ASSA 2026 Round-up: Day 3

Yesterday was the third and final day of the 2026 annual meeting of the Allied Social Science Associations, which is organized by the American Economic Association. The 3-day conference, held in Philadelphia this year, features hundreds of sessions covering a wide variety of economics and other social science research. This year, Equitable Growth’s grantee network, Steering Committee, and Research Advisory Board and their research are well-represented throughout the program, featured in many different sessions of the conference.

Below are lightly edited abstracts from some of the papers and presentations that caught the attention of Equitable Growth staff during the second day of this year’s conference, with links to the sessions in which the papers were presented. Equitable Growth also organized two different paper sessions on the third day of the event, one on participation and trends in U.S. social insurance programs and the other on the economics of the clean energy transition.

Want more? Check out our highlights from the first and second days of this year’s conference.

The Macroeconomics of Net Zero

Neil R. Mehrotra, Federal Reserve Bank of Minneapolis

Abstract: This paper examines the macroeconomic cost and implications of transitioning to net-zero emissions. The macroeconomic cost of achieving zero emissions is a combination of lower output due to higher energy prices and higher investment due to more costly technology. Along the transition path, a net-zero target operates as both an anticipated negative productivity shock and a negative capital shock. Thus, for monetary policy, net zero is a negative aggregate demand shock that lowers the natural rate of interest. Using projected technology costs and net-zero modeling scenarios, decarbonization of U.S. electric power generation is estimated to cost less than 0.2 percent of steady state consumption.

Liquid Wealth and Consumption Smoothing of Typical Labor Income Shocks

Peter Ganong, University of Chicago; Damon Jones, University of Chicago; Pascal Noel, University of Chicago

Abstract: We develop a methodology to identify exogenous, transitory, and unpredictable shocks to labor income by combining elements from both the quasi-experimental and more structural approaches in the consumption smoothing literature. We find that household consumption is highly sensitive to monthly labor income shocks. This suggests that temporary income volatility has a large welfare cost. Furthermore, consumption is most sensitive for households with low liquidity and almost unchanged for households with high liquidity. Our findings that consumption is sensitive in a welfare-relevant setting and that there is a steep, precisely estimated liquidity gradient help to distinguish between competing classes of consumption models.

This research was funded in part by Equitable Growth.

Unemployment Insurance Generosity and the Wages of New Hires

Kevin Rinz, Federal Reserve Bank of Cleveland; David N. Wasser, U.S. Census Bureau

Abstract: The federal government made Unemployment Insurance benefits substantially more generous in response to the COVID-19 pandemic, leading some observers to worry that emergency UI programs were reducing labor supply and forcing firms to bid up wages excessively, especially for low-wage jobs. Were they, and did the effects of pandemic UI programs differ from the effects of Unemployment Insurance at more typical levels of generosity? Prior to 2020, we find that increases in UI generosity modestly increased the wages of new hires from unemployment, with larger effects at the bottom of the wage distribution, and reduced hiring rates. New hires from employment and continuously employed workers also experience wage gains due to increases in UI generosity, suggesting that macroeconomic channels are likely important for transmitting wage effects. During and after the pandemic, however, wages were minimally responsive to UI generosity throughout the distribution and for all types of workers, and we find no evidence of effects on hiring.

Occupational Choice and the Intergenerational Mobility of Welfare

Corina Boar, New York University; Danial Lashkari, Federal Reserve Bank of New York

Abstract: How does parental income shape labor market outcomes? Standard measures of intergenerational mobility typically focus on earnings as the main outcome, but parental income
may also influence children’s access to more fulfilling careers. Using U.S. survey data, we
show that children from higher-income families are significantly more likely to select occupations offering greater nonmonetary qualities, such as autonomy, intellectual stimulation, and workplace respect. To explain this pattern, we develop and estimate a model where parental resources allow children to prioritize occupational quality over earnings. When we adjust earnings to compensate for the monetary equivalent of these desirable qualities, intergenerational mobility falls by 15 percent to 35 percent, revealing that traditional income-based measures overstate the equality of opportunity. Finally, we document recent labor market shifts toward higher-quality occupations that raise our compensated measure of intergenerational mobility, suggesting structural changes that may have led to more equal distributions of opportunity.

