Knowledge that Transforms

In this article, I propose and estimate a dynamic model of education, borrowing, and work decisions of high school graduates. I examine the effect of relaxing borrowing constraints on educational attainment by simulating increases in the amount students are permitted to borrow from government-sponsored loan programs. My results indicate that borrowing constraints have a small impact on attainment: the removal of education-related borrowing constraints raises bachelor’s degree completion by 2.4 percentage points. Tuition subsidies are necessary to obtain larger increases: I find that higher subsidies for average-ability students are the most cost effective targeted tuition subsidies.

Using personnel data from a large US retail firm, I examine the firm’s response to the 1996 federal minimum wage increase. Compulsory increases in average wages had negative but statistically insignificant effects on overall employment. However, increases in the relative wages of teenagers led to significant increases in the relative employment of teenagers, especially younger and more affluent teenagers. Further analysis suggests a pattern consistent with noncompetitive models. Where the legislation affected mainly the wages of teenagers and so was only moderately binding, it led both to higher teenage labor market participation and to higher absolute employment of teenagers.

We adopt a multi-country setup to show that years of schooling have a causal protective effect on the body mass index of females living in nine European countries. No such effect is found for males. The protective effect for European females is not negligible but is smaller than one recently found for the United States and stronger among overweight females. We discuss possible mechanisms justifying both the protective role of education and the gender difference in this role. We argue that the effects of additional schooling on income, the probability of employment, and the frequency of vigorous physical activities, both on and off the job, may help explain our results.

We ran a field experiment in a Dutch retail chain consisting of 128 stores. In a random sample of these stores, we introduced short-term sales competitions among subsets of stores. We find that sales competitions have a large effect on sales growth, but only in stores where the store’s manager and a sufficiently large fraction of the employees have the same gender. Remarkably, results are alike for sales competitions with and without monetary rewards, suggesting a high symbolic value of winning a tournament.

We evaluate the effects of the school system on mathematical, verbal, and logical reasoning skills using data from the Finnish comprehensive school reform that abolished the two-track school system. We use a difference-in-differences approach that exploits the gradual implementation across the country. Cognitive skills are measured using test scores from the Finnish Army Basic Skills Test. The reform had small positive effects on verbal test scores but no effect on the mean performance in the arithmetic or logical reasoning tests. However, the reform significantly improved the scores of the students whose parents had less than a high school education.

This article uses a game-theoretic, two-sided matching model and method of simulated moments estimation to study factors affecting the match of elementary teachers to their first jobs. We find that employers demonstrate preferences for teachers having stronger academic achievement (e.g., attended a more selective college) and for teachers living in closer proximity to the school. Teachers show preferences for schools that are closer geographically, are suburban, have a smaller proportion of students in poverty, and, for white teachers, have a smaller proportion of minority students. These results appear predictable but contradict findings from prior research estimating hedonic wage equations for teacher labor markets.

Teenage peers are perceived as being important, but there is little conclusive evidence demonstrating this. This paper uses data on the population of Norway and idiosyncratic variation in cohort composition within schools to examine the role of peer composition in ninth grade on longer-run outcomes such as IQ scores, teenage childbearing, education, and labor market outcomes. We find that outcomes are influenced by the proportion of females in the grade, and these effects differ by gender. Average age and average mother’s education of peers have little impact on teenagers but average father’s earnings of peers matters for boys.

Using data for students undertaking a series of real-world academic examinations with high future payoffs, we examine whether the differences in these evaluations’ competitive nature generate a performance gender gap. In the univariate setting we find that women’s performance is first-order stochastically dominated by that of men when the competition is higher, whereas the reverse holds true in the less competitive or noncompetitive tests. These results are confirmed in the multivariate setting. Our findings, from a real-world setting with important payoffs at stake, are in line with the evidence from experimental research that finds that females tend to perform worse in more competitive contexts.

As global policy makers and school leaders look for ways to improve student performance, financial incentives programs for teachers have become increasingly popular. This article describes a school-based randomized trial in over 200 New York City public schools designed to better understand the impact of teacher incentives. I find no evidence that teacher incentives increase student performance, attendance, or graduation, nor do I find evidence that these incentives change student or teacher behavior. If anything, teacher incentives may decrease student achievement, especially in larger schools. The article concludes with a speculative discussion of theories to explain these stark results.

We assess whether ethnic minority pupils are subject to low teacher expectations. We exploit the English testing system of "quasi-blind" externally marked tests and "nonblind" internal assessment to compare differences in these assessment methods between white and ethnic minority pupils. We find evidence that some ethnic groups are systematically underassessed relative to their white peers, while some are overassessed. We propose a stereotype model in which a teacher's local experience of an ethnic group affects assessment of current pupils; this is supported by the data.