@workingpaper {702811,
	title = {A Welfare Analysis of Tax Audits Across the Income Distribution},
	year = {Working Paper},
	abstract = {
	We estimate the returns to IRS audits of taxpayers across the income distribution. We find an additional $1 spent auditing taxpayers above the 90th income percentile yields more than $12 in revenue, while audits of below-median income taxpayers yield $5. We draw upon comprehensive internal accounting information and audit-level enforcement logs to quantify the average costs and revenues associated with each audit. We begin by estimating the average initial return to all audits of US taxpayers filing in 2010-2014. On average, $1 in audit spending raises $2.17 in initial revenue. Audits of high-income taxpayers are more costly, but the additional revenue raised more than offsets the costs. Audits of the 99-99.9th percentile have a 3.2:1 return; audits of the top 0.1\% return 6.3:1. We then exploit the 40\% audit reduction between tax years 2010 and 2014 to examine the returns to marginal audits. We find they exceed the returns to average audits. Revenues remain relatively unchanged but marginal costs fall below average costs due to economies of scale. Next, we use randomly selected audits to examine the impact of an initial audit on future revenue. This specific deterrence effect produces at least three times more revenue than the initial audit. Deterrence effects are relatively consistent across the income distribution. This results in the 12:1 return above the 90th percentile. We conclude by estimating the welfare consequences of audits using the MVPF framework and comparing audits to other revenue raising policies. We find that audits raise revenue at lower welfare cost.

},
	author = {Will C. Boning and Nathaniel Hendren and Sprung-Keyser, Ben and Ellen Stuart}
}
@workingpaper {692012,
	title = {The Radius of Economic Opportunity: Evidence from Migration and Local Labor Markets},
	year = {Working Paper},
	note = {View young adult migration patterns at migrationpatterns.org},
	abstract = {We examine the geographic incidence of local labor market growth across locations of childhood residence. We ask: when wages grow in a given US labor market, do the benefits flow to individuals growing up in nearby or distant locations? We begin by constructing new statistics on migration rates across labor markets between childhood and young adulthood. This migration matrix shows 80\% of young adults migrate less than 100 miles from where they grew up. 90\% migrate less than 500 miles. Migration distances are shorter for Black and Hispanic individuals and for those from low-income families. These migration patterns provide information on the first order geographic incidence of local wage growth. Next, we explore the responsiveness of location choices to economic shocks. Using geographic variation induced by the recovery from the Great Recession, we estimate the elasticity of migration with respect to increases in local labor market wage growth. We develop and implement a novel test for validating whether our identifying wage variation is driven by changes in labor market opportunities rather than changes in worker composition due to sorting. We find that higher wages lead to increased in-migration, decreased out-migration and a partial capitalization of wage increases into local prices. Our results imply that for a 2 rank point increase in annual wages (approximately $1600) in a given commuting zone (CZ), approximately 99\% of wage gains flow to those who would have resided in the CZ in the absence of the wage change. The geographically concentrated nature of most migration and the small magnitude of these migration elasticities suggest that the incidence of labor market conditions across childhood residences is highly local. For many individuals, the {\textquotedblleft}radius of economic opportunity{\textquotedblright} is quite narrow.},
	author = {Sprung-Keyser, Ben and Nathaniel Hendren and Sonya Porter}
}
@workingpaper {689403,
	title = {The Case for the MVPF in Empirical Welfare Analysis},
	year = {Working Paper},
	note = {An earlier draft circulated under the title "The Advantages of the MVPF: A Comment on Garcia and Heckman (2022)", and is availabe here.},
	abstract = {
	This paper outlines the case for using the Marginal Value of Public Funds (MVPF) in empirical welfare analysis. It compares the MVPF approach with more traditional welfare metrics such as the Cost-Benefit Ratio and the Net Social Benefits criterion. It outlines the advantages of the MVPF approach relative to these metrics. In building the case for the MVPF, this paper also addresses several misconceptions about the MVPF that appear in recent literature.



	\&nbsp;

},
	author = {Nathaniel Hendren and Sprung-Keyser, Ben}
}
@workingpaper {680771,
	title = {Opportunity Unraveled: Private Information and the Missing Markets for Financing Human Capital},
	year = {Working Paper},
	note = {
	NBER Working Paper $\#$29214Revise and Resubmit, American Economic Review

},
	abstract = {
	\&nbsp;



	Investing in college carries high returns but comes with considerable risk. Financial products like equity contracts can mitigate this risk, yet college is typically financed through non-dischargeable, government-backed student loans. This paper argues that adverse selection has unraveled private markets for college-financing contracts that mitigate risk. We use survey data on students{\textquoteright} expected post-college outcomes to estimate their knowledge about future outcomes and quantify the threat of adverse selection in markets for equity contracts and several state-contingent debt contracts. We find students hold significant private knowledge of their future earnings, academic persistence, employment, and loan repayment likelihood, beyond what is captured by observable characteristics. Our empirical results imply that a typical college-goer must expect to pay back $1.64 in present value for every $1 of equity financing to cover the financier{\textquoteright}s costs of covering those who would adversely select their contract. We estimate that college-goers are not willing to accept these terms so that private markets unravel. Nonetheless, our framework quantifies significant welfare gains from government subsidies that would open up these missing markets and partially insure college-going risks.



