Knowledge that Transforms

We survey archaeological evidence suggesting that among hunter-gatherers and farmers in Neolithic western Eurasia (11,700 to 5,300 years ago) elevated levels of wealth inequality occurred but were ephemeral and rare compared to the substantial enduring inequalities of the past five millennia. In response, we seek to understand not the de novo “creation of inequality” but instead the processes by which substantial wealth differences could persist over long periods and why this occurred only at the end of the Neolithic, at least four millennia after the agricultural revolution. Archaeological and anthropological evidence suggests that a culture of aggressive egalitarianism may have thwarted the emergence of enduring wealth inequality until the Late Neolithic, when new farming technologies raised the value of material wealth relative to labor and a concentration of elite power in early proto-states (and eventually the exploitation of enslaved labor) provided the political and economic conditions for heightened wealth inequalities to endure.

What are the effects of authoritarian regimes on scholarly research in economics? And how might economic theory survive ideological pressures? This article addresses these questions by focusing on the mathematization of economics over the past century and drawing on the history of Soviet science. Mathematics in the USSR remained internationally competitive and generated many ideas that were taken up and played important roles in economic theory. These same ideas, however, were disregarded or adopted only in piecemeal fashion by Soviet economists, despite the efforts of influential scholars to change the economic research agenda. The article draws this contrast into sharper focus by exploring the work of Soviet mathematicians in optimization, game theory, and probability theory that was used in Western economics. While the intellectual exchange across the Iron Curtain did help advance the formal modeling apparatus, economics could only thrive in an intellectually open environment absent under Soviet rule.

We survey the uses of combinatorial auctions that have been deployed in practice, giving emphasis to their key representational and economic aspects. In addition, we discuss behavioral economics considerations on both the bidder and auctioneer sides of the market, and the interrelated topics of simplicity and trust, highlighting key opportunities for future work.

Temporary employment has spiked in OECD countries over the last 40 years and is now a common feature of their labor market landscape. A large body of empirical literature examines the spread of temporary employment, but no systematic review and interpretation of its findings in light of economic theory exists. This survey aims at filling this gap by interpreting the key empirical results based on the predictions of the macro models in markets with frictions developed to address specific features of temporary employment. Revisions of workhorse models used so far to analyze temporary employment are also suggested.

We examine the contribution of different explanations to the slowdown of labor productivity. Comparing the post-2005 period with the preceding decade for five advanced economies, we seek to explain a slowdown of 0.8 to 1.8 pp. No single explanation accounts for the slowdown, but we have identified a combination of factors that, taken together, account for much of what has been observed. In the countries we have studied, these are mismeasurement, a decline in the contribution of capital per worker, lower spillovers from the growth of intangible capital, the slowdown in trade, and a lower growth of allocative efficiency. Sectoral reallocation and a lower contribution of human capital may also have played a role in some countries. In addition to our quantitative assessment of explanations for the slowdown, we qualitatively assess other explanations, including whether productivity growth may be declining due to innovation slowing down.

Over the last century, resource allocations within families changed significantly, as did marriage matching patterns. College-educated women became more likely to marry (and, to a lesser extent, have children) than less educated women. A large literature documents these patterns and proposes a variety of explanations. We review this literature. Then, we provide a unified empirical framework, which can integrate these mechanisms. We demonstrate the usefulness of that framework by employing it in decennial US censuses and showing that a combination of technological changes that increased the value of children’s education and enabled more educated women to devote more time to child-rearing are consistent with multiple behavioral changes within marriage, on the marriage market, and before marriage.

This article explores subjects in optimal income taxation characterized by recent research interest, practical importance in light of concerns about inequality, potential for misunderstanding, and prospects for advancement. Throughout the analysis, paths for further investigation are highlighted. Areas of focus include multidimensional abilities and endogenous wages; asymmetric information and the income of founders; production and consumption externalities from labor effort; market power and rents; behavioral phenomena relating to perceptions of the income tax schedule, myopic labor supply, and the interactions of savings, savings policies, and labor supply; optimal income transfers; the relationship between optimal income taxation and the use of other instruments; and issues relating to the social welfare function and utility functions, including non-welfarist objectives, welfare weights, heterogeneous preferences, and taxation of the family.

This essay reviews Streets of Gold: America’s Untold Story of Immigrant Success by Ran Abramitzky and Leah Boustan. This elegantly written book, whih is a must-read for anyone interested in the topic of immigration, walks the reader through a history of US immigration, examining patterns of immigrant assimilation from the mid-nineteenth century to today. The book challenges two myths about US immigration. First, it shows that historical European immigrants did not always arrive poor and quickly climb the economic and social ladder. Second, it documents that the pace of immigrant assimilation today resembles that prevailing at the turn of the twentieth century.

We review the growing literature on the political economy of immigration. First, we discuss the effects of immigration on a wide range of political and social outcomes. The existing evidence suggests that immigrants often, but not always, trigger backlash, increasing support for anti-immigrant parties and lowering preferences for redistribution and diversity among natives. Next, we unpack the channels behind the political effects of immigration, distinguishing between economic and noneconomic forces. In examining the mechanisms, we highlight important mediating factors, such as misperceptions, the media, and the conditions under which intergroup contact occurs. We also outline promising avenues for future research.

Family income is a positive predictor of children's health, human capital, and later-life earnings, but determining the extent to which these associations reflect causal effects is challenging. A recent wave of natural and randomized experiments, together with increased accessibility of large-scale administrative data, are allowing us to gain new perspectives about the importance of families' monetary resources in the U.S. and other high-income countries. This review pulls the emerging literature together to provide deeper insights into what we know, and what we don't know, about the extent to which policies that provide more generous income transfers could make a difference to children's life chances. My reading of the evidence suggests that policies providing financial resources to economically vulnerable families have the potential to improve children's outcomes. The magnitude of predicted impacts varies considerably across studies, however, and may be related to specific features of the income-generating event that researchers' leverage.