Adults who participated in the Food Stamp Program, renamed the Supplemental Nutrition Assistance Program (SNAP) in 2008, as children are healthier and better off financially than poverty-stricken families who did not have access to the program, according to findings in joint work with Douglas Almond and Diane Schanzenbach (this paper and a companion paper Almond, et al. 2011).
When new technologies enter the market, older products are often removed from store shelves. This article asks whether such product elimination is socially efficient. It studies this question in the context of the American Home PC market between 2001 and 2004. Empirically, the paper documents consumer heterogeneity and then studies how the major innovation of the time—Intel’s Pentium M™ processor—contributed to social welfare.
Urban land development in China is occurring on a massive scale and corruption is prevalent in the real estate sector through side deals between buyers and city officials. A recent study by Cai, Henderson, and Zhang (2013, RAND Journal of Economics) provides indirect evidence of this corruption through the use of two different types of auctions. The authors argue that the practices of city officials overseeing land sales amount to losses in city revenue in the hundreds of billions of dollars.
Developing economies are typically characterized by low tax revenue and widespread tax evasion. This research shows that in such environments, it can be better to tax firms based on turnover rather than profits: while turnover taxes are known to distort production decisions, they are more difficult to evade than profit taxes. Analyzing administrative tax records from Pakistan, the study shows that the use of production-inefficient turnover taxes sharply reduces tax evasion and increases tax revenue.
The landmark US welfare reform of 1996 provided strong incentives for poor women to work while receiving assistance – but it also provided incentives for some women to reduce their earnings to qualify for benefits. This research develops a new approach to detecting this ‘welfare opt-in’ effect and uses it to analyze data from a large randomized evaluation of welfare reform in Connecticut: the “Jobs First” program.
Improved access to foreign inputs has increased firms’ productivity in a number of countries. Analysing data for Hungary, this research explores the channels through which imported inputs boost productivity and finds that the positive effects are particularly strong for foreign-owned firms.
What’s the best way to match new doctors to medical residency programs? The medical residency matching problem is solved by a centralized coordination system that pairs market participants according to their preferences. This paper examines the evidence for the claim that the matching system depresses salaries and finds that an alternative explanation – low salaries represent an implicit tuition fee for medical training – is more promising.
Migration from rural areas of India to the city is surprisingly low compared with other large developing countries, leaving higher paying job opportunities unexploited. This research shows that well-functioning rural insurance networks are in part responsible for this misallocation in the labor market, creating incentives that keep adult males in the village. Policies that provide private credit to wealthy households or government safety nets to poor households would encourage greater rural-urban migration but they could also have unintended distributional consequences.
How long should we expect the labor market transition following a trade liberalization episode to last? To what extent will the potential gains from trade be reduced due to the slow adjustment of the economy to the new trade equilibrium? What are the characteristics of the workers who will lose the most from trade liberalization?
By regulating when divorce can occur and how resources are divided when it does, divorce laws can affect people’s behavior and their wellbeing both during marriage and at divorce. Household survey data from the United States shows that the introduction of unilateral divorce in states that imposed an equal division of property is associated with higher household savings and lower female employment rates among couples that are already married. This paper develops a model of household behavior to account for these effects and study how current laws can affect the wellbeing of different household members.