the poverty gap in school spending following the introduction of title i abstract title i of the 1965 elementary and secondary education act explicitly directed more federal aid for k 12 education to poorer areas for the first time in us history with a goal of promoting regional convergence in school spending using newly collected data we find some evidence that title i narrowed the gap in per pupil school spending between richer and poorer states in the short to medium run however the program was small relative to then existing poverty gaps in school spending even in the absence of crowd out by local or state governments the program could have reduced the gap by only 15 percent

on the equilibrium properties of locational sorting models abstract important to many models of location choice is the role of local interactions or spillovers whereby the payoffs from choosing a location depend in part on the number or attributes of other individuals or firms that choose the same or nearby locations in equilibrium this paper develops the equilibrium properties of a broadly applicable and readily estimable class of sorting models that allow location decisions to depend on both fixed local attributes including unobserved attributes and local interactions describes the conditions under which equilibria exist and are unique and provides a test for uniqueness in empirical analyses of sorting equilibrium

an economic analysis of acting white this paper formalizes a widely discussed peer eect entitled acting white acting white is modeled as a two audience signaling quandary signals that induce high wages can be signals that induce peer group rejection without peer eects equilibria involve all ability types choosing dierent levels of education acting white alters the equilibrium dramatically the possibly empty set of lowest ability individuals and the set of highest ability individuals continue to reveal their type through investments in education ability types in the middle interval pool on a common education level only those in the lower intervals are accepted by the group the model s predictions t many stylized facts in the anthropology and sociology literatures regarding social interactions among minority group members

the health returns of education policies from preschool to high school and beyond the accessibility of quality schools and educational resources for children are key engines of upward mobility in the united states holding the potential to break the cycle of poverty from one generation to the next inequalities in economic status tend to be correlated across generations in part because of intergenerational correlations in health and education rucker c johnson 2009 residential segregation by race and class that leads to unequal access to quality schools is often cited as a culprit in perpetuating inequality in attainment outcomes over the past four decades three major government interventions have had substantial impacts on the provision of school resources and have narrowed black white differences in access to dimensions of school quality i court mandated school desegregation ii state legislation and legal action aimed to change the distribution and level of school funding and iii the expansion of targeted preschool programs for disadvantaged children through head start court ordered school desegregation has been described as the most controversial and ambitious social experiment of the past 50 years human capital health outcomes and inequality

computing economies of vertical integration economies of scope and economies of scale using partial frontier nonparametric methods abstract so far in the nonparametric literature only full frontier nonparametric methods have been applied to search for economies of scope and scale particularly the data envelopment analysis method dea however these methods present some drawbacks that might lead to biased results this paper proposes a methodology based on more robust partial frontier nonparametric methods to look for scope and scale economies through this methodology it is possible to assess the robustness of these economies and in particular to assess the influence that extreme data or outliers might have on them the influence of the imposition of convexity on the production set of firms was also investigated this methodology was applied to the water utilities that operated in portugal between 2002 and 2008 there is evidence of economies of vertical integration and economies of scale in drinking water supply utilities and in water and wastewater utilities operating mainly in the retail segment economies of scale were found in water and wastewater utilities operating exclusively in the wholesale and in some of these utilities diseconomies of scope were also found the proposed methodology also allowed us to conclude that the existence of some smaller utilities makes the minimum optimal scales go down

school segregation educational attainment and crime evidence from the end of busing in charlotte mecklenburg we study the end of race based busing in charlotte mecklenburg schools cms in 2001 school boundaries in cms were redrawn dramatically and half of students received a new assignment using addresses measured prior to the policy change we compare students in the same neighborhood that lived on opposite sides of a newly drawn boundary we find that both white and minority students score lower on high school exams when they are assigned to schools with more minority students we also find decreases in high school graduation and four year college attendance for whites and large increases in crime for minority males we conclude that the end of race based busing widened racial inequality despite efforts by cms to mitigate the effect of segregation through compensatory resource allocation jel codes i20 i24