	\&nbsp;

},
	author = {Daniel Herbst and Nathaniel Hendren}
}
@workingpaper {622437,
	title = {The Opportunity Atlas: Mapping the Childhood Roots of Social Mobility},
	year = {Working Paper},
	note = {
	Revise and Resubmit, American Economic ReviewPaper, Executive Summary, SlidesOnline web tool:\&nbsp;https://opportunityatlas.org

},
	abstract = {We construct a publicly available atlas of children{\textquoteright}s outcomes in adulthood by Census tract using anonymized longitudinal data covering nearly the entire U.S. population. For each tract, we estimate children{\textquoteright}s earnings distributions, incarceration rates, and other outcomes in adulthood by parental income, race, and gender. These estimates allow us to trace the roots of outcomes such as poverty and incarceration back to the neighborhoods in which children grew up. We find that children{\textquoteright}s outcomes vary sharply across nearby tracts: for children of parents at the 25th percentile of the income distribution, the standard deviation of mean household income at age 35 is $5,000 across tracts within counties. We illustrate how these tract-level data can provide insight into how neighborhoods shape the development of human capital and support local economic policy using two applications. First, we show that the estimates permit precise targeting of policies to improve economic opportunity by uncovering specific neighborhoods where certain subgroups of children grow up to have poor outcomes. Neighborhoods matter at a very granular level: conditional on characteristics such as poverty rates in a child{\textquoteright}s own Census tract, characteristics of tracts that are one mile away have little predictive power for a child{\textquoteright}s outcomes. Our historical estimates are informative predictors of outcomes even for children growing up today because neighborhood conditions are relatively stable over time. Second, we show that the observational estimates are highly predictive of neighborhoods{\textquoteright} causal effects, based on a comparison to data from the Moving to Opportunity experiment and a quasi- experimental research design analyzing movers{\textquoteright} outcomes. We then identify high-opportunity neighborhoods that are affordable to low-income families, providing an input into the design of affordable housing policies. Our measures of children{\textquoteright}s long-term outcomes are only weakly correlated with traditional proxies for local economic success such as rates of job growth, showing that the conditions that create greater upward mobility are not necessarily the same as those that lead to productive labor markets.},
	author = {Raj Chetty and John Friedman and Nathaniel Hendren and Maggie R. Jones and Sonya Porter}
}
@article {639141,
	title = {Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice},
	year = {Forthcoming},
	note = {
	Accepted, American Economic ReviewPaper, Executive Summary, Slides

},
	abstract = {
	Low-income families in the United States tend to live in neighborhoods that offer limited opportunities for upward income mobility. One potential explanation for this pattern is that low-income families prefer such neighborhoods for other reasons, such as affordability or proximity to family and jobs. An alternative explanation is that families do not move to high-opportunity areas because of barriers that prevent them from making such moves. We test between these two explanations using a randomized controlled trial with housing voucher recipients in Seattle and King County. We provided services to reduce barriers to moving to high-upward-mobility neighborhoods: customized search assistance, landlord engagement, and short-term financial assistance. The intervention increased the fraction of families who moved to high-upward-mobility areas from 14\% in the control group to 54\% in the treatment group. Families induced to move to higher opportunity areas by the treatment do not make sacrifices on other dimensions of neighborhood quality and report much higher levels of neighborhood satisfaction. These findings imply that most low-income families do not have a strong preference to stay in low-opportunity areas; instead, barriers in the housing search process are a central driver of residential segregation by income. Interviews with families reveal that the capacity to address each family{\textquoteright}s needs in a specific manner {\textendash} from emotional support to brokering with landlords to financial assistance {\textendash} was critical to the program{\textquoteright}s success. Using quasi-experimental analyses and comparisons to other studies, we show that more standardized policies {\textendash} increasing voucher payment standards in high-opportunity areas or informational interventions {\textendash} have much smaller impacts. We conclude that redesigning affordable housing policies to provide customized assistance in housing search could reduce residential segregation and increase upward mobility substantially.

