AEA Research Highlights

Drug prices have become a hot-button issue in the United States, with politicians across the spectrum agreeing that American consumers pay too much for prescription medications. But bringing down drug prices raises fundamental economic challenges that affect innovation, access, and healthcare costs worldwide. In a paper in the Journal of Economic Perspectives, author Margaret K. Kyle examines how different countries approach pharmaceutical pricing regulation and the lessons to be  learned from international experience. Her work reveals that while the United States does pay significantly higher prices for drugs, the story is more nuanced than a simple comparison suggests. Kyle recently spoke with Tyler Smith about why economists generally support market solutions but make an exception for pharmaceuticals, how "pay-for-performance" contracts and subscription pricing models could bring down costs, and why simple solutions like copying other countries' prices might backfire.

Civil conflict has plagued much of Africa, with ethnically diverse countries experiencing particularly high rates of violence. Yet within these nations, patterns vary, leading to questions of why some groups rebel while others do not and why a given group rebels at certain times but not at other times. In a paper in the American Economic Review, author Eleonora Guarnieri untangles the factors that drive groups to rebel against their central government. She shows that when ethnicities become more culturally distant from those in power, their likelihood of engaging in civil conflict increases significantly.  Her research suggests that conflicts arise as a result of ethnic favoritism in resource distribution and from fundamental disagreements over the types of public goods that central governments should provide. Guarnieri recently spoke with Tyler Smith about how she estimated the impact of cultural distance on civil conflict, and what her findings may mean for reducing violence across Africa's diverse societies.

The Clean Air Act has been an essential tool for reducing air pollution in the United States. But standard estimation methods may overstate its impact, according to a paper in the American Economic Journal: Economic Policy. Authors Lutz Sager and Gregor Singer reexamined the 2005 regulations targeting fine particulate matter (PM2.5) and found that improvements in air quality were closer to a 3 percent reduction in pollutants rather than the 10 percent suggested by conventional methods. However, they also found that the benefits from cleaner air may be larger than previous estimates suggested. Sager and Singer recently spoke with Tyler Smith about methods for properly estimating regulatory impacts that feature time trends and the implications for other measures based on estimates of air quality improvements.

The patchwork nature of America's public safety net has evolved over centuries, shaped by political winds and changing views on poverty. Understanding this complicated history may help shed light on the core tensions that continue to define debates about who deserves assistance and how it should be provided. In a paper in the Journal of Economic Perspectives, author Christopher Howard explored how programs targeted at people with low incomes expanded from meager, local support in colonial times to the large-scale programs of today. He draws a distinction between two parallel systems: means-tested programs targeted specifically at low-income Americans and inclusive social insurance programs available to citizens across income levels.  Howard recently spoke with Tyler Smith about the surprising political durability of some targeted programs, the dramatic success of Social Security in reducing elderly poverty, and the ongoing gaps in the public safety net that leave many Americans vulnerable.

Between 2006 and 2013, China's government poured enormous resources into its shipbuilding industry through various subsidies—from providing free coastal land to offering financing assistance for ship buyers. But estimating the true scale and impact of these policies is challenging, as governments are often opaque about their industrial support programs. In a paper in the Journal of Economic Perspectives, authors Panle Jia Barwick, Myrto Kalouptsidi, and Nahim Bin Zahur developed new methods for overcoming these measurement challenges and quantifying China's support for its shipbuilding industry.  Their research reveals which types of industrial policies work best, when they should be implemented, and why countries might pursue them even when the direct economic returns are low. These insights are particularly relevant today, as countries around the world are increasingly embracing industrial policies to support strategic sectors. Barwick and Kalouptsidi recently spoke with Tyler Smith about how they measured China's shipbuilding subsidies, why entry subsidies are particularly inefficient, and the importance of timing industrial support with market cycles

A growing number of US households hire advisers to assist with major financial decisions, such as planning life events or making portfolio choices for retirement. But some advisers exploit the inherent complexity of these decisions and the lack of sophistication of their clients to benefit themselves. In a paper in the Journal of Economic Perspectives, Mark Egan, Gregor Matvos, and Amit Seru show that about 7 percent of financial advisers have serious misconduct records, with rates reaching nearly 30 percent in some regions and firms. The authors explain why misconduct clusters in certain firms and geographic areas, particularly those with wealthy but less financially sophisticated populations. Importantly, the researchers also show that widely publicizing the names of the firms with the highest misconduct rates can lead to a substantial reduction in misconduct. Egan recently spoke with Tyler Smith about how the complex regulatory landscape of financial advising creates potential confusion for consumers and the best ways to clean up the industry.

