THE AMERICAN ECONOMIC ASSOCIATION

VOL. 108 MAY 2018

PAPERS AND PROCEEDINGS

OF THE

One Hundred Thirtieth Annual Meeting

OF THE

AMERICAN ECONOMIC ASSOCIATION

Philadelphia, PA

January 5-7, 2018

Program Arranged by Olivier Blanchard

Papers and Proceedings Edited by William R. Johnson and Kelly Markel

Copyright © AMERICAN ECONOMIC ASSOCIATION, 2018

President's Foreword

CONTENTS

Xll

Editors' Introduction xiii

PAPERS

Richard T. Ely Lecture

Private Paternalism, the Commitment Puzzle, and Model-Free Equilibrium David Laibson 1

Advances in Big Data Research in Economics

Algorithmic Fairness Jon Kleinberg, Jens Ludwig, Sendhil Mullainathan, andAshesh Rambachan 22

Radically Rethinking Economic Policy

Welfarism's Envy Problem Extends to Popular Judgments Matthew Weinzierl 28

Quadratic Voting: How Mechanism Design Can Radicalize Democracy Steven P. Lalley andE. Glen Weyl 33

Should We Treat Data as Labor? Moving beyond "Free" . . . .Imanol Arrieta-Ibarra, Leonard Gaff, Diego Jimenez-Hernandez, Jaron Lanier, andE. Glen Weyl 38

Economic Consequences of Artificial Intelligence and Robotics

What Can Machines Learn and What Does It Mean for Occupations and the Economy?

Erik Brynjolfsson, Tom Mitchell, and Daniel Rock 43

Modeling Automation Daron Acemoglu and Pascual Restrepo 48

A Method to Link Advances in Artificial Intelligence to Occupational Abilities Edward W. Feiten, Manav Raj, and Robert Seamans 54

Human Judgment and AI Pricing Ajay Agrawal, Joshua S. Gans, andAvi Goldfarb 58

Economic Applications of Machine Learning

Estimating Heterogeneous Consumer Preferences for Restaurants and Travel Time Using Mobile Location Data. ,

Susan Athey, David Blei, Robert Donnelly, Francisco Ruiz, and Tobias Schmidt 64

The Potential of Digital Credit to Bank the Poor Daniel Björkegren and Darrell Grissen 68

Estimating Economic Characteristics with Phone Data. Joshua E. Blumenstock 72

Nowcasting Gentrification: Using Yelp Data to Quantify Neighborhood Change Edward L. Glaeser, Hyunjin Kim, and Michael Luca 11

Policy Implications of Suboptimal Choice: Theory and Evidence

Misperceptions about Tax Audits Marcelo Bergolo, Rodrigo Ceni, Guillermo Cruces, Matias Giaccobasso, and Ricardo Perez-Truglia 83

, Ramsey Strikes Back: Optimal Commodity Taxes and Redistribution in the Presence of Salience Effects Hunt Allcott, Benjamin Lockwood, and Dmitry Taubinsky 88

m

IV AEA PAPERS AND PROCEEDINGS MAY2018

Can Information Change Personal Retirement Savings? Evidence from Social Security Benefits Statement Mailings Susan Payne Carter and William Skimmyhorn 93

Rationalizations and Mistakes: Optimal Policy with Normative Ambiguity Jacob Goldin and Daniel Reck 98

Global Inequality and Policy

The Elephant Curve of Global Inequality and Growth Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman 103

From Communism to Capitalism: Private versus Public Property and Inequality in China and Russia Filip Novokmet, Thomas Piketty, Li Yang, and Gabriel Zucman 109

Applying Generalized Pareto Curves to Inequality Analysis . . . . . Thomas Blanchet, Bertrand Garbinti, Jonathan Goupille-Lebret, and Clara Martinßz-Toledano 114

Extreme Inequality: Evidence from Brazil, India, the Middle East, and South Africa Lydia Assouad, Lucas Chancel, and Marc Morgan 119

Climate Policy and Trade

Challenges in the Measurement of Leakage Risk Meredith Fowlie and Mar Reguant 124

How Trade Sensitive Are Energy-Intensive Sectors? Carolyn Fischer and Alan K. Fox 130

Regulating Mismeasured Pollution: Implications of Firm Heterogeneity for Environmental Policy . . . Eva Lyubich, Joseph S. Shapiro, and Reed Walker 136

Mental Accounting

Is Altruism Sensitive to Scope? The Role of Tangibility Alex Imas and George Loewenstein 143

Mental Budgeting versus Relative Thinking Samuel Hirshman, Devin Pope, and Jihong Song 148

When Nudges Are Forever: Inertia in the Swedish Premium Pension Plan Henrik Cronqvist, Richard H. Thaler, and Frank Yu 153

Gender Norms and Discrimination

Cross-Country Differences in Household Stock Market Participation: The Role of Gender Norms .'.'.' , Da Ke 159

Gender Norms and Relative Working Hours: Why Do Women Suffer More Than Men from Working Longer Hours Than Their Partners? .

