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The Latest NBER Working Papers
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29 августа, 16:11

Coping with H-1B Shortages: Firm Performance and Mitigation Strategies -- by Anna Maria Mayda, Francesc Ortega, Giovanni Peri, Kevin Y. Shih, Chad Sparber

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The United States' H-1B visa program, which allows private firms to hire highly skilled foreign workers, was so severely over-subscribed in the years since 2014 that H-1B status was distributed by lotteries to a subset of applicants. Using data on H-1B applications and on a range of outcomes for publicly traded companies, we find that employers using the H-1B program experienced reduced employment, sales and profits, compared to non-users in the years since 2014. We also find that some employers anticipated the rationing of H-1Bs and retained a larger share of H-1B workers, mitigating the damaging effects of H-1B rationing on their performance.

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29 августа, 16:11

The Stable Transformation Path -- by Francisco J. Buera, Joseph P. Kaboski, Martí Mestieri, Daniel G. O'Connor

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Standard dynamic models of structural transformation, without knife-edge and counterfactual parameter values, preclude balanced growth path (BGP) analysis. This paper develops a dynamic equilibrium concept for a more general class of models — an alternative to a BGP, which we coin a Stable Transformation Path (STraP). The STraP characterizes the medium-term dynamics of the economy in a turnpike sense; it is the path toward which the economy (quickly) converges from an arbitrary initial capital stock. Calibrated simulations demonstrate that the relaxed parameter values that the STraP allows have important quantitative implications for structural transformation, investment, and growth. Indeed, analyzing the dynamics along the STraP, we show that the modern dynamic model of structural transformation makes progress over the Neoclassical growth model in matching key growth and capital accumulation patterns in cross-country data, including slow convergence.

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29 августа, 16:11

Repurchase Options in the Market for Lemons -- by Saki Bigio, Liyan Shi

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We study repurchase options (repo contracts) in a competitive asset market with asymmetric information. Gains from trade emerge from a liquidity need, but private information about asset quality prevents the full realization of trade. We obtain a unique equilibrium, which features a pooling repo contract and full participation among borrowers. The equilibrium repo contract resolves adverse selection: the embedded repurchase option prevents the market unraveling that occurs in asset-sale markets. However, the contract is inefficient due to cream skimming. Competition to attract high-quality borrowers through the terms of the repurchase option inefficiently lowers liquidity. The equilibrium contract has a closed form and is portable to many applications.

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29 августа, 16:11

Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform -- by Alisa Tazhitdinova

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Moonlighting is increasingly popular in OECD countries, with 5 to 10% of workers holding two or more jobs. However, little is known about the responsiveness of moonlighting to financial incentives due to the lack of identifying variation. This paper studies a unique reform in Germany that allowed workers to hold small secondary jobs tax-free, decreasing the marginal tax rate by between 19.5 to 66pp. I show that the reform resulted in a dramatic increase in moonlighting that was not offset by reductions in primary earnings, and that hours constraints is the key determinant of moonlighting.

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29 августа, 16:11

Dynamic Trade-offs and Labor Supply Under the CARES Act -- by Corina Boar, Simon Mongey

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The CARES Act resulted in many unemployed workers receiving benefits that exceeded wages at their previous job. Given this, would an unemployed worker reject an offer to return to their former job at the same wage? Qualitatively, we provide a very simple dynamic model that incorporates four reasons the answer could be ‘no’: (i) the temporary nature of the CARES Act, (ii) uncertainty that their return-to-work offer might expire, (iii) search frictions, and (iv) wage losses out of unemployment in a recession. Quantitatively, when evaluated under empirically relevant parameters, we find it unlikely a worker would reject an offer to return to work at the same wage. We show special cases where this is not true and relate these to anecdotal evidence.

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29 августа, 16:11

Heterogeneous Effects Of Health Insurance On Birth Related Outcomes: Unpacking Compositional Vs. Direct Changes -- by Jie Ma, Kosali I. Simon

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When women of childbearing age gain health insurance, we expect their birth outcomes to improve, but comparing births that occur before and after policy changes may confound two separate impacts of coverage. For one, health insurance could affect who gives birth, through reduced costs of contraception. Health insurance could also directly improve maternal and child health among those who give birth, through additional prenatal resources. We address this question using the Affordable Care Act young adult provision, comparing birth related outcomes for those aged 24-25 years after the law, to outcomes among older young adults. We show that since the law subsidized contraceptives mainly among higher socioeconomic groups, the composition of mothers shifted towards less advantaged groups. Accounting for this shift, we find evidence of direct improvements in prenatal care and pregnancy-related health (reduced gestational diabetes and hypertension).

