Journal Cover
Quarterly Journal of Economics
Journal Prestige (SJR): 29.602
Citation Impact (citeScore): 11
Number of Followers: 364  
 
  Hybrid Journal Hybrid journal (It can contain Open Access articles)
ISSN (Print) 0033-5533 - ISSN (Online) 1531-4650
Published by Oxford University Press Homepage  [406 journals]
  • Firming Up Inequality*
    • Authors: Song J; Price D, Guvenen F, et al.
      Pages: 1 - 50
      Abstract: We use a massive, matched employer-employee database for the United States to analyze the contribution of firms to the rise in earnings inequality from 1978 to 2013. We find that one-third of the rise in the variance of (log) earnings occurred within firms, whereas two-thirds of the rise occurred due to a rise in the dispersion of average earnings between firms. However, this rising between-firm variance is not accounted for by the firms themselves but by a widening gap between firms in the composition of their workers. This compositional change can be split into two roughly equal parts: high-wage workers became increasingly likely to work in high-wage firms (i.e., sorting increased), and high-wage workers became increasingly likely to work with each other (i.e., segregation rose). In contrast, we do not find a rise in the variance of firm-specific pay once we control for the worker composition in firms. Finally, we find that two-thirds of the rise in the within-firm variance of earnings occurred within mega (10,000+ employee) firms, which saw a particularly large increase in the variance of earnings compared with smaller firms.
      PubDate: Thu, 25 Oct 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy025
      Issue No: Vol. 134, No. 1 (2018)
       
  • The Price Ain’t Right' Hospital Prices and Health Spending on
           the Privately Insured*
    • Authors: Cooper Z; Craig S, Gaynor M, et al.
      Pages: 51 - 107
      Abstract: We use insurance claims data covering 28% of individuals with employer-sponsored health insurance in the United States to study the variation in health spending on the privately insured, examine the structure of insurer-hospital contracts, and analyze the variation in hospital prices across the nation. Health spending per privately insured beneficiary differs by a factor of three across geographic areas and has a very low correlation with Medicare spending. For the privately insured, half of the spending variation is driven by price variation across regions, and half is driven by quantity variation. Prices vary substantially across regions, across hospitals within regions, and even within hospitals. For example, even for a nearly homogeneous service such as lower-limb magnetic resonance imaging, about a fifth of the total case-level price variation occurs within a hospital in the cross section. Hospital market structure is strongly associated with price levels and contract structure. Prices at monopoly hospitals are 12% higher than those in markets with four or more rivals. Monopoly hospitals also have contracts that load more risk on insurers (e.g., they have more cases with prices set as a share of their charges). In concentrated insurer markets the opposite occurs—hospitals have lower prices and bear more financial risk. Examining the 366 mergers and acquisitions that occurred between 2007 and 2011, we find that prices increased by over 6% when the merging hospitals were geographically close (e.g., 5 miles or less apart), but not when the hospitals were geographically distant (e.g., over 25 miles apart).
      PubDate: Tue, 04 Sep 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy020
      Issue No: Vol. 134, No. 1 (2018)
       
  • Regional Heterogeneity and the Refinancing Channel of Monetary Policy*
    • Authors: Beraja M; Fuster A, Hurst E, et al.
      Pages: 109 - 183
      Abstract: We argue that the time-varying regional distribution of housing equity influences the aggregate consequences of monetary policy through its effects on mortgage refinancing. Using detailed loan-level data, we show that regional differences in housing equity affect refinancing and spending responses to interest rate cuts, but these effects vary over time with changes in the regional distribution of house price growth. We build a heterogeneous household model of refinancing with mortgage borrowers and lenders and use it to explore the monetary policy implications arising from our regional evidence. We find that the 2008 equity distribution made spending in depressed regions less responsive to interest rate cuts, thus dampening aggregate stimulus and increasing regional consumption inequality, whereas the opposite occurred in some earlier recessions. Taken together, our results strongly suggest that monetary policy makers should track the regional distribution of equity over time.
      PubDate: Mon, 03 Sep 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy021
      Issue No: Vol. 134, No. 1 (2018)
       
