Knowledge that Transforms

This paper offers the first study of how changes in corporate R&D investment affect labor mobility. We show that increases in R&D spur employee departures to join start-ups’ founding teams. This appears to reflect employees taking the ideas, skills, or technologies created through the R&D process but not especially valuable to the R&D-investing firm to start-ups. The employee-founded start-ups tend to be outside the R&D-investing employer’s industry, suggesting that the underlying ideas would impose diversification costs on the R&D-investing firm. The start-ups are more likely to be VC backed, high tech, and high wage, pointing to substantial spillover benefits.

We revisit the estimation of industry wage differentials using linked employer-employee data. Cross-sectional industry differences overstate pay premiums due to unmeasured heterogeneity. Estimates based on models with person and industry effects understate true premiums: workers who switch to a higher-premium industry typically move from higher-paying firms in their origin industry to lower-paying firms in their destination (and vice versa). The corrected standard deviation of log wage effects is 0.122 across narrowly defined industries and is similar at higher levels of aggregation. Higher-skilled workers sort to higher-pay industries. Premiums and worker sorting are more variable in cities with higher-wage firms and higher-skilled workers.

Many countries impose job search requirements on unemployment benefit recipients. Existing studies have mainly focused on the impact of incremental changes to requirements on the recipients. Australian reforms in 1995 saw groups of partnered welfare recipients newly subjected to job search requirements, allowing us to produce causal estimates of the effects on family welfare receipt of introducing such requirements. Using a quasi-experimental design and administrative data, we find large negative effects on welfare receipt for the mature-age partnered women targeted by the reforms and similar effects on welfare receipt of their partners, suggesting that family labor supply decisions were considerably affected.

Firms frequently provide general skill training for workers. Theories propose that labor market frictions entail wage compression, generate larger productivity gains than wage growth to skill acquisition, and motivate a firm to offer general skill training, but few studies directly test them. We use unusually rich data from a temporary help service firm that records both workers’ wages and their productivity as measured by the fees charged to client firms. We find that skill acquired through training and learning by doing increases productivity more than wages, with such wage compression accounting for half of the average 40% productivity growth over 5 years of tenure.

A significant share of the rapidly growing demand for long-term care is met by family members, many of whom also work, and family caregiving has been shown to affect labor market outcomes. We use survey responses about family caregiving roles linked to administrative earnings records to estimate the employment trajectories of family caregivers over a 25-year period around the reported start of a caregiving episode. These trajectories vary significantly by gender. Relative to a matched comparison group, caregiving precipitates a drop in both earnings and employment for women, while men enter caregiving only after experiencing significant labor supply disruptions.

We identify the labor market returns to university grade point average (GPA) by leveraging a nationwide change in the scaling of grades in Danish universities. Our results show that a reform-induced increase in GPA that is unrelated to ability causes higher earnings immediately after graduation, but the effect fades in subsequent years. The effect at labor market entry is largest for individuals with fewer alternative signals. Although employers initially screen candidates on the basis of skill signals, our findings are consistent with a model in which employers rapidly learn about worker productivity.

Children exposed to pollutants like lead have lower academic achievement and are more likely to engage in risky behavior. However, little is known about whether lead-exposed children affect the long-run outcomes of their peers. We estimate these spillover effects using unique data on preschool blood lead levels (BLLs) matched to education data for all students in North Carolina public schools. We compare siblings whose school-grade cohorts differ in the proportion of children with elevated BLLs, holding constant school and peers’ demographics. Having more lead-exposed peers is associated with lower high school graduation and SAT-taking rates and increased suspensions and absences.

Online university courses have become common, though some question whether the modality can adequately substitute for an in-person experience. We explore online course enrollment and student outcomes at a large public 4-year system. Online enrollment nearly doubled from 2012 to 2019. Female students and older students were especially likely to take online classes. Students earned more As and Fs in online courses, but semester grade point averages were higher in terms when students took at least one class online. Importantly, taking higher shares of courses online was associated with increased degree completion, with the largest benefits for younger students and male students.

Analyzing data spanning three decades covering the near universe of births, we study county-level differences in Cesarean section (C-section) rates among first-time mothers of singleton births. Our research reveals persistent geographic variation in C-section rates for both low- and high-risk groups. Counties with elevated C-section rates consistently perform more C-sections across mothers at all levels of appropriateness for the procedure. These elevated rates of C-section in high C-section counties are associated with reduced maternal and infant morbidity. We also find that C-section decisions are less responsive to underlying risks for Black mothers relative to white mothers, suggesting potential welfare-reducing disparities.

We study the relationship among occupational employment, occupational wages, and wage inequality. In all occupations, entrants and leavers earn less than stayers, suggesting negative selection effects for growing occupations and positive effects for shrinking ones. We estimate a model of occupational prices and skills that includes specific skill accumulation and endogenous switching. Contrary to uncorrected wages, prices and employment growth are positively related. Forty percent of selection is due to age, as entrants and leavers have had less time to accumulate skills. The remainder is Roy-type selection. Skill prices establish a quantitative connection of occupational changes with surging wage inequality.