Review of Economics and Statistics (REStat)

Curriculum, Political Participation, and Career Choice Abstract. We examine the causal impact of ideological education on students' political participation and career choices by exploiting China's staggered rollout of a high school curriculum reform that emphasized political indoctrination. Using nationally representative survey data on college students that the authors collected, we find that exposure to the new curriculum increases the likelihood of joining the Chinese Communist Party by 14% and raises the probability of securing state-sector jobs after graduation by 15%. These results highlight the powerful role of ideological education in shaping students' political alignments and career trajectories.

China's curriculum reform steered graduates to the CCP and state jobs. Just Accepted new paper by Hongbin Li. Sai Luo, and Yang Wang zurl.co/ii7dw

Does Affordability Status Matter in Who Wants Multifamily Housing in Their Backyard? Abstract. We provide evidence that similar price effects occur from new multifamily rental housing on surrounding owner-occupied property values regardless of whether the development was subsidized. These effects were on average negative in higherincome communities, but became either non-distinguishable from zero or positive in higher-income communities with sufficient population density. These results imply that previous opposition to all new rental housing by homeowners is misguided as developments could raise property values in some higher-income neighborhoods.

Multifamily rental housing is not as harmful to owner-occupied property values as previously estimated. Just Accepted new paper by Michael D. Eriksen and Guoyang Yang zurl.co/7s8ye

Experienced Utility, Engel Curves and Expenditure Choices Abstract. This study examines how individual spending behaviours change for different levels of experienced utility using a composite SWB indicator as a utility proxy and modelling expenditure behaviours through Engel curves across different utility regions. To perform the analysis, we use expenditure and SWB data for Italian residents in 2016 and estimate Engel curves through a non-parametric instrumental variable threshold regression approach. Our findings indicate that individual spending behaviours are characterized by distinct experienced utility functions, with respect to different goods' categories and durability, and corroborate the strict association between conspicuous consumption, social aspects of life, and well-being.

Expenditure patterns differ across experienced utility levels using Engel curves. Just Accepted new paper by Cristina Bernini, Silvia Emili, and Federica Galli zurl.co/yjegE

Safer in School? The Impact of Compulsory Schooling on Maltreatment and Associated Harms Abstract. Abused and neglected children are at extreme risk of school dropout, poor health, and destructive behaviours, yet evidence on interventions that prevent maltreatment and its harms is limited. We use a South Australian education reform to examine whether extending the school-leaving age from 16 to 17 improves maltreatment-related outcomes. Using administrative records and regression-discontinuity techniques, we find that the reform reduced first-time cases of maltreatment reported to Child Protection Services (CPS). Among adolescents with past CPS involvement, it also reduced emergency healthcare utilisation. Our findings suggest school attendance can improve child safety, with an incapacitation effect as the likely mechanism.

Raising the school-leaving age in South Australia reduced maltreatment reports and emergency room visits. Just Accepted new paper by Adam A. Dzulkipli (@adzulkipli.bsky.social), Nicole Black, David W. Johnston, and Leonie Segal zurl.co/jkFkt

Agricultural Transformation and Farmers' Expectations: Experimental Evidence from Uganda Abstract. This paper uses the randomized rollout of a national agricultural extension program in Uganda to study subsistence smallholders' decisions to adopt cash oilseed crops and shift to commercial farming. By eliciting yield and price expectations, we examine how beliefs evolve after the intervention and influence adoption decisions. Our findings indicate that technical and market information significantly raises farmers' expectations, leading to an average 15% increase in oilseed adoption. Results highlight the role of information in shaping beliefs and behavior, and suggest that addressing knowledge gaps and belief misperceptions about crop profitability is crucial for improving technology adoption and agricultural transformation.

