Public finance in the era of the COVID-19 crisis.

The COVID-19 crisis poses new policy challenges and has spurred new research agendas in public economics. In this article, we selectively reflect on how the field of public economics has been shaped by the COVID-19 pandemic and discuss several areas where more research is necessary. We highlight major changes and inequalities in the labor market and K-12 education, in addition to discussing how technological change creates new challenges for the taxation of income and consumption. We discuss various policy responses to these challenges and the role of fiscal federalism in the context of worldwide crises. Finally, we summarize the key issues discussed at the 2021 International Institute of Public Finance Congress and the papers published in this special issue.

Inequality in mortality between Black and White Americans by age, place, and cause and in comparison to Europe, 1990 to 2018.

Although there is a large gap between Black and White American life expectancies, the gap fell 48.9% between 1990 and 2018, mainly due to mortality declines among Black Americans. We examine age-specific mortality trends and racial gaps in life expectancy in high- and low-income US areas and with reference to six European countries. Inequalities in life expectancy are starker in the United States than in Europe. In 1990, White Americans and Europeans in high-income areas had similar overall life expectancy, while life expectancy for White Americans in low-income areas was lower. However, since then, even high-income White Americans have lost ground relative to Europeans. Meanwhile, the gap in life expectancy between Black Americans and Europeans decreased by 8.3%. Black American life expectancy increased more than White American life expectancy in all US areas, but improvements in lower-income areas had the greatest impact on the racial life expectancy gap. The causes that contributed the most to Black Americans' mortality reductions included cancer, homicide, HIV, and causes originating in the fetal or infant period. Life expectancy for both Black and White Americans plateaued or slightly declined after 2012, but this stalling was most evident among Black Americans even prior to the COVID-19 pandemic. If improvements had continued at the 1990 to 2012 rate, the racial gap in life expectancy would have closed by 2036. European life expectancy also stalled after 2014. Still, the comparison with Europe suggests that mortality rates of both Black and White Americans could fall much further across all ages and in both high-income and low-income areas.

Employment effects of healthcare policy: Evidence from the 2007 FDA black box warning on antidepressants.

Public policies aimed at improving health may have indirect effects on outcomes such as education and employment. We study the labor market effects of the US Food and Drug Administration's 2007 expanded black box warning on antidepressants. Our difference-in-differences estimates imply that the warning reduced employment by 6.1 percent among women aged 35-49 with a history of depression. We explore potential mechanisms and find that antidepressant and psychotherapy use among women aged 35-49 decreased after the warning. Our analysis suggests that the 2007 warning reduced US labor force participation by 0.23 percentage points, leading to $11.8 billion in lost wages.

Evidence that prenatal testosterone transfer from male twins reduces the fertility and socioeconomic success of their female co-twins.

During sensitive periods in utero, gonadal steroids help organize biological sex differences in humans and other mammals. In litter-bearing species, chromosomal females passively exposed to prenatal testosterone from male littermates exhibit altered physical and behavioral traits as adults. The consequences of such effects are less well understood in humans, but recent near-doubling of twinning rates in many countries since 1980, secondary to advanced maternal age and increased reliance on in vitro fertilization, means that an increasing subset of females in many populations may be exposed to prenatal testosterone from their male co-twin. Here we use data on all births in Norway (n = 728,842, including 13,800 twins) between 1967 and 1978 to show that females exposed in utero to a male co-twin have a decreased probability of graduating from high school (15.2%), completing college (3.9%), and being married (11.7%), and have lower fertility (5.8%) and life-cycle earnings (8.6%). These relationships remain unchanged among the subsets of 583 and 239 females whose male co-twin died during the first postnatal year and first 28 days of life, respectively, supporting the interpretation that they are due primarily to prenatal exposure rather than to postnatal socialization effects of being raised with a male sibling. Our findings provide empirical evidence, using objectively measured nation-level data, that human females exposed prenatally to a male co-twin experience long-term changes in marriage, fertility, and human capital. These findings support the hypothesis of in utero testosterone transfer between twins, which is likely affecting a small but growing subset of females worldwide.