What we're reading: The Rest of the Abundance Job Market Papers We're Excited About
State capacity and transportation and immigration: oh my!
The Abundance and Growth Fund team combed through over 1,000 economics job market papers to find the ones relevant to our work on abundance and growth. We’re in the process of posting roundups by topic; first we did innovation, then housing, then energy.
Today’s post is about everything else under the broader abundance umbrella: infrastructure and transportation spending; health and medical abundance; immigration and assimilation; and state capacity, to name a few big subcategories.
Job market papers matter a lot in econ. First and foremost they’re how departments do hiring for junior faculty, but for those of us outside of academia they are a strong signal of where economics is heading as a field. They’re also a category that shows off some of the coolest methodological tricks developed in recent years. Newly minted PhDs want their papers to pop so employers notice them, which means that job market papers use new tools and often tackle more interesting and policy-relevant topics than other kinds of papers.
Overall we identified a staggering 51 (!) job market papers unrelated to innovation, housing, and energy, but nonetheless interesting to us. You can read that full list here. Here are eight of them, though, that struck us as particularly important or novel.
Competition and the Cost of U.S. Infrastructure
Lindsey Currier
Can limited competition in procurement auctions explain the high, and rising, price of road infrastructure in the U.S.? I assemble a new dataset covering the near-universe of state highway auctions between 2002 and 2024. I first document thin competition: one- or two-bidder auctions account for a third of awards, and this share has risen over the past decade. Using spatial variation in inter-state bidder locations, I then estimate the average causal effect of competition on prices; an additional bidder reduces prices by ten percent. To decompose bids in the data into markups and production costs, I develop a semi-parametric structural auction model that incorporates bidders’ uncertainty over the number of competitors they face. I show that price increases over the past decade are primarily attributable to increasing markups, not increasing production costs. Limited competition, in turn, is consistent with patterns generated by fixed costs of entry, but not broad construction-sector fixed costs. Embedding the markup estimates in an entry model, I estimate large auction and market entry costs, consistent with an important role for procurement complexity and regulatory barriers.
Road to Green? The Effect of Highway Expansion on Industrial Emissions Intensity
Siyu Zhang
This paper examines whether highway expansion, beyond improving connectivity and lowering trade costs, can also reduce the emissions intensity of industrial production. I develop a general equilibrium model in which emissions are an endogenous by-product of firms’ output, and show that highways can lower aggregate emissions intensity by fostering tougher competition and improving resource allocation, especially where trade costs were initially high. The sign of the effect depends on the relative elasticities of wages and productivity with respect to trade costs. Empirically, I use detailed firm-level data from China and a network-based instrument variable to show that highway expansion reduces markup dispersion and lowers sulfur dioxide (SO2) emissions and chemical oxygen demand (COD) per unit of output at the province level, consistent with improved resource allocation. Using geospatial highway data, I further document reductions in emissions intensity at the county level. These results highlight the potential for transportation infrastructure to jointly enhance economic efficiency and environmental sustainability, a co-benefit thus far overlooked.
Paving the Way for Higher Costs? The Impact of Steel Tariffs on Highway Procurement
Ashwin Nair
I study the impact of the 2018 U.S. steel tariffs on bidding in highway procurement auctions. The requirement to use domestically produced steel did not insulate procurement spending from the effects of tariffs in import-reliant coastal states. I find that bids on steel inputs saw a significant increase in these states but were unaffected in the Midwest, where most domestic steel is produced. Using a structural model of bidding and entry, I show that bidders in California faced higher costs but also earned higher markups as fewer bidders participated in steel-intensive projects. I estimate that California incurred an additional $100 million (a 6.8% increase) to construct highway projects, with one-third of the increase driven by the decline in competition. These effects are absent in Michigan.
