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Begin New Search Topic Economics Political Geography United States Content Type Working Paper Publication Year within 10 Years

1. The effect of recent technological change on US immigration policy

Author:
Björn Brey
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
Did recent technological change, in the form of automation, affect immigration policy in the United States? I argue that as automation shifted employment from routine to manual occupations at the bottom end of the skill distribution, it increased competition between natives and immigrants, consequently leading to increased support for restricting low-skill immigration. I formalise this hypothesis theoretically in a partial equilibrium model with constant elasticity of substitution in which technology leads to employment polarization, and policy makers can vote on immigration legislation. I empirically evaluate these predictions by analysing voting on low-skill immigration bills in the House of Representatives during the period 1973-2014. First, I find evidence that policy makers who represent congressional districts with a higher share of manual employment are more likely to support restricting low-skill immigration. Second, I provide empirical evidence that representatives of districts which experienced more manual-biased technological change are more likely to support restricting low-skill immigration. Finally, I provide evidence that this did not affect trade policy, which is in line with automation having increased employment in occupations exposed to low-skill immigration, but not those exposed to international trade.
Topic:
Economics, Immigration, Economic Policy, Automation, Technocracy, and Skilled Labor
Political Geography:
United States

2. Economic Conditions and the Rise of Anti-Democratic Extremism

Author:
Benjamin Crost
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Empirical Studies of Conflict Project (ESOC)
Abstract:
This paper provides evidence that adverse economic conditions contributed to the rise of anti-democratic extremism in the United States. A state-level analysis shows that increases in the unemployment rate during the Great Recession led to a large increase in the number of anti democratic extremist groups. The effect is concentrated in states with high pre-existing racial resentment, as proxied by racist web searches, and strongest for the male unemployment rate and the white unemployment rate. If unemployment had remained at its pre-recession level, the increase in anti-democratic groups between 2007 and 2010 could have been reduced by more than 60%.
Topic:
Economics, Democracy, Inequality, Far Right, Economic Inequality, and Political Extremism
Political Geography:
United States

3. Risk Shocks and Divergence between the Euro Area and the US in the aftermath of the Great Recession

Author:
Thomas Brand and Fabien Tripier
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
Highly synchronized during the Great Recession of 2008-2009, the Euro area and the US have diverged in the period that followed. To explain this divergence, we provide a structural interpretation of these episodes through the estimation for both economies of a business cycle model with financial frictions and risk shocks, measured as the volatility of idiosyncratic uncertainty in the financial sector. Our results show that risk shocks have stimulated US growth in the aftermath of the Great Recession and have been the main driver of the double-dip recession in the Euro area. They play a positive role in the Euro area only after 2015. Risk shocks therefore seem well suited to account for the consequences of the sovereign debt crisis in Europe and the subsequent positive effects of unconventional monetary policies, notably the ECB’s Asset Purchase Programme (APP).
Topic:
Debt, Economics, International Political Economy, Global Recession, Finance, Europe Union, Economic Growth, and Risk
Political Geography:
United States, Europe, and Global Focus

4. Inclusive American Economic History: Containing Slaves, Freedmen, Jim Crow Laws, and the Great Migration

Author:
Trevon Logan and Peter Temin
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper records the path by which African Americans were transformed from enslaved persons in the American economy to partial participants in the progress of the economy. The path was not monotonic, and we organize our tale by periods in which inclusiveness rose and fell. The history we recount demonstrates the staying power of the myth of black inferiority held by a changing white majority as the economy expanded dramatically. Slavery was outlawed after the Civil War, and blacks began to participate in American politics en masse for the first time during Reconstruction. This process met with white resistance, and black inclusion in the growing economy fell as the Gilded Age followed and white political will for black political participation faded. The Second World War also was followed by prosperity in which blacks were included more fully into the white economy, but still not completely. The Civil Rights Movement proved no more durable than Reconstruction, and blacks lost ground as the 20th century ended in the growth of a New Gilded Age. Resources that could be used to improve the welfare of whites and blacks continue to be spent on the continued repressions of blacks.
Topic:
Economics, Race, History, Capitalism, and Slavery
Political Geography:
United States and Global Focus

5. The Millennials' Transition from School-to-Work

Author:
Yuet-Yee Linda Wong and Audra J. Bowlus
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
We present the first study of the high school-to-work transition for American Millennial males and females. Using data from the PSID Transition to Adulthood from 2005-2011, we estimate the Burdett and Mortensen (1998) model and study changes between Generation X and Millennials. We find convergence in racial differences in transition patterns across the generations and in gender earnings by the Great Recession. These patterns are driven by a large decline in search efficiencies for white males. Finally, we show the labor market deteriorated for high school graduates prior to, with a further decline during, the Great Recession.
Topic:
Economics, Education, Global Recession, Human Capital, Labor Market, and Productivity
Political Geography:
United States

