We trace the family origins of Members of Congress (MC) born between 1830 and 1950, linking each MC, their parents, and their brothers to the complete-count censuses. Future MCs have always been economic outliers. By 1940, close to 60 percent of MCs aged 18--40 held a college degree, against under 5 percent of comparable young men outside Congress. In the 19th-century censuses, MCs as adults held roughly three times the wealth of demographically matched controls. They also come from economically elite families: their fathers earn more, attain more education, and hold more wealth. The brothers of future MCs sit between the population and the MCs themselves. Across the socioeconomic measures we compare, we calculate that roughly half of an MC's adult premium is shared with his brother and the other half is his own. Even as the American economy and political system have changed, the family background gap has widened over the last century and a half. Wealth, household servants, and four separate occupation-based scores all show the gap holding or growing across cohorts. We study four Progressive-Era reforms in a triple-difference design---women's suffrage, the secret ballot, direct primaries, and the direct election of senators---and none produce detectable shifts in who reaches Congress. Our results document a Congress drawn from the most fortunate families in American society in every cohort we observe. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Does family history matter for policy making in democracies? Linking members of Congress (MCs) to the census, we observe countries of birth for members, their parents, and their grandparents, allowing us to measure ancestry for the politicians in office when U.S. immigration policy changed dramatically, from closing the border in the 1920s to reshaping admittance criteria in the 1960s. We find that legislators descended from immigrant parents or grandparents support more permissive immigration legislation. They are also less likely to speak negatively about immigration in speeches before Congress. A regression discontinuity design analyzing close elections, which addresses district-level selection and holds district composition constant, confirms our results on roll call voting and speech. Efforts to account for selection into immigration—such as comparing international immigrants to domestic migrants and exploiting variation in restrictive legislation targeting specific regions of origin—further confirm the relationship between family immigration experience and more permissive stances on immigration policy. We then explore mechanisms, finding support for in-group identity in connecting family history with policy making. MCs name their children in ways that express immigrant identity, and immigrant-descended MCs discuss immigration using more personal frames, emphasizing family over economic considerations. Our findings illustrate the important role of personal background in legislative behavior in democratic societies, even on major and controversial topics like immigration, and suggest how experiences transmitted from previous generations can inform lawmakers’ views.

Motivated by the Generation-Skipping Transfer Tax (GSTT) in the United States, we examine how varying estate tax rates by the heir’s age affects welfare. Methodologically, we introduce a parsimonious constant elasticity of substitution (CES) bequest utility that is markedly more tractable than the altruistic specifications commonly used in the literature, delivering closed-form optimal rules and transparent parameterization. Using this new framework, we provide a proof of concept showing how transfers from older to younger generations can enhance equilibrium welfare in a dynamically efficient economy à la Samuelson (1975). We embed the tractable bequest utility in a two-period overlapping-generations model with age-dependent estate tax schedules. Numerical exercises—parameterized to the fact that estate tax revenue is small relative to labor income taxation—indicate that lowering the tax rate on bequests to younger heirs (grandchildren) relative to older heirs (adult children) raises the present value of lifetime resources and overall welfare, effectively reversing the logic of the current GSTT. The findings highlight a practical avenue for implementing a “reverse social security” transfer from old to young that can improve welfare in dynamically efficient economies.

AT&T was the largest U.S. firm for most of the 20th century. Telephone operators once comprised more than 50% of its workforce, but in the late 1910s, it initiated a decades-long process of automating telephone operation with mechanical call switching—a technology invented in the 1880s. We study what drove AT&T to do so and why it took nearly a century. Interdependencies between call switching and nearly every other activity in AT&T’s business presented obstacles to change: Telephone operators were the fulcrum of a complex production system that had developed around them, and automation only began after the firm and new technology were adapted to work together. Even then, automatic switching was only profitable in larger markets—hence, diffusion expanded when the technology improved or service areas grew. The example suggests even narrowly defined tasks can be difficult to automate if they interact with many others. This paper was accepted by Joshua Gans, business strategy. Funding: The authors thank the Duke University Fuqua School of Business and Harvard Business School Division of Research and Faculty Development for financial support. Supplemental Material: The online appendices and data files are available at https://doi.org/10.1287/mnsc.2022.01760 .

Time-inconsistent preferences, which are modeled by relative discount functions, are a common explanation for the empirical finding that lifecycle profiles of household consumption are typically hump-shaped rather than monotonic. More precisely, time-inconsistent preferences that are present-biased often generate a hump-shaped consumption profile over the lifecycle. We develop a general framework for understanding present bias in consumption through a future weighting factor that perturbs the discount factor of utility at future periods away from exponential discounting. Using our framework we derive necessary and sufficient conditions on the future weighting factors for the log consumption profile to be locally concave. We find that these conditions, which are necessary for the consumption profile to be hump-shaped, are stronger than just assuming a present bias. Furthermore, we explore the conditions under which the consumption profile determined in the first period of life Pareto dominates the realized consumption profile. Lastly, we explore the interconnections between these two sets of conditions, elucidating the linkages between the determinants of hump-shaped consumption profiles and the conditions necessary for the initial consumption path to achieve Pareto dominance.

