By the year 2050, around 2.5 billion more people will be living in urban areas than there are now (United Nations, 2018). Around 90% of these new city dwellers will be in Africa and South Asia, expanding already populous cities like Dar es Salaam and Dhaka. Policymakers in developing nations therefore often discuss whether to […]
A better way to pay for college?
Economists have long advocated for alternative financial contracts to mitigate the risks of investing in education (Barr et al. 2017; Chapman 2006; Palacios 2004; Zingales 2012). Most famously, Friedman (1955) writes: “[Human capital] investment necessarily involves much risk. The device adopted to meet the corresponding problem for other risky investments is equity investment… The counterpart […]
Taxing wealth: Some lessons from Colombia
Yet because few countries levy wealth taxes, relatively little is known about the actual responses of wealthy individuals when governments tax their assets – especially in countries outside Europe. The research summarized here provides new evidence for Colombia, a middle-income country with one of the most ambitious and long-standing wealth tax regimes in the world. […]
The race between automation and new work
Casual observation and historical evidence suggest this picture is incomplete: as employment in previously labor-intensive sectors such as agriculture, textiles, mining, and manufacturing has eroded, new varieties of labor-demanding activities have emerged, including in medicine, software, electronics, healthcare, finance, entertainment, recreation, and personal care. These new forms of work require specialized human expertise, making them […]
Ownership concentration and strategic supply reduction
In March 2016, the Federal Communications Commission launched one such auction, the most complex spectrum auction it had ever conducted. The agency was seeking to solve a bedeviling problem. The rapid growth in data and video usage by smartphone users had significantly increased the demand for mobile broadband spectrum. Much of that spectrum, however, was […]
Does Pricing Carbon Mitigate Climate Change?
The unchecked accumulation of greenhouse gas emissions is one of the starkest examples of market failure worldwide. Despite the high costs they impose on society through climate change, these externalities remain largely unpriced in economic decision-making. In theory, market-based regulatory instruments—such as carbon pricing—have the potential to mitigate climate change at the lowest cost to […]
Private monopoly and restricted entry
Occupational licensing regulations are common across many service sectors, including health, education, transportation, and legal services. These regulations affect up to 20-30% of workers in both the U.S. and Europe, with considerable variation across states and countries; see for example Kleiner and Krueger (2010, 2013) and Koumenta and Pagliero (2019). General education and training requirements […]
The role of diagnostic skill: How and why it matters
When making these decisions, the typical expert will begin by assessing the likely effects of their options based on the specific case at hand. For instance, physicians aim to diagnose a patient’s underlying condition and evaluate potential treatment outcomes, and judges work to determine the facts of a crime and the likelihood of recidivism. The […]
Expanding renewable energy: lessons from Chile
Effective and economical expansion of renewable energy is one of the most urgent challenges for addressing climate change. Along with the transport sector, the electricity sector generates one of the largest shares of global greenhouse gas emissions. In addition, a significant part of the transport sector is expected to be electrified in the near future. […]
Worker Beliefs About Outside Options
Firms differ substantially in the wages they pay to similar workers. Standard models of the labor market assume that workers have accurate beliefs about the differences in wages across firms, including in bargaining models and wage posting models with search. While this fundamental assumption remains untested, its violation—in the form of worker misperceptions about the […]
