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Economics: Faculty Publications

Library resources available to support the Department of Economics program

This page features faculty publications indexed in the EconLit and Business Source Premier databases and published in the last calendar year (2021).  BYU Economics faculty names are highlighted.  Click on the title image to view the article record and download or request the full text.

Recent Economics Faculty Publications

Abstract:  Prior research suggests that gender differences in hours worked play an important role in the gender pay gap. Yet common estimates of the wage returns to hours worked are close to zero, implying that hours differences explain little of the gender wage gap, even though men work more hours than women on average. However, while the wage returns to hours worked within occupations are small, the authors document that the wage returns to average hours worked across occupations are large. They develop a conceptual framework that reconciles these facts. Findings show that, under some assumptions, gender differences in hours worked can account for a substantial portion of the gender wage gap and that increases in the returns to hours worked over the past four decades slowed progress in reducing the gender pay gap.  

Denning, J. T., Jacob, B. A., Lefgren, L. J., & vom Lehn, C. (2021). The return to hours worked within and across occupations: Implications for the gender wage gap. ILR Review, 1. https://doi.org/10.1177/00197939211045376

Abstract:  Despite growing student loans, little evidence exists on the effects of access to student loans on borrowing and educational outcomes. We examine these effects by using policy variation in the maximum federal student loan borrowing limits. In particular, first-, second-, and third-year students have access to different amounts of federal loans. Using a regression discontinuity and administrative data from a state higher education system, we find that access to higher loan limits increases borrowing for at least 26 percent of borrowers. Despite this increase, we find no evidence that eligibility for loans affects student GPA, credits, persistence, or graduation.

Denning, J. T., & Jones, T. R. (2021). Maxed out? The effect of larger student loan limits on borrowing and education outcomes. Journal of Human Resources, 56(4), 1–29. https://doi.org/10.3368/jhr.56.4.0419-10167r1

Abstract:  Previous research has documented that Social Security Disability Insurance (SSDI) applications and awards increase during economic downturns and that expanded access to SSDI leads to a reduction in employment. We build on these insights and investigate to what extent differential access to SSDI during economic downturns leads to differential changes in SSDI enrollment and employment during the subsequent recovery. We exploit plausibly exogenous variation in SSDI appeals processing time (a measure of hassle or access) facing individuals living in ZIP codes that straddle Social Security Administration hearing office catchment borders. During the Great Recession, ZIP codes assigned to hearing offices with faster appellate processes saw a larger increase in SSDI enrollment than their cross-border neighbors. These enrollment effects are concentrated among ZIP code pairs that experienced more severe labor market downturns, and they persist as late as 2015. In the full sample, there is no clear effect of longer processing times on subsequent employment rates. However, we find some limited evidence that faster appellate processes may have weighed on the employment recovery in hard-hit ZIP codes that had high pre-recession rates of SSDI enrollment. Our findings highlight the importance of considering interaction effects between economic shocks and ease of access to the safety net.

Kearney, M. S., Price, B. M., & Wilson, R. (2021). Disability insurance in the Great Recession: Ease of access, program enrollment, and local hysteresis. AEA Papers & Proceedings, 111, 486–490.

Abstract:  We bound the distribution of treatment effects under plausible and testable assumptions on the joint distribution of potential outcomes, namely that potential outcomes are mutually stochastically increasing. We show how to test the empirical restrictions implied by those assumptions. The resulting bounds substantially sharpen bounds based on classical inequalities. We apply our method to estimate bounds on the distribution of effects of attending a Knowledge is Power Program (KIPP) charter school on student achievement, and find that a substantial majority of students’ math achievement benefited from attendance, especially those who would have fared poorly in a traditional classroom.

Frandsen, B. R., & Lefgren, L. J. (2021). Partial identification of the distribution of treatment effects with an application to the Knowledge is Power Program (KIPP). Quantitative Economics, 12(1), 143–171.