networks in conflict theory and evidence from the great war of africa we study from both a theoretical and an empirical perspective how a network of military alliances and enmities affects the intensity of a conflict the model combines elements from network theory and from the politico economic theory of conflict we obtain a closed form characterization of the nash equilibrium using the equilibrium conditions we perform an empirical analysis using data on the second congo war a conflict that involves many groups in a complex network of informal alliances and rivalries the estimates of the fighting externalities are then used to infer the extent to which the conflict intensity can be reduced through i dismantling specific fighting groups involved in the conflict ii weapon embargoes iii interventions aimed at pacifying animosity among groups finally with the aid of a random utility model we study how policy shocks can induce a reshaping of the network structure

vertical economies in electric power evidence on integration and its alternatives abstract the restructuring of the electric power industry raises questions about the possible sacrifice of economies previously secured by integrating generation with downstream transmission and distribution this study utilizes a data set of u s electric utilities that differ widely in their degree of vertical integration in order to model estimate and measure such economies cost savings from vertical integration are found to be quite substantial for all but the smallest utilities and are largest for those that are nearly fully integrated the study goes on to investigate alternatives to sources of and determinants of vertical integration among other findings it appears that some holding companies achieve economies comparable to those from vertical integration

personnel policies at the union bank of australia evidence from the 1888 1900 entry cohorts this article uses personnel payroll and other records from the union bank of australia to examine internal labor markets it is shown that employment was characterized by limited ports of entry impersonal rules for pay and promotion well defined career ladders shielding from the external labor market and a long term employment relationship in addition tenure within the bank was rewarded considerably more than experience elsewhere and compensation increased considerably after 25 30 years tenure these facts are partially consistent with the human capital matching and contract theory models but cannot be fully explained by any one model

determinants of international university rankings scores this article analyses the relationship between a university s score in international university rankings its expenditure per student and other factors such as university mission size and productive inefficiency we develop an economic model of rankings and universities and estimate this model with data on universities classified in the top 200 by the times higher education supplement ranking of 2007 we find that the elasticity of a university s ranking score for the expenditure per student is between 4 and 9 and that there are no clear signs of inefficiency in production among the top 200 universities university mission and size are also significant predictors of ranking score these results are especially interesting given the relevance attributed to rankings by government officials university directors and students

worker mobility in a search model with adverse selection we analyze the effects of adverse selection on worker turnover and wage dynamics in a frictional labor market we consider a model of on the job search where firms offer promotion wage contracts to workers of different abilities which is unknown to firms at the hiring stage with sufficiently strong information frictions low wage firms offer separating contracts and hire all types of workers in equilibrium whereas high wage firms offer pooling contracts promoting high ability workers only low ability workers have higher turnover rates and are more often employed in low wage firms the model replicates the negative relationship between job to job transitions and wages observed in the u s labor market

sixty years after the magic carpet ride the long run effect of the early childhood environment on social and economic outcomes this paper estimates the effect of the early childhood environment on a large array of social and economic outcomes lasting almost 60 years to do this we exploit variation in the living conditions experienced by yemenite children after being airlifted to israel in 1949 we find that children who were placed in a more modern environment i e with better sanitary and infrastructure conditions were more likely to obtain higher education marry at an older age have fewer children and work at age 55 they were also more likely to be assimilated into israeli society to be less religious and have more worldly tastes in music and food however these effects are found mainly for women and not for men we also find an effect on the next generation children who lived in a better environment grew up to have children with more education

cultural transmission and discrimination workers can have good or bad work habits these traits are transmitted from one generation to the next through a learning and imitation process which depends on parents investment in the trait and the social environment where children live if a sufficiently high proportion of employers have taste based prejudices against minority workers we show that their prejudices are always self fulfilled in steady state and minority workers end up having on average worse work habits than majority workers this leads to a ghetto culture affirmative action can improve the welfare of minorities whereas integration can be beneficial to minority workers but detrimental to workers from the majority group

does temporary affirmative action produce persistent effects a study of black and female employment in law enforcement abstract this paper exploits variation in the timing and outcomes of employment discrimination lawsuits against u s law enforcement agencies to estimate the cumulative and persistent employment effects of temporary externally imposed affirmative action aa we find that aa increased black employment at all ranks by 4 5 to 6 2 percentage points relative to national trends we also find no erosion of these employment gains in the fifteen years following aa termination although black employment growth was significantly lower in departments after aa ended than in departments whose plans continued for women in contrast we find only marginal employment gains at lower ranks

