AEA Research Highlights

The place where a child grows up in America shapes their economic future to a significant degree. One long-suspected explanation is racial segregation, but proving whether segregation actually causes worse outcomes—rather than just correlating with them—has been challenging for economists.
In a paper in the American Economic Journal: Applied Economics, authors Eric Chyn, Kareem Haggag, and Bryan A. Stuart provide evidence that racial segregation shapes the long-run economic prospects of American children. 
Using the placement of railroad tracks in the 19th century, they found that a one standard deviation increase in segregation—roughly the gap between Minneapolis and Philadelphia—cost a Black child from a poor family about $4,200 a year in income as an adult. While lower-income Black children were hit the hardest, segregation also hurt higher-income Black children and lower-income White children.
Chyn recently spoke with Tyler Smith about why segregation hurts low-income kids in particular and what his findings imply for policymakers.

More than two billion people around the world do not have safe drinking water at home. Piped water infrastructure remains out of reach for much of the developing world, and cheaper alternatives like chlorine tablets have low take-up rates even when given away for free. 
In a paper in the American Economic Review, authors Fiona Burlig, Amir Jina, and Anant Sudarshan explore a third option. Working with a private company in rural Odisha, one of India's poorest states, the researchers ran a randomized experiment across roughly 60,000 households to test the effectiveness of delivering treated water directly to people's doors.
Burlig recently spoke with Tyler Smith about revealed-preference measurements of the value of clean water and steps governments might take toward reaching the goal of universal access.

Asian Americans are the fastest-growing racial group in the United States and are on track to become the largest immigrant group by 2050. Yet, researchers have devoted much less attention to this population than to other immigrant groups.
In a paper in the Journal of Economic Perspectives, author Hannah M. Postel helps to fill that gap. She traces Asian immigration to the United States across three policy eras—1882–1943, 1943–1965, 1965–present—and explores how they affected the characteristics of those admitted, where they settled, and what work they were allowed to do. 
Postel recently spoke with Tyler Smith about the origins of the US federal immigration system, the history of Asian immigration, and how current policy might shape immigration going forward.

W. E. B. Du Bois is remembered as a civil rights leader, sociologist, and author of The Souls of Black Folk. But before he became famous for his empirical studies of Black life in America, Du Bois was a graduate student at Harvard studying cutting-edge economic theory. In 1891, at age 23, he submitted a 158-page manuscript entitled A Constructive Critique of Wage Theory to a Harvard prize competition. The manuscript sat in the Harvard archives for over a century, largely unexamined by trained economists.
Author Daniel Kuehn recently requested that Harvard digitize the manuscript so that he could analyze its contents. In a paper in the Journal of Economic Perspectives, he explores how Du Bois anticipated the application of marginalist ideas in economics to the determination of wages. 
Kuehn recently spoke with Tyler Smith about Du Bois's contributions to wage theory, why these contributions went unrecognized, and how his time in Berlin redirected him toward the historical and empirical work for which he is known.

Guidance counselors generally advise college applicants to diversify their applications across schools they believe to be safeties, matches, and reaches. Yet, prevailing economic theories of school choice suggest that such hedging strategies are suboptimal and that applicants should focus on applying to the best schools they have a chance of getting into.
In a paper in the American Economic Review, authors S. Nageeb Ali and Ran I. Shorrer show how incorporating correlations among admissions decisions rationalizes the motive to hedge. Their findings highlight the tradeoffs applicants face under realistic assumptions and may offer insights into the optimal design of admission processes.
Ali and Shorrer recently spoke with Tyler Smith about how the admissions process can be correlated and the implications for students.