male interracial wage differentials competing explanations persistent interracial wage differentials present a challenge for neoclassical models of discrimination which claim that long rung competition is not consistent with persistent discrimination this study provides an empirical examination of the missing variable and job competition models of interracial wage inequality the results argue strongly against the missing variables approach and strongly in favor of the job competition model specifically this study finds that about one half of the male african american white and latino white interracial wage differentials are due to market discrimination against african americans and latinos in addition the positive and significant coefficients on the race gender employment density variables strongly affirm the job competition model s contention that access to white especially male dominated jobs increases an individual s wage rate regardless of race racial job segregation then is an important explanatory variable for racial wage discrimination copyright 1999 by oxford university press

social behaviour in work absence by making use of a large scale randomized experiment we test whether social behaviour is important for work absence due to illness the individuals treated in the experiment were exposed to less monitoring of their eligibility to collect sickness insurance benefits which sharply increased their non monitored work absence this exogenous variation is exploited in two complementary analyses in both analyses we find significant social behaviour effects using detailed data we conclude that the social behaviour effects most likely stem from fairness concerns

market contagion evidence from the panics of 1854 and 1857 to test a model of contagion where individuals hear some bad news and communicate it to their acquaintances who then pass it on leading to a market panic requires a knowledge of the information networks of participants something hitherto unavailable for two panics in the 1850s this paper examines the behavior of irish depositors in a new york bank as recent immigrants their social network was determined largely by their place of origin in ireland and where they lived in new york during both panics this social network turns out to be the prime determinant of behavior

information school choice and academic achievement evidence from two experiments we examine a natural experiment and a field experiment that provided direct information on school test scores to lower income families in a public school choice plan receiving information significantly increases the fraction of parents choosing higher performing schools parents with high scoring alternatives nearby were more likely to choose nonguaranteed schools with higher test scores using random variation from each experiment we find that attending a higher scoring school increases student test scores the results imply that school choice will most effectively increase academic achievement for disadvantaged students when parents have easy access to test score information and good options from which to choose

what can we learn about financial access from u s immigrants the role of country of origin institutions and immigrant beliefs immigrants from countries with more effective institutions are more likely than other immigrants to have a relationship with a bank and to use formal financial markets more extensively the evidence that a country s institutional environment shapes beliefs and by extension the use of financial services provides support for policies that focus on institutional reforms in promoting financial access after holding wealth education and other factors constant the impact of institutional quality in the country of origin affects the financial market participation of all immigrant groups except those who have lived in the united states for more than 28 years these findings are robust to alternative measures of institutional effectiveness to controlling for additional country of origin characteristics and to various methods for addressing potential biases caused by immigrant self selection

are ghettos good or bad spatial separation of racial and ethnic groups may theoretically have positive or negative effects on the economic performance of those groups we examine the effects of segregation on outcomes for blacks in schooling employment and single parenthood we find that blacks in more segregated areas have significantly worse outcomes than blacks in less segregated areas we control for the endogeneity of location choice using instruments based on political factors topographical features and residence before adulthood a one standard deviation decrease in segregation would eliminate one third of the black white differences in most of our outcomes

ethnicity neighborhoods and human capital externalities the socioeconomic performance of today s workers depends not only on parental skills but also on the average skills of the ethnic group in the parents generation or ethnic capital this paper investigates the link between the ethnic externality and ethnic neighborhoods the evidence indicates that residential segregation and the external effect of ethnicity are linked partly because ethnic capital summarizes the socioeconomic background of the neighborhood where the children were raised ethnicity has an external effect even among persons who grow up in the same neighborhood when children are exposed frequently to persons who share the same ethnic background copyright 1995 by american economic association

the math gender gap the role of culture this paper investigates the effect of gender related culture on the math gender gap by analysing math test scores of second generation immigrants who are all exposed to a common set of host country laws and institutions we find that immigrant girls whose parents come from more gender equal countries perform better relative to similar boys than immigrant girls whose parents come from less gender equal countries suggesting an important role of cultural beliefs on the role of women in society on the math gender gap the transmission of cultural beliefs accounts for at least two thirds of the overall contribution of gender related factors

using maimonides rule to estimate the effect of class size on scholastic achievement the twelfth century rabbinic scholar maimonides proposed a maximum class size of 40 this same maximum induces a nonlinear and nonmonotonic relationship between grade enrollment and class size in israeli public schools today maimonides rule of 40 is used here to construct instrumental variables estimates of effects of class size on test scores the resulting identiecation strategy can be viewed as an application of donald campbell s regression discontinuity design to the class size question the estimates show that reducing class size induces a signiecant and substantial increase in test scores for fourth and efth graders although not for third graders when asked about their views on class size in surveys parents and teachers generally report that they prefer smaller classes this may be because those involved with teaching believe that smaller classes promote student learning or simply because smaller classes offer a more pleasant environment for the pupils and teachers who are in them mueller chase and walden 1988 social scientists and school administrators also have a longstanding interest in the class size question class size is often thought to be easier to manipulate than other school inputs and it is a variable at the heart of policy debates on school quality and the allocation of school resources in many countries see e g robinson 1990 for the united states ofsted 1995 for the united kingdom and moshel ravid 1995 for israel this broad interest in the consequences of changing class size

