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THE AMERICAN ECONOMIC ASSOCIATION
VOL. 108 MAY 2018
PAPERS AND PROCEEDINGS
OF THE
One Hundred Thirtieth Annual Meeting
OF THE
AMERICAN ECONOMIC ASSOCIATION
Philadelphia, PA
January 5-7, 2018
Program Arranged by Olivier Blanchard
Papers and Proceedings Edited by William R. Johnson and Kelly Markel
Copyright © AMERICAN ECONOMIC ASSOCIATION, 2018
President's Foreword
CONTENTS
Xll
Editors' Introduction xiii
PAPERS
Richard T. Ely Lecture
Private Paternalism, the Commitment Puzzle, and Model-Free Equilibrium David Laibson 1
Advances in Big Data Research in Economics
Algorithmic Fairness Jon Kleinberg, Jens Ludwig, Sendhil Mullainathan, andAshesh Rambachan 22
Radically Rethinking Economic Policy
Welfarism's Envy Problem Extends to Popular Judgments Matthew Weinzierl 28
Quadratic Voting: How Mechanism Design Can Radicalize Democracy Steven P. Lalley andE. Glen Weyl 33
Should We Treat Data as Labor? Moving beyond "Free" . . . .Imanol Arrieta-Ibarra, Leonard Gaff, Diego Jimenez-Hernandez, Jaron Lanier, andE. Glen Weyl 38
Economic Consequences of Artificial Intelligence and Robotics
What Can Machines Learn and What Does It Mean for Occupations and the Economy?
Erik Brynjolfsson, Tom Mitchell, and Daniel Rock 43
Modeling Automation Daron Acemoglu and Pascual Restrepo 48
A Method to Link Advances in Artificial Intelligence to Occupational Abilities Edward W. Feiten, Manav Raj, and Robert Seamans 54
Human Judgment and AI Pricing Ajay Agrawal, Joshua S. Gans, andAvi Goldfarb 58
Economic Applications of Machine Learning
Estimating Heterogeneous Consumer Preferences for Restaurants and Travel Time Using Mobile Location Data. ,
Susan Athey, David Blei, Robert Donnelly, Francisco Ruiz, and Tobias Schmidt 64
The Potential of Digital Credit to Bank the Poor Daniel Björkegren and Darrell Grissen 68
Estimating Economic Characteristics with Phone Data. Joshua E. Blumenstock 72
Nowcasting Gentrification: Using Yelp Data to Quantify Neighborhood Change Edward L. Glaeser, Hyunjin Kim, and Michael Luca 11
Policy Implications of Suboptimal Choice: Theory and Evidence
Misperceptions about Tax Audits Marcelo Bergolo, Rodrigo Ceni, Guillermo Cruces, Matias Giaccobasso, and Ricardo Perez-Truglia 83
, Ramsey Strikes Back: Optimal Commodity Taxes and Redistribution in the Presence of Salience Effects Hunt Allcott, Benjamin Lockwood, and Dmitry Taubinsky 88
m
IV AEA PAPERS AND PROCEEDINGS MAY2018
Can Information Change Personal Retirement Savings? Evidence from Social Security Benefits Statement Mailings Susan Payne Carter and William Skimmyhorn 93
Rationalizations and Mistakes: Optimal Policy with Normative Ambiguity Jacob Goldin and Daniel Reck 98
Global Inequality and Policy
The Elephant Curve of Global Inequality and Growth Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman 103
From Communism to Capitalism: Private versus Public Property and Inequality in China and Russia Filip Novokmet, Thomas Piketty, Li Yang, and Gabriel Zucman 109
Applying Generalized Pareto Curves to Inequality Analysis . . . . . Thomas Blanchet, Bertrand Garbinti, Jonathan Goupille-Lebret, and Clara Martinßz-Toledano 114
Extreme Inequality: Evidence from Brazil, India, the Middle East, and South Africa Lydia Assouad, Lucas Chancel, and Marc Morgan 119
Climate Policy and Trade
Challenges in the Measurement of Leakage Risk Meredith Fowlie and Mar Reguant 124
How Trade Sensitive Are Energy-Intensive Sectors? Carolyn Fischer and Alan K. Fox 130
Regulating Mismeasured Pollution: Implications of Firm Heterogeneity for Environmental Policy . . . Eva Lyubich, Joseph S. Shapiro, and Reed Walker 136
Mental Accounting
Is Altruism Sensitive to Scope? The Role of Tangibility Alex Imas and George Loewenstein 143
Mental Budgeting versus Relative Thinking Samuel Hirshman, Devin Pope, and Jihong Song 148
When Nudges Are Forever: Inertia in the Swedish Premium Pension Plan Henrik Cronqvist, Richard H. Thaler, and Frank Yu 153
Gender Norms and Discrimination
Cross-Country Differences in Household Stock Market Participation: The Role of Gender Norms .'.'.' , Da Ke 159
Gender Norms and Relative Working Hours: Why Do Women Suffer More Than Men from Working Longer Hours Than Their Partners? .
