Abstract We use event studies to examine changes in intergenerational financial transfers and informal care within families following wealth loss, job exit, widowhood, and health shocks. We find sharp reductions in giving to adult children following negative shocks to parents' wealth and earned income, particularly in low-wealth households. Giving also decreases with some health shocks and increases following spousal death. Meanwhile, children of low-wealth households increase financial transfers to parents following adverse shocks in parental households and children of both high- and low-wealth households sharply increase their provision of informal care to parents following a wide range of adverse shocks.
{"title":"Family Support during Hard Times: Dynamics of Intergenerational Exchange after Adverse Events","authors":"Jessamyn Schaller, Chase Eck","doi":"10.1162/rest_a_01329","DOIUrl":"https://doi.org/10.1162/rest_a_01329","url":null,"abstract":"Abstract We use event studies to examine changes in intergenerational financial transfers and informal care within families following wealth loss, job exit, widowhood, and health shocks. We find sharp reductions in giving to adult children following negative shocks to parents' wealth and earned income, particularly in low-wealth households. Giving also decreases with some health shocks and increases following spousal death. Meanwhile, children of low-wealth households increase financial transfers to parents following adverse shocks in parental households and children of both high- and low-wealth households sharply increase their provision of informal care to parents following a wide range of adverse shocks.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"95 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134952065","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Using administrative data on the Chinese National College Entrance Examination, we study how left-digit bias affects college applications. We find strong discontinuities in students' admission outcomes at 10-point thresholds. Students with scores just below multiples of 10 make more conservative college application choices that place them into less selective colleges and majors. In contrast, students who score at or just above multiples of 10 aim and achieve higher but are at greater risk of overshooting. The discontinuity reveals that, despite the educational and labor market consequences, students' self-evaluation based on exam scores is subject to information-processing heuristics.
{"title":"Heuristics in Self-Evaluation: Evidence from the Centralized College Admission System in China","authors":"Hongbin Li, Xinyao Qiu","doi":"10.1162/rest_a_01331","DOIUrl":"https://doi.org/10.1162/rest_a_01331","url":null,"abstract":"Abstract Using administrative data on the Chinese National College Entrance Examination, we study how left-digit bias affects college applications. We find strong discontinuities in students' admission outcomes at 10-point thresholds. Students with scores just below multiples of 10 make more conservative college application choices that place them into less selective colleges and majors. In contrast, students who score at or just above multiples of 10 aim and achieve higher but are at greater risk of overshooting. The discontinuity reveals that, despite the educational and labor market consequences, students' self-evaluation based on exam scores is subject to information-processing heuristics.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"314 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134952064","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract We shed light on housing price inertia by investigating how the home-sale mechanism affects housing price dynamics. Using Australian data, we find that auction prices forecast better and display less momentum than negotiated prices. These findings are robust to alternative price measurements and different sample selection corrections. Motivated by micro-theory that predicts different weights for buyer and seller values in auction and negotiated prices, we decompose housing prices into two diffusion processes and interpret them as buyer value and seller value, respectively. The seller value updates much more slowly, which could be an important driver of housing price inertia.
{"title":"Auctions and Negotiations in Housing Price Dynamics","authors":"David Genesove, James Hansen","doi":"10.1162/rest_a_01325","DOIUrl":"https://doi.org/10.1162/rest_a_01325","url":null,"abstract":"Abstract We shed light on housing price inertia by investigating how the home-sale mechanism affects housing price dynamics. Using Australian data, we find that auction prices forecast better and display less momentum than negotiated prices. These findings are robust to alternative price measurements and different sample selection corrections. Motivated by micro-theory that predicts different weights for buyer and seller values in auction and negotiated prices, we decompose housing prices into two diffusion processes and interpret them as buyer value and seller value, respectively. The seller value updates much more slowly, which could be an important driver of housing price inertia.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"158 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135289413","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper aims to understand the relationship between high-skill immigration and multinational activity. I assemble a novel firm-level dataset on high-skill visas and show that there is a large home bias effect: foreign multinationals hire more immigrants from their home countries than from other origins. I then build and estimate a quantitative model that relates multinational production with immigration. First, I impose a restrictive immigration policy in the US and evaluate how it affects production and wages. Second, I increase the barriers to multinational production and show that immigration is an important channel to quantify the welfare gains generated by multinationals.