Uganda farming program boosted crop adoption by 15% by changing farmers' expectations about oilseed yields. Just Accepted new paper by Jacopo Bonan, Harounan Kazianga (@hkazianga.bsky.social‬), and Mariapia Mendola zurl.co/pvJN3

Computerized Machine Tools and the Transformation of U.S. Manufacturing Abstract. The diffusion of computerized machine tools in the mid-20th century was a pivotal step in the century-long process of factory automation. We build a novel measure of exposure to computer numerical control (CNC) using initial variation in tool types across industries and differential shifts toward CNC by type. Industries more exposed to CNC from 1970–2007 increased labor productivity and reduced production employment. Workers in more exposed labor markets adjusted by shifting from metal to non-metal manufacturing. Union members were shielded from this job loss, and some workers returned to school to retrain.

Computer machine tools c. 1970s automated metal manufacture. Displaced workers shifted to light manufacture. Just Accepted new paper by Leah Boustan, Jiwon Choi, and David Clingingsmith zurl.co/9ENPU

Opioid Use and Employment Outcomes: Evidence from the U.S. Military Abstract. There is significant interest in understanding labor market consequences of the opioid epidemic, but little is known about how opioid use affects on-the-job performance. We analyze the impact of opioid initiation on job performance using linked medical and personnel data for active-duty military members. Exploiting quasi-random assignment of patients to physicians in the emergency department, we find that military members assigned to high-intensity opioid prescribing physicians have a higher likelihood of long-term opioid use, are less likely to receive promotions, and are more likely to receive disciplinary actions and leave their jobs. Our results demonstrate productivity costs of opioid use.

Opioid use reduces job performance in the military: fewer promotions, more disciplinary actions and exits. Just Accepted new paper by Abby Alpert, Stephen D. Schwab, and Benjamin Ukert zurl.co/NOZJp

Religious Barriers to Birth Control Access Abstract. This paper presents new causal evidence on the “power” of oral contraceptives in shaping women's lives, leveraging the 1970 liberalization of the Pill for minors in the Netherlands and demand- and supply-side religious preferences that affected Pill take-up. We analyze administrative data to demonstrate that, after Pill liberalization, minors from less conservative areas were more likely to delay fertility/marriage and to accumulate human capital in the long run. We then show how these large effects were eliminated for women facing a higher share of gatekeepers—general practitioners and pharmacists—who were opposed to providing the Pill on religious grounds.

Pill access helped women delay childbirth and build careers, unless religious gatekeepers intervened. Just Accepted new paper by Olivier Marie (@econom.bsky.social) and Esmée Zwiers (@esmeezwiers.bsky.social) zurl.co/Zdwvc

Sexual Misconduct, Accused Scientists, and Their Research Abstract. Does the scientific community sanction sexual misconduct? Using a sample of scientists at U.S. universities involved in substantiated cases of sexual misconduct that became public, we find that their prior work is cited less after the allegations become known. The effect weakens with distance in the coauthorship network, suggesting that researchers primarily learn about misconduct through their peers. Among the closest peers, male authors react more strongly. In male-dominated fields, the effects on citations appear muted. Accused scientists are more likely to leave academic research, to move to non-university institutions, and to publish less.

After sexual misconduct cases, accused scientists' prior work is cited less, and many stop publishing. Just Accepted new paper by Rainer Widmann, Michael E. Rose (@merose.bsky.social‬‬), and Marina Chugunova zurl.co/5r1t3

Local Corporate Taxes and the Geography of Foreign Multinationals Abstract. We study the implications of the presence of foreign multinationals on regional corporate tax policies of a country. We develop and estimate a quantitative spatial model with multinational production (MP) and local corporate taxes. Exploiting China's 2008 corporate tax reform, we find that firm production across regions is twice as footloose as estimates in the literature on cross-country production. Counterfactual analysis shows that (i) China's 2008 corporate tax reform shifted foreign-firm productions to western provinces and increased Chinese welfare by 0.86%; (ii) regional tax competition would significantly reduce China's corporate tax revenue, lowering the welfare by 5.56%; (iii) the nationally optimal corporate tax schedule would increase Chinese welfare by 3.10%. Finally, without the presence of foreign multinationals, the welfare loss from regional tax competition would be 2.04%, while the gain from the nationally optimal corporate taxes would be only 0.06%.

