We evaluate equity-efficiency trade-offs from admissions quotas by examining effects on output once beneficiaries start producing in the relevant industry. We estimate the impact of abolishing a 40 percent quota for male primary school teachers on their pupils’ long-run outcomes. We combine this reform with the timing of union-bargained teacher retirements to isolate quasi-random variation in male quota teachers. Pupils exposed to male quota teachers transition more smoothly to postcompulsory education and have higher educational attainment and labor force attachment at age 25. Evidence suggests the quota improved the allocation of talent by mending imperfections in the unconstrained selection process. (JEL I21, I23, I28, J16, J24, J45)

Do elite colleges help talented students join the social elite or help incumbent elites retain their positions? We combine intergenerationally linked data from Chile with a regression discontinuity design to show that, looking across generations, elite colleges do both. Lower-status individuals who gain admission to elite college programs transform their children’s social environment. Children become more likely to attend high-status private schools and colleges and to live near and befriend high-status peers. In contrast, academic achievement is unaffected. Simulations combining descriptive and quasi-experimental findings show that elite colleges tighten the link between social and human capital while decreasing intergenerational social mobility. (JEL I23, I26, J24, J62, O15, Z13)

Policy choices often create trade-offs between workers and consumers. I examine how foreign competition alters the consumer welfare and domestic employment effects of mergers. I construct a model incorporating consumer demand, endogenous product portfolios, and employment decisions. Applying the model to Whirlpool’s acquisition of Maytag in the appliance industry, I compare the observed merger to a counterfactual acquisition by a foreign buyer. Although Whirlpool’s acquisition decreased consumer welfare by $271 million annually, it preserved 797 domestic jobs. These jobs must therefore be valued at more than $344, 000 per year for the domestic employment benefits to offset the consumer harm. (JEL E24, F23, G34, J30, L13, L68, R23)

This paper examines the effects of privatizing social health insurance. We exploit a natural experiment in Medicaid, wherein nearly 100,000 enrollees were randomly assigned between a publicly operated fee-for-service system and private managed care. Managed care reduced costs by 5.6 percent via cost-effective substitutions among prescription drugs and via lower prices for outpatient services. We present evidence that pharmacy utilization management was the key mechanism reducing overuse and encouraging substitution to lower-cost drugs without decreasing observed quality. In contrast, privatizing medical benefits led to only modest savings and was associated with decreased health care quality and consumer satisfaction. (JEL G22, H41, I13, I18, I38)

We examine how social interactions and friendships shape students’ political opinions in a natural experiment at Sciences Po, a leading French university specializing in social and political sciences. The quasi-random assignment of students into short-term integration groups before their academic curriculum reduces political opinion gaps and fosters friendship formation. Using same-group membership as an instrumental variable for friendship, we find that friendship reduces opinion differences by 44 percent of the mean opinion gap. Our evidence supports a homophily-enforced mechanism: Friendships form among initially politically similar students, leading them to join political associations together, reinforcing their similarity. (JEL C93, D72, Z13)

Item-level transactions data yield cost-of-living indices that can account for quality change and consumer substitution. Transactions data require confronting the rapid turnover of items because prices of new and existing products are interrelated in equilibrium. This paper evaluates multiple approaches to measuring quality change at scale. It shows that a hedonic superlative approach—using econometrics or machine learning for hedonic estimation combined with index formulas that require simultaneous observation of item-level price and expenditure—yields improved measures of the cost of living. Accounting for ubiquitous quality change and for consumer substitution yields lower measures of inflation than traditional, official methods. (JEL C43, C45, E31, L15, L81)

Conflict along transportation routes during Somalia’s al-Shabaab insurgency significantly increases maize prices at distant locations, decreasing food security, health, and education. Estimated conflict risk has strong price effects independently of realized conflict, highlighting the importance of safety concerns. A model of least-cost route choice in the presence of conflict reveals that more and shorter alternative routes to circumvent conflict can lower prices but their effectiveness diminishes as violence becomes more correlated across routes. Alternatively, securing key transportation routes would alleviate price increases. A market access approach suggests spatial spillovers of conflict also matter for prices of more general baskets of food and nonfood items. (JEL D74, I15, I25, O15, O17, Q11, R41)

This paper develops an asset market-based test for preference for the timing of resolution of uncertainty. Our main theorem provides a characterization of preference for early resolution of uncertainty in terms of the risk premium realized during the period when the informativeness of macroeconomic announcements is resolved. Empirically, we find support for preference for early resolution of uncertainty based on evidence on the dynamics of the implied volatility of S&P 500 index options before Federal Open Market Committee announcements. (JEL D81, D83, G13, G14, G41)

When employers face a trade-off between being large and paying low wages—and in this sense have monopsony power—some productive employers decide against building large business networks, forgo sales, and remain small. These decisions have adverse consequences for aggregate labour productivity. Using high-quality administrative data from Germany, we document that East German plants (compared to West German ones) face steeper size-wage curves, invest less in their business networks, remain smaller, and are less productive. A model with labour market monopsony, product market power, and business network investments matching these features of the data predicts a 10% lower aggregate labour productivity in East Germany.

