Knowledge that Transforms

Most criminal defendants cannot afford to hire an attorney. To provide constitutionally mandated legal services, states commonly use either private court-appointed attorneys or a public defender organization. This paper investigates the relative efficacy of these two modes of indigent defense by comparing outcomes of codefendants assigned to different types of attorneys within the same case. Using data from San Francisco, I show that in multiple defendant cases, public defender assignment is plausibly as good as random. I find that public defenders reduce the probability of any prison sentence by 22% and the length of prison sentences by 10%.

We identify earnings impacts of exposure to an infant health intervention in Sweden, using individual-linked administrative data to trace potential mechanisms. Leveraging quasi-random variation in eligibility, we estimate that exposure was associated with higher test scores in primary school for boys and girls. However, only girls were more likely to score in the top quintile. Subsequent gains, in secondary schooling, employment, and earnings, are restricted to girls. We show that the differential gains for women accrued from both skills and opportunities.

We present novel insights on the role of international trade following unanticipated fiscal changes in a flexible exchange rate environment. We show analytically that fiscal multipliers can be larger in economies more open to trade, even when fiscal expansions imply trade deficits. Three factors determine how trade linkages matter: the relative import share of public and private goods, the financing of government debt, and the currency invoicing of exports. A Bayesian prior-predictive analysis shows that a quantitative model bears the same predictions. Conditioning on Canadian and U.S. data, we find support for larger multipliers relative to a counterfactually closed economy.

We introduce NLK, a model that connects the Nash equilibrium (NE) and level-k. It allows a player in a game to believe that her opponent may be either less or as sophisticated as she is, a view supported in psychology. We apply NLK to data from five published papers on static, dynamic, and auction games. NLK provides different predictions from those of the NE and level-k; moreover, a simple version of NLK explains the experimental data better in many cases, with the same or fewer parameters. We discuss extensions to games with more than two players and heterogeneous beliefs.

Higher-order risk preferences are important determinants of economic behavior. We apply insights from behavioral economics: we measure higher-order risk preferences for pure gains and losses. We find a reflection effect not only for second-order risk preferences, as did Kahneman and Tversky (1979), but also for higher-order risk preferences: we find risk aversion, prudence and intemperance for gains and much more risk-loving preferences, imprudence and temperance for losses. These findings are at odds with a universal preference for combining good with bad or good with good, which previous results suggest may underlie higher-order risk preferences.

This paper shows robust effects of trade shocks on within-firm wage inequality through changes in firm hierarchies. It uses two distinct research designs—one considering firm-level shocks to foreign demand and transportation costs, the other analyzing the Muslim boycott of Danish exports after the 2006 “cartoon crisis.” Consistent with knowledge-based and incentive-based hierarchy models, trade shocks affect organizational choices through production scale. Adding a hierarchy layer increases inequality throughout the organization, particularly widening the 90-50 wage gap and pay differences between top and bottom layers. Delayering after the boycott leads to wage compression through wage cuts, demotions, and employee turnover.

We use exogenously assigned general practitioners to study the effects of female role models on girls' educational outcomes. Girls who are exposed to female general practitioners are more likely to sort into male-dominated education programs in high school, most notably science, technology, engineering, mathematics, and medicine (STEMM). These effects persist as they enter college and select majors. The effects are larger for high-ability girls with low-educated mothers, suggesting that female role models improve intergenerational mobility and narrow the gifted gap. This demonstrates that role model effects in education need not involve individuals in the classroom but can arise due to everyday interactions with medical professionals.

In this study, we conduct a stated-choice experiment to analyze the decision to contribute to either a front- or back-loaded tax-preferred retirement savings account. Our experimental design includes a randomized financial education intervention that provides information on the tax implications of both types of account. Respondents who were exposed to the intervention have greater knowledge of these accounts and make contribution choices that increase their after-tax income. Using a well-defined benchmark, we show that on average, respondents who experienced the intervention increase their discounted welfare by about 4% of their contribution amount.

Identification via heteroskedasticity exploits variance changes between regimes to identify parameters in simultaneous equations. Weak identification occurs when shock variances change very little or multiple variances change close to proportionally, making standard inference unreliable. I propose an F-test for weak identification in a common simple version of the model. More generally, I establish conditions for validity of nonconservative robust inference on subsets of the parameters, which can be used to test for weak identification. I study monetary policy shocks identified using heteroskedasticity in high-frequency data. I detect weak identification, invalidating standard inference, in daily data, while intraday data provide strong identification.

Before the racial integration of schools in the southern United States, predominantly African American schools were staffed almost exclusively by African American teachers as well, and teaching constituted an extraordinarily large share of professional employment among southern Blacks. The large-scale desegregation of southern schools that occurred after passage of the 1964 Civil Rights Act represented a potential threat to this employment base, and this paper estimates how student integration affected Black teacher employment. Using newly assembled archival data from 759 southern school districts observed between 1960 and 1972, I estimate that a school district transitioning from fully segregated to fully integrated education, which approximates the experience of the modal southern district in this period, led to a 41.7% reduction in Black teacher employment. Additional results, including event-study specifications and models with extensive controls for concurrent policy changes, strongly suggest that these employment reductions were a causal effect of integration and not due to school district self-selection into desegregation. To study the broader impacts of reduced teaching employment, I estimate race-specific changes in occupations and earnings in the decennial Censuses and find that displaced southern Black teachers either entered lower skill occupations within the South or migrated out of the region to continue teaching and that integration-induced displacement led to substantial earnings reductions.