efficient education subsidization and the pay as you use principle abstract we investigate whether the pay as you use principle of public finance should apply to education subsidization for children to internalize human capital externalities in an intergenerational model with endogenous fertility leisure and accumulations of human and physical capital we characterize social optimality concerning physical and human capital accumulation leisure labor and fertility to guide the design of efficient education subsidization we show that efficient education subsidization requires future generations benefitting from it pay for it when fertility and leisure are endogenous namely the government should uphold the pay as you use principle to subsidize children s education by deficit and repay the debt by future taxes

community membership aspirations the link between inequality and redistribution revisited the issue at stake is to explain why redistributive policies may vary so greatly for a given distributional skewness to this end we abandon the stylized median voter and study how distributional tensions can act in many different ways depending on social affinity between the different economic classes and their prospect of upward or downward mobility in particular we consider that socioeconomic group membership through its implied social interactions and peer effects is an important determinant of an individual s outcome hence agents while voting on a social contract must take into account the consequences of their choice over their ex post belonging to a particular community this allows us to shed light on how the endogenous sorting of the population into clusters may interact with the balance of political power leading to a non monotonic relationship through the pattern of community formation in the economy between inequality and the pressure for redistributive policies

social networks and technology adoption in northern mozambique despite their potentially strong impact on poverty agricultural innovations are often adopted slowly using a unique household dataset on sunflower adoption in mozambique we analyse whether and how individual adoption decisions depend upon the choices of others in the same social networks since farmers anticipate that they will share information with others we expect farmers to be more likely to adopt when they know many other adopters dynamic considerations however suggest that farmers who know many adopters might strategically delay adoption to free ride on the information gathered by others we present empirical evidence that shows that the relationship between the probability of adoption and the number of known adopters is shaped as an inverse u in line with information sharing the network effect is stronger for farmers who report discussing agriculture with others the data contains information which is needed to ameliorate the identification issues that commonly arise in this context in particular social networks are precisely identified and in addition we can control for village heterogeneity and endogenous group formation

street crime and street culture a model shows how reputation concerns can support widespread street crime a street culture where the direct incentives for such behavior are weak there are social benefits to street reputations but those benefits are dominated when reputation concerns draw into crime those who obtain no direct gain from it the model matches facts about violent crime that a standard model cannot easily explain including low monetary returns disproportionate victimization of the young and poor and high variance in rates across small distances the model generates novel implications for policy and social science including a negative effect of social capital

black residential centralization and the spatial mismatch hypothesis abstract black residential centralization is found to be an important determinant of black employment status when estimated across metropolitan areas mas to avoid neighborhood selection the effects are greatest in large mas for the young and elderly and for individuals with less than a college education instrumental variable iv estimates support ordinary least squares ols results black residential centralization can account for 48 62 of the black white employment differential among 18 30 year olds living in large mas when estimated together black residential centralization job centralization and segregation all have large effects but the effects of black centralization and job centralization are considerably larger

residential segregation discrimination and african american theater entry during jim crow abstract we examine the effect of residential segregation on the entry of movie theaters serving african american customers in the 1950s which provided an alternative to the segregated theaters of the jim crow era consistent with preference externalities in racial and ethnic enclaves we find that greater residential segregation was associated with more african american theater entry estimates from a model of firm entry indicate that residential segregation increased the variable profits of african american movie theaters reducing the market size required for theater entry by 13 3 percent for a one standard deviation increase in segregation we also provide evidence that racial bias increased both variable profits and fixed costs and on net reduced african american theater entry an interpretation consistent with this finding is that racial animus forced black customers toward segregated accommodations while also limiting access to key inputs for potential entrants

like grand parent like child multigenerational mobility across the eu abstract this study shows that the multigenerational transmission of inequality in most of the 28 eu countries is higher than what a parent to child paradigm would suggest while a strand of the literature claims that this is due to a direct grandparental effect economic historian gregory clark argues that multigenerational mobility follows a markovian process in his view not only are previous estimates severely attenuated by an errors in variables problem but persistence is also constant across time and space using a unique retrospective survey containing information on three generations of european citizens we provide suggestive evidence against such a universal law of mobility while estimates based on measurement error models show that persistence is indeed as strong as clark suggests there are cross country differences furthermore for a few eu countries we cannot reject the hypothesis of a direct grandparental effect overall there is no single data generating process to describe multigenerational persistence that fits all eu countries 2

information flows and social externalities in a tanzanian banana growing village this article analyses the role of social networks as facilitators of information flows and banana output increase based on a village census full information is available on the socio economic characteristics and banana production of farmers kinship group members neighbours and informal insurance group members the census data enable us to use individual specific reference groups and include exogenous group controls to tackle standard difficulties related to identification and omitted variables bias when analysing social effects for the survey village of nyakatoke in tanzania the results suggest that information flows exist within all types of groups analysed but output externalities are limited to kinship groups using networks may offer scope for effective information flows on agricultural techniques but our evidence suggests that not just any local network will have a social externality impact requiring a clear understanding of local social networks for maximum impact

socially optimal social security and education subsidization in a dynastic model with human capital externalities fertility and endogenous growth abstract this paper considers socially optimal government policies in a dynastic family model with physical capital human capital endogenous fertility and positive spillovers from average human capital such spillovers reduce human capital investment but raise fertility from their social optimum we first characterize the social optimum with a non convex feasible set due to the quantity quality tradeoff concerning children we then show that social security and education subsidization together financed by labor income taxes can fully eliminate the efficiency losses of the spillovers and achieve the social optimum under plausible conditions however none of the policies can do so alone

social networks and inequality abstract about half of all vacancies are filled through networks of personal contact we consider the arrow loury conjecture that such labor market networks exacerbate inequality our central result is that referral networks display threshold behavior above a critical density of referrals qualified workers at all levels of the network are recruited with probability one below the threshold the probability of referral falls exponentially and workers low in the hierarchy are hired with probability zero an underclass emerges

unequal societies income distribution and the social contract this paper develops a theory of inequality and the social contract aiming to explain how countries with similar economic and political fundamentals can sustain such different systems of social insurance fiscal redistribution and education finance as those of the united states and western europe with imperfect credit and insurance markets some redistributive policies can improve ex ante welfare and this implies that their political support tends to decrease with inequality conversely with credit constraints lower redistribution translates into more persistent inequality hence the potential for multiple steady states with mutually reinforcing high inequality and low redistribution or vice versa

