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Quarterly Journal of Economics
Journal Prestige (SJR): 29.602
Citation Impact (citeScore): 11
Number of Followers: 394  
 
  Hybrid Journal Hybrid journal (It can contain Open Access articles)
ISSN (Print) 0033-5533 - ISSN (Online) 1531-4650
Published by Oxford University Press Homepage  [412 journals]
  • back-mater
    • PubDate: Fri, 03 Apr 2020 00:00:00 GMT
      DOI: 10.1093/qje/qjaa002
      Issue No: Vol. 135, No. 2 (2020)
       
  • The Rise of Market Power and the Macroeconomic Implications*
    • Authors: De Loecker J; Eeckhout J, Unger G.
      Pages: 561 - 644
      Abstract: AbstractWe document the evolution of market power based on firm-level data for the U.S. economy since 1955. We measure both markups and profitability. In 1980, aggregate markups start to rise from 21% above marginal cost to 61% now. The increase is driven mainly by the upper tail of the markup distribution: the upper percentiles have increased sharply. Quite strikingly, the median is unchanged. In addition to the fattening upper tail of the markup distribution, there is reallocation of market share from low- to high-markup firms. This rise occurs mostly within industry. We also find an increase in the average profit rate from 1% to 8%. Although there is also an increase in overhead costs, the markup increase is in excess of overhead. We discuss the macroeconomic implications of an increase in average market power, which can account for a number of secular trends in the past four decades, most notably the declining labor and capital shares as well as the decrease in labor market dynamism.
      PubDate: Thu, 23 Jan 2020 00:00:00 GMT
      DOI: 10.1093/qje/qjz041
      Issue No: Vol. 135, No. 2 (2020)
       
  • The Fall of the Labor Share and the Rise of Superstar Firms*
    • Authors: Autor D; Dorn D, Katz L, et al.
      Pages: 645 - 709
      Abstract: AbstractThe fall of labor’s share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments typically rely on industry or macro data, obscuring heterogeneity among firms. In this article, we analyze micro panel data from the U.S. Economic Census since 1982 and document empirical patterns to assess a new interpretation of the fall in the labor share based on the rise of “superstar firms.” If globalization or technological changes push sales toward the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms, which have high markups and a low labor share of value added. We empirically assess seven predictions of this hypothesis: (i) industry sales will increasingly concentrate in a small number of firms; (ii) industries where concentration rises most will have the largest declines in the labor share; (iii) the fall in the labor share will be driven largely by reallocation rather than a fall in the unweighted mean labor share across all firms; (iv) the between-firm reallocation component of the fall in the labor share will be greatest in the sectors with the largest increases in market concentration; (v) the industries that are becoming more concentrated will exhibit faster growth of productivity; (vi) the aggregate markup will rise more than the typical firm’s markup; and (vii) these patterns should be observed not only in U.S. firms but also internationally. We find support for all of these predictions.
      PubDate: Mon, 03 Feb 2020 00:00:00 GMT
      DOI: 10.1093/qje/qjaa004
      Issue No: Vol. 135, No. 2 (2020)
       
  • Identifying Sources of Inefficiency in Healthcare*
    • Authors: Chandra A; Staiger D.
      Pages: 785 - 843
      Abstract: AbstractIn medicine, the reasons for variation in treatment rates across hospitals serving similar patients are not well understood. Some interpret this variation as unwarranted and push standardization of care as a way of reducing allocative inefficiency. An alternative interpretation is that hospitals with greater expertise in a treatment use it more because of their comparative advantage, suggesting that standardization is misguided. A simple economic model provides an empirical framework to separate these explanations. Estimating this model with data for heart attack patients, we find evidence of substantial variation across hospitals in allocative inefficiency and comparative advantage, with most hospitals overusing treatment in part because of incorrect beliefs about their comparative advantage. A stylized welfare calculation suggests that eliminating allocative inefficiency would increase the total benefits from the treatment that we study by 44%.
      PubDate: Tue, 07 Jan 2020 00:00:00 GMT
      DOI: 10.1093/qje/qjz040
      Issue No: Vol. 135, No. 2 (2020)
       
