Showing papers in "The American Economic Review in 2019"
TL;DR: In this paper, the role of redistribution in the transmission mechanism of monetary policy to consumption has been evaluated using consumer theory, and it has been shown that redistribution has aggregate effects whenever marginal propensities to consume (MPCs) covary, across households, with balancesheet exposures to aggregate shocks.
Abstract: This paper evaluates the role of redistribution in the transmission mechanism of monetary policy to consumption. Using consumer theory, I show that redistribution has aggregate effects whenever marginal propensities to consume (MPCs) covary, across households, with balancesheet exposures to aggregate shocks. Unexpected inflation gives rise to a Fisher channel and real interest rate shocks to an interest rate exposure channel; both channels are likely to contribute to the expansionary effects of accommodative monetary policy. Indeed, using a sufficient statistic approach, I find that redistribution could be the dominant reason why aggregate consumer spending reacts to transitory changes in the real interest rate, provided households’ elasticities of intertemporal substitution are reasonably small (0.3 or less in the United States). I then build and calibrate a general equilibrium model with heterogeneity in MPCs, and I evaluate how the redistribution channel alters the economy’s response to shocks. When household assets and liabilities have short effective maturities, the interest rate exposure channel raises the elasticity of aggregate demand to real interest rates, which dampens fluctuations in the natural rate of interest in response to exogenous shocks and amplifies the real effects of monetary policy shocks. The model predicts that if U.S. mortgages all had adjustable rates—as they do in the U.K.—the effect of interest-rate changes on consumer spending would more than double. In addition, this effect would be asymmetric, with rate increases reducing spending by more than cuts would increase it.
471 citations
TL;DR: In this article, the authors focus on the costs of public debt when safe interest rates are low and develop four main arguments for public debt rollovers, including the existence of multiple equilibria where investors believe debt to be risky and, by requiring a risk premium, increase the fiscal burden and make debt effectively more risky.
Abstract: This lecture focuses on the costs of public debt when safe interest rates are low. I develop four main arguments. First, I show that the current US situation, in which safe interest rates are expected to remain below growth rates for a long time, is more the historical norm than the exception. If the future is like the past, this implies that debt rollovers, that is the issuance of debt without a later increase in taxes, may well be feasible. Put bluntly, public debt may have no fiscal cost. Second, even in the absence of fiscal costs, public debt reduces capital accumulation, and may therefore have welfare costs. I show that welfare costs may be smaller than typically assumed. The reason is that the safe rate is the risk-adjusted rate of return to capital. If it is lower than the growth rate, it indicates that the risk-adjusted rate of return to capital is in fact low. The average risky rate however also plays a role. I show how both the average risky rate and the average safe rate determine welfare outcomes. Third, I look at the evidence on the average risky rate, i.e., the average marginal product of capital. While the measured rate of earnings has been and is still quite high, the evidence from asset markets suggests that the marginal product of capital may be lower, with the difference reflecting either mismeasurement of capital or rents. This matters for debt: the lower the marginal product, the lower the welfare cost of debt. Fourth, I discuss a number of arguments against high public debt, and in particular the existence of multiple equilibria where investors believe debt to be risky and, by requiring a risk premium, increase the fiscal burden and make debt effectively more risky. This is a very relevant argument, but it does not have straightforward implications for the appropriate level of debt. My purpose in the lecture is not to argue for more public debt, especially in the current political environment. It is to have a richer discussion of the costs of debt and of fiscal policy than is currently the case.
437 citations
TL;DR: In this article, the importance of shocks to oil supply and demand was revisited and it was shown that supply disruptions are a bigger factor in historical oil price movements and inventory accumulation a smaller factor than implied by earlier estimates.
Abstract: Traditional approaches to structural vector autoregressions (VARs) can be viewed as special cases of Bayesian inference arising from very strong prior beliefs. These methods can be generalized with a less restrictive formulation that incorporates uncertainty about the identifying assumptions themselves. We use this approach to revisit the importance of shocks to oil supply and demand. Supply disruptions turn out to be a bigger factor in historical oil price movements and inventory accumulation a smaller factor than implied by earlier estimates. Supply shocks lead to a reduction in global economic activity after a significant lag, whereas shocks to oil demand do not.
