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20 марта, 16:17

Revising Infant Mortality Rates for the Early 20th Century United States -- by Katherine Eriksson, Gregory T. Niemesh, Melissa Thomasson

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Accurate vital statistics are required to understand the evolution of racial disparities in infant health and the causes of rapid secular decline in infant mortality during the early twentieth century. Unfortunately, infant mortality rates prior to 1950 suffer from an upward bias stemming from a severe underregistration of births. At one extreme, African-American births in Southern states went unregistered at the rate of 15 to 25 percent. In this paper, we construct improved estimates of births and infant mortality in the United States for the 1915-1940 period using recently released complete count decennial census microdata combined with the counts of infant deaths from published sources. We check the veracity of our estimates with a major birth registration study completed in conjunction with the 1940 Decennial Census, and that the largest adjustments occur in states with less complete birth registration systems. An additional advantage of our census-based estimation method is the extension back of the birth and infant mortality series for years prior to published estimates of registered births, enabling previously impossible comparisons and estimations. Finally, we show that underregistration can bias effect estimates even in a panel setting with specifications that include location fixed effects and place-specific linear time trends.

20 марта, 16:17

Annuity Options in Public Pension Plans: The Curious Case of Social Security Leveling -- by Robert L. Clark, Robert G. Hammond, Melinda S. Morrill

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Social Security Leveling is an annuity option that allows participants to receive a level income before and after age 62. The retiree receives a larger pension benefit prior to age 62, but then the pension benefit is lowered at age 62 when the individual is expected to claim Social Security benefits. This option is not uncommon in public pension plans, yet little is known about how this option is used in practice and its impact on well-being in retirement. Our study uses a combination of administrative records and survey data from recent North Carolina public sector retirees. We find that one-third of all retirees selecting a single life annuity between 2009 and 2014 opted for Social Security Leveling. The evidence suggests that individuals are choosing this option in a way that is consistent with their stated preferences and a consumption smoothing motive. However, we also see higher rates of ex post "regret" in the annuity choice among those choosing the level income option.

Выбор редакции
20 марта, 16:17

Characterizing Global Value Chains: Production Length and Upstreamness -- by Zhi Wang, Shang-Jin Wei, Xinding Yu, Kunfu Zhu

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We develop a new set of country-sector level indicators of Global Value Chains (GVCs) characteristics in terms of average production length, and relative "upstreamness" on a production network, which we argue are better than the existing ones in the literature. We distinguish production activities into four types: those whose value added is both generated and absorbed within the country, those whose value-added crosses borders only once for consumption, those whose value added crosses borders only once for production, and those whose value added crosses borders more than once. Based on such an accounting framework, we further decompose total production length into different segments. Using these measures, we characterize cross-country production sharing patterns and their evolution for 56 sectors and 44 countries over 2000-2014. While the production chain has become longer for the world as a whole, there are interesting variations across countries and sectors.

20 марта, 16:17

The Surprising Pass-Through of Solar Subsidies -- by Jacquelyn Pless, Arthur A. van Benthem

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We estimate the pass-through of solar energy subsidies to solar system prices. Rich micro-level transaction and subsidy data from California indicate that pass-through is remarkably high and differs substantially for consumers who buy versus lease solar systems. Buyers capture nearly the full subsidy, while there is more-than-complete pass-through to lessees. We formalize pass-through over-shifting as an under-utilized test for market power that can also be applied in other contexts. We rule out alternative explanations for over-shifting and conclude that our estimates provide evidence for imperfectly competitive solar markets. Our findings have implications for the distributional effects of energy subsidies.

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20 марта, 16:17

Does Quebec's Subsidized Child Care Policy Give Boys and Girls an Equal Start? -- by Michael J. Kottelenberg, Steven F. Lehrer

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Although an increasing body of research promotes the development of universal early education and care programs, little is known about the extent to which these programs affect gender gaps in academic achievement and other developmental outcomes. Analyzing the introduction of universal highly-subsidized child care in Quebec, we first demonstrate that there are no statistically significant gender differences in the average effect of access to universal child care on child outcomes. However, we find substantial heterogeneity in policy impacts on the variance of developmental and behavioral scores across genders. Additionally, our analysis reveals significant evidence of differential parenting practices by gender in response to the introduction of the policy. The analysis is suggestive that the availability of subsidized child care changed home environments disproportionately, and may be responsible for the growing gender gaps in behavioral outcomes observed after child care is subsidized.

Выбор редакции
20 марта, 16:17

Is the Internet Causing Political Polarization? Evidence from Demographics -- by Levi Boxell, Matthew Gentzkow, Jesse M. Shapiro

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We combine nine previously proposed measures to construct an index of political polarization among US adults. We find that the growth in polarization in recent years is largest for the demographic groups least likely to use the internet and social media. For example, our overall index and eight of the nine individual measures show greater increases for those older than 75 than for those aged 18-39. These facts argue against the hypothesis that the internet is a primary driver of rising political polarization.

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20 марта, 16:17

The Impact of Information Technology on the Diffusion of New Pharmaceuticals -- by Kenneth J. Arrow, Kamran Bilir, Alan T. Sorensen

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How does information affect the diffusion of innovations? This paper evaluates the influence of physicians' access to detailed drug information on their decisions about which products to prescribe. Combining data on prescriptions and use of a point-of-care electronic drug reference database for over 125,000 individual U.S. physicians, we find that those using the reference prescribe a significantly more diverse set of products, are faster to begin prescribing new generic drugs, and also have a greater propensity to prescribe generics in general. Notably, physicians using the reference database are not faster to prescribe new branded drugs. Given that a new generic drug resembles its branded equivalent clinically, these results are consistent with database users responding primarily to the increased accessibility of non-clinical information such as drug price and insurance formulary data; the results also suggest improvements to physician information access could have important implications for the costs and efficiency of medical care. We address possible selection effects in physician types by relying on within-doctor variation and an instrument for adoption timing that is based on the marketing strategy of the drug reference firm.

