Knowledge that Transforms

A growing literature uses random assignment of cases to judges to examine criminal sentencing. To extend this line of work, we directly examine how judicial “harshness” varies with the seriousness of criminal conviction. Using a model that respects the mix of cases and the noise produced by small caseloads, we find that case severity is best viewed as an endogenous outcome of bargaining. We also find that harsher judges have a higher share of cases failing to reach a plea bargain, but perhaps surprisingly, there is little evidence that large jumps in expected incarceration lead to differential plea bargain outcomes.

We are pleased to introduce this volume of papers, all of which were presented at a conference in honor of JohnDiNardo held in Ann Arbor, Michigan, in September 2018. After battling leukemia for close to a decade, John left us on August 26, 2017, at the age of 56. The conference was an opportunity for colleagues, coauthors, students, and friends to celebrate John’s life and academic achievements. The proud son of Italian immigrants, John was born and raised in Allen Park, Michigan. He spent most of his academic career at his alma mater, the University of Michigan, where he earned an undergraduate degree and a masters of public policy. After completing his PhD at Princeton in 1990, John spent a year at the RAND Corporation before joining the faculty at the University of California, Irvine, in 1991. He moved back to Michigan in 2001, where he spent the remainder of his career. At this point, convention calls for a discussion of the main research contributions of the scholar being honored, followed by a summary of the contributed papers. However, following convention is not what best describes John DiNardo’s life and career. Armed with a trademark irreverence, a

Joseph Altonji is one of the pioneers of modern labor economics. To mark Joe’s sixty-fifth birthday and honor his illustrious career, a conference was held at his alma mater and employer, Yale University, on September 7–8, 2018. This special issue contains seven of the papers presented by former students, coauthors, and colleagues. Joe has been central to the empirical revolution that has brought vast amounts of individual-level data to some of the most important questions ofbothmicroandmacroeconomics.His seminal breakthroughshave changed thewaywe think aboutnumerous topics, including the studyof consumption behavior and labor supply over time, intrafamily insurance, discrimination, wage determination and learning, school choice and school quality, returns to higher education, and the stochastic process of income. The hallmark of all thiswork is a thoughtful combination of theory anddata, the development ofnewempiricalmethods, thediscoveryofnovel identificationstrategies, and extreme care with extensive robustness checks and attention to data details. Early on in his career Joe was one of the first to develop our understanding of the relationship between intratemporal and intertemporal allocations and the implication this distinction has on estimating elasticities. These

Covariate-adjusted cross-sectional comparisons show that Medicaid patients have worse health outcomes than other patients. We evaluate the validity of this research design for estimating the causal effect of Medicaid on mortality. Even after controlling for common covariates, Medicaid patients have worse preoperative health and lower socioeconomic status than privately insured patients. Controlling for additional variables shrinks the mortality differences but still does not eliminate imbalance in other predetermined variables. These results can be explained by fairly weak assumptions about unmeasured confounders. We conclude that cross-sectional observational methods do not produce valid causal estimates of Medicaid’s mortality effects.

We analyze the consequences of labor market quotas for the wages of women in high-level positions. Labor market quotas create uncertainty about the reason a woman is promoted. Firms know whether they promoted female employees because of the quota or their ability; their competitors do not. A winner’s curse, reducing competition for women in high-level positions, results. This widens the gender pay gap for these women. Ex ante, women are better off without quotas. Next we investigate how quotas affect incentives for employers to learn women’s abilities to make better job assignment decisions. Then, under specific conditions women may benefit.

Fewer births occur on major US holidays than would otherwise be expected. We use California data to study the nature and health implications of this birth date manipulation. We document 18% fewer births on the day of and just after a holiday. Cesarean sections account for roughly half of the decline. “Missing” holiday births are displaced to a window of time 11 days before the holiday through 16 days after the holiday. High-risk births are more likely to be rescheduled. Despite the change in timing, we find little evidence of any adverse health consequences for babies born around a holiday.

Using data for three cohorts of women in the PSID, we show that annual earnings inequality fell sharply between the late 1960s and the mid-1990s, with a large decline in the component attributable to the extensive margin. We then fit earnings-generating models that incorporate both intensive- and extensive-margin dynamics to data for the three cohorts. Our models suggest that more than 80% of the decline in female earnings inequality can be attributed to a weakening of the link between family-based factors (i.e., children and the presence and incomes of partners) and the intensive and extensive margins of earnings determination.

The composition of immigrants depends not only on immigrant choice but also on immigration policy, because slots are rationed. Policy determines immigrant attainment, as evidenced by immigrants from Algeria having higher educational attainment than those from Israel or Japan. Theory predicts and evidence confirms that immigrant attainment is inversely related to the number admitted from a source country and positively related to population and education levels at home. A parsimonious specification has only two variables yet explains a majority of the variation in educational attainment of US immigrant groups. The theory and predictions are bolstered by Swedish data.

There is concern that the risky behaviors of teenagers, such as truancy, negatively influence the behaviors of others through their social networks. We use administrative data to construct social networks based on students who are truant together. We simulate these networks to document that certain students systematically coordinate their absences. We validate them by showing that a parent information intervention on student absences has spillover effects from treated students onto their peers. Excluding these effects understates the intervention’s cost-effectiveness by 43%. We show that there is potential to use networks to target interventions more efficiently given a budget constraint.

How does school quality affect health amid multiple behavioral responses? The Rosenwald schools transformed school quality for rural southern African Americans in the early 1900s. Research shows that the schools made black migration northward more likely and that the Great Migration shortened life expectancy for these migrants. Besides the hypothesized health-enhancing effects of school quality, negative health effects might also occur through migration. We disentangle behavioral mechanisms and find complete exposure to the Rosenwald schools increased life expectancy by 2–3 months; a more naive approach finds no relationship. Results are robust to heterogeneous treatment effects and various measurement issues.