We characterize the employment value of different worker-occupation matches and estimate the substitutability of match-specific inputs in production. In an equilibrium model of the U.S. labor market, we examine the responses of employment and wages to shifts in technology and match values.
We study the accumulation of financial competencies in a model of dynamic skill formation. We find evidence of complementarities between financial literacy and risk attitudes. Risk tolerance facilitates experimentation and learning-by-doing.
Two centuries ago, in most countries around the world, women were unable to vote, had no say over their own children or property, and could not obtain a divorce.
Exploiting the randomized expansion of preferential college admissions in Chile, we show they increased admission and enrollment of disadvantaged students by 32%. But the intended beneficiaries were nearly three times as many, and of higher average ability, than those induced to be admitted.
We conduct a randomized controlled trial with households of secondary school students in Bangladesh to investigate how parents adjust their investments in response to three educational interventions: an informational campaign about an educational phone application, an internet data subsidy, and o
This paper finds that accounting for the human capital development of children has a quantitatively large effect on the true costs and benefits of providing cash assistance to single mothers in the United States.
We estimate doctor value-added and provide evidence on the distribution of physician quality in an entire country, combining rich population-wide register data with random assignment of patients to general practitioners (GPs).
This chapter provides new evidence on educational inequality and reviews the literature on the causes and consequences of unequal education.
In this survey, we argue that the economic analysis of fertility has entered a new era.
In many high-income economies, the recession caused by the Covid-19 pandemic has resulted in unprecedented declines in women’s employment.
In areas with an insufficient supply of qualified teachers, delivering instruction through technology may be a solution to provide education.
This paper provides new evidence that preventive health care services delivered at schools and provided at a relatively low cost have positive and lasting impacts.
The labor supply of older men increased from the 1930s to the 1950s cohort.
In this paper, we challenge the conventional idea that an increase in the progressivity of old-age pensions unanimously distorts the labor supply decision of households.
This paper provides a novel constructive identification proof for non-stationary Hidden Markov models. The identification result establishes that only two periods of time are required if one wants to identify transition probabilities between those two periods.
Recent estimates are that about 150 million children under five years of age are stunted, with substantial negative consequences for their schooling, cognitive skills, health, and economic productivity.
We study the role of non-cognitive skills (NCS) in university readiness and performance of first-in-family students (FIFS) using both nationally representative survey data and linked survey-administrative data on an incoming student cohort at a leading Australian university.
We examine the impact of the global recession triggered by the Covid-19 pandemic on women’s versus men’s employment.
A long-standing challenge for welfare economics is to develop welfare criteria that can be applied to allocations with different population levels.
What are the effects of school closures during the COVID-19 pandemic on children’s education? Online education is an imperfect substitute for in-person learning, particularly for children from low-income families.
We develop a novel empirical approach to identify the effectiveness of policies against a pandemic. The essence of our approach is the insight that epidemic dynamics are best tracked over stages, rather than over time.
Although many students suffer from anxiety and depression, and students often identify school pressure and concerns about their futures as the main reasons for their worries, little is known about the consequences of a selective school environment on students' physical and mental health.
Using a structural life-cycle model, we quantify the long-term impact of school closures during the Corona crisis on children affected at different ages and coming from households with different parental characteristics.
In recent US recessions, employment losses have been much larger for men than for women. Yet, in the current recession caused by the Covid-19 pandemic, the opposite is true: unemployment is higher among women. In this paper, we analyze the causes and consequences of this phenomenon.
We examine the dynamics of GDP following an economy-wide pandemic shock that curtails physical mobility and the ability to perform certain tasks at work. We examine whether greater reliance on digital technologies has the potential to mediate employment and productivity losses.
To slow the spread of COVID-19, many countries are shutting down non-essential sectors of the economy. Older individuals have the most to gain from slowing virus diffusion. Younger workers in sectors that are shuttered have the most to lose.
Over the last 15 years, 11 states have restricted employers' access to the credit reports of job applicants.
We study a dynamic macro model to capture the trade-off between policies that simultaneously decrease output and the rate of infection transmission.
Exploiting results from the literature on non-parametric identification, we make three methodological contributions to the empirical literature estimating the matching function, commonly used to map unemployment and vacancies into hires.
We investigate what accounts for the observed international differences in schooling and fertility, in particular the role of TFP, age-dependent mortality rates and public education policies.
