FEDS Paper: Costly Misdemeanours: Labour Market Effects of Low-Level Drink-Driving Violations

Kabir Dasgupta, Marco Francesconi, Jonathan James Linda Kirkpatrick, and Alexander PlumThis paper estimates the causal effect of a drink-driving conviction on labour market outcomes. Using linked administrative data and variation in the timing of first convictions in a staggered difference-in-differences design, we compare individuals before and after conviction to those convicted later. We find employment falls by 6–7 percentage points and monthly earnings decline by around 2 percent.

IFDP Paper: Trade Deflection: The Spillover Effects of U.S. Tariffs on Import Prices in Bystander Countries

Sofie Grouws, Giulia Lo Forte, Sharon Jeon, and Justin PierceEven as tariffs have reduced U.S. imports from China, Chinese exports have continued to expand globally. Yet despite the relevance of this redirected trade for firms and consumers, globally, there is little systematic evidence on how import prices have responded in "bystander" countries. We show that Chinese products targeted by U.S.

IFDP Paper: Who Built the Service Economy?

Immo Schott and Vladimir SmirnyaginWe show empirically that the reallocation of employment from manufacturing to services in the U.S. was driven by large incumbent service firms, which expanded by opening additional establishments. Guided by these facts, we develop a two-sector general equilibrium model of firm dynamics in which incumbent firms can scale by operating multiple establishments.

US national debt keeps rising after years of tax cuts – and this will make policymaking all the more difficult

A series of tax cuts since President George W. Bush's 2001 legislation have helped push the national debt to US$32 trillion. AP Photo/Ron EdmondsDemocrats, set to take over Congress with robust majorities, will face at least one expensive obstacle to their policy agenda: a national debt that now equals the size of the U.S. economy.

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