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Pages: 1335 - 1351 Abstract: AbstractViolent conflicts, particularly at election times in Africa, are a common cause of instability and economic disruption. This paper studies how firms react to electoral violence using the case of Kenyan flower exporters during the 2008 postelection violence as an example. The violence induced a large negative supply shock that reduced exports primarily through workers' absence and had heterogeneous effects: larger firms and those with direct contractual relationships in export markets suffered smaller production and loss of workers. On the demand side, global buyers were not able to shift sourcing to Kenyan exporters located in areas not directly affected by the violence or to neighboring Ethiopian suppliers. Consistent with difficulties in ensuring against supply-chain risk disruptions caused by electoral violence, firms in direct contractual relationships ramp up shipments just before the subsequent 2013 presidential election to mitigate risk. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01185 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1352 - 1365 Abstract: AbstractThis paper explores the impact of water quality on mortality by exploiting a natural experiment: the rise of tea consumption in eighteenth century England. This resulted in an unintentional increase in consumption of boiled water, thereby reducing mortality rates. The methodology uses two identification strategies tying areas with lower initial water quality to larger declines in mortality rates after tea drinking became widespread and following larger volumes of tea imports. Results are robust to the inclusion of controls for income and access to trade. The hypothesis is further bolstered by suggestive evidence from cause specific deaths and early childhood mortality. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01158 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1366 - 1378 Abstract: AbstractWe connect gender disparities in research output and collaboration patterns in economics. We first document large gender gaps in research output. These gaps persist across fifty years despite a significant increase in the fraction of women in economics during that time. We further show that output differences are closely related to differences in the coauthorship networks of men and women: women have fewer collaborators, collaborate more often with the same coauthors, and a higher fraction of their coauthors collaborate with each other. Taking into account coauthorship networks reduces the gender output gap by 18%. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01113 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1379 - 1393 Abstract: AbstractWe use a randomized field experiment to test the causal impact of short-term work experience on employment and school enrollment among disadvantaged, in-school youth in the Philippines. This experience leads to a 4.4 percentage point (79%) increase in employment eight to twelve months later. Although we find no aggregate increase in enrollment, we also do not find that the employment gains push youth out of school. Our results are most consistent with work experience serving as a signal of unobservable applicant quality, and these findings highlight the role of temporary work as a stepping stone to employment for low-income youth. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01135 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1394 - 1410 Abstract: AbstractThis paper presents new evidence showing that parental incarceration increases children's education. I collect criminal records for 90,000 low-income parents who have been convicted of a crime in Colombia, and link the educational attainment of their children. I exploit exogenous variation resulting from the random assignment of judges and extend the standard framework to incorporate both conviction and incarceration decisions. I show that the effect of incarceration for a given conviction threshold can be identified. My results indicate that parental incarceration increases educational attainment by 0.78 years for the children of convicted parents on the margin of incarceration. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01129 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1411 - 1425 Abstract: AbstractBeing born in a hospital versus having a traditional birth attendant at home represents the most common early life policy change worldwide. By applying a difference-in-differences approach to register-based individual-level data on the total population, this paper explores the long-term economic effects of the opening of new maternity wards as an early life quasi-experiment. It first finds that the reform substantially increased the share of hospital births and reduced early neonatal mortality. It then shows sizable long-term effects on labor income, unemployment, health-related disability, and schooling. Small-scale local maternity wards yield a larger social rate of return than large-scale hospitals. