AEA Research Highlights

It's well documented that women earn less than men for doing the same job. But the pay gap is just one way in which women are economically disadvantaged.

In some countries, women cannot work without their husband's permission. They have restricted access to credit and are effectively penalized for having children. And this discrimination is not just governed by social norms; it is codified in the law.

In the American Economic Review: Insights, renowned economist Penny Goldberg and co-authors Marie Hyland and Simeon Djankov provide the first global picture of gender discrimination by the law as it affects women's economic opportunities.

They dig into the World Bank's newly compiled database of gendered laws covering 190 economies and going back 50 years to examine legal gender discrimination against women. Progress has been made, such as creating more job opportunities for women as demand for their labor has grown. But Goldberg said the progress has been uneven and there are some aspects of the law, especially around equal pay and parenthood, that have been slower to change.

Goldberg, a Yale professor and former vice president of the AEA, spoke with us about gender discrimination in the law, which countries are the most and least progressive, how legal reforms can result in a more equitable economy, and questions she would like to see other economists pursue.

*Music in the audio is by Sound of Picture.

More and more of the wealth in the richest countries is going to their richest citizens. And there are no signs that it's stopping.

But how inequality has grown—who it's affecting and why—has changed significantly over the last four decades, according to a paper in the Fall issue of the Journal of Economic Perspectives.

Authors Florian Hoffmann, David S. Lee, and Thomas Lemieux say that since 2000 income inequality in the US has shifted more to the top of the income distribution and that income from capital has grown more important. But these patterns differ across European countries—a sign that inequality is a policy choice.

If policymakers want to close this growing gap between the haves and the have nots, Hoffman says better education will be key.

Hoffman recently spoke with the AEA's Tyler Smith about the anatomy of inequality in advanced economies, the many potential factors behind its growth, and how COVID-19 could exacerbate the problem.

Epidemiology used to be a quiet discipline whose experts were not much used to being in the public eye.

Then COVID-19 happened. Suddenly, epidemiologists everywhere were being called into service to track the virus and formulate a plan to combat its spread.

But Boston University epidemiologist Eleanor Murray says there are a lot of questions about the pandemic's impact that are beyond her field's expertise. In the Journal of Economic Perspectives, she makes the case that economists have an important role to play in studying and responding to COVID-19.

She recently spoke with the AEA's Chris Fleisher about why estimated cases and deaths in some of the early models were so wildly different, some of the most urgent questions about the pandemic that economists should tackle, and why she believes it's important that both fields work together.

The GOP has owned the US South, winning a majority of the region's votes in every presidential election for the past 40 years. But it wasn't always this way.

The so-called "Solid South" used to vote reliably Democratic. So what happened? Most scholars believe it was backlash to Civil Rights legislation of the 1960s.

Still, even today, the question is not completely settled.

Researchers Ilyana Kuziemko and Ebonya Washington used Gallup poll data available through Cornell University's Roper Center to investigate the role that racial attitudes — as opposed to economic concerns — played in Southern whites' defection from the Democratic party. Their paper published in the American Economic Review in October 2018 concludes that whites' backlash to the Civil Rights law explains almost entirely the shift toward the Republican Party.

Kuziemko and Washington spoke with the AEA after their paper was published about how their research contributes to our understanding of voters' motivations during that period and why researchers need to be careful about connecting that experience to today's political environment.

The gap between red and blue America has been expanding for decades, and the consequences of this increasing polarization are clear to close oberserves of Washington

But why Americans have grown so far apart in the first place is still a complicated, unanswered question.

Part of the story appears to be the sudden rise of China as an export powerhouse, according to a paper in the October issue of the American Economic Review.

Authors David Autor, David Dorn, Gordon Hanson, and Kaveh Majlesi say that trade competition from China has redicalized many Americans in declining manufacturing towns. Long-term joblessness and insecurity has pushed people in those communities to the far-right and far-left edges of the political spectrum.

But Hanson says in this episode of the Research Highlights podcast that it's not a failure of trade policy. It's a failure of America's safety net to protect the workers hit hardest by Chinese imports.

