AN NBER PUBLICATION ISSUE: No. 5, May 2018

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Two studies suggest that an increase in employers' monopsony power is associated with lower wages. Stagnant wages and a declining share of labor income in GDP in recent decades have spawned a number of explanations. These include outsourcing, foreign competition, automation, and the decline of unions. Two new studies focus on another factor that may have affected the relative bargaining position of workers and firms: employer domination of local job markets....

Research Summaries

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Recent enforcement initiatives increased reported capital income by $2.5 to $4 billion annually, yielding between $700 million and $1 billion in tax revenue. In 2008, the United States government launched a number of enforcement initiatives to rein in its residents' use of secret offshore accounts to avoid their tax liabilities. Through several high-profile lawsuits, the U.S. forced a number of Swiss banks, including UBS, the largest Swiss banking institution, to...
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Outstanding sales performance increased the probability that an employee would be promoted, and was associated with sales declines among the new manager's subordinates. In casual conversations, citing a variation of the Peter Principle — the idea that managers tend to "rise to the level of their incompetence" — often draws a chuckle, especially among those who work for incompetent managers. But in Promotions and the Peter Principle (NBER Working Paper No. 24343)...
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Consumers bore most of the costs when expansion of fracking activity stressed the capacity of railroads to transport North Dakota's grain harvest. North Dakota produces between 250 and 300 million bushels of hard red spring wheat each year, about half of the U.S. harvest. It produces 300 to 400 million bushels of corn and 150 to 200 million bushels of soybeans. In Food vs. Fuel? Impacts of Petroleum Shipments on Agricultural Prices (NBER Working Paper No. 23924...
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A 66-year-old worker who works one year longer and claims Social Security one year later sees a 7.75 percent rise in his inflation-adjusted retirement income, 83 percent of which comes from the rise in Social Security benefits. Working a little longer, and postponing the start of Social Security benefits, can raise annual retirement income by as much as a modestly higher saving rate over several decades of work. That's the conclusion of a new study which finds...

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