Economics

We trace the family origins of Members of Congress (MC) born between 1830 and 1950, linking each MC, their parents, and their brothers to the complete-count censuses. Future MCs have always been economic outliers. By 1940, close to 60 percent of MCs aged 18--40 held a college degree, against under 5 percent of comparable young men outside Congress. In the 19th-century censuses, MCs as adults held roughly three times the wealth of demographically matched controls. They also come from economically elite families: their fathers earn more, attain more education, and hold more wealth. The brothers of future MCs sit between the population and the MCs themselves. Across the socioeconomic measures w..

We study the optimal design and analysis of experiments for estimating spillover effects. Assuming a known (e.g., linear) exposure mapping, we characterize the treatment-assignment distribution and regression-based estimator that minimize worst-case asymptotic variance against a broad class of distributions of unobservables. The design problem yields an intuitive solution in which the planner trades off spillover signal strength against diffusion of spillover variation. The analysis problem yields a simple recentered instrumental variable estimator to best leverage this variation. This framework produces natural solutions in several benchmark cases -- such as clustered exposure-- and suggest..

Union growth has historically happened in spurts. We combine union election data from 1961–2025 with a large-scale information experiment involving 9,000 low-wage workers to study the role of social learning in union growth. Observationally, close election wins cause future wins within state-industries. Experimentally, information about recent union wins increases union support and beliefs about co-worker support, with effects concentrated among workers with weak information environments and low baseline coworker support. In contrast, information about labor market tightness has little effect. Our results highlight social learning as a mechanism for union growth.

We show that quantitative asset pricing models, built to address the equity premium and risk-free rate puzzles, systematically fail when applied to open economies: they cannot generate the large and persistent interest rate differentials we observe between risky and safe currencies. This failure stems from the key mechanism that produces their success in matching both closed-economy puzzles: In these models, the mean of the stochastic discount factor offsets its variance nearly one-for-one, which immobilizes interest rates --- so that differences in expected currency returns across countries must arise almost exclusively from predictable changes in exchange rates, at odds with the data. We p..

This paper develops a theory of balanced growth and optimal climate policy in an integrated assessment framework. Balanced growth is possible despite climate change, but at a slower rate. Two distinct policy regimes emerge because emissions permanently raise carbon stocks. For low damages, optimal growth coincides with the laissez-faire and carbon is priced at a constant rate. For high damages, optimal policy caps temperature growth to prevent escalating losses and achieve faster economic growth than in the laissez-faire by pricing carbon at an increasing rate. We quantify our model and show that empirical damage estimates span both regimes. For low damages, optimal policy achieves a 1% welf..

We ask a representative sample to write prompts seeking spending and investing advice from LLMs, then simulate the lifetime effects of following the advice under realistic asset and labor market conditions. Applying this method to GPT-5.2, we find following the advice would move respondents toward life cycle theory: broader participation in diversified equity funds, age-declining equity shares, and larger savings buffers. Recommendations vary systematically by gender, prior AI experience, and financial literacy. For gender, two-thirds of recommended equity-share differences arise from men and women writing different prompts (demand), while one-third arise from gender labels attached to other..

Using a randomized survey experiment in the Italian Survey of Consumer Expectations, we study how observability and commonality shape responses to a €1,000 employer bonus. Making an idiosyncratic bonus observable to coworkers lowers the marginal propensity to consume by 3 percentage points. Conditional on observability, extending the bonus to all coworkers raises it by 6 percentage points. Under a social-interactions model, the latter effect implies a social-interaction parameter of 0.16 and a multiplier of 1.2. Thus, consumption responses depend not only on resources but also on whether income shocks are private, public, or shared within a salient peer group.

Parents’ and teachers’ expectations and aspirations are critical drivers of educational outcomes, yet what causally shapes these expectations remains unclear. In the present study, we address this question by deploying the random experiment of meiosis: namely, conditional on parental genotype, offspring genotype is random, allowing for the unconfounding of unique child characteristics from the more general family and household environment. Using the Wisconsin Longitudinal Study, we employ Mendelian imputation to estimate the direct genetic effects of 18 polygenic indices on college encouragement, net of parental genetic background. The genetic propensity for educational attainment and ma..

In 2008, the aggregate market value of U.S.-listed firms was roughly one-third higher than that of European-listed firms. By 2023, it was more than 300% higher, a difference of $34 trillion. The valuation gap is broad-based, rather than concentrated among a few superstar firms, and is driven by differences in firm values, not in the number of listed firms. Across sectors, the gap is larger in R&D-intensive industries and in industries with high returns to scale. European firms’ size is strongly correlated with home-country GDP, whereas U.S. firms’ size is unrelated to home-state GDP. Smaller European firms also face a particularly large cost-of-capital gap and do not appear able to subst..

