Knowledge that Transforms

The diffusion of computerized machine tools in the mid-20th century was a pivotal step in the century-long process of factory automation. We build a novel measure of exposure to computer numerical control (CNC) using initial variation in tool types across industries and differential shifts toward CNC by type. Industries more exposed to CNC from 1970–2007 increased labor productivity and reduced production employment. Workers in more exposed labor markets adjusted by shifting from metal to non-metal manufacturing. Union members were shielded from this job loss, and some workers returned to school to retrain.

Do centralized pricing decisions by retail chains with a presence in multiple markets contribute to the propagation of local economic shocks? Using storelevel scanner data linked to county-level house prices during the Great Recession, I show that prices in a county respond to house price-induced demand shocks in distant counties served by the same chains. This pattern is consistent with a model of uniform pricing. Counterfactual analysis reveals that uniform pricing, combined with the geographic dispersion of retail chains, reduced cross-county dispersion of inflation by 50%, amplifying the effects of the Great Recession in areas more severely affected.

We develop a decomposition of firm-level revenue-based TFP growth into six margins: i) mean quantity-based TFP growth, ii) mean growth in demand shifters, iii) intensive margin specialization effects, iv) scope effects, v) product adding effects, and vi) product dropping effects. We then estimate and decompose firm-level revenue-based TFP gains generated by increased Chinese import competition and input access using Indian manufacturing data. We find evidence of quality upgrading in response to increased output market competition, and that firms tend to add new products that are lower productivity than their incumbent goods in response to increased input access.

Inequalities are often regarded as more acceptable when they reflect differences in effort, rather than differences in luck. However, effort and luck are often intertwined, and luck may decide if an individual can even exert effort. Using survey experiments in the US and Sweden we study situations where luck fully determines whether an agent works. We document that spectators, tasked with redistributing income between agents, grant working agents more earnings and also more utility, than non-workers. This leads to individuals who were unable to work, owing to sheer bad luck, to fall behind both in terms of earnings and welfare.

We implement a field experiment to examine how part-time work attracts applicants with different productivity than full-time work. In a large-scale recruitment drive for a data-entry position in Ethiopia, either a part-time or full-time job opportunity was randomly offered. We find that part-time work attracts less qualified applicants with lower productivity but stronger preferences for short work hours. Our estimates show this selection effect may explain about half of the typical part-time wage penalty, which is about 25%. A simple model demonstrates how lack of high-quality workers with strong preference for short work hours could explain the experimental findings.

This paper studies mental health spillovers among new mothers. We exploit variation in the mental health of peers in mother groups in the Danish public postnatal care program. We show that municipal nurses assign mothers arbitrarily to groups conditional on a narrow set of well-defined characteristics. Exposure to a depressed peer in the group increases mothers' mental health care uptake by 11 percent two years after birth. We document worse self-reported mental health and labor market outcomes for treated mothers. Exploring heterogeneity, we find suggestive evidence for mental health deterioration, rather than increased demand for health care, as mechanism

Progress on child mortality requires better curative care, but common policies to improve access risk reducing underuse incompletely or creating overuse. In an RCT of 1,768 children in Mali we analyze how subsidized care and community health worker (CHW) visits affect the targeting of acute care, using nine weeks of daily health data to measure demand conditional on need for care per WHO standards. Parents are five times more likely to seek care when medically indicated. Subsidies increase utilization by over 250%, significantly reducing underuse with moderate effects on overuse. CHW do not improve efficient health care utilization on average.

Mechanisms used to derive optimal allocations are typically designed assuming agents fully know their own preferences. It is often impossible to duplicate optimal allocations when agents imperfectly observe object characteristics. I present a crowdsourcing mechanism to approximate optimal allocations under imperfect observations. To ensure truthtelling, agents are punished when their reports differ from the “wisdom of the crowd.” Under mild conditions, this crowdsourcing-with-punishment mechanism replicates the full-information optimal allocation with probability exponentially converging to one in the market size, with small waste. No alternative mechanism meaningfully does better. The proposed mechanism can be applied in many settings, including matching markets.

We examine the effect of job displacement on mortality, hospitalization, biomarkers, and health behaviors in South Korea. We find that the impact on health differs between severe and less severe outcomes and also by gender. Men experience little impact on mortality and hospitalization except for an increase in suicide deaths, whereas their biomarkers and health behaviors improve. Women experience an increase in mortality and hospitalization due to cancer, but no significant effects on biomarkers or health behaviors. The study emphasizes the need to consider a comprehensive range of outcomes to accurately evaluate the effect of job loss on health.

Many public programs let individuals choose between publicly provided benefits and a subsidized private alternative. We investigate health insurance choice in Medicare—a setting with vast geographic variation in the uptake of the private alternative. We analyze insurance decisions among individuals who move to quantify the relative importance of individual-specific factors (e.g., preferences or income) and place-specific factors (e.g., local health insurance options). We find roughly 40% of the geographic variation in the share selecting private coverage is due to place-based factors, while the remainder due to individuals. Our findings inform the potential for place-based policy to address geographic disparities.