the effect of attending the flagship state university on earnings a discontinuity based approach abstract this paper examines the effect of attending the flagship state university on the earnings of 28 to 33 year olds by combining confidential admissions records from a large state university with earnings data collected through the state s unemployment insurance program to distinguish the effect of attending the flagship state university from the effects of confounding factors correlated with the university s admission decision or the applicant s enrollment decision i exploit a large discontinuity in the probability of enrollment at the admission cutoff the results indicate that attending the most selective state university causes earnings to be approximately 20 higher for white men

business strategies and the small professional firm evidence from the conveyancing market this paper examines the use of business strategies by firms of solicitors in england although still often seen as the epitome of the traditional profession recent deregulation and liberalisation of the legal services market has forced solicitors to consider the use of more business like approaches to the operations of their firms using the framework provided by john kay it is possible to identify distinctive capabilities among some firms in the provision of conveyancing despite the fact that this is a relatively routine service provided mainly by small professional firms the use of reputation is crucial here analysis of the conduct of sample firms suggests that business strategies can be identified with respect to pricing and advertising and that the advertising behaviour of law firms closely matches the predictions of relevant economic theory the paper concludes that it is meaningful to speak of strategy among at least some small professional firms

minimax regret and efficient bargaining under uncertainty bargaining under uncertainty is modeled by the assumption that there are several possible states of nature each of which is identified with a bargaining problem we characterize bargaining solutions which generate ex ante efficient combinations of outcomes under the assumption that the bargainers have minimax regret preferences for the case of two bargainers a class of monotone utopia path solutions is characterized by the efficiency criterion but for more than two bargainers only dictatorial solutions are efficient by incorporating scale covariance into the minimax regret preferences a possibility result is obtained for the general case journal of economic literature classification numbers c78 d81 d71

estimating marginal returns to education this paper estimates marginal returns to college for individuals induced to enroll in college by different marginal policy changes the recent instrumental variables literature seeks to estimate this parameter but in general it does so only under strong assumptions that are tested and found wanting we show how to utilize economic theory and local instrumental variables estimators to estimate the effect of marginal policy changes our empirical analysis shows that returns are higher for individuals with values of unobservables that make them more likely to attend college we contrast our estimates with iv estimates of the return to schooling

spatial aspects of deregulation in the market for legal services love j h stephen f h gillanders d d and paterson a a 1992 spatial aspects of deregulation in the market for legal services reg studies 26 137 147 since the early 1980s there has been a consistent policy of deregulating the legal profession in the uk however there has been little recognition that there are spatially distinct markets for legal services which may vary in their responses to policy initiatives this paper explores the implications of solicitor advertising and of licensed conveyancers in twenty seven geographical markets in england and wales evidence is presented which suggests that certain types of advertising have the effect of reducing the level of quoted conveyancing fees and that the removal of the solicitors conveyancing monopoly has also had some effect on quoted fees possible policy implications are discussed love j h stephen f h gillanders d d et paterson a a 1992 des aspects geographiques de la liberalisation du marche des services juridiques reg s

college choice and subsequent earnings results using swedish sibling data college choice and subsequent earnings results using swedish sibling data this paper investigates the relationship between college choice and annual earnings using within family variation in college choice the results show that earnings vary significantly between students who graduated from different types of colleges and the earnings premium is larger for those who graduated at an old university do birth order and family size matter for intergenerational income mobility evidence from sweden previous studies of intergenerational income mobility have not considered potential birth order or family size effects in the estimated income elasticity this paper estimates the intergenerational income elasticity by birth order position and family size the main finding of this paper is that the elasticity tends to decrease with birth order for a given family size especially for fathers and sons a comparison of family and neighborhood effects on grades test scores educational attainment and income evidence from sweden this paper compares sibling and neighborhood correlations in school performance educational attainment and income as a way to learn whether the neighborhood where a child grows up in might explain parts of the sibling similarities found in previous sibling correlation studies the results show that living in the same neighborhood does not seem to add much to the sibling similarity what more than parental income an exploration of what swedish siblings get from their parents in this paper we explore what factors other that parental income can explain why siblings tend to have such similar outcomes as previous correlation studies show our results show that parental involvement and attitudes especially propensity to plan ahead and willingness to postpone benefits to the future are particularly important for the sibling similarity

the equal loss principle for bargaining problems abstract we introduce a new bargaining solution which we call the equal loss solution this solution equalizes across agents the losses from the ideal point two characterizations of the solution are presented by formulating axioms specifying how bargaining solutions should respond to changes in the feasible set and the ideal point

