In this article, we first examine the pertinent differences between electric vehicles (EVs) and internal combustion engine (ICE) vehicles and then address the question of how the rapid growth of EVs might impact the prevailing geography of automotive production in North America—which comprises Canada, Mexico, and the United States.1 We suggest that the geography of battery electric vehicle (BEV) production is influenced by factors such as agglomeration economics and economies of scale that also underlie the location of ICE vehicle production.
{"title":"North America’s rapidly growing electric vehicle market: Implications for the geography of automotive production","authors":"T. Klier, James M. Rubenstein","doi":"10.21033/ep-2022-5","DOIUrl":"https://doi.org/10.21033/ep-2022-5","url":null,"abstract":"In this article, we first examine the pertinent differences between electric vehicles (EVs) and internal combustion engine (ICE) vehicles and then address the question of how the rapid growth of EVs might impact the prevailing geography of automotive production in North America—which comprises Canada, Mexico, and the United States.1 We suggest that the geography of battery electric vehicle (BEV) production is influenced by factors such as agglomeration economics and economies of scale that also underlie the location of ICE vehicle production.","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":"51 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84943249","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In many countries, employers are forced to make large severance payments to workers when their employment is terminated for reasons other than worker misconduct.1 Actually, it is not uncommon for severance payments to exceed 20 days of pay per year worked, with a cap of one year of wages (for example, in Argentina, Italy, and Spain). In addition, employers often face substantial legal costs when they terminate their workers. Economic theory indicates that these firing costs have large effects on the hiring and firing decisions of firms. Not surprisingly, in an effort to economize their immediate costs, firms respond to the firing costs by reducing their firing rates. However, because they are afraid of the costs that they will have to face in the future, firms also respond by reducing their hiring rates. The net effects on their employment levels depend on whether the decrease in firing rates exceeds the decrease in hiring rates. While their effects on average employment are ambiguous, firing costs generate a clear misallocation of labor across firms. The reason is that firms that receive positive shocks do not expand as much as they should and firms that receive negative shocks do not contract as much as they should. Perhaps because of this misallocation of resources across firms, governments have introduced legislation attempting to improve the efficiency of their countries’ labor markets. One common way that governments have done this is through the introduction of temporary employment contracts of fixed lengths. These temporary contracts effectively provide a period of time during which workers can be fired at no costs. If a temporary worker is retained after their temporary contract ends, they become a permanent worker subject to regular firing costs. The purpose of this article is to provide a quantitative assessment of temporary contracts. In particular, we are interested in determining how effectively temporary contracts of observed length bring the economy close to laissez-faire outcomes (that is, to the economic outcomes that would be obtained under zero firing costs to firms).
{"title":"Quantitative effects of temporary employment contracts in Spain","authors":"F. Álvarez, Marcelo Veracierto","doi":"10.21033/ep-2022-1","DOIUrl":"https://doi.org/10.21033/ep-2022-1","url":null,"abstract":"In many countries, employers are forced to make large severance payments to workers when their employment is terminated for reasons other than worker misconduct.1 Actually, it is not uncommon for severance payments to exceed 20 days of pay per year worked, with a cap of one year of wages (for example, in Argentina, Italy, and Spain). In addition, employers often face substantial legal costs when they terminate their workers. Economic theory indicates that these firing costs have large effects on the hiring and firing decisions of firms. Not surprisingly, in an effort to economize their immediate costs, firms respond to the firing costs by reducing their firing rates. However, because they are afraid of the costs that they will have to face in the future, firms also respond by reducing their hiring rates. The net effects on their employment levels depend on whether the decrease in firing rates exceeds the decrease in hiring rates. While their effects on average employment are ambiguous, firing costs generate a clear misallocation of labor across firms. The reason is that firms that receive positive shocks do not expand as much as they should and firms that receive negative shocks do not contract as much as they should. Perhaps because of this misallocation of resources across firms, governments have introduced legislation attempting to improve the efficiency of their countries’ labor markets. One common way that governments have done this is through the introduction of temporary employment contracts of fixed lengths. These temporary contracts effectively provide a period of time during which workers can be fired at no costs. If a temporary worker is retained after their temporary contract ends, they become a permanent worker subject to regular firing costs. The purpose of this article is to provide a quantitative assessment of temporary contracts. In particular, we are interested in determining how effectively temporary contracts of observed length bring the economy close to laissez-faire outcomes (that is, to the economic outcomes that would be obtained under zero firing costs to firms).","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":"13 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73094896","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The author argues that while models of bubbles seem like a natural framework for studying asset booms, whether an asset is a bubble may not matter in determining if policymakers should intervene against the boom to mitigate the fallout should the boom turn into a bust.
