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AN NBER PUBLICATION ISSUE: No. 6, June 2012

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Weak household balance sheets and the resulting aggregate demand shock are the main reasons for historically high unemployment in the U.S. economy. Unemployment rose dramatically during the Great Recession because highly indebted consumers slashed their spending, according to Atif Mian and Amir Sufi writing in What Explains High Unemployment? The Aggregate Demand Channel (NBER Working Paper No. 17830). They find that shocks to household balance sheets account for 4...

Research Summaries

Article
Some households do not have the liquid assets that are needed to cover the costs of bankruptcy filing; receiving tax rebates provided the needed liquidity. Over the past three decades, consumer bankruptcy rates have tripled. As of the late 1990s, nearly 10 percent of American households had declared bankruptcy. In the early years of the last decade, the annual rate of bankruptcy filing among American households was over 1.3 percent. In an attempt to slow the increase...
Article
The same black communities that saw an increase in enfranchisement-driven turnout saw an increase in their share of the state resource pie. The Voting Rights Act of 1965 (VRA) has been called one of the most effective pieces of civil rights legislation in U.S. history. The VRA removed literacy tests as a barrier to black citizens' political participation in seven of eleven southern states. By 1967, black voter registration rates in all southern states exceeded 50...
Article
Firms that make greater use of group incentive pay decrease voluntary turnover by almost 11 percentage points. In Does Linking Worker Pay to Firm Performance Help the Best Firms Do Even Better? (NBER Working Paper No. 17745), co-authors Douglas Kruse, Joseph Blasi, and Richard Freeman find that firms that make greater use of group incentive pay with supportive policies decrease voluntary turnover by almost 11 percentage points. Those same firms also enjoy a higher...
Article
Each day in transit is worth between 0.6 and 2.2 percent of the value of the good. In Time as a Trade Barrier (NBER Working Paper No. 17758), co-authors David Hummels and Georg Schaur study the choice that firms make between delivering their products by air or sea. Delivery times are much shorter for air freight than for ocean freight, but shipping by air is also much more expensive than shipping by sea. Still, a large and growing share of international trade is...
Article
The typical American mathematician whose research most overlapped with that of the Soviets suffered a reduction in productivity after the collapse of the Soviet Union and the emigration of Soviet researchers. In The Collapse of the Soviet Union and the Productivity of American Mathematicians (NBER Working Paper No. 17800), George Borjas and Kirk Doran measure the impact of the influx of renowned Soviet mathematicians on the American (and global) mathematics community...

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