407 citations
TL;DR: The findings suggest black doctors could reduce the black-white male gap in cardiovascular mortality by 19 percent and the effect of physician workforce diversity on the demand for preventive care among African American men.
Abstract: We study the effect of physician workforce diversity on the demand for preventive care among African American men. In an experiment in Oakland, California, we randomize black men to black or non-black male medical doctors. We use a two-stage design, measuring decisions before (pre-consultation) and after (post-consultation) meeting their assigned doctor. Subjects select a similar number of preventives in the pre-consultation stage, but are much more likely to select every preventive service, particularly invasive services, once meeting with a racially concordant doctor. Our findings suggest black doctors could reduce the black-white male gap in cardiovascular mortality by 19 percent.
371 citations
TL;DR: William D. Nordhaus as discussed by the authors delivered his Prize Lecture on 8 December 2018 at the Aula Magna, Stockholm University, Sweden, which was the last lecture he gave.
Abstract: William D. Nordhaus delivered his Prize Lecture on 8 December 2018 at the Aula Magna, Stockholm University.
286 citations
TL;DR: Both approaches find that mortality effects are concentrated in about 25 percent of the elderly population, and a new approach that uses machine learning to estimate the life-years lost due to pollution exposure is developed.
Abstract: We estimate the causal effects of acute fine particulate matter exposure on mortality, health care use, and medical costs among the US elderly using Medicare data. We instrument for air pollution using changes in local wind direction and develop a new approach that uses machine learning to estimate the life-years lost due to pollution exposure. Finally, we characterize treatment effect heterogeneity using both life expectancy and generic machine learning inference. Both approaches find that mortality effects are concentrated in about 25 percent of the elderly population.
272 citations
TL;DR: This article studied how misallocation due to goods-and labour-market frictions affect aggregate productivity in China and quantified the magnitude and consequences of trade and migration costs, and showed that the costs were high in 2000, but declined afterward.
Abstract: We study how misallocation due to goods- and labour-market frictions affect aggregate productivity in China. Combining unique data with a general equilibrium model of internal and international trade, and migration across regions and sectors, we quantify the magnitude and consequences of trade and migration costs. The costs were high in 2000, but declined afterward. The decline accounts for roughly twofifths of aggregate labour productivity growth in China between 2000 and 2005. Reductions in internal rather than international costs are particularly important. Despite the decline, migration costs are still high and potential gains from further reform are large.
231 citations
TL;DR: In this article, the authors estimate the size and distribution of tax evasion in rich countries and find that tax evasion rises sharply with wealth, a phenomenon random audits fail to capture. But they also find that after reducing tax evasion - by using tax amnesties - tax evaders do not legally avoid taxes more.
Abstract: This paper attempts to estimate the size and distribution of tax evasion in rich countries. We combine random audits - the key source used to study tax evasion so far- with new micro-data leaked from large offshore financial institutions - HSBC Switzerland ("Swiss leaks") and Mossack Fonseca ("Panama Papers")|matched to population-wide wealth records in Norway, Sweden, and Denmark. We find that tax evasion rises sharply with wealth, a phenomenon random audits fail to capture. On average about 3% of personal taxes are evaded in Scandinavia, but this figure rises to close to 30% in the top 0.01% of the wealth distribution, a group that includes households with more than $45 million in net wealth. A simple model of the supply of tax evasion services can explain why evasion rises steeply with wealth. Taking tax evasion into account increases the rise in inequality seen in tax data since the 1970s markedly, highlighting the need to move beyond tax data to capture income and wealth at the top, even in countries where tax compliance is generally high. We also find that after reducing tax evasion - by using tax amnesties - tax evaders do not legally avoid taxes more. This result suggests that fighting tax evasion can be an effective way to collect more tax revenue from the very wealthy.
201 citations
TL;DR: The authors analyzes the effect of a large (~60%) and persistent increase in the minimum wage in Hungary in 2001 and finds that the costs of the increase were largely passed through to consumers.
