Post-Selection and Post-Regularization Inference in Linear Models with Many Controls and Instruments

By Victor Chernozhukov, Christian Hansen, and Martin Spindler

American Economic Review, May 2015

We consider estimation of and inference about coefficients on endogenous variables in a linear instrumental variables model where the number of instruments and exogenous control variables are each allowed to be larger than the sample size. We work within ...

Prediction Policy Problems

By Jon Kleinberg, Jens Ludwig, Sendhil Mullainathan, and Ziad Obermeyer

American Economic Review, May 2015

Most empirical policy work focuses on causal inference. We argue an important class of policy problems does not require causal inference but instead requires predictive inference. Solving these "prediction policy problems" requires more than simple regres...

Can Online Learning Bend the Higher Education Cost Curve?

By David J. Deming, Claudia Goldin, Lawrence F. Katz, and Noam Yuchtman

American Economic Review, May 2015

We examine whether online learning technologies have led to lower prices in higher education. Using data from the Integrated Postsecondary Education Data System, we show that online education is concentrated in large for-profit chains and less-selective p...

Evaluating Econometric Evaluations of Post-Secondary Aid

By Josh Angrist, David Autor, Sally Hudson, and Amanda Pallais

American Economic Review, May 2015

In an ongoing evaluation of post-secondary financial aid, we use random assignment to assess the causal effects of large privately-funded aid awards. Here, we compare the unbiased causal effect estimates from our RCT with two types of non-experimental eco...

Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile

By Harald Beyer, Justine Hastings, Christopher Neilson, and Seth Zimmerman

American Economic Review, May 2015

Rising student loan default rates and protests over debt suggest that many students make college enrollment and financing choices they regret. Policymakers have considered tying the availability of federally subsidized loans at degree programs to financia...

What High-Achieving Low-Income Students Know about College

By Caroline M. Hoxby and Sarah Turner

American Economic Review, May 2015

Previous work demonstrates that low-income higher achievers fail to apply to selective colleges despite their being admitted at high rates and receiving financial aid so generous that they pay less than at non-selective schools. The Expanding College Oppo...

Factoryless Goods Producing Firms

By Andrew B. Bernard and Teresa C. Fort

American Economic Review, May 2015

This paper documents the existence and characteristics of US firms that do not manufacture themselves, but nonetheless are heavily involved in the production of goods. These factoryless goods producing firms (FGPFs) are formally in the wholesale sector bu...

How Well Is US Intrafirm Trade Measured?

By Kim J. Ruhl

American Economic Review, May 2015

Using two independent data sources—the intrafirm trade data from the US Bureau of Economic Analysis and the related party trade data from the US Census Bureau—I construct and compare measures of US intrafirm exports and imports. I find that, i...

Multinational Production: Data and Stylized Facts

By Natalia Ramondo, Andrés Rodríguez-Clare, and Felix Tintelnot

American Economic Review, May 2015

We present a comprehensive data set on the bilateral activity of multinational firms, with focus on two variables: affiliate revenues and the number of affiliates across country pairs. Our basic data are from UNCTAD and include 59 countries, an average ov...

Markup and Cost Dispersion across Firms: Direct Evidence from Producer Surveys in Pakistan

By David Atkin, Azam Chaudhry, Shamyla Chaudhry, Amit K. Khandelwal, and Eric Verhoogen

American Economic Review, May 2015

Researchers typically invoke theoretical assumptions to estimate mark-ups. Instead, we directly obtain mark-ups by surveying Pakistani soccer-ball producers. We document six facts: (i) Mark-ups are more dispersed than costs; (ii) Mark-ups and costs increa...

Informal Employment in a Growing and Globalizing Low-Income Country

By Brian McCaig and Nina Pavcnik

American Economic Review, May 2015

We document several facts about workforce transitions from the informal to the formal sector in Vietnam, a fast growing, industrializing, and low-income country. First, younger workers, particularly migrants, are more likely to work in the formal sector a...

Trade Liberalization and the Skill Premium: A Local Labor Markets Approach

By Rafael Dix-Carneiro and Brian K. Kovak

American Economic Review, May 2015

We develop a specific-factors model of regional economies that includes two types of workers, skilled and unskilled. The model delivers a simple equation relating trade-induced local shocks to changes in local skill premia. We apply the methodology to Bra...

History and the Sizes of Cities

By Hoyt Bleakley and Jeffrey Lin

American Economic Review, May 2015

We contrast evidence of urban path dependence with efforts to analyze calibrated models of city sizes. Recent evidence of persistent city sizes following the obsolescence of historical advantages suggests that path dependence cannot be understood as the m...

Declining Mortality Inequality within Cities during the Health Transition

By Dora L. Costa and Matthew E. Kahn

American Economic Review, May 2015

In the United States in the late 19th and early 20th century, large cities had extremely high death rates from infectious disease. Within major cities such as New York City and Philadelphia, there was significant variation at any point in time in the mort...

Killer Cities: Past and Present

By W. Walker Hanlon and Yuan Tian

American Economic Review, May 2015

The industrial cities of the 19th century were incredibly unhealthy places to live. How much progress has been made in reducing these negative health effects over the past 150 years? To help answer this question, we compare mortality patterns in 19th cent...

The Impact of Temporary Protected Status on Immigrants' Labor Market Outcomes

By Pia M. Orrenius and Madeline Zavodny

American Economic Review, May 2015

The United States currently provides Temporary Protected Status (TPS) to more than 300,000 immigrants. TPS is typically granted if dangerous conditions prevail in migrants' home countries. Individuals with TPS are allowed to stay and work in the United St...

The Labor Market Impacts of Forced Migration

By Isabel Ruiz and Carlos Vargas-Silva

American Economic Review, May 2015

During the 1990s the Kagera region of Tanzania experienced a forced migration shock. A series of geographical barriers led to a higher concentration of forced migrants in some parts of the region relative to others, resulting in a natural experiment. Usin...

The Impact of Economic Freedom on the Black/White Income Gap

By Gary A. Hoover, Ryan A. Compton, and Daniel C. Giedeman

American Economic Review, May 2015

Using state-level data from 1980-2010 we examine whether economic freedom, as measured by the Economic Freedom of North America Index, has had any impact in increasing or decreasing the ratio of median income for black households to the median income of w...

Income Inequality, Capitalism, and Ethno-linguistic Fractionalization

By Jan-Egbert Sturm and Jakob De Haan

American Economic Review, May 2015

We examine the relationship between capitalism and income inequality for a large sample of countries using an adjusted economic freedom index as proxy for capitalism. Our results suggest that there is no robust relationship between economic freedom and Gi...

Falling through the Cracks? Grade Retention and School Dropout among Children of Likely Unauthorized Immigrants

By Catalina Amuedo-Dorantes and Mary J. Lopez

American Economic Review, May 2015

We evaluate how intensified interior immigration enforcement impacts the likelihood that children of unauthorized immigrants will repeat a grade or drop out of school. Using a weighted index of the intensity of interior immigration enforcement at the MSA ...