Abstract:  Although previous research documents that having dinner together as a family positively relates to long-run child and family outcomes, one aspect of family dinner that has not been explored previously is the role that dinner timing may play in facilitating or hindering parental time investments in their children. We use time diary data for roughly 41,000 families from the nationally representative American Time Use Survey (2003-2019) to examine whether the timing of family dinner is correlated with differential parental time investments in children during the evening. We find that parents who start dinner as a family before the median time (6:15 p.m.) spend more quality time in the evening with their children, including more time reading and playing with their children. The relationship cannot be explained by observable family constraints, as it is stable regardless of parental labor force activity and the day of the week. Additionally, parents who eat dinner later do not reallocate quality time to other times of the day. These findings suggest that having dinner earlier may be an important mechanism facilitating parental time investments in children.

Price, J., Rodgers, L. P., & Wikle, J. S. (2021). Dinner timing and human capital investments in children. Review of Economics of the Household, 19(4), 1047–1075.

Abstract:  While many firms have set ambitious goals to increase diversity in their ranks, there is a dearth of empirical evidence on effective ways to reach them. We use a natural field experiment to test several hypotheses on effective means to attract minority candidates for top professional careers. By randomly varying the content in recruiting materials of a major financial services corporation with more than 10,000 employees, we find that signaling explicit interest in employee diversity more than doubles the interest in openings among racial minority candidates, as well as the likelihood that they apply and are selected. Impacts on gender diversity are less sharp and generally not significant.

Flory, J. A., Leibbrandt, A., Rott, C., & Stoddard, O. (2021). Increasing workplace diversity: Evidence from a recruiting experiment at a Fortune 500 company. Journal of Human Resources, 56(1), 73–92.

Abstract:  This paper exploits county-level variation in exposure to news about labor markets impacted by fracking to show that access to information about employment opportunities affects migration. Exposure to newspaper articles about fracking increased migration to areas mentioned in the news by 2.4% on average, concentrated among young, unmarried, less educated men. Commuting also increased, sentiment of the news matters, and TV news has an impact. Google searches for "fracking" and names of states specifically mentioned spike after news broadcasts about fracking. Counties experiencing weak labor markets are the most responsive, suggesting that these areas see large benefits to information provision.

Wilson, R. (2021). Moving to jobs: The role of information in migration decisions. Journal of Labor Economics, 39(4), 1083–1128. https://doi.org/10.1086/713008

Abstract:  This study presents new evidence on the impacts of unionization using administrative data matching workers to employers in a regression discontinuity design. Close union elections exhibit substantial nonrandom selection or manipulation. Estimates accounting for this selection show that unionization substantially decreases payroll, employment, average worker earnings, and establishment survival. Payroll and earnings decreases are driven by composition changes, with older and higher-paid workers leaving unionizing establishments and younger workers joining or staying. Worker-level effects on earnings are small and are reconciled with large negative establishment-level effects in a model of employer and employee selection into union jobs.  

Frandsen, B. R. (2021). The surprising impacts of unionization: Evidence from matched employer-employee data. Journal of Labor Economics, 39(4), 861–894. https://doi.org/10.1086/711852

Abstract:  The Post‐9/11 GI Bill allows service members to transfer generous education benefits to a dependent. We run a large‐scale experiment that encourages service members to consider the transfer option among a population that includes individuals for whom the transfer benefits are clear and individuals for whom the net‐benefits are significantly more ambiguous. We find no impact of a one‐time e‐mail about benefits transfer among service members for whom we predict considerable ambiguity in the action, but sizeable impacts among service members for whom education benefits transfer is far less ambiguous. Our work contributes to the nascent literature investigating conditions when low‐touch nudges at scale may be effective.

Castleman, B. L., Murphy, F. X., Patterson, R. W., & Skimmyhorn, W. L. (2021). Nudges don’t work when the benefits are ambiguous: Evidence from a high‐stakes education program. Journal of Policy Analysis & Management, 40(4), 1230–1248. https://doi-org.erl.lib.byu.edu/10.1002/pam.22303

Abstract:  Why do individuals engage in self-defeating behaviors like self-harm, addiction, and risky sexual behaviors? Why do they experience the apathy of depression or inaction when trapped by multiple competing problems? We propose a framework for explaining these and other related behaviors based on the insight that individuals can only experience a limited number of latent stimuli to which they are exposed. We conduct an experiment to test this model and find that more than two thirds of the subjects behave consistent with our theoretical framework.

