AEA Research Highlights
A podcast featuring interviews with economists whose work appears in journals published by the American Economic Association.
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Ep. 82: Service quality in the financial advisory industry
12/17/2024
Ep. 82: Service quality in the financial advisory industry
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 financially sophisticated populations. Importantly, the researchers also show that widely publicizing the names of the firms with the highest misconduct rates can lead to a substantial reduction in misconduct. Egan recently spoke with Tyler Smith about how the complex regulatory landscape of financial advising creates potential confusion for consumers and the best ways to clean up the industry.
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Ep. 81: Assessing the Effects of the 2017 Tax Cut and Jobs Act
11/20/2024
Ep. 81: Assessing the Effects of the 2017 Tax Cut and Jobs Act
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 to what some proponents said, the tax cuts significantly reduced tax revenues. Zwick recently spoke with Tyler Smith about the legislation, who benefited the most from the bill, and whether provisions that are set to expire in the coming years should be retained.
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Ep. 80: Agricultural productivity and chronic disease
10/24/2024
Ep. 80: Agricultural productivity and chronic disease
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 of higher levels of rice consumption, likely increased the risks of chronic diseases. The findings suggest that dietary diversification should accompany efforts to promote agricultural production. Sekhri recently spoke with Tyler Smith about how the Green Revolution changed diets in India and why it led to a rise in diet-related diseases like diabetes.
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Ep. 79: Social organization and redistribution
09/26/2024
Ep. 79: Social organization and redistribution
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 shape inequality. Jacob Moscona recently spoke with Tyler Smith about the difference between kin-based societies and age-based societies and how they affect development policies.
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Ep. 78: Broader economic impacts of the Paycheck Protection Program
08/28/2024
Ep. 78: Broader economic impacts of the Paycheck Protection Program
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 billion in 2020 and likely played an important role in averting wider distress in financial markets. Ambrose recently spoke with Tyler Smith about the impact of PPP loans on the commercial real estate market and ways in which the program could have been better targeted.
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Ep. 77: The political power of historical narratives
07/31/2024
Ep. 77: The political power of historical narratives
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 Sieges of Vienna and explained how political innovators reinvigorated latent xenophobic narratives that mobilized voters. Ochsner recently spoke with Tyler Smith about the recent political environment in Austria, the use of historical parallels, and the impact on Muslim minorities.
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Ep. 76: The political consequences of NAFTA
07/02/2024
Ep. 76: The political consequences of NAFTA
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, feeling betrayed by the Democratic party, embraced the Republican party instead. Choi and Wright recently spoke with Tyler Smith about the economic and political history of NAFTA and what economists have learned since its passage.
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Ep. 75: Moral hazard and migration
06/05/2024
Ep. 75: Moral hazard and migration
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 beneficial to migrants on the whole. Maheshri recently spoke with Tyler Smith about the impact of search and rescue operations on the market for smuggling along the Central Mediterranean Route and what policymakers should do to reduce migrant deaths.
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Ep. 74: The pace of economics publishing
05/07/2024
Ep. 74: The pace of economics publishing
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, are taking steps to shorten the time between submission and publication. He recently spoke with Tyler Smith about the pace of publishing in economics, how to fix it, and some advice for young economists trying to publish their work.
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Ep. 73: Improving vaccine messaging
04/09/2024
Ep. 73: Improving vaccine messaging
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 may be the best positioned to dispel myths about vaccines. She recently spoke with Tyler Smith about the design of her and Alsan’s experiment and what their results imply about vaccine messaging.
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Ep. 72: A textbook bank run
03/12/2024
Ep. 72: A textbook bank run
In the middle of the day on Friday, March 10, 2023, bank regulators swiftly shut down Silicon Valley Bank (SVB), arguably averting a wider panic. Compared to past financial crises, it was not especially economically significant, but it stands out as an important, illustrative example of the economics of banking. In a , author explains the causes behind SVB’s failure and how the government responded. He says that understanding the collapse of SVB is a stepping stone to making sense of more complicated financial crises such as the . Metrick recently spoke with Tyler Smith about why Silicon Valley Bank failed and what policymakers can do to prevent financial crises.
