This study examines how a policy that sharply increased alcohol availability during 8.5 months affected the labor productivity of those exposed to it in utero. Compared to the surrounding cohorts, the prenatally exposed children have substantially worse labor market and educational outcomes and lower cognitive and noncognitive ability. Effects on earnings are found throughout the distribution but are largest below the median. Males are more affected than females, consistent with growing evidence that boys are less resilient to early environmental insults. The long-term effects seem primarily driven by changes in prenatal health rather than changes in the childhood environment.

We study the impact of lead exposure from birth to adulthood and provide evidence on the mechanisms producing these effects. Following 800,000 children differentially exposed to the phaseout of leaded gasoline in Sweden, we find that even a low exposure affects long-run outcomes, that boys are more affected, and that changes in noncognitive skills explain a sizeable share of the impact on crime and human capital. The effects are greater above exposure thresholds still relevant for the general population, and reductions in exposure equivalent to the magnitude of the recent redefinition of elevated blood lead levels can increase earnings by 4%.

This paper studies whether adverse selection can rationalize a universal mandate for unemployment insurance (UI). Building on a unique feature of the unemployment policy in Sweden, where workers can opt for supplemental UI coverage above a minimum mandate, we provide the first direct evidence for adverse selection in UI and derive its implications for UI design. We find that the unemployment risk is more than twice as high for workers who buy supplemental coverage. Exploiting variation in risk and prices, we show how 25–30 percent of this correlation is driven by risk-based selection, with the remainder driven by moral hazard. Due to the moral hazard and despite the adverse selection we find that mandating the supplemental coverage to individuals with low willingness-to-pay would be suboptimal. We show under which conditions a design leaving choice to workers would dominate a UI system with a single mandate. In this design, using a subsidy for supplemental coverage is optimal and complementary to the use of a minimum mandate. (JEL D82, G22, J65)

This paper provides a simple, yet robust framework to evaluate the time profile of benefits paid during an unemployment spell. We derive sufficient-statistics formulae capturing the marginal insurance value and incentive costs of unemployment benefits paid at different times during a spell. Our approach allows us to revisit separate arguments for inclining or declining profiles put forward in the theoretical literature and to identify welfare-improving changes in the benefit profile that account for all relevant arguments jointly. For the empirical implementation, we use administrative data on unemployment, linked to data on consumption, income, and wealth in Sweden. First, we exploit duration-dependent kinks in the replacement rate and find that, if anything, the moral hazard cost of benefits is larger when paid earlier in the spell. Second, we find that the drop in consumption affecting the insurance value of benefits is large from the start of the spell, but further increases throughout the spell. In trading off insurance and incentives, our analysis suggests that the flat benefit profile in Sweden has been too generous overall. However, both from the insurance and the incentives side, we find no evidence to support the introduction of a declining tilt in the profile. (JEL D82, E21, E24, J64, J65)