AN NBER PUBLICATION ISSUE: No. 10, October 2016

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Legislation to help convicts find jobs after release from prison is associated with reduced job-finding prospects for non-offending black and Hispanic young men without college degrees. A person who can't get a job upon release from prison is more likely to break the law again. But employers don't want to hire ex-offenders—particularly those released recently—because as a group they are less prepared for work life, in worse health, and more likely to misbehave...

Research Summaries

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Article
Secondary market buyers of private equity limited partner stakes on average outperform sellers, but the market provides liquidity, enabling sellers to make otherwise impossible portfolio changes. Substantial transactions costs are associated with investing in private equity funds, which are generally illiquid. Investors who wish to sell their positions in these funds tend to bear those transaction costs, according to The Liquidity Cost of Private Equity...
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German consumers' reaction to announcement of a future hike in the value-added tax suggests such announcements could be used to spur buying of durables. In November 2005, the German government announced plans to increase its value-added tax (VAT) from 16 percent to 19 percent in January 2007. The increase was imposed to bring Germany's deficit in line with European Union rules. In The Effect of Unconventional Fiscal Policy on Consumption Expenditure (NBER...
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Historically, the most successful countries in transitioning to renewable energy were those able to handle supply variability through fast-reacting fossil fuel generation systems. Successful development of clean renewable energy requires dealing with the variable nature of renewables. Because peak production of wind and solar energy may not coincide with peak energy demand, particularly for electricity, either energy storage or a backup source of energy supply is...
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Requiring midwives to be licensed reduced maternal mortality significantly, and may have led to modest reductions in nonwhite infant mortality. Debates over occupational licensing of workers, from real estate agents to manicurists to rehabilitation therapists, have tended to focus on the economic effects of such regulations on those getting licenses and on whether licensures increase or decrease costs for consumers. Often overlooked is whether the ostensible...
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Study participants who made a change reported months later that they were "substantially happier" than those who did not. When faced with deciding whether to make a change, people may be too cautious for their own good. So Steven D. Levitt concludes on the basis of a study using social media and the toss of a virtual coin. Levitt presents his findings in Heads or Tails: The Impact of a Coin Toss on Major Life Decisions and Subsequent Happiness (NBER Working Paper...

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