6. Optimal Contracting with Altruistic Agents: A Structural Model of Medicare Payments for Dialysis Drugs

Author:
Martin Gaynor, Nirav Mehta, and Seth Richards-Shubik
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
We study physician agency and optimal payment policy in the context of an expensive medication used in dialysis care. Using Medicare claims data we estimate a structural model of treatment decisions, in which physicians differ in their altruism and marginal costs, and this heterogeneity is unobservable to the government. In a novel application of nonlinear pricing methods, we theoretically characterize the optimal unrestricted contract in this screening environment with multidimensional heterogeneity. We combine these results with the estimated model to construct the optimal contract and simulate counterfactual outcomes. The optimal contract is a flexible fee-for-service contract, which pays for reported treatments but uses variable marginal payments instead of constant reimbursement rates, resulting in substantial health improvements and reductions in costs. Our structural approach also yields important qualitative findings, such as rejecting the optimality of any linear contract, and may be employed more broadly to analyze a variety of applications.
Topic:
Economics, Government, Health, Health Care Policy, Human Capital, Productivity, and Medicare
Political Geography:
United States

7. The EITC and Maternal Time Use: More Time Working and Less Time with Kids?

Author:
Jacob Bastian and Lance Lochner
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
Parents spend considerable time and resources investing in their children's development. Given evidence that the Earned Income Tax Credit (EITC) aects maternal labor supply, we investigate how the EITC aects a broad array of time-use activities, focusing on the amount and nature of time spent with children. Using 2003-2018 time-use data, we nd that federal and state EITC expansions increase maternal work time, which reduces time devoted to home production, leisure, and time with children. However, for children of all ages, almost none of the reduction comes from time devoted to investment activities, such as active learning and development activities.
Topic:
Economics, Labor Issues, Children, Women, Income Inequality, Tax Systems, Human Capital, Family, and Productivity
Political Geography:
United States

8. Global giants and local stars: How changes in brand ownership affect competition

Author:
Vanessa Alviarez, Keith Head, and Thierry Mayer
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4-7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU.
Topic:
Economics, International Political Economy, and Multinational Corporations
Political Geography:
United States, United Kingdom, Latin America, and Global Focus

9. Corporate tax avoidance and industry concentration

Author:
Farid Toubal, Mathieu Parenti, and Julien Martin
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper argues that tax avoidance by large corporations has contributed to the 25% increase in concentration among U.S. firms since the mid-1990s. Corporate tax avoidance gives large firms a competitive edge, which translates into larger market shares and an increase in the granularity of the economy. We develop IV and difference-in-differences strategies that show the causal impact of tax avoidance on firm-level sales. Had firms not resorted to tax avoidance in 2017, our results imply that the average industry concentration would have been 8.3% lower, which is around its early 2000 level.
Topic:
Economics, International Political Economy, Markets, Tax Systems, Corporations, Tax Evasion, and Corporate Tax
Political Geography:
United States and Global Focus

10. Is the Most Unproductive Firm the Foundation of the Most Efficient Economy? Penrosian Learning Confronts the Neoclassical Fallacy

Author:
William Lazonick
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Edith Penrose’s 1959 book The Theory of the Growth of the Firm [TGF] provides intellectual foundations for a theory of innovative enterprise, which is essential to any attempt to explain productivity growth, employment opportunity, and income distribution. Properly understood, Penrose’s theory of the firm is also an antidote to the deception that is foundational to neoclassical economics: The theory, taught by PhD economists to millions upon millions of college students for over seven decades, that the most unproductive firm is the foundation of the most efficient economy. The dissemination of this “neoclassical fallacy” to a mass audience of college students began with Paul A. Samuelson’s textbook, Economics: An Introductory Analysis, first published in 1948. Over the decades, the neoclassical fallacy has persisted through 18 revisions of Samuelson, Economics and in its countless “economics principles” clones. This essay challenges the intellectual hegemony of neoclassical economics by exposing the illogic of its foundational assumptions about how a modern economy functions and performs. The neoclassical fallacy gained popularity in the 1950s, during which decade Samuelson revised Economics three times. Meanwhile, Penrose derived the logic of organizational learning that she lays out in TGF from the facts of firm growth, absorbing what was known in the 1950s about the large corporations that had come to dominate the U.S. economy. Also, during that decade, the knowledge base on the growth of firms on which economists could subsequently draw was undergoing an intellectual revolution, led by the business historian, Alfred D. Chandler, Jr. He was engaged in the first stage of a career that would span more than a half century, during which Chandler documented and analyzed the centrality to U.S economic development of what he would come to call “the managerial revolution in American business.” In combination, the works of Penrose and Chandler form intellectual foundations for my own work on the Theory of Innovative Enterprise—an endeavor that has enabled me, as an economist, to recognize not only the profound importance of organizational learning for economic theory but also the illogic of the neoclassical theory of the firm for our understanding of the central institution of a modern economy, the business corporation. In this essay, I argue that the key characteristic of the innovative enterprise is fixed-cost investment in the productive capabilities of the company’s employees to engage in organizational learning. The purpose of this investment in organizational learning is to develop a higher-quality product than was previously available. When successful, the development of the higher-quality product enables the firm to capture a large extent of the market, transforming high fixed cost into low unit cost. The result is sustainable competitive advantage that enables the growth of the firm, contributing to the growth of the economy as a whole. I argue that to get beyond the neoclassical fallacy, economists have to stop relying on constrained-optimization methodology. Rather, they need to be trained in a “historical transformation” methodology that integrates history and theory. It is a methodology in which theory serves as both a distillation of what we have learned from the study of history and a guide to what we need to learn about reality as the “present as history” unfolds.
Topic:
Economics, Political Economy, Macroeconomics, and Neoclassical Economics
Political Geography:
United States