interactions neighborhood selection and housing demand abstract this paper contributes to the growing literature that aims at identifying and measuring the impact of social context on individual economic behavior we develop a model of housing structure demand with neighborhood effects and neighborhood choice modeling neighborhood choice is of fundamental importance in estimating and understanding endogenous and contextual neighborhood effects controlling for non random sorting into neighborhoods allows for unbiased estimates and provides a means for identifying endogenous neighborhood effects estimation of the model exploits a household level data set that has been augmented with contextual information at two different levels scales of aggregation one is at the neighborhood level consisting of about ten neighbors with the data coming from the neighborhood clusters sub sample of the american housing survey a second level is the census tract to which these dwelling units belong these data were geocoded by means of privileged access to confidential us census data our results for the neighborhood choice model indicate that individuals prefer to live near others like themselves our estimates of the housing structure demand equation confirm that neighborhood effects are important in particular one s demand for housing depends on the mean of neighbors demand for housing

separability test for the electricity supply industry this paper examines the vertical integration issue of the electricity industry this industry is typically vertically integrated and heavily regulated the paper investigates the potential technological efficiency loss due to the vertical disintegration using the translog production function three separability hypotheses using the allen uzawa elasticity of substitution are tested to examine the feasibility of various degrees of disintegration of the current industry structure all three separability hypotheses are rejected and the cost of disintegration is estimated further estimates indicate that the electricity industry appears to have exhausted economies of scale unlike other deregulated industries disintegration of the electricity industry will entail technological efficiency loss

incentive compensation in a corporate hierarchy abstract a theoretical and empirical analysis of within job and promotion based incentives for middle managers is presented using personnel data from a firm within job incentives are stronger than implied by previous studies evidence is provided that promotions sort employees by ability and also generate incentives promotions are associated with large increases in lifetime earnings as long as performance is sustained in the future there is little evidence that the firm trades off within job and promotion based incentives as predicted instead it appears to use a simple incentive scheme resulting in declining incentives for those passed over for promotion

promotions and wage growth this article presents evidence that internal mobility defined as a promotion or other position change is an important source of wage growth it accounts for approximately 15 of wage growth over the life cycle for white and black men but less for women the incidence of promotions and other position changes appears tied to the wage level better paid workers are more likely to be promoted the life cycle incidence of internal mobility looks similar to that for conventionally defined job mobility most moves are made early in the career mobility declines both with time in position and with experience

the measurement of vertical economies and the efficient structure of the electric utility industry in this article the concept of multiproduct cost economies is modified to the case of production at vertically related stages to derive an explicit and general measure of economies of vertical integration the utility of this measure is then demonstrated by estimating the vertical cost structure of the electric utility industry and by carrying out the calculations necessary to determine the magnitude of vertical economies in this industry the results provide empirical evidence of the existence of significant economies of vertical integration between the generation and transmission distribution stages of electricity supply copyright 1991 by blackwell publishing ltd

a theory of wage and promotion dynamics inside firms we show that a framework that integrates job assignment human capital acquisition and learning captures several empirical findings concerning wage and promotion dynamics inside firms including the following first real wage decreases are not rare but demotions are second wage increases are serially correlated third promotions are associated with large wage increases fourth wage increases at promotion are small relative to the difference between average wages across levels of the job ladder fifth workers who receive large wage increases early in their stay at one level of the job ladder are promoted quickly to the next

do credit constraints favor dirty production theory and plant level evidence abstract this paper explores the effect of credit constraints on production generated pollution emissions i develop a theoretical model wherein polluting firms borrow externally to finance investment in various assets subject to a credit constraint the main insight of the model is that credit constraints distort the composition of assets towards over investment in tangible assets which can be pledged as collateral thereby increasing the intensity of emissions the predictions of the model are tested using a unique dataset consisting of plant level measures of pollution emissions and creditworthiness the empirical results indicate that credit constraints significantly increase pollution emissions even after accounting for the scale effect and the results withstand multiple robustness checks moreover the effect of credit constraints is particularly acute in industries with greater reliance on external credit finally i demonstrate that firm level credit constraints distort the composition of assets and that the composition of assets influences pollution emissions

