Knowledge that Transforms

This paper investigates the relationship between economic growth and bank concentration. We introduce imperfect competition within the banking system according to the Schumpeterian growth paradigm, and we theoretically and empirically show that the effects of bank concentration on economic growth depend on the proximity to the world technology frontier. The theory predicts that when a country reaches a sufficient level of financial development, bank concentration has a negative effect on development and growth and that this effect increases when the country approaches the frontier. However, for countries with credit constraints, growth depends on only financial intermediation.

In the U.S. Census Bureau’s 2002 and 2007 Censuses of Manufactures, 79% and 73% of observations, respectively, have imputed data for at least one variable used to compute total factor productivity (TFP). The bureau primarily imputes for missing values using mean-imputation methods, which can reduce the underlying variance of the imputed variables. For five variables entering TFP, we show that dispersion is significantly smaller in the Census mean-imputed versus the nonimputed data. We use classification and regression trees (CART) to produce multiple imputations with observed data for similar plants. For 90% of the 473 industries in 2002 and 84% of the 471 industries in 2007, we find that TFP dispersion increases as we move from Census mean-imputed data to nonimputed data to the CART-imputed data.

We propose that individuals are more politically active in more like-minded social environments. To test this hypothesis, we combine administrative data from the Federal Election Commission and the U.S. Postal Service. We identify 45,000 individuals who contributed to Barack Obama’s 2008 presidential campaign and changed residences either before or after the 2012 election cycle.We examine whether living in an area with a higher share of Democrats causes higher contributions to Obama. We find that conformity effects are economically significant. Additionally, we conduct counterfactual analysis that shows that these effects are important for understanding geographic polarization.

This paper discusses testable implications of rank invariance or rank similarity, assumptions that are common in program evaluation and in the quantile treatment effect (QTE) literature. We nonparametrically identify, estimate, and test the counterfactual distribution of potential ranks, or features of the distribution. The proposed tests allow treatment to be endogenous, with exogenous treatment following as a special case. The tests essentially do not require any additional assumptions other than those to identify and estimate QTEs. We apply the proposed tests to investigate whether the Job Training Partnership Act training causes trainees to systematically change their ranks in the earnings distribution.

We introduce a test of the rank invariance or rank similarity assumption common in treatment effects and instrumental variables models. The test probes the implication that the conditional distribution of ranks should be identical across treatment states using a regression-based test statistic. We apply the test to data from the Tennessee STAR class-size reduction experiment and show that systematic slippages in rank can be important statistically and economically.

We report three findings. First, using evidence from chain bankruptcies and data on 12 million to 18 million establishments per year, we show that large retailers produce significant positive spillovers. Second, local governments respond to the size of these externalities. When a town’s boundaries allow it to capture a larger share of retail spillovers, it is more likely to offer retail subsidies. Third, these subsidies partially crowd out private sector mechanisms that also subsidize large retailers, such as shopping malls. These facts provide powerful evidence of the Coase theorem at work and highlight a concern for local development policies even when externalities can be targeted.

Gun violence is an important problem across the United States. However, the impact of government policies on gunfire has been difficult to test due to limited and low-quality data. This paper uses new, more accurate data on gunfire (generated by ShotSpotter audio sensors) to measure the effects of juvenile curfews in Washington, DC. Using variation in the hours of the DC curfew, we find that this policy increases gunfire incidents by 150% during marginal hours. In contrast, voluntarily reported crime measures (such as 911 calls) suggest that the curfew decreases gun violence, likely because of confounding effects on reporting rates.

Exploiting county-level variation in oil-producing areas from shocks to world oil and gas prices, we study how local labor market conditions affect disability take-up. We extend well-known previous work using a similar research design by analyzing a different price shock; a larger, more representative set of labor markets; and a more recent period marked by skyrocketing disability payments. Our estimated elasticity for SSDI payments with respect to earnings of −0.29 is surprisingly similar to earlier findings. Our preferred SSI elasticity estimate of −0.16 is smaller than previous findings, but we show that SSI programmatic changes explain most of the difference.

Political agency models suggest that elected public officials choose different policies than appointed officials do. This paper is the first (a) to apply a clean empirical design to study whether the selection rule has a causal effect on public officials’ policy choices and (b) to investigate transmission channels. I exploit a unique setting in Germany, where a reform has created quasi-experimental variation in the selection rule for mayors. As the outcome variable, I use data on grant receipts for highly visible investment projects for which mayors must apply to the state government. Elected mayors attract 7% to 7.4% more grants in election years; for appointed mayors, there is no cycle. Using hand-collected data on mayor characteristics, I find suggestive evidence that although the selection of mayors changes following the reform studied, a likely reason for the observed cycle is that elected mayors have stronger electoral incentives.

This paper quantifies the effects of Russia’s 1981 expansion in maternity benefits on completed childbearing. The program provided one year of partially paid parental leave and a small cash transfer upon a child’s birth. I exploit the program’s two-stage implementation and find evidence that women had more children as a result of the program. Fertility rates rose immediately by 8.2% over twelve months. The increase in fertility rates not only persisted for the ten-year duration of the program, but it reflected large increases in higher-order births to older women who already had children before the program started.