WHAT DO BICYCLE HELMET LAWS DO? EVIDENCE FROM CANADA

Twenty‐one states and the District of Columbia require youths to wear helmets when riding a bicycle, and there has been a push to extend such laws to adults. We provide new evidence on helmet laws by studying Canada using difference‐in‐differences models and restricted area‐identified public health survey data with information on cycling and helmet use for nearly 800,000 individuals from 1994 to 2014. We first confirm prior patterns from the United States that laws requiring youths to wear helmets significantly increased youth helmet use. We then provide the literature's first comprehensive evidence that “all‐age” bicycle helmet laws significantly increased both adult and youth helmet use by 50%–190% relative to pre‐reform levels, with larger effects for younger adults and less‐educated adults. All‐age helmet laws had modest effects at reducing cycling and increasing in‐home exercise during winter months among adults but did not meaningfully affect weight. Overall, our findings confirm that all‐age helmet laws can be effective at increasing population helmet use without significant unintended adverse health consequences. (JEL I18, I12, K32)     

DO MERGERS REALLY REDUCE COSTS? EVIDENCE FROM HOSPITALS

In this paper, we compare potential and realized cost savings from hospital mergers. Our approach isolates changes in realized cost savings due to different output mixes from systematic changes due to time and also provides a measure of the potential cost savings due to scale economies. Our findings suggest that economies of scale are present for merging hospitals and they realize these cost savings immediately following a merger. However, we also show that over time, cost savings from the merger decrease and the proportion of hospitals experiencing positive cost savings declines.     

DO EMPLOYERS PAY FOR CONSISTENT PERFORMANCE?: EVIDENCE FROM THE NBA

In a world of uncertainty in which a worker's performance is variable over time and average performance is unknown when hiring, how will employers determine compensation? We develop a monitoring and signaling model where information is symmetric and parties are risk neutral. Monitoring costs increase with inconsistency, lowering pay for inconsistent workers. If discrimination exists, minority workers will be rewarded less than majority workers for improving consistency. Testing these and other predictions using National Basketball Association data, we find that consistent professional basketball players are paid more, but, in contrast to previous studies, there is no evidence of discrimination. (JEL J3, J7)     

DO REEMPLOYMENT PROGRAMS FOR THE UNEMPLOYED WORK FOR YOUTH? EVIDENCE FROM THE GREAT RECESSION IN THE UNITED STATES

We present experimental evidence on the effects of four U.S. reemployment programs for youth unemployment insurance (UI) recipients during the Great Recession. The three programs that emphasized monitoring and service referrals reduced UI receipt but had minimal effects on employment and earnings; these programs mainly induced the early exit of participants. The fourth program, which combined mandatory job counseling with monitoring, caused the largest reductions in UI receipt and clearly increased employment and earnings. Both early participant exits and effective job counseling underlie these impacts. We conclude that policymakers should require job counseling for youth UI recipients during recessions. (JEL J0, J6, H4)     

DO GENDER‐VARIANT PREFERENCES FOR COMPETITION PERSIST IN THE ABSENCE OF PERFORMANCE?

The well‐established gender gap in preferences for competition has been attributed to gender‐variant feelings about performing in competitive environments. Using a novel task with agency, in which subjects experience competition but cannot perform, we find evidence that performing may be sufficient but not necessary to generate gender‐variant preferences for competition. This suggests that the gender‐gap cannot be eliminated by correcting beliefs alone; that eliminating performance—for example, routinizing tasks—may not eliminate the gender gap; and that there may be heretofore unidentified determinants of preferences for competition—for example, men may prefer payment schemes that are based on social comparison. (JEL J16, C91, J24)     

WHO WINS IN AN ENERGY BOOM? EVIDENCE FROM WAGE RATES AND HOUSING

This article presents evidence on the distributional effects of energy extraction by examining the effect of the recent U.S. energy boom on wage rates and housing. The boom increased local wage rates in almost every major occupational category. The increase occurred regardless of whether the occupation experienced a corresponding change in employment, suggesting a tighter labor market that benefited local workers. Wage rates also increased substantially across the entire wage rate distribution, although the percentage increase was slightly higher at the bottom of the distribution than at the top. Local housing values and rental prices both increased, thereby benefiting landowners. For renters, the increase in prices was completely offset by a contemporaneous increase in income. The results suggest that bans on drilling have negative monetary consequences for a large share of local residents. (JEL J23, Q33, R31)     