For many technologies and behaviors, an agent’s benefit from adopting depends on his contacts adopting, and the benefit to his contacts of adopting depends on their contacts adopting. This paper examines how the architecture of these connections shapes the success or failure of the diffusion of innovations. We start with a standard model of diffusion with the key addition that some agents can coordinate their decisions. This captures the idea that people often talk and make decisions together with friends or family to adopt technologies. We show that insularity of connections, that is, the extent to which agents tend to concentrate their connections to a narrow set of other agents, determines contagion. However, whether insularity helps or hinders depends on the technology being diffused. For technologies that are valuable even without many contacts adopting, we find insular connections hinder adoption, but for technologies that are valuable only when many contacts adopt, insular connections facilitate adoption.

We study the role of expertise in new work—novel occupational roles that emerge as technological and economic conditions evolve—using newly available 1940 and 1950 Census Complete Count files and confidential American Community Survey data from 2011 to 2023. We show that new work is systematically distinct from simply more work in existing occupations in four respects. First, it attracts workers with distinct characteristics: New work is disproportionately performed by younger and more educated workers, even within detailed occupation-industry cells. Second, new work commands economically significant wage premiums that persist beyond workers’ initial entry into new work, consistent with returns to scarce, specialized expertise rather than temporary market disequilibrium. Third, these premiums decline across vintages as expertise diffuses, with “newer” new work commanding larger premiums than older new work. Fourth, the emergence of new work can be traced to specific demand shocks in particular locations and time periods, suggesting that expertise formation responds systematically to economic opportunities. These findings suggest that new work serves as a countervailing force to automation-driven job displacement not merely by creating additional employment but also by generating new domains of human expertise that command market premiums. This expertise-based mechanism helps explain both the expanding variety of work activities across decades and the historical resilience of the labor share.

We estimate the impact of unionization on the wage distribution of Canadian university faculty using longitudinal administrative data on salaries and exploiting the staggered rollout of unionization across institutions. We find that unionization compressed salaries: Wages at the bottom of the unconditional distribution increased by roughly 10 percent, while wages at the top were unaffected. Our evidence suggests that these distributional impacts were driven by the introduction of contractual salary floors. We also estimate little impact of unionization on faculty employment. Instead, our results suggest that the increase in universities’ wage bills was financed by an increase in student enrollment. (JEL I23, J31, J45, J51)

We study how information disclosure shapes social learning about a potentially harmful product. Increased transparency helps early agents avoid harm, which may undermine learning by later agents. Despite this conflict of interest, we show that full transparency is uniquely optimal for all agents when they learn only by observing neighbors’ harm. We investigate whether full transparency about harm continues to benefit all agents when they also learn from additional, imperfect signals. (JEL D18, D82, D83, L15)

Using an evolutionary approach, we address the prominent tension in the literature that updating of ambiguity and nonexpected-utility preferences cannot, in general, be both dynamically consistent and consequentialist. Perhaps not surprisingly, evolutionary optimality requires dynamic consistency. The more subtle insight is the evolutionary optimality of systematic violations of consequentialism. We base our investigation on the model of adaptive preferences (Sadowski and Sarver 2024), which generalizes the model of Robson (1996) and nests variants of many well-known models in the literature. (JEL B52, D11, D81, D83)

There has been a dramatic rise in disability employment since the pandemic, while work from home (WFH) has risen fourfold. This paper asks whether the two are causally related. Controlling for compositional changes and labor market tightness, a 1 percentage point increase in WFH increases full-time employment by 1.0 percent for individuals with a physical disability. The postpandemic increase in working from home explains 68–85 percent of the rise in full-time employment. Wage data suggest that WFH increased the supply of workers with a physical disability, likely by reducing commuting costs and enabling better control of working conditions. (JEL I12, J14, J22, J28, J81)

We document strong behavioral responses to an asset test for an old-age support program in Denmark using comprehensive administrative data. We show that the density distribution of the liquid assets targeted by the test exhibits large but diffuse excess mass below the threshold for the treated group relative to control groups of comparable but ineligible individuals. A cohort analysis exploiting the panel structure suggests that the program reduces liquid assets by 20 percent around the threshold. Analyzing high-frequency bank data on assets and cash withdrawals shows that the excess mass around the threshold largely reflects permanent rather than temporary responses. (JEL D91, G51, H24, H55, I32, J14)

