Knowledge that Transforms

We explore whether a 1990 Japanese educational reform that eliminated gender-segregated and gender-stereotyped industrial arts and home economics classes in junior high schools led to behavioral changes among these students some two decades later when they were married and in their early forties. Using a Regression Discontinuity (RD) design and Japanese time-use data from 2016, we find that the reform had a direct impact on Japanese women's attachment to the labor force, which seems to have changed the distribution of gender roles within the household, as we observe both a direct effect of the reform on women spending more time in traditionally male tasks during the weekend and an indirect effect on their husbands, who spend more time in traditionally female tasks. We present suggestive evidence that women's stronger attachment to the labor force may have been driven by changes in beliefs regarding men' and women's gender roles. As for men, the reform only had a direct impact on their weekend home production if they were younger than their wives and had small children. In such relationships, the reform also had the indirect effect of reducing their wives' time spent in weekend home production without increasing their labor-market attachment. Interestingly, the reform increased fertility only when it decreased wives' childcare. Otherwise, the reform delayed fertility.

We study the US labor market transitions using a latent variable approach, explicitly modeling the persistent misclassification process and the non-Markovian nature of the underlying true labor force dynamics. A closed-form global identification for misclassification probabilities and labor transition probabilities is established through an eigenvalue-eigenvector decomposition. Contrary to existing studies, our empirical results suggest that the observed data have understated the true mobility in labor force statuses after we account for persistence in both the misclassification errors and the latent true labor force dynamics.

We quantify firm heterogeneity in skill returns and present direct evidence of worker-firm complementarities. Within a model of firms’ demand for cognitive and noncognitive attributes, we show that identification depends on the availability of skill measures. Linking administrative data to test scores, we document worker sorting and convex earnings-skill relationships. We find that (1) both skills’ returns vary substantially across employers and correlate weakly within firms; (2) workers with large endowments of a skill populate firms with higher returns to it, and sorting intensifies with the cross-sectional dispersion of returns; and (3) complementarities and sorting significantly influence the earnings distribution.

Exploiting cross–commuting zone differences in age composition among the old, this paper estimates the impact of retirements on youth labor market outcomes over the period 1980–2017. In commuting zones where fewer workers retire because of the initial age structure, there is no evidence of significant effects on youth employment, but the share of younger workers in high-skill jobs declines, while the share of younger workers in low-skill jobs rises. Fewer retirements also leads to declining youth wages and lower job mobility. This suggests that the retirement slowdown in recent decades has contributed to deteriorating early-career outcomes.

We consider how adverse selection affects the efficiency of turnover and postturnover job assignments. In the model, when a high-ability worker is not promoted at the worker’s current employer because of a lack of available managerial openings, it is efficient for the worker to move to a firm seeking a high-ability worker to promote. But this type of turnover does not occur given asymmetric information and adverse selection. We show that up-or-out contracts can be an efficient response to this inefficiency, where our analysis matches several observations concerning real-world promotion decisions and practices related to up-or-out.

Using a two-level randomized experiment, we find that job search assistance (JSA) reduces unemployment among the treated but also creates displacement effects. Analyses of mechanisms show that vacancy referrals from caseworkers to job seekers explain the positive effects for the treated by helping the job seekers apply to the most relevant jobs earlier. We also find that the overall assessment of JSA hinges on how the displacement effects hit the labor market and to what extent firms react by opening new vacancies. The displacement is larger in weak labor markets, and we find no displacement of resources.

In addition to realized earnings and employment shocks, forward-looking individuals are presumed to condition their consumption and labor supply decisions on their subjective beliefs about future labor market risks. This paper uses rich panel data to document considerable individual heterogeneity in earnings growth expectations and in the perceived likelihood of voluntary and involuntary job exits. We examine how expectations evolve over the working life and business cycle and how they covary with macroeconomic expectations and personal experiences. While largely consistent with patterns in realized outcomes, our findings highlight the unanticipated nature of the pandemic recession and the ensuing resignation wave.

This study explores relationships between parental resource trajectories and child development and their implications for intergenerational mobility. By modifying the child skill formation technology to incorporate new skills emerging during adolescence, we analyze the importance of the timing of family resources on life outcomes, educational attainment, and participation in crime. Parental financial resources partially offset deficiencies in nonpecuniary inputs to children’s human capital. Estimates of the intergenerational influence on child outcomes are strongly influenced by the choice of lifetime versus snapshot parental income measures. The most predictive ages of children when family resources are measured vary by the outcome analyzed.

This paper develops a spatial general equilibrium job search model to study the effects of local and universal minimum wage policies on employment, wages, job postings, vacancies, migration, and welfare. Workers search for jobs locally and in neighboring areas, deciding whether to migrate or commute after receiving remote offers. The model, estimated using ACS and QWI data, reliably forecasts commuting responses to city minimum wage hikes. Simulations show that low-skill (noncollege) workers benefit from local wage increases up to $12.50. The greatest per capita welfare gain for all workers is achieved by a $15.25 universal minimum wage.

I investigate high school tracking policies using a dynamic discrete choice model of study programs and unobserved effort. I estimate the model using data from Flanders (Belgium) and perform an ex-ante evaluation of a policy that encourages underperforming students to switch to less academically ori-ented programs. This reduces grade retention by a third and dropout by 11%. Although it decreases college enrollment, the decrease in college graduation is small and insignificant. I also show that modeling effort is important, otherwise we would predict smaller decreases in grade retention and dropout and larger decreases in college enrollment and graduation.