Knowledge that Transforms

Current Editorial Board:Pierre Azoulay, Massachusetts Institute of TechnologyOlivier Coibion, University of Texas, AustinWill Dobbie (Co-Chair), Harvard UniversityRaymond Fisman (Co-Chair), Boston UniversityBenjamin R. Handel, University of California, BerkeleyPeter Hull, Brown UniversityBrian A. Jacob, University of MichiganScott Kominers, Harvard UniversityTavneet Suri, Massachusetts Institute of TechnologyDaniel Xu, Duke UniversityRecently Retired from the Editorial Board:Kareen Rozen, Brown UniversityXiaoxia Shi, University of Wisconsin-MadisonTable 1—Manuscripts Submitted and Published, 2018–2022This table shows the trends in papers submitted and published over the past five years. The journal saw increased growth in submissions of papers from 2018 to 2020. Submission numbers remained steady from 2020 to 2021, then declined by 10% in 2022. The number of published papers increased by 25 due to the publication of three larger issues (July, September, and November 2022).Table 2—Status of Manuscripts by Year of Submission, 2018–2022This table shows the status of manuscripts submitted over the past five years. The number of papers summarily rejected remains steady, ranging from 54% to 61% of papers submitted. The percent of papers sent out for review but ultimately rejected has remained steady, ranging from 31% to 35% of papers. Acceptance rates range from 7% to 10% of papers submitted. Papers submitted in 2022 have not had enough time to reflect the final acceptance rate.Table 3—Decision Time for Manuscripts Sent to Referees for ReviewThis table reports the decision time for manuscripts sent to referees for review over the past five years. The average decision time remained steady, ranging from 82 to 95 days.Table 4—Distribution of First Decision Times by Submission YearThis table shows the distribution of decision times for all first-round paper submissions in monthly increments for the past five years. The table also reflects the improvement in the journal's decision turnaround times. In 2022, 80% of manuscripts received a decision within three months and 99% within six months.Table 5—Subject Matter of Published Manuscripts, 2022This table shows the distribution of the subject matter of papers published in 2022. Published papers covered a variety of subjects, but the most common published topics were microeconomics and macro and monetary economics. Table 1.Manuscripts Submitted and PublishedYearSubmittedPublished20181,2007020191,3306620201,6666520211,6746520221,48090Table 2.Status of Manuscripts by Year of SubmissionSubmission YearAcceptedPendingRejectedSummary RejectRevise and ResubmitWithdrawnTotal20188903737154191,2007%0%31%60%0%2%2019982410808951,3327%0%31%61%1%0%2020126255758993721,6648%2%35%54%2%0%202121634671,009104101,6741%4%28%60%6%1%2022251652483966101,4802%1%35%57%4%1%Percentages are rounded to the nearest integer. Pending manuscripts include submissions and revisions that were undergoing review as of June 5, 2023, and Revise and Resubmit manuscripts have been returned and are in the hands of the authors on that date. Summary rejections are manuscripts rejected without referee review.Table 3.Decision Time in Days for Manuscripts Sent to Referees for ReviewFractionAverageMedian75%90thNumber of PapersYearSummarily RejectedDecision TimeDecision TimePercentilePercentileSent to Referees201860%9586112149466201961%827797118517202068%8684102122765202160%8684100118657202257%9591109137649Decision times are for papers sent out for review. Percentages are rounded to the nearest integer. Data for one paper submitted in 2022 that did not have a decision when this report was compiled have been included.Table 4.Distribution of First Decision Times by Submission Year20182019202020212022Months toMonthlyCumulativeMonthlyCumulativeMonthlyCumulativeMonthlyCumulativeMonthlyCumulativeResponsePercentPercentPercentPercentPercentPercentPercentPercentPercentPercent16565606055556262585827721171762466462313851889228420861880489389712961197149454972993992994986299<199<199<1991997199<199<199<199<1998<199<199<1100<1100<11009<199<110001000100010010<199010001000100010011<110001000100010001001201000100010001000100Percentages are rounded to the nearest integer. Data for one paper submitted in 2022 that did not have a decision when this report was compiled have been included.Table 5.Subject Matter of Published Manuscripts, 2022JELSubject CategoryNumberAGeneral Economics and Teaching0BMethodology/History of Thought0CMathematical and Quantitative Methods9DMicroeconomics18EMacro and Monetary Economics12FInternational Economics6GFinancial Economics1HPublic Economics4IHealth, Education, and Welfare9JLabor and Demographic Economics7KLaw and Economics5LIndustrial Organization4MBusiness Economics0NEconomic History0OEconomic Development8PEconomic Systems0QAgricultural/Natural Resources4RUrban, Rural, and Regional Economics1ZMisc. and Special Topics1Derived from JEL codes reported for each manuscript for the 2022 publication year.