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01134 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1426 - 1441 Abstract: AbstractThis paper considers an unavoidable feature of the school environment, class rank. What are the long-run effects of a student's ordinal rank in elementary school' Using administrative data on all public school students in Texas, we show that students with a higher third-grade academic rank, conditional on achievement and classroom fixed effects, have higher subsequent test scores, are more likely to take AP classes, graduate from high school, enroll in and graduate from college, and ultimately have higher earnings nineteen years later. We also discuss the necessary assumptions for the identification of rank effects and propose new solutions to identification challenges. The paper concludes by exploring the trade-off between higher-quality schools and higher rank in the presence of these rank-based peer effects. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01125 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1442 - 1447 Abstract: AbstractWe provide novel estimates of the location, timing, magnitude, and determinants of the start of the previous U.S. housing boom. The housing cycle cannot be interpreted as a single, national event, as different markets began to boom across a decade-long period, some of them multiple times. A fundamental factor, income of prospective buyers, can account for half of the initial jump in price growth, while expansion of purchases by underrepresented minorities cannot. The start of the boom also was financed conventionally, not by subprime mortgages. The latter's share did rise sharply over time, but only after a multiyear lag. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01133 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1448 - 1464 Abstract: AbstractThis paper studies the role of the U.S. pipeline infrastructure in the country's transition from coal to natural gas energy. I leverage the Environmental Protection Agency's Mercury and Air Toxics Standards as a plausibly exogenous intervention, which encouraged many coal plants to convert to natural gas. Combining this quasi-experimental variation with a plant's preexisting proximity to the pipeline network, I isolate implied pipeline connection costs within a dynamic discrete choice model of plant conversions. Key model results indicate that infrastructure-related costs prevent $9 billion in emissions reductions from taking place, suggesting a $2.4 million per mile external benefit of pipeline expansions. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01137 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1465 - 1480 Abstract: AbstractI test whether economic incentives impact peer effects in public-good settings. I study how a visible and subsidized contribution to a public good (installing solar panels) affects peer contributions to the same good that are neither subsidized nor visible (electing green power). Exploiting spatial variation in the feasibility of installing solar panels, I find that on average panels increase voluntary purchases of green power by neighbors. However, when subsidies to solar are high, solar panels reduce peer contributions. The results support the hypothesis that signals drive peer responses to visible public-good contributions and that economic incentives alter those signals. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01124 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1481 - 1499 Abstract: AbstractOccasionally binding constraints (OBCs) like the zero lower bound (ZLB) can lead to multiple equilibria, and so to belief-driven recessions. To aid in finding policies that avoid this, we derive existence and uniqueness conditions for otherwise linear models with OBCs. Our main result gives necessary and sufficient conditions for such models to have a unique (“determinate”) perfect foresight solution returning to a given steady state, for any initial condition. While standard New Keynesian models have multiple perfect-foresight paths eventually escaping the ZLB, price level targeting restores uniqueness. We also derive equilibrium existence conditions under rational expectations for arbitrary nonlinear models. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01122 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1500 - 1514 Abstract: AbstractWe propose a new measure of the output gap based on a dynamic factor model that is estimated on a large number of U.S. macroeconomic indicators and which incorporates relevant stylized facts about macroeconomic data (comovements, nonstationarity, and the slow drift in long-run output growth over time). We find that (1) from the mid-1990s to 2008, the U.S. economy operated above its potential and (2) in 2018:Q4, the labor market was tighter than the market for goods and services. Because it is mainly data-driven, our measure is a natural complementary tool to the theoretical models used at policy institutions. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01119 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1515 - 1529 Abstract: AbstractThe tension between efficiency and equilibrium is a central feature of economic systems. We examine this tradeoff in a network game with a unique Nash equilibrium in which agents can achieve a higher payoff by following a “collaborative norm.” Subjects establish and maintain a collaborative norm in the circle, but the norm weakens with the introduction of one hub connected to everyone in the wheel. In complex and asymmetric networks of 15 and 21 nodes, the norm disappears and subjects' play converges to Nash. We provide evidence that subjects base their decisions on their degree, rather than the overall network structure. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01105 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1530 - 1543 Abstract: AbstractWe examine how preplay communication and clustering affect play in a challenging hybrid experimental game on networks. Free-form chat is impressively effective in achieving the nonequilibrium efficient outcome, but restricted communication has little effect. We support this result with a model about the credibility of cheap-talk messages. We also offer a model of message diffusion that correctly predicts more rapid diffusion without clustering. We show an interaction effect of network structure and communication technologies. A remarkable result is that restricted communication is quite effective in a network stag hunt but not in our extended game. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01150 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1544 - 1561 Abstract: This paper studies how exporting and importing firms match based on their capability by investigating the change in such exporter-importer matching during trade liberalization. During the recent liberalization of the Mexico-U.S. textile and apparel trade, exporters and importers often switch their main partners as well as change trade volumes. We develop a many-to-many matching model of exporters and importers where partner switching is the principal margin of adjustment, featuring Beckerian positive assortative matching by capability. Trade liberalization achieves efficient global buyer-supplier matching and improves consumer welfare by inducing systematic partner switching. The data confirm the predicted partner-switching patterns. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01114 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1562 - 1579 Abstract: AbstractA key input to quantitative evaluations of transport infrastructure projects is their impact on transport costs. We propose a new method of estimating this impact relying on widely accessible customs data: by using the route choice of exporters. We combine our method with a spatial equilibrium model to study the effects of the massive expressway construction in China between 1999 and 2010. We find transport costs are 20% lower on expressways than on regular roads. The expressways construction increases aggregate exports by 10% and domestic trade by 14%. It generates 5.1% welfare gains, implying a 150% net return to investment. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01084 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1580 - 1595 Abstract: AbstractBy the end of 2019, U.S. output was 14% below the level predicted by its pre-2008 trend. To understand why, I develop and estimate a model of the United States with demographics, real and monetary shocks, and the occasionally binding zero lower bound on nominal rates. Demographic shocks generate slow-moving trends in interest rates, employment, and productivity. Demographics alone can explain about 40% of the gap between log output per capita and its linear trend by 2019. By lowering interest rates, demographic changes caused the zero lower bound to bind after the Great Recession, contributing to the slow recovery. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01177 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1596 - 1605 Abstract: AbstractHow does one's childhood neighborhood shape political engagement later in life' We study voting rates of children who were displaced by public housing demolitions and moved to higher opportunity areas using housing vouchers. Those displaced during childhood had 11% (2 pp) higher participation in the 2016 Presidential election and were 10% (2.9 pp) more likely to vote in any general election. We argue that the results are unlikely to be driven by changes in incarceration or parental outcomes but rather by political socialization or improvements in education and earnings. These results suggest that housing assistance programs may reduce inequality in political participation. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01207 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1606 - 1614 Abstract: AbstractWide dispersion is seen in pharmaceutical prices across countries with comparable quality standards. Under monopoly, off-patent and generic drug prices are at least four times higher in the United States than in comparable English-speaking high-income countries. With five or more competitors, off-patent drug prices are similar or lower. Our analysis shows that differential U.S. markups are largely driven by the market power of drug suppliers and are not due to wholesale intermediaries or pharmacies. Furthermore, we show that the traditional mechanism of reducing market power—free entry—is limited because implied entry costs are substantially higher in the United States. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01130 Issue No:Vol. 105, No. 6 (2023)
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Pages: 1615 - 1623 Abstract: AbstractThe video entertainment industry is experiencing increases in over-the-top (OTT) video usage and cord-cutting behavior. Using unique panel data from 2012–2016, we document the behavior of the 2.4% of households who “cut the cord” annually. After dropping TV, these households increase internet usage by 22%, reduce payments to multiple-system operators (MSOs) by 50%, and 16% acquire new OTT video subscriptions. These results indicate meaningful substitution between OTT video and TV and suggest that competition authorities should consider broadening market definitions. MSOs appear to have little incentive to degrade OTT video, despite OTT video's contribution to declining TV revenues. PubDate: Fri, 17 Nov 2023 00:00:00 GMT DOI: 10.1162/rest_a_01132 Issue No:Vol. 105, No. 6 (2023)