Abstract: This paper analyzes the eects of a large (~60%) and persistent increase in the minimum wage instituted in Hungary in 2001. We propose a new approach to estimating the employment eects of a minimum wage increase that exploits information on the distribution of wages before and after the policy change. We infer the number of jobs destroyed by comparing the number of pre-reform jobs below the new minimum wage to the excess number of jobs paying at (and above) the new minimum wage. Our estimates imply that the higher minimum wage had at most a small negative eect on employment, and so the main eect was pushing up wages. We then use data on a large panel of firms to evaluate the economic incidence of the minimum wage increase. Contrary to theoretical models that attribute the small employment eects of minimum wage changes to monopsonistic wage setting, we find no evidence that the rise in the minimum wage led to lower profitability among low-wage employers. Instead, we find that the costs of the minimum wage were largely passed through to consumers.
199 citations
[...]
TL;DR: This paper found that participants greatly overestimate not only their own ability but also that of others, suggesting that miscalibration is a substantial, first-order factor in stated beliefs.
Abstract: We conduct a laboratory experiment on the determinants of beliefs about own and others’ ability across different domains. A preliminary look at the data points to two distinct forces: miscalibration in estimating performance depending on the difficulty of tasks and gender stereotypes. We develop a theoretical model that separates these forces and apply it to analyze a large laboratory dataset in which participants estimate their own and a partner’s performance on questions across six subjects: arts and literature, emotion recognition, business, verbal reasoning, mathematics, and sports. We find that participants greatly overestimate not only their own ability but also that of others, suggesting that miscalibration is a substantial, first order factor in stated beliefs. Women are better calibrated than men, providing more accurate estimates of ability both for themselves and for others. Gender stereotypes also have strong predictive power for beliefs, particularly for men’s beliefs about themselves and others’ beliefs about the ability of men. Our findings help interpret evidence on gender gaps in self-confidence.
197 citations
TL;DR: This paper showed that the rise of popular support for the UK Independence Party (UKIP) was the single most important predictor of the subsequent Leave vote in the 2016 European Union (EU) referendum, along with broader measures of political dissatisfaction, are strongly and causally associated with an individual's or an area's exposure to austerity since 2010.
Abstract: Did austerity cause Brexit? This paper shows that the rise of popular support for the UK Independence Party (UKIP), as the single most important correlate of the subsequent Leave vote in the 2016 European Union (EU) referendum, along with broader measures of political dissatisfaction, are strongly and causally associated with an individual’s or an area’s exposure to austerity since 2010. In addition to exploiting data from the population of all electoral contests in the UK since 2000, I leverage detailed individual level panel data allowing me to exploit within-individual variation in exposure to specific welfare reforms as well as broader measures of political preferences. The results suggest that the EU referendum could have resulted in a Remain victory had it not been for a range of austerity-induced welfare reforms. Further, auxiliary results suggest that the welfare reforms activated existing underlying economic grievances that have broader origins than what the current literature on Brexit suggests. Up until 2010, the UK’s welfare state evened out growing income differences across the skill divide through transfer payments. This pattern markedly stops from 2010 onwards as austerity started to bite.
TL;DR: In this paper, a survey of "structured" management practices in two waves of 35,000 manufacturing plants in 2010 and 2015 is presented, with an enormous dispersion of management practices across plants, with 40 percent of this variation across plants within the same frm.
Abstract: Partnering with the US Census Bureau, we implement a new survey of "structured" management practices in two waves of 35,000 manufacturing plants in 2010 and 2015. We fnd an enormous dispersion of management practices across plants, with 40 percent of this variation across plants within the same frm. Management practices account for more than 20 percent of the variation in productivity, a similar, or greater, percentage as that accounted for by R&D, ICT, or human capital. We fnd evidence of two key drivers to improve management. The business environment, as measured by right-to-work laws, boosts incentive management practices. Learning spillovers, as measured by the arrival of large "Million Dollar Plants" in the county, increases the management scores of incumbents.
TL;DR: In this article, the authors exploit the gradual arrival of submarine Internet cables on the coast and maps of the terrestrial cable network to show how fast Internet affects employment in Africa, and exploit the difference-in-difference (DI) measure.
Abstract: To show how fast Internet affects employment in Africa, we exploit the gradual arrival of submarine Internet cables on the coast and maps of the terrestrial cable network. Robust difference-in-diff ...
TL;DR: In this article, the authors exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants and landlords and find rent control limits renters' mobility by 20 percent and lowers displacement from San Francisco.
Abstract: Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants and landlords. Leveraging new data tracking individuals' migration, we find rent control limits renters' mobility by 20 percent and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15 percent by selling to owner-occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.
