Journal Cover
Quarterly Journal of Economics
Journal Prestige (SJR): 29.602
Citation Impact (citeScore): 11
Number of Followers: 403  
  Hybrid Journal Hybrid journal (It can contain Open Access articles)
ISSN (Print) 0033-5533 - ISSN (Online) 1531-4650
Published by Oxford University Press Homepage  [409 journals]
  • Capitalists in the Twenty-First Century*
    • Authors: Smith M; Yagan D, Zidar O, et al.
      Pages: 1675 - 1745
      Abstract: How important is human capital at the top of the U.S. income distribution' A primary source of top income is private “pass-through” business profit, which can include entrepreneurial labor income for tax reasons. This article asks whether top pass-through profit mostly reflects human capital, defined as all inalienable factors embodied in business owners, rather than financial capital. Tax data linking 11 million firms to their owners show that top pass-through profit accrues to working-age owners of closely held mid-market firms in skill-intensive industries. Pass-through profit falls by three-quarters after owner retirement or premature death. Classifying three-quarters of pass-through profit as human capital income, we find that the typical top earner derives most of her income from human capital, not financial capital. Growth in pass-through profit is explained by both rising productivity and a rising share of value added accruing to owners.
      PubDate: Wed, 31 Jul 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz020
      Issue No: Vol. 134, No. 4 (2019)
  • What do Workplace Wellness Programs do' Evidence from the Illinois
           Workplace Wellness Study*
    • Authors: Jones D; Molitor D, Reif J.
      Pages: 1747 - 1791
      Abstract: Workplace wellness programs cover over 50 million U.S. workers and are intended to reduce medical spending, increase productivity, and improve well-being. Yet limited evidence exists to support these claims. We designed and implemented a comprehensive workplace wellness program for a large employer and randomly assigned program eligibility and financial incentives at the individual level for nearly 5,000 employees. We find strong patterns of selection: during the year prior to the intervention, program participants had lower medical expenditures and healthier behaviors than nonparticipants. The program persistently increased health screening rates, but we do not find significant causal effects of treatment on total medical expenditures, other health behaviors, employee productivity, or self-reported health status after more than two years. Our 95% confidence intervals rule out 84% of previous estimates on medical spending and absenteeism.
      PubDate: Fri, 16 Aug 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz023
      Issue No: Vol. 134, No. 4 (2019)
  • Food Deserts and the Causes of Nutritional Inequality*
    • Authors: Allcott H; Diamond R, Dubé J, et al.
      Pages: 1793 - 1844
      Abstract: We study the causes of “nutritional inequality”: why the wealthy eat more healthfully than the poor in the United States. Exploiting supermarket entry and household moves to healthier neighborhoods, we reject that neighborhood environments contribute meaningfully to nutritional inequality. We then estimate a structural model of grocery demand, using a new instrument exploiting the combination of grocery retail chains’ differing presence across geographic markets with their differing comparative advantages across product groups. Counterfactual simulations show that exposing low-income households to the same products and prices available to high-income households reduces nutritional inequality by only about 10%, while the remaining 90% is driven by differences in demand. These findings counter the argument that policies to increase the supply of healthy groceries could play an important role in reducing nutritional inequality.
      PubDate: Mon, 20 May 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz015
      Issue No: Vol. 134, No. 4 (2019)
  • How Wide Is the Firm Border'*
    • Authors: Atalay E; Hortaçsu A, Li M, et al.
      Pages: 1845 - 1882
      Abstract: We examine the within- and across-firm shipment decisions of tens of thousands of goods-producing and goods-distributing establishments. This allows us to quantify the normally unobservable forces that determine firm boundaries, that is, which transactions are mediated by ownership control, as opposed to contracts or markets. We find firm boundaries to be an economically significant barrier to trade: having an additional vertically integrated establishment in a given destination ZIP code has the same effect on shipment volumes as a 40% reduction in distance. These effects are larger for high value-to-weight products, faraway destinations, differentiated products, and IT-intensive industries.
      PubDate: Mon, 19 Aug 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz026
      Issue No: Vol. 134, No. 4 (2019)
  • Industrial Policies in Production Networks*
    • Authors: Liu E.
      Pages: 1883 - 1948
      Abstract: Many developing economies adopt industrial policies favoring selected sectors. Is there an economic logic to this type of intervention' I analyze industrial policy when economic sectors form a production network via input-output linkages. Market imperfections generate distortionary effects that compound through backward demand linkages, causing upstream sectors to become the sink for imperfections and have the greatest size distortions. My key finding is that the distortion in sectoral size is a sufficient statistic for the social value of promoting that sector; thus, there is an incentive for a well-meaning government to subsidize upstream sectors. Furthermore, sectoral interventions’ aggregate effects can be simply summarized, to first order, by the cross-sector covariance between my sufficient statistic and subsidy spending. My sufficient statistic predicts sectoral policies in South Korea in the 1970s and modern-day China, suggesting that sectoral interventions might have generated positive aggregate effects in these economies.
      PubDate: Wed, 14 Aug 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz024
      Issue No: Vol. 134, No. 4 (2019)
  • Shift-Share Designs: Theory and Inference*
    • Authors: Adão R; Kolesár M, Morales E.