},
	author = {Peter Bergman and Raj Chetty and Stefanie DeLuca and Nathaniel Hendren and Lawrence F. Katz and Christopher Palmer}
}
@article {692877,
	title = {Social Capital II: Determinants of Economic Connectedness},
	journal = {Nature},
	volume = {608},
	year = {2022},
	pages = {122-134},
	url = {https://www.nature.com/articles/s41586-022-04997-3},
	author = {Raj Chetty and Matthew O. Jackson and Theresa Kuchler and Johannes Stroebel and Nathaniel Hendren and Robert B. Fluegge and Sara Gong and Federico Gonzalez and Armelle Grondin and Jacob, Matthew and Drew Johnston and Martin Koenen and Eduardo Laguna-Muggenburg and Florian Mudekereza and Tom Rutter and Nicolaj Thor and Wilber Townsend and Ruby Zhang and Mike Bailey and Pablo Barber{\'a}, and Monica Bhole and Nils Wernerfelt}
}
@article {692876,
	title = {Social Capital I: Measurement and Associations with Economic Mobility },
	journal = {Nature},
	volume = {608},
	year = {2022},
	pages = {180-121},
	url = {https://www.nature.com/articles/s41586-022-04996-4},
	author = {Raj Chetty and Matthew O. Jackson and Theresa Kuchler and Johannes Stroebel and Nathaniel Hendren and Robert B. Fluegge and Sara Gong and Federico Gonzalez and Armelle Grondin and Jacob, Matthew and Drew Johnston and Martin Koenen and Eduardo Laguna-Muggenburg and Florian Mudekereza and Tom Rutter and Nicolaj Thor and Wilbur Townsend and Ruby Zhang and Mike Bailey and Pablo Barber{\'a}, and Monica Bhole and Nils Wernerfelt}
}
@article {663317,
	title = {Choice in Insurance Markets: A Pigouvian Approach to Social Insurance Design},
	journal = {Annual Review of Economics},
	volume = {13},
	year = {2021},
	note = {Draft prepared for the 2022 edition of the Annual Review of Economics.\&nbsp;},
	pages = {457{\textendash}486},
	abstract = {
	Should choice be offered in social insurance programs? The paper presents a conceptual framework that identifies the key forces determining the value of offering choice, reviews some existing evidence on these forces, and aims to guide further empirical research in different in- surance domains. The value of offering choice is higher the larger the variation in individual valuations, but gets reduced by both selection on risk and selection on moral hazard. The imple- mentation of choice-based policies is further challenged by the presence of adverse selection and choice frictions or the obligation to offer basic uncompensated care. These inefficiencies can be seen as externalities, which do not rationalize the absence of providing choice per se, but point to the need for regulatory policies and the potential value of corrective pricing {\`a} la Pigou.

},
	url = {https://www.annualreviews.org/doi/abs/10.1146/annurev-economics-090820-111716},
	author = {Camille Landais and Nathaniel Hendren and Johannes Spinnewijn}
}
@article {661330,
	title = {Welfare Analysis Meets Causal Inference},
	journal = {Journal of Economic Perspectives},
	volume = {34},
	number = {4},
	year = {2020},
	note = {NBER Working Paper $\#$27640},
	month = {September, 2020},
	pages = { 146-167},
	abstract = {We describe a framework for empirical welfare analysis that uses the causal estimates of a policy{\textquoteright}s impact on net government spending. This framework provides guidance for which causal effects are (and are not) needed for empirical welfare analysis of public policies.The key ingredient is the construction of each policy{\textquoteright}s marginal value of public funds (MVPF). The MVPF is the ratio of beneficiaries{\textquoteright} willingness to pay for the policy to the net cost to the government. We discuss how the MVPF relates to {\textquotedblleft}traditional{\textquotedblright} welfare analysis tools such as the marginal excess burden and marginal cost of public funds. We show how the MVPF can be used in practice by applying it to several canonical empirical applications from public finance, labor, development, trade, and industrial organization.},
	author = {Amy Finkelstein and Nathaniel Hendren}
}
@article {638301,
	title = {A Unified Welfare Analysis of Government Policies},
	journal = {Quarterly Journal of Economics},
	volume = {135},
	number = {3},
	year = {2020},
	note = {
	View the estimates online at www.policyinsights.orgWatch the Econimate Video

},
	pages = {1209-1318},
	abstract = {We conduct a comparative welfare analysis of 133 historical policy changes over the past\&nbsp;half-century in the United States, focusing on policies in social insurance, education and job\&nbsp;training, taxes and cash transfers, and in-kind transfers. For each policy, we use existing causal\&nbsp;estimates to calculate both the benefit that each policy provides its recipients (measured as their\&nbsp;willingness to pay) and the policy{\textquoteright}s net cost, inclusive of long-term impacts on the government{\textquoteright}s\&nbsp;budget. We divide the willingness to pay by the net cost to the government to form each policy{\textquoteright}s\&nbsp;Marginal Value of Public Funds, or its {\textquotedblleft}MVPF{\textquotedblright}. Comparing MVPFs across policies provides\&nbsp;a unified method of assessing their impact on social welfare. Our results suggest that direct\&nbsp;investments in low-income children{\textquoteright}s health and education have historically had the highest\&nbsp;MVPFs, on average exceeding 5. Many such policies have paid for themselves as governments\&nbsp;recouped the cost of their initial expenditures through additional taxes collected and reduced\&nbsp;transfers. We find large MVPFs for education and health policies amongst children of all ages,\&nbsp;rather than observing diminishing marginal returns throughout childhood. We find smaller\&nbsp;MVPFs for policies targeting adults, generally between 0.5 and 2. Expenditures on adults have\&nbsp;exceeded this MVPF range in particular if they induced large spillovers on children. We relate\&nbsp;our estimates to existing theories of optimal government policy and we discuss how the MVPF\&nbsp;provides lessons for the design of future research.},
	url = {https://academic.oup.com/qje/article/135/3/1209/5781614},
	author = {Nathaniel Hendren and Sprung-Keyser, Ben}
}
@article {606749,
	title = {Race and Economic Opportunity in the United States: An Intergenerational Perspective},
	journal = {Quarterly Journal of Economics},
	volume = {135},
	number = {2},
	year = {2020},
	note = {
	Paper, Executive Summary, Slides

