This paper investigates the demand for precautionary liquidity versus commitment contracts among participants in employer-sponsored retirement saving programs in France. All firms in the sample offer medium-term investments; they cannot be accessed for five years. Some also offer long-term (LT) investments, which cannot be accessed until retirement. If a plan offers LT investments, its auto-enrollment default must include them. Workers who experience changes in access to LT investments as a result of job changes are about 6 percentage points less likely to take up the plan default option, and 3 percentage points less likely to participate in the plan at all, when exposed to LT investments. We intepret this as a preference for precautionary liquidity, but two-thirds of active choosers still allocate some contributions, although less than the default, to LT investments, consistent with demand for partial commitment.

The American Economic Association awarded the 2025 John Bates Clark Medal to Stefanie Stantcheva of Harvard University. Her research ranges widely in the field of public economic. It includes theoretical contributions to optimal income taxation, empirical contributions to the study of how income tax rates across countries and states affect the mobility of inventors and the level of innovation, and contributions in the development and execution of on-line surveys to measure respondents' beliefs about economic primitives, such as the distribution of income or the rate of inflation, and the way these beliefs influence policy preferences. She has demonstrated that randomized controlled trials can be embedded within on-line surveys and used to the way informational interventions and other treatments affect economic beliefs and policy preferences.

This paper catalogues policies that have been deployed by jurisdictions seeking to mitigate the effects of tax competition.There are many instruments in this policy arsenal, since the tax base associated with a particular tax instrument may be affected by multiple policy choices, including some such as capital controls and development incentives that are outside the traditional realm of tax policy.This paper describes sixteen instruments that both federal and sub-federal governments have adopted in an effort to limit tax competition.It classifies them into three groups: those that can be pursued unilaterally, those that require bilateral or multilateral agreement, and those that require action by an external actor such as an overarching government.It also discusses the set of economic responses that are relevant to the evaluation of these policies, and then summarizes new evidence on the impact of a subset of these policy instruments in the United States and several other nations.

This paper documents trends over the last two decades in retirement behavior and retirement income choices of participants in TIAA, a large and mature defined contribution plan. From 2000 and 2018, the average age at which TIAA participants stopped contributing to their accounts, which is a lower bound on their retirement age, rose by 1.2 years for female and 2.0 years for male participants. There is considerable variation in the elapsed time between the time of the last contribution to and the first income draw from plan accounts. Only 40% of participants take an initial income payment within 48 months of their last contribution. Later retirement and lags between retirement and the first retirement income payout led to a growing fraction of participants reaching the required minimum distribution (RMD) age before starting income draws. Between 2000 and 2018, the fraction of first-time income recipients who took no income until their RMD rose from 10% to 52%, while the fraction of these recipients who selected a life-contingent annuitized payout stream declined from 61% to 18%. Among those who began receiving income before age 70, annuitization rates were significantly higher than among those who did so at older ages. Aggregating across all income-receiving beneficiaries at TIAA, not just new income recipients, the proportion with a life annuity as part of their payout strategy fell from 52% in 2008 to 31% in 2018. By comparison, the proportion of all income recipients taking an RMD payment rose from 16% to 29%. About one-fifth of retirees received more than one type of income; the most common pairing was an RMD and a life annuity. In the later years of our sample, the RMD was becoming the de facto default distribution option for newly retired TIAA participants.

Pigouvian taxes and user fees can address environmental externalities and efficiently fund transportation infrastructure, but these policies may place burdens on poorer households. This paper presents new evidence on the distributional consequences of the gasoline tax, bus and light-rail charges, and a vehicle miles traveled (VMT) tax. Gas taxes have become more regressive over time, partially because of environmentally oriented technological change, although the share of expenditures on gas taxes declines with expenditures much less than the share of income spent on gas taxes declines with income. Replacing the gasoline tax with a household-level VMT tax would increase the average tax burden on households in the top income and expenditure deciles, because of their greater use of hybrid-electric and battery-electric vehicles. This progressive shift would be small given current levels of hybrid and electric vehicle ownership, but will be larger in the future if such vehicles continue to be more common among higher- than lower-income households. An expanded commercial VMT would place a larger burden, as a share of expenditures, on lower-income or lower-expenditure households, because better-off households consume more nontradable goods that do not require transportation. User charges for airports, subways, and commuter rail are progressive, and bus fees loom much larger for lower-income households.