In 2017, then-President Trump signed into law the Tax Cut and Jobs Act, which was arguably the largest corporate tax cut in US history. The TCJA significantly lowered the statutory rate that corporations pay in taxes and reshaped numerous tax rules. Proponents said it would boost US competitiveness on the international stage and juice business investment. But its overall effects are still being debated among economists. In a paper in the Journal of Economic Perspectives, authors Gabriel Chodorow-Reich, Owen Zidar, and Eric Zwick explored the current understanding of the TCJA, discussing its costs and benefits, as well as future policy implications. They argue that, contrary to what some proponents said, the tax cuts significantly reduced tax revenues.  Zwick recently spoke with Tyler Smith about the legislation, who benefited the most from the bill, and whether provisions that are set to expire in the coming years should be retained.

A half a century ago, new high-yield varieties of crops were introduced to India, and it transformed the country's farming. This so-called “Green Revolution” significantly boosted agricultural output, allaying concerns about famine and food security. But it may have had some unanticipated consequences for long-term health outcomes. In a paper in the American Economic Journal: Applied Economics, authors Sheetal Sekhri and Gauri Kartini Shastry show that the areas where agricultural productivity accelerated the most also saw the highest rates of diabetes among men later in life. The authors argue that substantial changes to the diets of mothers and young children, in the form of higher levels of rice consumption, likely increased the risks of chronic diseases. The findings suggest that dietary diversification should accompany efforts to promote agricultural production. Sekhri recently spoke with Tyler Smith about how the Green Revolution changed diets in India and why it led to a rise in diet-related diseases like diabetes.

Qualitative accounts of anthropologists indicate that social structure plays an important role in how resources are shared in society. But quantitative evidence measuring the impacts of social organization on financial ties and transfers has been lacking. In a paper in the American Economic Review, authors Jacob Moscona and Awa Ambra Seck helped to fill that gap. They found that in East Africa, cash transfer policies had very different effects in cultures organized by kinship ties compared to cultures organized around age groups. The findings suggest that social organization has a deep impact on how resources spread through economies and ultimately shape inequality. Jacob Moscona recently spoke with Tyler Smith about the difference between kin-based societies and age-based societies and how they affect development policies.

The Paycheck Protection Program (PPP) was launched at the height of the COVID-19 pandemic in the hopes that it would keep businesses from laying off workers during government shutdown measures taken to contain the spread of the disease. Initial estimates of the direct impacts have been mixed, with some studies suggesting that the cost was hundreds of thousands of dollars per job saved. But a paper in the American Economic Journal: Economic Policy looked beyond the labor market at a second order effect showing a clear and positive benefit. Authors Sumit Agarwal, Brent W. Ambrose, Luis A. Lopez, Xue Xiao found that the PPP reduced mortgage delinquencies for commercial real estate by roughly $36 billion in 2020 and likely played an important role in averting wider distress in financial markets. Ambrose recently spoke with Tyler Smith about the impact of PPP loans on the commercial real estate market and ways in which the program could have been better targeted.

In 2005, Austria's most prominent far-right party proclaimed a “Third Turkish Siege of Vienna.” The campaign warned voters that, like their ancestors who were almost overrun by the Ottoman Empire four centuries ago, they were being culturally invaded by Muslims. The campaigners hoped to use long-past historical events to shape the behavior and sentiments of modern-day voters. But did it work? The strategy sparked a surge in the far-right's vote share and a wave of anti-Muslim sentiment, according to a paper in the American Economic Journal: Applied Economics. The authors, Christian Ochsner and Felix Roesel, studied areas with ties to the historical trauma of the Sieges of Vienna and explained how political innovators reinvigorated latent xenophobic narratives that mobilized voters. Ochsner recently spoke with Tyler Smith about the recent political environment in Austria, the use of historical parallels, and the impact on Muslim minorities.

In 1993, the North American Free Trade Agreement (NAFTA) was passed with bipartisan support and near universal endorsement by economists. In hindsight, the economic costs and political consequences were far greater than many contemporary observers would have imagined. In a paper in the American Economic Review, authors Jiwon Choi, Ilyana Kuziemko, Ebonya Washington, and Gavin Wright found that US counties most exposed to NAFTA and Mexican import competition saw their total employment drop by roughly 6 percent compared to those with little exposure to the trade deal. However, workers in these communities didn't respond by moving away to find better opportunities, and many, feeling betrayed by the Democratic party, embraced the Republican party instead.  Choi and Wright recently spoke with Tyler Smith about the economic and political history of NAFTA and what economists have learned since its passage.