the old boy and girl network social network formation on university campuses this paper documents the structure and composition of social networks on university campuses and investigates the processes that lead to their formation using administrative data and information from facebook com we document the factors that are the strongest predictors of whether two students are friends race is strongly related to social ties even after controlling for a variety of measures of socioeconomic background ability and college activities we develop a model of the formation of social networks that decomposes the formation of social links into effects based upon the exogenous school environment and effects of endogenous choice arising from preferences for certain characteristics in one s friends we use student level data from an actual social network to calibrate the model we simulate the social network under alternative university policies aimed at reducing social segmentation we find that changes in the school environment that affect the likelihood that two students interact have only a limited potential to reduce the racial segmentation of the social network

measuring economies of vertical integration in network industries an application to the water sector this paper provides a framework that aims at distinguishing the technological economies of vertical integration from the vertical economies resulting from an inefficient input allocation due to upstream market imperfections to illustrate our analysis we use consistent panel data econometric methods to estimate cost functions on a sample of north american water utilities contrary to what has been found for other network industries electricity and gas for instance we show that the global and technological economies of vertical integration are not significant except for the smallest utilities

are competitors forward looking in strategic interactions field evidence from multistage tournaments abstract this paper investigates whether decision makers are forward looking in dynamic strategic interactions and incorporate variations of continuation values in their choices using data from professional and semi professional basketball tournaments we find that the expected relative strength of a team in future interactions indeed affects behavior in the present the results also show that the response to changes in the continuation value is stronger if the structure of prizes is convex across stages if the players are in a decisive game and if the prevalence of free riding within a team is low

tipping and the dynamics of segregation schelling dynamic models of segregation journal of mathematical sociology 1 1971 143 186 showed that extreme segregation can arise from social interactions in white preferences once the minority share in a neighborhood exceeds a tipping point all the whites leave we use regression discontinuity methods and census tract data from 1970 through 2000 to test for discontinuities in the dynamics of neighborhood racial composition we find strong evidence that white population flows exhibit tipping like behavior in most cities with a distribution of tipping points ranging from 5 to 20 minority share tipping is prevalent both in the suburbs and near existing minority enclaves in contrast to white population flows there is little evidence of nonlinearities in rents or housing prices around the tipping point tipping points are higher in cities where whites have more tolerant racial attitudes

correlated income shocks and excess smoothness of consumption abstract in the literature econometricians typically assume that household income is the sum of a random walk permanent component and a transitory component with uncorrelated permanent and transitory shocks using data on realized individual incomes and individual expectations of future incomes from the survey of italian households income and wealth i find that permanent and transitory shocks are negatively correlated relaxing the assumption of no correlation between the shocks i explore the effects of correlated income shocks on the estimated consumption insurance against permanent and transitory shocks and consumption smoothness using a life cycle model with self insurance calibrated to u s data negatively correlated income shocks result in smoother consumption and upward biased estimates of the insurance against transitory and permanent when borrowing constraints are not tight income shocks while the life cycle model with negatively correlated shocks fits well the sensitivity of consumption to current income shocks observed in u s data it falls short of explaining the sensitivity of consumption to income shocks cumulated over a longer horizon

a measure of segregation based on social interactions we develop an index of segregation based on two premises 1 a measure of segregation should disaggregate to the level of individuals and 2 an individual is more segregated the more segregated are the agents with whom she interacts we present an index that satisfies 1 and 2 and that is based on agents social interactions the extent to which blacks interact with blacks whites with whites etc we use the index to measure school and residential segregation using detailed data on friendship networks we calculate levels of within school racial segregation in a sample of u s schools we also calculate residential segregation across major u s cities using block level data from the 2000 u s census

gender segregation in occupations the role of tipping and social interactions this paper documents that the dynamics of occupational segregation are highly nonlinear and exhibit tipping patterns occupations experience discontinuous declines in net male employment growth at tipping points ranging from 25 to 45 from 13 to 30 female in white collar blue collar occupations from 1940 to 1990 these patterns appear consistent with a schelling 1971 social interaction model where tipping results from male preferences toward the fraction female in their occupation supporting the model s predictions evidence from the general social survey indicates that tipping points are lower in regions where males hold more sexist attitudes toward the appropriate role of women

discrete choice with social interactions this paper provides an analysis of aggregate behavioural outcomes when individual utility exhibits social interaction effects we study generalized logistic models of individual choice which incorporate terms reflecting the desire of individuals to conform to the behaviour of others in an environment of noncooperative decisionmaking laws of large numbers are generated in such environments multiplicity of equilibria in these models which are equivalent to the existence of multiple self consistent means for average choice behaviour will exist when the social interactions exceed a particular threshold local stability of these multiple equilibria is also studied the properties of the noncooperative economy are contrasted with the properties of an economy in which a social planner determines the set of individual choices finally a likelihood function based on the theoretical model is given and conditions for the econometric identifiability of the model are established