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Ep. 71: The roots of US innovation clusters
02/14/2024
Ep. 71: The roots of US innovation clusters
Before Silicon Valley became a byword for innovation, , outside of Boston, was America's technology highway, connecting the country’s premier technology companies and research facilities. However, this first American high-tech cluster likely would not have developed as it did without one of the biggest shocks to federal R&D funding in US economic history. In a , authors and explain how a World War II research effort jump-started innovation hubs like Route 128 across the United States. Gross and Sampat recently spoke with Tyler Smith about the history of R&D funding in the United States, and the lessons policymakers can take from it.
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Ep. 70: Counselors matter
01/16/2024
Ep. 70: Counselors matter
Numerous studies have highlighted the importance of effective teachers for student achievement. But new research suggests that school counselors may be just as critical as teaching staff for some students. In a , author Christine Mulhern found that effective high school counselors can significantly improve the chance that students graduate from high school and attend a four-year college. She says that although it is challenging to predict which counselors will have these large positive impacts, the effects are comparable to many popular education interventions. Mulhern recently spoke with Tyler Smith about the role that counselors play in students' choices, which students benefit the most from counseling, and the lessons administrators and parents can take away from her findings.
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Ep. 69: Testing two theories of the origin of government
10/31/2023
Ep. 69: Testing two theories of the origin of government
Some social scientists have postulated that governments are designed for the purpose of helping the powerful take resources from the less powerful. But while there have been many exploitative governments throughout history, states may have actually started to form as a means of facilitating cooperation. In a , authors , , and found that in ancient Mesopotamia, states were more likely to form when large-scale irrigation projects were needed after losing access to a river. They argue that the pattern observed in the archeological records is best explained by small settlements banding together to cooperate through new institutions. Heldring recently spoke with Tyler Smith about the economic origins of government, the nature of archaeological evidence for ancient state formation, and parallels to modern-day institutions.
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Ep. 68: Ending school segregation for Mexican Americans
10/02/2023
Ep. 68: Ending school segregation for Mexican Americans
Seven years before the 1954 Brown v. Board of Education decision ended the legal segregation of Black schoolchildren, California ended the legal segregation of Mexican American schoolchildren. That decision, known as Mendez v. Westminster, had a rapid impact across the state and led to significant educational benefits, according to a . Authors and found that in areas more likely to practice segregation, the Mendez decision caused Mexican American children to significantly increase their years of schooling. Antman recently spoke with Tyler Smith about the history of Mexican American school desegregation and the lessons the authors’ work provides for policymakers.
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Ep. 67: Learning the language
09/05/2023
Ep. 67: Learning the language
The bulk of education research focuses on the benefits of the traditional K–12 and higher education systems, while non-traditional programs are relatively understudied. But economists are starting to shine a light on the large returns to investing in adult education. In a , authors and found large earnings gains and more civic engagement among immigrants who participated in an adult program teaching English as a second language (ESL). The benefits of these programs also led to a sizable return for taxpayers. Heller suggests that, in spite of the polarized space of immigration politics, ESL programs are likely to find traction on both sides of the political aisle because they combine the appeal of people working hard to improve themselves with a social safety net appeal. He recently spoke with Tyler Smith about the need for more research on adult education and the benefits of English language programs.
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Ep. 66: Transitional housing and recidivism
08/09/2023
Ep. 66: Transitional housing and recidivism
The United States spends over a billion dollars a year on housing programs that give recently released prisoners a place to stay and modest support before reintegration into society. Yet there is little causal evidence that these programs work. In a , author estimated whether residential housing programs in Iowa kept prisoners from returning to prison. He found that instead of reducing recidivism, prisoners assigned to halfway houses appeared to have higher rates of reincarceration than those who were paroled. Lee recently spoke with Tyler Smith about how he arrived at his estimates and whether or not residential housing programs should be scaled back in the United States.
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Ep. 65: Economic questions raised by Alzheimer's disease
07/11/2023
Ep. 65: Economic questions raised by Alzheimer's disease
The costs of Alzheimer’s disease are significant. In 2021, it affected nearly 6 million Americans and accounted for an estimated 8 percent of total US health-care spending—about as much as cancer and heart disease combined. And those numbers are only expected to increase as the population ages. In a , authors , , and explain how economists can help provide insights into the numerous policy issues that Alzheimer’s disease raises. However, Mommaerts says that the disease also challenges core assumptions in the standard economics tool kit. She recently spoke with Tyler Smith about cognitive constraints, incentives for providers, and encouraging more innovative treatments for Alzheimer’s disease.
