Impacts of Corporate Tax Cuts on Firms and Workers: Evidence from Small Businesses

By Yige Duan and Terry S. Moon

American Economic Journal: Economic Policy

This paper assesses the effects of corporate tax cuts on small firms and their workers. Following a reform in Quebec, Canada, firms receiving tax cuts expand and their workers' earnings increase com- pared to workers and firms without tax cuts. We esti...

CSWEP News

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Published four times yearly since 1972 and full of advice and information on how the profession works for all economists

CSWEP News: Feature Articles by Topic (1996-present)

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See twenty years of CSWEP News articles by topic

Front Matter

American Economic Review, December 2025

Supply, Demand, Institutions, and Firms: A Theory of Labor Market Sorting and the Wage Distribution

By Daniel Haanwinckel

American Economic Review, December 2025

This paper examines how workforce composition, labor demand, and minimum wage jointly determine wages through their effects on worker-task assignments, firm wage premiums, and firm-worker sorting. Using an estimated model of monopsonistic local labor mark...

Downward Rigidity in the Wage for New Hires

By Jonathon Hazell and Bledi Taska

American Economic Review, December 2025

Wage rigidity is an important explanation for unemployment fluctuations. In benchmark models wages for new hires are key, but there is limited evidence on this margin. We use wages posted on vacancies, with job and establishment information, to measure th...

Gender Differences in Financial Advice

By Tabea Bucher-Koenen, Andreas Hackethal, Johannes Koenen, and Christine Laudenbach

American Economic Review, December 2025

Based on data gathered from 27,000 real-world meetings between financial advisors and clients of a large German bank, we show that advisors offer more self-serving advice to women, while men are more likely to receive sales fee rebates and less likely to ...

A Goldilocks Theory of Fiscal Deficits

By Atif Mian, Ludwig Straub, and Amir Sufi

American Economic Review, December 2025

We develop a tractable framework for deficit and debt dynamics. A "free lunch" fiscal deficit—one that raises spending without higher future taxes—is sustainable without zero lower bound (ZLB) only when R < G − φ, where φ is the sensitivity of the...

Strategic Voting in Two-Party Legislative Elections

By Niall Hughes

American Economic Review, December 2025

I study multidistrict legislative elections with two parties and two binary dimensions of policy. Strategic voters focus on the dimension where their district is most likely to be pivotal in the legislature. Anticipating this, candidates select different ...

Firm Responses and Wage Effects of Foreign Demand Shocks with Fixed Labor Costs and Monopsony

By Emmanuel Dhyne, Ayumu Ken Kikkawa, Toshiaki Komatsu, Magne Mogstad, and Felix Tintelnot

American Economic Review, December 2025

We quantify the firm responses and real wage effects of foreign demand shocks. We use Belgian microdata to construct firm-specific measures of demand shocks, which capture that firms pass on foreign demand shocks to domestic suppliers. Our estimates of fi...

First-Generation Elite: The Role of School Social Networks

By Sarah Cattan, Kjell G. Salvanes, and Emma Tominey

American Economic Review, December 2025

High school students from non-elite backgrounds are less likely to have peers with elite-educated parents than their elite counterparts. This difference in social capital is a key driver of the high intergenerational persistence in elite education. We ide...

Incentive Complexity, Bounded Rationality, and Effort Provision

By Johannes Abeler, David Huffman, and Collin Raymond

American Economic Review, December 2025

Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded rationality can affect effort provision. This is because some attributes of the incentives become opaque; that is, workers do not take them ...

When Product Markets Become Collective Traps: The Case of Social Media

By Leonardo Bursztyn, Benjamin Handel, Rafael Jiménez-Durán, and Christopher Roth

American Economic Review, December 2025

Individuals might experience negative utility from not consuming a popular product. With such externalities to nonusers, standard consumer surplus measures, which take aggregate consumption as given, fail to appropriately capture consumer welfare. We prop...

Changing Income Risk across the US Skill Distribution: Evidence from a Generalized Kalman Filter

By J. Carter Braxton, Kyle Herkenhoff, Jonathan Rothbaum, and Lawrence Schmidt

American Economic Review, December 2025

For whom has earnings risk changed, and why? We answer these questions by combining the Kalman filter and EM algorithm to estimate persistent and temporary earnings for every individual at every point in time. We apply our method to administrative earning...

An Equilibrium Analysis of the Effects of Neighborhood-Based Interventions on Children

By Eric Chyn and Diego Daruich

American Economic Review, December 2025

This paper studies housing vouchers and urban redevelopment programs by incorporating neighborhood effects into a general equilibrium overlapping-generations model with endogenous location choice and child development. We calibrate the model using US data...

Allocation Mechanisms with Mixture-Averse Preferences

By David Dillenberger and Uzi Segal

American Economic Review, December 2025

Consider an economy with equal amounts of N types of goods, to be allocated to agents with strict quasi-convex preferences over lotteries. We show that ex ante, all Pareto-efficient allocations give almost all agents lotteries over at most two outcomes. O...

The effects of unemployment benefit duration

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What happened to the US labor market when the Emergency Unemployment Compensation Act expired after the Great Recession?

Liquidity Traps: A Unified Theory of the Great Depression and the Great Recession

By Gauti B. Eggertsson and Sergei K. Egiev

Journal of Economic Literature, December 2025

This review of liquidity traps unifies three landmark economic downturns—the US Great Depression, the Great Recession, and Japan's Long Recession—into a single analytical framework. We examine various forces that drive natural interest rates negative:...

Imperfect Competition in Financial Markets: Recent Developments

By Marzena Rostek and Ji Hee Yoon

Journal of Economic Literature, December 2025

This article reviews the theory of imperfectly competitive financial markets, with special attention to recent contributions and rapidly growing areas of research. We highlight the methodological advances that have led to a unified analytic framework for ...

The Beautiful Dataset

By Ignacio Palacios-Huerta

Journal of Economic Literature, December 2025

Natural experiments, high stakes, expert subjects, knowledge of the precise objectives and exact rules, clean measurement, observability of strategies, incentives, actions and consequences, large datasets, exogenous rule changes, distinct social effects, ...