Abstract Allocative wages—the labor costs considered when deciding to form or dissolve a long-term employment relationship—are more sensitive to cyclical conditions for more educated workers. Specifically, college-educated workers’ allocative wages are highly pro-cyclical, while high school dropouts’ wages exhibit only moderate cyclicality. Further, as education increases, an increasing share of the sensitivity of allocative wages is driven by the persistent scarring effects of the cyclical position at the time of hiring on the wages associated with higher levels of tenure, amounting to more than a third of the overall sensitivity for the college educated. The greater job stability of the more educated—and therefore the exposure to scarring—contributes to these differences. In addition, more significant scarring at each horizon of tenure amplifies the effect. In service of documenting these facts, I develop new methods for inferring the sensitivity of labor costs to shocks when agents are forward-looking and wages may be intertemporally smoothed.

Abstract We exploit a panel of city-level data with rich demographic information to estimate the distributional effects of Department of Defense spending and its effects on a range of social outcomes. The income and employment generated by defence spending accrue predominantly to households without a bachelor's degree. These households as well as Black and Hispanic households tend to disproportionately benefit from this spending. Defence spending also promotes a range of beneficial social outcomes that are often targeted by government programs, including reductions in poverty, divorce rates, disability rates, and mortality rates, as well as increases in homeownership rates, health insurance rates, and occupational prestige. We compare the effects of defence spending with the effects of general demand shocks and explore reasons for the differential effects of the shocks.

Abstract We formulate a tractable model of pricing under directed search with heterogeneous firm demands. Demand characteristics drive bids in a position auction and enable us to bridge insights from the ordered search literature to those in the position auction literature. Equilibrium pricing implies that the marginal consumer’s surplus decreases down the search order, so consumers optimally follow the firms’ position ordering. A firm suffers from “business stealing” by firms that precede it and “search appeal” from subsequent firms. We find rankings that achieve the maximal joint profit or consumer surplus by constructing firm-specific scores. A generalized second price auction for positions endogenizes equilibrium orders and bids are driven by position externalities that impact incremental profit from switching positions. The joint profit maximization order is upheld when firm heterogeneity concerns mostly their mark-up potentials. But the consumer welfare order is robust when firms differ mostly over their potential market sizes.

We use novel, large-scale data on 17.5 million Americans to study how a policy-driven increase in economic resources affects children's long-term outcomes. Using the 2000 Census and 2001-13 American Community Survey linked to the Social Security Administration's NUMIDENT, we leverage the county-level rollout of the Food Stamps program between 1961 and 1975. We find that children with access to greater economic resources before age five have better outcomes as adults. The treatment-on-the-treated effects show a 6% of a standard deviation improvement in human capital, 3% of a standard deviation increase in economic self-sufficiency, 8% of a standard deviation increase in the quality of neighbourhood of residence, a 1.2-year increase in life expectancy, and a 0.5 percentage-point decrease in likelihood of being incarcerated. These estimates suggest that Food Stamps' transfer of resources to families is a highly cost-effective investment in young children, yielding a marginal value of public funds of approximately sixty-two.

Abstract We quantify intergenerational and assortative processes by comparing different degrees of kinship within the same generation. This “horizontal” approach yields more, and more distant kinship moments than traditional methods, which allows us to account for the transmission of latent advantages in a detailed intergenerational model. Using Swedish registers, we find strong persistence in the latent determinants of status, and a striking degree of sorting—to explain the similarity of distant kins, assortative matching must be much stronger than previously thought. Latent genetic influences explain little of the variance in educational attainment, and sorting occurs primarily in non-genetic factors.

Abstract The rise of opinion programs has transformed television news. Because they present anchors’ subjective commentary and analysis, opinion programs often convey conflicting narratives about reality. We experimentally document that people across the ideological spectrum turn to opinion programs over “straight news”, even when provided large incentives to learn objective facts. We then examine the consequences of diverging narratives between opinion programs in a high-stakes setting: the early stages of the COVID-19 pandemic in the US. We find stark differences in the adoption of preventative behaviours among viewers of the two most popular opinion programs, both on the same network, which adopted opposing narratives about the threat posed by the COVID-19 pandemic. We then show that areas with greater relative viewership of the program downplaying the threat experienced a greater number of COVID-19 cases and deaths. Our evidence suggests that opinion programs may distort important beliefs and behaviours.

Abstract This article sets out a data-driven approach for targeting environmental policies optimally in order to combat deforestation. We focus on the Amazon, the world’s most extensive rainforest, where Brazil’s federal government issued a “Priority List” of municipalities in 2008—a blacklist to be targeted with more intense environmental monitoring and enforcement. First, we estimate the causal impact of the Priority List on deforestation (along with other relevant treatment effects) using “changes-in-changes” due to Athey and Imbens (2006), finding that it reduced deforestation by 43$\%$ and cut emissions by almost 50 million tons of carbon. Second, we develop a novel framework for computing targeted optimal blacklists that draws on our treatment effect estimates, assigning municipalities to a counterfactual list that minimizes total deforestation subject to realistic resource constraints. We show that the ex post optimal list would result in carbon emissions over 10$\%$ lower than the actual list, amounting to savings of more than $ \$ $1.2 billion (34$\%$ of the total value of the Priority List), with emissions over 23$\%$ lower on average than a randomly selected list. The approach we propose is relevant both for assessing targeted counterfactual policies to reduce deforestation and for quantifying the impacts of policy targeting more generally.

Abstract This article studies the decentralized adoption of a technology standard when network effects are present. If the new standard is incompatible with the current installed base, adoption may be inefficiently delayed. I quantify the magnitude of “excess inertia” in the switch of the movie distribution and exhibition industries from 35 mm film to digital. I specify and estimate a dynamic game of digital hardware adoption by theatres and digital movies supply by distributors. Counterfactual simulations establish that excess inertia reduces surplus by $16\%$ relative to the first-best adoption path; network externalities explain $41\%$ of the surplus loss. Targeted adoption subsidies or a mandate on digital distribution help bridge this welfare gap.