      Pages: 1949 - 2010
      Abstract: We study inference in shift-share regression designs, such as when a regional outcome is regressed on a weighted average of sectoral shocks, using regional sector shares as weights. We conduct a placebo exercise in which we estimate the effect of a shift-share regressor constructed with randomly generated sectoral shocks on actual labor market outcomes across U.S. commuting zones. Tests based on commonly used standard errors with 5% nominal significance level reject the null of no effect in up to 55% of the placebo samples. We use a stylized economic model to show that this overrejection problem arises because regression residuals are correlated across regions with similar sectoral shares, independent of their geographic location. We derive novel inference methods that are valid under arbitrary cross-regional correlation in the regression residuals. We show using popular applications of shift-share designs that our methods may lead to substantially wider confidence intervals in practice.
      PubDate: Tue, 20 Aug 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz025
      Issue No: Vol. 134, No. 4 (2019)
  • Uniform Pricing in U.S. Retail Chains*
    • Authors: DellaVigna S; Gentzkow M.
      Pages: 2011 - 2084
      Abstract: We show that most U.S. food, drugstore, and mass-merchandise chains charge nearly uniform prices across stores, despite wide variation in consumer demographics and competition. Demand estimates reveal substantial within-chain variation in price elasticities and suggest that the median chain sacrifices ${\$}$16 million of annual profit relative to a benchmark of optimal prices. In contrast, differences in average prices between chains are broadly consistent with the optimal benchmark. We discuss a range of explanations for nearly uniform pricing, highlighting managerial inertia and brand image concerns as mechanisms frequently mentioned by industry participants. Relative to our optimal benchmark, uniform pricing may significantly increase the prices paid by poorer households relative to the rich, dampen the response of prices to local economic shocks, alter the analysis of mergers in antitrust, and shift the incidence of intranational trade costs.
      PubDate: Tue, 25 Jun 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz019
      Issue No: Vol. 134, No. 4 (2019)
  • Promotions and the Peter Principle*
    • Authors: Benson A; Li D, Shue K.
      Pages: 2085 - 2134
      Abstract: The best worker is not always the best candidate for manager. In these cases, do firms promote the best potential manager or the best worker in their current job' Using microdata on the performance of sales workers at 131 firms, we find evidence consistent with the Peter Principle, which proposes that firms prioritize current job performance in promotion decisions at the expense of other observable characteristics that better predict managerial performance. We estimate that the costs of promoting workers with lower managerial potential are high, suggesting either that firms are making inefficient promotion decisions or that the benefits of promotion-based incentives are great enough to justify the costs of managerial mismatch. We find that firms manage the costs of the Peter Principle by placing less weight on sales performance in promotion decisions when managerial roles entail greater responsibility and when frontline workers are incentivized by strong pay for performance.
      PubDate: Fri, 16 Aug 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz022
      Issue No: Vol. 134, No. 4 (2019)
  • Firm-Level Political Risk: Measurement and Effects*
    • Authors: Hassan T; Hollander S, van Lent L, et al.
      Pages: 2135 - 2202
      Abstract: We adapt simple tools from computational linguistics to construct a new measure of political risk faced by individual U.S. firms: the share of their quarterly earnings conference calls that they devote to political risks. We validate our measure by showing that it correctly identifies calls containing extensive conversations on risks that are political in nature, that it varies intuitively over time and across sectors, and that it correlates with the firm’s actions and stock market volatility in a manner that is highly indicative of political risk. Firms exposed to political risk retrench hiring and investment and actively lobby and donate to politicians. These results continue to hold after controlling for news about the mean (as opposed to the variance) of political shocks. Interestingly, the vast majority of the variation in our measure is at the firm level rather than at the aggregate or sector level, in the sense that it is captured neither by the interaction of sector and time fixed effects nor by heterogeneous exposure of individual firms to aggregate political risk. The dispersion of this firm-level political risk increases significantly at times with high aggregate political risk. Decomposing our measure of political risk by topic, we find that firms that devote more time to discussing risks associated with a given political topic tend to increase lobbying on that topic, but not on other topics, in the following quarter.
      PubDate: Mon, 26 Aug 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz021
      Issue No: Vol. 134, No. 4 (2019)
  • Liquidity Affects Job Choice: Evidence from Teach for America*
    • Authors: Coffman L; Conlon J, Featherstone C, et al.
      Pages: 2203 - 2236
      Abstract: Can access to a few hundred dollars of liquidity affect the career choice of a recent college graduate' In a three-year field experiment with Teach For America (TFA), a prestigious teacher placement program, we randomly increase the financial packages offered to nearly 7,300 potential teachers who requested support for the transition into teaching. The first two years of the experiment reveal that although most applicants do not respond to a marginal $600 of grants or loans, those in the worst financial position respond by joining TFA at higher rates. We continue the experiment into the third year and self-replicate our results. For the highest-need applicants, an extra $600 in loans, $600 in grants, and $1,200 in grants increase the likelihood of joining TFA by 12.2, 11.4, and 17.1 percentage points (or 20.0%, 18.7%, and 28.1%), respectively. Additional grant and loan dollars are equally effective, suggesting a liquidity mechanism. A follow-up survey bolsters the liquidity story and also shows that those drawn into teaching would have otherwise worked in private-sector firms.
      PubDate: Mon, 24 Jun 2019 00:00:00 GMT
      DOI: 10.1093/qje/qjz018
      Issue No: Vol. 134, No. 4 (2019)
School of Mathematical and Computer Sciences
Heriot-Watt University
Edinburgh, EH14 4AS, UK
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Fax: +00 44 (0)131 4513327
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