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Alex Catling



Articles by Alex Catling

Face-to-Face Communication in Organizations

13 days ago

Summary

The COVID-19 pandemic has meant that many of us have now been working at home for most of the last year. The results of this global experiment have sometimes been positive, or at least not as negative as feared. Engagement and productivity have not nosedived, and many workers seem to prefer the new arrangements. There are, however, potential drawbacks. Not interacting with colleagues in person on a regular basis may, for example, decrease the sort of creativity that is facilitated by physical proximity, provide fewer learning opportunities for junior workers, and threaten performance on activities that require rapid decisions on the basis of complex information.
Many factors have changed for

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Moral Values and Voting

27 days ago

Summary

What roles do moral values play in elections, and how do politicians appeal to them? To examine these questions, this research introduces a core idea of modern moral psychology into the study of political economy. People may endorse “universalist” values, such as individual rights, justice, and impartial fairness, or more “communal” concepts, such as community, loyalty, betrayal, respect, and tradition.
This may help in understanding election outcomes. The research summarized here asks whether voting decisions in the United States partly reflect the match between the moral values of voters and politicians. It introduces methods for studying the moral types of politicians and voters, and the

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Geography, transportation, and endogenous trade costs

April 8, 2021

Summary

Whether by sea, land or air, the entirety of trade is carried out by the transportation sector. We know surprisingly little, however, about the role of transportation in shaping trade networks. How do transport markets interact with the markets for world trade in goods? How does the behavior of profit-maximizing transport agents influence transport costs, and thus global imports and exports?

A new paper uses vessel AIS data—which regularly reports each ship’s exact position and how deeply it is submerged in the water—and data on shipping contracts to document several facts about transport markets and world trade. The paper illustrates that ships travel

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Second chance: the social benefits of diversion in the criminal justice system

March 16, 2021

Summary

Public officials have made substantial efforts over the past decade to reform criminal justice policy. The general trend in the US has been towards more leniency, especially for first-time and low-risk defendants, with ‘diversion’ emerging as a popular option.
Diversion is a practice where a police officer, prosecutor, or judge provides an opportunity for an individual charged with a criminal offense to avoid a conviction either through a dismissal of the charge or by some alternative measure. Despite the growing popularity of such programs, until now not much has been known about the impact of diversion on future behavior.

A recent study estimates the

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What Goes Up May Not Come Down: Asymmetric Incidence of Value-Added Taxes

March 1, 2021

Summary

Value-Added Taxes (VATs) raise the most revenue of any tax in OECD countries and some form of VAT has been adopted by almost all countries in the world. While it is commonly assumed that their incidence is borne by consumers, there is limited empirical evidence on this question.
New evidence from Finland analyzes the effect of a large—14 percentage point—VAT decrease in the hairdressing sector in Finland, which was later reversed. The magnitude of the cut, its temporary nature, and the richness of the Finnish administrative dataset allows the authors to track the effect of the VAT cut on prices and firm-level outcomes.

They uncover several new facts

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Age of marriage, weather shocks, and the direction of marriage payments

February 1, 2021

Summary

Child marriage, defined as marriage before the age of 18, has been associated with a wide array of poor economic, social, and health outcomes for women and their children. It was estimated in 2014, however, that around half of all prime-aged women living in South Asia and in Sub-Saharan Africa were married as children. 
This post summarizes a recent article, which has demonstrated that aggregate economic shocks have sizable effects on the age of marriage of women living in developing countries. The study focuses on Sub-Saharan Africa, where it is customary for the groom or his family to pay a bride price to the bride’s family, and India, where the bride’s family traditionally pays a dowry to

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Innovation in the global firm

January 5, 2021

Summary

Multinational corporations are among the most innovative firms in the world. Although they are defined by their geographically fragmented production processes, the innovation that they carry out is comparatively concentrated, with a large share of them pursuing innovation investment mainly in one ‘headquarters’ country. 
A new study analyzes data on the global operations of US-based multinationals to quantify the impact of innovation investments by parent firms on their affiliates located abroad. These data have been collected by the Bureau of Economic Analysis and cover the period from 1989 to 2008.