estimating outcome distributions for compliers in instrumental variables models in imbens and ingrist 1994 angrist imbens and rubin 1996 and imbens and rubin 1997 assumptions have been outlined under which instrumental variables estimands can be given a causal interpretation as a local average treatment effect without requiring functional form or constant treatment effect assumptions we extend these results by showing that under these assumptions one can estimate more from the data than the average causal effect for the subpopulation of compliers one can in principle estimate the entire marginal distribution of the outcome under different treatments for this subpopulation these distributions might be useful for a policy maker who wishes to take into account not only differences in average of earnings when contemplating the merits of one job training programme vs another we also show that the standard instrumental variables estimator implicitly estimates these underlying outcome distributions without imposing the required nonnegativity on these implicit density estimates and that imposing non negativity can substantially alter the estimates of the local average treatment effect we illustrate these points by presenting an analysis of the returns to a high school education using quarter of birth as an instrument we show that the standard instrumental variables estimates implicitly estimate the outcome distributions to be negative over a substantial range and that the estimates of the local average treatment effect change considerably when we impose nonnegativity in any of a variety of ways

a major in science initial beliefs and final outcomes for college major and dropout taking advantage of unique longitudinal data we provide the first characterization of what college students believe at the time of entrance about their final major relate these beliefs to actual major outcomes and provide an understanding of why students hold the initial beliefs about majors that they do the data collection and analysis are based directly on a conceptual model in which a student s final major is best viewed as the end result of a learning process we find that students enter school quite optimistic about obtaining a science degree but that relatively few students end up graduating with a science degree the substantial overoptimism about completing a degree in science can be attributed largely to students beginning school with misperceptions about their ability to perform well academically in science copyright 2014 oxford university press

an objective measure of search versus experience goods i introduction search goods and experience goods have been part of the lexicon of economics for twenty years now during this time a substantial body of research has been influenced by nelson s 1970 and 1974 papers which enlarged upon stigler s 1961 seminal paper despite the appeal of the search versus experience dichotomy to members of the economics profession empirical development and application of the concepts involved has not been impressive 1 stigler 1961 argued that consumers efforts to acquire information about the quality or performance of products and vendors are a function of expected benefits and costs nelson s 1970 1974 work attempted to measure the expected benefits and to a lesser extent expected costs to consumers of acquiring product and vendor information unfortunately although this search versus experience dichotomy now is part of economists conventional wisdom it has led to little empirical analysis beyond nelson s investigations the root problem seems to be a lack of agreement over the definition of a search good versus an experience good to nelson 1970 the latter is one whose qualitative characteristics are not ascertainable by buyer inspection prior to purchase thus information about the product s quality or performance can be obtained only through buying and using the item we can however ascertain performance information about search goods prior to purchase porter s 1976 analysis of the acquisition of product information by consumers classified items as convenience and non convenience goods the former are characterized by low unit price and high frequency of purchase the opposite holds for non convenience goods the low unit price of convenience goods implies that relevant performance information will be acquired via sampling experience even though one might be able to acquire the information from other sources but at higher cost an experience good is not such by design rather by virtue of consumer choice in the face of varying informational costs thus porter s measure of the incentive to acquire product vendor information is product price as opposed to nelson s ad hoc search experience dichotomy using porter s classification meisel 1979 argues that the degree to which consumers efforts to acquire information take the form of search rather than sampling experience depends on the expected costs and benefits for any given product similarly laband 1986 argues that consumer demand for product and vendor information in advance of purchase is affected by both price and frequency of purchase nelson s classification scheme is at odds with his definitions for example he regards food as an experience item although much relevant information about it is available prior to purchase 2 product classification is admittedly ambiguous e g jewelry and silverware in fact the search vs experience classification more logically represents the two extremes of product classification with most items falling somewhere in between by subdividing experience goods into durable and nondurable categories nelson 1974 validates this assertion given this ambiguity it is understandable that empirical research in this nexus of producer consumer interaction has been limited to use the search experience classification for empirical analysis one must either borrow nelson s existing scheme which is limited in product coverage or create new product classifications which are of dubious merit on the other hand the porter meisel analyses which do provide the micro foundations of consumer behavior in the face of uncertain product vendor quality have never supplanted or integrated nelson s work into their broader framework the purpose of this paper is to bridge these two strands of the advertising as information literature i argue that the discussion of search versus experience goods and more importantly the behavior of buyers and sellers is driven by the cost to the buyer of a disappointing purchase

mobility and the return to education testing a roy model with multiple markets self selected migration presents one potential explanation for why observed returns to a college education in local labor markets vary widely even though u s workers are highly mobile to assess the impact of self selection on estimated returns this paper first develops a roy model of mobility and earnings where workers choose in which of the 50 states plus the district of columbia to live and work available estimation methods are either infeasible for a selection model with so many alternatives or place potentially severe restrictions on earnings and the selection process this paper develops an alternative econometric methodology that combines lee s 1983 parametric maximum order statistic approach to reduce the dimensionality of the error terms with more recent work on semiparametric estimation of selection models e g ahn and powell 1993 the resulting semiparametric correction is easy to implement and can be adapted to a variety of other polychotomous choice problems the empirical work which uses 1990 u s census data confirms the role of comparative advantage in mobility decisions the results suggest that self selection of higher educated individuals to states with higher returns to education generally leads to upward biases in ols estimates of the returns to education in state specific labor markets while the estimated returns to a college education are significantly biased correcting for the bias does not narrow the range of returns across states consistent with the finding that the corrected return to a college education differs across the u s the relative state to state migration flows of college versus high school educated individuals respond strongly to differences in the return to education and amenities across states