TL;DR: This paper developed a system of cities model with costly idea exchange as the agglomeration force and provided the first spatial equilibrium theory of why skill premia are higher in larger cities and how variation in these premia emerges from symmetric fundamentals.
Abstract: Leading empiricists and theorists of cities have recently argued that the generation and exchange of ideas must play a more central role in the analysis of cities This paper develops the first system of cities model with costly idea exchange as the agglomeration force The model replicates a broad set of established facts about the cross section of cities It provides the first spatial equilibrium theory of why skill premia are higher in larger cities and how variation in these premia emerges from symmetric fundamentals
TL;DR: This article found that having poor classmates makes rich students more prosocial, generous, and egalitarian; and less likely to discriminate against poor students, and more willing to socialize with them.
Abstract: I exploit a natural experiment in Indian schools to study how being integrated with poor students affects the social behaviors and academic outcomes of rich students. Using administrative data, lab and field experiments to measure outcomes, I find that having poor classmates makes rich students (i) more prosocial, generous, and egalitarian; and (ii) less likely to discriminate against poor students, and more willing to socialize with them. These effects are driven by personal interactions between rich and poor students. In contrast, I find mixed but overall modest impacts on rich students' academic achievement.
TL;DR: The authors consider a linear panel event-study design in which unobserved confounds may be related both to the outcome and to the policy variable of interest, and provide sufficient conditions to identify the causal effect of the policy by exploiting covariates related to the policies only through the confounds.
Abstract: We consider a linear panel event-study design in which unobserved confounds may be related both to the outcome and to the policy variable of interest. We provide sufficient conditions to identify the causal effect of the policy by exploiting covariates related to the policy only through the confounds. Our model implies a set of moment equations that are linear in parameters. The effect of the policy can be estimated by 2SLS, and causal inference is valid even when endogeneity leads to pre-event trends ("pre-trends") in the outcome. Alternative approaches perform poorly in our simulations.
TL;DR: In this paper, the authors studied the impact of a personalized technology-aided after-school instruction program in middle-school grades in urban India using a lottery that provided winners with free access to the program.
Abstract: We study the impact of a personalized technology-aided after-school instruction program in middle-school grades in urban India using a lottery that provided winners with free access to the program Lottery winners scored 037 sigma higher in math and 023 sigma higher in Hindi over just a 45-month period IV estimates suggest that attending the program for 90 days would increase math and Hindi test scores by 06 sigma and 039 sigma respectively We find similar absolute test score gains for all students, but much greater relative gains for academically-weaker students Our results suggest that well-designed, technology-aided instruction programs can sharply improve productivity in delivering education
TL;DR: This paper used a regression discontinuity design based on admissions rules at elite business-focused degree programs in Chile to investigate whether elite colleges help students outside of historically advantaged groups reach top positions in the economy.
Abstract: This paper asks whether elite colleges help students outside of historically advantaged groups reach top positions in the economy. I combine administrative data on income and leadership teams at publicly traded firms with a regression discontinuity design based on admissions rules at elite business-focused degree programs in Chile. The 1.8% of college students admitted to these programs account for 41% of leadership positions and 39% of top 0.1% incomes. Admission raises the number of leadership positions students hold by 44% and their probability of attaining a top 0.1% income by 51%. However, these gains are driven by male applicants from high-tuition private high schools, with zero effects for female students or students from other school types with similar admissions test scores. Admissions effects are equal to 38% of the gap in rates of top attainment by gender and 54% of the gap by high school background for male students. A difference-in-differences analysis of the rates at which pairs of students lead the same firms suggests that peer ties formed between college classmates from similar backgrounds may play an important role in driving the observed effects.
TL;DR: In this article, the authors exploit changes in the area-specific eligibility criteria for a major program to support jobs through investment subsidies, and find that areas eligible for business support create significantly more jobs and reduce unemployment.