The results suggest that ‘headquarters innovation’

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More Precise Regulation can Lower Pollution in India

December 21, 2020

Summary

Around the world, air pollution is a major problem, and today’s large developing countries have perhaps the highest levels of air pollution recorded in human history. The World Health Organization sets an air quality standard for fine particulate matter which all 687 districts in India fail to meet. Air pollution beyond the WHO standard lowers the life expectancy of 1.3 billion Indian citizens by five years, on average. 
The high level of pollution is a puzzle, given that firms in developing countries have access to the same pollution abatement technologies as firms in the United States, at least in principle. Manufacturing in the United States has become markedly cleaner over time while

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How acquisitions affect firm behavior and performance: Evidence from the dialysis industry

December 9, 2020

Summary

Health care markets have become increasingly concentrated through mergers and acquisitions. This consolidation can lower costs due to economies of scale and improve patient outcomes through coordinated care. However, greater concentration may also result in higher prices or lower quality. A recent paper studies the effects of mergers and acquisitions in the dialysis industry, which makes up 6% of total Medicare expenditures (Eliason et al., 2020).
The dialysis industry has consolidated over the past three decades, with the share of independently owned dialysis facilities falling from 86% to 21%. This new research uses detailed claims data to show directly how large chains transfer their

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The Return to Protectionism

December 2, 2020

Summary

After more than a half-century of leading efforts to lower international trade barriers, the United States enacted several waves of tariff increases on specific products and countries in 2018 and 2019. Overall, the U.S. implemented tariffs on 17.6% of its 2017 imports, primarily from China, raising tariffs on targeted imports from an average of 3.7% to an average of 25.8%. Trade partners retaliated by targeting 8.7% of U.S. exports, raising tariffs from an average of 8.7% to an average of 20.8%. This episode is the largest return to protectionism by the U.S. since the 1930 Smoot-Hawley Act (Irwin, 1998).

Two recent papers look at U.S. trade and tariff

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What Medicare Part D Teaches Us About Social Insurance Markets

November 25, 2020

Summary

Seeking to reduce costs and increase the quality of services, policymakers have recently transferred the provision of certain traditional government social services to private firms. The central economic problem to be solved in this arrangement is how to structure payments to these firms and reduce their ability to capture rents from subsidies intended for consumers.

This paper illustrates the complex interplay between subsidy payments, market power, and equilibrium outcomes in the setting of prescription drug coverage in Medicare Part D, an example of such a market. These findings can apply to other privately-provided social insurance markets and

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Poor Little Rich Kids? The Role of Nature versus Nurture in Wealth and Other Economic Outcomes and Behaviors

November 6, 2020

Summary

Which has more impact on our wealth and behavior: biology or environment? This research attempts to disentangle the role of nature versus nurture and the role of nature-nurture interactions in the intergenerational transmission of wealth. Results suggest that persistence in wealth across generations is primarily driven by environment, while biology has more impact on educational achievement.

Wealth is highly correlated between parents and their children; however, little is known about what drives this relationship. Is it that children of wealthy parents are inherently more talented, and that is what shapes their later success? Or is it that children had

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Who Profits from Patents? Rent-Sharing at Innovative Firms

October 21, 2020

Summary

Mounting empirical evidence that intra-firm wage differences contribute substantially to wage inequality among identically skilled workers has renewed interest in theoretical models of the ways in which variation in firm productivity can influence worker pay.
A key question is the extent to which firms pass changes in the average labor productivity through into wages, but observational fluctuations in standard labor productivity measures are likely to reflect a number of factors that can influence wages without necessarily signaling a violation of price-taking behavior by firms.

This paper circumvents the endogeneity problem by using patent allowance

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Improved allocation of talent boosts US economic growth

October 5, 2020

Summary

In 1960, 94% of American doctors and lawyers were white men: by 2010, the fraction was just over 60%. Similar changes have occurred throughout the US economy over the last 50 years, particularly among high-skilled occupations.
Since the innate talent for a profession among members of a group is unlikely to change over time, the change in the distribution of occupations since 1960 suggests that, historically, many innately talented people were not pursuing their comparative advantage. The resulting misallocation of talent potentially had important aggregate consequences.
The fact that the occupational distribution of women and black men has converged towards that of white men suggests that

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Capitalists in the Twenty-First Century

August 21, 2020

Summary

In the 21st century, top incomes have risen due to business income and other non-wage income like interest and rent (Piketty 2014; Piketty, Saez, and Zucman 2018). Hence, recent trends raise the possibility that the financial-capital rich—those who derive most of their income from nonhuman capital—may possibly now dominate the ranks of America’s highest earners instead of the human-capital rich—the entrepreneurs and wage earners who derive most of their income from their human capital.