Precautionary demand for liquidity manifests itself as a preference for holding assets in an accessible form not because of any current liquidity need but because of a possible future need. We explore such demand by analyzing employer-sponsored retirement saving plans in France, where firms must offer medium-term investment vehicles that cannot be accessed for five years. Some also offer long-term vehicles that cannot be accessed until retirement. Plan take-up is lower when there is a long-term option; more workers opt out of the plan default when it includes one; and when hardship strikes, workers tend to withdraw long-term funds before medium-term funds.

This paper employs administrative data from one of the largest plan providers in France to investigate the role of plan and default characteristics in affecting whether employees participate in the plan and whether they accept its default investment option. The dataset includes information on the saving choices of 680,392 active employees at 1,610 firms. French employers have wide discretion in structuring employee saving plans. All plans must offer medium-term investments, which cannot be accessed for five years. Employers may also offer long-term investments that cannot be accessed until retirement. When plans include a long-term option, participation is lower than when the plan offers only more liquid medium term investments. The presence of a long-term saving option also reduces the take-up of the plan’s default investment allocation, which must include a long-term component. One interpretation of the findings, consistent with the theory of choice overload, is that some employees are unwilling to forego the liquidity of the medium-term option but find it costly to make an active election when they opt out of the default, and therefore choose not to participate in the plan at all.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Estimates the expected present discounted value (EPDV) of future payouts on both immediate and deferred annuities are sensitive to the discount rate used to value future payment streams and assumptions about future mortality rates. This paper illustrates this with respect to annuities that were available in the US retail insurance market in 2020. The spread between the interest rates on Treasury and corporate bonds was high by historical standards as a share of the riskless Treasury yield during much of 2020, making the choice of discount rate more consequential than in the past. The EPDV estimates also depend on whether the rapid but since-attenuated decline in US old-age mortality rates during the 1990s and early 2000s is extrapolated to future decades. The “money’s worth” is the EPDV divided by the annuity’s purchase price. Our central estimates, using discount rates drawn from the corporate BBB yield curve and future mortality rates that combine a Society of Actuaries individual annuitant mortality table with projections of future mortality improvements from the Social Security Administration, suggest money’s worth values for annuities offered to 65-year-old men and women of about 92 cents per premium dollar. Recent Department of Labor rulemaking requires defined contribution plan sponsors to provide participants with estimates of the annuity income stream that their plan balance could purchase. These estimates, like EPDVs, are also sensitive to both prospective rate of return and mortality rate assumptions. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

This paper summarizes economic research on investment in public infrastructure and introduces the findings of several new studies on this topic. It begins with a review of several potential justifications for the public sector’s involvement in building, financing, and operating infrastructure, including limitations of private capital markets, externalities, and the control of natural monopolies. It then describes the conditions that characterize an optimal infrastructure investment program, emphasizing the need to extend project-based microeconomic cost-benefit analysis to incorporate the value of economy-wide macroeconomic and other externalities. It notes the importance of efficient use of infrastructure capital, and discusses three areas -- procurement, project management, and expenditure on externality mitigation – where further research could identify paths to efficiency improvement. It concludes by identifying several trends that have emerged since outbreak of the COVID-19 pandemic that may have long-term effects on the role of both physical and digital infrastructure in the U.S. economy.

Economic growth depends critically on entrepreneurship, which drives the creation of new enterprises and the generation and commercialization of new ideas by start-ups as well as established businesses. New businesses account for an outsize share of new job creation. Two of the distinguishing features of the US economy are its robust rate of business creation, particularly in technology-intensive sectors, and its welldeveloped capital market institutions that support new ventures. A wide range of public policies, ranging from tax incentives for small businesses and their investors to provisions facilitating the transfer of intellectual property from government-funded research to businesses that can commercialize it, also promote entrepreneurial activity. Although the level of entrepreneurial activity has long been a policy focus, recently there has been increased emphasis on who becomes an entrepreneur, with attention to expanding pathways to entrepreneurial sectors as a means of supporting broadly shared prosperity. Economic analysis can identify key trade-offs and quantify the impact of policy-driven incentives on various outcomes. The determinants and consequences of entrepreneurship are the subject of active research in many subfields of economics, including corporate finance, industrial organization, labor, macro, organizational economics, productivity, and publicfinance. Past research has investigated the impact of a host of public programs on the level and direction of entrepreneurship and on the pace of economic growth. This research has also explored which segments of the population benefit from these programs, and how they in turn affect the composition of the entrepreneurial pool.