{"title":"Confessions of a repentant bubble theorist","authors":"Gadi Barlevy","doi":"10.21033/ep-2022-3","DOIUrl":"https://doi.org/10.21033/ep-2022-3","url":null,"abstract":"The author argues that while models of bubbles seem like a natural framework for studying asset booms, whether an asset is a bubble may not matter in determining if policymakers should intervene against the boom to mitigate the fallout should the boom turn into a bust.","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":"6 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75318140","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A hallmark of every developed nation is the provision of a social safety net-a collection of public programs that deliver aid to the poor. Because of their higher rates of poverty, children are often a major beneficiary of safety net programs. Countries vary considerably in both the amount of safety net aid to children and the design of their programs. The United States provides less aid to families with children as a share of GDP (0.6 percent) than most countries: Among 37 OECD countries, only Turkey provides less, as shown in Figure 1. Countries that provide less aid to families with children have higher rates of child poverty. Among these same 37 countries, only Turkey and Costa Rica have higher child poverty rates than the United States. Why does the United States appear to be such an outlier in terms of the amount of aid it provides to families and child poverty rates? While there are likely multiple reasons, in this paper we focus on one possible explanation: Past emphasis on the negative behavioral effects of safety net programs for families over the benefits of such programs for children.
{"title":"Children and the US Social Safety Net: Balancing Disincentives for Adults and Benefits for Children.","authors":"Anna Aizer, Hilary Hoynes, Adriana Lleras-Muney","doi":"10.1257/jep.36.2.149","DOIUrl":"10.1257/jep.36.2.149","url":null,"abstract":"<p><p>A hallmark of every developed nation is the provision of a social safety net-a collection of public programs that deliver aid to the poor. Because of their higher rates of poverty, children are often a major beneficiary of safety net programs. Countries vary considerably in both the amount of safety net aid to children and the design of their programs. The United States provides less aid to families with children as a share of GDP (0.6 percent) than most countries: Among 37 OECD countries, only Turkey provides less, as shown in Figure 1. Countries that provide less aid to families with children have higher rates of child poverty. Among these same 37 countries, only Turkey and Costa Rica have higher child poverty rates than the United States. Why does the United States appear to be such an outlier in terms of the amount of aid it provides to families and child poverty rates? While there are likely multiple reasons, in this paper we focus on one possible explanation: Past emphasis on the negative behavioral effects of safety net programs for families over the benefits of such programs for children.</p>","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":"36 2","pages":"149-174"},"PeriodicalIF":6.9,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10659762/pdf/","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138176348","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Sarah Flood, Joel McMurry, Aaron Sojourner, Matthew Wiswall
Using every major nationally representative dataset on parental and non-parental care provided to children up to age 6, we quantify differences in American children's care experiences by socioeconomic status (SES), proxied primarily with maternal education. Increasingly, higher-SES children spend less total time with their parents and more time in the care of others. Non-parental care for high-SES children is more likely to be in childcare centers, where average quality is higher, and less likely to be provided by relatives where average quality is lower. Even within types of childcare, higher-SES children tend to receive care of higher measured quality and higher cost. Inequality is evident at home as well: measures of parental enrichment at home, from both self-reports and outside observers, are on average higher for higher-SES children. We also find that parental and non-parental quality is reinforcing: children who receive higher quality non-parental care also tend to receive higher quality parental care.
{"title":"Inequality in Early Care Experienced by US Children.","authors":"Sarah Flood, Joel McMurry, Aaron Sojourner, Matthew Wiswall","doi":"10.1257/jep.36.2.199","DOIUrl":"https://doi.org/10.1257/jep.36.2.199","url":null,"abstract":"<p><p>Using every major nationally representative dataset on parental and non-parental care provided to children up to age 6, we quantify differences in American children's care experiences by socioeconomic status (SES), proxied primarily with maternal education. Increasingly, higher-SES children spend less total time with their parents and more time in the care of others. Non-parental care for high-SES children is more likely to be in childcare centers, where average quality is higher, and less likely to be provided by relatives where average quality is lower. Even within types of childcare, higher-SES children tend to receive care of higher measured quality and higher cost. Inequality is evident at home as well: measures of parental enrichment at home, from both self-reports and outside observers, are on average higher for higher-SES children. We also find that parental and non-parental quality is reinforcing: children who receive higher quality non-parental care also tend to receive higher quality parental care.</p>","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":"36 2","pages":"199-222"},"PeriodicalIF":8.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10586457/pdf/nihms-1868421.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49678023","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this article, we review a growing empirical literature on the effectiveness and fairness of the US pretrial system and discuss its policy implications. Despite the importance of this stage of the criminal legal process, researchers have only recently begun to explore how the pretrial system balances individual rights and public interests. We describe the empirical challenges that have prevented progress in this area and how recent work has made use of new data sources and quasi-experimental approaches to credibly estimate both the individual harms (such as loss of employment or government assistance) and public benefits (such as preventing non-appearance at court and new crimes) of cash bail and pretrial detention. These new data and approaches show that the current pretrial system imposes substantial short-and long-term economic harms on detained defendants in terms of lost earnings and government assistance, while providing little in the way of decreased criminal activity for the public interest. Non-appearances at court do significantly decrease for detained defendants, but the magnitudes cannot justify the economic harms to individuals observed in the data. A second set of studies shows that that the costs of cash bail and pretrial detention are disproportionately borne by Black and Hispanic individuals, giving rise to large and unfair racial differences in cash bail and detention that cannot be explained by underlying differences in pretrial misconduct risk. We then turn to policy implications and describe areas of future work that would enable a deeper understanding of what drives these undesirable outcomes.