Why most people claim Social Security benefits early? And why early claimers tend to work less? We investigate the role of preferences and institutions in claiming decisions using a structural framework.
We construct a dynamic general equilibrium model with occupation mobility, human capital accumulation and endogenous assignment of workers to tasks to quantitatively assess the aggregate impact of automation and other task-biased technological innovations.
This paper experimentally estimates medium term impacts of a large-scale and low-cost parenting program targeting poor families in Chile.
We develop a unied empirical framework for child development which nests the key features of two previously parallel research programs, the Child Development literature and the Education Production Function literature.
Residential mobility rates in the U.S. have fallen considerably over the past three decades. The cause of the long-term decline remains largely unexplained.
We document new facts on the distributions of male wages, male earnings, and household earnings and income (before and after taxes) in the Netherlands and the United States.
We examine the role of demographics and changing industrial policies in accounting for the rapid rise in household savings and in per capita output growth in China since the mid-1970s.
What are the welfare implications of labor market power?
This paper studies two experiments of early childhood development programs in The Gambia: one increasing access to services, and another improving service quality.
White, non-college-educated Americans born in the 1960s face shorter life expectancies, higher medical expenses, and lower wages per unit of human capital compared with those born in the 1940s, and men’s wages declined more than women’s.
We use rich data on a cohort of English adolescents to analyse the long-term effects of experiencing bullying victimisation in junior high school. The data contain self-reports of five types of bullying and their frequency, for three waves of the data, when the pupils were aged 13 to 16 years.
This paper analyzes the optimal response of the social insurance system to a rise in labor market risk.
We characterize the distribution of permanent-income and quantify the value of assets and human capital in lifetime wealth portfolios.
The evaluation of educational programs has accelerated dramatically in the past quarter century. While such evaluations were once almost exclusively conducted in the U.S., they have broadened dramatically across many countries of the world.
Using de-identified bank account data, we show that spending drops sharply at the large and predictable decrease in income arising from the exhaustion of unemployment insurance (UI) benefits.
This paper studies optimal education subsidies when parental transfers are unequally distributed across students and cannot be publicly observed.
Parenting decisions are among the most consequential choices people make throughout their lives. Starting with the work of pioneers such as Gary Becker, economists have used the toolset of their discipline to understand what parents do and how parents’ actions affect their children.
China’s college expansion program, which was implemented in 1999, significantly increased the share of college-educated workers in the urban labor force. We find that returns to education were not responsive to changes in local skill supply between then and 2009.
Is a school’s impact on high-stakes test scores a good measure of its overall impact on students? Do parents value school impacts on high-stakes tests, longer-run outcomes, or both?
The effect of coworkers on the learning and the productivity of an individual is measured combining theory and data.
Wealth inequality has received considerable attention, with mounting evidence of steady and economically meaningful changes in the concentration of wealth ownership.
This paper draws on household survey data from countries of all income levels to measure how average unemployment rates vary with income per capita. We document that unemployment is increasing with GDP per capita.
This paper examines academic peer effects in college. Unique new data from the Berea Panel Study allow us to focus on a mechanism wherein a student’s peers affect her achievement by changing her study effort.
Individuals' medical spending has both necessary and discretionary components which are not, however, separately observable.
In this paper we examine whether – conditional on other family inputs – bilingual children achieve different outcomes in language and emotional development. Our data come from the UK Millennium Cohort Study (MCS) which allows us to analyze children’s language and emotional development in depth.
We document the time-series of employment rates and hours worked per employed by married couples in the US and seven European countries (Belgium, France, Germany, Italy, the Netherlands, Portugal, and the UK) from the early 1980s through 2016.
We investigate the role of information frictions in the US labor market using a new nationally representative panel dataset on individuals’ labor market expectations and real- izations. We find that expectations about future job offers are, on average, highly predictive of actual outcomes.
The taxation of bequests can have a positive impact on the labor supply of heirs through wealth effects. This leads to an increase in future labor income tax revenue on top of direct bequest tax revenue.
We develop a framework to understand pre-employment credit screening through adverse selection in labor and credit markets. Workers differ in an unobservable characteristic that induces a positive correlation between labor productivity and repayment rates in credit markets.
Gender differences in current and past job tasks may be crucial for understanding the gender wage gap. We use novel task data to address well-known measurement concerns, including that standard task measures assume away within-occupation gender differences in tasks.