Who Bears Climate Change Damages? Evidence from the Gig Economy

Anna Papp, Columbia University

Abstract: This paper provides the first causal evidence that gig economy platforms enable consumer adaptation to climate change while shifting climate-related damages to workers. Across diverse markets and climates (the United Kingdom, Germany, France, and Mexico), I leverage detailed transaction data and labor force surveys and exploit exogenous variation in daily maximum temperatures. On hot days relative to moderate days, I find an 8 percent to 16 percent increase in food-delivery expenditures and a similar decline in dine-in restaurant spending, driven primarily by higher-income consumers. On these days, food-delivery workers work 1.7 hours more on average, exposing them to material health risks. Yet I find that their hourly wages do not increase, despite the flexibility of wages in this setting. This response to heat is unique to platform-based work. I show that worker beliefs are the main mechanism: Platform workers believe that declining tasks—particularly during periods of peak demand such as hot days—deprioritizes them for future work. My findings raise broader questions about algorithmic fairness and highlight environmental equity concerns from unequal access to climate adaptation.

The Macroeconomics of Tariff Shocks

Adrien Auclert, Stanford University; Matthew Rognlie, Northwestern University; Ludwig Straub, Harvard University

Abstract: We study the short-run effects of import tariffs on Gross Domestic Product and the trade balance in an open-economy New Keynesian model with intermediate input trade. We find that temporary tariffs cause a recession whenever the import elasticity is below an openness-weighted average of the export elasticity and the intertemporal substitution elasticity. We argue this condition is likely satisfied in practice because durable goods generate great scope for intertemporal substitution and because it is easier to lose competitiveness on the global market than to substitute between home and foreign goods. Unilateral tariffs do tend to improve the trade balance, but when other countries retaliate, the trade balance worsens and the recession deepens. Taking into account the recessionary effect of tariffs dramatically brings down the optimal unilateral tariff level derived in standard trade theory.

A Large-Scale Evaluation of Merger Simulations

Vivek Bhattacharya, Northwestern University; Gastón Illanes, Northwestern University; Avner A. Kreps, Northwestern University; José D. Salas, Northwestern University; David Stillerman, American University

Abstract: We conduct merger simulations for a set of 37 U.S. consumer packaged-goods mergers consummated over a decade, which allows us to directly compare the predictions from these simulations to realizations of prices. We find that the unilateral price effects computed by the merger simulations are poor predictors of the realized changes in prices. This is true both across mergers and across different geographic markets within a merger. We rule out changes in product assortment as a possible explanation for all but a few mergers. In ongoing work, we are expanding our sample and evaluating the performance of more flexible models of demand.

This research was funded in part by Equitable Growth.

Benefits, Barriers, and Strategies for High Road Worker Ownership

Danny Spitzberg, University of California, Berkeley

Abstract: California, the world’s fifth-largest economy, has a unique history of worker ownership and many promising futures. What should we learn from worker-owned firms, high-road employment, and organized labor? How can worker ownership improve job quality, firm performance, and community well-being? This presentation introduces research and analysis for California’s Promote Ownership by Workers for Economic Recovery, or POWER, Act, published in February 2025. This presentation covers the benefits, barriers, and strategies of High Road Worker Ownership, or HRWO, an original, evidence-based framework that unites the most promising elements of high-road employment and worker-owned business models to improve both job quality and firm performance. This presentation focuses on two specific strategies: certifying HRWO businesses and advisors to create new markets and funding umbrella groups that provide back-office services and technology support to multiple businesses. The session will also include a Q&A focus on opportunities for governments, philanthropies, and economic development organizations.

The Macroeconomic Effects of Supply Chain Shocks: Evidence from Global Shipping Disruptions

Diego Känzig, Northwestern University; Ramya Raghavan, Northwestern University

Abstract: This paper studies the macroeconomic consequences of global supply chain disruptions, focusing on maritime choke points critical to international trade. We identify supply chain shocks based on disruptions at key locations such as the Suez and Panama canals, using narrative accounts and high-frequency financial data. These shocks lead to a significant and persistent increase in shipping costs, which, in turn, has substantial economic consequences. Economic activity falls significantly and producer and consumer prices rise persistently. The persistently elevated shipping costs also lead to a sluggish expansion of the world merchant fleet and a significant increase in measures of supply chain shortages, but are not associated with changes in geopolitical risk, consistent with our interpretation of exogenous supply chain disruptions. We use our estimates to discipline a network model of the U.S. economy and estimate key input elasticities.

This research was funded in part by Equitable Growth.