does school quality explain the recent black white wage trend around 1980 the trend toward racial wage convergence essentially stopped i ask whether this break in the convergence trend can be explained by school quality department of education surveys provide earnings data for the high school class of 1972 in 1979 and the class of 1980 in 1986 both linked to data from the respondents high schools by several measures differences between schools attended by blacks and whites were already rather small in the 1970s furthermore i find that measurable school inputs generally have little effect on wages thus school quality explains little of the recent black white wage trend

educated preferences explaining attitudes toward immigration in europe recent studies of individual attitudes toward immigration emphasize concerns about labor market competition as a potent source of anti immigrant senti ment in particular among less educated or less skilled citizens who fear being forced to compete for jobs with low skilled immigrants willing to work for much lower wages we examine new data on attitudes toward immigration available from the 2003 european social survey in contrast to predictions based on conventional argu ments about labor market competition which anticipate that individuals will oppose immigration of workers with similar skills to their own but support immigration of workers with different skill levels we find that people with higher levels of educa tion and occupational skills are more likely to favor immigration regardless of the skill attributes of the immigrants in question across europe higher education and higher skills mean more support for all types of immigrants these relationships are almost identical among individuals in the labor force that is those competing for jobs and those not in the labor force contrary to the conventional wisdom then the connection between the education or skill levels of individuals and views about immigration appears to have very little if anything to do with fears about labor market competition this finding is consistent with extensive economic research show ing that the income and employment effects of immigration in european economies are actually very small we find that a large component of the link between educa tion and attitudes toward immigrants is driven by differences among individuals in cultural values and beliefs more educated respondents are significantly less racist and place greater value on cultural diversity than do their counterparts they are also more likely to believe that immigration generates benefits for the host economy as a whole

the effects of consolidation amongst japanese water utilities a hedonic cost function analysis in many parts of the world water is supplied by very small local undertakings in recent years there has been a move to consolidation of these utilities in a number of countries this paper look

schelling s spatial proximity model of segregation revisited schelling schelling t c 1969 models of segregation american economic review papers and proceedings 59 488 493 schelling t c 1971a dynamic models of segregation journal of mathematical sociology 1 2 143 186 schelling t c 1971b on the ecology of micromotives the public interest 25 61 98 schelling t c 1978 micromotives and macrobehavior new york norton presented a microeconomic model showing how an integrated city could unravel to a rather segregated city notwithstanding relatively mild assumptions concerning the individual agents preferences i e no agent preferring the resulting segregation we examine the robustness of schelling s model focusing in particular on its driving force the individual preferences we show that even if all individual agents have a strict preference for perfect integration best response dynamics may lead to segregation this raises some doubts on the ability of public policies to generate integration through the promotion of openness and tolerance with respect to diversity we also argue that the one dimensional and two dimensional versions of schelling s spatial proximity model are in fact two qualitatively very different models of segregation

the internal economics of the firm evidence from personnel data we analyze twenty years of personnel data from one firm the hierarchical structure is quite simple and stable career movements suggest that the employee s rate of learning and the firm s learning about ability are important there are promotion fast tracks exit rates vary little with tenure or salary the firm has personnel policies like those described in the internal labor markets literature although several theoretical preconditions for ilms such as ports of entry and exit are lacking job levels are important to compensation but there is also substantial individual variation in pay within levels our companion paper in this issue explores the wage policy of this firm

the organization of regulated production complementarities correlation and collusion we analyze the choice between vertical separation vs and vertical integration vi when two regulated firms produce complementary inputs with correlated costs and are protected by ex post break even constraints first in the absence of collusion the regulator prefers vi vs for negative and weak positive respectively strong positive correlation second if the firms can collude under vs and know all costs then vs is equivalent to vi however if firms collude under asymmetric information then collusion does not affect the choice between vs and vi since the regulator takes advantage of the transaction costs created by asymmetric information