Sarah Fleche, Anthony Lepinteur, andNattavudh Powdthavee 163

The Language of Discrimination: Using Experimental versus Observational Data , . , . . . Aislinn Bohren, Alex Imas, and Michael Rosenberg 169

Gender Issues in Economics

Gendered Language on the Economics Job Market Rumors Forum .Alice H. Wu 175

Representations of Men and Women in Introductory Economics Textbooks Betsey Stevenson and Hanna Zlotnick 180

What Can UWE Do for Economics? Tatyana Avilova and Claudia Goldin 186

VOL. 108 CONTENTS v

Economic Effects of Populism . - e J ; :•-'; « ? ? •'•';

A Dialogue between a Populist and an Economist..:...... ,..-......•. . . , , . % . . . . . . . . . . :

Tito Boeri, Prachi Mishra, Chris Papageorgiou, and Antonio Spilimbergo 191

Is Populism Necessarily Bad Economics? . . . , . . , . ; . . , . . . . Dani Rodrik 196

Economic Drivers of Populism. ... » ••• • • • • • Sergei Guriev 200

Studying the (Economic) Consequences of Populism . . . Cristobal Rovira Kaltwasser 204

Inequality, Discrimination, and Violence

On the Returns to Invention within Firms: Evidence from Finland Philippe Aghion, Ufuk Akcigit, Ari Hyytineti, and OttoToivanen 208

Local Violence, Academic Performance, and School Accoun tab i l i t y . . . . . ' - . . . . . . ; . . . . . . . I...:... . . . . . . . . . i . . . . . . . . . . ; . . . ; Marcus Casey, Jeffrey C. Schimon, and Maciej Wachala 213

Racial Differences in Police Use of Force: Evidence from the 1960s Civil Disturbances . . . . . . . . . . . JameinP. Cunningham and Rob Gillezeau 111

Last Place? The Intersection of Ethnicity, Gender, and Race in Biomedical Authorship . . . . . . Gerald Marschke, Allison Nunez, Bruce A. Weinberg, and Huifeng Yu 222

New Findings in the Economics of Crime and Policing

Reconciling Results on Racial Differences in Police Shootings ......... .RolandG. Fryer, Jr. 228

Intergenerational Effects of Incarceration Manudeep Bhuller, Gordon B. DM, Katrine V. L0ken, andMagne Mogstad 234

Racial and Ethnic Sentencing Differentials in the Federal Criminal Justice System ,..,,. . . . . . . . . . . . »•••• •••••• . . . • • BrendonMcConnellandImranRasul 241

Barriers to the Success of Female Owned Microenterprises

Participating or Not? Characteristics of Female Entrepreneurs Participating in and Completing an Entrepreneurial Training Program , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Leonardo lacovone, Gabriela Calderön, and Cristina MacGregor 246

Mind The (Profit) Gap: Why Are Female Enterprise Owners Earning Less Than Men? .'• Morgan Hardy and Gisella Kagy 252

Is Personal Initiative Training a Substitute or Complement to the Existing Human Capital of Women? Results from a Randomized Trial in Togo Francisco Campos, Michael Frese, Markus Goldstein,

Leonardo lacovone, Hillary C. Johnson, David McKenzie, and Mona Mensmann 256

Disability Insurance and Disability Discrimination . '

Disability Saliency and Discrimination in Hiring . . . . . . V . . . . . . . Phillip Armour, Patrick Button, and Simon Hollands 262

The Effect of the Disability Insurance Application Decision on the Employment of Denied Applicants Mashfiqur R. Khan 267

Return-to-Work Policies and Labor Supply in Disability Insurance Programs Arezou Zaresani 272

vi AEA PAPERS AND PROCEEDINGS MAY2018

The Dynamics of Income: Celebrating 50 Years of the PSID

Income Volatility and the PSID: Past Research and New Results Robert Moffitt and Sisi Zhang 277

Nonlinear Persistence and Partial Insurance: Income and Consumption Dynamics in the PSID Manuel Arellano, Richard Blundell, and Stephane Bonhomme 281

New Evidence on Earnings Volatility in Survey and Administrative Data Michael D. Carr and Emily E. Wiemers 287

On the Heterogeneity in Family Earnings and Income Dynamics in the PSID Dmytro Hryshko and lourii Manovskii 292

Research in Economic Education

Beyond the Flipped Class: The Impact of Research-Based Teaching Methods in a Macroeconomics Principles Class Austin Boyle and William L. Goffe 297

From "Traditional" to Research-Based Instructional Strategies: An Assessment of Learning Gains . . Sarah B. Cosgrove and Neal H. Olitsky 302

Low-Cost Randomized Controlled Trials in Education . . . Nathan Wozny, Cary Baiser, and Drew Ives 307

A New Look at Lake Wobegon: Who's in Your Canoe? Chris Bollinger, Tisha L. N. Emerson, Linda English, and Gail M. Hoyt 312

Is the Large Firm Wage Premium Dead or Merely Resting?