Sarah Fleche, Anthony Lepinteur, andNattavudh Powdthavee 163
The Language of Discrimination: Using Experimental versus Observational Data , . , . . . Aislinn Bohren, Alex Imas, and Michael Rosenberg 169
Gender Issues in Economics
Gendered Language on the Economics Job Market Rumors Forum .Alice H. Wu 175
Representations of Men and Women in Introductory Economics Textbooks Betsey Stevenson and Hanna Zlotnick 180
What Can UWE Do for Economics? Tatyana Avilova and Claudia Goldin 186
VOL. 108 CONTENTS v
Economic Effects of Populism . - e J ; :•-'; « ? ? •'•';
A Dialogue between a Populist and an Economist..:...... ,..-......•. . . , , . % . . . . . . . . . . :
Tito Boeri, Prachi Mishra, Chris Papageorgiou, and Antonio Spilimbergo 191
Is Populism Necessarily Bad Economics? . . . , . . , . ; . . , . . . . Dani Rodrik 196
Economic Drivers of Populism. ... » ••• • • • • • Sergei Guriev 200
Studying the (Economic) Consequences of Populism . . . Cristobal Rovira Kaltwasser 204
Inequality, Discrimination, and Violence
On the Returns to Invention within Firms: Evidence from Finland Philippe Aghion, Ufuk Akcigit, Ari Hyytineti, and OttoToivanen 208
Local Violence, Academic Performance, and School Accoun tab i l i t y . . . . . ' - . . . . . . ; . . . . . . . I...:... . . . . . . . . . i . . . . . . . . . . ; . . . ; Marcus Casey, Jeffrey C. Schimon, and Maciej Wachala 213
Racial Differences in Police Use of Force: Evidence from the 1960s Civil Disturbances . . . . . . . . . . . JameinP. Cunningham and Rob Gillezeau 111
Last Place? The Intersection of Ethnicity, Gender, and Race in Biomedical Authorship . . . . . . Gerald Marschke, Allison Nunez, Bruce A. Weinberg, and Huifeng Yu 222
New Findings in the Economics of Crime and Policing
Reconciling Results on Racial Differences in Police Shootings ......... .RolandG. Fryer, Jr. 228
Intergenerational Effects of Incarceration Manudeep Bhuller, Gordon B. DM, Katrine V. L0ken, andMagne Mogstad 234
Racial and Ethnic Sentencing Differentials in the Federal Criminal Justice System ,..,,. . . . . . . . . . . . »•••• •••••• . . . • • BrendonMcConnellandImranRasul 241
Barriers to the Success of Female Owned Microenterprises
Participating or Not? Characteristics of Female Entrepreneurs Participating in and Completing an Entrepreneurial Training Program , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leonardo lacovone, Gabriela Calderön, and Cristina MacGregor 246
Mind The (Profit) Gap: Why Are Female Enterprise Owners Earning Less Than Men? .'• Morgan Hardy and Gisella Kagy 252
Is Personal Initiative Training a Substitute or Complement to the Existing Human Capital of Women? Results from a Randomized Trial in Togo Francisco Campos, Michael Frese, Markus Goldstein,
Leonardo lacovone, Hillary C. Johnson, David McKenzie, and Mona Mensmann 256
Disability Insurance and Disability Discrimination . '
Disability Saliency and Discrimination in Hiring . . . . . . V . . . . . . . Phillip Armour, Patrick Button, and Simon Hollands 262
The Effect of the Disability Insurance Application Decision on the Employment of Denied Applicants Mashfiqur R. Khan 267
Return-to-Work Policies and Labor Supply in Disability Insurance Programs Arezou Zaresani 272
vi AEA PAPERS AND PROCEEDINGS MAY2018
The Dynamics of Income: Celebrating 50 Years of the PSID
Income Volatility and the PSID: Past Research and New Results Robert Moffitt and Sisi Zhang 277
Nonlinear Persistence and Partial Insurance: Income and Consumption Dynamics in the PSID Manuel Arellano, Richard Blundell, and Stephane Bonhomme 281
New Evidence on Earnings Volatility in Survey and Administrative Data Michael D. Carr and Emily E. Wiemers 287
On the Heterogeneity in Family Earnings and Income Dynamics in the PSID Dmytro Hryshko and lourii Manovskii 292
Research in Economic Education
Beyond the Flipped Class: The Impact of Research-Based Teaching Methods in a Macroeconomics Principles Class Austin Boyle and William L. Goffe 297
From "Traditional" to Research-Based Instructional Strategies: An Assessment of Learning Gains . . Sarah B. Cosgrove and Neal H. Olitsky 302
Low-Cost Randomized Controlled Trials in Education . . . Nathan Wozny, Cary Baiser, and Drew Ives 307
A New Look at Lake Wobegon: Who's in Your Canoe? Chris Bollinger, Tisha L. N. Emerson, Linda English, and Gail M. Hoyt 312
Is the Large Firm Wage Premium Dead or Merely Resting?