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29 августа, 16:11

Income and Poverty in the COVID-19 Pandemic -- by Jeehoon Han, Bruce D. Meyer, James X. Sullivan

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This paper addresses the economic impact of the COVID-19 pandemic by providing timely and accurate information on the impact of the current pandemic on income and poverty to inform the targeting of resources to those most affected and assess the success of current efforts. We construct new measures of the income distribution and poverty with a lag of only a few weeks using high frequency data from the Basic Monthly Current Population Survey (CPS), which collects income information for a large, representative sample of U.S. families. Because the family income data for this project are rarely used, we validate this timely measure of income by comparing historical estimates that rely on these data to estimates from data on income and consumption that have been used much more broadly. Our results indicate that at the start of the pandemic, government policy effectively countered its effects on incomes, leading poverty to fall and low percentiles of income to rise across a range of demographic groups and geographies. Simulations that rely on the detailed CPS data and that closely match total government payments made show that the entire decline in poverty that we find can be accounted for by the rise in government assistance, including unemployment insurance benefits and the Economic Impact Payments. Our simulations further indicate that of those losing employment the vast majority received unemployment insurance, though this was less true early on in the pandemic and receipt was uneven across the states, with some states not reaching a large share of their out of work residents.

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29 августа, 16:11

When Tariffs Disturb Global Supply Chains -- by Gene M. Grossman, Elhanan Helpman

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We study unanticipated tariffs on imports of intermediate goods in a setting with firm-to-firm supply relationships. Firms that produce differentiated products conduct costly searches for potential input suppliers and negotiate bilateral prices with those that pass a reservation level of match productivity. Global supply chains are formed in anticipation of free trade. Once they are in place, the home government surprises with an input tariff. This can lead to renegotiation with initial suppliers or new search for replacements. We identify circumstances in which renegotiation generates improvement or deterioration in the terms of trade. The welfare implications of a tariff are ambiguous in this second-best setting, but plausible parameter values suggest a welfare loss that rises rapidly at high tariff rates.

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29 августа, 16:11

Data-intensive Innovation and the State: Evidence from AI Firms in China -- by Martin Beraja, David Y. Yang, Noam Yuchtman

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Data-intensive technologies, like AI, are increasingly widespread. We argue that the direction of innovation and growth in data-intensive economies may be crucially shaped by the state because: (i) the state is a key collector of data and (ii) data is sharable across uses within firms, potentially generating economies of scope. We study a prototypical setting: facial recognition AI in China. Collecting comprehensive data on firms and government procurement contracts, we find evidence of economies of scope arising from government data: firms awarded contracts providing access to more government data produce both more government and commercial software. We then build a directed technical change model to study the implications of government data access for the direction of innovation, growth, and welfare. We conclude with three applications showing how data-intensive innovation may be shaped by the state: both directly, by setting industrial policy; and indirectly, by choosing surveillance levels and privacy regulations.

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29 августа, 16:11

On Socializing and Social Distancing in Markets: Implications for Retail Prices, Store-level Consumer Density, and Disease Transmission -- by Ricardo Lagos

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I generalize the "noisy search" model of Burdett and Judd (1983) to settings where individual buyers have preferences over the number of other buyers who visit the same seller as them. I consider a version in which buyers have a preference for social distancing derived from the risk of contracting a disease from other buyers, and use it to study the two-way equilibrium interaction between supply-side considerations (such as the distribution of prices posted by sellers) and individual buyers' behavioral responses to the risk of contagion. I find that the price response to the buyers' shift toward social distancing can be an important determinant of the degree to which buyers' individual behavioral responses to the risk of contagion can mitigate the spread of the disease.

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29 августа, 16:11

Gender and Culture -- by Paola Giuliano

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This paper reviews the literature on gender and culture. Gender gaps in various outcomes (competitiveness, labor force participation, and performance in mathematics, amongst many others) show remarkable differences across countries and tend to persist over time. The economics literature initially explained these differences by looking at standard economic variables such as the level of development, women’s education, the expansion of the service sector, and discrimination. More recent literature has argued that gender differences in a variety of outcomes could reflect underlying cultural values and beliefs. This article reviews the literature on the relevance of culture in the determination of different forms of gender gap. I examine how differences in historical situations could have been relevant in generating gender differences and the conditions under which gender norms tend to be stable or to change over time, emphasizing the role of social learning. Finally, I review the role of different forms of cultural transmission in shaping gender differences, distinguishing between channels of vertical transmission (the role of the family), horizontal transmission (the role of peers), and oblique transmission (the role of teachers or role models).

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29 августа, 16:11

The Economic Impact of Migrants from Hurricane Maria -- by Giovanni Peri, Derek Rury, Justin C. Wiltshire

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We examine the economic impact of the large migration of Puerto Ricans to Orlando after Hurricane Maria. Using a synthetic control approach, we find that employment in Orlando increased, especially in construction and retail, and find positive aggregate labor market effects for non-Hispanic and less-educated workers. While we find that earnings for these workers decreased slightly in construction, this was balanced by earnings growth in retail and hospitality. These results are consistent with small negative impacts on earnings in sectors exposed to a labor supply shock, offset by positive effects in sectors impacted by an associated positive consumer demand shock.