Experience counts

[Research Highlight]

February 21, 2020

The AEA interviews Ben Jones about why successful entrepreneurs tend to be older than we think.

The Role of Information in Disability Insurance Application: An Analysis of the Social Security Statement Phase-In

By Philip Armour

American Economic Journal: Economic Policy, August 2018

This paper exploits a natural experiment in information provision on US Disability Insurance (DI) applications: the Social Security statement. Although the effect of the statement on DI application was negligible in the general health and retirement study...

Tourism and Economic Development: Evidence from Mexico's Coastline

By Benjamin Faber and Cecile Gaubert

American Economic Review, June 2019

Tourism is a fast-growing services sector in developing countries. This paper combines a rich collection of Mexican microdata with a quantitative spatial equilibrium model and a new empirical strategy to study the long-term economic consequences of touris...

The Effect of Corporate Taxation on Investment and Financial Policy: Evidence from the DPAD

By Eric Ohrn

American Economic Journal: Economic Policy, May 2018

This study estimates the investment, financing, and payout responses to variation in a firm's effective corporate income tax rate in the United States. I exploit quasi-experimental variation created by the Domestic Production Activities Deduction, a corpo...

An Efficient Ascending-Bid Auction for Multiple Objects: Reply

By Lawrence M. Ausubel

American Economic Review, February 2018

In a comment, Okamoto (2018) identifies and corrects a misspecification of the rationing rule in Ausubel (2004). This reply elaborates on the observation that the optimality of truthful bidding in dynamic auctions may be sensitive to the fine details of t...

The Effect of Prescription Drug Monitoring Programs on Opioid Utilization in Medicare

By Thomas C. Buchmueller and Colleen Carey

American Economic Journal: Economic Policy, February 2018

The misuse of prescription opioids has become a serious epidemic in the United States. In response, states have implemented Prescription Drug Monitoring Programs (PDMPs), which record a patient's opioid prescribing history. While few providers participate...

The Agricultural Wage Gap: Evidence from Brazilian Micro-data

By Jorge A. Alvarez

American Economic Journal: Macroeconomics, January 2020

A key feature of developing economies is that wages in agriculture are below those of other sectors. Using Brazilian household surveys and administrative panel data, I use information on workers who switch sectors and workers with multiple jobs to assess ...

Real Effects of Information Frictions: When the States and the Kingdom Became United

By Claudia Steinwender

American Economic Review, March 2018

This paper exploits a unique historical experiment to estimate how information frictions distort international trade: the establishment of the transatlantic telegraph in 1866. I use newly collected data on cotton prices, trade, and information flows from ...

Front Matter

American Economic Review, January 2020

Option-Based Credit Spreads

By Christopher L. Culp, Yoshio Nozawa, and Pietro Veronesi

American Economic Review, February 2018

We present a novel empirical benchmark for analyzing credit risk using "pseudo firms" that purchase traded assets financed with equity and zero-coupon bonds. By no-arbitrage, pseudo bonds are equivalent to Treasuries minus put options on pseudo firm asset...

Exploiting Externalities to Estimate the Long-Term Effects of Early Childhood Deworming

By Owen Ozier

American Economic Journal: Applied Economics, July 2018

I investigate whether a school-based deworming intervention in Kenya had long-term effects on young children. I exploit positive externalities from the program to estimate impacts on younger children who were not directly treated. Ten years after the inte...

Socializing at Work: Evidence from a Field Experiment with Manufacturing Workers

By Sangyoon Park

American Economic Journal: Applied Economics, July 2019

Through a field experiment at a seafood-processing plant, I examine how working alongside friends affects employee productivity and how this effect is heterogeneous with respect to an employee's personality. This paper presents two main findings. First, w...

Foreign Rivals Are Coming to Town: Responding to the Threat of Foreign Multinational Entry

By Cathy Ge Bao and Maggie Xiaoyang Chen

American Economic Journal: Applied Economics, October 2018

How do domestic firms respond to the threat of foreign competition? This paper quantifies foreign competition threats by exploiting news of potential multinational investments from over 35,000 media outlets around the world. Using firm-specific measures o...

Fiscal Rules, Bailouts, and Reputation in Federal Governments

By Alessandro Dovis and Rishabh Kirpalani

American Economic Review, March 2020

Expectations of transfers by central governments incentivize overborrowing by local governments. In this paper, we ask if fiscal rules can reduce overborrowing if central governments cannot commit to enforce penalties when rules are violated. We study a m...

The Evolution of Physician Practice Styles: Evidence from Cardiologist Migration

By David Molitor

American Economic Journal: Economic Policy, February 2018

Physician treatment choices for observably similar patients vary dramatically across regions. This paper exploits cardiologist migration to disentangle the role of physician-specific factors such as preferences and learned behavior versus environment-leve...

Estimating the Value of Public Insurance Using Complementary Private Insurance

By Marika Cabral and Mark R. Cullen

American Economic Journal: Economic Policy, August 2019

The welfare associated with public insurance is often difficult to quantify because the demand for coverage is unobserved and thus cannot be used to analyze welfare. However, in many settings, individuals can purchase private insurance to supplement publi...

Workplace Signaling and Financial Commitment: Evidence from a Field Experiment

By Emily Breza, Martin Kanz, and Leora Klapper

AEA Papers and Proceedings, May 2018

We provide evidence of strategic behavior in financial decisions that occur in the workplace and are observable to one's employer. We offer factory workers the opportunity to sign up for a commitment savings account that credibly signals the intention to ...

Does Incomplete Spanning in International Financial Markets Help to Explain Exchange Rates?

By Hanno Lustig and Adrien Verdelhan

American Economic Review, June 2019

We assume that domestic (foreign) agents, when investing abroad, can only trade in the foreign (domestic) risk-free rates. In a preference-free environment, we derive the exchange rate volatility and risk premia in any such incomplete spanning model, as w...

Front Matter

American Economic Review, May 2019

Raising Capital from Heterogeneous Investors

By Marina Halac, Ilan Kremer, and Eyal Winter

American Economic Review, March 2020

A firm raises capital from multiple investors to fund a project. The project succeeds only if the capital raised exceeds a stochastic threshold, and the firm offers payments contingent on success. We study the firm's optimal unique-implementation scheme, ...