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AN NBER PUBLICATION ISSUE: No. 11, November 2008

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
There is a two-thirds chance that state pension plans will realize a shortfall in 15 years. The expected conditional shortfall is almost $1.5 trillion in 2005 dollars. The extent to which public pensions are underfunded has been obscured by governmental accounting rules, which allow pension liabilities to be discounted at expected rates of return on pension assets, according to NBER researchers Robert Novy-Marx and Joshua Rauh. In The Intergenerational Transfer of...

Research Summaries

Federal taxes lower long-run employment levels in high-wage areas by 15 percent. In the United States, workers in cities offering above-average nominal wages pay 30 percent more in federal taxes than otherwise identical workers in cities offering below-average wages. In The Unequal Geographic Burden of Federal Taxation (NBER Working Paper No. 13995), author David Albouy estimates that federal taxes lower long-run employment levels in high-wage areas by 15 percent,...
Women who resided in communities with fluoridated water during childhood earn approximately 4 percent more than women who did not, but [there is] no effect of fluoridation for men. Is good oral health valued in the labor market? In The Economic Value of Teeth (NBER Working Paper No. 13879), co-authors Sherry Glied and Matthew Neidell exploit variation in access to fluoridated water during childhood -- protecting children from cavities and possible tooth loss...
[A]uthorities seem reluctant to be bound by the iron triangle of international finance that holds only two of the following three can be achieved: freely mobile capital, fixed exchange rates, and monetary autonomy. As global capital flows have intensified over the past decade, many emerging market nations have tried to keep their currencies from appreciating against the U.S. dollar. They use a wide variety of tools to accomplish that feat. By trying to maintain...
The fall in the net barter terms of trade in Mexico, Brazil, and Venezuela implied a rise (or at the very least, no fall) in the relative price of imported manufactured goods, a trend that obviously favored domestic industry there. Brazil and Mexico enjoyed faster industrialization after 1870 than did the rest of Latin America and much of what we now call the Third World. In Was It Prices, Productivity or Policy? The Timing and Pace of Latin American Industrialization...

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