The Disappearing Large-Firm Wage Premium Nicholas Bloom, Fatih Guvenen, Benjamin S. Smith, Joe Song, and Till von Wächter 317

A Cross-Country Comparison of Dynamics in the Large Firm Wage Premium Emanuele Colonnelli, Joacim Tag, Michael Webb, and Stefanie Wolter 323

The Productivity-Wage Premium: Does Size Still Matter in a Service Economy? Giuseppe Berlingieri, Sara Calligaris, and Chiara Criscuolo 328

Inner Workings of Organ Markets and Organ Allocation

What Matters for the Productivity of Kidney Exchange? . . . Nikhil Agarwal, Itai Ashlagi, Eduardo Azevedo, Clayton Featherstone, and Ömer Karaduman 334

Dynamic Incentives in Wait List Mechanisms Nikhil Agarwal, Itai Ashlagi, Paulo Somaini, and Daniel Waldinger 341

Demography and Development

Dynamics of Child Mortality Inequality .TomS. Vogl 348

Cousin Marriage Is Not Choice: Muslim Marriage and Underdevelopment Lena Edlund 353

Women's Empowerment, the Gender Gap in Desired Fertility, and Fertility Outcomes in Developing Countries Matthias Doepke and Michele Tertilt 358

Male Social Status and Women's Work Arielle Bernhardt, Erica Field, Rohini Pande, Natalia Rigol, Simone Schaner, and Charity Troyer-Moore 363

VOL. 108 CONTENTS Vll

Household Security Issues: Family, Health, and Food

Split Families and the Future of Children: Immigration Enforcement and Foster Care Placements . . . Catalina Amuedo-Dorantes and Esther Arenas-Arroyo 368

The Effect of Parental Education on Children's Drug and Alcohol Use .,,.. , Aaron Chalfin and Monica Deza 373

The Differential Incidence and Severity of Food Insecurity by Racial, Ethnic, and Immigrant Groups over the Great Recession in the United States Alfonso Flores-Lagunes, Hugo B. Jales,

Judith Liu, and Norbert L. Wilson 379

Elasticity of Medicaid Access with Respect to State Financial Distress Victoria Perez, Joseph Benitez, and Eric Selber 384

Interaction of Gender with Household Decision-Making Peer Effects

Trends and Disparities in Leave Use under California's Paid Family Leave Program: New Evidence from Administrative Data . . . Sarah Bona, Kelly Bedard, and Maya Rossin-Slater 388

Gender Peer Effects in a Predominantly Male Environment: Evidence from West Point. Nick Huntington-Klein and Elaina Rose 392

Developments in the Economics of Aging

Time and Money: Social Security Benefits and Intergenerational Transfers Anita Mukherjee 396

In Debt and Approaching Retirement: Claim Social Security or Work Longer? Barbara A. Butrica and Nadia S. Karamcheva 401

The Changing Face of Debt and Financial Fragility at Older Ages Annamaria Lusardi, Olivia S. Mitchell, and Noemi Oggero 407

Health, Human Capital

The Price of Labor: Evaluating the Impact of Eliminating User Fees on Maternal and Infant Health

Outcomes Anne Fitzpatrick 412

Indoor Air Pollution and Infant Mortality: A New Approach Itnelda 416

Short-Term Impacts of a Pay-it-Forward Livestock Transfer and Training Program in Nepal Sarah A. Janzen, Nicholas P. Magnan, Sudhindra Sharma, and William M. Thompson 422

Investment, Rates and Rents

Intangibles, Investment, and Efficiency Nicolas Crouzet and Janice Eberly 426

Ownership, Concentration, and Investment German Gutierrez and Thomas Philippon 432

Financial Inclusion through Savings: Commitment Devices, Mobile Money, and the Role of Trust

Workplace Signaling and Financial Commitment: Evidence from a Field Experiment Emily Breza, Martin Kanz, and Leora Klapper 438

Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion Pierre Bachas, Paul Gertler, Sean Higgins, and Enrique Seira AAA

Salary Delays and Overdrafts in Rural Ghana.. .Niklas Buehren, Virginia Ceretti, Ervin Dervisevic, Markus Goldstein, Leora Klapper, Tricia Koroknay-Palicz, and Simone Schaner 449

AEA PAPERS AND PROCEEDINGS MAY 2018

China's National Carbon Market

Carbon Pricing Induces Innovation: Evidence from China's Regional Carbon Market Pilots . . . . . . . Jingbo Cui, Junjie Zhang, and Yang Zheng 453

China's Rate-Based Approach to Reducing C0 2 Emissions: Attractions, Limitations, and Alternatives . .