In the early 1900s, telephone operation was among the most common jobs for American women, and telephone operators were ubiquitous. Between 1920 and 1940, AT&T undertook one of the largest automation investments in modern history, replacing operators with mechanical switching technology in over half of the U.S. telephone network. Using variation across U.S. cities in the timing of adoption, we study how this wave of automation affected the labor market for young women. Although automation eliminated most of these jobs, it did not reduce future cohorts' overall employment: the decline in operators was counteracted by employment growth in middle-skill clerical jobs and lower-skill service jobs, including new categories of work. Using a new genealogy-based census-linking method, we show that incumbent telephone operators were most affected, and a decade later more likely to be in lower-paying occupations or no longer working.

In a continuous-time lifecycle model with log utility and a general time-inconsistent discount function, we establish necessary and sufficient conditions under which commitment to the initial plan will increase the realized objective function for all future selves. We also establish necessary and sufficient conditions under which the log consumption profile over the lifecycle is locally concave. Empirically, the lifecycle profile of average household consumption is hump-shaped and thus concave at the peak, so this result is useful for identifying what discount functions are consistent with data. We express these conditions in terms of what we call the future weighting factor, which measures the deviation of the discount function from an (arbitrarily chosen) exponential discount function. Both the welfare and concavity conditions depend on how the marginal future weighting factor compares to a weighted average of marginal future weighting factors. If the marginal future weighting factor is sufficiently high at a given delay, i.e. if the discount function decays sufficiently more slowly than the chosen exponential at that delay, this implies that log consumption is concave at a point on the lifecycle profile and there will be a positive contribution to commitment utility relative to the realized utility for one of the selves.

Although bracket pools in the NCAA Men’s Basketball Tournament are a game, in practice most players do not compete strategically. Instead, they are more likely to choose brackets as though they are playing a lottery. When faced with such unsophisticated opponents, the game simplifies to a finance problem where you must choose an optimal portfolio of brackets. The brackets that pay the highest return are modal brackets in which higher seeds are always picked to beat lower seeds until the Final Four. When playing multiple brackets, the optimal strategy is to diversify across possible winners in the first round of the Final Four. We have found both theoretically and empirically that enormous returns can be earned with this approach.

It is a truism of neoclassical economics that a sufficiently high savings rate will be bad if it is dynamically inefficient. Here we consider a Solow model in which households follow a savings rate dictated by a social planner. Ideally, the social planner would instruct households to save at the Golden Rule savings rate that maximizes consumption per capita, but this advice needs to be adjusted when the social planner has imperfect control over how much households actually save. Analogous to what happens with precautionary saving at the household level, in this case, the social planner will maximize social welfare by targeting a savings rate higher than the Golden Rule. Precautionary social planning then yields a dynamically inefficient allocation, albeit with greater stability of consumption, which is often a stated priority of social planners.

Using General Sherman's March through Georgia, South Carolina, and North Carolina during the Civil War, we study the effect of capital destruction on medium-and long-run local economic activ-ity, and the role of financial markets in recovery. We show that the march's capital destruction led to a large contraction in agricul-tural investment, farming asset prices, and manufacturing activ-ity compared to neighboring counties. Elements of the decline in agriculture persisted through 1920. Exploiting variation in local access to antebellum credit, we argue that the underdevelop-ment of financial markets played a role in weakening the recovery. (JEL N21, N51, N52, N61, N91, N92, Q10)

The recent digitization of complete count census data is an extraordinary opportunity for social scientists to create large longitudinal datasets by linking individuals from one census to another or from other sources to the census. We evaluate different automated methods for record linkage, performing a series of comparisons across methods and against hand linking. We have three main findings that lead us to conclude that automated methods perform well. First, a number of automated methods generate very low (less than 5 percent) false positive rates. The automated methods trace out a frontier illustrating the trade-off between the false positive rate and the (true) match rate. Relative to more conservative automated algorithms, humans tend to link more observations but at a cost of higher rates of false positives. Second, when human linkers and algorithms use the same linking variables, there is relatively little disagreement between them. Third, across a number of plausible analyses, coefficient estimates and parameters of interest are very similar when using linked samples based on each of the different automated methods. We provide code and Stata commands to implement the various automated methods. (JEL C81, C83, N01, N31, N32)

Does contact across social groups influence sociopolitical behavior? This question is among the most studied in the social sciences with deep implications for the harmony of diverse societies. Yet, despite a voluminous body of scholarship, evidence around this question is limited to cross-sectional surveys that only measure short-term consequences of contact or to panel surveys with small samples covering short time periods. Using advances in machine learning that enable large-scale linkages across datasets, we examine the long-term determinants of sociopolitical behavior through an unprecedented individual-level analysis linking contemporary political records to the 1940 U.S. Census. These linked data allow us to measure the exact residential context of nearly every person in the United States in 1940 and, for men, connect this with the political behavior of those still alive over 70 years later. We find that, among white Americans, early-life exposure to black neighbors predicts Democratic partisanship over 70 years later.