},
	pages = {711{\textendash}783},
	abstract = {
	We study the sources of racial and ethnic disparities in income using de-identified longitudinal data covering nearly the entire U.S. population from 1989-2015. We document three sets of results. First, the intergenerational persistence of disparities varies substantially across racial groups. For example, Hispanic Americans are moving up significantly in the income distribution across generations because they have relatively high rates of intergenerational income mobility. In contrast, black Americans have substantially lower rates of upward mobility and higher rates of downward mobility than whites, leading to large income disparities that persist across generations. Conditional on parent income, the black-white income gap is driven entirely by large differences in wages and employment rates between black and white men; there are no such differences between black and white women. Second, differences in family characteristics such as parental marital status, education, and wealth explain very little of the black-white income gap conditional on parent income. Differences in ability also do not explain the patterns of intergenerational mobility we document. Third, the black-white gap persists even among boys who grow up in the same neighborhood. Controlling for parental income, black boys have lower incomes in adulthood than white boys in 99\% of Census tracts. Both black and white boys have better outcomes in low-poverty areas, but black-white gaps are larger on average for boys who grow up in such neighborhoods. The few areas in which black-white gaps are relatively small tend to be low-poverty neighborhoods with low levels of racial bias among whites and high rates of father presence among blacks. Black males who move to such neighborhoods earlier in childhood earn more and are less likely to be incarcerated. However, fewer than 5\% of black children grow up in such environments. These findings suggest that reducing the black-white income gap will require efforts whose impacts cross neighborhood and class lines and increase upward mobility specifically for black men.\&nbsp;

},
	author = {Raj Chetty and Nathaniel Hendren and Maggie R. Jones and Sonya Porter}
}
@article {458171,
	title = {Measuring Ex-Ante Welfare in Insurance Markets},
	journal = {Review of Economic Studies},
	volume = {88},
	number = {3},
	year = {2020},
	month = {2020},
	pages = {1193{\textendash}1223},
	abstract = {
	



	
		
		
			\&nbsp;
		

		
			The willingness to pay for insurance captures the value of insurance against only the risk that remains when choices are observed. This paper develops tools to measure the ex-ante expected utility impact of insurance subsidies and mandates when choices are observed after some insurable information is revealed. The approach retains the transparency of using reduced-form willingness to pay and cost curves, but it adds one additional sufficient statistic: the difference in marginal utilities between insured and uninsured. I provide an approach to estimate this statistic that uses only reduced-form willingness to pay and cost curves, combined with either a measure of risk aversion. I compare the approach to structural approaches that require fully specifying the choice environment and information sets of individuals. I apply the approach using existing willingness to pay and cost curve estimates from the low-income health insurance exchange in Massachusetts. Ex-ante optimal insurance prices are roughly 30\% lower than prices that maximize market surplus. While mandates would increase deadweight loss, the results suggest they would actually increase ex-ante expected utility.
		

		
			\&nbsp;
		
	



	

},
	url = {https://academic.oup.com/restud/article/88/3/1193/5815570?guestAccessKey=96c47eb3-8c37-4114-81a7-30d02bafb65b},
	author = {Nathaniel Hendren}
}
@article {154811,
	title = {Measuring Economic Efficiency Using Inverse-Optimum Weights},
	journal = {Journal of Public Economics},
	volume = {187},
	year = {2020},
	note = {
	(Earlier versions circulated under the titles "The Inequality Deflator: Interpersonal Comparisons without a Social Welfare Function", available here, and "Efficiency Welfare Weights", available here).

},
	month = {2020},
	abstract = {
	\&nbsp;



	This paper provides a method to measure the traditional Kaldor-Hicks notion of {\textquotedblleft}economic efficiency{\textquotedblright} when taxes affect behavior. In contrast to traditional unweighted surplus, measuring efficiency requires weighting individual benefits (or surplus) by the marginal cost to the government of providing a $1 transfer at each income level. These weights correspond to the solution to the {\textquotedblleft}inverse-optimum{\textquotedblright} program in optimal tax: they are the social planning weights that would rationalize the status quo tax schedule as optimal. I estimate the weights using the universe of US income tax returns from 2012. The results suggest that measuring economic efficiency requires weighting surplus accruing to the poor roughly 1.5-2 times more than surplus accruing to the rich. This is because $1 of surplus to the poor can be turned into roughly $1.5-$2 of surplus to the rich by reducing the progressivity of the tax schedule. Following Kaldor and Hicks{\textquoteright} original applications, I compare income distributions over time in the US and across countries. The results suggest US economic growth is 15-20\% lower due to increased inequality than is suggested by changes in GDP. Because of its higher inequality, the U.S. is unable to replicate the income distribution of countries like Austria and the Netherlands, despite having higher national income per capita.



