Exploiting long term interindustry demand shifts, this article provides evidence that (1) industry‐level wages do not respond to industry demand conditions; (2) at the industry level, the employment of young workers responds more to demand shifts than does the employment of experienced workers; and (3) the postdisplacement wages of displaced workers are strongly affected by demand in their predisplacement industries. These findings are consistent with a model in which worker's investments in industry‐specific skills pose a barrier to interindustry labor mobility and wages do not respond to spot labor market conditions.

Economists explain the positive relationship between parental income and children’s outcomes using an investment model. Building on work in psychology and sociology, this paper emphasizes the importance of child‐rearing practices, which vary with income. I argue that parents’ ability to mold their children’s behavior through pecuniary incentives is limited at low incomes, leading to lower outcomes and increased reliance on nonpecuniary mechanisms such as corporal punishment. My model generates a positive relationship between parental income and children’s outcomes especially at low incomes and endogenously produces a relationship between parental income and child‐rearing practices. Empirical work confirms these implications.

Creating Modern Art: The Changing Careers of Painters in France from Impressionism to Cubism by David W. Galenson and Bruce A. Weinberg. Published in volume 91, issue 4, pages 1063-1071 of American Economic Review, September 2001