We study whether the Coase conjecture holds for bargaining during war. Two players, A and B, contest a divisible resource until one side collapses or agreement is reached. If player B is militarily strong, then he insists on getting a large share. However, player A only concedes this large share if player B credibly signals his strength by fighting a sufficiently long war. Thus, the Coase conjecture fails, and asymmetric information about military strength explains why long wars may be inevitable. Using a mechanism design approach, we derive a lower bound on the expected duration of war. (JEL C78, D74, D82, F51)

The charter school movement encompasses many school models. In Massachusetts in the 2010s, the site of our study, urban charter schools primarily used “No Excuses” practices, whereas nonurban charters had greater model variety. Using randomized admissions lotteries, we estimate the impact of charter schools by locality on college preparation, enrollment, and graduation. Urban charter schools boost all of these outcomes. Nonurban charter schools raise college enrollment and graduation despite reducing state test scores and AP enrollment. Notably, the nonurban charter college graduation edge is more than twice as large as that from urban charter attendance. (JEL H75, I21, I23, I28)

We use administrative records on the universe of Danish households to characterize survivors’ mental health following their spouse’s death. We provide visually clear evidence for the immediate, large, and lingering adverse impacts and focus on studying the role of income security in driving the immediate effects. We find that, for both males and females, a large share of the spike in the take-up of mental health medication upon spousal death can be explained by the income loss imposed by the shock. Our results imply that safety net policies can improve survivors’ mental health via the immediate liquidity they provide. (JEL D12, D91, G51, H55, I12, I38, J16)

We introduce a Generalized Nested Logit model of demand for bundles that can be estimated sequentially, eliminating the challenge of dimensionality due to large choice sets. We use it to investigate quantity discounts for carbonated soft drinks by simulating a counterfactual with linear pricing. The prices of small-volume UPCs (<2L) decrease by −29.2% while those of large-volume UPCs (≥2L) increase by +16.8%. Purchased quantities decrease by −19.5% and industry profit by −6.3%. Consumer surplus however reduces only moderately, suggesting that a ban on quantity discounts on sugary drinks may be a simple and effective policy to limit added sugar intake. Our calculations confirm that such a ban would be as effective as a sugar tax of 1.5/oz of added sugar and reduce added sugar intake by −17.4%. A nested logit model that mistakenly ignores joint purchases of UPCs within shopping trips would instead simulate a reduction in added sugar intake of only −3.9%.

Can participation in safety net programs have long-lasting negative effects across multiple generations? We take advantage of a 1993 Dutch disability insurance reform which tightened requirements and lowered benefits for participants. We study the third generation 25 years after the reform, finding that grandchildren of individuals whose DI eligibility and benefits were reduced are less likely to be born premature, have low birthweight, or experience complicated deliveries. They also have better health and schooling outcomes during early childhood. These early-life improvements are consequential, as they have been linked to better health, education, and labor market outcomes in adulthood.

Chamley and Judd argued that optimal taxation dictates zero long-run taxes on capital income, but Straub and Werning found that these taxes may be positive in the steady state. These models feature a ‘period-zero problem’ because the Ramsey formulation omits past commitments but includes future ones. Chari, Nicolini, and Teles (2020) add commitments to the representative household’s wealth in utility units. Then a nonzero capital levy may apply in period 1, future tax rates on asset income equal zero, and tax rates on consumption are constant. Time-consistency fails if future policymakers are unconstrained but holds if wealth commitments in each period are strict enough to motivate each policymaker to choose zero capital levies. Then a timeless perspective applies where period 1 is not special, tax rates on asset income are always zero, and tax rates on consumption are constant. In the neoclassical growth model with utility depending on the log of consumption, the level of the wealth commitment is constant in the steady state. Extensions allow for uncertainty and heterogeneity and for a form of partial commitment.

We conduct a meta-analysis of distributional preferences, examining 297 estimates of sensitivity to inequality from 41 articles that structurally estimate the Fehr and Schmidt (1999) model. Our analysis indicates that individuals are inequality averse: mean sensitivity to disadvantageous and advantageous inequality are, respectively, 0.533 and 0.326. We also uncover systematic heterogeneity: aversion to advantageous (disadvantageous) inequality is smaller (larger) in strategic environments. Finally, we examine 98 estimates of altruism and attitude towards equity versus efficiency from 17 studies structurally estimating the Andreoni and Miller (2002) model. The representative individual displays Cobb–Douglas preferences with roughly 1/3 weight on others’ earnings.

How does polarisation — as measured by mistreatment of political rivals — spread? In an online experiment, participants choose between splitting financial resources equally or discriminating against a supporter of the opposing political party. We vary the information subjects receive about others’ choices and justifications for discrimination. Exposure to extreme justifications for discrimination increases discrimination — particularly in a polarized environment, when many others are already discriminating — and it leads participants to adopt more extreme justifications themselves. Our findings suggest a self-reinforcing dynamic that may fuel polarisation: Exposure to extreme statements increases polarisation and the prevalence of extreme reasoning.