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Ep. 64: Reconceptualizing the path to universal health insurance
06/12/2023
Ep. 64: Reconceptualizing the path to universal health insurance
For decades US policymakers have tried to achieve the universal health insurance coverage that many other developed countries enjoy. But despite incremental reforms, based on tweaking health insurance markets, America's uninsured population has remained stubbornly high. In a , authors , , and argue that economists should move away from the paradigm that has inspired these past reforms and toward an approach that encourages wholesale change. They say that proposals should start from a basic, mandatory health insurance package, which can then be supplemented in markets for health insurance. Shepard recently spoke with Tyler Smith about the success of health care systems using this framework in other developed countries and why economists need to rethink their approach to health insurance reform in the United States.
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Ep. 63: Gender bias in bank lending
05/16/2023
Ep. 63: Gender bias in bank lending
Around the world, female entrepreneurs borrow less than their male counterparts. Many people suggest that the reason for this gap comes down to the fact that women select into less capital-intensive industries. But in a , authors and show that implicit bias against women leads to more onerous guarantor requirements on loans. The findings come from a lab-in-the-field experiment conducted with over three hundred Turkish loan officers and real-life loan applications. Brock says that the additional collateral requirements placed on female entrepreneurs could be a significant barrier to women running businesses. But there may be steps that banks can take to mitigate the problem. Brock recently spoke with Tyler Smith about her and De Haas’s experiment in Turkey and what lessons policymakers should take away from the results.
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Ep. 62: The importance of local activism
04/17/2023
Ep. 62: The importance of local activism
A of in recent years has grabbed headlines and helped to reshape the political landscape. But it’s an open question as to whether these protest movements actually change opinions in the long run. In a , authors and found that activism can have a lasting impact on local communities. In particular, they found that areas with unusually bad weather on the original Earth Day in 1970, which would have presumably lowered the participation rate, saw weaker support for the environment and worse newborn health outcomes 10 to 20 years later. Hungerman says that while climate change is a global phenomenon, their work is a reminder that bringing people together still makes a difference at the local level. He recently spoke with Tyler Smith about how the first Earth Day shaped communities’ views about the environment and what his research contributes to the broader conversation around climate change.
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Ep. 61: Market design and live events
03/20/2023
Ep. 61: Market design and live events
Fans have frequently experienced the frustration of event tickets selling out in a matter of minutes and then being resold for twice as much or more. This combination of underpriced tickets in the primary market and rent-seeking speculation in the secondary market has long puzzled economists. In a , authors and show that auctions are an easy way to fix broken ticket markets by looking at changes Ticketmaster made in 2003. However, the benefits of using auctions in primary markets are unlikely to be felt by consumers. Budish says that other reforms, such as preventing resales, could be a way for artists and sports teams to reward their die-hard followers. Budish recently spoke with Tyler Smith about Ticketmaster’s efforts to curb secondary markets with auctions, and how reforming the primary market for tickets benefits sellers as well as society.
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Ep. 60: Graduate school and mental health
02/21/2023
Ep. 60: Graduate school and mental health
Graduate school should be about learning how to push the frontiers of knowledge. Many students, however, also learn that getting a PhD can push them into emotional and psychological trouble. In a , authors , , and surveyed eight top-ranked economics PhD programs across the country and found high levels of significant depression and anxiety symptoms among students. Their survey indicates that some norms in the field, such as working alone and downplaying emotional distress, may be exacerbating the profession’s mental health issues. Bolotnyy recently spoke with Tyler Smith about the prevalence of mental distress among economics PhD students and what universities can do to remedy the situation, such as encouraging a more collaborative research environment.