interactions between workers and the technology of production evidence from professional baseball this paper examines how the effort choices of workers within the same firm interact with each other in contrast to the existing literature we show that workers can affect the productivity of their co workers based on income maximization considerations rather than relying on behavioral considerations such as peer pressure social norms and shame theoretically we show that a worker s effort has a positive effect on the effort of co workers if they are complements in production and a negative effect if they are substitutes the theory is tested using panel data on the performance of baseball players from 1970 to 2003 the empirical analysis shows that a player s batting average significantly increases with the batting performance of his peers but decreases with the quality of the team s pitching furthermore a pitcher s performance increases with the pitching quality of his teammates but is unaffected by the batting output of the team these results are inconsistent with behavioral explanations which predict that shirking by any kind of worker will increase shirking by all fellow workers the results are consistent with the idea that the effort choices of workers interact in ways that are dependent on the technology of production these findings are robust to controlling for individual fixed effects and to using changes in the composition of one s co workers in order to produce exogenous variation in the performance of one s peers

promotions demotions halo effects and the earnings dynamics of american executives this paper explores the determinants of earnings growth in corporate hierarchies using static and dynamic panel data techniques the novelty derives from the distinction between base pay and bonus the asymmetric effects of promotion and demotion and the consideration of dynamic effects we find that the convexity of pay structures is robust to the allowance for unobserved individual heterogeneity demotion has a stronger effect on compensation growth in absolute value than promotion dynamic models indicate that the causal effect of past promotion is positive on the growth in base and total pay but has no significant effect on bonus growth

intergenerational correlation and social interactions in education we propose a dynastic model where individuals are born into an educated or uneducated environment that they inherit from their parents we study the impact of social interactions on the correlation in parent child educational status independently of any parent child interaction when the level of social interactions is decided by a social planner we show that the correlation in education status between generations decreases very fast as social interactions increase in turn when the level of social interactions is decided by the individuals themselves we show that the intergenerational correlation still decreases although less rapidly than with exogenous social interactions

discrimination and assimilation at school abstract i present a theory of assimilation among students of two different backgrounds with unequal status students with a disadvantaged background face an incentive to assimilate into the more advantaged group the advantaged group chooses the cost of assimilation strategically to screen those who seek to assimilate in equilibrium only the most skilled disadvantaged students assimilate this theory provides a novel explanation of the acting white problem acting white refers to a social phenomenon in which students from disadvantaged ethnicities suffer social sanctions if they obtain good grades these sanctions raise the cost of acquiring the skills that make it easier to assimilate disadvantaged students with low ability impose these sanctions in order to induce their more able co ethnics to stay in the disadvantaged group

football players career and wage profiles abstractthe objective of this article is to look over football players career path from lower leagues to the first league and the associated wage profile the information comes from a portuguese

incentives and earnings growth the career prospects of newly recruited employees differ substantially within an organization the stars experience considerable growth in earnings others can hardly maintain their entry salaries this article sheds light on the mechanisms generating the observed heterogeneity in earnings growth by investigating the effects that explicit short run incentives and implicit incentives have on earnings growth the model s predictions are tested using personnel records from a large bank and are found to be consistent with the observed earnings growth during the first half of the employees careers

technological externalities and economies of vertical integration in the electric utility industry abstract this paper investigates economies of vertical integration of the electric utility industry focusing on the technological externality between the generation and transmission distribution stages for this purpose a shadow cost function of the symmetric generalized mcfadden form is estimated using panel data on the transmission distribution stage of nine japanese electric utility firms the results show that there exist the technological externality effects of generation facilities on the cost of the transmission distribution stage suggesting economies of vertical integration

do formal salary systems really matter drawing on a single large u s corporation s personnel records for the years 1989 93 the authors analyze an example of the kind of formal salary system used by most large firms they find that this firm s practices were consistent with most of the important conclusions of prior empirical research on internal labor markets the system was highly centralized covering salary levels salary ranges raises and bonuses supervisors had little discretion over pay other than through subjective performance ratings the firm held fairly strictly to the salary rules leading to observable constraints on pay for employees near the top of the salary range these constraints however apparently did not impose important costs on the firm in the form of increased turnover although the system operated without any apparent connection to external factors the authors conclude that it transmitted external labor market forces with little distortion

