Knowledge that Transforms

The firm is almost entirely absent from models of immigration, and yet firms play a central role for high-skilled immigration. The H-1B visa program, for example, is a firm-sponsored entry where firms are responsible for every stage: from identifying the immigrant, to employing them, to filing for permanent residency on behalf of the immigrant. This central role of firms for high-skilled immigration suggests the traditional lens for evaluating the impact of immigration on natives through local area labor markets or national age-education approaches may miss important dynamics. We analyze the employment and wage trajectories of high-skilled workers born in America when a high-skilled immigrant arrives at their work site. We use linked employer-employee data during the 1995-2008 period from the Census Bureau for this exercise, which identifies the immigration status and country-of-birth of workers. We follow the subsequent career path of workers after high-skilled immigration occurs to the employee's work site both within firms (e.g., changes in employee salary, relocation to other sites) and across firms (e.g., movements to new jobs or out of workforce, long-term salary adjustments). The richness and depth of the Census Bureau data allow for multiple comparison points: selection on observables (e.g., age, tenure, salary levels and recent growth), varying immigration treatments across different work sites for the same firm for otherwise comparable employees, and (for a subset of cases and short time period at the end of our sample) randomization in H-1B admission lotteries.

Using data from the American Time Use Survey between 2003 and 2010, we document that home production absorbs roughly 30 percent of foregone market work hours at business cycle frequencies. Leisure absorbs roughly 50 percent of foregone market work hours, with sleeping and television watching accounting for most of this increase. We document significant increases in time spent on shopping, child care, education, and health. Job search absorbs between 2 and 6 percent of foregone market work hours. We discuss the implications of our results for business cycle models with home production and non-separable preferences. (JEL D31, E32, J22)

Human capital theory predicts that life expectancy will impact human capital attainment. We estimate this relationship using variation in life expectancy driven by Huntington disease, an inherited neurological disorder. We compare investments for individuals who have ex-ante identical risks of HD but differ in disease realization. Individuals with the HD mutation complete less education and job training. The elasticity of demand for college attendance with respect to life expectancy is around 1.0. We relate this to cross-country and over-time differences in education. We use smoking and cancer screening data to test the corollary that health capital responds to life expectancy. (JEL I11, I12, I20, I31, J24)

We examine the degree to which federal fiscal integration smoothes income and unemployment shocks across US States. We find that roughly 25 cents of every dollar of income shock at the state level is offset by federal fiscal policy. This stabilization comes entirely through the Federal tax system, not through spending stabilizers, automatic or otherwise. If we apply a comparable amount of cross country stabilization to European Union countries (as exists across US States), Greece and Spain would be receiving additional transfers of 2.5 percent of GDP.

We develop a theory of optimal estate taxation in a model where bequest inequality is driven by differences in parental altruism. We show that a wide range of results are possible, from positive taxes to subsidies. The results depend on redistributive objectives implicit in the cardinal specification of utility and social welfare functions. We propose a normalization that is helpful in classifying these different possibilities. We isolate cases where the optimal policy bans negative bequests and taxes positive bequests, features present in most advanced countries.

This paper explores the geographic overlap of trade and technology shocks across local labor markets in the United States. Regional exposure to technological change, as measured by specialization in routine task-intensive production and clerical occupations, is largely uncorrelated with regional exposure to trade competition from China. While the impacts of technology are dispersed throughout the United States, the impacts of trade tend to be more geographically concentrated, owing in part to the spatial agglomeration of labor-intensive manufacturing. Our findings highlight the feasibility of separately identifying the impacts of recent changes in trade and technology on US regional economies.

A growing literature establishes that high quality early childhood interventions targeted toward disadvantaged children have substantial impacts on later life outcomes. Little is known about the mechanisms producing these impacts. This paper uses longitudinal data on cognitive and personality traits from an experimental evaluation of the influential Perry Preschool program to analyze the channels through which the program boosted both male and female participant outcomes. Experimentally induced changes in personality traits explain a sizable portion of adult treatment effects.

ABSTRACT We find consistent value and momentum return premia across eight diverse markets and asset classes, and a strong common factor structure among their returns. Value and momentum returns correlate more strongly across asset classes than passive exposures to the asset classes, but value and momentum are negatively correlated with each other, both within and across asset classes. Our results indicate the presence of common global risks that we characterize with a three‐factor model. Global funding liquidity risk is a partial source of these patterns, which are identifiable only when examining value and momentum jointly across markets. Our findings present a challenge to existing behavioral, institutional, and rational asset pricing theories that largely focus on U.S. equities.