Since 2014, over 15,000 migrants have died or gone missing trying to make the voyage from the north coast of Africa to southern Europe. In response, European authorities have launched several search and rescue operations. There are few signs that migration along this deadly route is slowing down. In fact, efforts to curb migrant deaths may encourage even more migrants to make the perilous journey. In a paper in the American Economic Journal: Economic Policy, authors Claudio Deiana, Vikram Maheshri, and Giovanni Mastrobuoni found evidence that migrants and smugglers responded to search and rescue operations by attempting even more dangerous crossings. However, the authors still say that such operations are likely beneficial to migrants on the whole. Maheshri recently spoke with Tyler Smith about the impact of search and rescue operations on the market for smuggling along the Central Mediterranean Route and what policymakers should do to reduce migrant deaths.

Timely publication of research in peer-reviewed journals is critical for economists seeking tenure and important for audiences looking for high-quality, trustworthy studies. But in recent decades, there has been an increasing concern that the pace of publishing in economics is too slow. In a paper in the Journal of Economic Literature, authors Aboozar Hadavand, Daniel S. Hamermesh, and Wesley W. Wilson analyzed the publication lag in top economics journals and compared it to other fields. They found that economics publishing takes nearly twice as long as comparable fields in the other social sciences. However, Hamermesh says that some innovative journals, such as AER: Insights, are taking steps to shorten the time between submission and publication. He recently spoke with Tyler Smith about the pace of publishing in economics, how to fix it, and some advice for young economists trying to publish their work.

The COVID-19 pandemic highlighted the importance of vaccines, but it also underscored the reservations and low take-up rates among US citizens. In a paper in the American Economic Journal: Economic Policy, authors Marcella Alsan and Sarah Eichmeyer tested several approaches to improving messages aimed at boosting vaccine demand. Their main finding was that messages delivered by laypersons were more effective than those delivered by persons perceived to be doctors.  Eichmeyer says that video messages delivered by experts who were of the same race or were perceived as empathetic can be effective for some types of viewers, but for the most hesitant, ordinary citizens may be the best positioned to dispel myths about vaccines.  She recently spoke with Tyler Smith about the design of her and Alsan's experiment and what their results imply about vaccine messaging.

In the middle of the day on Friday, March 10, 2023, bank regulators swiftly shut down Silicon Valley Bank (SVB), arguably averting a wider panic. Compared to past financial crises, it was not especially economically significant, but it stands out as an important, illustrative example of the economics of banking. In a paper in the Journal of Economic Perspectives, author Andrew Metrick explains the causes behind SVB's failure and how the government responded. He says that understanding the collapse of SVB is a stepping stone to making sense of more complicated financial crises such as the Global Financial Crisis. Metrick recently spoke with Tyler Smith about why Silicon Valley Bank failed and what policymakers can do to prevent financial crises.

Before Silicon Valley became a byword for innovation, Route 128, outside of Boston, was America's technology highway, connecting the country's premier technology companies and research facilities. However, this first American high-tech cluster likely would not have developed as it did without one of the biggest shocks to federal R&D funding in US economic history. In a paper in the American Economic Review, authors Daniel P. Gross and Bhaven N. Sampat explain how a World War II research effort jump-started innovation hubs like Route 128 across the United States. Gross and Sampat recently spoke with Tyler Smith about the history of R&D funding in the United States, and the lessons policymakers can take from it.

Numerous studies have highlighted the importance of effective teachers for student achievement. But new research suggests that school counselors may be just as critical as teaching staff for some students. In a paper in the American Economic Review, author Christine Mulhern found that effective high school counselors can significantly improve the chance that students graduate from high school and attend a four-year college. She says that although it is challenging to predict which counselors will have these large positive impacts, the effects are comparable to many popular education interventions. Mulhern recently spoke with Tyler Smith about the role that counselors play in students' choices, which students benefit the most from counseling, and the lessons administrators and parents can take away from her findings.