  • Optimal Spatial Policies, Geography, and Sorting*
    • Authors: Fajgelbaum P; Gaubert C.
      Pages: 959 - 1036
      Abstract: AbstractWe study optimal spatial policies in a quantitative trade and geography framework with spillovers and spatial sorting of heterogeneous workers. We characterize the spatial transfers that must hold in efficient allocations, as well as labor subsidies that can implement them. There exists scope for welfare-enhancing spatial policies even when spillovers are common across locations. Using data on U.S. cities and existing estimates of the spillover elasticities, we find that the U.S. economy would benefit from a reallocation of workers to currently low-wage cities. The optimal allocation features a greater share of high-skill workers in smaller cities relative to the observed allocation. Inefficient sorting may lead to substantial welfare costs.
      PubDate: Mon, 06 Jan 2020 00:00:00 GMT
      DOI: 10.1093/qje/qjaa001
      Issue No: Vol. 135, No. 2 (2020)
       
  • Capital Accumulation and Structural Transformation*
    • Authors: Bustos P; Garber G, Ponticelli J.
      Pages: 1037 - 1094
      Abstract: AbstractSeveral scholars argue that high agricultural productivity can retard industrial development because it draws resources toward the comparative advantage sector, agriculture. However, agricultural productivity growth can increase savings and the supply of capital, generating an expansion of the capital-intensive sector, manufacturing. We highlight this mechanism in a simple model and test its predictions in the context of a large and exogenous increase in agricultural productivity due to the adoption of genetically engineered soy in Brazil. We find that agricultural productivity growth generated an increase in savings, but these were not reinvested locally. Instead, there were capital outflows from rural areas. Capital reallocated toward urban regions, where it was invested in the industrial and service sectors. The degree of financial integration affected the speed of structural transformation. Regions that were more financially integrated with soy-producing areas through bank branch networks experienced faster growth in nonagricultural lending. Within these regions, firms with preexisting relationships with banks receiving funds from the soy area experienced faster growth in borrowing and employment.
      PubDate: Fri, 03 Jan 2020 00:00:00 GMT
      DOI: 10.1093/qje/qjz044
      Issue No: Vol. 135, No. 2 (2020)
       
  • Negotiating a Better Future: How Interpersonal Skills Facilitate
           Intergenerational Investment*
    • Authors: Ashraf N; Bau N, Low C, et al.
      Pages: 1095 - 1151
      Abstract: AbstractUsing a randomized controlled trial, we study whether a negotiation skills training can improve girls’ educational outcomes in a low-resource environment. We find that a negotiation training given to eighth-grade Zambian girls significantly improved educational outcomes over the next three years, and these effects did not fade out. To better understand mechanisms, we estimate the effects of two alternative treatments. Negotiation had much stronger effects than an informational treatment, which had no effect. A treatment designed to have more traditional girls’ empowerment effects had directionally positive but insignificant educational effects. Relative to this treatment, negotiation increased enrollment in higher-quality schooling and had larger effects for high-ability girls. These findings are consistent with a model in which negotiation allows girls to resolve incomplete contracting problems with their parents, yielding increased educational investment for those who experience sufficiently high returns. We provide evidence for this channel through a lab-in-the-field game and follow-up survey with girls and their guardians.
      PubDate: Thu, 09 Jan 2020 00:00:00 GMT
      DOI: 10.1093/qje/qjz039
      Issue No: Vol. 135, No. 2 (2020)
       
  • Choice Simplification: A Theory of Mental Budgeting and Naive
           Diversification*
    • Authors: Kőszegi B; Matějka F.
      Pages: 1153 - 1207
      Abstract: AbstractWe develop a theory of how an agent makes basic multiproduct consumption decisions in the presence of taste, consumption opportunity, and price shocks that are costly to attend to. We establish that the agent often simplifies her choices by restricting attention to a few important considerations, which depend on the decision at hand and affect her consumption patterns in specific ways. If the agent’s problem is to choose the consumption levels of many goods with different degrees of substitutability, then she may create mental budgets for more substitutable products (e.g., entertainment). In some situations, it is optimal to specify budgets in terms of consumption quantities, but when most products have an abundance of substitutes, specifying budgets in terms of nominal spending tends to be optimal. If the goods are complements, in contrast, then the agent may—consistent with naive diversification—choose a fixed, unconsidered mix of products. And if the agent’s problem is to choose one of multiple products to fulfill a given consumption need (e.g., for gasoline or a bed), then it is often optimal for her to allocate a fixed sum for the need.
      PubDate: Fri, 03 Jan 2020 00:00:00 GMT
      DOI: 10.1093/qje/qjz043
      Issue No: Vol. 135, No. 2 (2020)
       