This paper investigates the extent to which state-level differences in business taxes influence the location decisions of multiestablishment firms. Each state in the United States administers their own unemployment insurance program, and cross-state variation leads to significant tax differences across state lines. This decentralized administration creates opposing employment incentives on the intensive and extensive margins depending on the economic conditions. Studying the locations of multistate manufacturing firms, I find that firms are more likely to exit from high-tax states during economic downturns, but high-tax plants experience more stable employment during nonrecession years.

Global terrorist organizations attract radicalized individuals across borders and constitute a threat for both sending and receiving countries. We use unique personnel records from the Islamic State in Iraq and the Levant (Daesh) to show that unemployment in sending countries is associated with the number of transnational terrorist recruits from these countries. The relationship is spatially heterogeneous, which is most plausibly attributable to travel costs. We argue that poor labor market opportunities generally push more individuals to join terrorist organizations, but at the same time, limit their ability to do so when longer travel distances imply higher travel costs.

Public procurement bodies increasingly resort to pay-for-performance contracts to promote efficient spending. We show that firm responses to pay-for-performance can widen the inequality in accessing social services. Focusing on the quality bonus payment initiative in Medicare Advantage, we find that higher quality-rated insurers responded to bonus payments by selecting healthier enrollees with premium differences across counties. Selection is profitable because the quality rating fails to adjust for differences in enrollee health. Selection inflated the bonus payments and shifted the supply of high-rated insurance to the healthiest counties, reducing access to lower-priced, higher-rated insurance in the riskiest counties.

Do firms respond to cost shocks by reducing the quality of their products? Using microdata from a large Russian retailer that refreshes its product line twice-yearly, we document that higher quality products are more profitable than lower quality ones, but that the number of high-quality products experiences a relative decrease after a large ruble devaluation in 2014. We show that rising firm costs—and not shrinking consumer incomes—explains the reallocation, and rationalize the data with a model that features consumer expenditure switching between high and low qualities. The reallocation to lower quality products reduces average pass-through by 26%.

There is substantial waste in U.S. healthcare but little consensus on how to combat it. We identify one source of waste: long-term care hospitals (LTCHs). Using the entry of LTCHs into hospital markets in an event study design, we find that most LTCH patients would have counterfactually received care at Skilled Nursing Facilities—facilities that provide medically similar care but are paid significantly less—and that substitution to LTCHs leaves patients unaffected or worse off on all dimensions we can objectively measure. Our results imply Medicare could save about $4.6 billion per year by not allowing discharge to LTCHs.

This paper presents new evidence showing that parental incarceration increases children's education. I collect criminal records for 90,000 low-income parents who have been convicted of a crime in Colombia, and link the educational attainment of their children. I exploit exogenous variation resulting from the random assignment of judges and extend the standard framework to incorporate both conviction and incarceration decisions. I show that the effect of incarceration for a given conviction threshold can be identified. My results indicate that parental incarceration increases educational attainment by 0.78 years for the children of convicted parents on the margin of incarceration.

Insurance markets often feature consumer sorting along both an extensive margin (whether to buy) and an intensive margin (which plan to buy). We present a new graphical theoretical framework that extends a workhorse model to incorporate both selection margins simultaneously. A key insight from our framework is that policies aimed at addressing one margin of selection often involve an economically meaningful trade-off on the other margin in terms of prices, enrollment, and welfare. Using data from Massachusetts, we illustrate these trade-offs in an empirical sufficient statistics approach that is tightly linked to the graphical framework we develop.

Schumpeter (1939) claims that recessions are periods of “creative destruction,” concentrating innovation that is useful for the long-term growth of the economy. However previous research finds that standard measures of firms’ innovation, such as R&D expenditures or raw patent counts, concentrate in booms. We argue that these measures do not capture shifts in firms’ innovative search strategies. We contemplate firms’ choice between exploration versus exploitation over the business cycle and find evidence with more nuanced measures of patent characteristics that firms shift toward exploration during contractions and exploitation during expansions, with a stronger effect for firms in more cyclical industries.

We study the effects of audits on long run compliance behavior using a random audit program covering more than 53,000 tax returns. We find that audits raise reported tax liabilities for five years after audit, effects are longer-lasting for more stable sources of income, and only individuals found to have made errors respond to audit. A total of 60%–65% of revenue from audit comes from the change in reporting behavior. Extending the standard model of rational tax evasion, we show that these results are best explained by information revealed by audits constraining future misreporting. Together these imply that more resources should be devoted to audits, audit targeting should account for reporting responses, and performing audits has additional value beyond merely threatening them.