Martin Feldstein was a remarkable economic scholar, an extraordinary teacher, a fabulous economic and academic administrator, and a dedicated public servant who had a tremendous impact. He played an enormous role in advancing  empirical research in economics and was a mentor to generations of undergraduates and graduate students. Beyond his research and teaching, Feldstein was a transformative figure within economics, through his three decade leadership of the National Bureau of Economic Research. He is going to be very deeply missed.

The COVID-19 pandemic radically and rapidly changed the world, including the world of business economists. Eight NABE members employed in a wide variety of fields discuss how their lives and work were transformed.

Previous articleNext article FreeSeries IntroductionJames PoterbaJames PoterbaPresident and CEO, NBER Search for more articles by this author PDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreEconomic analysis has much to contribute in many spheres of public policy, but the fields of environmental and energy policy stand out for the centrality of economic issues. With regard to the environment, the relative attractiveness of many leading policy alternatives that emerge in the context of climate change and global warming depends on the social discount rate, an economic construct. Economic analysis is essential for judging the potential costs, and for some areas benefits, that may be associated with rising global temperatures, and for assessing the relative merits of abatement and amelioration strategies. A crucial economic insight is that when designing policies to reduce any type of environmental degradation, whether air, water, or noise pollution, it is essential to consider the relative costs of emission reduction at different point sources and to search for least-cost strategies to achieve a given emission target.With regard to energy, current tax and regulatory policies play important roles in affecting the utilization of various fossil fuel and renewable energy sources. The rate of economic growth is one of the primary drivers of aggregate energy demand, both within countries and globally. Public spending on energy research and development and intellectual property rules surrounding new discoveries are likely to be key determinants of the future viability of alternatives to current energy sources.In recognition of the importance of economics to the study of both environmental and energy policy, and with the generous support of the Alfred P. Sloan Foundation, the National Bureau of Economic Research (NBER) is pleased to launch a new annual initiative—the Environmental and Energy Policy and the Economy series—that will encourage leading economic researchers to prepare research papers on current issues in these two fields. The researchers must abide by the NBER’s prohibition on policy recommendations, but they are encouraged to draw on the latest cutting-edge research to distill findings that can affect the policy process. The initiative includes a capstone research meeting in Washington, DC, at which the researchers share their findings with members of the policy and research communities.I am very grateful to Matthew Kotchen of Yale University for leading this new initiative and serving as the inaugural editor of the annual publication that will result from it. James Stock of Harvard University and Catherine Wolfram of the University of California, Berkeley, have generously agreed to serve as coeditors. All three are leading scholars in the fields of environmental and energy economics. Their good judgment in identifying important topics and their high standards in research quality are reflected in the research studies that were commissioned in the initiative’s first year. Those studies are collected in this volume. I also wish to thank Evan Michelson of the Alfred P. Sloan Foundation for his enthusiastic support for launching this initiative, Helena Fitz-Patrick at NBER for her outstanding management of the publication process, and the NBER Conference Department for handling the meeting planning for the inaugural conference with its usual efficiency and good cheer. I look forward to learning from the important research findings that will result from this initiative. Previous articleNext article DetailsFiguresReferencesCited by Environmental and Energy Policy and the Economy Volume 12020 Sponsored by the National Bureau of Economic Research (NBER) Article DOIhttps://doi.org/10.1086/706896 © 2020 by the National Bureau of Economic Research. All rights reserved.PDF download Crossref reports no articles citing this article.

Does significant market power or the presence of large rents affect optimal income taxation, calling for greater redistribution due to tainted gains? Or perhaps less because of an additional wedge that distorts labor effort? Do concerns about inequality have implications for antitrust, regulation, trade, and other policies that influence market power, which contributes to inequality? This article addresses these questions in a model with heterogeneous abilities and hence a concern for distribution, markups, multiple sectors, ownership that is a function of income, allowance for any share of profits to be recoveries of investments (including rent-seeking efforts), endogenous labor supply, and a nonlinear income tax. In this model, proportional markups with no profit dissipation have no effect on the economy, and a policy that reduces a nonproportional markup raises (lowers) welfare when it is higher (lower) than a weighted average of other markups. With proportional (partial or full) profit dissipation, proportional markups are equivalent to a downward shift of the distribution of abilities, and the welfare effect of correcting nonproportional markups associated with nonproportional profit dissipation now depends also on the degree of dissipation and how that is affected by the policy. In all cases, optimal policies maximize consumer plus producer surplus, without regard to a policy’s distributive effects on consumers and profits or how markups and income taxation distort labor effort. Louis Kaplow Harvard University Hauser 322 Cambridge, MA 02138 and NBER meskridge@law.harvard.edu