 5–10 percent to save their jobs, and one-third w...

The Long-Run Effects of California's Paid Family Leave Act on Women's Careers and Childbearing: New Evidence from a Regression Discontinuity Design and US Tax Data

By Martha Bailey, Tanya Byker, Elena Patel, and Shanthi Ramnath

American Economic Journal: Economic Policy, February 2025

We use administrative tax data to analyze the cumulative, long-run effects of California's 2004 Paid Family Leave Act (CPFL) on women's employment, earnings, and childbearing. A regression-discontinuity design exploits the sharp increase in the weeks of p...

Fighting Poverty One Family at a Time: Experimental Evidence from an Intervention with Holistic, Individualized, Wraparound Services

By William N. Evans, Shawna Kolka, James X. Sullivan, and Patrick S. Turner

American Economic Journal: Economic Policy, February 2025

Families in poverty face numerous barriers to establishing stable economic footing. This paper estimates experimental effects of a holistic, individualized wraparound service intervention for low-income individuals. The intervention includes a detailed as...

Spillover, Efficiency, and Equity Effects of Regional Firm Subsidies

By Sebastian Siegloch, Nils Wehrhöfer, and Tobias Etzel

American Economic Journal: Economic Policy, February 2025

We analyze the effects of a large place-based policy, subsidizing up to 50 percent of the investment costs of East German manufacturing plants. We show that a 1 percentage point decrease in subsidy rate leads to a 1 percent decrease in manufacturing emplo...

Expecting Floods: Firm Entry, Employment, and Aggregate Implications

By Ruixue Jia, Xiao Ma, and Victoria Wenxin Xie

American Economic Journal: Macroeconomics

Using county-level and ZIP-code-level data from the United States during 1998–2018, we document: (1) increased flood risk has a large negative impact on firm entry, employment, and output in the long run; and (2) flood events reduce output in the shor...

Structural Reforms and Economic Performance: The Experience of Advanced Economies

By Nauro F. Campos, Paul De Grauwe, and Yuemei Ji

Journal of Economic Literature, March 2025

This article provides a comprehensive assessment of the theoretical and empirical literature on structural reforms in advanced economies. Structural reforms matter because they entail profound and systematic changes that affect economic welfare, productiv...

The uneven labor market impact of industrial robots

[Research Highlight]

February 28, 2025

How are the effects of automation spread across the population?

America’s public safety net

[Research Highlight]

March 18, 2025

Christopher Howard discusses the history of public assistance and social insurance in the United States.