What should urban transportation systems be trying to achieve? Most government officials have one goal only, which is to reduce congestion. They rely on engineering models and passenger tallies to estimate the immediate effects of a policy change—without necessarily taking into account all the behavioral adjustments that might eventually occur. And so additional highway lanes quickly fill up again due to “induced demand.” The total number of rides per day may increase, for example, but who rides is hardly ever mentioned. What would a more comprehensive approach look like? Economists often find it useful to imagine an ideal social planner. Specifically, how would such a czar set public transportation prices, offerings, and fleet sizes so that—when everyone from commuters to ride-share companies make their own best decisions—the resulting trips and trip durations maximize society’s total welfare after netting out costs of all kinds including externalities due to environmental damage, etc.? Even if it seems like a tall order, economists who study industrial organization naturally think about transportation in terms of spatial equilibrium models like this. Under the leadership of Milena Almagro, the researchers have been particularly successful so far at compiling and combining remarkable datasets. These include cell phone records from entire metropolitan areas. Besides travel routes and durations, they are also inferring information about travelers’ home and work locations, income, and other demographic details as well as estimates of environmental impacts, equity considerations, and other externalities. Based on such models and datasets, the team will dive into four deep research questions. They aim to characterize: 1) Optimal mixes of transportation modes, pricing strategies, and service levels; 2) Where expanding public transportation makes sense and where it does not; 3) The potential role of public transport that is “on-demand” rather than scheduled; 4) Gains due to transportation policy coordination across geographical jurisdictions. All will require the analysis of counterfactual scenarios, cross-subsidies, and other methodological challenges that this team is ready to overcome.

Suppose you want to address the critical shortage of caregivers for children. According to the U.S. Bureau of Labor Statistics, childcare workers currently earn hourly wages ($14.22 on average) that are even lower than those of pet caretakers or parking attendants (over $15 each). So part of almost any strategy would be to increase their salaries. But by how much? To formulate an appropriate policy, you would want to know more about the market for childcare workers—especially about the responsiveness of labor supply to changes in wage rates. To measure such responsiveness, economists like to talk about “elasticity.” Formally, it is the percentage change of one variable per percent change in the other. Assuming, for simplicity, that the labor supply curve looks like a line as a function of wage rate, it is easy to compute the elasticity we need from the slope of that line. And to determine that slope, all we need are two points on the line. One of those can be the current market equilibrium, i.e., where supply equals demand. In fact, the only points you ever get to observe are where the supply curve and the demand curve intersect. So to find a second point on the line, you would have to look for a situation that causes employers’ demand for childcare workers to shift. The big problem, though, is that anything that shifts demand is likely to shift supply as well. Then the new equilibrium will not even lie on the original line whose slope you wanted to find. The upshot is that elasticities, though marvelously useful, can be devilishly hard to estimate. That is why, facing proposed legislation it must evaluate, the Congressional Budget Office specifically published a call to researchers for help with estimating the elasticity of labor supply among childcare workers. Aaron Sojourner is stepping up to meet this challenge. Sojourner is organizing three different teams, methods, and data sources that will each help estimate elasticities in different settings he has identified where demand has shifted without necessarily changing the supply curve by much. These include places where: 1) a large new plant or facility opened that attracts jobseekers who were previously minding their children at home instead; 2) a state (e.g., New York or Massachusetts) offered extra COVID relief funds to childcare facilities with more than a certain number of caregivers; 3) a state or city (e.g., New York) rolled out universal Pre-Kindergarten programs that must be staffed quickly. The labor market in each such setting has its own intricacies, interactions, and idiosyncrasies—such as job requirements and quality—that the research teams will also take into account. But the three studies, taken together, will provide much better and more useful estimates of how the supply of caregivers responds to wage changes.  As the saying goes, “Economists agree on everything but the elasticities.” Empirical evidence about those numbers in the context of caregiving is precisely what this project will supply.

This grant supports an effort by the University of Southern California Center for Enrollment Research, Policy, and Practice (CERPP)—in partnership with the American Association for the Advancement of Science and EducationCounsel—to develop an equity-minded, law-attentive organizational learning series. The series will support institutions of higher education as they continue to advance diversity, equity, and inclusion in their respective communities in light of evolving legal and policy environments. Project activities center on three key components. First, the team will create 8-10 educational videos (10-15 minutes in length) that provide digestible summaries of key legal, policy, and research concepts pertaining to advancing diversity, equity, and inclusion in legally sustainable ways. Second, the team will host a webinar series featuring a robust, interactive curriculum for teams of campus stakeholders to engage in shared learning, facilitated dialogue, and action planning on program design. While this webinar series will be live and interactive, key content will be recorded and made available as on-demand resources. Third, the project will convene 5-7 teams of campus stakeholders, including legal counsel, senior leadership (i.e., provost), and other policymaking and decision-making positions (i.e., deans) to address a specific problem of practice. Participants will be offered additional technical assistance following the convening, including correspondence and consultations with experts who can provide insight on equity-minded, law-attentive practice, managing the change process, and interpreting data/research. The project promises to provide both high-level information and hands-on engagement to help educators effectively navigate the increasingly challenging legal and policy landscape around diversity, equity, and inclusion in higher education.

