Knowledge that Transforms

Children’s and parents’ incomes are highly correlated, yet little is known about how early-career shocks contribute to this correlation. This paper focuses on a consequential labor market shock: job loss. We document three new results. First, adult children born into the bottom 20% of the income distribution have double the unemployment following job loss compared with those from the top 20% and 154% higher earnings losses. Second, this increases the rank-rank correlation 30% for those impacted. Third, richer parents provide career opportunities to their adult children after job loss, consistent with advantages from wealthy parents persisting well into adulthood.

The US suffers from persistent regional disparities in employment rates. In principle, these disparities should be eliminated by population mobility. Can immigration fulfill this role? Remarkably, since 1960, I show that new migrants from abroad account for 40% of the average population response to these disparities - which vastly exceeds their historic share of gross migratory flows. But despite this, immigration does not significantly accelerate local population adjustment (or reduce local employment rate disparities), as it crowds out the contribution from internal mobility. Indeed, this crowd-out can help account for the concurrent decline in internal mobility. Finally, I attribute the “excess” foreign contribution to a local snowballing effect, driven by persistent local shocks and the dynamics of migrant enclaves. This mechanism raises challenges to the (pervasive) application of migrant enclaves as an instrument for foreign inflows. But rather than abandoning the instrument, I offer an empirical strategy (motivated by my model) to overcome these challenges; and I demonstrate its efficacy.

Class size reduction mandates are frequent and invariably justified by studies reporting positive effects on student achievement. Yet other studies report no effects, and the literature as a whole awaits correction for potential publication bias. Moreover, if identification drives results systematically, the relevance of individual studies will vary. We build a sample of 1,767 estimates collected from 62 studies and for each estimate codify 42 factors reflecting estimation context. We employ recently developed nonlinear techniques for publication bias correction and Bayesian model averaging techniques that address model uncertainty. The results suggest publication bias among studies featured in top five economics journals, but not elsewhere. The implied class size effect is zero for all identification approaches except Tennessee's Student/Teacher Achievement Ratio project. The effect remains zero for disadvantaged students and across subjects, school types, and countries.

We examine the effects of an affirmative action policy at an elite Brazilian university that reserved 45% of admission slots for Black and low-income students. We find that marginally admitted students who enrolled through the affirmative action tracks experienced a 14% increase in early-career earnings. But the adoption of affirmative action also caused a large decrease in earnings for the university’s most highly ranked students. We present evidence that the negative spillover effects on highly ranked students’ earnings were driven by both a reduction in human capital accumulation and a decline in the value of networking.