Hanson recently spoke with the AEA's Tyler Smith about how economic and cultural insecurity drive hyper partisanship and what policymakers can do to help areas distressed by the China trade shock.

Populism's rise has sparked fundamental questions for advanced democracies around the world.

Perhaps the biggest question is why it's happening. Some research points to economic explanations. Americans who gravitated to President Trump's nationalistic appeals and British voters who approved leaving the European Union were frustrated by job losses associated with globalization. And that anxiety made them susceptible to politicians who promised to claw back their economic power.

Political scientist Yotam Margalit says that explanation is overstated. He says that long-term cultural changes, like growing ethnic diversity and the shift toward urbanization, are bigger factors underlying the populist appeal.

These changes have sparked resentments among some groups that threaten to undermine liberal democracy, itself.

The IRS knows that taxpayers hide a large chunk of their wealth overseas. According to the best estimates, Americans hold more than a trillion dollars in offshore tax havens.

But it's not easy to find those secret accounts and make tax dodgers pay their fair share.

In the August issue of the American Economic Journal: Economic Policy, Daniel Reck says that an array of enforcement efforts in 2008 provide a starting point.

He and his co-authors Niels Johannesen, Patrick Langetieg, Max Risch, and Joel Slemrod looked at how special incentives, better information sharing, and more aggressive prosecution by US authorities led to the voluntary disclosure of thousands of foreign accounts.

Overall, the new compliance raised nearly a billion dollars in annual tax revenue. However, Reck says that more progress is needed to understand how the ultra wealthy use complex networks of ownership to hide their assets.

The US spends nearly $50 billion a year on job-creating business incentives. Unfortunately, a lot of this money doesn't go to the places that need it most.

Upjohn Institute senior economist Tim Bartik says that policymakers must do more to invest in distressed regions. In the Journal of Economic Perspectives, he argues that policymakers could get more bang for their buck by targeting needy communities. Even more, economic development officials need to broaden their approach beyond cash grants and tax incentives, which might be politically popular but are less effective at generating jobs than skills training, brownfield development, or other programs.

Bartik spoke with the AEA's Chris Fleisher about which incentives are most effective, the trade-offs of becoming a high-tech hub, and why places will continue to matter even when more workers are doing their jobs from home.

Black, Latinx, and Native American people are badly underrepresented in economics. In 2017, they were 30 percent of the US population, but earned fewer than 10 percent of economics PhDs.

The question now facing economists is why minorities are opting for other careers.

To find out, Gary Hoover of the University of Oklahoma reached out to minorities still in the profession, as well those who ultimately decided to leave it.

He and his co-authors Amanda Bayer and Ebonya Washington published their in-depth survey results in the Summer issue of the Journal of Economic Perspectives.

While some respondents faced openly hostile environments, many graduate students and faculty said that more subtle forms of biases made them feel like outsiders.

Hoover says that all economists can do more to inform, mentor, and welcome underrepresented groups. But it starts with listening.

He recently spoke with the AEA's Tyler Smith about minority experiences in economics, including his own, and some concrete steps for making the profession more inclusive.

This week marks the centennial of women's enfranchisement in the United States and women have never been so politically powerful—or politically divided with men.

The "sex gap" in partisanship and voter turnout continues to widen. Once willing to defer the work of politics to men, women now have a 4 percentage point advantage in voter turnout. The partisanship gap has also grown. Women are 12 percentage points more likely to identify with the Democratic Party.

Dartmouth professor Elizabeth Cascio says the shifts in turnout reflect generational change. The gains have come from younger, higher-participation cohorts replacing older women who were less likely to vote. On the other hand, women of all ages have contributed to the changes in partisanship. The increasing Democratic identification of women is less about women becoming more liberal and more about how Democrats and Republicans have come to differentiate themselves.

Her paper with co-author Na'ama Shenhav looking back on a century of the American woman voter appears in the Spring issue of the Journal of Economic Perspectives. Cascio recently spoke with the AEA's Chris Fleisher about how women's political influence has evolved differently from men's and the factors driving that change.