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.

Childcare, Labor Supply, and Business Development: Experimental Evidence from Uganda

By Kjetil Bjorvatn, Denise Ferris, Selim Gulesci, Arne Nasgowitz, Vincent Somville, and Lore Vandewalle

American Economic Journal: Applied Economics, April 2025

We randomly offered a childcare subsidy, an equivalent cash grant, or both to mothers of three-to-five-year-old children. The childcare subsidy substantially increased the labor supply and earnings of single mothers, highlighting the importance of time co...

The Geography of Consumption and Local Economic Shocks: The Case of the Great Recession

By Abe Dunn and Mahsa Gholizadeh

American Economic Journal: Macroeconomics, April 2025

We estimate across-county spending flows between firms and consumers for every county in the United States, providing a new consumption link that has not been studied previously. We highlight the importance of this link by estimating the effect of changes...

Does Unemployment Risk Affect Business Cycle Dynamics?

By Sebastian Graves

American Economic Journal: Macroeconomics, April 2025

In this paper, I show that the decline in consumption during unemployment depends on both liquid and illiquid wealth; that unemployment predicts illiquid asset withdrawal, primarily when households have few liquid assets; and that increased idiosyncratic ...

Trade Shocks and Credit Reallocation

By Stefano Federico, Fadi Hassan, and Veronica Rappoport

American Economic Review, April 2025

This paper identifies a credit-supply contraction that arises endogenously after trade liberalization. Banks with loan portfolios concentrated in sectors exposed to competition from China face an increase in nonperforming loans after China's entry into th...

Climate shocks and the economy

[Research Highlight]

April 29, 2025

Is the US economy adapting to more severe weather patterns?

Severe Weather and the Macroeconomy

By Hee Soo Kim, Christian Matthes, and Toàn Phan

American Economic Journal: Macroeconomics, April 2025

We investigate the impact of severe weather shocks on the US macroeconomy over the past 60 years. Using a nonlinear vector autoregressive model, we find robust evidence of time-varying effects. While negligible at the beginning of the sample, the impact b...

Rebuilding careers

[Research Highlight]

May 27, 2025

Higher education can help injured workers transition to higher-paying occupations.

Changing Tracks: Human Capital Investment after Loss of Ability

By Anders Humlum, Jakob R. Munch, and Pernille Plato

American Economic Review, May 2025

We provide the first evidence on how workers invest in human capital after losing ability. Using quasi-random work accidents in Danish administrative data, we find that workers enroll in bachelor's programs after physical injuries, pursuing degrees that b...

Regional Dissent: Do Local Economic Conditions Influence FOMC Votes?

By Anton Bobrov, Rupal Kamdar, and Mauricio Ulate

American Economic Review: Insights, June 2025

US monetary policy decisions are made by the 12 voting members of the FOMC, seven of which inherently represent national-level interests. The remaining members, a rotating group of presidents from the 12 Federal Reserve districts, come instead from subnat...