  • Busting the “Princelings”: The Campaign Against Corruption in
           China’s Primary Land Market*
    • Authors: Chen T; Kung J.
      Pages: 185 - 226
      Abstract: Using data on over a million land transactions during 2004–2016 where local governments are the sole seller, we find that firms linked to members of China's supreme political elites—the Politburo—obtained a price discount ranging from 55.4% to 59.9% compared with those without the same connections. These firms also purchased slightly more land. In return, the provincial party secretaries who provided the discount to these “princeling” firms are 23.4% more likely to be promoted to positions of national leadership. To curb corruption, President Xi Jinping stepped up investigations and strengthened personnel control at the province level. Using a spatially matched sample (e.g., within a 500-meter radius), we find a reduction in corruption of between 42.6% and 31.5% in the provinces either targeted by the central inspection teams or whose party secretary was replaced by one appointed by Xi. Accordingly, this crackdown on corruption has also significantly reduced the promotional prospects of those local officials who rely on supplying a discount to get ahead.
      PubDate: Mon, 22 Oct 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy027
      Issue No: Vol. 134, No. 1 (2018)
       
  • The Macro Effects of Unemployment Benefit Extensions: a Measurement Error
           Approach*
    • Authors: Chodorow-Reich G; Coglianese J, Karabarbounis L.
      Pages: 227 - 279
      Abstract: By how much does an extension of unemployment benefits affect macroeconomic outcomes such as unemployment' Answering this question is challenging because U.S. law extends benefits for states experiencing high unemployment. We use data revisions to decompose the variation in the duration of benefits into the part coming from actual differences in economic conditions and the part coming from measurement error in the real-time data used to determine benefit extensions. Using only the variation coming from measurement error, we find that benefit extensions have a limited influence on state-level macroeconomic outcomes. We apply our estimates to the increase in the duration of benefits during the Great Recession and find that they increased the unemployment rate by at most 0.3 percentage point.
      PubDate: Mon, 20 Aug 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy018
      Issue No: Vol. 134, No. 1 (2018)
       
  • Moral Hazard: Experimental Evidence from Tenancy Contracts*
    • Authors: Burchardi K; Gulesci S, Lerva B, et al.
      Pages: 281 - 347
      Abstract: Agricultural productivity is particularly low in developing countries. Output-sharing rules that make farmers less-than-full residual claimants are seen as a potentially important driver of low agricultural productivity. We report results from a field experiment designed to estimate and understand the effects of sharecropping contracts on agricultural input choices, risk-taking, and output. The experiment induced variation in the terms of sharecropping contracts. After agreeing to pay 50% of their output to the landlord, tenants were randomized into three groups: (i) some kept 50% of their output; (ii) others kept 75%; (iii) others kept 50% of output and received a lump-sum payment at the end of their contract, either fixed or stochastic. We find that tenants with higher output shares used more inputs, cultivated riskier crops, and produced 60% more output relative to control. Income or risk exposure have at most a small effect on farm output; the increase in output should be interpreted as an incentive effect of the output-sharing rule.
      PubDate: Mon, 24 Sep 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy023
      Issue No: Vol. 134, No. 1 (2018)
       
  • Consequences of the Clean Water Act and the Demand for Water Quality*
    • Authors: Keiser D; Shapiro J.
      Pages: 349 - 396
      Abstract: Since the 1972 U.S. Clean Water Act, government and industry have invested over ${\$}$1 trillion to abate water pollution, or ${\$}$100 per person-year. Over half of U.S. stream and river miles, however, still violate pollution standards. We use the most comprehensive set of files ever compiled on water pollution and its determinants, including 50 million pollution readings from 240,000 monitoring sites and a network model of all U.S. rivers, to study water pollution’s trends, causes, and welfare consequences. We have three main findings. First, water pollution concentrations have fallen substantially. Between 1972 and 2001, for example, the share of waters safe for fishing grew by 12 percentage points. Second, the Clean Water Act’s grants to municipal wastewater treatment plants, which account for ${\$}$650 billion in expenditure, caused some of these declines. Through these grants, it cost around ${\$}$1.5 million (2014 dollars) to make one river-mile fishable for a year. We find little displacement of municipal expenditure due to a federal grant. Third, the grants’ estimated effects on housing values are smaller than the grants’ costs; we carefully discuss welfare implications.
      PubDate: Fri, 07 Sep 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy019
      Issue No: Vol. 134, No. 1 (2018)
       
