Significance
One fundamental issue in economic, psychological, and social sciences is whether and how much income truly brings happiness. This paper draws on twins data to examine whether income indeed affects happiness and estimates the size of such an effect. We control for unobserved genetic factors that may impact both income and happiness using identical twins, address measurement error bias, and conduct a series of robustness checks. Income has a much larger effect than previous estimates: doubling income boosts the four-scale happiness value by 0.26 scales or 0.37 SDs. Heterogeneity analyses suggest that income matters most for males and the middle-aged. Our findings emphasize the importance of income maintenance for individuals’ well-being.

Abstract
We estimate the causal effect of income on happiness using a unique dataset of Chinese twins. This allows us to address omitted variable bias and measurement errors. Our findings show that individual income has a large positive effect on happiness, with a doubling of income resulting in an increase of 0.26 scales or 0.37 SDs in the four-scale happiness measure. We also find that income matters most for males and the middle-aged. Our results highlight the importance of accounting for various biases when studying the relationship between socioeconomic status and subjective well-being.

We link industrial clusters, regional productivity and resource reallocation efficiency with geographical and sectoral disaggregated data. Based on a county-industry level panel from 1998 to 2007 in China, we find that industrial clusters significantly increase local industries' productivity by lifting the average firm productivity and reallocating resources from less to more productive firms. Moreover, we find major mechanisms through which resource reallocation is improved within clusters: (i) clusters are associated with a higher firm turnover with increased entry and exit rates simultaneously; and (ii) within clusters' environment, the dispersion of individual firm's markup is significantly reduced, indicating intensified local competition within clusters. Such results suggest that industrial clusters in China help improve regional productivity and resource allocation efficiency with intensified competition and accelerated firm dynamics. The identification issues are carefully addressed by two-stage estimations with instrumental variables and other robustness checks.

In each of the three waves of the Section 301 tariffs on Chinese imports, the US government exempted some products on the originally proposed list from additional duties. Using these exempted products as the counterfactual, we identify modest but heterogeneous impacts of the tariffs on the value of US imports from China. We find a complete pass-through for the first and second waves of tariffs. However, unlike in previous studies, we estimate a very limited tariff pass-through of the third wave of tariffs. Finally, we find little import diversion for the US and significant export diversion for China.

After nearly two decades of rising wages for those in the unskilled sectors of China's economy, in the mid-2010s employment and wages in China began to experience new polarizing trends. Using data from the National Bureau of Statistics of China, this paper examines trends in multiple sectors and subeconomies of China, revealing the substantial rise of employment in informal, low-skilled services as well as the steady decline of wage growth in the informal subeconomy. At the same time, we find that although employment growth in the formal subeconomy is relatively moderate, wage growth in high-skilled services is steadily rising. These two trends pose a challenge for China, presenting a new and uncertain period of economic change.

This paper estimates the labor market impacts of parenthood in China. We find that becoming a mother has negative impacts on women's labor outcomes. But the impacts appear to recover sooner than what has been found in other countries. A decomposition exercise suggests that parenthood plays a limited role in explaining the large gender inequality in China's labor market. We document a form of intergenerational arrangement that is prevalent among Chinese families: Upon the arrival of a child, grandmothers substantially reduce market labor supply and provide much of the childcare. Grandparents’ help with childcare likely plays an important role in alleviating the motherhood effect. Suggestive evidence indicates that in return, grandparents who help with childcare receive more intra-family transfers and report higher subjective wellbeing. We further show that the motherhood effect, though relatively small, has increased substantially over the past decades. The rising gender gap in the labor market, the declining state sector that historically provides more flexible accommodations for working mothers, and the abolishment of the one-child policy all suggest a rising burden of motherhood on labor market outcomes.