Knowledge that Transforms

We experimentally examine how individuals commit to a cutoff stopping rule when facing a sequence of independent lotteries. We identify two main behavior patterns: (a) a small share of participants consistently choose stopping rules whose gain bound (i.e., the accumulated gain at which the sequence stops) is larger than the loss bound, and (b) a larger share of participants consistently choose rules whose loss bound is larger than the gain bound. We introduce a procedural choice model that accounts for these patterns and show that the behavior of most of our participants is inconsistent with prominent theories of decision under risk.

We study college admissions markets where students can attend the same college under different financial terms. The deferred acceptance algorithm identifies a stable allocation where funding is allocated based on merit and the set of meritbased stable allocations is small. When students are heterogeneous in the way they trade off program characteristics and contractual terms, the set of stable allocations is large and different stable allocations differ in the number of assigned students. In Hungary, where such heterogeneity is present, a non-merit-based stable allocation would increase the number of assigned applicants by 1.9% relative to any merit-based stable allocation.

We study the implications of the presence of foreign multinationals on regional corporate tax policies of a country. We develop and estimate a quantitative spatial model with multinational production (MP) and local corporate taxes. Exploiting China's 2008 corporate tax reform, we find that firm production across regions is twice as footloose as estimates in the literature on cross-country production. Counterfactual analysis shows that (i) China's 2008 corporate tax reform shifted foreign-firm productions to western provinces and increased Chinese welfare by 0.86%; (ii) regional tax competition would significantly reduce China's corporate tax revenue, lowering the welfare by 5.56%; (iii) the nationally optimal corporate tax schedule would increase Chinese welfare by 3.10%. Finally, without the presence of foreign multinationals, the welfare loss from regional tax competition would be 2.04%, while the gain from the nationally optimal corporate taxes would be only 0.06%.

Recently, mandatory pension contributions in Iceland were increased substantially in the private sector while remaining unchanged in the public sector. Taking this as a large natural experiment, this paper studies the effects of this change on households’ voluntary saving, using comprehensive third-party reported information on income, assets, and debt for all taxpayers. Using difference-in-differences, we find that households do not reduce voluntary saving when faced with a rise in mandatory saving. Our results are supported by an event study of workers switching from the private sector to the public sector. Survey evidence suggests widespread ignorance about the pension system.

I show that parents select schools that improve the student-school match. Using the centralized algorithm for offers to primary schools in London, I compare the achievement of students who are as good as randomly enroled in schools ranked differently in their application. Enroling at the first choice compared to a school ranked lower increases achievement by 0.03 standard deviations per year beyond the average school value-added across students. Match effects arise from unobserved student's and school's attributes, and are larger for relatively advantaged students. Results imply that parental choice can increase aggregate learning.

Using the Survey of Consumer Expectations, which asks employed workers to report their salaries and job offers every four months, we find that rejecting an outside offer has no significant effect on a worker's salary with the current employer, the expected probability that the current employer will match an outside offer with a higher salary, and the worker's satisfaction with the current job, both overall and separately for wages and non-wage benefits. The results suggest that wage renegotiation in response to changes in an employed worker's outside option does not play a significant role for individual wages.

We provide evidence that an influx of technical human capital improves regional entrepreneurship, both by increasing firm entry and reducing entrepreneurial failure. The results also indicate negative externalities upon lowtech and competing industries: an influx of inventors in a county shifts the locus of venture capital investment away from low-tech startups to high-tech startups and moreover towards new ventures in the same sector as those inventors' skills. We strengthen causal inference with a shift-share instrument which combines the spatial distribution of surnames in the LM>= U.S. Census with thousands of surnamespecific shifts based on modern inventor mobility.

This paper studies the effects of natural rate shocks on output and inflation. It estimates a semi-structural model inspired by the DSGE literature. A decline in the natural rate is found to lower trend output and to be contractionary and deflationary in the short run. When the economy is constrained by the zero lower bound (ZLB), these results are consistent with the secular stagnation hypothesis. However, negative natural rate shocks are found to depress the trend of output even outside of the ZLB, calling for a more general theory. A model with liquidity scarcity is proposed as a first step.

We examine the impact of biometric monitoring devices placed in tuberculosis treatment centers in Indian slums. The devices record health worker attendance and patient visits. Combining survey data, random center visits, and hospital registers, we find that patients at biometric-equipped centers are 25% less likely to interrupt treatment, reflecting increased efforts by health workers and greater daily adherence by patients. The technology also improves the quality of public data by reducing overreported patient numbers and underreported treatment interruptions. Overall, our results suggest that real-time monitoring of service delivery can strengthen the state’s capacity to serve poor and marginalized populations.

This paper examines the authorship of postpublication criticisms in the scientific literature, with a focus on gender differences. Bibliometrics from journals in the natural and social sciences show that comments that criticize or correct a published study are 20% to 40% less likely than regular papers to have a female author. In preprints in the life sciences, prior to peer review, women are missing by 20% to 40% in failed replications compared to regular papers, but they are not missing in successful replications. In an experiment, I then find large gender differences in willingness to point out and penalize a mistake in someone's work.