Knowledge that Transforms

This paper studies the expansion of US child support policies from 1977 to 1992 and its consequences for marriage and fertility decisions. I develop a model showing that child support enforces ex ante commitment from men to provide financial support in the event of a child, which (1) increases premarital sex among couples unlikely to marry and (2) reduces the abortion rate by reducing the cost of child-rearing to single moms. Using variation in the rollout relative to the timing of nonmarital pregnancy, I find that child support policies reduced the likelihood of marriage and reduced the abortion rate.

The Self-Sufficiency Project (SSP) was a well-known welfare-to-work experiment that provided a generous but time-limited financial incentive to leave welfare and enter the workforce. Experimental evidence showed large short-term impacts but no lasting effects. We argue that these conclusions need to be reassessed. Policy changes implemented during the SSP implied that the control group’s behavior did not provide an appropriate counterfactual. We estimate the impacts the financial incentive would have had in an unchanging policy environment. This reassessment leads to significant changes in the lessons previously reached. Our study demonstrates that experimental findings need to be interpreted with care.

This paper reports findings from a randomized evaluation of an intensive tutoring program conducted in underprivileged high schools. Within each school, the intervention targets students identified as having the ability to pursue a college education. The program is designed to strengthen their readiness for higher education. We demonstrate that such an intervention can have negative effects on a large fraction of participants, even though participation is entirely voluntary. This result is consistent with a simple model where time invested in extracurricular programs and time invested in homework represent imperfect substitutes in the education production function.

This paper presents findings from a national experimental evaluation of performance bonuses funded by the Teacher Incentive Fund grant program. The study finds no robust evidence of positive impacts of bonuses on student achievement, although some specifications suggest a small positive effect that compares favorably with other education interventions. When controlling for covariates, we find that offering bonuses of an average yearly cost of $100 per student had a small significant impact of about 0.04 standard deviations. However, these impacts are smaller (0.01 standard deviations) and become insignificant when not controlling for covariates or using an alternative method of inference.

Conscription forces young men to serve in the military, irrespective of their opportunity costs. Using random assignment in the Danish draft lottery, we find a negative average effect of peacetime military service on earnings, an effect varying by ability, with high-ability men facing a $23,000 lifetime earnings penalty but with low-ability men facing none. This gradient is robust to different measures of labor market prospects. Educational disruption is an important mechanism, while service has little effect on health or criminal activity. The opportunity costs of conscription are borne by men with the best labor market prospects.

We present experimental evidence on four US reemployment programs targeting unemployment insurance (UI) recipients during the Great Recession. All programs reduced UI spells, produced UI savings that exceeded program costs, and increased employment rates. The services referral program had the smallest effects, occurring because of voluntary UI exits by participants to avoid requirements. The two programs reviewing participants’ UI eligibility produced greater effects because they induced voluntary exits and disqualified participants who did not meet UI requirements. The program requiring participation in both eligibility review and job-counseling services was the most effective, suggesting that services improved participants’ job search efforts.

Informational asymmetries between employers may inhibit optimal worker mobility. However, researchers rarely observe shocks to employers’ information. I exploit two school districts’ adoptions of value-added (VA) measures of teacher effectiveness—informational shocks to some, but not all, employers—to provide direct tests of asymmetric employer learning. I develop a learning model and test its predictions for teacher mobility. I find that adopting VA increases within-district mobility of high-VA teachers, while low-VA teachers move out of district to uninformed principals. These patterns are consistent with asymmetric employer learning. This sorting from widespread VA adoption exacerbates inequality in access to effective teaching.

This paper studies labor supply responses to transitory income, exploiting the differential timing of the 2008 tax rebates. While an influential literature finds that rebates encourage consumer spending, it has ignored the ramifications on labor supply. I estimate that each rebate dollar reduces monthly earnings by 9 cents with smaller but significant lagged effects. This responsiveness is primarily concentrated in the second quartile of the earnings distribution and among hourly workers. The results imply that the $96 billion in stimulus payments had a partial equilibrium effect of reducing short-term national labor earnings by more than $26 billion.

We study the labor market returns to a state-guaranteed loan used to finance university degrees in Chile. Using a regression discontinuity design, we show that marginally eligible students forgo vocational education in favor of university education but reduce their probability of graduation. Even though university loan takers accumulate more student debt, their labor market outcomes are not different from those of ineligible students. We find suggestive evidence that the lower quality of the receiving institutions accounts for these results. Finally, we extrapolate the effects away from the eligibility cutoff and show that supramarginal students benefit from this policy.

This paper examines the transmission of human capital from parents to children using variation in parental influence due to parental death, divorce, and the increasing specialization of parental roles in larger families. All three sources of variation yield strikingly similar patterns that show that the strong parent-child correlation in human capital is largely causal. In each case, the parent-child correlation in education is stronger with the parent who spends more time with the child and weaker with the parent who spends relatively less time parenting. These findings help us understand why educated parents spend more time with their children.