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

education and ethnicity in canada an intergenerational perspective ethnic and intergenerational aspects of human capital investment are explored levels of and cross sectional returns to education across ethnic groups in canada are estimated and large differences observed for men a positive correlation exists between ethnic group average years of education and its return we also find large negative correlations between ethnic group average educational outcomes and the previous generation s fertility suggesting a role for home production as a complement to formal education and supporting models of child quantity quality trade offs very slow intergenerational convergence in ethnic group level educational and labor market outcomes is also observed

moving to opportunity in boston early results of a randomized mobility experiment this paper examines the short run impacts of a change in residential neighborhood on the well being of low income families using evidence from a program in which eligibility for a housing voucher was determined by random lottery we examine the experiences of households at the boston site of moving to opportunity mto a demonstration program in five cities families in high poverty public housing projects applied to mto and were assigned by lottery to one of three groups experimental offered mobility counseling and a section 8 subsidy valid only in a census tract with a poverty rate of less than 10 percent section 8 comparison offered a geographically unrestricted section 8 subsidy or control offered no new assistance but continued to be eligible for public housing our quantitative analyses of program impacts uses data on 540 families from a baseline survey at program enrollment a follow up survey administered l to 3 5 years after random assignment and state administrative data on earnings and welfare receipt 48 percent of the experimental group and 62 percent of the section 8 comparison group moved through the mto program one to three years after program entry families in both treatment groups were more likely to be residing in neighborhoods with low poverty rates and high education levels than were families in the control group however while members of the experimental group were much more likely to be residing in suburban communities than were those in the section 8 group the lower program take up rate among the experimental group resulted in more families remaining in the most distressed communities households in both treatment groups experienced improvements in multiple measures of well being relative to the control group including increased safety improved health among household heads and fewer behavior problems among boys experimental group children were also less likely to be a victim of a personal crime to be injured or to experience an asthma attack there are no significant impacts of either mto treatment on the employment earnings or welfare receipt of household heads in the first three years after random assignment

the long run consequences of living in a poor neighborhood author s oreopoulos philip abstract many social scientists presume that the quality of the neigborhood to which children are exposed affects a variety of long run social outcomes i examine the effect on the long run labor market outcomes of adults who were assigned when young to substantially different public housing projects in toronto administrative data are matched to public housing addresses to track children from the program for over 15 years the main finding is that neighborhood quality plays little role in determining a youth s adult earnings education attainment or welfare participation but does affect exposure to crime while living in contrasting housing projects cannot explain large variances in labor market outcomes family differences as measured by sibling outcome correlations account for up to 30 percent of the total variance in the data

keeping the doctor away experimental evidence on investment in preventative health products household investment in preventative health products in developing countries is typically low even though the returns to such products are high in this paper we experimentally estimate demand curves for health products and test whether 1 information about health risk 2 cash liquidity 3 peer effects and 4 intra household differences in preferences affect demand in our main experiment in kenya involving children s shoes critical for preventing hookworm infection price is by far the most important predictor of purchase providing liquidity and targeting women also increased demand information had no effect even though we find that genuine learning occurred we find no peer effects even though people discussed the product purchase decision extensively we find similar results for price and information in three smaller studies in guatemala india and uganda in experiments involving soap and multivitamins

emigration and wages the eu enlargement experiment abstract the enlargement of the european union provides a unique opportunity to study the impact of the lifting of migration restrictions on the migrant sending countries with eu enlargement in 2004 1 2 million workers from eastern europe emigrated to the uk and ireland i use this emigration wave to show that emigration significantly changed the wage distribution in the sending country in particular between young and old workers using a novel dataset from lithuania the uk and ireland for the calibration of a structural model of labor demand i find that over the period of five years emigration increased the wages of young workers by 6 while it had no effect on the wages of old workers contrary to the immigration literature there is no significant effect of emigration on the wage distribution between high skilled and low skilled workers

ethnic enclaves and immigrant labor market outcomes quasi experimental evidence i examine the effects of the ethnic enclave size on labor market outcomes of immigrants i account for ability sorting into enclaves by exploiting a danish spatial dispersal policy under which refugees were randomly dispersed across locations first i find strong evidence that refugees with unfavorable unobserved characteristics self select into ethnic enclaves second a relative standard deviation increase in the ethnic enclave size increases annual earnings by 18 on average irrespective of skill level third further findings are consistent with the explanation that ethnic networks disseminate job information which increases the job worker match quality and thereby the hourly wage rate

