12 November 2012
analyzes the labor market effects over time of recent changes in safety net programs. Because people from the middle and above-middle parts of the skill distribution can become eligible overnight for safety net programs such as unemployment insurance and SNAP (formerly known as food stamps) merely by becoming unemployed for a period of time, these safety net program rules even affect the incentives for skilled people to seek and retain work. Mulligan finds that wide swaths of the skill distribution saw their marginal tax rates increase by more than 5 percentage points between 2007 and 2009, and this increase was most dramatic for unmarried household heads.
9 November 2012
Using the Chicago Board Options Exchange Volatility Index (VIX) -- a forward-looking indicator of the expected volatility of the Standard and Poor's 500 Stock Index -- as a measure of aggregate uncertainty, Susanto Basu
and Brent Bundick
study how uncertainty affects aggregate economic activity. They conclude that increased uncertainty about the future may have played a role in worsening the Great Recession. The dramatic increase in uncertainty during the autumn of 2008 was one of the factors that contributed to the large and persistent decline in output starting at that time.
8 November 2012
, Stephan Meier
, and Dina Pomeranz
conducted an experiment in Chile with 2,700 micro-entrepreneurs who were given the opportunity to open a formal savings account and then randomly assigned to one of three groups. In the control group, individuals received only the basic savings account; the "Self-Help Peer Group Treatment" gave participants the option to announce their savings commitment publicly, and then to be monitored in weekly meetings; a "High Interest Rate" group was offered a 5 percent real interest rate (instead of the 0.3 percent in the basic account). The researchers find that participants assigned to the Peer Group Treatment make deposits into their savings account 3.5 times more often, and their average savings balance is almost twice that of the control group. In a second related experiment in which participants were assigned to one of two types of weekly feedback text messages or to a control group, the results show that holding people accountable through the weekly feedback messages increases savings almost as much as self-help peer groups, even without any physical meetings.
7 November 2012
, Lionel Fontagné
, Nicholas Sly
, and Farid Toubal
find strong evidence from M&A activity in France over the period 1999-2006 that foreign multinationals seek firms with strong prior export behavior and recent productivity losses. Two seemingly opposing incentives simultaneously motivate global M&A activity: on one hand, in a world where trade costs vary across locations, the formation of export networks creates cost synergies between firms in different locations. Firms with high initial levels of productivity are better able to establish these costly export networks, which makes them more attractive targets for takeover by multinationals, especially those located far from the domestic market. On the other hand, firm productivities change over time, and when a domestic firm's performance suffers, it may be more profitable to transfer control of its assets to new management. Thus, productivity losses among target firms provide an opportunity for multinational acquirers to obtain desired assets at relatively lower costs.
6 November 2012
The profession of "pharmacist" is probably the most egalitarian of all U.S. professions today. More women than men now work as pharmacists; they are relatively well paid; and they experience only a small gender earnings gap and less earnings dispersion than in many other occupations. Using surveys of pharmacists for 2000, 2004, and 2009 and data from the American Community Surveys and the Current Population Surveys, economists Claudia Goldin
and Larry Katz
explore why the substantial entrance of women into this profession was associated with an increase in their earnings relative to male pharmacists. Their results suggest that the growth of large national pharmacy chains and hospitals, and the related decline in independent pharmacies, were keys to the profession becoming more family-and female-friendly.