Background Matters, but Not Whether Parents Are Immigrants: Outcomes of Children Born in Denmark

By Mathias Fjællegaard Jensen and Alan Manning

American Economic Journal: Applied Economics, July 2025

In Europe, the children of migrants often have worse economic outcomes than those with local-born parents. This paper shows that children born in Denmark with immigrant parents (first-generation locals) have lower earnings, higher unemployment, less educa...

Uncertainty Shocks, Adjustment Costs, and Firm Beliefs: Evidence from a Representative Survey

By Andreas Dibiasi, Heiner Mikosch, and Samad Sarferaz

American Economic Journal: Macroeconomics, July 2025

This paper studies the dynamic effects of an uncertainty shock on firm expectations. We conduct a survey that confronts managers from a representative firm sample with a model-consistent uncertainty shock scenario. An exogenous increase in uncertainty sig...

The Debt-Inflation Channel of the German (Hyper) Inflation

By Markus Brunnermeier, Sergio Correia, Stephan Luck, Emil Verner, and Tom Zimmermann

American Economic Review, July 2025

This paper studies how a large increase in the price level is transmitted to the real economy through firm balance sheets. Using newly digitized macro- and micro-level data from the German inflation of 1919–1923, we show that inflation led to a large re...

Should College Be "Free"? Evidence on Free College, Early Commitment, and Merit Aid from an Eight-Year Randomized Trial

By Douglas N. Harris and Jonathan Mills

American Economic Journal: Economic Policy, August 2025

We provide evidence on the effects of college financial aid from an eight-year randomized trial offering ninth graders a $12,000 merit-based grant. The program was designed to be free of tuition/fees at community colleges and substantially lower the cost ...

Eliminating Fares to Expand Opportunities: Experimental Evidence on the Impacts of Free Public Transportation on Economic and Social Disparities

By Rebecca Brough, Matthew Freedman, and David C. Phillips

American Economic Journal: Economic Policy, August 2025

We conduct a randomized controlled trial to study the employment effects of providing free public transportation to individuals with low incomes. A temporary subsidy that reduces the price of transit to zero has no significant effects on individuals' paid...

Direct and Indirect Effects of Investment Tax Incentives

By Adrian Lerche

American Economic Review, August 2025

This paper estimates the direct effects and indirect spillover effects of investment tax credits on firms. Exploiting a differential tax credit rate change by firm size in the German manufacturing sector, I find that lowering a firm's investment cost by 7...

Employers and Unemployment Insurance Take-Up

By Marta Lachowska, Isaac Sorkin, and Stephen A. Woodbury

American Economic Review, August 2025

We quantify the employer's role in unemployment insurance (UI) take-up. Employer effects on claiming and appeals are substantial, and those effects are negatively correlated, consistent with appeals deterring claims. Low-wage workers are less likely to cl...

The Life-Cycle Implications of Temporary Employment Contracts

By Rosemary Kaiser

American Economic Journal: Macroeconomics

Employment protections often create two-tiered labor markets with substantial differences in job security. I estimate the effects of removing these protections using a quantitative life-cycle model, where younger workers are more likely to select into ...

Work from Home and Disability Employment

By Nicholas Bloom, Gordon B. Dahl, and Dan-Olof Rooth

American Economic Review: Insights

There has been a dramatic rise in disability employment since the pandemic. At the same time, work from home (WFH) has risen four-fold. This paper asks whether the two are causally related. Controlling for compositional changes and labor market tightnes...

Labor Market Power, Self-Employment, and Development

By Francesco Amodio, Pamela Medina, and Monica Morlacco

American Economic Review, September 2025

This paper shows that self-employment shapes labor market power in low-income countries, with implications for industrial development. Using Peruvian data, we find that wage-setting power increases with employer concentration but less so where self-employ...

Drivers of Change: Employment Responses to the Lifting of the Saudi Female Driving Ban

By Chaza Abou Daher, Erica Field, Kendal Swanson, and Kate Vyborny

American Economic Review, September 2025

We conduct a field experiment to quantify the impact of the lifting of the Saudi women's driving ban on women's employment by randomizing rationed spaces in driver's training. Treated women are 41 percent more likely to be employed yet are 19 percent less...

The Impact of Unions on the Wage Distribution: Evidence from Higher Education

By Michael Baker, Yosh Halberstam, Kory Kroft, Alexandre Mas, and Derek Messacar

American Economic Review: Insights

We estimate the impact of unionization on the wage distribution of Canadian university faculty using longitudinal administrative data on salaries and exploiting the staggered rollout of unionization across institutions. We find that unionization compres...

Income Equality in the Nordic Countries: Myths, Facts, and Lessons

By Magne Mogstad, Kjell G. Salvanes, and Gaute Torsvik

Journal of Economic Literature, September 2025

Policymakers, public commentators, and researchers often cite the Nordic countries as examples of a socioeconomic model that combines low income inequality with prosperity and growth. This article critically assesses that claim by integrating theoretical ...

Guaranteed Employment in Rural India: Intra-Household Labor and Resource Allocation Consequences

By Jorge Luis García

American Economic Journal: Economic Policy

I investigate the intra-household labor and resource allocation consequences of an employment guarantee targeting rural households in India. The guarantee insures household earnings, replacing women as added workers and shutting down a motive for savin...

Taxes Today, Benefits Tomorrow

By Thomas Le Barbanchon

American Economic Journal: Applied Economics, October 2025

This paper tests whether partially unemployed workers value future preserved benefits when they bunch at the kink of the unemployment insurance benefit-withdrawal schedule. I extend the bunching formula of Saez (2010) to a dynamic setting that accounts fo...

Labor Market Inequality and the Changing Life Cycle Profile of Male and Female Wages

By Richard Blundell, Hugo Lopez, and James P. Ziliak

American Economic Journal: Applied Economics, October 2025

We estimate the full distribution of life cycle wages for cohorts of men and women in the United States using a quantile selection model to account for systematic differences in employment by gender and education group. Although common within-group time e...

Human Capital and Racial Inequality in the US Labor Market

By Owen Thompson

Journal of Economic Literature

If racial gaps in measures of human capital like educational attainment and standardized test scores were eliminated, what would happen to racial disparities in wages, employment, and other labor market outcomes? A credible answer to this question is foun...

Time to Say Goodbye: The Macroeconomic Implications of Termination Notice

By Tomer Ifergane

American Economic Journal: Macroeconomics, October 2025

Insuring households against unemployment risk is a cornerstone of modern economic policy. Many countries provide unemployment insurance partly by employment protection mandates, most commonly using termination notice mandates. Unlike unemployment insuranc...

Temporary Layoffs, Firm Entry and Exit Dynamics, and Aggregate Fluctuations

By Sanjay K. Chugh and Alan Finkelstein Shapiro

American Economic Journal: Macroeconomics, October 2025

We build a model to study how the countercyclicality of temporary layoffs affects unemployment, firm entry and exit, and macroeconomic fluctuations. The model can quantitatively generate the rich cyclical dynamics of temporary layoffs, unemployment, and f...

Monetary Policy and the Labor Market: A Quasi-experiment in Sweden

By John Coglianese, Maria Olsson, and Christina Patterson

American Economic Review, October 2025

We analyze a monetary quasi-experiment in Sweden from 2010–2011, when the Riksbank raised the interest rate substantially. We argue that this increase was beyond what labor market conditions warranted, driven instead by new concerns about financial stab...