institutions and financial development evidence from international migrants in the united states abstract we investigate the impact of institutions on financial development by analyzing the financial behavior of immigrants in the united states we find that immigrants from countries with institutions that more effectively protect private property are more likely to own stock in the united states the effect of home country institutions is persistent and absorbed early in life the impact of institutions is amplified for immigrants who live in metropolitan areas with many other immigrants from the same country these findings are robust to alternative measures of institutional effectiveness and to various methods of controlling for unobserved individual characteristics including specifications with country fixed effects

social contacts and occupational choice social contacts help workers to find jobs but those jobs need not be in the occupations where workers are most productive hence social contacts can generate mismatch between a worker s occupational choice and his comparative productive advantage thus economies with dense social networks can exhibit apparently low labor force quality and as a result low returns to firms investment and depressed aggregate productivity we employ us and european data for the 1990 s to test the key prediction that social contacts distort workers occupational choices in a direction that reduces their apparent productivity we find that the use of social contacts helps find jobs one to two months sooner but leads to individual wage discounts of 5 to 7 and produces negative externalities on aggregate productivity

mexican enclaves and the price of culture abstract studies of mexican immigrant earnings consistently find a negative relationship between concentration of mexicans and earnings smith and newman economic inquiry 15 51 66 1977 and yuengert journal of human resources 30 194 204 1995 among others attribute this enclave effect as the compensating differential for culture however the existence of a land market suggests that the price of culture may also depend on culture s effect on the price of land adopting a model developed by roback economic inquiry 26 23 41 1988 i first show that the price of mexican culture is a function of culture s effect on both earnings and rents second using data for california and texas from the 1990 census i estimate the price for mexican culture consistent with the model culture lowers earnings and increases rents in enclaves with larger concentration of mexicans in fact land s share of the price of culture is as much as 42 therefore studies that attribute the lower earnings in enclaves as the compensating differential for enclave externalities underestimate the value of culture this paper also tests several predictions implied by the theoretical model satisfying the general equilibrium conditions the earnings of other workers are higher in enclaves furthermore except for mexican americans the assumption that culture is not an amenity to other workers is supported by the data

liquidity risk and exchange traded fund returns variances and tracking errors abstract we investigate the effect of exchange traded fund etf liquidity on etf tracking errors returns and volatility in the us we find that illiquid etfs have large tracking errors the effect is more pronounced when underlying assets are less liquid returns and liquidity of illiquid etfs are more sensitive to underlying index returns or etf market liquidity or both thus a positive liquidity premium exists in us etf markets the etf variance could be larger than its net asst value variance owing to infrequent trading in summary illiquid etfs are more likely to deviate from their underlying indexes and could be riskier than underlying portfolios

the impact of school racial compositions on neighborhood racial compositions evidence from school redistricting i use data surrounding public school redistricting to study how school racial compositions affect neighborhood racial compositions this redistricting followed from the end of court ordered busing for racial desegregation significantly changing the racial composition of the assigned school for many neighborhoods over a 5 year period the impact of an increase in the percent black of the assigned elementary school on the percent black of the neighborhood was positive the effects increased over time consistent with a simple model of short run neighborhood racial dynamics these results have implications for potential effects of school racial desegregation policy changes on neighborhood racial compositions jel h75 i28 r23

job information networks neighborhood effects and inequality this paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends relatives and acquaintances during job search and its consequences for the job market it also addresses the role of network structure and size the resource endowments of contacts and nature of the links between contacts to explain differences in the effects of job information networks in doing so the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties inbreeding distance from structural holes etc the paper distinguishes between models of exogenous job information networks that is where individuals obtain job related information through a given social structure and endogenous job information networks which are social networks that result from individuals uncoordinated actions the paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature finally the paper outlines a model that integrates job information networks where interactions occur in business cycle frequencies with the dynamics of human capital formation which include the joint effects of parental community and neighborhood human capital and are set in life cycle frequencies for the purpose of organizing suggestions for future research and examining earned income inequality

bridging trade theory and labour econometrics the effects of international migration this paper surveys current theoretical and empirical research on international migration with a particular emphasis on the links between trade theory and labour empirics

the pursuit of opportunity explaining selective black migration abstract this paper examines the destination choices of black migrants during the great migration as previous research has shown educated blacks were more likely to relocate to the north in the pre world war ii era this analysis shows that this tendency can be attributed to the better educated migrants ability to finance transportation costs greater responsiveness to intercity wage differentials and stronger distaste for southern disamenities after 1940 the destination choice gap closed largely because migrant responses to wage differentials and valuation of southern disamenities changed these changes are observed both in the population at large and within birth year cohorts

growth divergence due to spatial externalities abstract on using household level panel data to unpack a regional growth regression for rural china we find that aggregate divergence at the regional level is entirely due to external effects of community wealth at the household level

government debt and economic growth in an overlapping generations model prior studies have shown that an increase in government debt raises the real interest rate and lowers the rate of economic growth in an overlapping generations model of endogenous growth this paper shows that an increase in government debt may not increase the real interest rate with the real interest rate being greater than the growth and that an introduction of government debt will increase the growth rate of per capita output if the growth rate is greater than the real interest rate and will decrease the growth rate if the growth rate is less than the real interest rate recent decades have seen a large increase in the share of government debt in national income in many countries this paper develops an endogenous growth model of overlapping generations to examine the effect of government debt on the rate of economic growth most prior studies of the effects of government policies on economic growth have assumed that government debt is absent romer 1986 jones and manuelli 1990 king and rebelo 1990 and rebelo 1991 showed that when government spending is not productive an increase in the income tax rate will lower the rate of per capita output growth 2 barro 1990 showed that an increase in government spending may either increase or decrease the rate of growth in a model with productive government spending government debt was incorporated in endogenous growth models by king 1992 and van der ploeg and alogoskoufis 1994 king 1992 developed a model of endogenous growth and showed that a necessary condition for the feasibility of perpetual debt finance is that labor s share of income must be greater than two thirds van der ploeg and alogoskoufis 1994 developed a blanchard type overlapping generations og model of endogenous growth and found that an increase in government debt arising from an intertemporal shift in taxation reduces the growth rate this paper analyzes the effect of government debt by developing a diamond type of og

