nep-neu New Economics Papers
on Neuroeconomics
Issue of 2023‒10‒02
three papers chosen by

  1. Cognitive Aging and Labor Share By B. N. Kausik
  2. Income-Based Family Typology and Child Development: Evidence from the UK By Elena Claudia Meroni; Francesca Verga
  3. A Cognitive View of Policing By Oeindrila Dube; Sandy Jo MacArthur; Anuj K. Shah

  1. By: B. N. Kausik
    Abstract: Labor share, the fraction of economic output accrued as wages, is inexplicably declining in industrialized countries. Whilst numerous prior works attempt to explain the decline via economic factors, our novel approach links the decline to biological factors. Specifically, we propose a theoretical macroeconomic model where labor share reflects a dynamic equilibrium between the workforce automating existing outputs, and consumers demanding new output variants that require human labor. Industrialization leads to an aging population, and while cognitive performance is stable in the working years it drops sharply thereafter. Consequently, the declining cognitive performance of aging consumers reduces the demand for new output variants, leading to a decline in labor share. Our model expresses labor share as an algebraic function of median age, and is validated with surprising accuracy on historical data across industrialized economies via non-linear stochastic regression.
    Date: 2023–08
  2. By: Elena Claudia Meroni; Francesca Verga
    Abstract: Our paper contributes to the literature studying how household conditions can influence children’s development, focusing on the type of family model where children grow up, defined on the basis of parental employment status and relative earnings. The traditional “male-breadwinner” model is no longer the only type of family that has been observed throughout recent decades; the “dual-breadwinner” family model is currently widespread across all developed countries and an additional household type is becoming more prevalent: the one in which the woman is the sole or main wage-earner, the so-called “female-breadwinner” arrangement. How do different family models influence the development of children’s skills? We use data from the Millennium Cohort Study (UK) to investigate the association between different typologies of families and cognitive and socio-emotional outcomes, focusing on children aged 7 and 11. We find that, compared to children growing up in male-breadwinner households, only children who have at least one parent who does not work at all are worse off in some socioemotional outcomes. Children growing up in other types of arrangements (equal earners or female-breadwinner) do not differ in their cognitive or socio-emotional outcomes.
    Keywords: Child development, female breadwinner, dual breadwinner, male breadwinner, household employment, Millennium Cohort Study
    JEL: J13 J24 D10
    Date: 2023
  3. By: Oeindrila Dube; Sandy Jo MacArthur; Anuj K. Shah
    Abstract: What causes adverse policing outcomes, such as excessive uses of force and unnecessary arrests? Prevailing explanations focus on problematic officers or deficient regulations and oversight. Here, we introduce a new, overlooked perspective. We suggest that the cognitive demands inherent in policing can undermine officer decision-making. Unless officers are prepared for these demands, they may jump to conclusions too quickly without fully considering alternative ways of seeing a situation. This can lead to adverse policing outcomes. To test this perspective, we created a new training that teaches officers to more deliberately consider different ways of interpreting the situations they encounter. We evaluated this training using a randomized controlled trial with 2, 070 officers from the Chicago Police Department. In a series of lab assessments, we find that treated officers were significantly more likely to consider a wider range of evidence and develop more explanations for subjects' actions. Critically, we also find that training affected officer performance in the field, leading to reductions in uses of force, discretionary arrests, and arrests of Black civilians. Meanwhile, officer activity levels remained unchanged, and trained officers were less likely to be injured on duty. Our results highlight the value of considering the cognitive aspects of policing and demonstrate the power of using behaviorally informed approaches to improve officer decision-making and policing outcomes.
    JEL: C91 C93 D03 D91 J08 K40 K42
    Date: 2023–09

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.