Inputs in the Production of Early Childhood Human Capital: Evidence from Head Start

By Christopher R. Walters

American Economic Journal: Applied Economics, October 2015

This paper uses data from a randomized evaluation of Head Start to answer two questions: (i) How much do short-run causal effects vary across Head Start centers? and (ii) Do observed inputs explain this variation? I find that the cross-center standard dev...

The Judge, the Politician, and the Press: Newspaper Coverage and Criminal Sentencing across Electoral Systems

By Claire S. H. Lim, James M. Snyder Jr., and David Strömberg

American Economic Journal: Applied Economics, October 2015

We study how media environments interact with political institutions that structure the accountability of public officials. Specifically, we quantify media influence on the behavior of US state court judges. We analyze around 1.5 million criminal sente...

Checklists and Worker Behavior: A Field Experiment

By C. Kirabo Jackson and Henry S. Schneider

American Economic Journal: Applied Economics, October 2015

We analyze data from a field experiment in which an auto repair firm provided checklists to mechanics and monitored their use. Revenue was 20 percent higher during the experiment, and the effect is equivalent to that of a 1.6 percentage point (10 percent)...

The Consequences of Teenage Childbearing before Roe v. Wade

By Kevin Lang and Russell Weinstein

American Economic Journal: Applied Economics, October 2015

Using five cycles of the National Survey of Family Growth, we estimate the effect of teen motherhood on education, labor market, and marriage outcomes for teens conceiving from 1940 through 1968. Effects vary by marital status at conception, socioeconomic...

Political Parties and Labor-Market Outcomes: Evidence from US States

By Louis-Philippe Beland

American Economic Journal: Applied Economics, October 2015

This paper estimates the causal impact of the party allegiance (Republican or Democratic) of US governors on labor-market outcomes. I match gubernatorial elections with March Current Population Survey (CPS) data for income years 1977 to 2008. Using a regr...

Trade Liberalization and Markup Dispersion: Evidence from China's WTO Accession

By Yi Lu and Linhui Yu

American Economic Journal: Applied Economics, October 2015

In this paper, we empirically investigate whether trade liberalization affects markup dispersion, a potential source of resource misallocation. The identification uses China's WTO accession at the end of 2001. We show that trade liberalization reduces mar...

Front Matter

American Economic Journal: Applied Economics, October 2015

Industrial Policy and Competition

By Philippe Aghion, Jing Cai, Mathias Dewatripont, Luosha Du, Ann Harrison, and Patrick Legros

American Economic Journal: Macroeconomics, October 2015

Using a comprehensive dataset of all medium and large enterprises in China between 1998 and 2007, we show that industrial policies allocated to competitive sectors or that foster competition in a sector increase productivity growth. We measure competition...

Rounding the Corners of the Policy Trilemma: Sources of Monetary Policy Autonomy

By Michael W. Klein and Jay C. Shambaugh

American Economic Journal: Macroeconomics, October 2015

A central result in international macroeconomics is that a government cannot simultaneously opt for open financial markets, fixed exchange rates, and monetary autonomy; rather, it is constrained to choosing no more than two of these three. This paper cons...

Asset Pricing with Concentrated Ownership of Capital and Distribution Shocks

By Kevin J. Lansing

American Economic Journal: Macroeconomics, October 2015

This paper develops a production-based asset pricing model with two types of agents and concentrated ownership of physical capital. A temporary but persistent "distribution shock" causes the income share of capital owners to fluctuate in a procyclical man...

Sectoral Technology and Structural Transformation

By Berthold Herrendorf, Christopher Herrington, and Ákos Valentinyi

American Economic Journal: Macroeconomics, October 2015

We assess how the properties of technology affect structural transformation, i.e., the reallocation of production factors across the broad sectors of agriculture, manufacturing, and services. To this end, we estimate sectoral constant elasticity of substi...

The Few Leading the Many: Foreign Affiliates and Business Cycle Comovement

By Jörn Kleinert, Julien Martin, and Farid Toubal

American Economic Journal: Macroeconomics, October 2015

This paper argues that the correlation of business cycles across countries is largely due to linkages between multinational firms and their foreign affiliates. There are very few foreign affiliates in France, but they contribute considerably to aggregate ...

Happiness and the Persistence of Income Shocks

By Christian Bayer and Falko Juessen

American Economic Journal: Macroeconomics, October 2015

We reassess the empirical effects of income and employment on self-reported well-being. Our analysis makes use of a two-step estimation procedure that allows us to apply instrumental variable regressions with ordinal observable data. As suggested by the ...

How Much of South Korea's Growth Miracle Can Be Explained by Trade Policy?

By Michelle Connolly and Kei-Mu Yi

American Economic Journal: Macroeconomics, October 2015

This paper assesses the importance of trade policy reforms in South Korea, as well as the General Agreement on Tariffs and Trade (GATT) tariff reductions, in explaining Korea's growth miracle. We develop a model of neoclassical growth and trade in which l...

Labor Market Heterogeneity and the Aggregate Matching Function

By Regis Barnichon and Andrew Figura

American Economic Journal: Macroeconomics, October 2015

We estimate an aggregate matching function and find that the regression residual, which captures movements in matching efficiency, displays procyclical fluctuations and a dramatic decline after 2007. Using a matching function framework that explicitly tak...

Front Matter

American Economic Journal: Macroeconomics, October 2015

Averting Catastrophes: The Strange Economics of Scylla and Charybdis

By Ian W. R. Martin and Robert S. Pindyck

American Economic Review, October 2015

Faced with numerous potential catastrophes—nuclear and bioterrorism, mega-viruses, climate change, and others—which should society attempt to avert? A policy to avert one catastrophe considered in isolation might be evaluated in cost-benefit terms. Bu...

Disability Insurance and the Dynamics of the Incentive Insurance Trade-Off

By Hamish Low and Luigi Pistaferri

American Economic Review, October 2015

We provide a life-cycle framework for comparing insurance and disincentive effects of disability benefits. The risks that individuals face and the parameters of the Disability Insurance (DI) program are estimated from consumption, health, disability insur...

Efficient Firm Dynamics in a Frictional Labor Market

By Leo Kaas and Philipp Kircher

American Economic Review, October 2015

We develop and analyze a labor market model in which heterogeneous firms operate under decreasing returns and compete for labor by posting long-term contracts. Firms achieve faster growth by offering higher lifetime wages, which allows them to fill vacan...

Technical Change, Wage Inequality, and Taxes

By Laurence Ales, Musab Kurnaz, and Christopher Sleet

American Economic Review, October 2015

This paper considers the normative implications of technical change for tax policy design. A task-to-talent assignment model of the labor market is embedded into an optimal tax problem. Technical change modifies equilibrium wage growth across talents and ...