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

do neighborhoods affect hours worked evidence from longitudinal data using a confidential version of the nlsy79 we estimate large effects of neighborhood social characteristics and job proximity on labor market activity a variety of neighborhood social characteristics are associated with less market work social characteristics have nonlinear effects with the greatest impact in the worst neighborhoods social characteristics are also more important for less educated workers exploiting the panel aspects of our data we find that estimates that do not account for neighborhood selection on the basis of time invariant and time varying unobserved individual characteristics substantially overstate the social effects of neighborhoods but understate the effects of job access

on the determinants of fiscal centralization theory and evidence abstract this paper presents a simple model that unifies most of the results of the literature on fiscal federalism the model describes an economy characterized by two levels of government one public good and a private good the predictions of the model are tested by using a new set of measures of fiscal centralization the main findings are that country size income per capita ethnic fractionalization and level of democracy are negatively correlated with the degree of fiscal centralization the model is tested using ols tobit and semi parametric estimators the paper also shows that the variables included in the regression are helpful in the prediction of changes in the level of centralization

choosing the right pond social approval and occupational choice we model the endogenous emergence of social perceptions about occupations and their impact on occupational choice in particular an individual s social approval increases with his community s perception of his skill in his chosen career these perceptions vary across communities because individuals better assess the skill of those in occupations similar to their own such imperfect assessment can distort choices away from comparative advantage when skill distributions differ across occupations and or correlate positively the community perceives one occupation more favorably this favored sector experiences overcrowding but misallocation occurs across both sectors furthermore a positive skill correlation can produce multiple steady states

robust determinants of intergenerational mobility in the land of opportunity abstract this paper revisits the influential work by chetty et al 2014 who attempt to explain the variation in intergenerational mobility across commuter zones in the us i e spatial mobility using nine classes of variables we employ bayesian model averaging methods that allow for model uncertainty to identify robust predictors of spatial mobility in doing so we pay special attention to the specification of model and parameter priors we also investigate the heterogeneous effects of these predictors on spatial mobility across commuter zones in different average income quintiles our findings suggest a more nuance and complex characterization of the spatial mobility process than that proposed by chetty hendren kline and saez

ethnic capital and intergenerational transmission of educational attainment this paper studies the role of ethnicity in the intergenerational transmission of educational attainment within the framework outlined by borjas quarterly journal of economics 1992 107 1 123 150 relying on heteroskedasticity to identify parameters in the presence of endogenous regressors i find evidence that the ordinary least squares estimates of the effect of ethnic capital on intergenerational transmission of education are biased upwards due to the transfer of unobserved ability i also find that while the role of parental capital has declined over time ethnic capital has a relatively constant effect on intergenerational transmission of educational attainment

statistical discrimination with peer effects can integration eliminate negative stereotypes we introduce peer effects in the costs of human capital acquisition into a model of statistical dis crimination in labour markets this creates a link between the level of segregation in social networks and racial disparities in job assignment and wages we show that this relationship is characterized by disconti nuities there is a threshold level of segregation below which negative stereotypes become unsustainable and steady state skill levels can change dramatically this change can work in either direction skill levels may either rise or fall in both groups vvtiich of these outcomes arises depends on the population share of the disadvantaged group and on the distribution of the costs of human capital investments we also examine the effects of affirmative action policies in the presence of peer effects and provide conditions under which such policies eliminate negative stereotypes

a natural experiment in school accountability the impact of school performance information on pupil progress we test the hypothesis that the publication of school performance tables raises school effectiveness our data allow us to implement a classic difference in difference analysis comparing outcomes in england and wales before and after the abolition of the tables in wales we find significant and robust evidence that this reform markedly reduced school effectiveness in wales there is significant heterogeneity across schools schools in the top quartile of the league tables show no effect we also test whether the reform reduced school segregation in wales and find no systematic significant impact on either sorting by ability or by socioeconomic status

incentives and targets in hospital care evidence from a natural experiment performance targets are commonly used in the public sector despite their well known problems when organisations have multiple objectives and performance is difficult to measure it is possible that such targets may work where there is considerable consensus that performance needs to be improved we investigate this possibility by examining the response of the english national health service to high profile waiting time targets we exploit a natural policy experiment between two countries of the uk england and scotland to establish the global effectiveness of the targets we then use a within england hospital analysis to confirm that responses vary by treatment intensity and to control for differences in resources which may accompany targets we find that targets met their goals of reducing waiting times without diverting activity from other less well monitored aspects of health care and without decreasing patient health on exit from hospital

alternative approaches to evaluation in empirical microeconomics four alternative but related approaches to empirical evaluation of policy interventions are studied social experiments natural experiments matching methods and instrumental variables in each case the necessary assumptions and the data requirements are considered for estimation of a number of key parameters of interest these key parameters include the average treatment effect the treatment on the treated and the local average treatment effect some issues of implementation and interpretation are discussed drawing on the labour market programme evaluation literature

