Knowledge that Transforms

We analyze an immigration reform in Denmark that tightened refugee immigrants’eligibility criteria for permanent residency to incentivize their labor market attachment and acquisition of local language skills. Contrary to what the reform intended, the overall employment of those affected decreased while their average language proficiency remained largely unchanged. This was caused by a disincentive effect, where individuals with low pre-reform labor market performance reduced their labor supply. Our findings suggest that stricter permanent residency rules, rather than incentivizing refugees’ skill investment, may decrease the efforts of those who believe they cannot meet the new requirements.

We develop a tractable economic framework to study the impact of family structure on children’s cognitive and noncognitive outcomes. Combining a sequential choice model with panel data on both biological parents, irrespective of subsequent relationship status, and on social fathers and a set of exclusion restrictions, we identify the unobserved heterogeneity of biological families and examine child skill formation via a control function approach. Time investments made by high-ability fathers have positive returns, whereas those made by low-ability fathers can generate negative returns. Policies that incentivize family formation should consider the quality of the fathers whom mothers are cohabited with.

We use the medical specialties of physician-patients with advanced cancer to study the role of knowledge versus networks in treatment choices and patient survival by matching comparable patients with doctors and admission periods to control unobserved doctor quality. Physician-patients are less likely to have surgery, radiation, or checkups and more likely to receive targeted therapy, spend more on drugs, enjoy a higher survival rate, and spend less on coinsurance than nonphysician-patients. Knowledge mechanisms play a crucial role because the network effect explains some, but not all, patterns. For less informed physician-patients, possessing a network is equivalent to reducing medical knowledge.

Severe gender imbalances coupled with stark income differences across countries are driving an increase in cross-border marriages in many Asian countries. I theoretically and empirically study who marries whom and how couples allocate marital surplus in Taiwanese and Vietnamese marriage markets. I find that Taiwanese men are selected from the middle level of the human capital distribution and that Vietnamese women are positively selected for cross-border marriages. I show that changes in the costs of cross-border marriage affect the welfare of Taiwanese and Vietnamese who do not participate in cross-border marriages by altering marriage rates, matching partners, and intrahousehold allocations.

Rehabilitating convicted criminals is challenging; indeed, an important share of them return to prison only a few years after their release.Thus, finding effective ways of encouraging crime desistance, particularly among young individuals, has become an important policy goal to reduce crime and incarceration rates.This paper provides causal evidence that the local institutions of the neighborhood that receives young individuals after prison matter.Specifically, we show that the opening of an Evangelical church reduces twelve-months re-incarceration rates among property crime offenders by more than 10 percentage points.This effect represents a drop of 16% in the probability of returning to prison for this group of individuals.We find smaller and less precise effects for more severe types of crime.We discuss two classes of mechanisms that could explain our results: religiosity and social support.We provide evidence that the social support provided by evangelical churches is an important driver of our findings.This suggests that non-religious local institutions could also play an important role in the rehabilitation of former inmates.

This paper analyzes whether technological change improves equality of labor market opportunities by increasing the returns to skills relative to the returns to parental background. We find that in Germany during the 1990s, the introduction of computer technologies improved the access to technology-adopting occupations for workers with low-educated parents and reduced their wage penalty within these occupations. We also show that this significantly contributed to a decline in the overall wage penalty experienced by workers from disadvantaged parental backgrounds over this time period. Competing mechanisms, such as skill-specific labor supply shocks and skill upgrading, do not explain these findings.

We analyze how economic conditions at the time of arrival affect the economic integration of family-sponsored migrants in the U.S. Our identification strategy exploits long waiting times for family-sponsored immigration visas that decouple the migration decision from economic conditions at the time of arrival. A one pp higher unemployment rate at arrival decreases annual wage income by four percent in the short run and two percent in the longer run. The loss in wage income is the result of substantial occupational downgrading, lower hourly wages, and a reduction in working hours. Family migrants who immigrate into a recession draw on migrant and family networks to mitigate the negative labor market effects. As a result, they take up occupations with higher concentrations of fellow countrypeople. They are also more likely to reside with family members, potentially reducing their geographical mobility.

Published online January 27, 2025

We present new estimates of earnings volatility over time and the life cycle for men and women by race and human capital, using Social Security earnings linked to the Current Population Survey. From the late 1970s to the mid-1990s, there is a strong negative trend in earnings volatility driven by a decline in transitory variance. From the mid-1990s, there is relative stability in trends of male earnings volatility due to an increase in the variance of permanent shocks. Cohort analyses indicate that earnings volatility is U-shaped, driven by large permanent shocks early and later in the life cycle.

This article uses state-specific timing of legal changes and data from the Current Population Survey and National Longitudinal Survey of Young Women to estimate effects of confidential access to the pill in late adolescence on earnings, labor force participation, and human capital accumulation over the life cycle, finding no evidence of effects. These results are contrary to past research, which imposed a restriction on the regression model that this article shows explains the past results.