Some social scientists have postulated that governments are designed for the purpose of helping the powerful take resources from the less powerful. But while there have been many exploitative governments throughout history, states may have actually started to form as a means of facilitating cooperation. In a paper in the American Economic Review, authors Robert C. Allen, Mattia C. Bertazzini, and Leander Heldring found that in ancient Mesopotamia, states were more likely to form when large-scale irrigation projects were needed after losing access to a river. They argue that the pattern observed in the archeological records is best explained by small settlements banding together to cooperate through new institutions. Heldring recently spoke with Tyler Smith about the economic origins of government, the nature of archaeological evidence for ancient state formation, and parallels to modern-day institutions.

Seven years before the 1954 Brown v. Board of Education decision ended the legal segregation of Black schoolchildren, California ended the legal segregation of Mexican American schoolchildren. That decision, known as Mendez v. Westminster, had a rapid impact across the state and led to significant educational benefits, according to a paper in the Journal Economic Literature.  Authors Francisca M. Antman and Kalena E. Cortes found that in areas more likely to practice segregation, the Mendez decision caused Mexican American children to significantly increase their years of schooling. Antman recently spoke with Tyler Smith about the history of Mexican American school desegregation and the lessons the authors' work provides for policymakers.

The bulk of education research focuses on the benefits of the traditional K–12 and higher education systems, while non-traditional programs are relatively understudied. But economists are starting to shine a light on the large returns to investing in adult education. In a paper in the American Economic Journal: Economic Policy, authors Blake H. Heller and Kirsten Slungaard Mummafound large earnings gains and more civic engagement among immigrants who participated in an adult program teaching English as a second language (ESL). The benefits of these programs also led to a sizable return for taxpayers. Heller suggests that, in spite of the polarized space of immigration politics, ESL programs are likely to find traction on both sides of the political aisle because they combine the appeal of people working hard to improve themselves with a social safety net appeal. He recently spoke with Tyler Smith about the need for more research on adult education and the benefits of English language programs.

The United States spends over a billion dollars a year on housing programs that give recently released prisoners a place to stay and modest support before reintegration into society. Yet there is little causal evidence that these programs work. In a paper in the American Economic Journal: Applied Economics, author Logan M. Lee estimated whether residential housing programs in Iowa kept prisoners from returning to prison. He found that instead of reducing recidivism, prisoners assigned to halfway houses appeared to have higher rates of reincarceration than those who were paroled.  Lee recently spoke with Tyler Smith about how he arrived at his estimates and whether or not residential housing programs should be scaled back in the United States.

The costs of Alzheimer's disease are significant. In 2021, it affected nearly 6 million Americans and accounted for an estimated 8 percent of total US health-care spending—about as much as cancer and heart disease combined. And those numbers are only expected to increase as the population ages. In a paper in the Journal of Economic Literature, authors Amitabh Chandra, Courtney Coile, and Corina Mommaerts explain how economists can help provide insights into the numerous policy issues that Alzheimer's disease raises. However, Mommaerts says that the disease also challenges core assumptions in the standard economics tool kit. She recently spoke with Tyler Smith about cognitive constraints, incentives for providers, and encouraging more innovative treatments for Alzheimer's disease.

For decades US policymakers have tried to achieve the universal health insurance coverage that many other developed countries enjoy. But despite incremental reforms, based on tweaking health insurance markets, America's uninsured population has remained stubbornly high. In a paper in the Journal of Economic Perspective, authors Katherine Baicker, Amitabh Chandra, and Mark Shepard argue that economists should move away from the paradigm that has inspired these past reforms and toward an approach that encourages wholesale change. They say that proposals should start from a basic, mandatory health insurance package, which can then be supplemented in markets for health insurance.  Shepard recently spoke with Tyler Smith about the success of health care systems using this framework in other developed countries and why economists need to rethink their approach to health insurance reform in the United States.

Around the world, female entrepreneurs borrow less than their male counterparts. Many people suggest that the reason for this gap comes down to the fact that women select into less capital-intensive industries. But in a paper in the American Economic Journal: Applied Economics, authors J. Michelle Brock and Ralph De Haas show that implicit bias against women leads to more onerous ​​guarantor requirements on loans. The findings come from a lab-in-the-field experiment conducted with over three hundred Turkish loan officers and real-life loan applications. Brock says that the additional collateral requirements placed on female entrepreneurs could be a significant barrier to women running businesses. But there may be steps that banks can take to mitigate the problem.  Brock recently spoke with Tyler Smith about her and De Haas's experiment in Turkey and what lessons policymakers should take away from the results.

