Despite the widespread use of face masks to combat COVID-19, little is known about their social and behavioral consequences. To understand the impact of face masks on interpersonal trust, we designed a novel experiment to assess the causal impact of face mask use on whether individuals follow economically relevant advice from a stranger. From a survey of more than 2000 US citizens, conducted during July and August 2020, we find that almost 5% fewer individuals trust advice when it is given by someone wearing a mask than when it is given by someone not wearing a mask. While, surprisingly, health-related risks do not seem to alter the way masks affect trust, the effects of masks are particularly large among individuals whose households face economic risks due to COVID-19 and those with below-average normative beliefs about mask wearing. Our results highlight the non-health-related meaning that face masks have developed during COVID-19 and suggest that mask use undermines trust in others among a substantial share of the US population.

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This paper examines whether Chinese import competition increases the propensity for firms to offshore production or to cease any involvement in production by switching completely and permanently out of the manufacturing sector (servitization). Using a Danish employer-employee matched dataset covering a large sample of manufacturing firms over the 1995-2012 period, we find that import competition from China significantly increases offshoring but does not induce servitization. These findings are confirmed using various robustness tests as well as an analogous analysis of a Portuguese employer-employee matched dataset.

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Zoning laws that restrict rural land to agricultural production pose an important institutional barrier to industrial development. We study the effects of the Industrial Areas (IA) program in Karnataka, India, which rezoned agricultural land for industrial use, but without the economic incentives common with other place-based policies. We find that the program caused a large increase in firm creation and employment in villages overlapping the IAs. Moreover, the surrounding areas experienced spillover effects, with workers shifting from agricultural to non-agricultural employment, and entrepreneurs establishing numerous small-scale service sector and agricultural firms.