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Ep. 59: Mental health therapy in the developing world
01/23/2023
Ep. 59: Mental health therapy in the developing world
(CBT) is a form of counseling designed to change unhelpful patterns of thinking. A strong, evidence-based track record has led to its widespread use in high-income countries. But it may also be an important tool for helping people in some of the poorest countries in the world. In a , authors , , , , and found that group-based CBT in rural Ghana significantly improved mental and perceived physical health, as well as cognitive and socioemotional skills—even for individuals who did not report mental distress. The findings may be paired with more traditional economic assistance to get the most out of anti-poverty programs, says Nathan Barker. Barker recently spoke with Tyler Smith about his experiment in Ghana and why CBT can be beneficial for everyone, not just people suffering poor mental health.
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Ep. 58: How good is popular financial advice?
12/13/2022
Ep. 58: How good is popular financial advice?
When most Americans look for financial advice, they don't turn to academic journals for guidance. Instead, they’re likely to get information from financial personalities like Dave Ramsey or Robert Kiyosaki, whose books have sold millions of copies. But how good is that advice? In a , author looked through 50 of the most popular personal finance books on the market and found that they sometimes deviate from the advice of economists. However, that doesn’t necessarily mean the popular authors are wrong. Choi says that while popular finance books may occasionally give bad advice, economists may learn something deeper about how people make financial decisions and the constraints they operate under if they take the popular authors’ prescriptions more seriously. Choi recently spoke with Tyler Smith about popular financial advice on a range of issues, such as savings rules and mortgage types, and how closely this advice matches modern economic theory.
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Ep. 57: The costs of cultural traditions
11/15/2022
Ep. 57: The costs of cultural traditions
Religion 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 . Authors and 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.
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Ep. 56: Fundraising Appeals and the Lift/Shift Question
10/20/2022
Ep. 56: Fundraising Appeals and the Lift/Shift Question
Major charity appeals can bring in hundreds of millions of dollars. But many worry that these efforts shift money away from other charities or merely move donations forward in time. In a , authors , , and found that charity fundraisers do in fact lift donations without being offset elsewhere. The findings show that fundraisers can increase the size of the overall charitable pie. However, major appeals still have some spillover effects on the timing of donations to other charities. As a result, Smith says that organizations should focus on sustaining fundraising efforts in order to ensure that funds don't disappear in the longer term. Sarah Smith recently spoke with Tyler Smith about how donors respond to major charity appeals in the United Kingdom and what fundraisers should take away from the results.
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Ep. 55: School bullying, cyberbullying, and remote learning
09/19/2022
Ep. 55: School bullying, cyberbullying, and remote learning
The pandemic has taken a toll on the education system. School has decreased, teacher has ticked up, and students have experienced substantial . But there is at least one silver lining, according to a . Authors , , , and found that school bullying and cyberbullying dropped by more than 30 percent as schools shifted to remote learning in the spring of 2020. Their results are based on real-time tracking of internet searches, which they show contain useful information about actual bullying behavior. Bacher-Hicks and Goodman recently spoke with Tyler Smith about their approach to studying bullying trends and the degree to which bullying originates in schools and then migrates online.
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Ep. 54: Protecting vulnerable kids
08/22/2022
Ep. 54: Protecting vulnerable kids
Every year, hundreds of thousands of kids enter the US foster care system. And yet, improving their welfare remains an understudied topic among economists, according to a . Authors , , , and lay out an economic framework for understanding the US foster care system. They detail what economists have learned about both the demand side and supply side of foster care, such as the causes of child maltreatment and the incentives to provide high-quality care. Doyle recently spoke with Tyler Smith about the history and impact of foster care in the United States, as well as opportunities for future research.
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Ep. 53: Grade inflation and graduation
07/25/2022
Ep. 53: Grade inflation and graduation
From the 1970s to the 1990s, the share of students leaving college with a degree steadily declined. But according to a , the trend since then has taken a turn for the better. Authors , , , , and documented a large increase in graduation rates over the last three decades. By digging into the records of nine large public universities, a public liberal arts college, and a nationally representative survey, the researchers concluded that grade inflation is the most likely driver, ruling out explanations such as better student preparation. Denning says that more research is needed to determine whether this grade inflation is beneficial on the whole. But it should be something that school administrators consider when making decisions about grading standards. Denning recently spoke with Tyler Smith about the impact of grade inflation on college completion rates and the upsides it has as a policy tool.
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