Accepted Papers

New

Lifecycle Wages and Human Capital Investments: Selection and Missing Data

16 November 2025

Laurent Gobillon, Thierry Magnac, and Sébastien Roux

We derive wage equations with individual specific coefficients from a structural model of human capital investment over the life cycle. This model allows for interruptions in labour market participation and deals with missing data and attrition problems. We propose a new framework that deals with missingness at random and is based on factor decompositions that allow for flexible control of selection.

New

Diversification, Market Entry, and the Global Internet Backbone

2 November 2025

El Hadi Caoui and Andrew Steck

In many industries, buyers diversify their supplier base to manage supplier disruption risk. We investigate the importance of such diversification as a determinant of demand and supplier entry in the context of the internet backbone, the worldwide network of undersea fiber-optic cables that underpins the internet. We specify a model of international bandwidth demand and cable operators’ dynamic entry and supply choices. The model is estimated using novel data on cross-border data flows, prices, cable characteristics, and disruptions.

New

Demand Stimulus as Social Policy

2 November 2025

Alan J. Auerbach, Yuriy Gorodnichenko, and Daniel Murphy

We exploit a panel of city-level data with rich demographic information to estimate the distributional effects of Department of Defense spending and its effects on a range of social outcomes. The income and employment generated by defense spending accrue predominantly to households without a bachelor’s degree. These households as well as Black and Hispanic households tend to disproportionately benefit from this spending.

Taxes Depress Corporate Borrowing: Evidence from Private Firms

2 November 2025

Ivan T. Ivanov, Luke Pettit, and Toni M. Whited

We use variation in state corporate income tax rates to re-examine the relation between taxes and corporate leverage. Contrary to prior research, corporate leverage rises after tax cuts for small private firms. An estimated dynamic equilibrium model shows that tax cuts make capital more productive and spur the use of leverage. Tax cuts also produce more distant default thresholds and lower credit spreads.

All Along the Watchtower: Military Landholders and Serfdom Consolidation in Early Modern Russia

2 November 2025

Andrea Matranga and Timur Natkhov

This article examines the emergence of coercive labor institutions using the case of serfdom in early modern Russia. We argue that serfdom consolidated under the pressure of landholding military elites who gained political influence due to the prolonged struggle with steppe nomads. To contain nomadic raids, the Russian state erected defense lines on the southern frontier, and granted land in the area to soldiers in charge of its defense. The soldiers could not farm while on defense duty, nor could they compete in the market for peasant labor, as the land had been selected for its defensive rather than agricultural value.

Demand Analysis under Latent Choice Constraints

20 October 2025

Nikhil Agarwal and Paulo Somaini

Consumer choices are constrained in many markets due to either supply-side rationing or information frictions. Examples include matching markets for schools and colleges; entry-level labor markets; limited brand awareness and inattention in consumer markets; and selective admissions to healthcare services. We analyze a general random utility model for consumer preferences that allows for endogenous characteristics and a reduced-form choice-set formation rule that can be derived from models of the examples described above.

Structural Change, Land Use and Urban Expansion

10 October 2025

Nicolas Coeurdacier, Florian Oswald, and Marc Teignier

How do cities grow in the process of structural transformation? To answer this question, we develop a multi-sector spatial equilibrium model with endogenous land use: land is used either for agriculture or housing. Urban land, densely populated due to commuting frictions, expands out of agricultural land. With low productivity and high subsistence needs, farmland is expensive, households cannot afford large homes and cities are very dense.

To Own or to Rent? The Effects of Transaction Taxes on Housing Markets

10 October 2025

Lu Han, L. Rachel Ngai, and Kevin D. Sheedy

Using sales and leasing data, this paper finds three novel effects of a higher property transaction tax: higher buy-to-rent transactions alongside lower buy-to-own transactions despite both being taxed, a lower sales-to-leases ratio, and a lower price-to-rent ratio. This paper explains these facts by developing a search model with entry of investors and households, households choosing to own or rent in the presence of credit frictions, and homeowners deciding when to move house.