  • Race and Economic Opportunity in the United States: an Intergenerational
           Perspective*
    • Authors: Chetty R; Hendren N, Jones M, et al.
      Pages: 711 - 783
      Abstract: AbstractWe study the sources of racial disparities in income using anonymized longitudinal data covering nearly the entire U.S. population from 1989 to 2015. We document three results. First, black Americans and American Indians have much lower rates of upward mobility and higher rates of downward mobility than whites, leading to persistent disparities across generations. Conditional on parent income, the black-white income gap is driven by differences in wages and employment rates between black and white men; there are no such differences between black and white women. Hispanic Americans have rates of intergenerational mobility more similar to whites than blacks, leading the Hispanic-white income gap to shrink across generations. Second, differences in parental marital status, education, and wealth explain little of the black-white income gap conditional on parent income. Third, the black-white gap persists even among boys who grow up in the same neighborhood. Controlling for parental income, black boys have lower incomes in adulthood than white boys in 99% of Census tracts. The few areas with small black-white gaps tend to be low-poverty neighborhoods with low levels of racial bias among whites and high rates of father presence among blacks. Black males who move to such neighborhoods earlier in childhood have significantly better outcomes. However, less than 5% of black children grow up in such areas. Our findings suggest that reducing the black-white income gap will require efforts whose impacts cross neighborhood and class lines and increase upward mobility specifically for black men.
      PubDate: Thu, 26 Dec 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz042
      Issue No: Vol. 135, No. 2 (2019)
       
  • The Institutional Foundations of Religious Politics: Evidence from
           Indonesia*
    • Authors: Bazzi S; Koehler-Derrick G, Marx B.
      Pages: 845 - 911
      Abstract: AbstractThis article explores the foundations of religious influence in politics and society. We show that an important Islamic institution fostered the entrenchment of Islamism at a critical juncture in Indonesia, the world’s largest Muslim country. In the early 1960s, rural elites transferred large amounts of land into waqf—inalienable charitable trusts in Islamic law—to avoid expropriation by the state. Regions facing a greater threat of expropriation exhibit more prevalent waqf land and Islamic institutions endowed as such, including mosques and religious schools. These endowments provided conservative forces with the capital needed to promote Islamist ideology and mobilize against the secular state. We identify lasting effects of the transfers on the size of the religious sector, electoral support for Islamist parties, and the adoption of local sharia laws. These effects are shaped by greater demand for religion in government but not by greater piety among the electorate. Waqf assets also impose costs on the local economy, particularly in agriculture, where these endowments are associated with lower productivity. Overall, our findings shed new light on the origins and consequences of Islamism.
      PubDate: Mon, 23 Dec 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz038
      Issue No: Vol. 135, No. 2 (2019)
       
  • Combining Life and Health Insurance*
    • Authors: Koijen R; Van Nieuwerburgh S.
      Pages: 913 - 958
      Abstract: AbstractWe estimate the benefit of life-extending medical treatments to life insurance companies. Our main insight is that life insurance companies have a direct benefit from such treatments because they lower the insurer’s liabilities by pushing the death benefit further into the future and raising future premium income. We apply this insight to immunotherapy, treatments associated with durable gains in survival rates for a growing number of cancer patients. We estimate that the life insurance sector’s aggregate benefit from FDA-approved immunotherapies is $9.8 billion a year. Such life-extending treatments are often prohibitively expensive for patients and governments alike. Exploiting this value creation, we explore various ways life insurers could improve stress-free access to treatment. We discuss potential barriers to integration and the long-run implications for the industrial organization of life and health insurance markets, as well as the broader implications for medical innovation and long-term care insurance markets.
      PubDate: Wed, 30 Oct 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz037
      Issue No: Vol. 135, No. 2 (2019)
       
 
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