Prediction with Misspecified Models

By John Geweke and Gianni Amisano

American Economic Review, May 2012

The assumption that one of a set of prediction models is a literal description of reality formally underlies many formal econometric methods, including Bayesian model averaging and most approaches to model selection. Prediction pooling does not invoke th...

Assumptions Matter: Model Uncertainty and the Deterrent Effect of Capital Punishment

By Steven N. Durlauf, Chao Fu, and Salvador Navarro

American Economic Review, May 2012

This paper examines how estimates of the deterrent effect of capital punishment depend on alternate choices of assumptions concerning the homicide process. Specific models of the homicide process represent bundles of these assumptions, which involve the u...

Heuristics and Heterogeneity in Health Insurance Exchanges: Evidence from the Massachusetts Connector

By Keith Marzilli Ericson and Amanda Starc

American Economic Review, May 2012

We examine heuristic decision rules in consumer choice on health insurance exchanges using data from the Massachusetts Connector. Consumers may have difficulty making optimal choices in a complex environment. The heuristic "choose the cheapest plan" is s...

Health Reform, Health Insurance, and Selection: Estimating Selection into Health Insurance Using the Massachusetts Health Reform

By Martin B. Hackmann, Jonathan T. Kolstad, and Amanda E. Kowalski

American Economic Review, May 2012

We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were i...

The Impact of the Massachusetts Health Care Reform on Health Care Use among Children

By Sarah Miller

American Economic Review, May 2012

In 2006 Massachusetts enacted a major health care reform aimed at achieving near-universal coverage in the state. While other studies have found that this reform substantially affected the use of health services in general, the impact of the reform on chi...

How Did Health Care Reform in Massachusetts Impact Insurance Premiums?

By John A. Graves and Jonathan Gruber

American Economic Review, May 2012

It is widely recognized that the 2006 Massachusetts health reforms served as a blueprint for national reform under the 2010 Affordable Care Act (ACA). As such, there is interest in using the Massachusetts experience to understand how insurance premiums m...

The Long-Term Effects of UI Extensions on Employment

By Johannes F. Schmieder, Till von Wachter, and Stefan Bender

American Economic Review, May 2012

The majority of papers analyzing the employment effects of unemployment insurance (UI) benefit durations focus on the duration of the first unemployment spell. In this paper, we make two contributions. First, we use a regression discontinuity design to an...

Unemployment in the Great Recession: Did the Housing Market Crisis Prevent the Unemployed from Moving to Take Jobs?

By Henry S. Farber

American Economic Review, May 2012

The labor market in the Great Recession and its aftermath is characterized by great difficulty in escaping unemployment. I present two empirical analyses of a particular explanation for that difficulty, that the housing market crisis has prevented the une...

Contract Form, Wage Flexibility, and Employment

By Thomas Lemieux, W. Bentley MacLeod, and Daniel Parent

American Economic Review, May 2012

We begin with two uncontroversial hypotheses - firm productivity is expensive to measure and employment entails relationship-specific investments. These assumptions imply that firms would optimally choose fixed-wage contracts, and complement these with bo...

Access to Credit by Small Businesses: How Relevant Are Race, Ethnicity, and Gender?

By Elizabeth Asiedu, James A. Freeman, and Akwasi Nti-Addae

American Economic Review, May 2012

This paper employs data from the 1998 and 2003 Survey of Small Business Finances to analyze whether, after controlling for observable factors that influence loan decisions, there is a significant difference in the loan approval rate and the interest rate ...

Coming to America: Does Having a Developed Home Country Matter for Self-Employment in the United States?

By Ruth Uwaifo Oyelere and Willie Belton

American Economic Review, May 2012

This research examines the relationship between the economic status of an immigrant's home country and the probability of self-employment in the US. We find that immigrants from developing countries on average have lower self-employment probabilities rela...

The Labor Market Impact of Mandated Employment Verification Systems

By Catalina Amuedo-Dorantes and Cynthia Bansak

American Economic Review, May 2012

Employment verification systems covered about one out of four people hired in the United States in 2010. In this paper, we evaluate the impact of state-level employment verification mandates on the employment and wages of likely unauthorized workers acros...

The Employment of Low-Skilled Immigrant Men in the United States

By Brian Duncan and Stephen J. Trejo

American Economic Review, May 2012

Using microdata from the 2000 Census, we analyze how the employment rates of foreign-born and US-born men vary with education. After a period of adjustment during the first few years upon arrival, the overall employment rate of immigrant men quickly appro...

Love and Money by Parental Matchmaking: Evidence from Urban Couples in China

By Fali Huang, Ginger Zhe Jin, and Lixin Colin Xu

American Economic Review, May 2012

Parental involvement in marriage matchmaking may distort the optimal spouse choice because parents are willing to substitute love for money. The rationale is that the joint income of married children can be shared among extended family members more easily...

Business Cycles and Gender Diversification: An Analysis of Establishment-Level Gender Dissimilarity

By Cynthia Bansak, Mary E. Graham, and Allan A. Zebedee

American Economic Review, May 2012

During recessions, the focus on male job losses may overshadow other important outcome variables. We examine the effects of economic downturns on occupational segregation by gender, using staffing data from over 6 million private-sector US establishments ...

Birth Rates and the Vietnam Draft

By Marianne P. Bitler and Lucie Schmidt

American Economic Review, May 2012

The Vietnam conflict was the defining event for a generation, with nearly 8 million Americans serving in the armed forces. A large literature in economics has focused on effects of Vietnam-Era service post-war, while little research looks at contemporaneo...

Identification of the Effect of Depression on Risky Sexual Behavior: Exploiting a Natural Experiment

By Susan L. Averett and Yang Wang

American Economic Review, May 2012

Depression is pervasive in the US particularly among women. The costs in terms of direct medical costs and forgone earnings are substantial. This paper investigates an additional cost of depression. Using data from the National Longitudinal Survey of Adol...

Hiring, Churn, and the Business Cycle

By Edward P. Lazear and James R. Spletzer

American Economic Review, May 2012

Hires occur for two reasons - to grow a business and to replace those who have left (churn). Churn is an important part of employment dynamics, allowing workers to move to their most productive use. We present evidence on churn from the Job Openings and L...

Job-to-Job Flows in the Great Recession

By Henry Hyatt and Erika McEntarfer

American Economic Review, May 2012

We develop prototype job-to-job flow measures to provide new evidence on labor turnover and earnings dynamics in the Great Recession. We find a sharp drop in job mobility in the Great Recession, much sharper than the previous recession, and higher earning...

Recruiting Intensity during and after the Great Recession: National and Industry Evidence

By Steven J. Davis, R. Jason Faberman, and John C. Haltiwanger

American Economic Review, May 2012

We measure job-filling rates and recruiting intensity per vacancy at the national and industry levels from January 2001 to September 2011 using data from the Job Openings and Labor Turnover Survey. Industry-level movements in these variables are at odds w...