A wave of political demonstrations in recent years has grabbed headlines and helped to reshape the political landscape. But it's an open question as to whether these protest movements actually change opinions in the long run. In a paper in the American Economic Journal: Applied Economics, authors Daniel Hungerman and Vivek Moorthy found that activism can have a lasting impact on local communities. In particular, they found that areas with unusually bad weather on the original Earth Day in 1970, which would have presumably lowered the participation rate, saw weaker support for the environment and worse newborn health outcomes 10 to 20 years later. Hungerman says that while climate change is a global phenomenon, their work is a reminder that bringing people together still makes a difference at the local level. He recently spoke with Tyler Smith about how the first Earth Day shaped communities' views about the environment and what his research contributes to the broader conversation around climate change.

Fans have frequently experienced the frustration of event tickets selling out in a matter of minutes and then being resold for twice as much or more. This combination of underpriced tickets in the primary market and rent-seeking speculation in the secondary market has long puzzled economists.  In a paper in the American Economic Journal: Microeconomics, authors Eric Budish and Aditya Bhave show that auctions are an easy way to fix broken ticket markets by looking at changes Ticketmaster made in 2003. However, the benefits of using auctions in primary markets are unlikely to be felt by consumers. Budish says that other reforms, such as preventing resales, could be a way for artists and sports teams to reward their die-hard followers. Budish recently spoke with Tyler Smith about Ticketmaster's efforts to curb secondary markets with auctions, and how reforming the primary market for tickets benefits sellers as well as society.

Graduate school should be about learning how to push the frontiers of knowledge. Many students, however, also learn that getting a PhD can push them into emotional and psychological trouble. In a paper in the Journal of Economic Literature, authors Valentin Bolotnyy, Matthew Basilico, and Paul Barreira surveyed eight top-ranked economics PhD programs across the country and found high levels of significant depression and anxiety symptoms among students. Their survey indicates that some norms in the field, such as working alone and downplaying emotional distress, may be exacerbating the profession's mental health issues. Bolotnyy recently spoke with Tyler Smith about the prevalence of mental distress among economics PhD students and what universities can do to remedy the situation, such as encouraging a more collaborative research environment.

Cognitive behavioral therapy (CBT) is a form of counseling designed to change unhelpful patterns of thinking. A strong, evidence-based track record has led to its widespread use in high-income countries. But it may also be an important tool for helping people in some of the poorest countries in the world.  In a paper in the American Economic Review: Insights, authors Nathan Barker, Gharad Bryan, Dean Karlan, Angela Ofori-Atta, and Christopher Udry found that group-based CBT in rural Ghana significantly improved mental and perceived physical health, as well as cognitive and socioemotional skills—even for individuals who did not report mental distress. The findings may be paired with more traditional economic assistance to get the most out of anti-poverty programs, says Nathan Barker. Barker recently spoke with Tyler Smith about his experiment in Ghana and why CBT can be beneficial for everyone, not just people suffering poor mental health.

When most Americans look for financial advice, they don't turn to academic journals for guidance. Instead, they're likely to get information from financial personalities like Dave Ramsey or Robert Kiyosaki, whose books have sold millions of copies. But how good is that advice? In a paper in the Journal of Economic Perspectives, author James J. Choi looked through 50 of the most popular personal finance books on the market and found that they sometimes deviate from the advice of economists. However, that doesn't necessarily mean the popular authors are wrong. Choi says that while popular finance books may occasionally give bad advice, economists may learn something deeper about how people make financial decisions and the constraints they operate under if they take the popular authors' prescriptions more seriously. Choi recently spoke with Tyler Smith about popular financial advice on a range of issues, such as savings rules and mortgage types, and how closely this advice matches modern economic theory.

Religion is a deep source of tradition and meaning for many people around the world, especially those in developing countries. But religious practices can sometimes stand in the way of long-term economic growth, according to a paper in the American Economic Review. Authors Eduardo Montero and Dean Yang found that ill-timed patron saint day festivals in Mexico lead to lower levels of development. In particular, celebrations coinciding with important agricultural seasons lowered household incomes, over the course of centuries, by roughly 20 percent. But that doesn't necessarily mean these festivals made people worse off overall. Montero and Yang say that it's up to communities and their leaders to decide what the right balance is between cultural traditions and economic growth. The authors recently spoke with Tyler Smith about patron saint day festivals and why they hampered long-run economic development in Mexico.