segregation and tiebout sorting the link between place based investments and neighborhood tipping abstract segregation has been a recurring social concern throughout human history while much progress has been made to our understanding of the mechanisms driving segregation work to date has ignored the role played by location specific amenities nonetheless policy remedies for reducing group inequity often involve place based investments in minority communities in this paper we introduce an exogenous location specific public good into a model of group segregation we characterize the equilibria of the model and derive the comparative statics of improvements to the local public goods we show that the dynamics of neighborhood tipping depend on the levels of public goods we also show that investments in low public good communities can actually increase segregation

desegregation and black dropout rates in 1954 the united states supreme court ruled that separate schools for black and white children were inherently unequal this paper studies whether the desegregation plans of the next 30 years benefited black and white students in desegregated school districts data from the 1970 and 1980 censuses suggest desegregation plans of the 1970 s reduced high school dropout rates of blacks by two to three percentage points during this decade no significant change is observed among whites the results are robust to controls for family income parental education and state and region specific trends as well as to tests for selective migration

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

school segregation and the identification of tipping behavior we develop a method to empirically implement the schelling model of segregation and use it to study racial segregation in los angeles schools from 1995 to 2012 our two step method combines the estimation of parents preferences for their children s peers with a counterfactual simulation analysis we find substantial heterogeneity in the existence and locations of tipping points and stable equilibria schools are observed on equilibrium trajectories but many remained out of equilibrium by 2012 we also introduce novel instrumental variables to identify preferences for endogenous peer groups that require no additional data and can be used in other educational settings

does head start improve children s life chances evidence from a regression discontinuity design this paper exploits a new source of variation in head start funding to identify the program s effects on health and schooling in 1965 the office of economic opportunity oeo provided technical assistance to the 300 poorest counties to develop head start proposals the result was a large and lasting discontinuity in head start funding rates at the oeo cutoff for grant writing assistance we find evidence of a large drop at the oeo cutoff in mortality rates for children from causes that could be affected by head start as well as suggestive evidence for a positive effect on educational attainment i introduction head start was established in 1965 as part of the war on poverty to provide preschool health and other social services to poor children age three to five and their families and currently serves over 900 000 children each year at a cost of around 7 billion hhs 2006 this paper provides new evidence on the effects of the head start program on schooling and health by drawing on a new source of variation in program funding spe

performance promotion and the peter principle this paper considers why organizations use promotions rather than just monetary bonuses to motivate employees even though this may conflict with efficient assignment of employees to jobs when performance is unverifiable use of promotion reduces the incentive for managers to be affected by influence activities that would blunt the effectiveness of monetary bonuses when employees are risk neutral use of promotion for incentives need not distort assignments when they are risk averse it may sufficient conditions for this are given the distortion may be either to promote more employees than is efficient the peter principle effect or fewer

promotions and incentives the case of multistage elimination tournaments promotions play an important role for the provision of incentives in firms we analyze incentives in multistage elimination tournaments with controlled laboratory experiments in our two main treatments we compare a two stage tournament to a one stage tournament subjects in the two stage treatment provide excess effort in the first stage both with respect to nash predictions and compared to the strategically equivalent one stage tournament additional control treatments confirm that excess effort in early stages is a robust finding and suggest that above equilibrium effort might be driven by limited degrees of forward looking behavior and subjects deriving nonmonetary value from competing

the effect of school closings on student achievement abstract many school districts across the country are shutting schools but school closing policies remain a very controversial issue the current study investigates the effects of school closing policies on student achievement by examining over 200 school closings in michigan relative to the previous literature the analysis uses a broader set of school closings to thoroughly investigate heterogeneity in treatment effects based on the performance level of the closed school the results indicate that on average school closings in michigan did no persistent harm to the achievement of displaced students moreover students displaced from relatively low performing schools experience achievement gains the displacement of students and teachers creates modest negative spillover effects on the receiving schools however hence the closing of low performing schools may generate some achievement gains for displaced students but not without imposing spillover effects on a large number of students in receiving schools

estimating equilibrium models of sorting across locations while there is growing interest in measuring the size and scope of local spillovers it is well understood that such spillovers cannot be distinguished from unobservable local attributes using solely the observed location decisions of individuals or firms we propose an empirical strategy for recovering estimates of spillovers in the presence of unobserved local attributes for a broadly applicable class of equilibrium sorting models our approach relies on an iv strategy derived from the internal logic of the sorting model itself we show practically how the strategy is implemented provide intuition for our instruments discuss the role of effective choice set variation in identifying the model and carry out a series of monte carlo simulations to demonstrate performance in small samples