{"title":"The US Pretrial System: Balancing Individual Rights and Public Interests","authors":"Will Dobbie, Crystal S. Yang","doi":"10.1257/jep.35.4.49","DOIUrl":"https://doi.org/10.1257/jep.35.4.49","url":null,"abstract":"In this article, we review a growing empirical literature on the effectiveness and fairness of the US pretrial system and discuss its policy implications. Despite the importance of this stage of the criminal legal process, researchers have only recently begun to explore how the pretrial system balances individual rights and public interests. We describe the empirical challenges that have prevented progress in this area and how recent work has made use of new data sources and quasi-experimental approaches to credibly estimate both the individual harms (such as loss of employment or government assistance) and public benefits (such as preventing non-appearance at court and new crimes) of cash bail and pretrial detention. These new data and approaches show that the current pretrial system imposes substantial short-and long-term economic harms on detained defendants in terms of lost earnings and government assistance, while providing little in the way of decreased criminal activity for the public interest. Non-appearances at court do significantly decrease for detained defendants, but the magnitudes cannot justify the economic harms to individuals observed in the data. A second set of studies shows that that the costs of cash bail and pretrial detention are disproportionately borne by Black and Hispanic individuals, giving rise to large and unfair racial differences in cash bail and detention that cannot be explained by underlying differences in pretrial misconduct risk. We then turn to policy implications and describe areas of future work that would enable a deeper understanding of what drives these undesirable outcomes.","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":" 61","pages":""},"PeriodicalIF":8.4,"publicationDate":"2021-11-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138494475","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Algorithms (in some form) are already widely used in the criminal justice system. We draw lessons from this experience for what is to come for the rest of society as machine learning diffuses. We find economists and other social scientists have a key role to play in shaping the impact of algorithms, in part through improving the tools used to build them.
{"title":"Fragile Algorithms and Fallible Decision-Makers: Lessons from the Justice System","authors":"Jens Ludwig, Sendhil Mullainathan","doi":"10.1257/jep.35.4.71","DOIUrl":"https://doi.org/10.1257/jep.35.4.71","url":null,"abstract":"Algorithms (in some form) are already widely used in the criminal justice system. We draw lessons from this experience for what is to come for the rest of society as machine learning diffuses. We find economists and other social scientists have a key role to play in shaping the impact of algorithms, in part through improving the tools used to build them.","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":" 50","pages":""},"PeriodicalIF":8.4,"publicationDate":"2021-11-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138494484","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How does one's place of residence affect individual behavior and long-run outcomes? Understanding neighborhood and place effects has been a leading question for social scientists during the past half-century. Recent empirical studies using experimental and quasi-experimental research designs have generated new insights on the importance of residential neighborhoods in childhood and adulthood. This paper summarizes the recent neighborhood effects literature and interprets the findings. Childhood neighborhoods affect long-run economic and educational outcomes in a manner consistent with exposure models of neighborhood effects. For adults, neighborhood environments matter for their health and well-being but have more ambiguous impacts on labor market outcomes. We discuss the evidence on the mechanisms behind the observed patterns and conclude by highlighting directions for future research.