Moving Opportunity Closer: How Public Transit Transforms Firm Composition and Employment
Akhila Kovvuri
Transportation infrastructure can improve workers’ access to existing economic opportunities, but it can also reshape economic opportunity itself by influencing where and what kinds of firms locate. This paper studies how public transit infrastructure influences firm location, composition, and employment at the neighborhood level. We construct novel data tracking over one million establishment entries and employ both difference-in-differences and market access specifications, exploiting the phased expansion of the Delhi Metro Rail in India. Transit access increases firm entry near stations, with larger, established retail and service firms locating first and inducing subsequent entry of other firms. These patterns create new economic hubs in peripheral areas, increasing employment per capita, especially for women in a context of low baseline female labor force participation. Counterfactual decompositions using a quantitative spatial model with estimated gender-specific commute elasticities reveal that compositional shifts toward larger establishments and consumer-facing industries that ex-ante employ more women account for the majority of this differential employment effect. Understanding how infrastructure reshapes the demand side of the labor market is thus critical for predicting and enhancing its distributional impacts.
The Impact of Medical Innovation on Health and Disability
Jinyeong Son
Despite substantial growth in medical technology, there is limited causal evidence on the impacts of many medical innovations on health and disability. This paper investigates the impact of a major surgical innovation: the move from conventional open surgery to minimally invasive surgery. Using an instrumental variables research design along with administrative data on injured workers undergoing orthopedic surgery, we quantify the impact of minimally invasive surgery (compared to analogous open surgery) on subsequent health care use, return to work, long-term disability, and social insurance payments. The findings suggest minimally invasive surgery reduces health care spending in the two years following surgery by 30%—through both reduced complexity of the surgery itself and large reductions in subsequent health care use. Analysis by type of service suggests minimally invasive surgery reduces subsequent office visits, opioid use, and revision surgeries. Moreover, we document that minimally invasive surgery also improves broader measures of patient health and disability—speeding return to work (by 37 days), reducing the severity of permanent disabilities (by 30%), and reducing associated social insurance costs (by 28%). We conclude by documenting trends in the adoption of minimally invasive surgeries and exploring the policy implications of our findings.
Can Drug Pricing Transparency Reduce Drug Costs?
Nicola Maria Fiore
High drug prices and opaque middle-man contracting have driven calls for transparency. I examine whether mandates to disclose rebate flows lower prescription drug costs. I find no meaningful reduction in premiums, deductibles, or out-of-pocket payments across different market structures and incentive conditions. Instead, I find that costs can rise in markets not directly regulated—consistent with intermediaries shifting costs across jurisdictions. Contrary to regulators’ expectations, transparency alone may not reduce drug spending—and may even redirect it—when contracts span multiple markets.
The Social Consequences of Technological Change: Evidence from U.S. Electrification and Immigrant Labor
Sara Benetti
This paper examines how technological change in production processes affects social cohesion in ethnically diverse societies. I study the early expansion of the electric grid in the United States between 1900 and 1940, when electrification transformed manufacturing and large-scale immigration reshaped the labor force. Using newly digitized maps of the U.S. high-voltage transmission network linked to full-count census data, I exploit the staggered rollout of electrification across counties to estimate its causal effects on the integration of immigrant and native workers. Electrified industries became more diverse and less segregated along ethnic lines. These effects extend beyond the workplace. Electrification is associated with lower residential segregation among manufacturing workers and a partial attenuation of the negative relationship between immigrant presence and local public service provision. Overall, I find that, in this context, technological change reshaped the social fabric by promoting integration both at work and within local communities.
Economic Ideas and Policy Implementation: Evidence from Malthusian Training in British Indian Bureaucracy
Eric Robertson
Public officials often fail to implement government policy as directed, yet the role of economic ideas in shaping these implementation choices is poorly understood. This paper provides causal evidence that exposure to economic ideas can durably influence bureaucrat behavior. I study British colonial bureaucrats in India, exploiting a natural experiment created by the abrupt death of Thomas Malthus in 1834, replacing his economics instruction at a bureaucrat training college for that of a contemporary critic, Richard Jones. Whereas Malthus regarded economic distress as a natural mechanism for restoring equilibrium by reducing population growth, Jones disagreed with this view. Linking rainfall shocks to district-level fiscal responses, I show that officials trained by Malthus delivered less relief during droughts, providing 0.10-0.25 SD less aid across all major measures compared with officials taught by Jones. The results reveal that exposure to abstract economic ideas can shape real-world policy implementation for decades.