Lefgren, L. J., Stoddard, O. B., & Stovall, J. E. (2021). Rationalizing self-defeating behaviors: Theory and evidence. Journal of Health Economics, 76, 102407.

Abstract:  Most rich nations maintain very tight restrictions on immigration despite widespread globalisation since World War II. This paper breaks new ground by assessing these barriers' poverty implications, using a two-region, one-sector, dynastic growth model with a continuum of skills. Like other global studies of migration, I find that rich nation immigration impediments impose huge losses on the global economy. I also find that such barriers increase global poverty by 40% or more. This corroborates a conclusion drawn by others: opening rich nations to freer immigration could reduce poverty more than any other single policy shift.

Bradford, S. (2021). A global model of migration and poverty. World Economy, 44(4), 1018–1030.

Abstract:  Do successful local nudge interventions maintain efficacy when scaled state or nationwide? We investigate, through two randomized controlled trials, the impact of a national and state-level campaign encouraging students to apply for financial aid for college. The campaigns collectively reached over 800,000 students, with multiple treatment arms patterned after prior local interventions in order to explore potential mechanisms. We find no impacts on aid receipt or college enrollment overall or for any subgroups. We find no evidence that different approaches to message framing, delivery, or timing, or access to one-on-one advising affected campaign efficacy. We discuss why nudge strategies that work locally may be hard to scale effectively.

Bird, K. A., Castleman, B. L., Denning, J. T., Goodman, J., Lamberton, C., & Rosinger, K. O. (2021). Nudging at scale: Experimental evidence from FAFSA completion campaigns. Journal of Economic Behavior and Organization, 183, 105–128.

Abstract:  We show that aversion to risk and ambiguity leads to information inertia when investors process public news about assets. Optimal portfolios do not always depend on news that is worse than expected; hence, the equilibrium stock price does not reflect this bad news. This informational inefficiency is more severe when there is more risk and ambiguity but disappears when investors are risk-neutral or the news is about idiosyncratic risk. Information inertia leads to news momentum (e.g., after earnings announcements) and is consistent with low household trading activity. An ambiguity premium helps explain the macro and earnings announcement premium.

Illeditsch, P. K., Ganguli, J. V., & Condie, S. (2021). Information inertia. Journal of Finance, 76(1), 443–479.

Abstract:  This paper uses a single‐sector dynamic stochastic general equilibrium model with heterogeneous households to analyse Japanese immigration policy. We examine the effects on output, consumption, factor prices, and utility. We do this for both steady states and transition paths. We find that: (a) aggregate output, investment, and consumption in Japan are likely to rise with any sort of loosening of immigration restrictions; (b) allowing more skilled immigration generates greater aggregate changes; (c) raising skilled immigration relative to unskilled immigration drives down skilled workers' wages, consumption, and utility, while cutting the skilled to unskilled immigration share has the opposite effects; and (d) such immigration policy changes have small effects compared to those that occur naturally due to business cycle fluctuations.

Bradford, S. C., & Phillips, K. L. (2021). Dynamic effects of changes to Japanese immigration policy. Pacific Economic Review, 26(1), 3–22. https://doi-org.erl.lib.byu.edu/10.1111/1468-0106.12332

Abstract:  College completion rates declined from the 1970s to the 1990s. We document that this trend has reversed--since the 1990s, college completion rates have increased. We investigate the reasons for the increase in college graduation rates. Collectively, student characteristics, institutional resources, and institution attended do not explain much of the change. However, we show that grade inflation can explain much of the change in graduation rates. We show that GPA is a strong predictor of graduation rates and that GPAs have been rising since the 1990s. We also find that in national survey data and rich administrative data from 9 large public universities increases in college GPAs cannot be explained by student demographics, preparation, and school factors. Further, we find that at a public liberal arts college, grades have increased over time conditional on final exam performance.

Denning, J. T., Eide, E. R., Mumford, K., Patterson, R. W., & Warnick, M. (2021). Why have college completion rates increased? An analysis of rising grades. NBER Working Papers, 28710.