Do corporate bond investors earn compensation for bearing credit risk? We construct a new historical corporate bond database spanning 128 years to estimate a corporate bond counterpart to the equity risk premium. Combining hand-collected archival data with modern sources, we assemble a panel of over 100,000 bonds and 7 million observations. While recent samples suggest corporate bond excess returns largely reflect the term premium, our long sample reveals a sizable and statistically significant credit risk premium. Credit spreads predict future corporate bond returns and macroeconomic aggregates, though their ability to forecast business cycle fluctuations weakens when prewar data are includ..

We identify a strong common risk factor structure that is pervasive across corporate securities: stocks, corporate bonds, and options. The common factors are closely linked to observable factors and key economic indicators. These factors explain much of the variation in individual asset returns, although pricing errors persist. A joint mean-variance efficient portfolio across asset classes achieves a high Sharpe ratio, resulting in part from cross-market hedging of the common sources of risk. We develop a measure of market segmentation based on differences in the common factor risk premia between markets and document a significant degree of segmentation.

Job mobility is risky, workers are risk averse, and insurance markets are incomplete. This paper studies how these features curb and distort job-to-job transitions by making workers excessively cautious: they place too much weight on job safety over wage and productivity gains. We demonstrate this tradeoff by eliciting employed workers’ wage-safety indifference curves in a custom, representative survey. On average, employed US workers require a 1.63% pay raise to accept each additional percentage point of annual unemployment risk in a new job. We assess the macroeconomic consequences of our mechanism by embedding it into a general equilibrium search model. Jobs differ in both wages (produc..

We estimate the Phillips curve for India to shed light on the output-inflation tradeoff in developing economies. We develop a method to estimate the slope of the Phillips curve based on sufficient statistics that apply to a broad class of New Keynesian models. Using portable causal research designs, we estimate the firm-level passthrough of cost shocks into prices at different horizons, and the slope of marginal cost curves at different levels of aggregation. These empirical moments map into the slope of the Phillips curve and yield a decomposition into three terms: price rigidity, micro real rigidities, and macro real rigidities. The slope of the Phillips curve in India is one order of magn..

In this paper, we characterize trends in the earnings assimilation of immigrant workers from 1981 to 2021. We use administrative longitudinal data that contain the earnings of workers beginning in their first year of residence in the United States and in each year thereafter, allowing us to identify immigrants who eventually leave the United States (referred to here as return migrants). We use those data to produce the first examination of trends in earnings assimilation over a 41-year period and to estimate earnings assimilation separately for return migrants versus those who stay in the United States. We document several new facts about immigrants who arrived between 1981 to 2010. First, r..

How should payers balance fiscal sustainability with access to transformative medical technology? We study Louisiana’s 2019 Medicaid subscription model for hepatitis C (HCV), the first example of a U.S. state employing a two-part tariff to secure unlimited access to curative medicines. Using a differences-in-differences design comparing spending on beneficiaries with HCV to those with diabetes or HIV, we find that treatment volume tripled, medical spending fell, and new HCV diagnoses declined 23 percent. The state’s $37 million in incremental spending on antivirals generated $266 million in five-year savings. Innovative financing models can generate health benefits and near-term savings ..

Evidence that domestic outsourcing lowers pay comes largely from on-site transfers, in which workers move to a contractor but keep the same jobs. Displacement is rarely observed: whether workers lose their jobs, where they go, how earnings evolve. In Brazil’s 1993–1994 pro-outsourcing reforms, which differentially affected security guards, such transfers were rare; firms instead used occupational layoffs, shedding their guards while keeping other workers. Displaced guards’ employment recovered within five years, but many changed occupations and wages stayed about 12% lower. Lifetime losses average 1.2 to 1.5 years of pre-layoff earnings, concentrated among workers from high-wage firms,..

This study examines the persistence of fertility-related health problems across generations within the same family, and the utilization of assisted reproductive technologies (ART). Using comprehensive Swedish registry data, we document significant intergenerational transmission of fertility difficulties for both daughters and sons, independent of parental socioeconomic status. Daughters whose parents reported such problems are 2.6 percentage points, or 19.4 percent, more likely to experience fertility problems themselves. Sons whose parents reported fertility difficulties experience a 1.7 percentage point, or 13.5 percent, increase. These associations persist across alternative measures and ..

How should regulators combine staged access to a dual-use AI model with developer liability? I model a defender and an adversary searching for the same software flaws. After release, liability induces more defensive search but also makes the adversary search harder, limiting its effect on harm. Exclusive access removes this strategic response, so staged access and liability are complements in protection. Defensive effort rises towards the release date, making additional delay progressively less productive. Optimal evaluation windows are therefore bounded, and their response to greater harm saturates. Because defensive search uses real resources, the efficient liability rate can be below full..