Knowledge that Transforms

We analyze the relationship between charter high school attendance and educational attainment in Florida and in Chicago. Controlling for observed student characteristics and test scores, we estimate that among students who attended a charter middle school, those who went on to attend a charter high school were 7–15 percentage points more likely to earn a standard diploma than students who transitioned to a traditional public high school. Similarly, those attending a charter high school were 8–10 percentage points more likely to attend college. We find even larger effects when we treat high school choice as endogenous.

Workers competing in a tournament for a prize (e.g., a promotion) often perform sequentially in multiple stages. When the firm is privately informed about the workers’ performance, it can sharpen incentives by strategically disclosing the intermediate results. But the policies that enhance final-stage effort may dampen incentives at the intermediate stage. In our model, the optimal disclosure policy has a simple form: disclose only if all workers perform poorly. This result offers a novel justification for partial disclosure in performance feedback. Also, it contrasts with the existing literature that focuses on the extreme policies of full disclosure and no disclosure.

In this article, I present structural estimates of a search model that flexibly incorporates general human capital accumulation along with career and firm choice, where a career is empirically identified as a combination of industry and occupation. I use these estimates to empirically distinguish between the relative importance of various factors for generating wage growth over the life cycle. Evidence presented in the article highlights the importance of considering the two-stage search process that originates from the model. In particular, I demonstrate that previous instrumental variables methods dramatically underestimate the importance of firm-specific matches for wage growth.

This article establishes the cyclical properties of a novel measure of worker reallocation: long-distance migration rates within the United States. Combining evidence from a number of data sets spanning the entire postwar era, we find that internal migration within the United States is procyclical. This result cannot be explained by cyclical variation in relative local economic conditions, suggesting that the net benefit of moving rises during booms. Migration is most procyclical for younger labor-force participants. Therefore, cyclical fluctuations in the net benefit of moving appear to be related to conditions in the labor market and the spatial reallocation of labor.

We specify and implement a test for the presence and importance of labor market networks based on residential proximity, in determining the establishments at which people work. Using matched employer-employee data at the establishment level, we measure the importance of these network effects for groups broken out by race, ethnicity, and measures of skill. The evidence indicates that these types of labor market networks do exist and play an important role in determining the establishments where workers work; that they are more important for minorities and the less skilled, especially among Hispanics; and that they appear to be race based.

Although economic theory predicts an inverse relation between relativewages and immigration-induced supply shifts, it has been difficultto document such effects. The weak evidence may be partly due to samplingerror in a commonly used measure of the supply shift, the immigrantshare of the workforce. After controlling for permanent factors thatdetermine wages in specific labor markets, little variation remainsin the immigrant share. We find significant sampling error in thismeasure of supply shifts in Canadian and U.S. census data. Correctingfor the resulting attenuation bias can substantially increase existingestimates of the wage impact of immigration. (c) 2011 by The University of Chicago. Allrights reserved.

We find that about 40% of a cohort of young Canadian men have been employed at some time with an employer for which their father also worked, and 6%–9% have the same employer in adulthood. The intergenerational transmission of employers is positively related to paternal earnings, particularly at the very top of the earnings distribution, and to the presence of self-employment income and the number of employers with which the father has had direct contact. It has an important influence on nonlinear patterns in the intergenerational elasticity of earnings.

We report the impacts of a job training program operated in the Dominican Republic. A random sample of applicants was selected to undergo training, and information was gathered 10–14 months after graduation. Unfortunately, people originally assigned to treatment who failed to show up were not included in the follow-up survey, potentially compromising the evaluation design. We present estimates of the program effect, including comparisons that ignore the potential nonrandomness of “no-show” behavior, and estimates that model selectivity parametrically. We find little indication of a positive effect on employment outcomes but some evidence of a modest effect on earnings, conditional on working.

This article uses short-run housing wealth changes to identify the effect of housing wealth on college attendance. I find that households used their housing wealth to finance postsecondary enrollment in the 2000s when housing wealth was most liquid; each $10,000 in home equity raises college enrollment by 0.7 of a percentage point on average. The effect is localized to lower-resource families, for whom a $10,000 increase in housing wealth increases enrollment by 5.7 percentage points. These estimates imply that the recent housing bust could significantly negatively affect college enrollment through reduction in the housing wealth of families with college-age children.