Whitney Newey, Distinguished Fellow 2020

[Page]

Front Matter

American Economic Review, May 2020

A Model of Complex Contracts

By Alexander M. Jakobsen

American Economic Review, May 2020

I study a mechanism design problem involving a principal and a single, boundedly rational agent. The agent transitions among belief states by combining current beliefs with up to K pieces of information at a time. By expressing a mechanism as a complex co...

Heterogeneous Beliefs and School Choice Mechanisms

By Adam J. Kapor, Christopher A. Neilson, and Seth D. Zimmerman

American Economic Review, May 2020

This paper studies how welfare outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. Using a survey of school choice participants in a strategic setting, we show that beliefs about admissions ch...

Interest Rates under Falling Stars

By Michael D. Bauer and Glenn D. Rudebusch

American Economic Review, May 2020

Macro-finance theory implies that trend inflation and the equilibrium real interest rate are fundamental determinants of the yield curve. However, empirical models of the term structure of interest rates generally assume that these fundamentals are consta...

Forced Migration and Human Capital: Evidence from Post-WWII Population Transfers

By Sascha O. Becker, Irena Grosfeld, Pauline Grosjean, Nico Voigtländer, and Ekaterina Zhuravskaya

American Economic Review, May 2020

We study the long-run effects of forced migration on investment in education. After World War II, millions of Poles were forcibly uprooted from the Kresy territories of eastern Poland and resettled ( primarily) in the newly acquired Western Territories, f...

Learning under Diverse World Views: Model-Based Inference

By George J. Mailath and Larry Samuelson

American Economic Review, May 2020

People reason about uncertainty with deliberately incomplete models. How do people hampered by different, incomplete views of the world learn from each other? We introduce a model of "model-based inference." Model-based reasoners partition an otherwise ho...

Do Parents Value School Effectiveness?

By Atila Abdulkadiroğlu, Parag A. Pathak, Jonathan Schellenberg, and Christopher R. Walters

American Economic Review, May 2020

School choice may lead to improvements in school productivity if parents' choices reward effective schools and punish ineffective ones. This mechanism requires parents to choose schools based on causal effectiveness rather than peer characteristics. We st...

Do medical bankruptcy laws affect health insurance rates?

[Research Highlight]

February 09, 2016

Some people are using bankruptcy laws as a crude form of health insurance

Melissa Dell, Clark Medalist 2020

[Page]

"An ambassador of the economics profession"

[Research Highlight]

March 31, 2020

Gregory Mankiw reflects on three decades as a textbook author.

Front Matter

American Economic Journal: Economic Policy, May 2020

Tax Credits and Small Firm R&D Spending

By Ajay Agrawal, Carlos Rosell, and Timothy Simcoe

American Economic Journal: Economic Policy, May 2020

In 2004, Canada changed the eligibility rules for its Scientific Research and Experimental Development (SRED) tax credit, which provides tax incentives for R&D conducted by small private firms. Difference-in-difference estimates show a 17 percent increase...

An Equilibrium Theory of Retirement Plan Design

By Ryan Bubb and Patrick L. Warren

American Economic Journal: Economic Policy, May 2020

We develop an equilibrium theory of employer-sponsored retirement plan design using a behavioral contract theory approach. The operation of the labor market results in retirement plans that generally cater to, rather than correct, workers' mistakes. Our t...

Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement-Error-Corrected Regression Discontinuity Approach

By Steven Dieterle, Otávio Bartalotti, and Quentin Brummet

American Economic Journal: Economic Policy, May 2020

This study documents two potential biases in recent analyses of UI benefit extensions using boundary-based identification: bias from using county-level aggregates and bias from across-border policy spillovers. To examine the first bias, the analysis uses ...

Take Two! SAT Retaking and College Enrollment Gaps

By Joshua Goodman, Oded Gurantz, and Jonathan Smith

American Economic Journal: Economic Policy, May 2020

Only half of SAT-takers retake the exam, with even lower retake rates among low-income students and underrepresented minority (URM) students. We exploit discontinuous jumps in retake probabilities at multiples of 100, driven by left-digit bias, to estimat...

Unemployment Insurance and Means-Tested Program Interactions: Evidence from Administrative Data

By Pauline Leung and Christopher O'Leary

American Economic Journal: Economic Policy, May 2020

We study the ways in which unemployment insurance (UI) benefits interact with other elements of the social safety net around job losses. We exploit a cutoff for UI eligibility, based on a workers' highest quarterly earnings in the past year, to generate q...

Upstream and Downstream Impacts of College Merit-Based Financial Aid for Low-Income Students: Ser Pilo Paga in Colombia

By Juliana Londoño-Vélez, Catherine Rodríguez, and Fabio Sánchez

American Economic Journal: Economic Policy, May 2020

How does financial aid affect postsecondary enrollment, college choice, and student composition? We present new evidence based on a large-scale program available to high-achieving, low-income students for attending high-quality colleges in Colombia. RD es...

Does School Desegregation Promote Diverse Interactions? An Equilibrium Model of Segregation within Schools

By Angelo Mele

American Economic Journal: Economic Policy, May 2020

This paper studies racial segregation in schools using data on student friendships from Add Health. I estimate an equilibrium model of friendship formation, with preferences allowing both homophily and heterophily in direct and indirect ties. I find that ...

Optimal Climate Policy When Damages Are Unknown

By Ivan Rudik

American Economic Journal: Economic Policy, May 2020

Integrated assessment models (IAMs) are economists' primary tool for analyzing the optimal carbon tax. Damage functions, which link temperature to economic impacts, have come under fire because of their assumptions that may be incorrect in significant but...