Knowledge that Transforms

This study examines the long-term effects of student loans and grants in Chile through a regression discontinuity design. It finds that university loans significantly boost degree completion, especially among women and low-income students, with marginal positive effects on employment and earnings for women. Vocational loans benefit only those ineligible for university loans. Conversely, grants, alongside loans, do not affect education or labor market outcomes. The limited impact of the tuition reductions induced by grants, combined with the substantial gains for low-income students, highlights the presence of credit constraints.

This paper evaluates self-employment assistance (SEA) programs, which are government initiatives extending the unemployment insurance system to support unemployment to self-employment transitions. Using a general equilibrium model of the US labor market, we show that these programs have important labor market mobility effects and increase the self-employment rate. They also significantly impact the composition and performance outcomes of self-employment: while lump-sum subsidies select low-skilled individuals, SEA programs contingent on previously employed earnings select skilled and wealthier individuals. At the aggregate level, the latter programs mainly reallocate individuals from employment to self-employment, leaving the unemployment rate largely unaffected.

We use a vignette-based survey experiment to elicit respondents’ assessments of the fairness of race-based hiring decisions and compare these assessments with the predictions of four preregistered ethical frameworks. While conservative respondents are much more accepting of discriminatory actions than others, respondents of all political leanings rate the relative fairness of different actions in a very similar way. A two-group framework in which one group (mostly self-described conservatives) values employers’ decision rights, the other has utilitarian concerns, and both groups use the same race-blind rules to assign relative fairness levels to actions explains our data well.

Weak local labor market conditions may change the trajectories of young adults who expected to find work. Well-documented responses include increasing educational investments, moving to more prosperous labor markets, or reducing labor force attachment. Military enlistment is a channel of potential adjustment that has received less study. Using data on Army recruits, we demonstrate a significant local response in enlistment to mass layoffs, characterized by increased labor supply to the military rather than increased local military recruiting. Our work documents the significance of military employment as an important arm of adjustment to local labor market shocks.

In theory, monitoring can improve employee motivation and effort, particularly in settings lacking measurable outputs, but research assessing monitoring as a motivator is limited to laboratory settings. To address this gap, I leverage exogenous variation in the presence and intensity of teacher monitoring, in the form of unannounced in-class observations as part of DC public schools’ IMPACT program. As monitoring intensifies, teachers use more individualized teaching and emphasize higher-level learning. When teachers are unmonitored, their students have lower test scores and increased suspensions. This evidence validates monitoring as a potential tool for enhancing teacher pedagogy and employee performance more broadly.

I study the role of social networks in the propagation of economic shocks across space. Combining comprehensive data on US online friendships with extraction activity during the fracking boom, I show that exogenous changes in economic conditions in one area affect outcomes in socially proximate places, regardless of how far apart they are geographically. Social exposure to fracking generates a wage spillover amounting to one-third of every dollar of energy produced in a county’s social network. This spillover decays slowly in space and is associated with a large mobility response. Diffusion mainly stems from the commuting of transient fracking workers.

Do peers in childhood influence the development of noncognitive skills? Despite a large literature on peer effects, this question remains largely unanswered. In this paper, we use Big Five Inventory measures of personality traits linked to the administrative records of children randomly assigned to primary school classrooms. We find that children exposed to “left-behind” classmates whose parents have temporarily migrated away for work become less conscientious, agreeable, and emotionally stable. These impacts mirror the traits of their left-behind peers with whom children become friends.

The long-term decline in US workers’ attempts to organize labor unions accelerated after 2000. We find that the swift rise of imports from China arising from a change in trade policy accounts for nearly all of this post-2000 acceleration: union certification elections decreased substantially among workers in manufacturing industries directly exposed to imports, but also among workers indirectly exposed through their local labor market. Consistent with a simple model of workers’ decision to seek union representation, direct exposure lowered the expected wage gain from unionization, whereas indirect exposure increased the cost of job loss—both of which discourage organizing.