This grant provides funding for the Scientific Research Partnerships (SRP) program, an initiative at The Metropolitan Museum of Art that seeks to offer other museums, libraries, and other cultural heritage institutions access to expert scientific researchers and state-of-the-art instruments housed at The Met. The Met’s scientific activities are led by Marco Leona, the David H. Koch Scientist in Charge, who heads a small team focused on the science of art conservation. Anchored in material science and chemistry, conservation science applies contemporary imaging and analytic techniques to questions of the history of artistic practice. Research questions vary from project to project, with recent projects ranging from what might be learned from the coatings of Egyptian funerary objects to the discovery of a painted-over King Charles Cavalier Spaniel in one of Picasso’s early works.  The SRP works to build partnerships that put these scientific capabilities at the service of other institutions.  To date, the SRP network has 19 such partnerships, including with the New York Municipal Archives, the American Folk Art Museum, and the Pratt Institute. Grant funds will support one Associate Research Scientist and two Research Assistant positions, as well as maintenance fees for some of The Met’s scientific equipment. A particular focus for the next three years will be the expansion of partnerships to less-well-resourced institutions that engage with different communities across the city.

Compared with the United States, it is noticeably easier in Europe, Japan, and some other countries to get people or products from one place to another. Speculation about why is easy. Serious diagnoses and practical remedies are much harder since these should rely on models, data, and analysis. Recently organized to address such challenges, the Transportation Infrastructure Procurement and Financing Project (TIPFP) is a research effort based at NBER that is mobilizing a variety of experts, institutions, and approaches. TIPFP is laser-focused on the problem of transportation infrastructure. Roads, bridges, ports, and transit systems cost trillions of dollars annually and play a critical role both in the U.S. economy and in the world’s trading network. TIPFP leaders Ed Glaeser of Harvard and Jim Poterba of MIT plan to investigate three specific questions that have emerged as having the greatest promise and priority: Are we choosing the right transportation projects to fund? Cost-benefit analysis (CBA) of some sort always accompanies such decisions, but it is often perfunctory and incomplete. Infrastructure projects require large up-front fixed costs and deliver benefits over long periods of time. So there can be significant uncertainty about the rate of return on new projects, not to mention sensitivity to assumed discount rates and long-term growth rates. These are, moreover, just complications when evaluating one project at a time. What people really care about is how well the whole transportation system performs. TIPFP will provide decision-makers with better tools, especially since one of the defining properties of infrastructure is that it is very hard to change once built. Why do such infrastructure projects cost so much? By many estimates, similar transportation projects are three times as expensive in the United States as in other countries. Costs also vary dramatically from one U.S. state to another, as do procurement processes, renegotiation procedures, and regulations of all sorts. TIPFP will systematically compile and compare data about all these variations to inform its analyses. One hypothesis to test is that “state capacity” really matters, i.e., the technocratic expertise that government officials can bring to bear when managing how construction contractors approach everything from auction bidding through project completion. How should we fund transportation infrastructure projects? Gasoline taxes currently contribute over $40 billion annually to the federal government’s Highway Trust Fund, for example. These contributions will dry up as Electric Vehicles (EVs) become more prevalent. Other sources have been proposed, but perhaps much more important is the possibility of also instituting new rules for determining how those new funds will be distributed. Current mechanisms for subsidizing projects provide poor incentives to control costs or maximize benefits. Again, TIPFP will compile and compare information about alternative allocation methods, including case studies from other countries for publication in a conference volume.

The Yale economist and 1981 Nobel laureate James Tobin is often quoted as saying, “The most important decisions a scholar makes are what problems to work on.”  Rather than trying to fill gaps in the literature, he continued, “The best economists have taken their subjects from the world around them.” On this view, perhaps academics seeking policy relevance need to reformulate and reframe the problems they work on with the real world more in mind?  That belief animates Tim Bresnahan, an economics professor emeritus at Stanford, and the team of other experts he leads.  Their goal is not just to inspire dozens more papers about the productivity (i.e., output per input) of the U.S. economy, but rather to inspire a new generation of researchers who study productivity questions in ways that are truly policy-relevant. Specifically, when legislation comes up that could enhance U.S. productivity or, for that matter, when legislation is proposed on nearly any topic, discussions in Congress that determine its fate depend far less on predicted consequences for the economy as a whole than on predicted consequences for the federal budget deficit.  The Congressional Budget Office (CBO) is a strictly nonpartisan and highly respected group of technocrats charged with “scoring” proposed bills in terms of their likely effect on federal revenues and expenditures. In contrast, academic economists are almost always concerned with policy impacts on growth, labor, equity, and the economy in general rather than on the budget deficit in particular.  The importance of CBO scoring has, to date, been largely ignored.  In concert with other offices like the Joint Committee on Taxation (JCT), these ratings are generated according to Congressionally mandated guidelines that—for the sake of consistency and practicality—oversimplify many issues.  They rarely, for example, consider any time frame longer than ten years!  CBO is not prohibited from also conducting more sophisticated analyses, but is severely constrained by a lack of evidence, models, and time.  Hence their recent appeal to academic researchers for help on specific topics that was published in the influential Journal of Economic Perspectives. Three of the challenges called out in the CBO’s “request for research” are estimating net returns on R&D investments, on immigration practices, and on permitting reforms.  In each case, the significant costs and benefits of particular policies are potentially much longer term than Congress usually takes into account.  These topics also intersect well with Sloan priorities: the ROI on research and development is a critical question in the economics of science; immigrant contributions are a critical factor in regional economic development; and construction permitting is a critical problem in creating transportation infrastructure. Over the next two years, this grant will support 24 early-career investigators working in these three areas as “NBER Productivity Fellows.”  They will benefit from mentoring, community engagement, connections with government officials and datasets, as well as, in the case of graduate students, modest stipends to free them from other obligations.  The grant will also fund a workshop in Washington for researchers and practitioners working on U.S. productivity enhancements in policy-relevant, technocratic, nonpartisan, and real-world ways.