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NBER Reporter NATIONAL BUREAU OF ECONOMIC RESEARCH A quarterly summary of NBER research No. 2, June 2017 Program Report ALSO IN THIS ISSUE Savings from Home Energy Report Programs Gains were larger for early adopters The Development of the Savings percentage 2.5% American Economy Program Early adopters Late adopters 2.0 1.5 Leah Boustan, William Collins, and Claudia Goldin* 1.0 0.5 The mission of the Development of the American Economy Program is 0.0 Jan. ’08 Jan. ’09 Jan. ’10 Jan. ’11 Jan. ’12 Jan. ’13 Date of program adoption to research historical aspects of the American economy broadly defined. Its Each dot represents one site where treatment took place Source: H. Allcott, NBER Working Paper No. 18373 members are economic historians whose specific interests span many sub- fields within economics. Economic history is a distinct field, like macro, Evaluating Energy Efficiency Policies 8 public finance, and labor, with a group of practitioners who self-identify as economic historians. Economic historians study parts of the past that are Developments in the Asset relevant to the issues of our day. Management Industry 12 Recent work by Ran Abramitzky has demonstrated that economic his- Price Dispersion and Bargain Hunting torians have increasingly become more integrated into mainstream eco- in the Macroeconomy 16 nomics.1 During the past 20 years, an increasing fraction of articles in top The Dynamics economics journals have been in the field of economic history and have of Air Pollution Impacts 20 been written by economic historians. Historical data and episodes are used, NBER News 24 Abramitzky notes, to test theory, to improve policy, to identify channels Conferences 25 of causation, and to understand big questions through the natural experi- Program and Working Group Meetings 31 ments history offers. The methods used by those who self-identify as eco- nomic historians are increasingly like those of other economists, and new NBER Books 42 Ph.Ds in economic history have prospects similar to those in other fields. Furthermore, economists of all stripes are doing more economic history. Still, there are differences that make the field and its practitioners distinct. In recent years, the topics of health and mortality, intergenerational mobility, the environment, education, banks, financial crises, the Great Depression, migration and immigration, and corporate governance have led the research interests of associates of the DAE Program. Big data and record *Claudia Goldin, the Henry Lee Professor of Economics at Harvard University, has served as director of the NBER Program on the Development of the American Economy since 1989. Leah Boustan, pro- fessor of economics at Princeton University, and William Collins, Terence E. Adderley Jr. Professor of Economics at Vanderbilt University, will suc- ceed her, becoming co-directors of the program beginning July 2017. Reporter OnLine at: www.nber.org/reporter linkage are among the new methodological areas of interest. This report highlights research in NBER Reporter three areas: health and economic growth, immi- gration and migration, and the Great Depression and the New Deal. The National Bureau of Economic Research is a private, nonprofit research orga- nization founded in 1920 and devoted to objective quantitative analysis of the Health and Economic Growth American economy. Its officers and board of directors are: President and Chief Executive Officer — James M. Poterba Health is among the most important aspects Controller — Kelly Horak of well-being that is not included in standard Corporate Secretary — Alterra Milone measures of national income. Studying health BOARD OF DIRECTORS changes over the long run reveals both pos- Chairman — Martin B. Zimmerman itive and negative dimensions of economic Vice Chairman — Karen N. Horn growth. Historically, greater income per cap- Treasurer — Robert Mednick ita has improved health through better nutri- DIRECTORS AT LARGE tion.2 Income growth during the last century Peter Aldrich Mohamed El-Erian Michael H. Moskow has enabled the innovation and diffusion of Elizabeth E. Bailey Jacob A. Frenkel Alicia H. Munnell effective medicines and medical treatments. But John H. Biggs Judith M. Gueron Robert T. Parry John S. Clarkeson Robert S. Hamada James M. Poterba economic growth has also fouled air and water, Don R. Conlan Peter Blair Henry John S. Reed producing setbacks and occasional reversals in Kathleen B. Cooper Karen N. Horn Marina v. N. Whitman measures of health. Charles H. Dallara Lisa Jordan Martin B. Zimmerman George C. Eads John Lipsky Health has been an important research Jessica P. Einhorn Laurence H. Meyer topic for DAE members since the beginning of the program. In the past several years, they DIRECTORS BY UNIVERSITY APPOINTMENT have made progress in understanding the mag- Timothy Bresnahan, Stanford Benjamin Hermalin, California, Berkeley nitude of the negative side of economic growth Pierre-André Chiappori, Columbia Marjorie B. McElroy, Duke Alan V. Deardorff, Michigan Joel Mokyr, Northwestern and also have sought to learn when the detri- Ray