At the end of every year, culture critics get to compile best of the year lists. But why should they have all the fun? Just like films and albums, economics research deserves a little reflection. To identify the research that mattered most in 2017, Quartz decided to call in some help, enlisting some of the greatest minds in economics today, including two Nobel prize winners.
We asked these economists which study they thought was the most important or intriguing of 2017, along with their thoughts on the research. The chosen studies capture the concerns of 2017, with subjects ranging from opioids to gender discrimination to globalization.
Here are their picks:
Main finding: When women are discussed on the main economics discussion forum, the conversation moves from the professional to the personal.
Nominating economist: Susan Athey, Stanford University
Specialization: The economics of technology
Why? “Alice Wu wrote a very provocative paper about misogyny on an anonymous website for economists frequented by tens of thousands of people. It led to policy intervention by the American Economics Association.”
Main finding: Even with generous subsidies, low-income people are still unlikely to buy health insurance.
Nominating economist: David Autor, Massachusetts Institute of Technology
Specialization: Globalization and labor markets
Why? No explanation given
Main finding: Managers are biased negatively against minority workers, and this, in turn, makes the minority workers perform worse.
Nominating economist: Raj Chetty, Stanford University
Specialization: Public economics and equality of opportunity
Why? “The recent work of Harvard’s Amanda Pallais is very interesting, as it addresses various issues underlying racial discrimination and gender gaps that are important from a social perspective but not well understood. Pallais and her collaborators study the dynamics that underlie discrimination and show that there is somewhat of a self-fulfilling prophecy: Certain managers have negative expectations about how minority employees will perform and in response those workers have worse performance when randomly paired with those managers. While many authors have noted the potential importance of discrimination, it has been difficult to uncover the mechanisms underlying discriminatory practices, which is a key step in figuring out how to reduce them.”
Main finding: Living standards may be growing faster than GDP growth.
Nominating economist: Diane Coyle, University of Manchester
Specialization: Economic statistics and the digital economy
Why? “This paper tries to formalize the intuition that there is a growing gap between the standard measure of GDP, capturing economic activity, and true economic welfare and to draw out some of the implications.”
Main finding: The World Bank’s $1-a-day poverty line inadequately deals with local context, and a better measure can be derived through more complicated math.
Nominating economist: Angus Deaton, Princeton University, winner of the 2015 Nobel prize in economics
Specialization: Economic development and poverty measurement
Why? “Bob Allen’s breakthrough paper shows a way ahead in a long-standing intractable problem of how to construct poverty lines that account for needs as well as prices. The World Bank’s global poverty count uses a single global poverty line that is adjusted for different price levels in different countries, but that takes no account of differences in needs across countries, for example between cold places and warm places. Allen shows that a linear programming procedure, long thought not to work, does much better than previously thought. And while this paper is certainly not the final word, and can be challenged in many respects, it opens up a new set of possibilities in an area that has seen little progress for a long time.”
Main finding: Decriminalizing sex work makes it safer and more common.
Nominating economist: Jennifer Doleac, University of Virgina
Specialization: Criminal justice and public policy
Why? “This paper uses an unusual natural experiment in Rhode Island to measure the effect of decriminalizing indoor prostitution on public health, and the findings will surprise many… When indoor prostitution suddenly became legal, reported rape offenses fell by 30% and female gonorrhea incidence fell by over 40%. Perhaps it’s time to rethink our current policies in this area.” [Indoor prostitution includes brothel workers and call girls. It does not include street solicitors.]
The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Project
Main finding: Poor kids who grow up in rich neighborhoods do a lot better than poor kids who grow up in poor ones.
Nominating economist: Claudia Goldin, Harvard University
Specialization: Economic history and labor economics
Why? “The authors reevaluate the well-known Moving to Opportunity (MTO) experiment [a program that offered to families with children that allowed them to move from high to low poverty neighborhoods]. They show that there were large and significant long-run effects on children that could not be adequately measured when the children were young… [T]his state-of-the-art research uses income tax data to find the causal impact on the children who were raised in low-poverty neighborhoods.