Abstract: Business support policies designed to raise employment and productivity are ubiquitous around the world. We exploit changes in the area-specific eligibility criteria for a major program to support jobs through investment subsidies. Pan-European state aid rules determine whether a sub-national geographical area is eligible for subsidies, and we construct instrumental variables for area (and plant) eligibility based on the estimated parameters of these rule changes. We find areas eligible for business support create significantly more jobs (and reduce unemployment), and this is not due to job displacement between eligible and ineligible areas. An exogenous ten-percentage point increase in an area’s maximum investment subsidy stimulates about a 7% increase in manufacturing employment. The treatment effect exists solely for small firms – large companies appear to “game” the system, accepting subsidies without increasing activity. There are positive effects on net entry of new plants, firm investment but no effects on Total Factor Productivity.
TL;DR: In this paper, the authors combine national accounts, survey, wealth and fiscal data (including recently released tax data on high - income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in China over the 1978 2015 period.
Abstract: This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high - income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in China over the 1978 2015 period. We find that the aggregate national wealth - income ratio has increased from 350% in 1978 to 700% in 2015. This can be accounted for by a combination of high saving and investment rates and a gradual rise in relative asset prices, reflecting changes in the legal system of property. The share of public property in national wealth has declined from about 70% in 1978 to 30% in 2015, which is still a lot higher than in rich countries (close to 0% or negative). Next, we provide sharp upward revision of official inequality estimates. The top 10% income share rose from 27% to 41% of national income between 1978 and 2015, while the bottom 50% shar e dropped from 27% to 15%. China’s inequality levels used to be close to Nordic countries and are now approaching U.S. levels.
TL;DR: This article proposed two approaches for identifying the conditional probability of publication as a function of a study's results, the first based on systematic replication studies and the second based on meta-studies.
Abstract: Some empirical results are more likely to be published than others. Such selective publication leads to biased estimates and distorted inference. This paper proposes two approaches for identifying the conditional probability of publication as a function of a study’s results, the first based on systematic replication studies and the second based on meta-studies. For known conditional publication probabilities, we propose median-unbiased estimators and associated confidence sets that correct for selective publication. We apply our methods to recent large-scale replication studies in experimental economics and psychology, and to meta-studies of the effects of minimum wages and de-worming programs.
TL;DR: This paper used bank account data to show that spending drops sharply at the large and predictable decrease in income arising from the exhaustion of unemployment insurance (UI) benefits, and that the consumption-smoothing gains from extending UI benefits are four times larger than from raising UI benefit levels.
Abstract: Using de-identified bank account data, we show that spending drops sharply at the large and predictable decrease in income arising from the exhaustion of unemployment insurance (UI) benefits. We use the high-frequency response to a predictable income decline as a new test to distinguish between alternative consumption models. The sensitivity of spending to income we document is inconsistent with rational models of liquidity-constrained households, but is consistent with behavioral models with present-biased or myopic households. Depressed spending after exhaustion also implies that the consumption-smoothing gains from extending UI benefits are four times larger than from raising UI benefit levels.
TL;DR: It is examined how the premature death of eminent life scientists alters the vitality of their fields and how a surge in contributions from outsiders draws upon a different scientific corpus and is disproportionately likely to be highly cited.
Abstract: We study the extent to which eminent scientists shape the vitality of their elds by examining entry rates into the elds of 452 academic life scientists who pass away while at the peak of their scientic abilities. Key to our analyses is a novel way to delineate boundaries around scientic elds by appealing solely to intellectual linkages between scientists and their publications, rather than collaboration or co-citation patterns. Consistent with previous research, the ow of articles by collaborators into aected elds decreases precipitously after the death of a star scientist (relative to control elds). In contrast, we nd that the ow of articles by non-collaborators increases by 8% on average. These additional contributions are disproportionately likely to be highly cited. They are also more likely to be authored by scientists who were not previously active in the deceased superstar’s eld. Overall, these results suggest that outsiders are reluctant to challenge leadership within a eld when the star is alive and that a number of barriers may constrain entry even after she is gone. Intellectual, social, and resource barriers all impede entry, with outsiders only entering subelds that oer a less hostile landscape for the support and acceptance of \foreign" ideas.
TL;DR: Mertens and Ravn as mentioned in this paper estimate impulse response functions (IRFs) from income tax changes in a structural vector autoregression (SVAR) by using narrative accounts of tax liability changes.
Abstract: Mertens and Ravn (2013) estimate impulse response functions (IRFs) from income tax changes in a structural vector autoregression (SVAR) by using narrative accounts of tax liability changes...
