Front Matter

American Economic Journal: Economic Policy, August 2021

Unit Sales and Price Effects of Preannounced Consumption Tax Reforms: Micro-level Evidence from European VAT

By Thiess Buettner and Boryana Madzharova

American Economic Journal: Economic Policy, August 2021

We study the effects of consumption tax changes on prices and unit sales of durables utilizing micro-level product data. The results show that tax rate changes are fully shifted into prices. An anticipated tax rate change causes a temporary shift in unit ...

Informal Labor and the Efficiency Cost of Social Programs: Evidence from Unemployment Insurance in Brazil

By François Gerard and Gustavo Gonzaga

American Economic Journal: Economic Policy, August 2021

It is widely believed that the presence of a large informal sector increases the efficiency cost of social programs in developing countries. We evaluate such claims for the case of unemployment insurance (UI) by combining an optimal UI framework with co...

Preferred Pharmacy Networks and Drug Costs

By Amanda Starc and Ashley Swanson

American Economic Journal: Economic Policy, August 2021

Selective contracting is an increasingly popular tool for reducing health care costs, but any savings must be weighed against consumer surplus losses from restricted access. Recently, many prescription drug plans (PDPs) utilize preferred pharmacy networks...

Women's Suffrage and Children's Education

By Esra Kose, Elira Kuka, and Na'ama Shenhav

American Economic Journal: Economic Policy, August 2021

While a growing literature shows that women, relative to men, prefer greater investment in children, it is unclear whether empowering women produces better economic outcomes. Exploiting plausibly exogenous variation in US suffrage laws, we show that expos...

Deterring Illegal Entry: Migrant Sanctions and Recidivism in Border Apprehensions

By Samuel Bazzi, Gordon Hanson, Sarah John, Bryan Roberts, and John Whitley

American Economic Journal: Economic Policy, August 2021

During the 2008 to 2012 period, the US Border Patrol enacted new sanctions on migrants apprehended while attempting to enter the United States illegally. Using administrative records on apprehensions of Mexican nationals that include fingerprint-based I...

The Effect of SNAP on the Composition of Purchased Foods: Evidence and Implications

By Justine Hastings, Ryan Kessler, and Jesse M. Shapiro

American Economic Journal: Economic Policy, August 2021

We use detailed data from a large retail panel to study the effect of participation in the Supplemental Nutrition Assistance Program (SNAP) on the composition and nutrient content of foods purchased for at-home consumption. We find that the effect of SNAP...

Wired and Hired: Employment Effects of Subsidized Broadband Internet for Low-Income Americans

By George W. Zuo

American Economic Journal: Economic Policy, August 2021

I present evidence on the relationship between broadband pricing and labor market outcomes for low-income individuals. Specifically, I estimate the effects of a Comcast service providing discounted broadband to qualifying low-income families. I use a trip...

The Effect of Leaded Gasoline on Elderly Mortality: Evidence from Regulatory Exemptions

By Alex Hollingsworth and Ivan Rudik

American Economic Journal: Economic Policy, August 2021

Leaded gasoline is still used globally for aviation and automotive racing. Exploiting regulatory exemptions and a novel quasi-experiment, we find that leaded gasoline use in racing increases ambient lead, elevated blood lead rates, and elderly mortality. ...

Using Labor Supply Elasticities to Learn about Income Inequality: The Role of Productivities versus Preferences

By Katy Bergstrom and William Dodds

American Economic Journal: Economic Policy, August 2021

Using a general labor supply model in which individuals choose how much to work conditional on productivities and preferences for consumption relative to leisure, we show that the mapping from earnings and hours worked to productivities and preferences ca...

Consumer Myopia in Vehicle Purchases: Evidence from a Natural Experiment

By Kenneth T. Gillingham, Sébastien Houde, and Arthur A. van Benthem

American Economic Journal: Economic Policy, August 2021

A central question in the analysis of fuel economy policy is whether consumers are myopic with regards to future fuel costs. We provide the first evidence on the consumer valuation of fuel economy from a natural experiment that provides exogenous variatio...

Horizontal Differentiation and the Policy Effect of Charter Schools

By Michael Gilraine, Uros Petronijevic, and John D. Singleton

American Economic Journal: Economic Policy, August 2021

While school choice may enhance competition, incentives for public schools to raise productivity may be muted if public education is imperfectly substitutable with alternatives. This paper estimates the aggregate effect of charter school expansion on educ...

Pay Me Later: Savings Constraints and the Demand for Deferred Payments

By Lasse Brune, Eric Chyn, and Jason Kerwin

American Economic Review, July 2021

We study a simple savings scheme that allows workers to defer receipt of part of their wages for three months at zero interest. The scheme significantly increases savings during the deferral period, leading to higher postdisbursement spending on lumpy goo...

Security Transitions

By Thiemo Fetzer, Pedro C. L. Souza, Oliver Vanden Eynde, and Austin L. Wright

American Economic Review, July 2021

How do foreign powers disengage from a conflict? We study this issue by examining the recent, large-scale security transition from international troops to local forces in the ongoing civil conflict in Afghanistan. We construct a new dataset that combine...

The case for paying college athletes

[Research Highlight]

September 11, 2019

The AEA interviews Allen Sanderson and John Siegfried about why they believe the NCAA's current model is broken.

Front Matter

American Economic Review, August 2021

Lapse-Based Insurance

By Daniel Gottlieb and Kent Smetters

American Economic Review, August 2021

Most individual life insurance policies lapse, with lapsers cross-subsidizing non-lapsers. We show that policies and lapse patterns predicted by standard rational expectations models are the opposite of those observed empirically. We propose two behaviora...

Daily Labor Supply and Adaptive Reference Points

By Neil Thakral and Linh T. Tô

American Economic Review, August 2021

This paper provides field evidence on how reference points adjust, a degree of freedom in reference-dependence models. Examining this in the context of cabdrivers' daily labor-supply behavior, we ask how the within-day timing of earnings affects decisions...

The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Health, and Labor Market Outcomes

By Andrew Goodman-Bacon

American Economic Review, August 2021

This paper estimates the long-run effects of childhood Medicaid eligibility on adult health and economic outcomes using the program's original introduction (1966–1970) and its mandated coverage of welfare recipients. The design compares cohorts born in ...

What to Expect from the Lower Bound on Interest Rates: Evidence from Derivatives Prices

By Thomas M. Mertens and John C. Williams

American Economic Review, August 2021

This paper analyzes the effects of the lower bound for interest rates on the distributions of inflation and interest rates. In a New Keynesian model with a lower bound, two equilibria emerge: policy is mostly unconstrained in the "target equilibrium," whe...