Do jobseekers benefit from tailored advice about suitable occupations provided by employment agencies? This column reports the results of a randomized field experiment in which a group of unemployed people received suggestions for alternative occupations based on labor market statistics. The researchers find that the information stimulates the recipients to broaden their search to a more diverse set of occupations. What’s more, they receive a significantly larger number of invitations to job interviews, which is concentrated among those with longer unemployment. These findings suggest that jobseekers find it difficult to access relevant labor market information themselves, and that they can be offered valuable tailored advice in a low-cost, automated way.
Subsidizing health insurance for low-income adults: evidence from Massachusetts
How much are low-income people willing to pay for health insurance – and what are the implications for our understanding of health insurance markets and the role of subsidies? This research investigates these questions drawing on subsidy variation in Massachusetts’ health insurance exchange for low-income individuals.
Understanding the Average Impact of Microcredit
The global microloan portfolio is now worth over 102 billion dollars and is growing yearly. This research estimates the impact of the policy and the extent to which this impact is different across different contexts. It finds that overall, the best existing evidence suggests that the average impact of these loans is small and that in the future, it may be beneficial to seek alternative approaches to improve the lives of poor households in the developing world.
Nominal wage rigidity in village labor markets: evidence from India
Markets for daily wage labor are ubiquitous in poor countries, providing employment for hundreds of millions of workers in India alone. In an exploration of how nominal wages in these markets respond to changing economic conditions, this research finds strong evidence of limited downward adjustment in the face of a negative shock. A key part of the explanation lies in perceptions that wage cuts are unfair and reduce worker productivity. The higher unemployment that results from nominal wage rigidity could be addressed by counter-cyclical employment programs, and by modest levels of inflation that allow real wages to adjust in a way that avoids too much harm to workers.
Market power and the Laffer curve
Arthur Laffer, who was recently awarded the Presidential Medal of Freedom, is famous for sketching an inverted U-shaped diagram of the supposed trade-off between tax rates and tax revenues. The Laffer curve helps to characterize how firms as well as consumers respond to tax changes, and this research uses it to evaluate whether commodity taxes are an effective tool for financing government expenditure. Applying the idea to taxation of distilled spirits in Pennsylvania, where retail sales only take place through a state-run monopoly, the study shows how firms with market power change their pricing when taxes are cut and what that implies for state tax revenues.
How management practices drive firms’ performance in the long run: evidence from the Marshall Plan
Economists have long speculated about why there are large differences in productivity across both firms and countries. One explanation is that they reflect variation in management practices, which raises the question of whether management training can improve firms’ performance. This research examines the long-run effects of such training, using evidence from the US Productivity Program […]
The value of international business relationships: insights from Kenya’s rose exporters
Globalization gives producers in developing countries the opportunity to serve larger, richer, and more demanding foreign markets. But between these producers and potential consumers in the West sit large buyers, such as Carrefour, H&M, Tesco, and Walmart, with whom business relationships must be negotiated. Due to the large opportunity costs of time and shelf space, […]
Taxing family income: the effects on marriage and how time and resources are shared within households
In all OECD countries, the central government levies a tax on personal income, with the associated revenues constituting a very significant share of overall government revenue. There is much debate and disagreement among both policy-makers and economists about how incomes should be taxed. This is reflected in important differences in how governments tax personal income […]
How do American families spend food benefits?
More than 19 million US households are enrolled in SNAP, the Supplemental Nutrition Assistance Program, which provides monthly benefits to buy groceries at a wide range of retailers. This research tests how recipients’ spending changes after they join the program – and in particular whether SNAP benefits affect their purchases of food by more than an equivalent cash benefit. The results indicate that a family receiving, say, a $200 monthly SNAP benefit can be expected to increase its monthly expenditure on groceries by $100, far more than the $20 expected rise in food spending from a cash benefit of comparable size.
The incentives of centralized school admissions systems
Many school districts have adopted centralized admissions systems to coordinate student assignments. These systems ask students to rank the schools they would like to attend and then use an algorithm to coordinate placement. These algorithms consider student preferences, eligibility criteria and school capacities. In order to better understand student preferences and the performance of various systems, this study develops a general methodology to analyze the reports on student preferences submitted to school choice systems.