cashier or consultant entry labor market conditions field of study and career success we measure impacts of entry conditions on labor market outcomes for the us college graduating classes of 1974 2011 a large recession reduces initial earnings by 10 through full time work and wag

the specificity of general human capital evidence from college major choice college graduates do not always pursue careers related to their major science majors working in jobs unrelated to their field of study earn approximately 30 lower wages than those working in related jobs we develop a structural model of major choice and labor market outcomes that allows for skill uncertainty and differential accumulation of human capital across major our findings confirm that the average return to obtaining a science degree and working in a related job remains close to 30 we also find that individuals are uncertain about their future productivity at the time of the college major decision

peer effects teacher incentives and the impact of tracking evidence from a randomized evaluation in kenya to the extent that students benefit from high achieving peers tracking will help strong students and hurt weak ones however all students may benefit if tracking allows teachers to better tailor their instruction level lower achieving pupils are particularly likely to benefit from tracking when teachers have incentives to teach to the top of the distribution we propose a simple model nesting these effects and test its implications in a randomized tracking experiment conducted with 121 primary schools in kenya while the direct effect of highachieving peers is positive tracking benefited lower achieving pupils indirectly by allowing teachers to teach to their level jel i21 j45 o15

affirmative action in education evidence from engineering college admissions in india abstract this paper examines an affirmative action program for lower caste groups in engineering colleges in india we study both the targeting properties of the program and its implications for labor market outcomes we find that affirmative action successfully targets the financially disadvantaged the upper caste applicants that are displaced by affirmative action come from a richer economic background than the lower caste applicants that are displacing them targeting by caste however may lead to the exclusion of other disadvantaged groups for example caste based targeting reduces the overall number of females entering engineering colleges we find that despite poor entrance exam scores lower caste entrants obtain a positive return to admission our estimates however also suggest that these gains may come at an absolute cost because the income losses experienced by displaced upper caste applicants are larger than the income gains experienced by displacing lower caste students limited sample sizes in our preferred econometric specifications however prevent us from drawing strong conclusions from these labor market findings

advertising as information an empirical note lamm r mcfall unionism and prices in the food retailing industry journal of labor research 3 winter 1982 69 79 marion bruce w willard f mueller ronald w cotterill frederick e geithman and john r schmelzer the food retailing industrv market structure profits and prices new york praeger 1979a the price and profit performance of leading food chains a merican journal of a gricultural economics 61 aug 1979b 420 433 salinger michael a tobin s q unionization and the concentration profits relationship rand journal of economics 15 summer 1984 159 170 voos paula b and lawrence r mishel the union impact on profits evidence from the supermarket industry working paper no 88 north central project 117 university of wisconsin madison oct 1985 the union impact on profits evidence from industry price cost margin data journal of labor economics 4 jan 1986 105 133

do agricultural outputs of partly autarkic peasants affect their health and nutrition evidence from rwanda abstract in rural areas of less developed countries because of market imperfections the health and nutritional status of peasants may directly depend on the production levels of specific agricultural goods rather than solely on income levels this channel of health and nutrition determination has never been studied in order to assess and test the empirical possibility of this channel we estimate the responses of health and nutritional status of autarkic agricultural households in rwanda with respect to differences in socio demographic characteristics and the main agricultural outputs and inputs while controlling for local environment and sampling scheme several food outputs are found to have a positive influence on health and nutrition whereas the production of traditional beers has a negative impact moreover greater land negatively affects health and nutrition conditionally on agricultural production perhaps because of a larger relative workload for households who have a large farm an alternative interpretation of the estimates is that they inform on the validity of the common hypothesis of perfect agricultural input output markets with no effect of agricultural inputs outputs on health and nutrition status this hypothesis is rejected

field of study earnings and self selection why do individuals choose different types of post secondary education and what are the labor market consequences of those choices we show that answering these questions is difficult because individuals choose between several unordered alternatives even with a valid instrument for every type of education instrumental variables estimation of the payoffs require information about individuals ranking of education types or strong additional assumptions like constant effects or restrictive preferences these identification results motivate and guide our empirical analysis of the choice of and payoff to field of study our context is norway s post secondary education system where a centralized admission process covers almost all universities and colleges this process creates credible instruments from discontinuities which effectively randomize applicants near unpredictable admission cutoffs into different fields of study at the same time it provides us with strategy proof measures of individuals ranking of fields taken together this allows us to estimate the payoffs to different fields while correcting for selection bias and keeping the next best alternatives as measured at the time of application fixed we find that different fields have widely different payoffs even after accounting for institutional differences and quality of peer groups for many fields the payoffs rival the college wage premiums suggesting the choice of field is potentially as important as the decision to enroll in college the estimated payoffs are consistent with individuals choosing fields in which they have comparative advantage we also test and reject assumptions of constant effects or restrictive preferences suggesting that information on next best alternatives is essential to identify payoffs to field of study