National Bureau of Economic Research

About: National Bureau of Economic Research is a nonprofit organization based out in Cambridge, Massachusetts, United States. It is known for research contribution in the topics: Monetary policy & Population. The organization has 2626 authors who have published 34177 publications receiving 2818124 citations. The organization is also known as: NBER & The National Bureau of Economic Research.

The Role of Social Capital in Financial Development

Abstract: To identify the effect of social capital on financial development, we exploit the well-known differences in social capital (Banfield (1958), Putnam (1993)) across different parts of Italy. In areas of the country with high levels of social capital, households invest less in cash and more in stock, are more likely to use checks, have higher access to institutional credit, and make less use of informal credit. The effect of social capital is stronger where legal enforcement is weaker and among less-educated people. These results are not driven by omitted environmental variables, since we show that the behavior of movers is still affected by the level of social capital present in the province where they were born.

Labor Supply Flexibility and Portfolio Choice in a Life-Cycle Model

Abstract: This paper examines the effect of the labor-leisure choice on portfolio and consumption decisions over an individual's life cycle. The model incorporates the fact that individuals may have considerable flexibility in varying their work effort (including their choice of when to retire). Given this flexibility, the individual simultaneously determines optimal levels of current consumption, labor effort, and an optimal financial investment strategy at each point in his life cycle. We show that labor and investment choices are intimately related. The ability to vary labor supply ex post induces the individual to assume greater risks in his investment portfolio ex ante. The model explains why the young (enjoying greater labor flexibility over their working lives) may take greater investment risks than the old. It also offers an explanation as to why consumption spending is relatively "smooth" despite volatility in asset prices. Finally, the paper provides a compact method for valuing the risky cash flows associated with future wage income.

The Power of the Pill: Oral Contraceptives and Women's Career and Marriage Decisions

Abstract: The fraction of U.S. college graduate women entering professional programs increased substantially around 1970 and the age at first marriage among all U.S. college graduate women soared just after 1972. We explore the relationship between these two changes and how each was shaped by the diffusion of the birth control pill among young, single college educated women. Although the pill' was approved in 1960 by the FDA and diffused rapidly among married women, it did not diffuse among young single women until the late 1960s when a series of state law changes reduced the age of majority and extended mature minor decisions. We model the impact of the pill on women's careers as consisting of two effects. The pill had a direct positive effect on women's career investment by almost eliminating the chance of becoming pregnant and thus the cost of having sex. The pill also created a social multiplier effect by encouraging the delay of marriage generally and thus increasing a career woman's likelihood of finding an appropriate mate after professional school. We present a collage of evidence pointing to the power of the pill in lowering the costs of long-duration professional education for women. The evidence consists of the striking coincidences in the timing of changes in career investment, marriage age, state laws, and pill use among young single women. The connection between changes in the age at first marriage and the pill is further explored using state variation in laws affecting young single women's pill access. We also evaluate alternative explanations for the changes in career and marriage.

Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets

Abstract: Product and labor market deregulation are fundamentally about reducing and redistributing rents, leading economic players to adjust in turn to this new distribution. Thus, even if deregulation eventually proves beneficial, it comes with strong distribution and dynamic effects. The transition may imply the decline of incumbent firms. Unemployment may increase for a while. Real wages may decrease before recovering, and so on. To study these issues, we build a model based on two central assumptions: Monopolistic competition in the goods market, which determines the size of rents, and bargaining in the labor market, which determines the distribution of rents between workers and firms. We then think of product market regulation as determining both the entry costs faced by firms, and the degree of competition between firms. We think of labor market regulation as determining the bargaining power of workers. Having characterized the effects of labor and product market deregulation, we then use our results to study two specific issues. First, to shed light on macroeconomic evolutions in Europe over the last twenty years, in particular on the behavior of the labor share. Second, to look at political economy interactions between product and labor market deregulation.