replication in labor economics evidence from data and what it suggests examining the most heavily cited publications in labor economics from the early 1990s i show that few of over 3000 articles citing them directly replicates them they are replicated more frequently using data from other time periods and economies so that the validity of their central ideas has typically been verified this pattern of scholarship suggests beyond the currently required depositing of data and code upon publication that there is little need for formal mechanisms for replication the market for scholarship already produces replications of non laboratory applied research

education and human capital externalities evidence from colonial benin colonial benin we investigate the effect of education on living standards occupation and political participation since both school locations and student cohorts were selected with very little information treatment and control groups are balanced on observables we can therefore estimate the effect of education by comparing the treated to the untreated living in the same village as well as those living in villages where no schools were set up we find a significant positive treatment effect of education for the first generation of students as well as their descendants they have higher living standards are less likely to be farmers and are more likely to be politically active we find large village level externalities descendants of the uneducated in villages with schools do better than those in control villages we also find extended family externalities nephews and nieces directly benefit from their uncle s education and show that this represents a family tax as educated uncles transfer resources to the extended family

a spatial temporal model of human capital accumulation abstract we develop an overlapping generations model of human capital accumulation and analyze its spatial and temporal properties the interplay between local spillovers of human capital and global market participation partitions the society into socio economic classes we focus upon stationary equilibria and show that a large class of them are locally stable stationary equilibria can be homogeneous where the human capital distribution is degenerate or stratified with a distinct spatial pattern of human capital distribution we provide several examples and specify conditions under which equilibria are sensitive to the spatial structure of the society we illustrate our results by numerical simulations journal of economic literature classification numbers d90 i21 j24 o15

ethnic enclaves and the economic success of immigrants evidence from a natural experiment recent immigrants tend to locate in ethnic enclaves within metropolitan areas the economic consequence of living in such enclaves is still an unresolved issue we use an immigrant policy initiative in sweden when government authorities distributed refugee immigrants across locales in a way that may be considered exogenous this policy initiative provides a unique natural experiment which allows us to estimate the causal effect on labor market outcomes of living in enclaves we find substantive evidence of sorting across locations when sorting is taken into account living in enclaves improves labor market outcomes for instance the earnings gain associated with a standard deviation increase in ethnic concentration is in the order of four to five percent

family values and the regulation of labor flexible labor markets requires geographically mobile workers to be e cient otherwise rms can take advantage of the immobility of workers and extract monopsony rents in cultures with strong family ties moving away from home is costly thus individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of rms even though regulation generates lower employment and income empirically we do nd that individuals who inherit stronger family ties are less mobile have lower wages are less often employed and support more stringent labor market regulations there are also positive cross country correlations between the strength of family ties and labor market rigidities finally we nd positive correlations between labor market rigidities at the beginning of the twenty rst century and family values prevailing before world war ii which suggests that labor market regulations have deep cultural roots

education social cohesion and economic growth analysis of the contribution of education to growth through its role in promoting a common culture indicates that when different cultural groups separately determine the social content of their school curricula excessive polarization can result with less than optimal growth the optimal trajectory involves a gradual reciprocal convergence of school curricula towards the middle ground this may be difficult to implement in a political context in which all agents are identified with one group or another when curricula are determined by legislative bargaining centralization of schooling may result in overly rapid homogenization in some cases and perhaps surprisingly excessive polarization in others this abstract was borrowed from another version of this item

schooling and economic growth a king rebelo experiment with human capital abstract education is added to the standard neoclassical growth model by calibrating a human capital technology to the empirical evidence on schooling simulation experiments patterned after king and rebelo 1993 american economic review 83 908 931 are conducted when agents act as if they are infinitely lived interest rates are too high and the rise in school spending is too weak over the transitional growth path when schooling is inefficiently low due to binding intergenerational credit constraints interest rates deviate only moderately from the steady state level and the historical rise in school spending is fully explained

revisiting the relationship between ethnic diversity and preferences for redistribution comment in this paper we return to the question raised in dahlberg et al 2012 concerning a causal relationship between ethnic diversity and preferences for redistribution a re analysis of their study indicates that results are based on an endogenous instrument and severe sample attrition bias correcting for either of these two problems reveals that there is no relationship between ethnic diversity and preferences for redistribution more generally we provide results that put into question the conventional description of the swedish refugee placement policy

the evolution of human capital in an interacting agent economy abstract we consider a dynamic spatial model of human capital accumulation in the presence of local spillovers in learning our results provide conditions under which homogeneous and heterogeneous steady states exist and are locally stable our model also considers the impact of role models and mentors and indicates when they can have a positive or negative impact upon the steady state human capital levels we also show that in some circumstances the dynamics of human capital accumulation can be chaotic

ethnic concentration and language fluency of immigrants evidence from the guest worker placement in germany this paper analyses the impact of regional ethnic concentration on the language proficiency and language use of immigrants it solves the endogeneity of immigrants location choices by exploiting a peculiar episode of the german immigration history the exogenous placement of guest workers after wwii one of the largest guest worker programs on record the econometric approach accounts for several sources of measurement error and provides a falsification exercise that hypothetically relocates the most language proficient immigrants into ethnic enclaves to test the extent of cross regional sorting necessary to render the results purely spurious the results show a robust negative effect of ethnic concentration on immigrants language ability which is driven by differences in contact rates with natives and not by differences in the willingness to integrate the paper discusses these findings against the background of a language production function and in the light of feasible policy options to foster the language acquisition of immigrants