Sociology, 1156 Social Science Building, 267 19 Ave S., Minneapolis, MN 55455 (email: ewf@umn.edu). Support for this work was provided by the Minnesota Population Center at the University of Minnesota (P2C HD041023) and the FeslerLampert Chair in Aging Studies at the University of Minnesota. Did the Urban Mortality Penalty Disappear? Revisiting the Early Twentieth Century’s Urban-Rural Mortality Convergence

We explored two measures of inequality that described the full income distribution in cities. One measure is an income gini based on family incomes in 1929 for 33 cities and in 1933 for up to 48 cities in 1933 were spread throughout the country. We also estimated gini coefficients that made use of contract rents for renters and implicit rents for home owners for up to 955 cities throughout the country. We were able to expand to all counties when looking at a top-end inequality measure, the number of taxpayers per family. All three measures varied substantially across the country. We show the correlations between the various measures and also estimate the relationship between the measures and various relief programs developed by governments at all levels during the period.

Telephone operation, one of the most common jobs for young American women in the early 1900s, provided hundreds of thousands of female workers a pathway into the labor force. Between 1920 and 1940, AT\u0026T adopted mechanical switching technology in more than half of the U.S. telephone network, replacing manual operation. We show that although automation eliminated most of these jobs, it did not affect future cohorts\u0027 overall employment: the decline in demand for operators was counteracted by growth in both middle-skill jobs like secretarial work and lower-skill service jobs, which absorbed future generations. Using a new genealogy-based census linking method, we show that incumbent telephone operators were most impacted by automation, and a decade later were more likely to be in lower-paying occupations or have left the labor force entirely.

In a canonical monetary policy model in which the central bank learns about underlying fundamentals by estimating the parameters of a Phillips curve, we show that the bank's loss function is asymmetric such that parameter overestimates may be more or less costly than underestimates, creating a precautionary motive in estimation. This motive suggests the use of a more efficient variance-adjusted least-squares estimator for learning about fundamentals. Informed by this "precautionary learning" the central bank sets low inflation targets, and the economy can settle near a Ramsey equilibrium.

Telephone operation, one of the most common jobs for young American women in the early 1900s, provided hundreds of thousands of female workers a pathway into the labor force. Between 1920 and 1940, AT&T adopted mechanical switching technology in more than half of the U.S. telephone network, replacing manual operation. We show that although automation eliminated most of these jobs, it did not affect future cohorts' overall employment: the decline in demand for operators was counteracted by growth in both middle-skill jobs like secretarial work and lower-skill service jobs, which absorbed future generations. Using a new genealogy-based census linking method, we show that incumbent telephone operators were most impacted by automation, and a decade later were more likely to be in lower-paying occupations or have left the labor force entirely.

How do coercive societies respond to negative economic shocks?We explore this question in the early 20th-Century United States South.Since before the nation's founding, cotton cultivation formed the politics and institutions in the South, including the development of slavery, the lack of democratic institutions, and intergroup relations between whites and blacks.We leverage the natural experiment generated by the boll weevil infestation from 1892-1922, which disrupted cotton production in the region.Panel difference-in-differences results provide evidence that Southern society became less violent and repressive in response to this shock with fewer lynchings and less Confederate monument construction.Cross-sectional results leveraging spatial variation in the infestation and historical cotton specialization show that affected counties had less KKK activity, higher non-white voter registration, and were less likely to experience contentious politics in the form of protests during the 1960s.To assess mechanisms, we show that the reductions in coercion were responses to African American out-migration.Even in a context of antidemocratic institutions, ordinary people can retain political power through the ability to ``vote with their feet.''

We link future members of Congress to the de-anonymized 1940 census to offer a uniquely detailed analysis of how economically unrepresentative American politicians were in the 20th century, and why.Future members under the age of 18 in 1940 grew up in households with parents who earned more than twice as much as the population average and who were more than 6 times as likely as the general population to hold college degrees.However, compared to siblings who did not become politicians, future members of Congress between the ages of 18 and 40 in 1940 were higher-earners and more educated, indicating that socioeconomic background alone does not explain the differences between politicians and non-politicians.Examining a smaller sample of candidates that includes non-winners, we find that the candidate pool is much higher-earning and more educated than the general population.At the same time, among the candidate pool, elections advantage candidates with higher earnings ability and education.We conclude that barriers to entry likely deter a more economically representative candidate pool, but that electoral advantages for more-educated individuals with more private-sector success also play an important role.