ARE SUNK COSTS IRRELEVANT? EVIDENCE FROM PLAYING TIME IN THE NATIONAL BASKETBALL ASSOCIATION

We use playing time in the National Basketball Association to investigate whether sunk costs affect decision making. Behavioral economics implies that teams favor players chosen in the lottery and first round of the draft because of the greater financial and psychic commitment to them. Neoclassical economics implies that only current performance matters. We build on previous work in two ways. First, we better capture potential playing time by accounting for time lost to injuries or suspension. Second, we use regression discontinuity to capture changes when a player's draft position crosses thresholds. We find that teams allocate no more time to highly drafted players. (JEL L83, J23, D03)     

DO TAXES ON SODA AND SUGARY DRINKS WORK? SCANNER DATA EVIDENCE FROM BERKELEY AND WASHINGTON STATE

We study two beverage taxes: the SSB tax of 1¢/oz in the city of Berkeley (in effect since 2015) and the temporary 2010 soda tax of 0.166¢/oz in Washington State. Using detailed scanner data, we find that prices in Washington reacted sharply and promptly (often by a larger magnitude than the tax), whereas retail prices in Berkeley reacted marginally (by less than 30% the magnitude of the tax). Further, we find a 5% volume reduction in Washington but fail to detect an effect in Berkeley. We discuss the possible causes for the discrepancy in effectiveness, in particular cross‐border shopping. (JEL H22, L66, I18)     

WHOSE PREFERENCES ARE REVEALED IN HOURS OF WORK?

It has become orthodox in economics research to interpret the association between hourly earnings and working hours as the expression of the preferences of workers. This convention originated in H. Gregg Lewis' explanation for the decline in hours of work since the nineteenth century. His explanation rested on an explicit resolution of the identification problem inherent in any quantity (hours)–price (wage) relation. For over 40 years, researchers have neglected this identification problem with the result that the findings in the purported “labor supply” literature are of questionable value. (JEL J22, J23, C13)     

WHICH COMMUNITIES COMPLAIN TO POLICYMAKERS? EVIDENCE FROM CONSUMER SENTINEL

Consumer complaints provide a signal of the problems that different American communities face. I use a large database of millions of complaints to examine how per capita complaint rates vary across communities, as well as heterogeneity in who complains to different agencies and about different consumer protection issues. I find higher complaint rates in more heavily Black, more educated, higher income, older, and more urban communities and lower complaint rates in more heavily Hispanic and higher household size communities. The demographics of complaints are quite different for the Consumer Financial Protection Bureau, with much higher rates of complaints from Black and college educated areas compared to the Federal Trade Commission or Better Business Bureaus. I also find much higher rates of finance related complaints from Black communities across all reporting agencies. (JEL D18, H50, J10)     

DO UNEMPLOYMENT BENEFITS AFFECT ON‐THE‐JOB SEARCH? EVIDENCE FROM LABOR TURNOVER BEFORE ESTABLISHMENT CLOSURES

We develop a job search model that predicts that potential job losers would reduce on‐the‐job search (OTJS) effort and job‐to‐job transitions before layoffs, in response to an increase in the potential duration of unemployment benefits (UB). To test this prediction, we exploit changes in the maximum potential duration of benefits in Germany to analyze how it affected labor turnover before establishment closings. The evidence supports the model prediction that workers with longer potential benefit duration are more likely to remain with their establishments until closure and to enter nonemployment. These findings indicate that the effects of UB on the OTJS decisions of potential job losers should be considered in the optimal design of the parameters of unemployment insurance systems. (JEL J63, J64, J65)     

WHAT MAKES A GOOD ECONOMY? EVIDENCE FROM PUBLIC OPINION SURVEYS

Analysis of 35 years of previously unstudied survey data shows how the American public evaluates the health of the macroeconomy. Survey responses are multidimensional, distinct from indexes of “consumer sentiment,” and based mostly on genuine perceptions of economic conditions, not media reports of economic statistics. As such, they contain unique information about current and future values of these statistics, particularly consumption growth, a longstanding focus of the literature. Both “intangibles” and macroeconomic fundamentals explain substantial variation in the survey data; the public equates 2 to 5 percentage points of inflation with 1 percentage point of unemployment. (JEL E32, E27, E01)     

DO STATES FREE RIDE IN ANTITRUST ENFORCEMENT?