	\&nbsp;

},
	url = {http://www.nber.org/papers/w20351},
	author = {Nathaniel Hendren}
}
@article {525956,
	title = {Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts},
	journal = {American Economic Review},
	volume = {109},
	number = {4},
	year = {2019},
	month = {2019},
	abstract = {How much are low-income individuals willing to pay for health insurance, and what are the implications for insurance markets? Using administrative data from Massachusetts{\textquoteright} subsidized insurance exchange, we exploit discontinuities in the subsidy schedule to estimate willingness to pay and costs of insurance among low-income adults. As subsidies decline, insurance take-up falls rapidly, dropping about 25\% for each $40 increase in monthly enrollee premiums. Marginal enrollees tend to be lower-cost, indicating adverse selection into insurance. But across the entire distribution we can observe {\textendash} approximately the bottom 70\% of the willingness to pay distribution {\textendash} enrollees{\textquoteright} willingness to pay is always less than half of their own expected costs that they impose on the insurer. As a result, we estimate that take-up will be highly incomplete even with generous subsidies: if enrollee premiums were 25\% of insurers{\textquoteright} average costs, at most half of potential enrollees would buy insurance; even premiums subsidized to 10\% of average costs would still leave at least 20\% uninsured. We briefly consider potential explanations for these findings and their normative implications.},
	url = {https://www.aeaweb.org/articles?id=10.1257/aer.20171455},
	author = {Amy Finkelstein and Nathaniel Hendren and Mark Shepard}
}
@article {234816,
	title = {The Value of Medicaid: Interpreting Results from the Oregon Health Insurance Experiment},
	journal = {Journal of Political Economy},
	volume = {127},
	number = {6},
	year = {2019},
	month = {2019},
	abstract = {We develop a set of frameworks for welfare analysis of Medicaid and apply them to the Oregon Health Insurance Experiment, a Medicaid expansion for low-income, uninsured adults that occurred via random assignment. Across different approaches, we estimate recipient willingness to pay for Medicaid between $0.5 and $1.2 per dollar of the resource cost of providing Medicaid; estimates of the expected transfer Medicaid provides to recipients are relatively stable across approaches, but estimates of its additional value from risk protection are more variable. We also estimate that the resource cost of providing Medicaid to an additional recipient is only 40\% of Medicaid{\textquoteright}s total cost; 60\% of Medicaid spending is a transfer to providers of uncompensated care for the low-income uninsured.\&nbsp;},
	url = {http://www.nber.org/papers/w21308},
	author = {Amy Finkelstein and Nathaniel Hendren and Erzo F.P. Luttmer}
}
@article {464326,
	title = {The Impact of Neighborhoods on Intergenerational Mobility II: County-Level Estimates},
	journal = {Quarterly Journal of Economics},
	volume = {113},
	number = {3},
	year = {2018},
	note = {Data available at\&nbsp;http://www.equality-of-opportunity.org/index.php/dataVideo presentation available here.Note: This paper is a revised version of an earlier draft (Chetty and Hendren, 2015), "The Impacts of Neighborhoods on Intergenerational Mobility: Childhood Exposure Effects and County-Level Estimates"},
	abstract = {We estimate the causal effect of each county in the U.S. on children{\textquoteright}s incomes in adulthood. We first estimate a fixed effects model that is identified by analyzing families who move across counties with children of different ages. We then use these fixed effect estimates to (a) quantify how much places matter for intergenerational mobility, (b) construct forecasts of the causal effect of growing up in each county that can be used to guide families seeking to move to opportunity, and (c) characterize which types of areas produce better outcomes. For children growing up in low-income families, each year of childhood exposure to a one standard deviation (SD) better county increases income in adulthood by 0.5\%. Hence, growing up in a one SD better county from birth increases a child{\textquoteright}s income by approximately 10\%. There is substantial local area variation in children{\textquoteright}s outcomes: for example, growing up in the western suburbs of Chicago (DuPage County) would increase a given child{\textquoteright}s income by approximately 30\% relative to growing up in Cook County. Areas with less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates tend to produce better outcomes for children in poor families. Boys{\textquoteright} outcomes vary more across areas than girls{\textquoteright} outcomes, and boys have especially negative outcomes in highly segregated areas. One-fifth of the black-white income gap can be explained by differences in the counties in which black and white children grow up. Areas that generate better outcomes have higher house prices on average, but our approach uncovers many {\textquotedblleft}opportunity bargains{\textquotedblright} {\textendash} places that generate good outcomes but are not very expensive.},
	author = {Raj Chetty and Nathaniel Hendren}
}
@article {464321,
	title = {The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects},
	journal = {Quarterly Journal of Economics},
	volume = {113},
	number = {3},
	year = {2018},
	note = {Data available at\&nbsp;http://www.equality-of-opportunity.org/index.php/dataVideo presentation available here.Note: This paper is a revised version of an earlier draft (Chetty and Hendren, 2015), "The Impacts of Neighborhoods on Intergenerational Mobility: Childhood Exposure Effects and County-Level Estimates"},
	abstract = {We show that the neighborhoods in which children grow up shape their earnings, college attendance rates, and fertility and marriage patterns by studying more than seven million families who move across commuting zones and counties in the U.S. Exploiting variation in the age of children when families move, we find that neighborhoods have significant childhood exposure effects: the outcomes of children whose families move to a better neighborhood {\textendash} as measured by the outcomes of children already living there {\textendash} improve linearly in proportion to the amount of time they spend growing up in that area, at a rate of approximately 4\% per year of exposure. We distinguish the causal effects of neighborhoods from confounding factors by comparing the outcomes of siblings within families, studying moves triggered by displacement shocks, and exploiting sharp variation in predicted place effects across birth cohorts, genders, and quantiles to implement overidentification tests. The findings show that neighborhoods affect intergenerational mobility primarily through childhood exposure, helping reconcile conflicting results in the prior literature.},
	url = {https://academic.oup.com/qje/article-abstract/133/3/1107/4850660},
	author = {Raj Chetty and Nathaniel Hendren}
}
@article {477706,
	title = {The Fading American Dream: Trends in Absolute Income Mobility Since 1940},
	journal = {Science},
	year = {2017},
	note = {
	Further data and replication code available at\&nbsp;http://www.equality-of-opportunity.org