The project addresses how we can improve neighborhood environments for disadvantaged youth. The short-term solution is to provide targeted housing vouchers (at birth or just after) conditional on moving to better (e.g. mixed-income) areas. The MTO experimental vouchers increased the present discounted value of earnings by $100K for children who moved at young ages. In terms of cost, the MTO experimental vouchers did not change the cost of housing for those in public housing. The increased cost was helping those with vouchers find housing in low-poverty areas. Most important is that the move increased tax revenue substantially. Therefore, taxpayers may ultimately gain from the investment. MTO was a win-win policy.”
Main finding: Better trained doctors mean fewer opioid related deaths.
Nominating economist: Alan Krueger, Princeton University
Specialization: Labor economics
Why? “The study finds that doctors trained at the United States’ lowest-ranked medical schools write more opioid prescriptions than doctors trained at the highest-ranked schools. Their results suggest that better training for physicians, especially general practitioners, would help curb the nation’s opioid epidemic. Their results imply that the US would have had 56.5 percent fewer opioid prescriptions and 8.5 percent fewer overdose deaths if all general practitioners had prescribed opioids at the same rate as those from the top-ranked school, which was Harvard.”
Main finding: After a bad outcome, female surgeon’s referrals went down much more than male surgeons.
Nominating economist: Sendhil Mullainathan, Harvard University
Specialization: Behavioral economics
Why? “The most often cited gender bias number is 79 cents; there’s good reasons to quibble with that number. But Ms. Sarsons’ impressive work shows how powerful and subtle gender bias really can be.”
Main finding: The average worker does not value an Uber-like ability to set their own schedule.
Nominating economist: Emily Oster, Brown University
Specialization: Health economics and research methodology
Why? “This paper looks at a question increasingly important in the current labor market: How do people value flexible work arrangements? The authors have an incredibly neat approach, using actual worker hiring to generate causal estimates of how workers value various employment setups.”
The aggregate and disttributional effects of financial globalization: evidence from macro and sectoral data
Main finding: Foreign finance has led to more inequality.
Nominating economist: Dani Rodrik, Harvard University
Specialization: Globalization and economic development
Why? “In brief, opening up to foreign finance (“financial globalization”) produces limited gains to aggregate output while generating significant increases in income inequality (a higher share of top incomes, a lower labor share, etc.). This paper’s conclusions are significant as the authors are researchers at the International Monetary Fund, which aggressively pushed for financial globalization until recently.”
Main finding: Preschool programs targeted at the poor don’t work nearly as well as universal pre-school programs.
Nominating economist: Diane Schanzenbach, Northwestern University
Specialization: Poverty and public policy
Why? “This is the paper from the last year that has most changed my mind about something that I thought I knew about. Cascio looks at states with universal vs. targeted preschool programs. I had been a proponent of targeted programs, because so many kids who go to universal programs would have gone [to a paid program] anyway, and so offering them a slot in a universal program drives up the public costs of the program, but doesn’t change whether the child gets preschool. Cascio’s paper shows that the benefits in terms of student outcomes are all coming only from the states with universal programs, not the targeted ones. I think this means we have to support universal pre-k programs, and the large price tags that go along with them.”
Main finding: Shocks to the economy in certain sectors can have larger effects on the entire economy than previously thought.
Nominating economist: Jean Tirole, Toulouse School of Economics, winner of the 2014 Nobel prize in economics
Specialization: Industrial organization
Why? “Baqaee and Farhi open up the black box of aggregate production by modeling the network linkages between firms and sectors, and demonstrate the emergence of important nonlinearities. This discovery has far-ranging macroeconomic implications, from the microeconomic origins of business cycles to the identification of key sectors with a disproportionate influence on the overall economy. For example, it leads to a radical revaluation, by a full factor of four, of the macroeconomic impact of the 1970s oil shocks. This opens up a fascinating research direction to build a more realistic macroeconomics, from the grounds up, with realistic microeconomic foundations.”
Comments have been lightly edited and/or condensed.