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20 января, 02:42

Urgent Care Centers and the Demand for Non-Emergent Emergency Department Visits -- by Lindsay Allen, Janet R. Cummings, Jason Hockenberry

Urgent care centers (UCCs) are a cost-efficient substitute to the emergency department (ED) for non-emergent conditions, but no study has identified their impact on ED demand. We address this gap using a novel strategy that exploits daily UCC operating times in a differencing framework. After UCCs close each day, local non-emergent ED visits increase by 1.43 percent (over the adjusted mean rate of 70.58 percent) in areas with multiple UCCs. This effect occurs only among the privately insured population, the target customers of UCCs. Our results suggest that UCCs are successfully substituting for EDs in the treatment of non-emergent conditions.

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20 января, 02:42

Does Scientific Progress Affect Culture? A Digital Text Analysis -- by Michela Giorcelli, Nicola Lacetera, Astrid Marinoni

We study the interplay between scientific progress and culture through text analysis on a corpus of about eight million books, with the use of techniques and algorithms from machine learning. We focus on a specific scientific breakthrough, the theory of evolution through natural selection by Charles Darwin, and examine the diffusion of certain key concepts that characterized this theory in the broader cultural discourse and social imaginary. We find that some concepts in Darwin's theory, such as Evolution, Survival, Natural Selection and Competition diffused in the cultural discourse immediately after the publication of On the Origins of Species. Other concepts such as Selection and Adaptation were already present in the cultural dialogue. Moreover, we document semantic changes for most of these concepts over time. Our findings thus show a complex relation between two key factors of long-term economic growth - science and culture. Considering the evolution of these two factors jointly can offer new insights to the study of the determinants of economic development, and machine learning is a promising tool to explore these relationships.

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20 января, 02:42

Folklore -- by Stelios Michalopoulos, Melanie Meng Xue

Folklore is the collection of traditional beliefs, customs, and stories of a community, passed through the generations by word of mouth. This vast expressive body, studied by the corresponding discipline of folklore, has evaded the attention of economists. In this study we do four things that reveal the tremendous potential of this corpus for understanding comparative development and culture. First, we introduce and describe a unique catalogue of folklore that codes the presence of thousands of motifs for roughly 1,000 pre-industrial societies. Second, we use a dictionary-based approach to elicit group-specific measures of various traits related to the natural environment, institutional framework, and mode of subsistence. We establish that these proxies are in accordance with the ethnographic record, and illustrate how to use a group's oral tradition to quantify non-extant characteristics of preindustrial societies. Third, we use folklore to uncover the historical cultural values of a group. Doing so allows us to test various influential conjectures among social scientists including the original affluent society, the culture of honor among pastoralists, the role of family in extended kinship systems and the intensity of trade and rule-following norms in politically centralized group. Finally, we explore how cultural norms inferred via text analysis of oral traditions predict contemporary attitudes and beliefs.

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20 января, 02:42

On the Controversies behind the Origins of the Federal Economic Statistics -- by Hugh Rockoff

Although attempts to measure trends in prices, output, and employment can be traced back for centuries, in the main the origins of the U.S. federal statistics are to be found in bitter debates over economic policy, ultimately debates over the distribution of income, at the end of the nineteenth century and during the world wars and Great Depression. Participants in those debates hoped that statistics that were widely accepted as nonpolitical and accurate would prove that their grievances were just and provide support for the policies they advocated. Economists - including luminaries such as Irving Fisher, Wesley C. Mitchell, and Simon Kuznets - responded by developing the methodology for computing index numbers and estimates of national income. Initially, individuals and private organizations provided these statistics, but by the end of WWII the federal government had taken over the role. Here I briefly describe the cases of prices, GDP, and unemployment.

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20 января, 02:42

Do Innovation Subsidies Make Chinese Firms More Innovative? Evidence from the China Employer Employee Survey -- by Hong Cheng, Hanbing Fan, Takeo Hoshi, Dezhuang Hu

The Chinese government has been using various subsidies to encourage innovations by Chinese firms. This paper examines the allocation and impacts of innovation subsidies, using the data from the China Employer Employee Survey (CEES). We find that the innovation subsidies are preferentially allocated to state owned firms and politically connected firms. Of these two (state ownership and political connection), political connection is more important in determining the allocation. We also find that the firms that receive innovation subsidies file and receive more patents, are more likely to introduce new products, but do not necessarily file and receive more patents abroad. Finally, the firms that receive innovation subsidies do not have higher productivity, more profits, or larger market shares. Overall, the results point to inefficiency of allocation of innovation subsidies and show that the subsidies encourage only incremental innovations and not radical ones.

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20 января, 02:42

Volatility and Informativeness -- by Eduardo Davila, Cecilia Parlatore

We explore the equilibrium relation between price volatility and price informativeness in financial markets, with the ultimate goal of characterizing the type of inferences that can be drawn about price informativeness by observing price volatility. We identify two different channels (noise reduction and equilibrium learning) through which changes in price informativeness are associated with changes in price volatility. We show that when informativeness is sufficiently high (low) volatility and informativeness positively (negatively) comove in equilibrium for any change in primitives. In the context of our leading application, we provide conditions on primitives that guarantee that volatility and informativeness always comove positively or negatively. We use data on U.S. stocks between 1963 and 2017 to recover stock-specific primitives and find that most stocks lie in the region of the parameter space in which informativeness and volatility comove negatively.

