The Economic Policy Institute (EPI) is a 501(c)(3) non-profit American, left-leaning think tank based in Washington, D.C., that carries out economic research and analyzes the economic impact of policies and proposals. Affiliated with the labor movement the EPI is usually described as presenting a left-leaning and pro-union viewpoint on public policy issues. Since 2021, the EPI has been led by economist Heidi Shierholz, a former Chief Economist of the Department of LaborThe EPI has a sister organization, the EPI Policy Center, which is a 501(c)(4) group.
To provide maturity transformation, banks need a deposit base -- deposits that could be, but are typically not, withdrawn and are therefore available for long-term investments. We show that a larger deposit base reduces a bank's vulnerability to panic runs. When depositors maintain multiple accounts across banks, the allocation of the deposit base becomes endogenous, creating externalities that affect run probabilities. We analyze the effect of multibanking on financial stability and demonstrate that in an economy with heterogeneous institutions, households allocate inefficiently low funds to maturity-transforming banks due to this deposit base externality. This has implications for financial stability in the context of Central Bank Digital Currencies (CBDCs), regulatory ring-fencing, and long-term saving subsidies.
Remote work surged during the COVID-19 pandemic. To analyze its post-pandemic persistency, we construct an original dataset measuring remote and hybrid work (WFH) in 20 OECD countries and 55 occupations from January 2019 to December 2023, based on over 1 billion job postings from the global job site Indeed. The share of job postings advertising WFH more than quadrupled from about 2.5 % to around 11 % between January 2020 and January 2023 in the average country in our sample, continuing to grow even after pandemic-related restrictions were phased out. Exploiting changes in pandemic severity across countries and differences in the feasibility of remote work across occupations in a difference-in-differences design, we find that increases in pandemic severity substantially raised advertised WFH, but pandemic easing had no effect. We then use job search data to document persistently high interest in WFH from jobseekers and conclude that the post-pandemic persistency of WFH may partly be a response by employers to demand for flexibility from workers.
Entry in many occupations is regulated with the objective to screen out the least able producers and guarantee high quality of output. Unfortunately, the available empirical evidence suggests that in most cases these objectives are not achieved. In this paper we investigate entry into the legal profession in Italy and we document that such a failure is due to the combination of the incomplete anonymity of the entry exam and the intergenerational transmission of business opportunities. We use microdata covering the universe of law school graduates from 2007 to 2013 matched with their careers and earnings up to 5 years after graduation. Variation generated by the random assignment of the entry exam grading commissions allows us to identify the role of family ties in the selection process. We find that connected candidates, i.e. those with relatives already active in the profession, are more likely to pass the exam and eventually earn more, especially those who performed poorly in law school. When we simulate the process of occupational choice assuming family connections did not matter, we find that strong positive selection on ability would emerge.
We use panel data on expected and realized changes in household finances to study the process of expectation formation. Households extrapolate from improvements in financial situation, but deteriorations are associated with an increased dispersion of forecasts, and higher probabilities of both negative and positive forecast errors. Individuals who expect earnings declines to revert too quickly save less and are more likely to be financially worse off again in the future. Learning from past errors reduces the likelihood that individuals are optimistic following a deterioration in their finances. The evidence shows how experiences, learning, and life events matter for expectation formation. This paper was accepted by Camelia Kuhnen, finance. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.03257 .
The general public grabs statistics from a variety of not necessarily reliable online sources when making big life decisions from baby names to house moves. Johnny Runge considers how the official stats world should feel about that