  • Forward and Spot Exchange Rates in a Multi-Currency World*
    • Authors: Hassan T; Mano R.
      Pages: 397 - 450
      Abstract: Separate literatures study violations of uncovered interest parity (UIP) using regression-based and portfolio-based methods. We propose a decomposition of these violations into a cross-currency, a between-time-and-currency, and a cross-time component that allows us to analytically relate regression-based and portfolio-based facts and to estimate the joint restrictions they put on models of currency returns. Subject to standard assumptions on investors’ information sets, we find that the forward premium puzzle (FPP) and the “dollar trade” anomaly are intimately linked: both are driven almost exclusively by the cross-time component. By contrast, the “carry trade” anomaly is driven largely by cross-sectional violations of UIP. The simplest model that the data do not reject features a cross-sectional asymmetry that makes some currencies pay permanently higher expected returns than others, and larger time series variation in expected returns on the U.S. dollar than on other currencies. Importantly, conventional estimates of the FPP are not directly informative about expected returns because they do not correct for uncertainty about future mean interest rates. Once we correct for this uncertainty, we never reject the null that investors expect high-interest-rate currencies to depreciate, not appreciate.
      PubDate: Thu, 25 Oct 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy026
      Issue No: Vol. 134, No. 1 (2018)
       
  • From Hyperinflation to Stable Prices: Argentina’s Evidence on Menu
           Cost Models*
    • Authors: Alvarez F; Beraja M, Gonzalez-Rozada M, et al.
      Pages: 451 - 505
      Abstract: In this article, we analyze how inflation affects firms’ price-setting behavior. For a class of menu cost models, we derive several predictions about how price-setting changes with inflation at very high and at near-zero inflation rates. Then, we present evidence supporting these predictions using product-level data underlying Argentina’s consumer price index from 1988 to 1997—a unique experience where monthly inflation ranged from almost 200% to less than zero. For low inflation rates, we find that (i) the frequency and absolute size of price changes as well as the dispersion of relative prices do not change with inflation, (ii) the frequency and size of price increases and decreases are symmetric around zero inflation, and (iii) aggregate inflation changes are mostly driven by changes in the frequency of price increases and decreases, as opposed to the size of price changes. For high inflation rates, we find that (iv) the elasticity of the frequency of price changes with respect to inflation is close to two-thirds, (v) the frequency of price changes across different products becomes similar, and (vi) the elasticity of the dispersion of relative prices with respect to inflation is one-third. Our findings confirm and extend available evidence for countries that experienced either very high or near-zero inflation. We conclude by showing that a hyperinflation of 500% a year is associated with a cost of approximately 8.5% of aggregate output a year as a result of inefficient price dispersion alone.
      PubDate: Mon, 24 Sep 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy022
      Issue No: Vol. 134, No. 1 (2018)
       
  • The Mission: Human Capital Transmission, Economic Persistence, and Culture
           in South America*
    • Authors: Valencia Caicedo F.
      Pages: 507 - 556
      Abstract: This article examines the long-term consequences of a historical human capital intervention. The Jesuit order founded religious missions in 1609 among the Guaraní, in modern-day Argentina, Brazil, and Paraguay. Before their expulsion in 1767, missionaries instructed indigenous inhabitants in reading, writing, and various crafts. Using archival records, as well as data at the individual and municipal level, I show that in areas of former Jesuit presence—within the Guaraní area—educational attainment was higher and remains so (by 10%–15%) 250 years later. These educational differences have also translated into incomes that are 10% higher today. The identification of the positive effect of the Guaraní Jesuit missions emerges after comparing them with abandoned Jesuit missions and neighboring Franciscan Guaraní missions. The enduring effects observed are consistent with transmission mechanisms of structural transformation, occupational specialization, and technology adoption in agriculture.
      PubDate: Mon, 08 Oct 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy024
      Issue No: Vol. 134, No. 1 (2018)
       
 
 
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