Just Accepted new paper, "Local Corporate Taxes and the Geography of Foreign Multinationals” by Jianpeng Deng, Chong Liu, Zi Wang, and Yuan Zi zurl.co/HWMOb

Monitoring Technology: The Impact of Body-Worn Cameras on Citizen-Police Interactions Abstract. We provide experimental evidence that using body-worn cameras (BWCs) for police monitoring improves police-citizen interactions. In an intervention carried out in Brazil in 2018, we find that treated incidents show a 61.2% decrease in police use of force and a 47.0% reduction in adverse interactions, including handcuff use and arrests. The use of body-worn cameras also significantly improves the quality of police reporting. The rate of incomplete reports dropped by 5.9%, which is accompanied by a 69.2% increase in reported incidents of domestic violence. We explore various mechanisms that explain why BWCs work and show that the results are consistent with the police changing their behavior in the presence of cameras. Overall, results show that the use of body-worn cameras de-escalates conflicts.

Body-worn cameras reduce police use of force by 61.2%. Just Accepted new paper by Daniel AC Barbosa, Thiemo Fetzer, Caterina Soto-Vieira, and Pedro CL Souza zurl.co/aZFHH

Online Social Network Effects in Labor Markets: Evidence from Facebook’s Entry to College Campuses Abstract. Using quasi-random variation from Facebook’s entry to college campuses, I exploit a natural experiment to estimate the effect of online social network access on future earnings. I estimate that access to Facebook for an additional year in college causes a .62 percentile increase in a cohort’s average earnings, translating to an average wage increase of around $970 in 2014, and decreases income inequality within a cohort. I provide indirect evidence that wage increases come through the channel of increased social ties with college alumni, strengthened employment networks, and increased match value between students’ majors and later occupations.

Students who received earlier access to Facebook during college earn more than their peers later in life. In the July issue, by Luis Armona zurl.co/mJQ56

A Dynamic Ordered Logit Model with Fixed Effects Abstract. We study a fixed-T panel data logit model for ordered outcomes that accommodates fixed effects and state dependence. We provide identification results for the autoregressive parameter, regression coefficients, and the threshold parameters in this model. Our results require only four observations on the outcome variable. We provide conditions under which a composite conditional maximum likelihood estimator is consistent and asymptotically normal. We use our estimator to explore the determinants of self-reported health in a panel of European countries over the period 2003–2016, and we find evidence for state dependence in self-reported health.

Study of a fixed-T panel data logit model for ordered outcomes that include fixed effects and state dependance. In the July issue, by Chris Muris, Pedro Raposo, and Sotiris Vandoros zurl.co/yjJ6d

Announcement-Specific Decompositions of Unconventional Monetary Policy Shocks and Their Effects Abstract. I propose to identify announcement-specific decompositions of asset price changes into monetary policy shocks exploiting heteroskedasticity in intraday data, accommodating both changes in the nature of shocks and the state of the economy across announcements. I compute decompositions with respect to Fed Funds, forward guidance, asset purchase, and Fed information shocks from January 1996 to December 2019. The decompositions illustrate which announcements of unconventional policy measures had significant effects during the Great Recession. Overall, forward guidance and asset purchases have significant effects on yields, spreads, equities, and uncertainty, but the effects of monetary policy vary over time, particularly asset purchases.

Heteroskedasticity identifies unique decompositions of asset prices into monetary shocks for each announcement. In the July issue, by Daniel J. Lewis zurl.co/3wWLF

An Estimated Model of Household Inflation Expectations: Information Frictions and Implications Abstract. This paper proposes and estimates a dynamic model of household inflation expectations with information frictions and time-varying parameters, where households use a Bayesian learning model to form and update inflation expectations. The model decomposes households’ inflation expectation formation process into a learning component, a noisy signal component, and a measurement component. Model-implied household inflation expectations provide a robust fit for the expectation-augmented Phillips curve. As a result of time-varying inflation dynamics, households’ attention to inflation is endogenous to its volatility. This insight offers explanations for the anchoring of inflation expectations during the Great Moderation.