{"title":"High-Skill Migration, Multinational Companies and the Location of Economic Activity","authors":"Nicolas Morales","doi":"10.1162/rest_a_01327","DOIUrl":"https://doi.org/10.1162/rest_a_01327","url":null,"abstract":"Abstract This paper aims to understand the relationship between high-skill immigration and multinational activity. I assemble a novel firm-level dataset on high-skill visas and show that there is a large home bias effect: foreign multinationals hire more immigrants from their home countries than from other origins. I then build and estimate a quantitative model that relates multinational production with immigration. First, I impose a restrictive immigration policy in the US and evaluate how it affects production and wages. Second, I increase the barriers to multinational production and show that immigration is an important channel to quantify the welfare gains generated by multinationals.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"156 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135289248","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use a nonlinear reduction in a bank's check-cashing fees and variation in regulated check-clearing times to identify the elasticity of demand for cashing checks rather than depositing them. We find that an extra day of check-clearing time makes account holders 65.5% more likely to cash a check than deposit it, which implies they are willing to pay $11.17 per day for faster access to their funds – an effective annualized discount rate of 11,054% for the average check. We use this elasticity to evaluate recent proposals that mandate faster check-clearing times.
{"title":"The Need for Speed: Demand, Regulation, and Welfare on the Margin of Alternative Financial Services","authors":"R. McDevitt, Aaron J. Sojourner","doi":"10.1162/rest_a_01308","DOIUrl":"https://doi.org/10.1162/rest_a_01308","url":null,"abstract":"\u0000 We use a nonlinear reduction in a bank's check-cashing fees and variation in regulated check-clearing times to identify the elasticity of demand for cashing checks rather than depositing them. We find that an extra day of check-clearing time makes account holders 65.5% more likely to cash a check than deposit it, which implies they are willing to pay $11.17 per day for faster access to their funds – an effective annualized discount rate of 11,054% for the average check. We use this elasticity to evaluate recent proposals that mandate faster check-clearing times.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127522789","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The low rate of inflation observed in the U.S. over the past decade is hard to reconcile with traditional measures of labor market slack. We develop a theory-based indicator of interfirm-wage competition that can explain the missing inflation. Key to this result is a drop in the rate of on-the-job search, which lowers the intensity of interfirm-wage competition to retain or hire workers. We estimate the on-the-job search rate from aggregate labor-market flows and show that its recent drop is corroborated by survey data. During “the great resignation”, interfirm-wage competition rose, raising inflation by around 1 percentage point in 2021.
{"title":"Job-to-Job Mobility and Inflation","authors":"Renato Faccini, Leonardo Melosi","doi":"10.1162/rest_a_01312","DOIUrl":"https://doi.org/10.1162/rest_a_01312","url":null,"abstract":"Abstract The low rate of inflation observed in the U.S. over the past decade is hard to reconcile with traditional measures of labor market slack. We develop a theory-based indicator of interfirm-wage competition that can explain the missing inflation. Key to this result is a drop in the rate of on-the-job search, which lowers the intensity of interfirm-wage competition to retain or hire workers. We estimate the on-the-job search rate from aggregate labor-market flows and show that its recent drop is corroborated by survey data. During “the great resignation”, interfirm-wage competition rose, raising inflation by around 1 percentage point in 2021.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135698388","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the dynamics of capital accumulation, income inequality, capital concentration, and voting up to 1914. Based on new panel data for Prussian regions, we re-evaluate the famous Revisionism Debate between orthodox Marxists and their critics. We show that changes in capital accumulation led to a rise in the capital share and income inequality, as predicted by orthodox Marxists. But against their predictions, this did neither lead to further capital concentration nor to more votes for the socialists. Instead, trade unions and strike activity limited income inequality and fostered political support for socialism, as argued by the Revisionists.