Major charity appeals can bring in hundreds of millions of dollars. But many worry that these efforts shift money away from other charities or merely move donations forward in time. In a paper in the American Economic Journal: Economic Policy, authors Kimberley Scharf, Sarah Smith, and Mark Ottoni-Wilhelm found that charity fundraisers do in fact lift donations without being offset elsewhere. The findings show that fundraisers can increase the size of the overall charitable pie.  However, major appeals still have some spillover effects on the timing of donations to other charities. As a result, Smith says that organizations should focus on sustaining fundraising efforts in order to ensure that funds don't disappear in the longer term. Sarah Smith recently spoke with Tyler Smith about how donors respond to major charity appeals in the United Kingdom and what fundraisers should take away from the results.   Please share your feedback by taking this quick survey. It should only take a minute or two.  

The pandemic has taken a toll on the education system. School enrollment has decreased, teacher turnover has ticked up, and students have experienced substantial learning losses.  But there is at least one silver lining, according to a paper in the American Economic Review: Insights.  Authors Andrew Bacher-Hicks, Joshua Goodman, Jennifer Greif Green, and Melissa K. Holt found that school bullying and cyberbullying dropped by more than 30 percent as schools shifted to remote learning in the spring of 2020. Their results are based on real-time tracking of internet searches, which they show contain useful information about actual bullying behavior. Bacher-Hicks and Goodman recently spoke with Tyler Smith about their approach to studying bullying trends and the degree to which bullying originates in schools and then migrates online.   Please share your feedback by taking this quick survey. It should only take a minute or two.  

Every year, hundreds of thousands of kids enter the US foster care system. And yet, improving their welfare remains an understudied topic among economists, according to a paper in the Journal of Economic Perspectives.  Authors Anthony Bald, Joseph J. Doyle Jr., Max Gross, and Brian A. Jacob lay out an economic framework for understanding the US foster care system. They detail what economists have learned about both the demand side and supply side of foster care, such as the causes of child maltreatment and the incentives to provide high-quality care. Doyle recently spoke with Tyler Smith about the history and impact of foster care in the United States, as well as opportunities for future research.

From the 1970s to the 1990s, the share of students leaving college with a degree steadily declined. But according to a paper in the American Economic Journal: Applied Economics, the trend since then has taken a turn for the better. Authors Jeffrey T. Denning, Eric R. Eide, Kevin J. Mumford, Richard W. Patterson, and Merrill Warnick documented a large increase in graduation rates over the last three decades. By digging into the records of nine large public universities, a public liberal arts college, and a nationally representative survey, the researchers concluded that grade inflation is the most likely driver, ruling out explanations such as better student preparation. Denning says that more research is needed to determine whether this grade inflation is beneficial on the whole. But it should be something that school administrators consider when making decisions about grading standards. Denning recently spoke with Tyler Smith about the impact of grade inflation on college completion rates and the upsides it has as a policy tool.

In the 1990s, drug manufacturers began marketing their products directly to consumers. Since then, prescription drug advertising has become a multibillion dollar industry, and some have worried that it might be getting between patients and what their doctors think is in their best interest. But in a paper in the American Economic Journal: Microeconomics, author Bradley T. Shapiro found that advertising antidepressants on television led to significant improvements in indicators of depression. He says that the gains from decreasing workplace absenteeism far outweigh the costs associated with higher antidepressant sales. Shapiro recently spoke with Tyler Smith about the challenges of estimating the impact of advertising on consumers and how direct-to-consumer advertising of antidepressants can improve mental health.

Publicly available statistics on career earnings show that an economics degree pays far more on the job market than degrees in other social sciences. But it's not clear that those higher salaries reveal the true returns to studying the dismal science.  In a paper in the American Economic Journal: Applied Economics, authors Zachary Bleemer and Aashish Mehta identify the causal effects of choosing one major over another by analyzing the outcomes of a policy at the University of California, Santa Cruz, that prevented students with low grades in introductory economics courses from declaring an economics major. They found that studying economics boosted annual early-career wages by $22,000 compared to students' second-choice majors—a return roughly as large as enrolling in college in the first place. Bleemer says that returns to a major can vary significantly from student to student and college to college. But the results highlight the importance of carefully evaluating information about career earnings when choosing a field of study. He recently spoke with Tyler Smith about the earnings premium of an economics degree and the downsides of major restriction policies at universities.