C. Fair, Yale Andrew Postlewaite, Pennsylvania mental consequences of economic growth were Edward Foster, Minnesota Cecilia Elena Rouse, Princeton abated, whether through advances in science or John P. Gould, Chicago Richard L. Schmalensee, MIT Mark Grinblatt, California, Los Angeles David B. Yoffie, Harvard intervention of enlightened professionals and Bruce Hansen, Wisconsin-Madison dedicated public officials. This research is highly DIRECTORS BY APPOINTMENT OF OTHER ORGANIZATIONS relevant for a number of current issues in both Jean-Paul Chavas, Agricultural and Applied Economics Association developing and developed nations. Martin Gruber, American Finance Association Infant mortality was high in general in Arthur Kennickell, American Statistical Association the past, and higher still in urban and indus- Jack Kleinhenz, National Association for Business Economics Robert Mednick, American Institute of Certified Public Accountants trial areas. Even in rich countries, historical Alan L. Olmstead, Economic History Association infant mortality rates were higher than rates Peter L. Rousseau, American Economic Association in the poorest nations today.3 But infant mor- Gregor W. Smith, Canadian Economics Association William Spriggs, American Federation of Labor and tality began to decline around the turn of the Congress of Industrial Organizations 20th century. How this happened is explored by Bart van Ark, The Conference Board Marcella Alsan and Claudia Goldin in a study The NBER depends on funding from individuals, corporations, and private of Massachusetts, the first state to collect vital foundations to maintain its independence and its flexibility in choosing its statistics and one of the earliest to commit vast research activities. Inquiries concerning contributions may be addressed to James resources to secure pure water for its citizens, M. Poterba, President & CEO, NBER, 1050 Massachusetts Avenue, Cambridge, MA 02138-5398. All contributions to the NBER are tax deductible. pass laws to protect its watersheds, and build a mammoth sewerage system to service the area The Reporter is issued for informational purposes and has not been reviewed by around its largest city, Boston.4 Using sharp the Board of Directors of the NBER. It is not copyrighted and can be freely repro- changes in the years that the water and sewer- duced with appropriate attribution of source. Please provide the NBER’s Public Information Department with copies of anything reproduced. age projects were completed across 54 cities and towns, Alsan and Goldin estimate that the two Requests for subscriptions, changes of address, and cancellations should be sent projects accounted for 37 percent of the total to Reporter, National Bureau of Economic Research, Inc., 1050 Massachusetts Avenue, Cambridge, MA 02138-5398 (please include the current mailing label), decline in infant mortality among fully treated or by email to [email protected]. Print copies of the Reporter are only mailed to municipalities during the 1880–1915 period. subscribers in the U.S. and Canada; those in other nations may request electronic subscriptions at www.nber.org/drsubscribe/. 2 NBER Reporter • No. 2, June 2017 Not every state had statistics as a lack of regulations, and the exter- erating plants.9 Bituminous coal use for reliable as those from Massachusetts. nal costs that firms imposed on others. home heating varied across states, years, Because mortality rates are computed Hanlon shows that had Britain adopted and months for various reasons. Using from two separate series — births and more efficient coal use, it would have that variation, Alan Barreca, Clay, and deaths — and because not all states were been substantially more urbanized by Joel Tarr show the extent to which the reporting complete data until 1933, seri- the early 20th century. reduction in soft coal use from 1945 to ous data issues can arise. In fact, as shown Babies were the proverbial “canar- 1960, due largely to the greater availabil- by Katherine Eriksson, Gregory T. ies in the coal mine” and died at higher ity of natural gas, saved both adult and Niemesh, and Melissa infant lives.10 Thomasson, because The bottom line Infant Mortality Rates in Massachusetts by Urban and Rural Areas deaths were better 1880–1920 is that pollution from reported than births, coal use in indus- Infant mortality rate (IMR) = Deaths of infants under 1 year old per 1,000 births infant mortality 200 try, electricity genera- rates have been over- tion, and home heat- Urban areas stated for much of the 180 ing had measurable 1915–40 period, par- and strong negative ticularly in southern 160 effects on health and states and for African life expectancy. 5 Americans. In con- 140 Economic growth sequence, the long- Rural areas has also led to enor- run decline in infant 120 mous advances in mortality for cer- health since the 1940s tain groups has been 100 with the advent of overstated. modern antibiotics Industrialization 80 and scores of medical was one of the great techniques and proce- engines of economic 60 dures. But some peo- 1880 1885 1890 1895 1900 1905 1910 1915 1920 growth, but it reduced Source: M.