Innovation matters because it drives economic growth, increases profits, and can often make consumers better off. Innovating firms are sometimes taken over by incumbents, typically while the innovating firm remains in the early stages of product development. Economists have traditionally viewed these deals quite positively as a routine part of overall growth. Established firms which […]
Taxation and Innovation in the Twentieth Century
How sensitive are inventors to changes in tax rates? This is a critical and controversial question in public policy given the centrality of the tax system to the structure of incentives in the real economy. While targeted tax policies, such as R&D tax credits, can spur innovation, our work focuses on whether general personal and […]
Tackling Youth Unemployment: Evidence from a Labor Market Experiment in Uganda
Motivation: youth unemployment as a global challenge Young people face a higher risk of unemployment than adults in all countries of the world (ILO 2020). Understanding which active labor market policies are effective at facilitating the transition of youth into remunerative employment is thus critical to ensure global economic and social stability. Nowhere is the […]
How Should R&D Procurement Be Structured?
Many buyers, such as firms and government agencies, acquire products that are not commercially available — from customized parts for automobiles or airplanes to major weapons systems with novel capabilities. Suppliers who want to compete for these procurement contracts must engage in costly R&D to design and develop the relevant products. Accordingly, the potential suppliers […]
Effects of vertical mergers on competition: evidence from the carbonated drinks industry
The competitive impacts of vertical mergers are a long-standing question in antitrust economics. A recent wave of vertical mergers has reinvigorated the academic and policy debate on enforcement, and the discussion is far from settled. An example of this is that US antitrust authorities presented new vertical merger guidelines in 2020, but the Federal Trade […]
Minimum Wages and Racial Inequality
Last summer’s mass mobilization for racial justice sparked debates around how to combat entrenched racial inequality in the United States. Recent corporate diversity initiatives, while a step in the right direction, are not sufficient to topple structural racism in the economy. One of the most striking dimensions of inequality in the United States is the […]
US immigration: effects on wages, internal migration, and welfare
Immigration has been a central political debate in the United States for decades, in part because of public concerns about its magnitude and its composition. For example, in the early 2000s, around 1.25 million immigrants arrived each year (Card, 2009). The share of immigrants in the US working-age population increased from 10% in 1990 to […]
Kidney Exchange: An Operations Perspective
Kidney failure is a leading cause of death around the world. The best treatment is transplantation, but no country is presently able to supply all the transplants required by its patient population. In the U.S. and many other countries, most transplants today come from deceased donors. Another source of kidneys for transplantation is from healthy […]
Competitive labor markets boost wage growth
A combination of empirical facts and economic theory suggest rising employer concentration contributed to wage stagnation in industrialized economies. Economic theory shows how labor market concentration can suppress wages by reducing workers’ bargaining leverage vis-à-vis powerful employers. Empirical evidence suggests that labor markets have become more concentrated since the late 20th century, shifting from a […]
Earnings Dynamics, Changing Job Skills, and STEM careers
The US labor market is particularly dynamic for Science, Technology, Engineering, and Math (STEM) jobs, with new technologies proliferating throughout workplaces every year. This technological change is the engine of long-run productivity growth and rising living standards. In the shorter run, however, workers in technology-intensive occupations must constantly learn on the job, or risk becoming […]