school finance spatial income segregation and the nature of communities in a general equilibrium model that links school and housing markets a purely public school system regardless of the degree of centralization results in substantially more spatial income segregation than a purely private system however the combination of a public system with a private school market yields the least residential segregation as housing price distortions from the capitalization of the public system generate incentives for middle and high income private school attendees to live with lower income public school attendees the impact of vouchers and the sensitivity of results to alternative school production models is also investigated

referral based job search networks this article derives novel testable implications of referral based job search networks in which employees provide employers with information about potential new hires that they otherwise would not have using comprehensive matched employer employee data covering the entire workforce in one large metropolitan labour market combined with unique survey data linked to administrative records we provide evidence that workers earn higher wages and are less inclined to leave their firms if they have obtained their job through a referral these effects are particularly strong at the beginning of the employment relationship and decline with tenure in the firm suggesting that firms and workers learn about workers productivity over time overall our findings imply that job search networks help to reduce informational deficiencies in the labour market and lead to productivity gains for workers and firms

human capital and interethnic marriage decisions common explanations for the generally negative relationship between education and ethnic endogamy include 1 education makes immigrants and their children better able to adapt to native culture thereby eliminating the need for a same ethnicity spouse and 2 education raises the likelihood of leaving ethnic enclaves thereby decreasing the probability of meeting potential same ethnicity spouses this paper considers a third option the role of assortative matching on education if education distributions differ by ethnicity then spouse searchers may trade similarities in ethnicity for similarities in education when choosing spouses u s census data on second generation immigrants provide strong support for the assortative matching mechanism

early labour market experiences of second generation immigrants in sweden this article investigates second generation immigrant s early labour market performances in sweden to study their labour market success we estimate dynamic transition rate models cox type proportional hazards in a competing risk framework using register based panel data set our results reveal that parental resources affect not only second generation immigrants continuing education but also their later labour market success the study verifies that finding a job is difficult for second generation immigrants and the significant unobserved heterogeneity parameter estimate may indicate discrimination as a whole second generation immigrants have worse labour market performances compared to their native born counterparts

networks or neighborhoods correlations in the use of publicly funded maternity care in california abstract this study focuses on network effects in the utilization of publicly funded prenatal care using vital statistics data from california for 1989 2000 networks are defined using 5 digit zip codes and a woman s racial or ethnic group like others we find evidence that the use of public programs is highly correlated within groups defined using race ethnicity and neighborhoods these correlations persist even when we control for many unobserved characteristics by including zip code year fixed effects and when we focus on the interaction between own group behavior and measures of the potential for contacts with other members of the group contact availability however the richness of our data allows us to go further and to conduct several tests of one important hypothesis about networks that the estimated effects represent information sharing within groups the results cast doubt on the idea that the observed correlations can be interpreted as evidence of information sharing in particular we find estimated effects to be as large or larger among women who have previously used the program as among first time users

does the river spill over estimating the economic returns to attending a racially diverse college t he attainment of a diverse student body is a constitutionally permissible goal for an institution of higher education the atmosphere of speculation experiment and creation so essential to the quality of higher education is widely believed to be promoted by a diverse student body lewis powell regents of the university of california v bakke 438 u s 265 1978 pp 311 12 quoting sweezy v new hampshire 354 u s 234 1957 p 263 i introduction for more than a quarter century the belief that diversity contributes to the quality of undergraduate and graduate education has motivated court opinions and college policies regarding racial preferences in admissions l surprisingly the social sciences have provided very little evidence to support or refute this claim such evidence would clearly be of great interest both to policy makers and to scholars conducting more general studies of the impacts of affirmative action on higher education 2 in the absence of programs employing random assignment of individuals to campuses with varying degrees of racial diversity any evidence offered on this question will be subject to criticism that diversity may correlate with unobserved determinants of individual outcomes 3 in such a scenario policy makers face an unenviable choice of making uninformed decisions or paying attention to potentially imperfect research findings this article does not claim to solve all the issues involved in the identification of racial diversity effects as described below however we use a promising data source the college and beyond c b data set and a variety of identification strategies to gain some degree of insight into the question of whether exposure to diversity is beneficial for college students we find no evidence of a positive link between the two variables and the imperfections of our research design most likely lead us to overstate the likelihood that there is such a link we begin by translating powell s hypothesis into economic terms building on the existing concepts of human capital becker 1964 and ethnic capital borjas 1992 1995 and inspired by lazear s 1995 model of cultural assimilation we introduce the concept of diversity capital we define diversity capital as a measure of an individual s ability to create surplus in interactions with individuals of different racial ethnic or socioeconomic backgrounds in this context the beliefs articulated by lewis powell in 1978 translate into a hypothesis that a diverse student body contributes directly or indirectly to diversity capital with this proposed causal mechanism in mind we focus our empirical analysis on a direct estimation of the relationship between minority representation and the postgraduation outcomes of undergraduates on elite campuses although our model of the returns to collegiate diversity is simple empirical estimation of the returns to diversity is complicated by an omitted variable problem college racial composition may correlate with unobserved institution level components of education quality or with individual level determinants of productivity in our sample of selective colleges the sign of this bias is most likely positive among selective colleges those matriculating the students with the highest sat scores also tend to have higher minority representation if student sat scores are imperfectly but positively correlated with unobserved determinants of productivity our estimates will exhibit a positive bias and thus overstate the case that exposure to underrepresented minorities urms improves postgraduate outcomes 4 in one set of specifications we allow the effect of exposure to diversity to vary with the relative position of individual students and peers in the sat score distribution in general we find that the type of diversity increase brought about by affirmative action policies which brings lower scoring minority students into potential contact with higher scoring majority race students is if anything detrimental to majority race students