The Disappearing Large-Firm Wage Premium Nicholas Bloom, Fatih Guvenen, Benjamin S. Smith, Joe Song, and Till von Wächter 317
A Cross-Country Comparison of Dynamics in the Large Firm Wage Premium Emanuele Colonnelli, Joacim Tag, Michael Webb, and Stefanie Wolter 323
The Productivity-Wage Premium: Does Size Still Matter in a Service Economy? Giuseppe Berlingieri, Sara Calligaris, and Chiara Criscuolo 328
Inner Workings of Organ Markets and Organ Allocation
What Matters for the Productivity of Kidney Exchange? . . . Nikhil Agarwal, Itai Ashlagi, Eduardo Azevedo, Clayton Featherstone, and Ömer Karaduman 334
Dynamic Incentives in Wait List Mechanisms Nikhil Agarwal, Itai Ashlagi, Paulo Somaini, and Daniel Waldinger 341
Demography and Development
Dynamics of Child Mortality Inequality .TomS. Vogl 348
Cousin Marriage Is Not Choice: Muslim Marriage and Underdevelopment Lena Edlund 353
Women's Empowerment, the Gender Gap in Desired Fertility, and Fertility Outcomes in Developing Countries Matthias Doepke and Michele Tertilt 358
Male Social Status and Women's Work Arielle Bernhardt, Erica Field, Rohini Pande, Natalia Rigol, Simone Schaner, and Charity Troyer-Moore 363
VOL. 108 CONTENTS Vll
Household Security Issues: Family, Health, and Food
Split Families and the Future of Children: Immigration Enforcement and Foster Care Placements . . . Catalina Amuedo-Dorantes and Esther Arenas-Arroyo 368
The Effect of Parental Education on Children's Drug and Alcohol Use .,,.. , Aaron Chalfin and Monica Deza 373
The Differential Incidence and Severity of Food Insecurity by Racial, Ethnic, and Immigrant Groups over the Great Recession in the United States Alfonso Flores-Lagunes, Hugo B. Jales,
Judith Liu, and Norbert L. Wilson 379
Elasticity of Medicaid Access with Respect to State Financial Distress Victoria Perez, Joseph Benitez, and Eric Selber 384
Interaction of Gender with Household Decision-Making Peer Effects
Trends and Disparities in Leave Use under California's Paid Family Leave Program: New Evidence from Administrative Data . . . Sarah Bona, Kelly Bedard, and Maya Rossin-Slater 388
Gender Peer Effects in a Predominantly Male Environment: Evidence from West Point. Nick Huntington-Klein and Elaina Rose 392
Developments in the Economics of Aging
Time and Money: Social Security Benefits and Intergenerational Transfers Anita Mukherjee 396
In Debt and Approaching Retirement: Claim Social Security or Work Longer? Barbara A. Butrica and Nadia S. Karamcheva 401
The Changing Face of Debt and Financial Fragility at Older Ages Annamaria Lusardi, Olivia S. Mitchell, and Noemi Oggero 407
Health, Human Capital
The Price of Labor: Evaluating the Impact of Eliminating User Fees on Maternal and Infant Health
Outcomes Anne Fitzpatrick 412
Indoor Air Pollution and Infant Mortality: A New Approach Itnelda 416
Short-Term Impacts of a Pay-it-Forward Livestock Transfer and Training Program in Nepal Sarah A. Janzen, Nicholas P. Magnan, Sudhindra Sharma, and William M. Thompson 422
Investment, Rates and Rents
Intangibles, Investment, and Efficiency Nicolas Crouzet and Janice Eberly 426
Ownership, Concentration, and Investment German Gutierrez and Thomas Philippon 432
Financial Inclusion through Savings: Commitment Devices, Mobile Money, and the Role of Trust
Workplace Signaling and Financial Commitment: Evidence from a Field Experiment Emily Breza, Martin Kanz, and Leora Klapper 438
Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion Pierre Bachas, Paul Gertler, Sean Higgins, and Enrique Seira AAA
Salary Delays and Overdrafts in Rural Ghana.. .Niklas Buehren, Virginia Ceretti, Ervin Dervisevic, Markus Goldstein, Leora Klapper, Tricia Koroknay-Palicz, and Simone Schaner 449
AEA PAPERS AND PROCEEDINGS MAY 2018
China's National Carbon Market
Carbon Pricing Induces Innovation: Evidence from China's Regional Carbon Market Pilots . . . . . . . Jingbo Cui, Junjie Zhang, and Yang Zheng 453
China's Rate-Based Approach to Reducing C0 2 Emissions: Attractions, Limitations, and Alternatives . .