group characteristics evolution arising from asymmetric information in asymmetric information problems agents with less information principals or contractors usually take as given the preferences of agents with more information agents or contractees moreover the distribution of characteristics of contractees is supposed to be invariant in this article we consider a mixed framework of asymmetric information adverse selection followed by moral hazard where those two assumptions are excluded specifically the contractor only knows the current distribution of characteristics and the contractees may change them after signing the contract if this improves their welfare thus we find that the asymmetric information problem leads to a group eect changes of characteristics this feedback defines a sequence of temporary equilibria we provide conditions for the convergence of that sequence to a stationary long run equilibrium we also prove that both temporary equilibrium and long run equilibrium coincide with the equilibrium in classical models of adverse selection and the moral hazard problem vanishes in the long run

is school segregation good or bad it has been well documented that segregation across schools denying access to resources inferior educational production functions and so on exacerbates racial differences in achievement using an individual measure of social connections within schools we have shown that this form of segregation asian kids sitting together in the cafeteria has a substantively unimportant relationship with academic achievement or social behavior in school or later in life there are important caveats to our analysis a our estimates of the relationship between within school segregation and outcomes are not causal and b friendships may not be the only relevant cross race social interaction that occurs within a school

enriching a theory of wage and promotion dynamics inside firms in previous work we showed that a model that integrates job assignment human capital acquisition and learning can explain several empirical findings concerning wage and promotion dynamics inside firms in this article we extend that model in two ways first we incorporate schooling and derive further testable implications that we then compare with the available empirical evidence second and more important we show that introducing task specific human capital allows us to produce cohort effects we further argue that task specific human capital is a realistic concept and may have many important implications we also discuss limitations of our extended approach

the effect of court ordered hiring quotas on the composition and quality of police arguably the most aggressive armative action program ever implemented in the united states was a series of court ordered racial hiring quotas imposed on municipal police departments my best estimate of the eect of court ordered armative action on workforce composition is a 14

racial segregation and the black white test score gap abstract racial segregation is often blamed for some of the achievement gap between blacks and whites we study the effects of school and neighborhood segregation on the relative sat scores of black students across different metropolitan areas using large microdata samples for the 1998 2001 test cohorts our models include detailed controls for the family background of individual test takers school level controls for selective participation in the test and city level controls for racial composition income and region we find robust evidence that the black white test score gap is higher in more segregated cities holding constant family background and other factors a shift from a highly segregated city to a nearly integrated city closes about one quarter of the raw black white gap in sat scores specifications that distinguish between school and neighborhood segregation suggest that neighborhood segregation has a consistently negative impact while school segregation has no independent effect though we cannot reject equality of the two effects additional tests indicate that much of the effect of neighborhood segregation operates through neighbors incomes not through race per se data on enrollment in honors courses suggest that within school segregation increases when schools are more highly integrated potentially offsetting the benefits of school desegregation and accounting for our findings

an empirical analysis of acting white abstract using a newly available data set which allows one to construct a novel measure of a student s social status we demonstrate that there are potentially important racial differences in the relationship between social status and academic achievement the effect is concentrated among students with a grade point average gpa of 3 5 or higher and more pronounced in schools with more interracial contact earlier studies showing a positive relationship between popularity and academic achievement for blacks are sensitive to the inclusion of more continuous achievement measures we argue that the data are most consistent with a model of acting white in which investments in education are taken as a signal of one s opportunity costs of peer group loyalty though imprecise estimates make definitive conclusions difficult

personnel economics past lessons and future directions presidential address to the society of labor economists san francisco may 1 1998 in 1987 the journal of labor economics published an issue on the economics of personnel since then personnel economics defined as the application of labor economics principles to business issues has become a major part of labor economics now accounting for a substantial proportion of papers in this and other journals much of the work in personnel economics has been theoretical in large part because the data needed to test these theories have not been available in recent years a number of firm based data sets have surfaced that allow personnel economics to be tested using two such data sets i give support to the implications of theories that relate to life cycle incentives tournaments piecework incentives pay compression and peer pressure i conclude that personnel economics is real it is far more than a set of clever theories it has relevance to the real world additionally firm based data make asking and answering new kinds of questions feasible the value of research in this area is h