Knowledge that Transforms

We estimate the impact of incentive strength on achievement under a group-based teacher incentive pay program. The system provides variation in the share of students in a subject-grade that a teacher instructs, which proxies for incentive strength. We find that achievement on incentivized exams, but not nonincentivized exams, improves when incentives strengthen. For the incentivized exams, we find that effects fade out monotonically as a teacher's portion of the group increases to between 20 and 30 percentage and are larger for teachers with low-achieving students. Calculations based off these estimates show modest positive effects of the program overall.

Many economists believe knowledge production generates positive spillovers among knowledge producers. The available evidence, however, is mixed. We argue that spillovers can exist along three dimensions: idea, geographic, and collaboration space. To isolate the key channel through which knowledge spills over, we use a unique data set to examine the impact of a large post-1992 exodus of Soviet mathematicians on the output of the nonémigrés. Although the data reveal strong competitive effects in idea space, there is evidence of knowledge spillovers in collaboration space, when high-quality researchers directly engage with other researchers in the joint production of new knowledge.

This paper examines how the fertility of enslaved women was affected by the promise of freedom. Exploiting geographic variation in the effect of the Fugitive Slave Law of 1850, I demonstrate a negative correlation between fertility and the distance to freedom. This negative correlation is stronger on larger plantations but weaker when the slaveholder is a woman. A similar correlation is not present for white children, slave children with white fathers, or slave children born prior to the Fugitive Slave Law. The negative correlation suggests that the promise of freedom played an important role in the everyday lives of slaves.

Psychologists and economists have argued that rewards often have hidden costs. One possible reason is that the principal may have incentives to offer higher rewards when she knows the task is difficult. Our experiment tests if high rewards embody such bad news and if this is correctly perceived by their recipients. Our design allows us to decompose the overall effect of rewards on effort into a direct incentive and an informational effect. The results show that participants correctly interpret high rewards as bad news. In accordance with theory, the negative informational effect coexists with the direct positive effect.

Standard economic models assume that the demand for expert predictions arises only under the conditions in which individuals are uncertain about the underlying process generating the data and there is a strong belief that past performances predict future performances. We set up the strongest possible test of these assumptions. In contrast to the theoretical suggestions made in the literature, people are willing to pay for predictions of truly random outcomes after witnessing only a short streak of accurate predictions live in the lab. We discuss potential explanations and implications of such irrational learning in the contexts of economics and finance.

This paper uses random assignment of students to investigate the impact of study groups and roommates on academic achievement. We find that informal social interaction with roommates has a significant positive impact on academic achievement, while study group peers have no discernible impact, a result driven by group heterogeneity in ability. We also find that lower-ability students benefit from high-ability students but not vice versa.

We use variation from the minimum legal drinking age to estimate the causal effect of access to alcohol on crime. Using a census of arrests in California and a regression discontinuity design, we find that individuals just over age 21 are 5.9% more likely to be arrested than individuals just under 21. This increase is mostly due to assaults, alcohol-related offenses, and nuisance crimes. These results suggest that policies that restrict access to alcohol have the potential to substantially reduce crime.

We combine firm-level panel data on U.S. foreign affiliate activity with detailed measures of U.S. trade policy to study the relationship between offshoring and preferential market access. Consistent with theory, we find that trade preferences and offshoring activity are positively and significantly correlated. Using instrumental variables, we estimate that a 10% increase in U.S. foreign affiliate exports to the United States is associated with a 4 percentage point increase in the rate of preferential duty-free access. Restricting attention to the Generalized System of Preferences (GSP) among developing countries, this estimate more than triples, relative to the baseline, full sample results.

This paper examines the factors that give rise to intermediaries in exporting and explores the implications for trade volumes. Export intermediaries such as wholesalers serve different markets and export different products than manufacturing exporters do. Wholesalers are more prevalent in markets with higher destination-specific fixed costs and focus on products that are less differentiated, have lower contract intensity, and have large sunk entry costs. Aggregate exports to destinations with high shares of indirect exports are less responsive to changes in the real exchange rate than are exports to markets served primarily by direct exporters.

We derive testable implications of instrument validity in just identified treatment effect models with endogeneity and consider several tests. The identifying assumptions of the local average treatment effect allow us to both point identify and bound the mean potential outcomes of the always takers under treatment and the never takers under nontreatment. The point-identified means must lie within their respective bounds, which provides us with four testable inequality moment constraints. Finally, we adapt our testing framework to the identification of distributional features. A brief simulation study and an application to labor market data are also provided.