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20 января, 02:42

The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator -- by Doruk Cengiz, Arindrajit Dube, Attila Lindner, Ben Zipperer

We propose a novel method that infers the employment effect of a minimum wage increase by comparing the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it. To implement our approach, we estimate the effect of the minimum wage on the frequency distribution of hourly wages using 138 prominent state-level minimum wage changes between 1979 and 2016. We find that the overall number of low-wage jobs remained essentially unchanged over five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution. Our estimates by detailed demographic groups show that the lack of job loss is not explained by labor-labor substitution at the bottom of the wage distribution. We also find no evidence of disemployment when we consider higher levels of minimum wages. However, we do find some evidence of reduced employment in tradable sectors. In contrast to our bunching-based estimates, we show that some conventional studies can produce misleading inference due to spurious changes in employment higher up in the wage distribution.

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20 января, 02:42

Do Firms Respond to Gender Pay Gap Transparency? -- by Morten Bennedsen, Elena Simintzi, Margarita Tsoutsoura, Daniel Wolfenzon

We examine the effect of pay transparency on gender pay gap and firm outcomes. This paper exploits a 2006 legislation change in Denmark that requires firms to provide gender dis-aggregated wage statistics. Using detailed employee-employer administrative data and a difference-in-differences approach, we find that the law reduces the gender pay gap, primarily by slowing the wage growth for male employees. The gender pay gap declines by approximately two percentage points, or a 7% reduction relative to the pre-legislation mean. In addition, the wage transparency mandate causes a reduction in firm productivity and in the overall wage bill, leaving firm profitability unchanged.

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20 января, 02:42

Retirement Choices by State and Local Public Sector Employees: The Role of Eligibility and Financial Incentives -- by Leslie E. Papke

I analyze the effects of state public pension parameters on the retirement of public employees. Using a panel data set of public sector workers from 12 waves of the Health and Retirement Study, I model the probability of retirement as a function of pension wealth at early and normal retirement eligibility and Social Security coverage in the public sector job. I find that becoming eligible for early retirement, or receiving an early-out offer, significantly increases the probability of retiring. I do not find any effect of retirement wealth levels; instead the findings are consistent with the literature on default options in defined contribution plans. These findings suggest that state legislative action to affect retirement decisions and reduce future pension costs may be most effective operating through plan eligibility rules and early-out incentives.

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20 января, 02:42

Why Has China Overinvested in Coal Power? -- by Mengjia Ren, Lee G. Branstetter, Brian K. Kovak, Daniel E. Armanios, Jiahai Yuan

Since 2005, the Chinese government has engaged in an ambitious effort to move China's energy system away from coal and towards more environmentally friendly sources of energy. However, China's investment in coal power has accelerated sharply in recent years, raising concerns of massive overcapacity and undermining the central policy goal of promoting cleaner energy. In this paper, we ask why China engaged in such a pronounced investment boom in coal power in the mid-2010s. We find the protective rules under which China's coal power industry has historically operated have made excessive investment extremely likely unless the central government serves as a "gatekeeper," slowing and limiting investment in the face of incentives for socially excessive entry. When coal-power project approval authority was decentralized from the central government to local governments at the end of 2014, the gate was lifted and approval time considerably shortened, allowing investment to flood into the market. We construct a simple economic model that elucidates the effects of key policies on coal power investment, and examine the model's predictions using coal-power project approval records from 2013 to 2016. We find the approval rate of coal power is about 3 times higher when the approval authority is decentralized, and provinces with larger coal industries tend to approve more coal power. We estimate that local coal production accounts for an additional 54GW of approved coal power in 2015 (other things equal), which is about 1/4 of total approved capacity in that year.

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20 января, 02:42

From Immigrants to Robots: The Changing Locus of Substitutes for Workers -- by George J. Borjas, Richard B. Freeman

Increased use of robots has roused concern about how robots and other new technologies change the world of work. Using numbers of robots shipped to primarily manufacturing industries as a supply shock to an industry labor market, we estimate that an additional robot reduces employment and wages in an industry by roughly as much as an additional 2 to 3 workers and by 3 to 4 workers in particular groups, which far exceed estimated effects of an additional immigrant on employment and wages. While the growth of robots in the 1996-2016 period of our data was too modest to be a major determinant of wages and employment, the estimated coefficients suggest that continued exponential growth of robots could disrupt job markets in the foreseeable future and thus merit attention from labor analysts.

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20 января, 02:42

Agent Orange: Trump, Soft Power, and Exports -- by Andrew K. Rose

A country's exports rise when its leadership is approved by other countries. I show this using a standard gravity model of bilateral exports, a panel of data from 2006 through 2017, and an annual Gallup survey which asks people in up to 157 countries whether they approve of the job performance of the leadership of China, Germany, Russia, the United Kingdom and the United States. Holding other things constant, a country's exports are higher if its leadership is approved by the importer; 'soft power' promotes exports. The soft power effect is statistically and economically significant; a one percent increase in leadership approval raises exports by around two-thirds of a percent. This effect is reasonably robust, and different measures of soft power deliver similar results. I conservatively estimate that the >20 percentage point decline in foreign approval of American leadership between 2016 (the final year of Obama's presidency) and 2017 (Trump's first year) lowered American exports by at least $3 billion.