Black Lives Matter protests have put a spotlight on police abuses since 2014, but it has been challenging for  researchers to assess the impact of race from the available data.  In a paper in the American Economic Review, authors Mark Hoekstra and CarlyWill Sloan found that White officers use force more frequently than Black officers, especially in Black neighborhoods.  Sloan says that their work is a step toward showing that some police departments may have systemic race problems rather than just a few high-profile, one-off incidents. She recently spoke with Tyler Smith about the challenges of studying officer–civilian interactions and the lessons her work might have for US police departments.

The COVID-19 pandemic has already significantly widened wealth and income disparities around the world.  Poorer populations suffered higher rates of infection, and workers in low paying jobs were the most impacted by widespread shutdowns. But not all pandemics have had the same effect. In a paper in the Journal of Economic Literature, author Guido Alfani looks at the history of pandemics stretching back to the medieval Black Death to examine how factors like mortality rates and the response by wealthy elites affected gaps between the rich and poor. Alfani says that the lessons from previous pandemics like cholera in the 19th century offer hope for how public policy responses can actually have a meaningful impact on reducing inequality over the long run. Alfani spoke with Chris Fleisher about how the history of global pandemics can help inform responses to COVID-19 and efforts to address the root causes of poverty. Music in the audio by Podington Bear.

The past weighs on every country, and nowhere is that more true than in Africa. The continent's legacy of slavery, colonialism, and division has stood in the way of Africa's struggle for stability and economic progress. But in a paper in the Journal of Economic Perspectives, authors Nathan Canen and Leonard Wantchekon argue that economists must primarily consider the impact of modern-day policy choices to fully understand long-term growth in Africa. They say that political distortions—situations where special interest groups are able to direct economic development toward their own ends rather than toward improving general welfare—play an underappreciated role in Africa's development. Approaching the continent's economic growth through that lens may lead to more insights about how to create institutions that give average citizens a leg up on special interest groups. Canen and Wantchekon recently spoke with Tyler Smith about how state capture is holding back economic progress in Africa and what to do about it.

In the first half of the twentieth century, four million African Americans left the Jim Crow South to create new lives for themselves. They moved to cities like Detroit, Baltimore, and Chicago in what came to be known as “the Great Migration.” And indeed, they did improve their economic standing, with some families doubling their earnings. But opportunities to move up the ladder would dwindle for the generations that followed. In a paper in the American Economic Review, Ellora Derenoncourt shows that the way northern cities responded to the migration dampened the earnings potential for African Americans living in those locations today.  She says the findings offer insights into how some policies that encourage families to move to opportunity, such as voucher programs, ignore more fundamental questions about the elements that make neighborhoods thrive. Derenoncourt spoke with Chris Fleisher about her research, the mechanisms that reduced earnings potential for Black residents in some northern cities, and the implications for programs aimed at moving low-income and minority families to opportunity.

The United States has dramatically increased its funding for public schools over the last four decades. Real per-pupil expenditures have nearly doubled since 1980.  In a paper in the American Economic Journal: Economic Policy, author Jason Baron found that when school budgets increased in Wisconsin, how that money got allocated made a big difference into student outcomes. Baron says that additional spending on operations, such as teacher salaries and support services, positively affected test scores, dropout rates, and postsecondary enrollment. But extra capital expenditures on new buildings and renovations had little impact. He spoke with Tyler Smith about why different types of school funding matter and how school budgets may continue to evolve.

Nine in ten Republicans say increasing border security is important, and immigration remains a salient issue with voters entering the 2022 midterm elections. But it's not just general opposition to immigrants that registers with voters. The skills immigrants bring shape how US voters view them. In a paper in the American Economic Journal: Applied Economics, authors Anna Maria Mayda, Giovanni Peri, and Walter Steingress investigate how Republican vote share changed with an influx of differently skilled workers. They say that Republicans lost votes in places where the immigrants were highly skilled, for example, in fields like health care or IT, while gaining vote share where there was an influx of low-skilled foreign workers. Additionally, they find that if overall immigration—including all skill levels—had been cut in half in certain states between 1990 and 2016, it would have swung the 2016 election for Democrats. Mayda spoke with Chris Fleisher recently about how immigrant skill level shapes public perceptions, the extent to which this affected Republican support, and the implications for how immigration is talked about by policymakers and covered in the media.

