The Trade-Offs of Welfare Policies in Labor Markets with Informal Jobs: The Case of the "Seguro Popular" Program in Mexico

By Mariano Bosch and Raymundo M. Campos-Vazquez

American Economic Journal: Economic Policy, November 2014

In 2002, the Mexican government began an effort to improve health access to the 50 million uninsured in Mexico, a program known as Seguro Popular (SP). The SP offered virtually free health insurance to informal workers, altering the incentives to opera...

Are Incentives for R&D Effective? Evidence from a Regression Discontinuity Approach

By Raffaello Bronzini and Eleonora Iachini

American Economic Journal: Economic Policy, November 2014

This paper evaluates a unique R&D subsidy program implemented in northern Italy. Firms were invited to submit proposals for new projects and only those which scored above a certain threshold received the subsidy. We use a sharp regression discontinuity...

Long-Term Impacts of Compensatory Preschool on Health and Behavior: Evidence from Head Start

By Pedro Carneiro and Rita Ginja

American Economic Journal: Economic Policy, November 2014

This paper provides new estimates of the medium- and long-term impacts of Head Start on health and behavioral problems. We identify these impacts using discontinuities in the probability of participation induced by program eligibility rules. Our strate...

Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges

By Stephanie Riegg Cellini and Claudia Goldin

American Economic Journal: Economic Policy, November 2014

We provide the first comprehensive estimates of the size of the for-profit higher education sector and evaluate whether for-profits increase tuition in response to federal subsidies. By using state administrative data we include institutions that do not p...

Cash for Coolers: Evaluating a Large-Scale Appliance Replacement Program in Mexico

By Lucas W. Davis, Alan Fuchs, and Paul Gertler

American Economic Journal: Economic Policy, November 2014

This paper evaluates a large-scale appliance replacement program in Mexico that from 2009 to 2012 helped 1.9 million households replace their old refrigerators and air conditioners with energyefficient models. Using household-level billing records from...

The Trillion Dollar Conundrum: Complementarities and Health Information Technology

By David Dranove, Chris Forman, Avi Goldfarb, and Shane Greenstein

American Economic Journal: Economic Policy, November 2014

We examine the heterogeneous relationship between the adoption of EMR and hospital operating costs at thousands of US hospitals between 1996 and 2009. We first document a previously-identified puzzle: Adoption of EMR is associated with a slight cost incre...

Estimating Taxable Income Responses Using Danish Tax Reforms

By Henrik Jacobsen Kleven and Esben Anton Schultz

American Economic Journal: Economic Policy, November 2014

This paper estimates taxable income responses using a series of Danish tax reforms and population-wide administrative data since 1980. The tax variation and data in Denmark makes it possible to overcome the biases from nontax changes in inequality and ...

Gasoline Taxes and Consumer Behavior

By Shanjun Li, Joshua Linn, and Erich Muehlegger

American Economic Journal: Economic Policy, November 2014

Gasoline taxes can be employed to correct externalities from automobile use and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to g...

The Dynamics of Firm Lobbying

By William R. Kerr, William F. Lincoln, and Prachi Mishra

American Economic Journal: Economic Policy, November 2014

How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by firms. Estimating a binary choice model of firm behavior, we find significant evidence for the idea that barriers to entry induce persistence ...

A Test for the Rational Ignorance Hypothesis: Evidence from a Natural Experiment in Brazil

By Fernanda Leite Lopez de Leon and Renata Rizzi

American Economic Journal: Economic Policy, November 2014

This paper tests the rational ignorance hypothesis by Downs (1957). This theory predicts that people do not acquire costly information to educate their votes. We provide new estimates for the effect of voting participation by exploring the Brazilian du...

Front Matter

American Economic Journal: Economic Policy, November 2014

Networks in the Understanding of Economic Behaviors

[Symposium: Social Networks]

By Matthew O. Jackson

Journal of Economic Perspectives, Fall 2014

As economists endeavor to build better models of human behavior, they cannot ignore that humans are fundamentally a social species with interaction patterns that shape their behaviors. People's opinions, which products they buy, whether they invest in edu...

From Micro to Macro via Production Networks

[Symposium: Social Networks]

By Vasco M. Carvalho

Journal of Economic Perspectives, Fall 2014

A modern economy is an intricately linked web of specialized production units, each relying on the flow of inputs from their suppliers to produce their own output which, in turn, is routed towards other downstream units. In this essay, I argue that this n...

Community Networks and the Process of Development

[Symposium: Social Networks]

By Kaivan Munshi

Journal of Economic Perspectives, Fall 2014

My objective in this paper is to lay the groundwork for a new network-based theory of economic development. The first step is to establish that community-based networks are active throughout the developing world. Plenty of anecdotal and descriptive eviden...

How Can Scandinavians Tax So Much?

[Symposium: Tax Enforcement and Compliance]

By Henrik Jacobsen Kleven

Journal of Economic Perspectives, Fall 2014

American visitors to Scandinavian countries are often puzzled by what they observe: despite large income redistribution through distortionary taxes and transfers, these are very high-income countries. They rank among the highest in the world in terms of ...

Why Do Developing Countries Tax So Little?

[Symposium: Tax Enforcement and Compliance]

By Timothy Besley and Torsten Persson

Journal of Economic Perspectives, Fall 2014

Low-income countries typically collect taxes of between 10 to 20 percent of GDP while the average for high-income countries is more like 40 percent. In order to understand taxation, economic development, and the relationships between them, we need to thin...

Taxing across Borders: Tracking Personal Wealth and Corporate Profits

[Symposium: Tax Enforcement and Compliance]

By Gabriel Zucman

Journal of Economic Perspectives, Fall 2014

This article attempts to estimate the magnitude of corporate tax avoidance and personal tax evasion through offshore tax havens. US corporations book 20 percent of their profits in tax havens, a tenfold increase since the 1980; their effective tax rate ha...

Tax Morale

[Symposium: Tax Enforcement and Compliance]

By Erzo F. P. Luttmer and Monica Singhal

Journal of Economic Perspectives, Fall 2014

There is an apparent disconnect between much of the academic literature on tax compliance and the administration of tax policy. In the benchmark economic model, the key policy parameters affecting tax evasion are the tax rate, the detection probability, a...

The Economics of Guilds

By Sheilagh Ogilvie

Journal of Economic Perspectives, Fall 2014

Occupational guilds in medieval and early modern Europe offered an effective institutional mechanism whereby two powerful groups, guild members and political elites, could collaborate in capturing a larger slice of the economic pie and redistributing it t...

The Wages of Sinistrality: Handedness, Brain Structure, and Human Capital Accumulation

By Joshua Goodman

Journal of Economic Perspectives, Fall 2014

Left- and right-handed individuals have different neurological wiring, particularly with regard to language processing. Multiple datasets from the United States and the United Kingdom show that lefties exhibit significant human capital deficits relative t...