Knowledge that Transforms

Using 1980–2000 Census data to study the impact of source country characteristics on married adult immigrants' labor supply assimilation profiles, we find that immigrant women from countries with high female labor supply persistently work more than those from low-female-supply countries. While both groups of women work less than comparable natives on arrival, women from high-female-participation countries eventually close the gap with natives entirely, and women from low-female-labor supply countries eliminate most of it. Men's labor supply is unaffected by source country female participation, suggesting that the findings on women reflect notions of gender roles.

Prevailing measures of relative poverty are unchanged when all incomes grow or contract by the same proportion. This property stems from seemingly implausible assumptions about the disutility of relative deprivation and the cost of social inclusion. We propose “weakly relative” lines that relax these assumptions. On calibrating our measures to national poverty lines and survey data, we find that half the population of the developing world in 2005 lived in poverty, only half of whom were absolutely poor. The total number of poor rose over 1981 to 2005 despite falling numbers of absolutely poor. With sustained economic growth, the incidence of relative poverty became less responsive to further growth. The number of relatively poor rose, just as the numbers of absolutely poor fell.

Using multiple data sets from different time periods, we document declines in academic time investment by full-time college students in the United States between 1961 and 2003. Full-time students allocated 40 hours per week toward class and studying in 1961, whereas by 2003, they were investing about 27 hours per week. Declines were extremely broad based and are not easily accounted for by framing effects, work or major choices, or compositional changes in students or schools. We conclude that there have been substantial changes over time in the quantity or manner of human capital production on college campuses.

Does hiring workers with experience from multinationals (MNEs) increase productivity in non-MNEs? Tracing worker flows between plants in Norwegian manufacturing during the 1990s, I find a positive correlation between the share of workers with MNE experience in non-MNEs and the productivity of these plants. Workers with MNE experience contribute 20% more to the productivity of their plant than workers without such experience, even after controlling for differences in unobservable worker characteristics. The private return to mobility is smaller than the productivity effect at the plant level, which suggests that labor mobility from MNEs to non-MNEs represents a true knowledge externality.

Can terrorist attacks be timed to change the outcome of democratic elections? In this paper, we analyze the electoral impact of the terrorist attacks of March 11, 2004, in Madrid. Studies using individual level postelectoral survey data reach contradictory conclusions. We propose an alternative approach. Since the bombings took place only three days before the 2004 congressional election, we can find a control group of individuals who cast their vote before the terrorist attacks. The results indicate that the attacks had an important electoral impact, rejecting the hypothesis that the identity of the winner was unaffected by the terrorist attacks.

Providing remedial (also known as developmental) education is the primary way colleges cope with students who do not have the academic preparation needed to succeed in college-level courses. Remediation is widespread, with nearly one-third of entering freshmen taking remedial courses at an annual cost of at least $1 billion. Despite its prevalence, there is uncertainty surrounding its short- and longer-run effects. This paper presents new evidence on this question using longitudinal administrative data from Texas and a regression discontinuity research design. We find little indication that remediation improves academic or labor market outcomes.

Health and income are strongly correlated both within and across countries, yet the extent to which improvements in income have a causal effect on health status remains controversial. We investigate whether short-term fluctuations in aggregate income affect infant mortality using an unusually large data set of 1.7 million births in 59 developing countries. We show a large, negative association between per capita GDP and infant mortality. Female infant mortality is more sensitive than male infant mortality to negative economic shocks, suggesting that policies that protect the health status of female infants may be especially important during economic downturns.

This paper estimates the economic effects of a recent reform that simplified business entry regulation in Mexico. The reform was introduced in different municipalities at different points in time. Using microlevel data, I find that the reform increased the number of registered businesses by 5%. This increase was due to former wage earners' opening businesses. Former unregistered business owners were not more likely to register their business after the reform. The reform also increased wage employment by 2.2%. Finally, the results imply that the competition from new entrants decreased the income of incumbent businesses by 3%.

We propose a formal test of the hypothesis that energy prices are predetermined with respect to U.S. macroeconomic aggregates. The test is based on regressing changes in daily energy prices on daily news from U.S. macroeconomic data releases. Using a wide range of macroeconomic news, we find no compelling evidence of feedback at daily or monthly horizons, contradicting the view that energy prices respond instantaneously to macroeconomic news and consistent with the commonly used identifying assumption that there is no feedback from U.S. macroeconomic aggregates to monthly innovations in energy prices.

I estimate the impact of hurricane strikes on local economic growth rates. To this end, I assemble a panel data set of U.S. coastal counties' growth rates and construct a novel hurricane destruction index that is based on a monetary loss equation, local wind speed estimates derived from a physical wind field model, and local exposure characteristics. The econometric results suggest that a county's annual economic growth rate falls on average by 0.45 percentage points, 28%% of it due to richer individuals moving away from affected counties. I also find that the impact of hurricanes is netted out in annual terms at the state level and does not affect national economic growth rates at all.