Knowledge that Transforms

Drawing on administrative data from the Social Security Administration, we find that individuals that go through a long period of non-employment suffer large and long-term earnings losses (around 35-40 percent) compared to individuals with similar age and previous earnings histories. Importantly, these differences depend on past earnings, and are largest at the bottom and top of the earnings distribution. Focusing on workers that are employed 10 years after a period of long-term non-employment, we find much smaller earnings losses (8-10 percent). Furthermore, the large earnings losses of low-income individuals are almost entirely due to employment effects.

What explains the growing gap in marriage rates between socioeconomic groups? We present a robust stylized fact not previously documented: marriage rates are higher for individuals with more assets. We argue this may be driven by marriage and cohabitation becoming increasingly similar in a number of ways except for the way assets become marital property to be divided upon divorce in marriage while they remain individual property in the case of cohabitation. We propose that ownership of assets may provide “insurance” to the partner making individually costly, but jointly optimal, investments in children, thus raising the value of marriage.

I examine replications of empirical papers in development economics published in the top-5 and next-5 general interest journals between the years 2000 through 2015. Of the 1,138 empirical papers, 71 papers (6.2 percent) were replicated in another published paper or working paper. The majority (77.5 percent) of replications involved reanalysis of the data using different econometric specifications to assess robustness. The strongest predictor of whether a paper is replicated or not is the paper's Google Scholar citation count, followed by year of publication. Papers based on randomized control trials (RCTs) appear to be replicated at a higher rate (12.5 percent).

Researchers have made progress in understanding the role of repugnance in transactions involving the human body. Yet, often, the focus remains on exchange between individuals and how they mentally cope (or not) with repugnance. But these exchanges also entail a “vertical” dimension in which organizational and state actors both directly manage repugnance and also limit the repugnance management tools available to the marketplace. Analyzing repugnance and its management as an organizational and regulatory problem, in addition to an individual one, suggests that a single, harmonized system of exchange in bodily goods is unlikely to emerge with the passage of time.

We use new county-level segregation estimates for the period of 1880 to 1940 to document a general rise in residential segregation in both urban and rural counties occurring alongside rising homeownership rates. However, we find a negative correlation between segregation and homeownership across space for both black and white households. Following Fetter (2013), we show that living in a more segregated county substantially reduced the impact of GI Bill benefits on white homeownership rates, suggesting that segregated locations potentially hindered both white and black homeownership.

In 2013 Memphis City Schools and Shelby County Schools consolidated into a unified system, creating one of the largest districts in the nation. Six Memphis suburbs subsequently voted to create separate municipal districts. Many school zoning changes resulted from the merger and subsequent splintering of districts, providing a rare opportunity to separately identify the value of both school and district quality as they are capitalized in housing prices. Utilizing school fixed effects and repeat sales data, we find that a one standard deviation increase in test scores increases prices by 3-4% while district administration accounts for 5-8% of home values.

We use administrative US matched employer-employee data merged with detailed information on individuals' academic records to assess the extent to which returns to education are mediated by the sorting of workers across firms. We present three results. First, we confirm findings in the earlier literature of large pay differences across higher education degrees. Second, we show that up to one quarter of pay premiums for higher degrees are explained by between-firm pay differences. Third, higher degrees are associated with greater representation at the best-paying firms. We conclude that employer heterogeneity is an important factor in mediating the returns to education.

We propose an axiomatic approach to study the superior performance of mechanisms with obviously dominant strategies to those with only dominant strategies. Guided by the psychological inability to reason state-by-state, we develop Obvious Preference as a weakening of Subjective Expected Utility Theory. We show that a strategy is an obviously dominant if and only if any Obvious Preference prefer it to any deviating strategy at any reachable information set. Applying the concept of Nash Equilibrium to Obvious Preference, we propose Obvious Nash Equilibrium to identify a set of mechanisms that are more robust than mechanisms with only Nash Equilibria.

Research on intrahousehold decision-making generally finds that fathers have more bargaining power than mothers, but mothers put more weight on children's well-being. This suggests a tradeoff when targeting policies to improve child health: fathers have more power to change household behavior in ways that improve child health, but mothers might have a stronger desire to do so. This paper compares health classes in Uganda that enrolled either mothers or fathers. We find that educating mothers leads to greater adoption of health-promoting behaviors by the household. In addition, educating one parent leads to positive spillovers on the other spouse's health behaviors.

Replicability is essential to assure the scientific integrity of empirical economic research. Some authors have suggested metadata analysis as a complementary tool. This suggestion must be addressed with caution. Empirical studies in most of economics are nonstochastic in the sense that they seldom are created via experiments and, with the data and computer software in-hand, should be reproducible without error.