20 March 2017

Recent Growth Boom in Developing Economies:
A Structural Change Perspective

In contrast to the East Asian experience, none of the recent growth accelerations in Latin America, Africa, or South Asia was driven by rapid industrialization, according to an analysis by Xinshen Diao, Margaret McMillan, and Dani Rodrik. They were based on either rapid within-sector labor productivity growth (Latin America) or growth-increasing structural change (Africa), but rarely both at the same time.

17 March 2017

Are SNAP Benefits Fungible?

Justine S. Hastings and Jesse M. Shapiro study the spending patterns of Supplemental Nutrition Assistance Program (SNAP) participants. They estimate that the marginal propensity to consume SNAP-eligible food out of SNAP benefits is between 0.5 and 0.6, much higher than the propensity to consume such food out of cash income. The findings suggest that beneficiaries do not regard SNAP benefits as cash-equivalent.

16 March 2017

Effects of Middle School Vaccination Requirements

State requirements that students obtain a tetanus, diphtheria, and pertussis (Tdap) booster prior to middle school entry increased vaccine take-up by 29 percent and reduced whooping cough incidence in the population by 53 percent in a study by Christopher S. Carpenter and Emily C. Lawler.

15 March 2017

Price-Linked Subsidies and Health Insurance Markups

Price-linked subsidies in health insurance programs, in which subsidies depend on the prices set by competing insurers, weaken price competition, leading to higher markups and subsidy costs for the government, according to research by Sonia P. Jaffe and Mark Shepard. Price-linking increases prices by up to 5 percent.

14 March 2017

Firm Heterogeneity in Consumption Baskets:
Evidence from Home and Store Scanner Data

Rich and poor households source their consumption from different parts of the firm size distribution, a study byBenjamin Faber and Thibault Fally finds. Larger, more productive firms cater more to the taste of wealthier households. This generates differences in inflation rates across households, amplifies nominal income inequality over time, and leads to a more regressive distribution of gains from international trade.

13 March 2017

Distortionary Effects of Incentives in Government:
Evidence from China's 'Death Ceiling' Program

In a 2004 program designed to motivate Chinese bureaucrats to reduce accidental deaths, each province received a ‘death ceiling’ that, if exceeded, would impede government officials' promotions. Raymond Fisman and Yongxiang Wang observe a sharp discontinuity in reported deaths at the ceiling, suggestive of manipulation. Provinces with safety incentives for municipal officials experienced larger declines in accidental deaths.

10 March 2017

How Do Option Grants Affect CEO Risk-Taking?

Exploiting features of multi-year compensation plans that generate two distinct types of variation in the timing of when large increases in new at-the-money options are granted, Kelly Shue and Richard Townsend find that a 10 percent increase in new options granted leads to a 2.8 to 4.2 percent increase in equity volatility, driven largely by increased leverage.

9 March 2017

Healthcare Spending and Utilization in Medicare

Vilsa Curto, Liran Einav, Amy Finkelstein, Jonathan D. Levin, and Jay Bhattacharya find that healthcare spending is 25 percent lower for Medicare Advantage enrollees than for traditional Medicare enrollees in the same county with the same risk score. Spending differences primarily reflect differences in healthcare utilization, not differences in spending per care episode.

8 March 2017

On Timing Energy Efficiency Investments Effectively

Using evidence from a rebate program for installation of energy-efficient air conditioners in Southern California, Judson P. Boomhower and Lucas W. Davis demonstrate that most of the energy savings come during periods of peak demand, when the value of reducing demand is greatest.

7 March 2017

When Children Rule: Parenting in Modern Families

Sebastian Galiani, Matthew Staiger, and Gustavo Torrens argue that the rise in the relative earnings of wives in the U.S. during the 20th century increased competition between spouses for influencing the behavior of children, while the decline in family size reduced competition between children for resources from their parents. Both developments empowered children.    
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