Only four times in US presidential history has the candidate with fewer popular votes won the election. Two of those occurred recently in 2000 and 2016, leading to calls to reform the system. Far from being a fluke, this peculiar outcome of the US Electoral College has a high probability in close races, according to a paper in the American Economic Journal: Applied Economics. Authors Michael Geruso, Dean Spears, and Ishaana Talesara say that regardless of changes in demographics and institutions, the odds of so-called inverted elections in close races has been about the same over the last 200 years. Geruso says that while Republicans benefit today from the chance of an inverted election, it hasn't always been that way.  He recently spoke with Tyler Smith about why the Electoral College causes inversions and what he thinks about moving to a national popular vote.  

This is a rebroadcast of a conversation that Chris Fleisher had with University of Georgia professor Emily Lawler back in 2019 about her research on vaccine mandates for adolescents.

Head Start was launched nearly sixty years ago as part of the United States' War on Poverty. Since then, it has helped prepare millions of kids for first grade. The architects of the program hoped that putting disadvantaged children on more equal footing with their better-off peers would set them up for future success. But the long-run impacts are only now becoming clear. In a paper in the American Economic Review, authors Martha J. Bailey, Shuqiao Sun, and Brenden Timpe found that Head Start significantly boosted educational attainment and economic self-sufficiency later in life. The returns were so great that the program more than paid for itself. Bailey says their findings offer important insights into evaluating large-scale social programs, especially those that invest in people while they are young. She recently spoke with Tyler Smith about the long-term effects of Head Start and its lessons for early childhood intervention programs. 

The Black Lives Matter movement has sparked a national conversation around police reform, with proposals ranging from reallocating resources to outright abolition of local departments. Economists could help inform these discussions. But critics say existing economic research falls short of understanding the true impacts of policing on communities. In a paper in the Journal of Economic Perspectives, Yale sociologist Monica C. Bell offers proposals for how economists can deepen their understanding of policing and public safety. She says a good first step is to separate those two concepts.  Bell recently spoke with Chris Fleisher about how focusing on crime limits our understanding of the way policing shapes communities, why more research is needed on community-based safety programs, and how qualitative approaches can inform research based on big data.

With advances in modern medicine, US life expectancy steadily improved over the second half of the 20th century. But that progress masked a growing gap in mortality between poorer and richer states that started in the 1980s.  The exact reasons for this divergence are still unknown, but a paper in the Journal of Economic Perspectives helps rule out some possibilities and provides guidance about where to look next. Authors Benjamin K. Couillard, Christopher L. Foote, Kavish Gandhi, Ellen Meara, and Jonathan Skinner say that two types of explanations stand out. On the one hand, previous research has found numerous ways that state institutions and policies have affected health outcomes. And on the other hand, there are reasons to believe that behavior and culture also contribute to mortality differences. Disentangling these two strands may be a significant challenge for future research, according to the authors.Meara, who is Professor of Health Economics and Policy at Harvard, and Foote, who is Senior Economist at the Federal Reserve Bank of Boston, recently spoke with Tyler Smith about rising geographic disparities in US mortality.The edited highlights of that conversation are below, and the full interview can be heard using the podcast player. [Note: The views expressed herein are solely those of the authors and do not necessarily represent the views of the Federal Reserve System or the Boston Fed.]

The American Civil War and emancipation ended chattel slavery, and as a result, substantially reduced the fortunes of slaveholding households in the years immediately following the war. In a paper in the American Economic Review, authors Philipp Ager, Leah Boustan, and Katherine Eriksson find that many White former slave-owning households rebuilt much of their lost wealth in just one generation, and within two generations, most had recovered entirely. According to the authors, this rapid recovery was made possible by non-material advantages, such as social networks and political connections, which persisted in spite of the large loss of wealth. The research challenges common narratives around the South's recovery from the Civil War by documenting the persistence of much of the wealth created from chattel slavery. Boustan recently spoke with Chris Fleisher about how she and her coauthors approached their research and what their findings say about wealth and inequality.  

DNA databases have become essential for solving crimes with few to no leads. But their benefits extend beyond finding suspects.  They provide a powerful tool for preventing crimes from happening in the first place, according to a paper in the American Economic Journal: Applied Economics. Authors Anne Sofie Tegner Anker, Jennifer L. Doleac, and Rasmus Landersø found that the expansion of DNA databases in Denmark led to a sharp reduction in recidivism. While some citizens worry about potential abuse of this surveillance tool, the effectiveness of registering offenders in DNA databases stands out compared to traditional policing measures. Professor Doleac recently spoke with Tyler Smith about how DNA registration deters crime and how policymakers should weigh the tradeoff between privacy and effective policing measures.