},
	month = {2016},
	abstract = {
	We estimate rates of {\textquotedblleft}absolute income mobility{\textquotedblright} {\textendash} the fraction of children who earn more than their parents {\textendash} by combining historical data from Census and CPS cross-sections with panel data for recent birth cohorts from de-identified tax records. Our approach overcomes the key data limitation that has hampered research on trends in intergenerational mobility: the lack of large panel datasets linking parents and children. We find that rates of absolute mobility have fallen from approximately 90\% for children born in 1940 to 50\% for children born in the 1980s. The result that absolute mobility has fallen sharply over the past half century is robust to the choice of price deflator, the definition of income, and accounting for taxes and transfers. In counterfactual simulations, we find that increasing GDP growth rates alone cannot restore absolute mobility to the rates experienced by children born in the 1940s. In contrast, changing the distribution of growth across income groups to the more equal distribution experienced by the 1940 birth cohort would reverse more than 70\% of the decline in mobility. These results imply that reviving the {\textquotedblleft}American Dream{\textquotedblright} of high rates of absolute mobility would require economic growth that is spread more broadly across the income distribution.

},
	url = {http://science.sciencemag.org/content/sci/early/2017/04/21/science.aal4617.full.pdf},
	author = {Raj Chetty and David Grusky and Nathaniel Hendren and Maximilian Hell and Robert Manduca and Jimmy Narang}
}
@article {282826,
	title = {Knowledge of Future Job Loss and Implications for Unemployment Insurance},
	journal = {American Economic Review},
	volume = {107},
	number = {7},
	year = {2017},
	note = {
	Replication code and files

},
	pages = {1778-1823},
	abstract = {
	



	
		
		
			
				
					
						

						
							
								
								
									
										This paper provides evidence that individuals{\textquoteright} knowledge about their potential future job loss prevents the existence of a private market for unemployment insurance (UI). Using information contained in subjective probability elicitations, I show privately-traded UI policies would be too adversely selected to be profitable, at any price. Moreover, in response to learning about future unemployment, individuals decrease consumption and spouses are more likely to enter the labor market. From a normative perspective, this suggests existing estimates miss roughly 35\% of the social value of UI because it also partially insures against the risk of learning one might lose their job.
									
								
								
							
						
					
				
			
		
	

},
	url = {https://www.aeaweb.org/articles?id=10.1257/aer.20151655\&\&from=f},
	author = {Nathaniel Hendren}
}
@article {366231,
	title = {Childhood Environment and Gender Gaps in Adulthood},
	journal = {American Economic Review Papers and Proceedings},
	year = {2016},
	note = {Data available at\&nbsp;http://www.equality-of-opportunity.org/index.php/data},
	abstract = {We show that differences in childhood environments shape gender gaps in adulthood by documenting three facts using population tax records for children born in the 1980s. First, gender gaps in employment rates, earnings, and college attendance vary substantially across the parental income distribution. Notably, the traditional gender gap in employment rates is reversed for children growing up in poor families: boys in families in the bottom quintile of the income distribution are less likely to work than girls. Second, these gender gaps vary substantially across counties and commuting zones in which children grow up. The degree of variation in outcomes across places is largest for boys growing up in poor, single-parent families. Third, the spatial variation in gender gaps is highly correlated with proxies for neighborhood disadvantage. Low-income boys who grow up in high-poverty, high-minority areas work significantly less than girls. These areas also have higher rates of crime, suggesting that boys growing up in concentrated poverty substitute from formal employment to crime. Together, these findings demonstrate that gender gaps in adulthood have roots in childhood, perhaps because childhood disadvantage is especially harmful for boys.},
	author = {Raj Chetty and Nathaniel Hendren and Frina Lin and Jeremy Majerovitz and Benjamin Scuderi}
}
@article {253991,
	title = {The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Project},
	journal = {American Economic Review},
	volume = {106},
	number = {4},
	year = {2016},
	abstract = {

