This paper provides direct evidence on the extent of monopsony power in the low-wage labor market by estimating the firm-level elasticity of labor supply for nurse aides in the long-term care (nursing home) industry. Using exogenous variation in hiring induced by the passage of a state minimum nurse staffing law, I find that facilities initially out of compliance with the new law did not have to raise their wage offers relative to their competitors in order to hire more nurses. While this is consistent with perfect competition in simple monopsony models of the labor market, I discuss how the results may be more ambiguous in more complicated models.

The Federal Pell Grant Program lowers the cost of higher education for low-income students. We estimate Pell’s average effect for the universe of federally aided students—the broadest swath of higher education studied to date. Exploiting discontinuities and kinks in the grant schedule, we find that the effect of Pell on completion rates and postcollege earnings is much smaller than the findings of recent prominent studies focused on specific states. We argue that interactions between Pell grants and state aid programs may explain this difference, underscoring the importance of understanding how the impact of financial aid depends on context.

Despite the widespread use of graphs in empirical research, little is known about readers’ ability to process the statistical information they are meant to convey (“visual inference”). We study visual inference in the context of regression discontinuity (RD) designs by measuring how accurately readers identify discontinuities in graphs produced from data-generating processes calibrated on 11 published papers from leading economics journals. First, we assess the effects of different graphical representation methods on visual inference using randomized experiments. We find that bin widths and fit lines have the largest effects on whether participants correctly perceive the presence or absence of a discontinuity. Our experimental results allow us to make evidence-based recommendations to practitioners, and we suggest using small bins with no fit lines as a starting point to construct RD graphs. Second, we compare visual inference on graphs constructed using our preferred method with widely used econometric inference procedures. We find that visual inference achieves similar or lower type I error (false positive) rates and complements econometric inference.