Abstract:  Using administrative data, we study the role of attribution bias in a high-stakes, consequential decision: the choice of a college major. Specifically, we examine the influence of fatigue experienced during exposure to a general education course on whether students choose the major corresponding to that course. To do so, we exploit the conditional random assignment of student course schedules at the United States Military Academy. We find that students who are assigned to an early morning (7:30 AM) section of a general education course are roughly 10% less likely to major in that subject, relative to students assigned to a later time slot for the course. We find similar effects for fatigue generated by having one or more back-to-back courses immediately prior to a general education course that starts later in the day. Finally, we demonstrate that the pattern of results is consistent with attribution bias and difficult to reconcile with competing explanations.

Haggag, K., Patterson, R. W., Pope, N. G., & Feudo, A. (2021). Attribution bias in major decisions: Evidence from the United States Military Academy. Journal of Public Economics, 200.

Abstract:  A key challenge for research on many questions in the social sciences is that it is difficult to link records in a way that allows investigators to observe people at different points in their life or across generations. In this paper, we contribute to recent efforts to create these links with a new approach that relies on millions of record links created by individual contributors to a large, public, wiki-style family tree. We use these "true" links both to inform the decisions one needs to make when using automated methods to link records and as a training data set for use in a supervised machine learning approach. We describe our procedure and illustrate its potential by linking individuals across the 100% samples of the US censuses from 1900, 1910, and 1920. When linking adjacent censuses, we obtain an overall match rate of 62-65 percent (for over 88.9 million matches), with a false positive rate that is around 6-7 percent and with links that are similar to the population along observable characteristics. Thus, our method allows us to link records with a combination of a high match rate, precision, and representativeness that is beyond the current frontier. Finally, we demonstrate the potential of the data by estimating the degree of intergenerational transmission of literacy between father-son and mother-daughter pairs.

Price, J., Buckles, K., Van Leeuwen, J., & Riley, I. (2021). Combining family history and machine learning to link historical records: The census tree data set. Explorations in Economic History, 80.

Abstract:  In the U.S., pharmacy benefit managers (PBMs) manage prescription drug purchases for payers. Firms selling branded pharmaceuticals bid for preferred slots on the PBM's formulary by offering rebates off of list price. We find that PBMs enhance efficiency, but the gains do not accrue to consumers or drug makers. Our analysis offers insights into otherwise puzzling questions. Why do drug makers pay rebates to PBMs? Why do payers delegate formulary operations to a few large PBMs? Why are list prices so high? Why might PBMs vertically integrate with payers? Our framework also offers insights into proposals for market reform.

Conti, R. M., Frandsen, B., Powell, M. L., & Rebitzer, J. B. (2021). Common agent or double agent? Pharmacy benefit managers in the prescription drug market. NBER Working Papers, 28866.

Abstract:  This paper studies how exclusive social groups shape upward mobility, and whether interactions between low- and high-status peers can integrate the top rungs of the economic and social ladder. Our setting is Harvard in the 1920s and 1930s, where new groups of students arriving on campus encountered a social system centered on exclusive old boys' clubs. We combine archival and Census records of students' college lives and long-run careers with a room-randomization design based on a scaled residential integration policy. We first show that high-status students from prestigious private high schools perform worse academically than other students, but are much more likely to join exclusive campus clubs. The club membership premium is large: members earn 32% more than other students, and are more likely to work in finance and join country clubs, both characteristic of the era's elite. The membership premium persists after conditioning on high school, legacy status, and even family. Random assignment to high-status peers raises the rates at which students join exclusive social groups on campus, but overall effects are driven entirely by large gains for private school students. In the long run, a shift from the 25th percentile of residential peer group status to the 75th percentile raises the rate at which private school students work in finance by 41% and their membership in adult social clubs by 26%. We conclude that social interactions among the educational elite mediate access to top positions in the economy and society, but may not provide a path to these positions for underrepresented groups. Differences in academic and career outcomes by high school type persist through at least the class of 1990, suggesting that this causal channel remains relevant at contemporary elite universities.

Michelman, V., Price, J., & Zimmerman, S. D. (2021). Old boys’ clubs and upward mobility among the educational elite. NBER Working Papers, 28583.