26 February 2013

Reducing Violence in Conflict Zones

Using data covering the first five years of the Iraq war, Eli Berman, Joseph Felter, Jacob Shapiro, and Erin Troland compare the effects of U.S. government spending across several development programs, each with different characteristics. They find that projects that are smaller, that involve professional development expertise, and that are undertaken when troop strength is high have a larger effect on reducing violence. This is consistent with the "hearts and minds" model, which predicts that there will be a reduction in violence if projects are secure and valued by community members, and when their implementation is conditional on citizens' behavior.

25 February 2013

New Evidence on the Middle-Income Trap

Barry Eichengreen, Donghyun Park, and Kwanho Shin analyze data on the world's economies up to the year 2010 and find that growth slowdowns take place, even in fast-growing middle-income countries, at different levels of per capita income. Their evidence suggests that there are two points at which such slowdowns typically occur: at around $11,000 and $15,000 of per capita GDP (expressed in 2005 purchasing power parity dollars). They also find that growth slowdowns are less likely in countries where the population has a relatively high level of secondary and tertiary education and where high-technology products account for a relatively large share of exports.

22 February 2013

Is Okun's Law Still "Fit at Fifty"?

Laurence Ball, Daniel Leigh, and Prakash Loungani ask how well "Okun’s Law" -- which holds that in the short run, when output rises, unemployment falls -- fits the post-1948 experience of the United States and the post-1980 experience of twenty advanced economies. They find that the Okun’s Law relationship is strong and stable in most countries, and that it did not change substantially during the Great Recession. However, the effect of a one percent change in output on the unemployment rate varies substantially across countries, partly because of distinct features of national labor markets.

21 February 2013

Housing Wealth Effects, 1975-2012

Chip Case, John Quigley, and Bob Shiller examine the links between changes in housing wealth, financial wealth, and consumer spending in a sample of U.S. states between 1975 and 2012. They find that declines in house prices stimulated large and significant decreases in household spending, and estimate that a decline in similar size to that of 2005 to 2009 reduces household spending by about 3.5 percent.

20 February 2013

The Effect of Length Limits on Journal Article Submissions

In 2008, the American Economic Review (AER) adopted a page limit policy for submitted articles, and the Journal of the European Economic Association (JEEA) instituted a similar policy in 2009. David Card and Stefano DellaVigna find that authors continued to submit long papers to the AER, later shortening the text and reformatting the papers as needed, but for the JEEA the page length policy led to nearly complete loss of longer manuscripts.

19 February 2013

Job Displacement Has a Negative Effect on Health

Sandra Black, Paul Devereux, and Kjell Salvanes analyze official data on Norwegian men and women, predominantly in their early forties, who lost their job at least once between 1986 and 1999. They study a period from five years before to seven years after the job loss, and find that job displacement had a negative effect on the cardiovascular health of both men and women. They attribute much of the effect to an increase in smoking after job loss.

15 February 2013

Size-Dependent Regulations and Firm Size Distribution

In France, firms with 50 or more employees are more highly regulated than firms with fewer than 50 employees. Focusing on data for the years 1994-2000, François Gourio and Nicolas Roys find that the size distribution of firms is visibly distorted: there are many firms with exactly 49 employees. They estimate that eliminating the regulations would improve the allocation of labor across firms and lead to a productivity gain of around 0.3 percent if the number of firms remained the same.

14 February 2013

Youth Depression and Future Criminal Behavior

Mark Anderson, Resul Cesur, and Erdal Tekin analyze data from the National Longitudinal Study of Adolescent Health -- a nationally representative sample of U.S. seventh-through-twelfth-grade students during the 1994-5 academic year -- and find that adolescent depression does not predict the likelihood of engaging in violent crime or selling illicit drugs. However, adolescents who suffer from depression are more likely to engage in property crime, which the researchers estimate to have an economic cost of at least $200 million dollars annually.

13 February 2013

China's Link to the Decline in U.S. Manufacturing Employment

Justin Pierce and Peter Schott find that there was a sharp drop in U.S. manufacturing employment after the United States granted permanent normal trade relations to China in late 2000. The industries in which the threat of tariff hikes declined most experienced the largest employment losses. This occurred through diminished job creation, increased job destruction, and a substitution away from low-skill workers. These policy-related employment losses coincided with an overall increase in U.S. imports from China and the number of U.S.-China importer-exporter pairs.

12 February 2013

Effects of Algebra Classes for Eighth Graders in North Carolina

The ten largest school districts in North Carolina staggered the adoption of a curriculum reform that offered algebra to eighth graders. Past practice had offered algebra no earlier than ninth grade. Charlie Clotfelter, Helen Ladd, and Jake Vigdor find that, overall, taking algebra in eighth grade increases the probability that students will pass Algebra I by tenth grade, but it depresses students' performance on the Algebra I test and decreases the likelihood that they will pass Geometry by eleventh grade. These effects vary across groups of students, with particularly strong negative effects among students who were in the bottom 60 percent of the achievement range in prior years.
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