APRIL 27 2017

Ali Alichi, Kory Kantenga, Juan Solé, IMF: Income Polarization in the United States. Since the turn of the current century, most of polarization has been towards lower incomes. This result is striking and in contrast with findings of other recent contributions. In addition, the paper finds evidence that, after conditioning on income and household characteristics, the marginal propensity to consume from permanent changes in income has somewhat fallen in recent years. We assess the potential impacts of these trends on private consumption. During 1998-2013, the rise in income polarization and lower marginal propensity to consume have suppressed the level of real consumption at the aggregate level, by about 3½ percent—equivalent to more than one year of consumption

R. Jason Faberman et al., FED NY: How Do People Find Jobs? We have found that “on‑the‑job” search is common among employed workers, and that the job search process is more effective for currently employed workers than for the unemployed. In the paper cited as the source of our table estimates, we also show that offers received by employed workers are better than those received by the unemployed, both in terms of the wage associated with them and in terms of their nonwage benefits. This is true even after controlling for detailed worker characteristics and prior work history.

Markus Gehrsitz, Martin Ungerer, IZA: Jobs, Crime, and Votes: A Short-run Evaluation of the Refugee Crisis in Germany. Millions of refugees made their way to Europe between 2014 and 2015, with over one million arriving in Germany alone. Yet, little is known about the impact of this inflow on labor markets, crime, and voting behavior. This article uses administrative data on refugee allocation and provides an evaluation of the short-run consequences of the refugee inflow. Our identification strategy exploits that a scramble for accommodation determined the assignment of refugees to German counties resulting in exogeneous variations in the number of refugees per county within and across states. Our estimates suggest that migrants have not displaced native workers but have themselves struggled to find gainful employment. We find very small increases in crime in particular with respect to drug offenses and fare-dodging. Our analysis further suggests that counties which experience a larger influx see neither more nor less support for the main anti-immigrant party than counties which experience small migrant inflows

Raj Chetty, Nathaniel Hendren, NBER: The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates. We estimate the causal effect of each county in the U.S. on children's earnings and other outcomes in adulthood using a fixed effects model that is identified by analyzing families who move across counties with children of different ages. For children growing up in low-income families, each year of childhood exposure to a one standard deviation (SD) better county increases income in adulthood by 0.5%. Hence, growing up in a one SD better county from birth increases a child's income by approximately 10%. There is substantial local area variation in children's outcomes: for example, growing up in the western suburbs of Chicago (DuPage county) would increase a given child's earnings by 30% relative to growing up in Cook county. Counties with less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates tend to produce greater upward mobility. One-fifth of the black-white earnings gap can be explained by differences in the counties in which black and white children grow up.

Michael L. Anderson, Justin Gallagher, Elizabeth Ramirez Ritchie, NBER: School Lunch Quality and Academic Performance. Medical and nutrition literature has long argued that a healthy diet can have a second important impact: improved cognitive function. In this paper, we test whether offering healthier lunches affects student achievement as measured by test scores. Our sample includes all California (CA) public schools over a five-year period. We estimate difference-in-difference style regressions using variation that takes advantage of frequent lunch vendor contract turnover. Students at schools that contract with a healthy school lunch vendor score higher on CA state achievement tests, with larger test score increases for students who are eligible for reduced price or free school lunches. We do not find any evidence that healthier school lunches lead to a decrease in obesity rates.

Manasi Deshpande, Microeconomic Insights: Does welfare inhibit success? The long-term effects of removing low-income youth from the disability rolls. Despite the controversy surrounding welfare programs, there is little empirical evidence about the long-term effects of these programs on recipients. In a recent paper, Deshpande (2016), I study the long-term effects of removing low-income youth from a large cash welfare program, using a policy change from the 1996 welfare reform law. I find that youth who are removed from welfare have low earnings and minimal earnings growth in adulthood. The results indicate that this welfare program does not substantially inhibit success and self-sufficiency among youth.

Daron Acemoglu, Leopoldo Fergusson, Simon Johnson, NBER: Population and Civil War. Medical and public health innovations in the 1940s quickly resulted in significant health improvements around the world. Countries with initially higher mortality from infectious diseases experienced greater increases in life expectancy, population, and - over the following 40 years - social conflict. This result is robust across alternative measures of conflict and is not driven by differential trends between countries with varying baseline characteristics. At least during this time period, a faster increase in population made social conflict more likely, probably because it increased competition for scarce resources in low income countries.