The Moving to Opportunity (MTO) experiment offered randomly selected families living in high-poverty housing projects housing vouchers to move to lower-poverty neighborhoods. We present new evidence on the impacts of MTO on children{\textquoteright}s long-term outcomes using administrative data from tax returns. We find that moving to a lower-poverty neighborhood significantly improves college attendance rates and earnings for children who were young (below age 13) when their families moved. These children also live in better neighborhoods themselves as adults and are less likely to become single parents. The treatment effects are substantial: children whose families take up an experimental voucher to move to a lower-poverty area when they are less than 13 years old have an annual income that is $3,477 (31\%) higher on average relative to a mean of $11,270 in the control group in their mid-twenties. In contrast, the same moves have, if anything, negative long-term impacts on children who are more than 13 years old when their families move, perhaps because of disruption effects. The gains from moving fall with the age when children move, consistent with recent evidence that the duration of exposure to a better environment during childhood is a key determinant of an individual{\textquoteright}s long-term outcomes. The findings imply that offering families with young children living in high-poverty housing projects vouchers to move to lower-poverty neighborhoods may reduce the intergenerational persistence of poverty and ultimately generate positive returns for taxpayers.

},
	author = {Raj Chetty and Nathaniel Hendren and Lawrence Katz}
}
@article {233426,
	title = {The Policy Elasticity},
	journal = {Tax Policy and the Economy},
	volume = {30},
	year = {2016},
	abstract = {

This paper illustrates how one can use causal effects of a policy change to measure its welfare impact without decomposing them into income and substitution effects. Often, a single causal effect suffices: the impact on government revenue. Because these responses vary with the policy in question, I term them policy elasticities, to distinguish them from Hicksian and Marshallian elasticities. The model also formally justifies a simple benefit-cost ratio for non-budget neutral policies. Using existing causal estimates, I apply the framework to five policy changes: top income tax rate, EITC generosity, food stamps, job training, and housing vouchers.\&nbsp;

},
	url = {http://www.nber.org/papers/w19177},
	author = {Nathaniel Hendren}
}
@article {142226,
	title = {Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility},
	journal = {American Economic Review Papers and Proceedings},
	volume = {104},
	number = {5},
	year = {2014},
	note = {Data available at\&nbsp;http://www.equality-of-opportunity.org/index.php/data