In the July issue, "An Estimated Model of Household Inflation Expectations: Information Frictions and Implications" by Shihan Xie zurl.co/uwQ6m

In Search of Dominant Drivers of the Real Exchange Rate Abstract. We uncover the major drivers of macro aggregates and the real exchange rate at business cycle frequencies in Group of Seven countries. The estimated drivers of key macro variables resemble each other and account for a modest fraction of the real exchange rate variances. Dominant drivers of the real exchange rate are orthogonal to the main drivers of business cycles, generate a significant deviation of the uncovered interest parity condition, and lead to small movements in net exports. We use these facts to evaluate international business cycle models accounting for the dynamics of both macro aggregates and the real exchange rate.

Our estimated real exchange rate driver is orthogonal to business cycles and generates a clear UIP deviation. In the July issue, by Wataru Miyamoto, Thuy Lan Nguyen, and Hyunseung Oh zurl.co/XaYRq

Auctions and Negotiations in Housing Price Dynamics Abstract. We shed light on housing price inertia by investigating how the home-sale mechanism affects housing price dynamics. Using Australian data, we find that auction prices forecast better and display less momentum than negotiated prices. These findings are robust to alternative price measurements and different sample selection corrections. Motivated by microtheory that predicts different weights for buyer and seller values in auction and negotiated prices, we decompose housing prices into two diffusion processes and interpret them as buyer value and seller value, respectively. The seller value updates much more slowly, which could be an important driver of housing price inertia.

Australian housing data on auctions and negotiations show sellers drive housing price inertia. In the July issue, by David Genesove and James Hansen zurl.co/OWklU

Permutation Inference with a Finite Number of Heterogeneous Clusters Abstract. I introduce a simple permutation procedure to test conventional (nonsharp) hypotheses about the effect of a binary treatment in the presence of a finite number of large, heterogeneous clusters when the treatment effect is identified by comparisons across clusters. The procedure asymptotically controls size by applying a level-adjusted permutation test to a suitable statistic. The adjusted permutation test is easy to implement in practice and performs well at conventional levels of significance with at least four treated clusters and a similar number of control clusters. It is particularly robust to situations where some clusters are much more variable than others.

Permutation inference can test conventional hypotheses in data with few arbitrarily heterogeneous clusters. In the July issue, by Andreas Hagemann zurl.co/eSA4N

Trust, Happiness, and Pro-social Behavior Abstract. This paper combines several large-scale surveys and empirical strategies to shed new light on the determinants of cooperative behavior. We provide evidence indicating that the level of trust maximizing subjective well-being tends to be above the income maximizing level. Higher trust is also linked to more cooperative and pro-social behaviors, including the private provision of global public goods such as climate change mitigation. Consistent with “warm glow” theories of pro-social behavior, our results indicate that individuals may enjoy being more cooperative than what would lead them to maximize income, which can be reflected in higher levels of subjective well-being.

People may be more trusting & cooperative than what would lead them to maximize income. Why? They are happier. In the July issue, by Stefano Carattini and Matthias Roesti zurl.co/20J97

Super Mario Meets AI: Experimental Effects of Automation and Skills on Team Performance and Coordination Abstract. This article studies the effects of the introduction of artificial intelligence (AI) into teams in a laboratory experiment. We randomly assign automated co-workers into “laboratory firms” who are playing a team-based game on the Nintendo Switch console. We demonstrate that even in a task where AI outperforms humans, automation decreases overall team performance and increases coordination failures. These effects are especially large in the short-term and in low- and medium-skilled teams. Moreover, automation reduces team trust and individual effort provision. Our results support the implication that improving collaborative human-machine teams is key to the positive transformation that AI may bring to organizations.

