Do social safety net programs bring long-term gains for those using them? A new study considers the rollout of the US Food Stamps program, which provides food vouchers to low-income families. This became a key part of the US safety net during the War on Poverty in the 1960s. The researchers take advantage of the staggered rollout, which meant that only some children born in a given year were exposed to the program, depending on where they lived. By linking various data sets, the researchers examine whether children exposed to the program have done relatively well in later life. The researchers ..read more

When the “gale of creative destruction” leads to the reallocation of economic resources from less productive incumbents to more productive innovative firms, competition thrives, innovation increases, the economy grows, and consumers benefit. But many market frictions, such as red tape and regulations, may impede this process and the churning of firms. The outcome is lower business dynamism and sluggish productivity growth. And if established companies come to rely on political ties to maintain their market dominance, they may no longer need to compete through innovation. If established compani ..read more

What are the long-run effects of financial shocks on patterns of global trade? The 1866 London banking crisis presents a unique opportunity to overcome the empirical difficulties in answering this question. The financing shock at the root of the crisis led to immediate and persistent export losses for affected countries. Trade patterns changed in a manner consistent with the financial shock affecting countries’ cost of exporting. These findings indicate that shocks to the relative price of exports could disrupt trade patterns, and that disruptions are driven by importers trading off the costs ..read more

What is the best way to sell something? Theory and experience have demonstrated the virtues of using formal mechanisms, like auctions, to allocate assets. Yet, in the real world, many important assets are allocated using less formal processes. We show that mineral leases in Texas allocated via auction produce significantly more output and generate much larger payments for mineral owners. These results suggest large potential gains from employing centralized, formal mechanisms in markets that traditionally allocate in an unstructured fashion, including the broader $3 trillion market for private ..read more

The spread of digital information and communication technology has fed a wave of optimism about its use as a “liberation technology” capable of helping the oppressed and disenfranchised around the world. Using novel geo-referenced data on access to mobile technology and protest occurrence across the whole of Africa over fifteen years, we find evidence in favor of a nuanced version of this argument: mobile phones are instrumental to mass political mobilization, although this only occurs during economic downturns. Our results suggest that, if appropriately used, digital technology has the potent ..read more

We study whether the small size of firms in developing countries prevents adoption of modern and productive machines, thus limiting technology adoption and productivity. Combining a novel survey of manufacturing firms in urban Uganda and a formal economic model, we document how an active rental market for large machines between small firms allows them to collectively achieve economies of scale and mechanize production. These results highlight the importance of taking into account firm-to-firm interactions within informal clusters in order to properly understand the barriers to technology adopt ..read more

The mobile telecom industry provides an interesting environment to study the impact of market structure on competition. Since the early 1990s, governments around the world have experimented with different approaches to allocate new spectrum licenses. In most countries, this has resulted in markets with at least three, but increasingly four or more, mobile network operators. The French market is an especially intriguing case. Until 2009, three incumbents, Orange, SFR and Bouygues Telecom, had been unchallenged for more than a decade. The French regulator then decided to promote competition by g ..read more

New work estimates that the settlement of refugees in West Germany after WWII increased income per capita by about 10 to 15% after 25 years. The empirical evidence, made possible by newly digitized historical data sources, indicates that the key mechanism for these productivity gains was local industrialization. These results highlight the tight link between local labor supply and local economic development and are qualitatively consistent with the narrative of growth models that rely on scale effects: a rising population increased market size for industrial production, which led to innovative ..read more

The Affordable Care Act represents a major expansion of market-based health insurance. In addition to the advantages stemming from choice and competition, market-based approaches can lead to problems of adverse selection. This paper uses the Massachusetts pre-ACA health insurance exchange to show that adverse selection is indeed a persistent problem—due to imperfect risk measurement and preferences for using expensive providers—and that coverage of ‘star’ hospitals is a prime candidate for adverse selection. However, mandating or heavily subsidizing star hospital coverage may, by substantially ..read more

Foreign multinationals account for a sizable fraction of value added, exports, and R&D in the U.S. (Bureau of Economic Analysis, 2017). These firms are affected by regulations on foreign investment, trade policies, and local subsidy competition. A widely-held belief is that attracting a foreign multinational to a location will bring major benefits for local workers and firms. But reliable evidence has been hard to obtain, due to a lack of data and challenges in separating causation from correlation. The key questions for policymakers and local stakeholders center on the direct and indirect ..read more