geographic poverty traps a micro model of consumption growth in rural china how important are neighbourhood endowments of physical and human capital in explaining diverging fortunes over time for otherwise identical households in a developing rural economy to answer this question we develop an estimable micro model of consumption growth allowing for constraints on factor mobility and externalities whereby geographic capital can influence the productivity of a household s own capital our statistical test has considerable power in detecting geographic effects given that we control for latent heterogeneity in measured consumption growth rates at the micro level we find robust evidence of geographic poverty traps in farm household panel data from post reform rural china our results strengthen the equity and efficiency case for public investment in lagging poor areas in this setting copyright 2002 john wiley sons ltd

evaluating the employment impact of a mandatory job search program this paper exploits area based piloting and age related eligibility rules to identify treatment effects of a labor market program the new deal for young people in the u k a central focus is on substitution displacement effects and on equilibrium wage effects the program includes extensive job assistance and wage subsidies to employers we find that the impact of the program significantly raised transitions to employment by about 5 percentage points the impact is robust to a wide variety of nonexperimental estimators however we present some evidence that this effect may not be as large in the longer run jel j18 j23 j38

regional agricultural endowments and shifts of poverty trap equilibria evidence from ethiopian panel data we examine changes in patterns of equilibria over time and across regions applied to the ethiopia rural household survey we revisit incidence of multiple equilibria using new nonparametric techniques and examine single equilibria that remain stagnant below the poverty line using quantile regressions we identify differences across the income distribution we introduce the empirical analysis of sequences of equilibria we identify a single equilibrium in 1994 1999 but find a second higher equilibrium emerging in 1999 2004 evidencing a shift from unimodal toward a bimodal asset distribution the most deprived region exhibits a low level stagnant equilibrium despite significant rural income growth nationwide

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

the inheritance of inequality how level is the intergenerational playing field what are the causal mechanisms that underlie the intergenerational transmission of economic status are these mechanisms amenable to public policies in a way that would make the attainment of economic success more fair these are the questions we will try to answer

labor earnings in one company towns theory and evidence from kazakhstan one company towns characterized by the presence of a large employer in a local labor market are a frequent legacy of state led development strategies how will downsizing or closing unprofitable state owned enterprises affect these towns this article develops a simple model combining monopsony power in the labor market with a keynesian closure of the product market and uses it to interpret the findings of previous studies the article evaluates the impact of the company s employment level on the town s labor earnings in kazakhstan where one company towns are still prevalent the evaluation is based on data from the 1996 living standards measurement survey the results show that labor earnings in the town decrease roughly 1 5 percent when the share of its population working for the company decreases 1 percent the results are robust to changes in the definition of labor earnings and to the inclusion of a variety of other community characteristics in the analysis these results and the theoretical model are combined to evaluate the welfare impact of company downsizing and consequently to derive the optimal extent of labor retrenchment

optimal social security in a dynastic model with human capital externalities fertility and endogenous growth abstract in this paper we investigate the optimal scale of pay as you go social security in a dynastic family model with human capital externalities fertility and endogenous growth human capital externalities reduce the return to human capital investment and hence lead to under investment in human capital and over reproduction of the population if the taste for the number of children is sufficiently weak relative to the taste for the welfare of children social security can be welfare enhancing by reducing fertility and raising human capital investment per child

teaching to the rating school accountability and the distribution of student achievement this paper examines whether minimum competency school accountability systems such as those created under no child left behind influence the distribution of student achievement because school ratings in these systems only incorporate students test scores via pass rates this type of system increases incentives for schools to improve the performance of students who are on the margin of passing but does not increase short run incentives for schools to improve other students performance using student level panel data from texas during the 1990 s i explicitly calculate schools short run incentives to improve various students expected performance and i find that schools do respond to these incentives students perform better than expected when their test score is particularly important for their schools accountability rating also low achieving students perform better than expected in math when many of their classmates math scores are important for the schools rating while relatively high achieving students do not perform better distributional effects appear to be related to broad changes in resources or instruction as well as narrowly tailored attempts to improve the performance of specific students

ethnic externalities in education and second generation immigrants i analyse the role of ethnic and native human capital defined respectively as the average years of schooling of ethnic groups and of natives within a specific region and of ethnic concentrations in the educational attainment of second generation immigrants in germany compared to natives children parents education has a small and insignificant effect on second generation immigrants education ethnic concentrations have a negative effect while ethnic capital is insignificant the effect of native capital too is insignificant but much larger in magnitude than the effect of ethnic capital for women mother s education is relatively more important for men ethnic concentrations constitute a stronger impediment to educational attainment than for women

how large are learning externalities the quantitative features of human capital externalities are not fully understood although static externalities are estimated in some studies learning externalities remain mostly unestimated by calibrating a growth model this article provides an estimate of learning externalities the calibration uses an equilibrium condition that equates private returns on physical capital and human capital the results suggest that sizable learning externalities exist even in a conservative setup the estimated social rate of return on human capital is 9 0 compared to the private rate of return 6 6 therefore human capital externalities are an important source of economic growth