We analyze how exposure to teacher collective bargaining affects long-run outcomes for students, exploiting the timing of state duty-to-bargain law passage in a cross-cohort difference-in-difference framework.
Using unique survey and administrative data from the Canada Student Loans Program, we document that parental support and personal savings substantially lower student loan repayment problems.
We examine the labor market consequences of an exogenous increase in the supply of skilled labor in several cities in Norway, resulting from the construction of new colleges in the 1970s.
The macroeconomic consequences of large-scale early childhood development policies depend on intergenerational dynamics, general equilibrium (GE) effects on labor and capital markets, and the deadweight loss of raising taxes to finance the policies.
Sectoral labor reallocation shocks change the optimal allocation of workers across industries. We find that a proxy for this type of labor market shocks has very strong and robust predictive power for future stock market returns.
The emergence of slums is a frequent feature of a country's path toward urbanization, structural transformation, and development.
This paper studies the welfare effects of encouraging rural-urban migration in the developing world.
Health shocks are an important source of risk. People in bad health work less, earn less, face higher medical expenses, die earlier, and accumulate much less wealth compared to those in good health.
This paper studies the role of match quality for contractual arrangements, wage dynamics and workers’ retention. We develop a model in which profit maximizing firms offer a performance-based pay arrangement to retain workers with relatively high match-specific productivity.
We study the formation of wages in a frictional search market where firms can choose either to bargain with workers or post non-negotiable wage offers.
A broadly accepted view contends that the 2007-09 financial crisis in the U.S. was caused by an expansion in the supply of credit to subprime borrowers during the 2001-2006 credit boom, leading to the spike in defaults and foreclosures that sparked the crisis.
We provide a common set of life-cycle earnings statistics based on administrative data from the United States, Canada, Denmark and Sweden. We find three qualitative patterns, which are common across countries. First, top-earnings inequality increases over the working lifetime.
One of the most important decisions a student can make during the course of his or her college career is the choice of major.
We develop and estimate a model of study time choices of students on a social network. The model is designed to exploit unique data collected in the Berea Panel Study.
We develop a dynastic human capital investment framework to study the importance of potential market failures--family borrowing constraints and uninsured labor market risk--as well as the process of intergenerational ability transmission in determining human capital investments in children at dif
Industrial clusters are promoted by policy and generally viewed as good for growth and development, but both clusters and policies may also enable non- competitive behavior. This paper studies the presence of non-competitive pricing in geographic industrial clusters.
How does access to consumer credit affect the allocation of workers to firms, and what happens to sorting and the subsequent recovery if credit tightens during a recession? To answer this question, we develop a labor sorting model with saving and borrowing.
How does consumer credit access impact job flows, earnings, and entrepreneurship?
Using household-level data from Mexico we document patterns among schooling, entrepreneurial decisions and household characteristics such as assets, talent of household members and age of the household head.
Using a theoretical model where students care about achievement rank, I study effort choices in the classroom and show that rank concerns generate peer effects.
Using newly collected cross-country survey and experimental data, we investigate how beliefs about intergenerational mobility affect preferences for redistribution in five countries: France, Italy, Sweden, U.K., and U.S.
We study the optimal design of R&D policies and corporate taxation when the outputs of innovation are not appropriable in the absence of intellectual property rights policies and there are non-internalized technology spillovers across firms.
Should asset testing be used in means-tested programs? These programs target low-income people, but low income can result not only from low productivity but also from low labor supply. We aim to show that in the asymmetric information environment, there is a positive role for asset testing.
Much of macroeconomics is concerned with the allocation of physical capital, human capital, and labor over time and across people. The decisions on savings, education, and labor supply that generate these variables are made within families.
It takes a woman and a man to make a baby. This fact suggests that for a birth to take place, the parents should first agree on wanting a child.
In the centuries leading up to the Industrial Revolution, Western Europe gradually pulled ahead of other world regions in terms of technological creativity, population growth, and income per capita.
We revisit the empirical relationship between wages and labor market conditions. Following work histories in the NLSY79 we document that the relationship between wages and unemployment rate differs across occupations. The results hold after controlling for unobserved match quality.
This paper is motivated by the fact that nearly half of U.S. college students drop out without earning a bachelor’s degree. Its objective is to quantify how much uncertainty college entrants face about their graduation outcomes. To do so, we develop a quantitative model of college choice.
