Knowledge that Transforms

Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty: Comment by Antonio Ciccone. Published in volume 94, issue 3, pages 785-795 of American Economic Review, June 2004

We develop a model where agents obtain information about job opportunities through an explicitly modeled network of social contacts. We show that employment is positively correlated across time and agents. Moreover, unemployment exhibits duration dependence: the probability of obtaining a job decreases in the length of time that an agent has been unemployed. Finally, we examine inequality between two groups. If staying in the labor market is costly and one group starts with a worse employment status, then that group's drop-out rate will be higher and their employment prospects will be persistently below that of the other group.

I assess the magnitude of human capital spillovers by estimating production functions using a unique firm-worker matched data set. Productivity of plants in cities that experience large increases in the share of college graduates rises more than the productivity of similar plants in cities that experience small increases in the share of college graduates. These productivity gains are offset by increased labor costs. Using three alternative measures of economic distance—input-output flows, technological specialization, and patent citations—I find that within a city, spillovers between industries that are economically close are larger than spillovers between industries that are economically distant.

Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. In contrast with earlier literature that failed to find positive intraindustry spillovers from FDI, this study focuses on effects operating across industries. The analysis, based on firm-level data from Lithuania, produces evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local suppliers in upstream sectors. The data indicate that spillovers are associated with projects with shared domestic and foreign ownership but not with fully owned foreign investments.

To identify the effect of social capital on financial development, we exploit social capital differences within Italy. In high-social-capital areas, households are more likely to use checks, invest less in cash and more in stock, have higher access to institutional credit, and make less use of informal credit. The effect of social capital is stronger where legal enforcement is weaker and among less educated people. These results are not driven by omitted environmental variables, since we show that the behavior of movers is still affected by the level of social capital of the province where they were born.

This paper explores a group rule–utilitarian approach to understanding voter turnout, inspired by the theoretical work of John C. Harsanyi (1980) and Timothy J. Feddersen and Alvaro Sandroni (2002). It develops a model based on this approach and studies its performance in explaining turnout in Texas liquor referenda. The results are encouraging: the comparative static predictions of the model are broadly consistent with the data, and a structurally estimated version of the model yields reasonable coefficient estimates and fits the data well. The structurally estimated model also outperforms a simple expressive voting model.

Bank for providing research funding and support. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors, and do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Non-Technical Summary Product variety plays an important role in the theoretical work on monopolistic competition and trade, and recent empirical work has begun to quantify this for aggregate and disaggregate import demands. The objective of this paper is to discuss the measurement of product variety in trade, using a broad cross-section of advanced and developing countries and disaggregating across sectors. We calculate the export variety of countries in their sales to the United States, and relate the export variety indexes to country productivities. We confirm that countries with greater product variety in exports also have higher productivity. This may be due to their own development of, and access to, these products. 2 1.

The conventional wisdom is that African-Americans, Hispanics, and American Indians are underrepresented among faculty in postsecondary institutions because they are underrepresented among Ph.D. recipients. Thus, the putative solution to the problem of minority faculty underrepresentation is to increase the supply of minority Ph.D.’s. In our book, Faculty of Color in Academe: Bittersweet Success (Turner and Myers, 2000) we point out that the supply-side argument has several flaws. In this and a companion paper (Myers and Turner, 2003) we replicate and update the analysis performed in Chapter 7 of our book using more recent census data and a larger sample for 1990. Once again, we demonstrate that an autonomous increase in the Ph.D. supply, uniform across all groups, would leave the representation of African-American and Hispanic faculty largely unchanged. This conclusion challenges the view that the underrepresentation of minority faculty is solely a supply-side phenomenon that can be addressed primarily by increasing the pipeline for new minority Ph.D.’s. Although a strong case can be made for increasing the minority pipeline, the pipeline itself does not appear to be the central cause of the continued underrepresentation of minority faculty. I. The Problem: At every point in the educational pipeline from the Bachelor’s degree to the doctoral degree, African-Americans, Hispanics, and American Indians are substantially underrepresented.

Managed Care, Information, and Diffusion: The Case of Treatment for Heart-Attack Patients by Laurence C. Baker, Christopher C. Afendulis and Paul A. Heidenreich. Published in volume 94, issue 2, pages 347-351 of American Economic Review, May 2004