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AN NBER PUBLICATION ISSUE: No. 9, September 2012

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
In the lowest income category ... a $10,000 increase in value increased the relative probability of attending a flagship university by 8.3 percent. In The Effect of Housing Wealth on College Choice: Evidence from the Housing Boom (NBER Working Paper No. 18075), Michael Lovenheim and Lockwood Reynolds find that a $10,000 increase in a family's housing wealth in the four years before they send a child off to college increases the likelihood that that child attends a...

Research Summaries

Article
[There is]... no evidence that tariff and non-tariff barriers rise systematically during cyclic downturns. Conventional wisdom holds that protectionism is counter-cyclic, meaning that tariffs and quotas become more prevalent during recessions. In Protectionism Isn't Counter-Cyclic (Anymore) (NBER Working Paper No. 18062), Andrew Rose shows that while that may have been a valid description in the period before the Second World War, it is now inaccurate. Rose...
Article
An increase of one percentage point in the share of immigrants aged 11-64 in the population increases the probability that natives aged 11-17 eventually complete 12 years of schooling by 0.3 percentage points. In The Impact of Immigration on the Educational Attainment of Natives (NBER Working Paper No. 18047), Jennifer Hunt finds that, contrary to the popular notion that immigrants may have a negative impact on the public education experience of native-born children,...
Article
During the last two recessions, the top 1 percent of earners saw bigger income drops than all other groups. During recessions, most individuals' incomes don't fluctuate much more than they do in good economic times -- the vast majority of wage earners experience the same small ups and down in income that they always do. What changes in an economic contraction are the nature of big fluctuations in income, according to The Nature of Countercyclical Income Risk (NBER...
Article
A 10 percent increase in cigarette prices can reduce the smoking prevalence among youth by around 5 percent. In early 2009, Congress approved a tobacco tax increase of 61.6-cents per pack of 20 cigarettes and similar tax hikes on other tobacco products, such as on smokeless tobacco. The tax increases were to fund the Children's Health Insurance Program, a program that helps states insure low-income children who are not eligible for Medicaid. The overall tobacco tax...
Article
Affiliates in low-tax jurisdictions use trade credit to lend, whereas those in high-tax jurisdictions use trade credit to borrow. International tax rate differences are sizeable and apparent. In general, high rates of taxation increase the cost of capital, reducing investment levels and driving up pre-tax returns. As a result, tax rate differences create incentives to transfer capital from low-tax, low-capital-cost, low-return users to high-tax, high capital-cost,...

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