TL;DR: This paper developed a methodology to disentangle sources of capital misallocation, i.e., dispersion in value-added/capital, by measuring the contributions of technological/informational frictions and a rich class of firm-specific factors.
Abstract: We develop a methodology to disentangle sources of capital "misallocation," i.e., dispersion in value-added/capital. It measures the contributions of technological/informational frictions and a rich class of firm-specific factors. An application to Chinese manufacturing firms reveals that adjustment costs and uncertainty, while significant, explain only a modest fraction of the dispersion, which stems largely from other factors: a component correlated with productivity and a fixed effect. Adjustment costs are more salient for large US firms, though other factors still account for the bulk of the dispersion. Technological/markup heterogeneity explains a limited fraction in China, but a potentially large share in the United States.
TL;DR: In this paper, the authors study a model where two countries each issue sovereign bonds to satisfy investors' safe asset demands, and the countries differ in the float of their bonds and their resources/fundamentals available to rollover debts.
Abstract: What makes an asset a “safe asset”? We study a model where two countries each issue sovereign bonds to satisfy investors' safe asset demands. The countries differ in the float of their bonds and their resources/fundamentals available to rollover debts. A sovereign's debt is more likely to be safe if its fundamentals are strong relative to other possible safe assets, but not necessarily strong on an absolute basis. Debt float can enhance or detract from safety: If global demand for safe assets is high, a large float can enhance safety. The large float offers greater liquidity which increases demand for the large debt and thus reduces rollover risk. If demand for safe assets is low, then large debt size is a negative as rollover risk looms large. When global demand is high, countries may make fiscal/debt-structuring decisions to enhance their safe asset status. These actions have a tournament feature, and are self-defeating: countries may over-expand debt size to win the tournament. Coordination can generate benefits. The model sheds light on the effects of “Eurobonds” – i.e. a coordinated Euro-area-wide safe bond design. Eurobonds deliver welfare benefits only when they make up a sufficiently large fraction of countries' debts. Small steps towards Eurobonds may hurt countries and not deliver welfare benefits.
TL;DR: In this article, the authors used administrative data to analyze a large employer-borne payroll tax rate cut for young workers in Sweden and found no effect on the net-of-tax wages of young treated workers relative to sl...
Abstract: This paper uses administrative data to analyze a large employer-borne payroll tax rate cut for young workers in Sweden. We find no effect on-net-of-tax wages of young treated workers relative to sl ...
TL;DR: It is found that in a 3-week field experiment, the majority of 229 cycle-rickshaw drivers were willing to forgo substantial monetary payments in order to set incentives for themselves to remain sober, thus exhibiting demand for commitment to sobriety.
Abstract: This paper studies alcohol consumption among low-income workers in India. In a 3-week field experiment, the majority of 229 cycle-rickshaw drivers were willing to forgo substantial monetary payments in order to set incentives for themselves to remain sober, thus exhibiting demand for commitment to sobriety. Randomly receiving sobriety incentives significantly reduced daytime drinking while leaving overall drinking unchanged. I find no evidence of higher daytime sobriety significantly changing labor supply, productivity, or earnings. In contrast, increasing sobriety raised savings by 50 percent, an effect that does not appear to be solely explained by changes in income net of alcohol expenditures.
TL;DR: Li et al. as discussed by the authors conducted a field experiment in China to measure the effects of providing citizens with access to an uncensored internet and found that free access alone does not induce subjects to acquire politically sensitive information; temporary encouragement leads to a persistent increase in acquisition.
Abstract: Media censorship is a hallmark of authoritarian regimes. We conduct a field experiment in China to measure the effects of providing citizens with access to an uncensored internet. We track subjects' media consumption, beliefs regarding the media, economic beliefs, political attitudes, and behaviors over 18 months. We find four main results: (i) free access alone does not induce subjects to acquire politically sensitive information; (ii) temporary encouragement leads to a persistent increase in acquisition, indicating that demand is not permanently low; (iii) acquisition brings broad, substantial, and persistent changes to knowledge, beliefs, attitudes, and intended behaviors; and (iv) social transmission of information is statistically significant but small in magnitude. We calibrate a simple model to show that the combination of low demand for uncensored information and the moderate social transmission means China's censorship apparatus may remain robust to a large number of citizens receiving access to an uncensored internet.