Accepted Papers

The Review of Economic Studies is one of the most highly respected academic journals in the field of economics. It is known for publishing leading research in all areas of economics, from microeconomics to macroeconomics. The journal is published by the Oxford University Press.

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How Important Is Health Inequality for Lifetime Earnings Inequality?

Roozbeh Hosseini, Karen Kopecky, and Kai Zhao

Using a dynamic panel approach, we provide empirical evidence that negative health shocks significantly reduce earnings. The effect is primarily driven by the participation margin and is concentrated among the less educated and those in poor health. Next, we develop a life cycle model of labor supply featuring risky and heterogeneous frailty profiles that affect individuals’ productivity, likelihood of access to social insurance, disutility from work, mortality, and medical expenses.

Efficient Conservation of the Brazilian Amazon: Estimates from a Dynamic Model

Rafael Araujo, Francisco Costa, and Marcelo Sant'Anna

This paper estimates the Brazilian Amazon’s carbon-efficient forest cover – i.e. when farmers internalize the social cost of carbon. We propose a dynamic discrete choice land-use model and estimate it using a panel of land use and carbon stock of 5.7 billion pixels between 2008 and 2017. The business-as-usual scenario implies an inefficient release of 42 billion tons of CO2 in the long run resulting from the deforestation of an area twice the size of France.

Barriers to Entry and Regional Economic Growth in China

Loren Brandt, Gueorgui Kambourov, and Kjetil Storesletten

Labor productivity in manufacturing differs starkly across regions in China. We document that productivity, wages, and start-up rates of non-state firms have nevertheless experienced rapid unconditional regional convergence after 1995. To analyze these patterns, we construct a Hopenhayn (1992) model that incorporates location-specific capital wedges, output wedges, and entry barriers. Using Chinese Industry Census data we estimate these wedges and examine their role in explaining differences in performance and growth across prefectures.

Retractions: Updating from Complex Information

Duarte Gonçalves, Jonathan Libgober, and Jack Willis

We modify a canonical experimental design to identify the effectiveness of retractions. Comparing beliefs after retractions to beliefs (a) without the retracted information and (b) after equivalent new information, we find that retractions result in diminished belief updating in both cases. We propose this reflects updating from retractions being more complex, and our analysis supports this: we find longer response times, lower accuracy, and higher variability.

Attention Utility: Evidence From Individual Investors

Edika Quispe–Torreblanca, John Gathergood, George Loewenstein, and Neil Stewart

We study attention utility, the hedonic pleasure or pain derived purely from paying attention to information, which differs from the news utility that arises from gaining new information. The main, field, study examines brokerage account login data to show that investors pay disproportionate attention to already-known positive information on their stocks. Through its effect on logins, this selective attention affects their trading activity.

Trauma at School: The Impacts of Shootings on Students’ Human Capital and Economic Outcomes

Marika Cabral, Bokyung Kim, Maya Rossin-Slater, Molly Schnell, and Hannes Schwandt

We examine how shootings at schools—an increasingly common form of gun violence in the United States—impact the educational and economic trajectories of students. Using linked schooling and labor market data in Texas from 1992 to 2018, we compare within-student and across-cohort changes in outcomes following a shooting to those experienced by students at matched control schools. We find that school shootings increase absenteeism and grade repetition; reduce high school graduation, college enrollment, and college completion; and reduce employment and earnings at ages 24–26.

Creating Cohesive Communities: A Youth Camp Experiment in India

Arkadev Ghosh, Prerna Kundu, Matt Lowe, and Gareth Nellis

Non-family-based institutions for socializing young people may play a vital role in creating close-knit, inclusive communities. We study the potential for youth camps—integrating rituals, sports, and civics training—to strengthen intergroup cohesion. We randomly assigned Hindu and Muslim adolescent boys, from West Bengal, India, to two-week camps or to a pure control arm. To isolate mechanisms, we cross-randomized collective rituals (such as singing the national anthem, wearing uniforms, chanting support during matches, and synchronous dancing) and the intensity of intergroup contact.

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Manager pay and pay inequality have increased substantially since the 1980s. Manager pay reflect that managers increase the firm’s productivity which in turn affects market power.

New paper by @jan_eeckhout, Bao, and De Loecker

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Uniform asymptotic theory for local projections with unknown/infinite lag order. LPs can achieve semiparametric efficiency and support robust IRF inference.

New paper by Xu:

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Monopsony power makes productive firms decide to stay small, hurting aggregate productivity. More strongly size-dependent wages in East Germany explain a third of the difference to the West.

New paper by @BachmannRudi, @christianbaye13, Stüber, and Wellschmied

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A sufficient statistics approach to financial frictions in macro models

New paper by Chiang (@YuTingChiang4) & Zoch (@pzoch5):

https://www.restud.com/financial-intermediation-and-aggregate-demand-a-sufficient-statistics-approach/

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