Lawrence H. Goulder and Richard D. Morgenstern 458
China's New National Carbon Market William A. Pizer and Xiliang Zhang 463
Institutions and Emissions Trading in China Valerie Jean Karplus 468
New Measures of the Economy
Measuring Welfare with Massive Online Choice Experiments: A Brief Introduction ErikBrynjolfsson, Felix Eggers, andAvinash Gttnnamaneni 473
The Empirics of Social Progress: The Interplay between Subjective Well-Being and Societal Performance Daniel Fehder, Michael Porter, and Scott Stern 477
Using Online Prices for Measuring Real Consumption across Countries:". .Alberto Cavallo, W. Erwin Diewert, Robert C. Feenstra, Robert Inklaar, and Marcel P. Timmer 483
Internet Rising, Prices Falling: Measuring Inflation in a World of E-Commerce. Austan D. Goolsbee and Peter J. Klenow 488
International Finance and Emerging Markets
Reach for Yield and Fickle Capital Flows Ricardo J. Caballero and Alp Simsek 493
Global Financial Cycles and the Exchange Rate Regime: A Perspective from Emerging Markets . . . .
Maurice Obstfeld, Jonathan D. Ostry, and Mahvash S. Qureshi 499
Optimal Payment Areas or Optimal Currency Areas?. Patrick Bolton and Haizhou Huang 505
Financial Cycles and Credit Growth across Countries Nuno Coimbra and Helene Rey 509
Conventional and Unconventional Fiscal Multipliers
The Effects of Tax Changes at the Zero Lower Bound: Evidence from Japan '.
Akihisa Kato, Wataru Miyamoto, Thuy Lan Nguyen, andDmitriy Sergeyev 513
Unconventional Fiscal Policy Francesco D'Acunto, Daniel Hoang, and Michael Weber 519
What Do We Know about the Effects of Austerity? Alberto Alesina, Carlo A. Favero, and Francesco Giavazzi 524
What's Special About the Dollar in Financial Markets?
Exchange Rates and the Working Capital Channel of Trade Fluctuations Valentino Bruno, Se-Jik Kim, and Hyun Song Shin 531
Foreign Safe Asset Demand for US Treasurys and the Dollar. Zhengyang Jiang, Arvind Krishnamurthy, and Hanno Lustig 537
Trade Invoicing, Bank Funding, and Central Bank Reserve Holdings Gita Gopinath and Jeremy C. Stein 542
VOL.108 -v CONTENTS
Demand Non-Homotheticities over the Business Cycle
The Welfare Consequences of Income-Induced Expenditure Switching Rudolfs Berns and Julian Di Giovanni 547
Wealth Redistribution after Exchange Rate Devaluations Andres Drenik, Gustavo Pereira, and Diego J. Perez 552
What Is the Impact of Food Stamps on Prices and Product Variety? The Importance of the Supply Response Xavier Jaravel 557
The Geographic Spread of a Large Devaluation Javier Cravino and Andrei A. Levchenko 562
Central Bank Communications
Through a Crystal Ball Darkly: The Future of Monetary Policy Communication . Alan S. Blinder 567
Central Bank Forward Guidance and the Signal Value of Market Prices Stephen Morris and Hyun Song Shin 572
Central Bank Communications and the General Public. . . . Andrew Haldane and Michael McMahon 578
What Can We Learn From Financial Market Responses to the 2016 Election?
The "Standard Error" of Event Studies: Lessons from the 2016 Election Justin Wolfers and Eric Zitzewitz 584
Unequal Rewards to Firms: Stock Market Responses to the Trump Election and the 2017 Corporate Tax Reform Alexander F. Wagner, Richard J. Zeckhauser, and Alexandre Ziegler 590
Economic Expectations, Voting, and Economic Decisions around Elections Gur Huberman, Tobias Konitzer, Masha Krupenkin, David Rothschild, and Shawndra Hill 597
PROCEEDINGS
Minutes of the Annual Business Meeting, Philadelphia, PA, January 5,2018 605
Reports Report of the Secretary 608 Report of the Treasurer 612 American Economic Association Universal Academic Questionnaire Summary Statistics 616 List of Online Reports 619