Identifying the nature of top income is stymied, however, by a data issue: most income at the very top of the income distribution is private business income, and standard

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Insuring the Poor: Experimental evidence from contract farming in Kenya

August 7, 2020

Summary

Around the world, the poor do not typically purchase insurance, despite having the most to gain from risk reduction. In the case of crop insurance, studies consistently find low adoption among small farmers, despite the large risks they face from drought, flood, and pests. One explanation is that insurance products typically require the premium to be paid upfront. Farmers must pay premiums at the time of planting, when they are typically low on cash, and they are paid at harvest, when most farmers receive at least some income.

Using a randomized controlled trial, we evaluate demand for a pay-at-harvest insurance product, where the premium is deducted

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Life-cycle benefits of early childhood programs: evidence from an influential early childhood program

July 17, 2020

Summary

There is a substantial body of evidence showing that early childhood programs can boost the skills of disadvantaged children. Most of this research has evaluated the short-run ‘treatment effects’ of these programs, focusing on outcomes such as cognitive test scores, school readiness, and measures of social behavior. So far, few studies have analyzed longer-term effects such as completed education, adult health, crime, and labor income.
New research aims to bridge this gap, focusing on influential early childhood programs for disadvantaged children in North Carolina. Guided by economic theory, the study shows that it is possible to supplement experimental data with non-experimental data to

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Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark

July 6, 2020

Summary

Extensive literature estimates the impact of taxes on labor, but much less is known about how taxes affect the supply of capital. In theory, wealth taxes may affect saving and consumption decisions, business creation, tax compliance, and inter-generational wealth transmission. Capturing the precise economic effects of taxing wealth poses formidable empirical challenges, however, due to the lack of reliable micro data on household wealth, particularly amongst the wealthiest.
This paper provides new evidence from Denmark, which used to impose one of the world’s highest marginal tax rates on wealth, and therefore has a rich and comprehensive annual dataset of taxable wealth. In addition,

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The First 2,000 Days: Investing in Children’s Skills Through Early Intervention

June 5, 2020

Summary

Children from poorer backgrounds typically have lower cognitive and socio-emotional skills due to differences in the quality of the environment they live in, and these early differences can feed into worse health, education and labor market outcomes later in life. Existing research suggests that these inequalities can be reduced through targeted early childhood intervention programs. Most of the evidence to date, however, comes from the US and from developing countries; this article examines whether these interventions can also be effective in Ireland, a developed country with more redistributive social policies.

Starting in 2008, pregnant women in a

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Consumer spending during unemployment: evidence from US bank account data

March 9, 2020

Summary

Unemployment insurance (UI) benefits provide an important financial cushion for the many people who lose their jobs, helping to stabilize their consumer spending while they look for new work opportunities. But is the typical duration of UI benefits in the United States of six months the appropriate length of time – or might some people be better off with a longer period, perhaps at a lower level of monthly payments?
New research indicates that consumption drops sharply at the large and predictable fall in income that happens when UI benefits expire. Looking at the changing patterns of 22 different types of spending, the study detects reductions in all 22, including particularly severe drops

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Jury verdicts: evidence from eighteenth century London of the dangers of sequential decision-making

February 25, 2020

Summary

When juries in criminal courts determine whether a defendant is guilty or not guilty, are their decisions at all influenced by the verdict and characteristics of the previous trial on which they were sitting? In an ideal world, every case should be assessed solely on its own merits, but a new study suggests that there is a strong element of what economists call ‘path dependency’ in jury decision-making: a guilty verdict in one trial raises the likelihood of a guilty verdict in the next one.

The context for this evidence of biases in sequential decision-making is the Central Criminal Court at London’s Old Bailey in the eighteenth century. This was a

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The Age of Mass Migration: contrasting economic and political effects

February 7, 2020

Summary

Recent waves of immigration to Europe and the United States have triggered concerns about the economic impact on the native populations, as well as calls for tighter restrictions. There are historical echoes in the Age of Mass Migration in the late nineteenth and early twentieth centuries, when more than 30 million European immigrants moved to the United States, and the share of immigrants in the US population peaked at 14% – even higher than today’s record of 13.7%.
A new study explores the economic and political effects on US cities of the later years of those large migration flows, between 1910 and 1930, when mass migration of Europeans was interrupted by two major shocks – the First World

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Performance management and workplace culture: evidence from a US trucking firm

January 24, 2020

Summary

Firms increasingly collect data on their employees’ performance, a management practice that they can use to promote comparisons among staff and potentially boost productivity. At the same time, there is growing corporate emphasis on employee empowerment, teamwork, and happiness – again with the goal of improving overall performance.
Are these two objectives compatible? A new study investigates how the success of a management practice depends on the underlying values articulated by senior managers. The researchers report evidence on what happened when a large US transport company tried to combine performance management with changing the workplace culture.