Does human task performance decrease when teammates are machines, and why? In the July issue, by Fabrizio Dell'Acqua, Bruce Kogut, and Patryk Perkowski zurl.co/I0cmv

Testing Marx: Capital Accumulation, Income Inequality, and Socialism in Late Nineteenth-Century Germany Abstract. We study the dynamics of capital accumulation, income inequality, capital concentration, and voting up to 1914. Based on new panel data for Prussian regions, we reevaluate the famous revisionism debate between orthodox Marxists and their critics. We show that changes in capital accumulation led to a rise in the capital share and income inequality, as predicted by orthodox Marxists. But against their predictions, this neither led to further capital concentration nor more votes for the socialists. Instead, trade unions and strike activity limited income inequality and fostered political support for socialism, as argued by the revisionists.

In the July issue, "Testing Marx: Capital Accumulation, Income Inequality, and Socialism in Late Nineteenth-Century Germany" by Charlotte Bartels, Felix Kersting, and Nikolaus Wolf zurl.co/ykAUp

Wealth-Income Ratios in Free Market Capitalism: Switzerland, 1900–2020 Abstract. We show that over the 20th century, the ratio of private wealth to national income, βpt, in Switzerland did not follow a U-shaped pattern, thereby contrasting the evolution in most European countries. Instead, the ratio was exceptionally stable at around 500%. We argue that this consistently high βptwas the result of geopolitical factors combined with Switzerland’s capital-friendly policymaking. Since the turn of the century, however, βpthas been on a rapid rise to reach 793% in 2020. This exceptionally fast increase is mainly driven by large capital gains, especially in housing wealth.

Over the entire past century, Switzerland's wealth was worth ~5x national income. Now wealth is worth 8x NNI. In the July issue, by Enea Baselgia and Isabel Z. Martínez zurl.co/tXgEu

Job-to-Job Mobility and Inflation Abstract. The low rate of inflation observed in the United States over the past decade is hard to reconcile with traditional measures of labor market slack. We develop a theory-based indicator of interfirm-wage competition that can explain the missing inflation. Key to this result is a drop in the rate of on-the-job search, which lowers the intensity of interfirm-wage competition to retain or hire workers. We estimate the on-the-job search rate from aggregate labor-market flows and show that its recent drop is corroborated by survey data. During “the great resignation,” interfirm-wage competition rose, increasing inflation by around 1 percentage point in 2021.

Changes in job-to-job mobility are key to explain inflation in the past decade and in the Great Resignation. In the July issue, by Renato Faccini and Leonardo Melosi zurl.co/K934O

Challenging Encounters and Within-Physician Practice Variability Abstract. We examine how physician decisions are affected by difficult cases—encounters with newly diagnosed cancer patients. Using detailed administrative data, we compare primary care physicians’ decisions in visits that occurred before and after difficult cases and matched comparison cases by the same physicians on other dates. Immediately following a difficult case, physicians increase referrals for common tests, including diagnostic tests unrelated to cancer. The effect lasts only for about an hour and is not driven by patient selection or schedule disruption. The results highlight difficult encounters as a source of variability in physician practice.

Shortly after meeting newly diagnosed cancer patients, physicians use more tests in unrelated cases. In the July issue, by Gabriel Chodick, Yoav Goldstein, Ity Shurtz, and Dan Zeltzer zurl.co/jIj9a

No Pain, No Gain: Work Demand, Work Effort, and Worker Health Abstract. We employ Danish worker-firm data to study the effect of rising workload on health. Using both within-job-spell regression analyses and cohort event studies, we show that increases in firm sales lead workers to log longer hours and experience higher probabilities of stress, depression, heart disease, and strokes, with more pronounced effects for high-risk groups such as older workers, job-strained workers, and those with long initial work hours. We calculate that the average worker's ex ante welfare loss due to higher sickness rates accounts for nearly one-quarter of her earnings gains from rising firm sales.