Выбор редакции
20 марта, 16:17

Memory, Attention, and Choice -- by Pedro Bordalo, Nicola Gennaioli, Andrei Shleifer

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We present a theory in which the choice set cues a consumer to recall a norm, and surprise relative to the norm shapes his attention and choice. We model memory based on Kahana (2012), where past experiences that are more recent or more similar to the cue are recalled and crowd out others. We model surprise relative to the norm using our salience model of attention and choice. The model predicts unstable and inconsistent behavior in new contexts, because these are evaluated relative to past norms. Under some conditions, repeated experience causes norms to adapt, inducing stable - sometimes rational - behavior across different contexts. We test some of the model's predictions using an expanded data set on rental decisions of movers between US cities first analyzed by Simonsohn and Loewenstein (2006).

20 марта, 16:17

Corporate Culture: Evidence from the Field -- by John R. Graham, Campbell R. Harvey, Jillian Popadak, Shivaram Rajgopal

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Does corporate culture matter? Can differences in corporate culture explain why similar firms diverge with one succeeding and the other failing? To answer these questions, we use a novel survey and interview-based analysis of 1,348 North American firms. Over half of senior executives believe that corporate culture is a top-three driver of firm value and 92% believe that improving their culture would increase their firm's value. Surprisingly, only 16% believe their culture is where it should be. Executives link culture to ethical choices (compliance, short-termism), innovation (creativity, taking appropriate risk), and value creation (productivity, acquisition premia). We assess these links within a framework that implies cultural effectiveness depends on interactions between cultural values, norms, and formal institutions. Our evidence suggests that cultural norms are as important as stated values in achieving success.

20 марта, 16:17

Myopia and Discounting -- by Xavier Gabaix, David Laibson

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We assume that perfectly patient agents estimate the value of future events by generating noisy, unbiased simulations and combining those signals with priors to form posteriors. These posterior expectations exhibit as-if discounting: agents make choices as if they were maximizing a stream of known utils weighted by a discount function, D(t). This as-if discount function reflects the fact that estimated utils are a combination of signals and priors, so average expectations are optimally shaded toward the mean of the prior distribution, generating behavior that partially mimics the properties of classical time preferences. When the simulation noise has variance that is linear in the event's horizon, the as-if discount function is hyperbolic, D(t)=1/(1+a t). Our agents exhibit systematic preference reversals, but have no taste for commitment because they suffer from imperfect foresight, which is not a self-control problem. In our framework, agents that are more skilled at forecasting (e.g., those with more intelligence) exhibit less discounting. Agents with more domain-relevant experience exhibit less discounting. Older agents exhibit less discounting (except those with cognitive decline). Agents who are encouraged to spend more time thinking about an intertemporal tradeoff exhibit less discounting. Agents who are unable to think carefully about an intertemporal tradeoff - e.g., due to cognitive load - exhibit more discounting. In our framework, patience is highly unstable, fluctuating with the accuracy of forecasting.

20 марта, 16:17

Reevaluating Agricultural Productivity Gaps with Longitudinal Microdata -- by Joan Hamory Hicks, Marieke Kleemans, Nicholas Y. Li, Edward Miguel

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Recent research has pointed to large gaps in labor productivity between the agricultural and non-agricultural sectors in low-income countries, as well as between workers in rural and urban areas. Most estimates are based on national accounts or repeated cross-sections of micro-survey data, and as a result typically struggle to account for individual selection between sectors. This paper contributes to this literature using long-run individual-level panel data from two low-income countries (Indonesia and Kenya). Accounting for individual fixed effects leads to much smaller estimated productivity gains from moving into the non-agricultural sector (or urban areas), reducing estimated gaps by over 80 percent. Per capita consumption gaps between non-agricultural and agricultural sectors, as well as between urban and rural areas, are also close to zero once individual fixed effects are included. Estimated productivity gaps do not emerge up to five years after a move between sectors, nor are they larger in big cities. We evaluate whether these findings imply a re-assessment of the current conventional wisdom regarding sectoral gaps, discuss how to reconcile them with existing cross-sectional estimates, and consider implications for the desirability of sectoral reallocation of labor.

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20 марта, 16:17

Banking on Trust: How Debit Cards Enable the Poor to Save More -- by Pierre Bachas, Paul Gertler, Sean Higgins, Enrique Seira

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Trust is an essential element of economic transactions, but trust in financial institutions is low, especially among the poor. Debit cards provide not only easier access to savings, but also a mechanism to monitor bank account balances and thereby build trust in a financial institution. We study a natural experiment in which debit cards are rolled out to beneficiaries of a Mexican conditional cash transfer program whose benefits are already directly deposited into a savings account. Using administrative data on over 340,000 bank accounts over four years, we find that prior to receiving a debit card, beneficiaries do not save in these accounts. Beneficiaries then begin to increase their savings after 9 to 12 months with the card. During this initial stagnant period, they use the card to check their balances frequently, and the number of checks decreases over time as their reported trust in the bank increases. After 1 to 2 years, the debit card causes the savings rate to increase by 3 to 5 percent of income. Using household survey panel data, we find that this effect represents an increase in overall savings.