},
	abstract = {We present new evidence on trends in intergenerational mobility in the U.S. using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts. For children born between 1971 and 1986, we measure intergenerational mobility based on the correlation between parent and child income percentile ranks. For more recent cohorts, we measure mobility as the correlation between a child{\textquoteright}s probability of attending college and her parents{\textquoteright} income rank. We also calculate transition probabilities, such as a child{\textquoteright}s chances of reaching the top quintile of the income distribution starting from the bottom quintile. Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the {\textquotedblleft}birth lottery{\textquotedblright} {\textendash} the parents to whom a child is born {\textendash} are larger today than in the past.},
	author = {Raj Chetty and Nathaniel Hendren and Kline, Patrick and Emmanuel Saez and Nicholas Turner}
}
@article {91416,
	title = {Where is the Land of Opportunity: The Geography of Intergenerational Mobility in the United States},
	journal = {Quarterly Journal of Economics},
	volume = {129},
	number = {4},
	year = {2014},
	note = {Data available at\&nbsp;http://www.equality-of-opportunity.org/index.php/data},
	pages = {1553-1623},
	abstract = {We use administrative records on the incomes of more than 40 million children and their parents to describe three features of intergenerational mobility in the United States. First, we characterize the joint distribution of parent and child income at the national level. The conditional expectation of child income given parent income is linear in percentile ranks. On average, a 10 percentile increase in parent income is associated with a 3.4 percentile increase in a child{\textquoteright}s income. Second, intergenerational mobility varies substantially across areas within the U.S. For example, the probability that a child reaches the top quintile of the national income distribution starting from a family in the bottom quintile is 4.4\% in Charlotte but 12.9\% in San Jose. Third, we explore the factors correlated with upward mobility. High mobility areas have (1) less residential segregation, (2) less income inequality, (3) better primary schools, (4) greater social capital, and (5) greater family stability. While our descriptive analysis does not identify the causal mechanisms that determine upward mobility, the publicly available statistics on
intergenerational mobility developed here can facilitate research on such mechanisms.},
	url = {http://qje.oxfordjournals.org/content/129/4/1553.full.pdf},
	author = {Raj Chetty and Nathaniel Hendren and Kline, Patrick and Emmanuel Saez}
}
@article {74381,
	title = {Unraveling versus Unraveling: A Memo on Competitive Equilibriums and Trade in Insurance Markets},
	journal = {Geneva Risk and Insurance Review},
	volume = {39},
	number = {2},
	year = {2014},
	pages = {176-183},
	abstract = {Both Akerlof (1970) and Rothschild and Stiglitz (1976) show that insurance markets may {\textquotedblleft}un- ravel{\textquotedblright}. This memo clarifies the distinction between these two notions of unraveling in the context of a binary loss model of insurance. I show that the two concepts are mutually exclusive occurrences. Moreover, I provide a regularity condition under which the two concepts are exhaustive of the set of possible occurrences in the model. Akerlof unraveling characterizes when there are no gains to trade; Rothschild and Stiglitz unraveling shows that the standard notion of competition (pure strategy Nash equilibrium) is inadequate to describe the workings of insurance markets when there are gains to trade.},
	url = {http://www.palgrave-journals.com/grir/journal/v39/n2/abs/grir20142a.html},
	author = {Nathaniel Hendren}
}
@article {73941,
	title = {The Great Equalizer: Health Care Access and Infant Mortality in Thailand},
	journal = {American Economic Journal:  Applied Economics},
	volume = {6},
	number = {1},
	year = {2014},
	pages = {91 - 107},
	abstract = {This paper analyzes Thailand{\textquoteright}s 2001 healthcare reform, {\textquotedblleft}30 Baht{\textquotedblright}. The program increased funding available to hospitals to care for the poor and reduced copays to 30 Baht (~$0.75). Our estimates suggest the supply-side funding of the program increased healthcare utilization, especially amongst the poor. Moreover, we find significant impacts on infant mortality: prior to 30 Baht poorer provinces had significantly higher infant mortality rates than richer provinces. After 30 Baht this correlation evaporates to zero. The results suggest that increased access to healthcare among the poor can significantly reduce their infant mortality rates.},
	author = {Jonathan Gruber and Nathaniel Hendren and Robert M. Townsend}
}
@article {73926,
	title = {Private Information and Insurance Rejections},
	journal = { Econometrica},
	volume = {81},
	number = {5},
	year = {2013},
	pages = {1713-1762},
	abstract = {Across a wide set of nongroup insurance markets, applicants are rejected based on observable, often high-risk, characteristics. This paper argues that private information, held by the potential applicant pool, explains rejections. I formulate this argument by developing and testing a model in which agents may have private information about their risk. I first derive a new no-trade result that theoretically explains how private in- formation could cause rejections. I then develop a new empirical methodology to test whether this no-trade condition can explain rejections. The methodology uses subjec- tive probability elicitations as noisy measures of agents{\textquoteright} beliefs. I apply this approach to three nongroup markets: long-term care, disability, and life insurance. Consistent with the predictions of the theory, in all three settings I find significant amounts of private information held by those who would be rejected; I find generally more private infor- mation for those who would be rejected relative to those who can purchase insurance, and I show it is enough private information to explain a complete absence of trade for those who would be rejected. The results suggest that private information prevents the existence of large segments of these three major insurance markets.},
	url = {http://www.slate.com/articles/business/the_dismal_science/2012/03/pre_existing_conditions_the_real_reason_insurers_won_t_cover_people_who_are_already_sick_.html},
	author = {Nathaniel Hendren}
}
@inbook {309606,
	title = {[BOOK REVIEW] Journal of Economic Literature Review for Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry, by Howard C. Kunreuther, Mark V. Pauly and Stacey McMorrow},
	year = {2015},
	abstract = {Nathaniel Hendren of Harvard University reviews "Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry", by Howard C. Kunreuther, Mark V. Pauly, and Stacey McMorrow. The Econlit abstract of this book begins: "Explores the behavior of individuals at risk, insurance industry decision-makers, and policymakers at the local, state, and federal levels involved in the selling, buying, and regulating of insurance. Discusses an introduction to insurance in practice and theory; anomalies and rumors of anomalies; behavior consistent with benchmark models; real-world complications; why people do or do not demand insurance; demand anomalies; descriptive models of insurance supply; anomalies on the supply side; design principles for insurance; strategies for dealing with insurance-related anomalies; innovations in insurance markets through multiyear contracts; publicly provided social insurance; and a framework for prescriptive recommendations. Kunreuther is James G. Dinan Professor of Decision Sciences and Business and Public Policy in the Wharton School and Co-director of the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania. Pauly is Bendheim Professor in the Department of Health Care Management in the Wharton School at the University of Pennsylvania. McMorrow is a research associate in the Health Policy Center at the Urban Institute."},
	url = {https://www.aeaweb.org/articles.php?doi=10.1257/jel.53.1.115.r6},
	author = {Nathaniel Hendren}
}