This paper studies the effect of graduating from college on lifetime earnings. We develop a quantitative model of college choice with uncertain graduation. Departing from much of the literature, we model in detail how students progress through college.
We use data from the Survey of Consumer Finance and Survey of Income Program Participation to show that young households with children are under-insured against the risk that an adult member of the household dies.
Rising costs of and returns to college have led to sizeable increases in the demand for student loans in many countries. In the U.S., student loan default rates have also risen for recent cohorts as labor market uncertainty and debt levels have increased.
The economic and social mobility of a generation may be largely determined by the time it enters school given early developing and persistent gaps in child achievement by family income and the importance of adolescent skill levels for educational attainment and lifetime earnings.
More than half of the variation across U.S. school districts in real K-12 education expenditures per student is due to differences between, rather than within, states.
We assess the consequences of substantially increasing the marginal tax rate on U.S. top earners using a human capital model.
We estimate the costs of occupational mobility using a novel approach that relies on aggregate flows of workers across occupations rather than on wage data.
We develop a theory of intergenerational preference transmission that rationalizes the choice between parenting styles. Parents maximize an objective function that combines Beckerian altruism and paternalism towards children.
Countries around the world are adopting market-oriented school choice reforms. Evidence shows that they affect both student and teacher sorting across school sectors. Previous studies have analyzed student and teacher sorting in isolation from each other.
More than low default rates, lenders are interested in the expected return on their loans. In this paper, we consider a number of other measures of repayment and nonpayment that are likely to be of direct interest to lenders.
Empirical evidence suggests that money in the hands of mothers (as opposed to fathers) increases expenditures on children. From this, should we infer that targeting transfers to women is good economic policy?
Government student loan programs must balance the need to enforce repayment among borrowers who can afford to make their payments with some form of forgiveness or repayment assistance for those who cannot.
This paper compares partial and general equilibrium effects of alternative financial aid policies intended to promote college participation.
We discuss a simple model in which parents and children make investments in the children’s education, investments for other purposes, and parents can transfer cash to their children.
This paper analyzes the effectiveness of three different types of education policies: tuition subsidies (broad based, merit based, and flat tuition), grant subsidies (broad based and merit based), and loan limit restrictions.
Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries.
In this paper I propose and estimate a dynamic model of education, borrowing, and work decisions of high school graduates.
The federal government makes subsidized federal financing for higher education widely available. The extent of the subsidy varies over time with interest rate and credit market conditions.
We analyze, theoretically and quantitatively, the interactions between two different forms of unsecured credit and their implications for default behavior of young U.S. households. One type of credit mimics credit cards in the U.S.
This paper posits a notion of the value of an individual's human capital and the associated return on human capital. These concepts are examined using U.S. data on male earnings and financial asset returns.
We develop a model of retirement and human capital investment to study the effects of tax and retirement policies. Workers choose the supply of raw labor (career length) and also the human capital embodied in their labor.
I develop and estimate a structural equilibrium model of the college market. Students, having heterogeneous abilities and preferences, make college application decisions, subject to uncertainty and application costs.
This paper uses data from the 1979 and 1997 National Longitudinal Survey of Youth cohorts (NLSY79 and NLSY97) to estimate changes in the effects of ability and family income on educational attainment for youth in their late teens during the early 1980s and early 2000s.
This paper provides a theory that explains the cross-country distribution of average years of schooling, as well as the so called human capital premium puzzle.
We develop a human capital model with borrowing constraints explicitly derived from government student loan (GSL) programs and private lending under limited commitment.
Past estimates of the effect of family income on child development have often been plagued by endogeneity and measurement error. In this paper, we use an instrumental variables strategy to estimate the causal effect of income on children's math and reading achievement.
Is lifetime inequality mainly due to differences across people established early in life or to differences in luck experienced over the working lifetime?
Increasingly, grade retention is viewed as an important alternative to social promotion, yet evidence to date is unable to disentangle how the effect of grade retention varies by abilities and over time.
This paper presents a model of human capital accumulation that allows for feedback effects between the consequences and the likelihood of suffering from particular diseases and the decisions to invest in knowledge, both in the form of schooling and on-the-job training.
There is growing state and national attention on addressing the achievement gap and increasing reading proficiency by 3rd grade.