Knowledge that Transforms

This paper shows that job mobility is a valuable channel that employed workers use to mitigate bad labor market shocks. I estimate a model of wage dynamics jointly with a dynamic model of employment and job mobility. The key feature of the model is the specification of wage shocks at the worker-firm-match level, for workers can respond to these shocks by changing jobs. I find that, relative to the variance of individual-level shocks, the variance of match-level shocks is large and the consequent value of job mobility is substantial, particularly for workers whose match-specific wages are low.

While much research has investigated peer effects in education, less is known about peer influence at work, particularly how bad peers affect other workers. I study soldiers during a time when the US Army granted large numbers of morality waivers to recruits with felony or misdemeanor convictions that normally preclude enlistment. I find that soldiers randomly assigned to larger shares of peers with criminal backgrounds are more likely to commit major misconduct. Additionally, that misconduct often occurs in the same month a waivered peer commits misconduct, suggesting that influence occurs through both exposure to adverse peers and their contemporaneous behavior.

We examine data from Australia, Canada, and the United States to assess the potential for immigrant screening policies to influence the labor market performance of skilled immigrants. Our estimates point to improvements in employment rates and weekly earnings of male university-educated immigrants in all three countries concomitant with policy reforms. Nonetheless, the gains are modest in comparison to a substantial and persistent performance advantage of US skilled immigrants. Given that there is increasingly little to distinguish the screening policies of these countries, we interpret the US advantage as primarily reflecting the relative positive self-selectivity of US immigrants.

This paper analyzes a new explanation of the “ripple effect” of minimum wages based on how minimum wages affect hedonic compensation. Minimum wage hikes lower compensating differentials at low-skill undesirable jobs because they raise wages at the most desirable low-skill job, the minimum wage job. This change in hedonic compensation may cause some individuals to optimally leave low-wage undesirable jobs and seek more desirable employment. If labor supply falls at low-wage undesirable jobs, employers would raise wages, consistent with the ripple effect. Empirically, I provide evidence that hedonic-based labor supply substitution is taking place and contributing to the ripple effect.

The Post-9/11 GI Bill brought about the largest expansion in veteran education benefits since the end of World War II, increasing annual benefit expenditures from $3 billion to more than $13 billion. Leveraging variation over time, geography, and type of veterans, I explore the effect of financial aid on degree attainment. I find that the aid expansion increased degree attainment by 5–6 percentage points (25%), roughly 0.4 percentage points per $1,000 of additional maximum aid. These findings indicate that financial aid can increase degree attainment, even for individuals with high levels of initial support.

A point of contention in the refugee crisis involves possible adverse effects on host communities associated with poor, low-skilled migrants with low host-community language knowledge. We use unique matched birth and schooling records to examine the effects of a large influx of poor, non-English-speaking Haitian migrants into Florida public schools immediately following the devastating 2010 earthquake. We find zero or modestly positive estimated effects of these migrants on the educational outcomes of incumbent students in the year of the earthquake or in the 2 years that follow, regardless of the socioeconomic status, grade level, ethnicity, or birthplace of incumbent students.

This paper is the first to present direct evidence showing how localized knowledge spillovers arise from workers changing jobs within the same local labor market. Using a unique data set combining Social Security earnings records and balance sheet information for the Veneto region of Italy, I first identify a set of highly productive firms, then show that hiring workers with experience at these firms significantly increases the productivity of other firms. My findings imply that worker flows explain around 10% of the productivity gains experienced by incumbent firms when new highly productive firms are added to a local labor market.

This paper reports the results from a large-scale laboratory experiment that compared the impacts of a performance bonus and a wage gift on output from a creative task and a simple task. We find that the performance bonus substantially increases output in both the creative task and the simple task. By comparison, the wage gift increases output only in the simple task. Additional experimental treatments suggest that reciprocity in the creative task is inhibited because agents are uncertain about how their efforts affect the payments that accrue to the principal as a result of the agents’ work.

We use a résumé audit study to investigate the role of employment and unemployment histories in callbacks to job applications. We find that applicants with 52 weeks of unemployment have a lower callback rate than those with shorter spells. There is no relationship, however, between spell length and callback among applicants with spells of 24 weeks or less. We also find that both younger and older applicants have a lower callback probability than prime-aged applicants. Finally, we find that applicants who are employed at the time of application have a lower callback rate than do unemployed applicants.

Intergenerational income mobility is lower in the United States than in Canada but varies significantly within each country. Our subnational analysis finds that the national border only partially distinguishes the approximately 1,000 regions we analyze within these countries. The Canada-US border divides central and eastern Canada from the US Great Lakes and northeastern regions. Simultaneously, some Canadian regions have more in common with the low-mobility southern parts of the United States than with the rest of Canada; that these areas represent a much larger fraction of the US population also explains why mobility is lower in the United States.