{"title":"Neighborhoods Matter: Assessing the Evidence for Place Effects","authors":"Eric Chyn, Lawrence F. Katz","doi":"10.1257/jep.35.4.197","DOIUrl":"https://doi.org/10.1257/jep.35.4.197","url":null,"abstract":"How does one's place of residence affect individual behavior and long-run outcomes? Understanding neighborhood and place effects has been a leading question for social scientists during the past half-century. Recent empirical studies using experimental and quasi-experimental research designs have generated new insights on the importance of residential neighborhoods in childhood and adulthood. This paper summarizes the recent neighborhood effects literature and interprets the findings. Childhood neighborhoods affect long-run economic and educational outcomes in a manner consistent with exposure models of neighborhood effects. For adults, neighborhood environments matter for their health and well-being but have more ambiguous impacts on labor market outcomes. We discuss the evidence on the mechanisms behind the observed patterns and conclude by highlighting directions for future research.","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":"1 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2021-11-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138517031","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The fourfold increase in opioid deaths between 2000 and 2017 rivals even the COVID-19 pandemic as a health crisis for America. Why did it happen? Measures of demand for pain relief – physical pain and despair – are high and in many cases rising, but their increase was nowhere near as large as the increase in deaths. The primary shift is in supply, primarily of new forms of allegedly safer narcotics. These new pain relievers flowed in greater volume to areas with more physical pain and mental health impairment, but since their apparent safety was an illusion, opioid deaths followed. By the end of the 2000s, restrictions on legal opioids led to further supply-side innovations, which created the burgeoning illegal market that accounts for the bulk of opioid deaths today. Because opioid use is easier to start than end, America's opioid epidemicis likely to persist for some time.
{"title":"When Innovation Goes Wrong: Technological Regress and the Opioid Epidemic","authors":"David M. Cutler, Edward L. Glaeser","doi":"10.1257/jep.35.4.171","DOIUrl":"https://doi.org/10.1257/jep.35.4.171","url":null,"abstract":"The fourfold increase in opioid deaths between 2000 and 2017 rivals even the COVID-19 pandemic as a health crisis for America. Why did it happen? Measures of demand for pain relief – physical pain and despair – are high and in many cases rising, but their increase was nowhere near as large as the increase in deaths. The primary shift is in supply, primarily of new forms of allegedly safer narcotics. These new pain relievers flowed in greater volume to areas with more physical pain and mental health impairment, but since their apparent safety was an illusion, opioid deaths followed. By the end of the 2000s, restrictions on legal opioids led to further supply-side innovations, which created the burgeoning illegal market that accounts for the bulk of opioid deaths today. Because opioid use is easier to start than end, America's opioid epidemicis likely to persist for some time.","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":" 59","pages":""},"PeriodicalIF":8.4,"publicationDate":"2021-11-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138494476","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The efficiency of any police action depends on the relative magnitude of its crime-reducing benefits and legitimacy costs. Policing strategies that are socially efficient at the city level may be harmful at the local level, because the distribution of direct costs and benefits of police actions that reduce victimization is not the same as the distribution of indirect benefits of feeling safe. In the United States, the local misallocation of police resources is disproportionately borne by Black and Hispanic individuals. Despite the complexity of this particular problem, the incentives facing both police departments and police officers tend to be structured as if the goals of policing were simple—to reduce crime by as much as possible. Formal data collection on the crime reducing-benefits of policing, and not the legitimacy costs, produce s further incentives to provide more engagement than may be efficient in any specific encounter, at both the officer and departmental level. There is currently little evidence as to what screening, training, or monitoring strategies are most effective at encouraging individual officers to balance the crime reducing benefits and legitimacy costs of their actions.
{"title":"The Economics of Policing and Public Safety","authors":"Emily C. Owens, Bocar A. Ba","doi":"10.1257/jep.35.4.3","DOIUrl":"https://doi.org/10.1257/jep.35.4.3","url":null,"abstract":"The efficiency of any police action depends on the relative magnitude of its crime-reducing benefits and legitimacy costs. Policing strategies that are socially efficient at the city level may be harmful at the local level, because the distribution of direct costs and benefits of police actions that reduce victimization is not the same as the distribution of indirect benefits of feeling safe. In the United States, the local misallocation of police resources is disproportionately borne by Black and Hispanic individuals. Despite the complexity of this particular problem, the incentives facing both police departments and police officers tend to be structured as if the goals of policing were simple—to reduce crime by as much as possible. Formal data collection on the crime reducing-benefits of policing, and not the legitimacy costs, produce s further incentives to provide more engagement than may be efficient in any specific encounter, at both the officer and departmental level. There is currently little evidence as to what screening, training, or monitoring strategies are most effective at encouraging individual officers to balance the crime reducing benefits and legitimacy costs of their actions.","PeriodicalId":15611,"journal":{"name":"Journal of Economic Perspectives","volume":" ","pages":""},"PeriodicalIF":8.4,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46637916","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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