What Medicare Part D Teaches Us About Social Insurance Markets

Social insurance programs, such as health insurance and social security, have traditionally been paid for and provided by the government. However, more recently, there have been a number of high-profile initiatives to replace government-provided services with private provision via regulated competition. The motivation for these programs is if incentives are set up in the right […]

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Poor Little Rich Kids? The Role of Nature versus Nurture in Wealth and Other Economic Outcomes and Behaviors

Wealth is highly correlated between parents and their children; however, little is known about what drives this relationship. Is it that children of wealthy parents are inherently more talented, and that is what shapes their later success? Or is it that children had parents who gave them more opportunities because they themselves had more wealth? […]

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Who Profits from Patents? Rent-Sharing at Innovative Firms

Measuring the extent to which firms pass changes in their performance through to worker earnings is challenging. Our work uses US patent allowance decisions as “natural experiments” that lift a company’s labor productivity. We find robust evidence that variability in firm performance is an important causal determinant of worker pay in our sample of small […]

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Improved allocation of talent boosts US economic growth

In 1960, 94% of American doctors and lawyers were white men: by 2010, the fraction was just 62%. Similar changes in other high-skilled occupations have occurred throughout the US economy over the last 60 years. Given that the innate talent for these professions is not likely to be any different across groups, the change in […]

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Capitalists in the Twenty-First Century

Suppose you happen to meet a very high earner. How does she typically make her money? Is she likely a human capitalist, in that she makes most of her income from her labor or other human capital? Or is she likely a financial capitalist, in that she makes most of her income from her portfolio […]

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Insuring the Poor: Experimental evidence from contract farming in Kenya

Throughout the world, the poor purchase less insurance (Rampini and Viswanathan 2016), and insurance markets are especially thin in the developing world. This could reflect supply-side problems: insurance is a complicated and highly regulated product, reliant on effective financial and legal institutions. Yet surprisingly, the binding constraint is often on the demand side. Across many […]

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Life-cycle benefits of early childhood programs: evidence from an influential early childhood program

A substantial body of evidence shows that high-quality early childhood programs boost the skills of disadvantaged children.[1] Most of this research reports short-run treatment effects of these programs on cognitive test scores, school readiness, and measures of early-life social behavior. A few studies analyze longer-term benefits in terms of completed education, adult health, crime, and […]

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Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark

What are the economic effects of taxing household wealth? While an enormous literature estimates the impact of taxes on labor supply and taxable income, much less is known about how taxes affect the supply of capital. The lack of evidence makes it hard to assess the desirability of taxing top-end wealth, a proposal that has […]

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The First 2,000 Days: Investing in Children’s Skills Through Early Intervention

Children from poorer backgrounds typically have lower cognitive and socio-emotional skills. This is due to differences in the quality of the environment, with disadvantaged children facing lower family incomes, higher levels of stress, poorer parenting practices, and less academic stimulation.[1] Consequently, living in disadvantaged circumstances early in life is frequently associated with poorer health, education, […]

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Consumer spending during unemployment: evidence from US bank account data

Nearly all of us experience unemployment at some point in our careers. For example, the Bureau of Labor Statistics finds that 90% of baby boomers have been out of work at least once in their lives. Unemployment is stressful in part because many people do not have enough savings to maintain their standard of living […]

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