In the July issue, "No Pain, No Gain: Work Demand, Work Effort, and Worker Health" by David Hummels, Jakob R. Munch, and Chong Xiang zurl.co/TVivh

Family Support During Hard Times: Dynamics of Intergenerational Exchange after Adverse Events Abstract. We use event studies to examine changes in intergenerational financial transfers and informal care within families following wealth loss, job exit, widowhood, and health shocks. We find sharp reductions in giving to adult children following negative shocks to parents’ wealth and earned income, particularly in low-wealth households. Giving also decreases with some health shocks and increases following spousal death. Meanwhile, children of low-wealth households increase financial transfers to parents following adverse shocks in parental households and children of both high- and low-wealth households sharply increase their provision of informal care to parents following a wide range of adverse shocks.

Adverse shocks in older households lead to reductions in transfers to children and increases in informal care. In the July issue, by Jessamyn Schaller and Chase Eck zurl.co/hosCs

Stimulating Collaborations: Evidence from a Research Cluster Policy Abstract. The production of knowledge relies on collaborations between researchers. However, we do not know to what extent policies may stimulate these interactions. In this paper we show how a large-scale public “research cluster” policy in France, which funds local communities of researchers working on a common theme, affects the organization of research. Relying on an identification strategy based on grades awarded by reviewers, we show that members of financed clusters increase their collaborations with other cluster members by up to 30%. Paradoxically, researchers not at the core of the cluster topic benefit the most from the policy.

In the July issue, “Stimulating Collaborations: Evidence from a Research Cluster Policy” by Nicolas Carayol, Emeric Henry, and Marianne Lanoë. zurl.co/T6A6w

How Important Is Editorial Gatekeeping? Evidence from Top Biomedical Journals Abstract. We examine editors’ influence on the scientific content of academic journals by unpacking the role of three major forces: journals’ stated missions, the aggregate supply of and demand for specific topics, and scientific homophily via editorial gatekeeping. In a sample of top biomedical journals, we find the first two forces explain the vast majority of variation in published content. The upper bound of the homophily effect is statistically significant but practically much less important. Marginal changes to the composition of editorial boards do not meaningfully impact journals’ content in the short run. However, we cannot rule out persistent or pervasive frictions in the publication process.

Editors' idiosyncratic preferences do not have a big influence on their journals. In the July issue, by Joshua L. Krieger, Kyle R. Myers, and Ariel D. Stern zurl.co/8E63p

High-Skill Migration, Multinational Companies, and the Location of Economic Activity Abstract. This article aims to understand the relationship between high-skill immigration and multinational activity. I assemble a firm-level dataset on high-skill visas and show that there is a large home bias effect: foreign multinationals hire more immigrants from their home countries than from other origins. I then build and estimate a quantitative model that relates multinational production with immigration. First, I impose a restrictive immigration policy in the United States and evaluate how it affects production and wages. Second, I increase the barriers to multinational production and show that immigration is an important channel to quantify the welfare gains generated by multinationals.

Foreign multinationals are particularly intensive on college-educated immigrants from their home countries. In the July issue, by Nicolas Morales zurl.co/WPvL4

Voice and Political Engagement: Evidence From a Field Experiment Abstract. We conduct a natural field experiment with a major European party to test whether giving party supporters more voice increases their engagement in the party’s electoral campaign. In the experiment, the party asked a random subset of supporters for their opinions on the importance of different policy areas. Giving supporters opportunities to voice their opinions increases their engagement in the campaign as measured using behavioral data from the party’s smartphone application. Survey data reveals that giving voice also increases other margins of campaign effort as well as perceived voice. Our evidence highlights the importance of voice for increasing political engagement.

Giving supporters of a political party more voice increases their engagement. In the July issue, by Anselm Hager, Lukas Hensel, Christopher Roth, and Andreas Stegmann zurl.co/MGhQQ