Recent research has documented a substantial role in antitrust enforcement by U.S. states. While many of the cases litigated involve small local firms, a nontrivial portion encompasses multiple‐state issues. Some previous literature has investigated whether states engage in free‐riding behavior in environmental regulation, and whether governments free ride on private decisions in provision of public goods. In this paper, we analyze a sample of antitrust cases involving cross‐state impacts (from the Multi‐State Antitrust Database, provided by the National Association of Attorneys General) and explain the determinants of free riding (which we define as participating in a case, but not as a lead plaintiff). (JEL L40, H41, H77)     

DOES OFFSHORING PAY? FIRM‐LEVEL EVIDENCE FROM JAPAN

This article explores the impact of offshoring on productivity using firm‐level data for the Japanese manufacturing industries during the period 1994–2000. We find that intrafirm offshoring, that is, sourcing of intermediate inputs to foreign affiliates within a particular multinational firm, has generally a positive effect on productivity of the offshoring firm, while arm’s‐length offshoring, that is, sourcing to unaffiliated foreign firms, does not have such an effect. In addition, the impact of arm’s‐length offshoring is negative for nonmultinationals and nonexporters but nonnegative for multinationals and exporters. These results suggest that the costs of searching foreign firms suitable for offshoring are nonnegligible. (JEL F14, L23)     

RISING AUTISM PREVALENCE: REAL OR DISPLACING OTHER MENTAL DISORDERS? EVIDENCE FROM DEMAND FOR AUXILIARY HEALTHCARE WORKERS IN CALIFORNIA

Autism is a development disorder that has increased in prevalence from 0.5 to 14.7 per 1,000 children over 1970–2010. Using annual wages and provider counts from the American Community Survey and information from 21 regional development centers in California, we estimate the labor demand for auxiliary health providers. We focus on this subset of providers because, unlike physicians and psychologists who can diagnose autism, these workers cannot induce their own demand. If the incidence of autism is increasing independently of other mental disorders, then the demand for auxiliary health providers should increase, leading to higher wages and labor supply. Otherwise, the increase in autism diagnosis is merely displacing other mental disorders. We find that a 100% increase in autism cases increases the wages of auxiliary health workers over non‐autism health occupations by 8–11% and the number of providers by 9–14%. Furthermore, we find that one of every three new autism diagnoses is merely supplanting mental retardation diagnoses, but does not displace other mental disorders. These estimates suggest that at least part of the increase in autism diagnoses, about 50–65%, reflects an increase in the true prevalence of the disorder. (JEL L11, J2, J3)     

DOES BANKRUPTCY LAW AFFECT BUSINESS TURNOVER? EVIDENCE FROM NEW AND EXISTING BUSINESS

This study examines how differences in state bankruptcy laws, specifically the homestead exemption, affect business turnover by studying both new and existing businesses. We focus on areas just near state boundaries to control for unobserved local attributes to better isolate the effect of more wealth protection. We find that an increase in the homestead exemption attracts new businesses but also has a positive impact on existing businesses, suggesting that asset protection through bankruptcy law encourages successful entrepreneurs to incur the risks. Our results indicate that the personal bankruptcy law is an important policy tool that governments can use to encourage business growth without causing business turnover. (JEL K30, K36, R11, R1)     

DOES THE SAMARITAN'S DILEMMA MATTER? EVIDENCE FROM U.S. AGRICULTURE

The Samaritan's dilemma posits a downside to charity: recipients may rely on free aid instead of their own efforts. Anecdotally, the expectation of free assistance is thought to be important for decisions about insurance and risky behavior in numerous settings, but reliable empirical evidence is scarce. We estimate whether the Samaritan's dilemma exists in U.S. agriculture, where both private crop insurance and frequent federal disaster assistance are present. We find that bailout expectations are qualitatively and quantitatively important for the insurance decision. Furthermore, aid expectations reduce both expenditure on farm inputs and subsequent crop revenue. (JEL D72, H84, Q18)     

GATEKEEPING IN FIELD PERFORMANCE: IS GRADE INFLATION A GIVEN?

This field note presents the results of a pilot study that explored the use of a new non-numerically rated field performance tool, a vignette matching measure for MSW students. Evaluation of performance in the field has proved to be a difficult task because few if any measures, including competency-based measures, have known levels of reliability and validity. Field instructors rated a sample of 154 students. Over half of the students were rated as exceptional, which may support the long-standing notion that performance ratings are inflated. Implications for social work education and research are discussed.