Ep. 82: Service quality in the financial advisory industry
AEA Research Highlights
A growing number of US households hire advisers to assist with major financial decisions, such as planning life events or making portfolio choices for retirement. But some advisers exploit the inherent complexity of these decisions and the lack of sophistication of their clients to benefit themselves. In a , , , and show that about 7 percent of financial advisers have serious misconduct records, with rates reaching nearly 30 percent in some regions and firms. The authors explain why misconduct clusters in certain firms and geographic areas, particularly those with wealthy but less...
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Ep. 81: Assessing the Effects of the 2017 Tax Cut and Jobs Act
AEA Research Highlights
In 2017, then-President Trump signed into law the Tax Cut and Jobs Act, which was arguably the largest corporate tax cut in US history. The TCJA significantly lowered the statutory rate that corporations pay in taxes and reshaped numerous tax rules. Proponents said it would boost US competitiveness on the international stage and juice business investment. But its overall effects are still being debated among economists. In a , authors , , and explored the current understanding of the TCJA, discussing its costs and benefits, as well as future policy implications. They argue that, contrary...
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Ep. 80: Agricultural productivity and chronic disease
AEA Research Highlights
A half a century ago, new high-yield varieties of crops were introduced to India, and it transformed the country's farming. This so-called “Green Revolution” significantly boosted agricultural output, allaying concerns about famine and food security. But it may have had some unanticipated consequences for long-term health outcomes. In a , authors and show that the areas where agricultural productivity accelerated the most also saw the highest rates of diabetes among men later in life. The authors argue that substantial changes to the diets of mothers and young children, in the form...
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Ep. 79: Social organization and redistribution
AEA Research Highlights
Qualitative accounts of anthropologists indicate that social structure plays an important role in how resources are shared in society. But quantitative evidence measuring the impacts of social organization on financial ties and transfers has been lacking. In a , authors and helped to fill that gap. They found that in East Africa, cash transfer policies had very different effects in cultures organized by kinship ties compared to cultures organized around age groups. The findings suggest that social organization has a deep impact on how resources spread through economies and ultimately...
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Ep. 78: Broader economic impacts of the Paycheck Protection Program
AEA Research Highlights
The Paycheck Protection Program (PPP) was launched at the height of the COVID-19 pandemic in the hopes that it would keep businesses from laying off workers during government shutdown measures taken to contain the spread of the disease. Initial estimates of the direct impacts have been mixed, with suggesting that the cost was hundreds of thousands of dollars per job saved. But a looked beyond the labor market at a second order effect showing a clear and positive benefit. Authors , , , found that the PPP reduced mortgage delinquencies for commercial real estate by roughly $36...
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Ep. 77: The political power of historical narratives
AEA Research Highlights
In 2005, Austria’s most prominent far-right party proclaimed a “Third Turkish Siege of Vienna.” The campaign warned voters that, like their ancestors who were almost overrun by the Ottoman Empire four centuries ago, they were being culturally invaded by Muslims. The campaigners hoped to use long-past historical events to shape the behavior and sentiments of modern-day voters. But did it work? The strategy sparked a surge in the far-right’s vote share and a wave of anti-Muslim sentiment, according to a . The authors, and , studied areas with ties to the historical trauma of the...
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Ep. 76: The political consequences of NAFTA
AEA Research Highlights
In 1993, the North American Free Trade Agreement (NAFTA) was passed with bipartisan support and near universal endorsement by economists. In hindsight, the economic costs and political consequences were far greater than many contemporary observers would have imagined. In a , authors , , , and found that US counties most exposed to NAFTA and Mexican import competition saw their total employment drop by roughly 6 percent compared to those with little exposure to the trade deal. However, workers in these communities didn’t respond by moving away to find better opportunities, and many,...
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Ep. 75: Moral hazard and migration
AEA Research Highlights
Since 2014, over 15,000 migrants have trying to make the voyage from the north coast of Africa to southern Europe. In response, European authorities have launched several search and rescue operations. There are few signs that along this deadly route is slowing down. In fact, efforts to curb migrant deaths may encourage even more migrants to make the perilous journey. In a , authors , , and found evidence that migrants and smugglers responded to search and rescue operations by attempting even more dangerous crossings. However, the authors still say that such operations are likely...
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Ep. 74: The pace of economics publishing
AEA Research Highlights
Timely publication of research in peer-reviewed journals is critical for economists seeking tenure and important for audiences looking for high-quality, trustworthy studies. But in recent decades, there has been an increasing concern that the pace of publishing in economics is too slow. In a , authors , , and analyzed the publication lag in top economics journals and compared it to other fields. They found that economics publishing takes nearly twice as long as comparable fields in the other social sciences. However, Hamermesh says that some innovative journals, such as AER: Insights,...
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Ep. 73: Improving vaccine messaging
AEA Research Highlights
The COVID-19 pandemic highlighted the importance of vaccines, but it also underscored the reservations and low take-up rates among US citizens. In a , authors and tested several approaches to improving messages aimed at boosting vaccine demand. Their main finding was that messages delivered by laypersons were more effective than those delivered by persons perceived to be doctors. Eichmeyer says that video messages delivered by experts who were of the same race or were perceived as empathetic can be effective for some types of viewers, but for the most hesitant, ordinary citizens...
info_outlineReligion is a deep source of tradition and meaning for many people around the world, especially those in developing countries. But religious practices can sometimes stand in the way of long-term economic growth, according to a paper in the American Economic Review.
Authors Eduardo Montero and Dean Yang found that ill-timed patron saint day festivals in Mexico lead to lower levels of development. In particular, celebrations coinciding with important agricultural seasons lowered household incomes, over the course of centuries, by roughly 20 percent.
But that doesn’t necessarily mean these festivals made people worse off overall. Montero and Yang say that it’s up to communities and their leaders to decide what the right balance is between cultural traditions and economic growth.
The authors recently spoke with Tyler Smith about patron saint day festivals and why they hampered long-run economic development in Mexico.