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The impact of new entry in regulated transport markets: evidence from New York City taxis

December 13, 2019

Summary

Traditional taxi services are giving way to ride-hailing companies such as Uber in many cities around the world – partly as a result of new technologies that make it easier to match waiting passengers with searching drivers; and partly because new entrants have been able to avoid local price and entry regulation. A new study uses data from New York City yellow cabs before the arrival of Uber to analyze the matching process, and to simulate the effects of new entry into the market, alternative matching technologies, and different market densities.

While in textbook markets, prices serve to balance demand and supply, in the traditional taxi market, this

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Who benefits from rent control? Evidence from San Francisco

November 21, 2019

Summary

Steadily rising rents in many American cities have brought the issue of affordable housing to the forefront of policy debate. This column reports evidence on the effects of an expansion of rent control in San Francisco on tenants, landlords, and inequality. The researchers find that while the policy prevented short-term displacement of incumbent tenants, landlords responded by converting rental housing to other uses, reducing the overall supply and ultimately making rents even less affordable. Rent control seems to have contributed to the gentrification of San Francisco, the exact opposite of the intended goal. Indeed, by simultaneously bringing in higher income residents and preventing

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Effects of vertical mergers in multichannel TV markets: evidence from regional sports programming

November 6, 2019

Summary

When producers of TV channels, such as Time Warner, and distributors of those channels, such as AT&T, are merged, what are the impacts on consumers, rival producers and rival distributors? Because ‘vertical integration’ of this kind can have both efficiency and anti-competitive effects, competition authorities and courts evaluating a prospective merger need to assess both the potential benefits and the potential harms to determine the overall welfare effects.

A team of economists has developed a new framework for doing just that, and used it to quantify welfare effects in the context of high-value sports content in the US cable and satellite TV

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When Fewer Options are Better for Consumers: The Benefits of Narrow Health Insurance Networks

September 9, 2019

Summary

Should health insurers be required to allow their enrollees to visit any hospital or doctor?  Many insurers limit enrollees to “in-network” medical providers, forcing them to pay significant “out-of-network” costs if they seek care elsewhere. Our research examines the role that limited medical provider networks play in the U.S. commercial healthcare market and measures both their impact on spending and their potential for consumer harm. We show that by excluding certain medical providers, particularly those that are low-quality or high-cost, insurers can obtain significant rate reductions when negotiating with hospitals. These reductions may then be partly passed along to consumers in the form

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Providing low-cost labor market information to assist jobseekers

August 14, 2019

Summary

People who are receiving unemployment benefits and looking for a job are typically required to consider occupations beyond their preferred line of work, at least after an initial period of joblessness. But how should jobseekers decide which occupations to consider, and how should employment agencies advise them?

A team of economists has developed a new tool to provide tailored advice to jobseekers at low cost. The tool is based on two alternative algorithms that identify potentially suitable occupations: one based on observed labor market transitions; the other drawing on O*NET, an online tool for career exploration and job analysis, which identifies

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Subsidizing health insurance for low-income adults: evidence from Massachusetts

July 24, 2019

Summary

How much are low-income individuals willing to pay for health insurance? And what are the implications for insurance market reforms that propose to change government subsidies? Using administrative data from the pioneer subsidized insurance exchange in Massachusetts over the period 2009 to 2013, this study exploits discontinuities in the premium subsidy schedule to estimate willingness to pay and costs of insurance among low-income adults. The researchers have three main findings.

Subsidies matter
Insurance take-up falls rapidly as subsidies decline. About 25% of the eligible population of low-income individuals drop coverage in response to a $40

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Understanding the Average Impact of Microcredit

July 17, 2019

Summary

The global microloan portfolio is now worth over 102 billion dollars and is growing yearly. This research estimates the impact of the policy and the extent to which this impact is different across different contexts. It finds that overall, the best existing evidence suggests that the average impact of these loans is small and that in the future, it may be beneficial to seek alternative approaches to improve the lives of poor households in the developing world.

Microcredit, the idea that giving small or “micro” loans to poor households in developing countries to help them escape poverty by starting or growing their own businesses, has become widely

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