Knowledge that Transforms

We study the influence of workplace peers on a high-stakes, irreversible retirement plan choice. Midcareer U.S. military personnel choose between higher future pension payouts or an immediate bonus plus lower future payouts. With peers defined as those who have locked in their choices and personnel assignment rules ensuring that peer groups are exogenously formed, we capture the causal impact of peers. Greater peer take-up of the bonus, which is difficult to compare to the alternative plan but often extremely costly over one’s lifetime, discourages choosers from selecting the bonus. Peers have special impact within professional, race, and gender groups.

We examine how the 1993 Family and Medical Leave Act (FMLA) impacts the gender composition at U.S. firms experiencing a negative demand shock. Combining changes in Chinese imports across industries between 2000 and 2003 and a sharp regression discontinuity to identify FMLA status, we find that an increase in import competition decreases the share of female employment, earnings, and promotions at FMLA relative to non-FMLA firms. This effect is driven by women in prime child-bearing ages and without college degrees and is pronounced at firms with all male managers. These results suggest that job-protected leave mandates may exacerbate gender inequalities in response to adverse shocks.

This paper revisits the relationship between federal debt and interest rates in the U.S. A common approach is to regress long-term forward interest rates on long-term projections of federal debt. We show that issues regarding nonstationarity have become more pronounced over the last 20 years, significantly biasing recent estimates. Estimating the model in first differences rather than in levels addresses these concerns. We find that a 1 percentage point increase in the debt-to-GDP ratio raises the 5-year-ahead, 5-year Treasury rate by about 3 basis points. Roughly half of the interest rate response is driven by a higher nominal term premium.

We study how economic development affects female labor force participation, focusing on the role of gender norms. Analyzing quasi-random variation in provincial exports in reunified Vietnam from 2002 to 2018, we find that positive economic shocks reduced women’s labor market engagement, particularly among married women from wealthier households and those with husbands in more skilled occupations. This trend is more pronounced in the South (formerly capitalist) than in the North (always socialist), and among native Southerners compared to Northerners relocated to the South after the war. Our findings highlight how gender role attitudes shape women’s responses to rising incomes.

I examine the long-run effects of the timing of railroad construction on city sizes. I first present a stylized model that predicts that towns that are railroad end points for a longer period of time become persistently larger. I then show that, in a sample of Brazilian railroad towns, time as end point strongly predicts town size: each additional year that a town was a railroad end point in the past is associated with a town population 0.107 log points larger in 2010. Additional testable implications of the model and an instrumental variable approach suggest that such an association reflects a causal effect.

Aid fragmentation—the simultaneous operation of multiple development agencies in one setting—has long raised concerns about coordination challenges and opportunities for corruption. Leveraging unique data on project delivery in Afghanistan, we present the first microlevel empirical analysis of aid fragmentation. We find that aid delivered by a single donor can significantly reduce corruption. Projects delivered under conditions of aid fragmentation, by contrast, can facilitate corruption. We find evidence for a theoretical mechanism linking infrastructure and physical goods with waste and leakage. Our results clarify the policy losses tied to fragmentation, yielding insights for combating misappropriation of aid.

Does monetary policy influence who becomes a homeowner? Lower-income home buyers may be more sensitive to interest rates, at least in part because they more frequently come up against binding payment-to-income ratio constraints in credit decisions. Exploiting the timing of high-frequency observations of individual mortgage rate locks around monetary policy shocks, I find that a 1 percentage point policy-induced increase in mortgage rates lowers the presence of lower-income households in the population of home buyers by 1 to 2 percentage points immediately following the shock. Effects are substantially stronger among first-time home buyers and persist for approximately one year.

We investigate how to improve efficiency using regression adjustments with covariates in covariate-adaptive randomizations (CARs) with imperfect subject compliance. Our regression-adjusted estimators, which are based on the doubly robust moment for local average treatment effects, are consistent and asymptotically normal even with heterogeneous probabilities of assignment and misspecified regression adjustments. We propose an optimal but potentially misspecified linear adjustment and its further improvement via a nonlinear adjustment, both of which lead to more efficient estimators than the one without adjustments. We also provide conditions for nonparametric and regularized adjustments to achieve the semiparametric efficiency bound under CARs.

The US tax system allows taxpayers to deduct local taxes from their taxable incomes. Using school district referendum results, we employ a continuous treatment two-way fixed-effects framework to provide causal evidence of a positive relation between the demand for local public goods and the share of residents deducting local taxes. We find that a 1 percentage point decrease in the share of residents deducting property taxes reduces tax and bond referendum approval rates by approximately 0.97 percentage points. Because these federal tax deductions disproportionately benefit higher-income individuals, they potentially widen disparities in public service provision across jurisdictions.

Despite the continuing U.S. hospital merger wave, it remains unclear how mergers change, or fail to change, hospital behavior and performance. We open the black box of hospital practices through a megamerger between two for-profit chains. Benchmarking the merger's effects against the acquirer's stated aims, we show they achieved some of their goals, harmonizing electronic medical records and sending managers to target hospitals. Postacquisition managerial processes were similar across the merged chain. However, these interventions failed to drive detectable gains in performance. Our findings demonstrate the importance of organizations for merger research in health care and the economy more generally.