AN NBER PUBLICATION ISSUE: No. 2, February 2014

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
For borrowers with FICO scores below 620, overall fee revenue dropped by more than half after enactment of the CARD Act... In 2009, Congress passed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, which was designed to protect credit card users from hidden or ill-understood borrowing costs. In Regulating Consumer Financial Products: Evidence from Credit Cards (NBER Working Paper No. 19484), Sumit Agarwal, Souphala Chomsisengphet, Neale...

Research Summaries

Article
...state and local government employees aged 60 to 64 are 5.1 percentage points more likely to stop working if they have retiree health benefits than if they do not. Public sector employment in the United States is often characterized as having lower salary levels than private sector employment, in return for which employees enjoy higher job security, greater access to defined benefit pensions, and retiree health insurance that is available at a relatively young...
Article
...there is less R&D investment in drugs that target patient groups with longer commercialization lags, as proxied by higher ... survival rates, for which the effective duration of patent protection is shorter. Patents award innovators a fixed period of market exclusivity, usually 20 years. However, in industries such as the pharmaceutical industry, firms file patents at the time of invention rather than at the time of first sale, so effective patent terms vary...
Article
...allowing students to send a fourth score report to colleges for free not only led them to apply to more colleges, but it also ... increased the likelihood that students would attend a more selective college. A small change in the cost of sending test scores to colleges can have a large impact on the number of schools to which students apply and consequently, students may end up attending more selective colleges, according to Small Differences that Matter: Mistakes...
Article
...[defined contribution] DC money is more volatile and exhibits more flow-performance sensitivity than non-DC money invested at mutual funds. Mutual fund holdings in employer-sponsored defined contribution (DC) plans are an important and growing segment of today's financial markets. Assets in DC plans increased from $1.7 trillion in 1995 to $5.1 trillion in 2012, and at the end of this period DC plans constituted 22 percent of total U.S. mutual fund assets and 27...
Article
...firms that engage in conference call casting experience higher short-term returns, but later suffer negative returns when adverse news is released... A number of laws and regulations govern the timing and type of information disclosed by public companies, as part of an overall effort to create a level playing field for institutional and individual investors. In Playing Favorites: How Firms Prevent the Revelation of Bad News (NBER Working Paper No. 19429), authors...

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