Knowledge that Transforms

Policymakers increasingly use norm-based messages to promote conservation efforts. Despite the apparent success of such strategies, empirical analyses have thus far focused exclusively on short-run effects. From a policy perspective, however, whether and how such strategies influence behavior in the long-run is of equal interest. We partner with a metropolitan water utility to implement a natural field experiment examining the effect of such messages on longer-run patterns of water use. Empirical results are striking. While appeals to pro-social preferences affect short-run patterns of water use, only messages augmented with social comparisons have a lasting impact on water demand.

The French Revolution had a momentous impact on neighboring countries. It removed the legal and economic barriers protecting oligarchies, established the principle of equality before the law, and prepared economies for the new industrial opportunities of the second half of the 19th century. We present within-Germany evidence on the long-run implications of these institutional reforms. Occupied areas appear to have experienced more rapid urbanization growth, especially after 1850. A two-stage least squares strategy provides evidence consistent with the hypothesis that the reforms instigated by the French had a positive impact on growth. JEL: N13, N43, O47

This paper presents new evidence that increases in college enrollment lead to a decline in the average quality of college graduates between 1960 and 2000, resulting in a decrease of 6 percentage points in the college premium. A standard demand and supply framework can qualitatively account for the trend in the college and age premia over this period, but substantial quantitative adjustments are needed to account for changes in quality.

This paper examines the residential location and school choice responses to the desegregation of large urban public school districts. We decompose the well documented decline in white public enrollment following desegregation into migration to suburban districts and increased private school enrollment, and find that migration was the more prevalent response. Desegregation caused black public enrollment to increase significantly outside of the South, mostly by slowing decentralization of black households to the suburbs, and large black private school enrollment declines in southern districts. Central district school desegregation generated only a small portion of overall urban population decentralization between 1960 and 1990.

We conduct a series of dictator games in which the status of the dictator relative to other players varies across treatments. Experiments are conducted in a conventional university lab and in villages in rural Kenya. We find that status is an important determinant of dictator game giving, but the relative importance of earned and unearned status differs across cultures.

This paper estimates a dynamic structural model of a producer's decision to invest in R&D and export, allowing both choices to endogenously affect the future path of productivity. Using plant-level data for the Taiwanese electronics industry, both activities are found to have a positive effect on the plant's future productivity. This in turn drives more plants to self-select into both activities, contributing to further productivity gains. Simulations of an expansion of the export market are shown to increase both exporting and R&D investment and generate a gradual within-plant productivity improvement.

We examine the sex differences in the pay of school teachers in Missouri. In Missouri school districts, pay is determined by a salary schedule that maps teaching experience and education level of an individual to a salary level. In spite of this apparently mechanical rule for determining pay, female teachers earn less than male teachers, after controlling for experience and education. We explore how such a difference could arise from differential job mobility and find some evidence to support this idea. However, within district differences in pay are a more important source of differences in pay between men and women.

We construct a growth model consistent with China's economic transition: high output growth, sustained returns on capital, reallocation within the manufacturing sector, and a large trade surplus. Entrepreneurial firms use more productive technologies, but due to financial imperfections they must finance investments through internal savings. State-owned firms have low productivity but survive because of better access to credit markets. High-productivity firms outgrow low-productivity firms if entrepreneurs have sufficiently high savings. The downsizing of financially integrated firms forces domestic savings to be invested abroad, generating a foreign surplus. A calibrated version of the theory accounts quantitatively for China's economic transition.

Our research addresses the importance of state fiscal policies on the probability of retirement using a panel of individual tax return data. Results indicate that a one percentage point increase in the income or sales tax rate reduces the probability of retirement by about 8.7 percent. The evidence suggests that state spending might also affect retirement decisions but magnitudes are inconclusive. In general, the results suggest that the income effect dominates; that is, higher tax rates at the state-level reduce disposable income and decrease the probability of retiring. Results are similar in models examining single and married filers separately.

The problem of the commons is more important to our lives and thus more central to economics than a century ago when Katharine Coman led off the first issue of the American Economic Review. As the US and other economies have grown, the carrying capacity of the planet—in regard to natural resources and environmental quality—has become a greater concern, particularly for common-property and open-access resources. The focus of this article is on some important, unsettled problems of the commons. Within the realm of natural resources, there are special challenges associated with renewable resources, which are frequently characterized by open-access. An important example is the degradation of open-access fisheries. Critical commons problems are also associated with environmental quality. A key contribution of economics has been the development of market-based approaches to environmental protection. These instruments are key to addressing the ultimate commons problem of the twenty-first century—global climate change.