{"title":"Testing Marx: Capital Accumulation, Income Inequality, and Socialism in Late Nineteenth-Century Germany","authors":"C. Bartels, F. Kersting, Nikolaus Wolf","doi":"10.1162/rest_a_01305","DOIUrl":"https://doi.org/10.1162/rest_a_01305","url":null,"abstract":"\u0000 We study the dynamics of capital accumulation, income inequality, capital concentration, and voting up to 1914. Based on new panel data for Prussian regions, we re-evaluate the famous Revisionism Debate between orthodox Marxists and their critics. We show that changes in capital accumulation led to a rise in the capital share and income inequality, as predicted by orthodox Marxists. But against their predictions, this did neither lead to further capital concentration nor to more votes for the socialists. Instead, trade unions and strike activity limited income inequality and fostered political support for socialism, as argued by the Revisionists.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130946496","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We construct and run an experiment to test the most basic choice effect predicted by Salience Theory. Subjects allocate wealth between a risky and a safe investment. While we vary an apparent payoff ratio to influence salience, treatments have economically equivalent consequences. Most other theories of behavior then predict zero effect. Our experimental findings are strongly consistent with the behavioral implication of a continuous version of Salience Theory. We provide a novel structural estimate on the strength of salience. In our setting, increasing the relative payoff contrast by one percent is equivalent to an increased odds ratio by about 0.4 percent.
{"title":"Testing for Salience Effects in Choices under Risk","authors":"Carsten S. Nielsen, Alexander Sebald, P. Sørensen","doi":"10.1162/rest_a_01307","DOIUrl":"https://doi.org/10.1162/rest_a_01307","url":null,"abstract":"\u0000 We construct and run an experiment to test the most basic choice effect predicted by Salience Theory. Subjects allocate wealth between a risky and a safe investment. While we vary an apparent payoff ratio to influence salience, treatments have economically equivalent consequences. Most other theories of behavior then predict zero effect. Our experimental findings are strongly consistent with the behavioral implication of a continuous version of Salience Theory. We provide a novel structural estimate on the strength of salience. In our setting, increasing the relative payoff contrast by one percent is equivalent to an increased odds ratio by about 0.4 percent.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"195 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133078092","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Allocation decisions are vulnerable to political influence, but it is unclear in which situations politicians use their discretionary power in a partisan manner. We analyze the allocation of presidential disaster declarations in the United States, exploiting the spatiotemporal randomness of all hurricane strikes from 1965-2018 along with changes in political alignment. We show that decisions are unbiased when disasters are either very strong or weak. Only after medium-intensity hurricanes do areas governed by presidents' co-partisans receive up to twice as many declarations. This hump-shaped political bias explains 8.3 percent of overall relief spending, totaling about USD 400 million per year.
{"title":"Disastrous Discretion: Political Bias in Relief Allocation Varies Substantially with Disaster Severity","authors":"Stephan A. Schneider, Sven Kunze","doi":"10.1162/rest_a_01319","DOIUrl":"https://doi.org/10.1162/rest_a_01319","url":null,"abstract":"\u0000 Allocation decisions are vulnerable to political influence, but it is unclear in which situations politicians use their discretionary power in a partisan manner. We analyze the allocation of presidential disaster declarations in the United States, exploiting the spatiotemporal randomness of all hurricane strikes from 1965-2018 along with changes in political alignment. We show that decisions are unbiased when disasters are either very strong or weak. Only after medium-intensity hurricanes do areas governed by presidents' co-partisans receive up to twice as many declarations. This hump-shaped political bias explains 8.3 percent of overall relief spending, totaling about USD 400 million per year.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127708775","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the authorship of post-publication criticisms in the scientific literature, with a focus on gender differences. Bibliometrics from journals in the natural and social sciences show that comments that criticize or correct a published study are 20-40% less likely than regular papers to have a female author. In preprints in the life sciences, prior to peer review, women are missing by 20-40% in failed replications compared to regular papers, but are not missing in successful replications. In an experiment, I then find large gender differences in willingness to point out and penalize a mistake in someone's work.
{"title":"Voicing Disagreement in Science: Missing Women","authors":"David Klinowski","doi":"10.1162/rest_a_01322","DOIUrl":"https://doi.org/10.1162/rest_a_01322","url":null,"abstract":"\u0000 This paper examines the authorship of post-publication criticisms in the scientific literature, with a focus on gender differences. Bibliometrics from journals in the natural and social sciences show that comments that criticize or correct a published study are 20-40% less likely than regular papers to have a female author. In preprints in the life sciences, prior to peer review, women are missing by 20-40% in failed replications compared to regular papers, but are not missing in successful replications. In an experiment, I then find large gender differences in willingness to point out and penalize a mistake in someone's work.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"11 2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121087482","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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