Lawrence H. Goulder and Richard D. Morgenstern 458

China's New National Carbon Market William A. Pizer and Xiliang Zhang 463

Institutions and Emissions Trading in China Valerie Jean Karplus 468

New Measures of the Economy

Measuring Welfare with Massive Online Choice Experiments: A Brief Introduction ErikBrynjolfsson, Felix Eggers, andAvinash Gttnnamaneni 473

The Empirics of Social Progress: The Interplay between Subjective Well-Being and Societal Performance Daniel Fehder, Michael Porter, and Scott Stern 477

Using Online Prices for Measuring Real Consumption across Countries:". .Alberto Cavallo, W. Erwin Diewert, Robert C. Feenstra, Robert Inklaar, and Marcel P. Timmer 483

Internet Rising, Prices Falling: Measuring Inflation in a World of E-Commerce. Austan D. Goolsbee and Peter J. Klenow 488

International Finance and Emerging Markets

Reach for Yield and Fickle Capital Flows Ricardo J. Caballero and Alp Simsek 493

Global Financial Cycles and the Exchange Rate Regime: A Perspective from Emerging Markets . . . .

Maurice Obstfeld, Jonathan D. Ostry, and Mahvash S. Qureshi 499

Optimal Payment Areas or Optimal Currency Areas?. Patrick Bolton and Haizhou Huang 505

Financial Cycles and Credit Growth across Countries Nuno Coimbra and Helene Rey 509

Conventional and Unconventional Fiscal Multipliers

The Effects of Tax Changes at the Zero Lower Bound: Evidence from Japan '.

Akihisa Kato, Wataru Miyamoto, Thuy Lan Nguyen, andDmitriy Sergeyev 513

Unconventional Fiscal Policy Francesco D'Acunto, Daniel Hoang, and Michael Weber 519

What Do We Know about the Effects of Austerity? Alberto Alesina, Carlo A. Favero, and Francesco Giavazzi 524

What's Special About the Dollar in Financial Markets?

Exchange Rates and the Working Capital Channel of Trade Fluctuations Valentino Bruno, Se-Jik Kim, and Hyun Song Shin 531

Foreign Safe Asset Demand for US Treasurys and the Dollar. Zhengyang Jiang, Arvind Krishnamurthy, and Hanno Lustig 537

Trade Invoicing, Bank Funding, and Central Bank Reserve Holdings Gita Gopinath and Jeremy C. Stein 542

VOL.108 -v CONTENTS

Demand Non-Homotheticities over the Business Cycle

The Welfare Consequences of Income-Induced Expenditure Switching Rudolfs Berns and Julian Di Giovanni 547

Wealth Redistribution after Exchange Rate Devaluations Andres Drenik, Gustavo Pereira, and Diego J. Perez 552

What Is the Impact of Food Stamps on Prices and Product Variety? The Importance of the Supply Response Xavier Jaravel 557

The Geographic Spread of a Large Devaluation Javier Cravino and Andrei A. Levchenko 562

Central Bank Communications

Through a Crystal Ball Darkly: The Future of Monetary Policy Communication . Alan S. Blinder 567

Central Bank Forward Guidance and the Signal Value of Market Prices Stephen Morris and Hyun Song Shin 572

Central Bank Communications and the General Public. . . . Andrew Haldane and Michael McMahon 578

What Can We Learn From Financial Market Responses to the 2016 Election?

The "Standard Error" of Event Studies: Lessons from the 2016 Election Justin Wolfers and Eric Zitzewitz 584

Unequal Rewards to Firms: Stock Market Responses to the Trump Election and the 2017 Corporate Tax Reform Alexander F. Wagner, Richard J. Zeckhauser, and Alexandre Ziegler 590

Economic Expectations, Voting, and Economic Decisions around Elections Gur Huberman, Tobias Konitzer, Masha Krupenkin, David Rothschild, and Shawndra Hill 597

PROCEEDINGS

Minutes of the Annual Business Meeting, Philadelphia, PA, January 5,2018 605

Reports Report of the Secretary 608 Report of the Treasurer 612 American Economic Association Universal Academic Questionnaire Summary Statistics 616 List of Online Reports 619