Knowledge that Transforms

This paper is the first to present direct evidence showing how localized knowledge spillovers arise from workers changing jobs within the same local labor market. Using a unique data set combining Social Security earnings records and balance sheet information for the Veneto region of Italy, I first identify a set of highly productive firms, then show that hiring workers with experience at these firms significantly increases the productivity of other firms. My findings imply that worker flows explain around 10% of the productivity gains experienced by incumbent firms when new highly productive firms are added to a local labor market.

This paper reports the results from a large-scale laboratory experiment that compared the impacts of a performance bonus and a wage gift on output from a creative task and a simple task. We find that the performance bonus substantially increases output in both the creative task and the simple task. By comparison, the wage gift increases output only in the simple task. Additional experimental treatments suggest that reciprocity in the creative task is inhibited because agents are uncertain about how their efforts affect the payments that accrue to the principal as a result of the agents’ work.

We use a résumé audit study to investigate the role of employment and unemployment histories in callbacks to job applications. We find that applicants with 52 weeks of unemployment have a lower callback rate than those with shorter spells. There is no relationship, however, between spell length and callback among applicants with spells of 24 weeks or less. We also find that both younger and older applicants have a lower callback probability than prime-aged applicants. Finally, we find that applicants who are employed at the time of application have a lower callback rate than do unemployed applicants.

Intergenerational income mobility is lower in the United States than in Canada but varies significantly within each country. Our subnational analysis finds that the national border only partially distinguishes the approximately 1,000 regions we analyze within these countries. The Canada-US border divides central and eastern Canada from the US Great Lakes and northeastern regions. Simultaneously, some Canadian regions have more in common with the low-mobility southern parts of the United States than with the rest of Canada; that these areas represent a much larger fraction of the US population also explains why mobility is lower in the United States.

Intergenerational income transmission varies across commuting zones (CZs). I investigate whether children’s educational outcomes help to explain this variation. Differences among CZs in the relationship between parental income and children’s human capital explain only one-ninth of the variation in income transmission. A similar share is explained by differences in the return to human capital. One-third reflects earnings differences not mediated by human capital, and 40% reflects differences in marriage patterns. Intergenerational mobility appears to reflect job networks and the structure of local labor and marriage markets more than it does the education system.

We present results of a randomized trial testing alternative approaches of mapping student achievement into rewards for teachers. Teachers in 216 schools in western China were assigned to performance pay schemes where teacher performance was assessed by one of three different methods. We find that teachers offered “pay-for-percentile” incentives outperform teachers offered simpler schemes based on class-average achievement or average gains over a school year. Moreover, pay-for-percentile incentives produced broad-based gains across students within classes. That teachers respond to relatively intricate features of incentive schemes highlights the importance of paying close attention to performance pay design.

Despite great focus on and public investment in STEM education, little causal evidence connects quantitative coursework to students’ economic outcomes. I show that state changes in minimum high school math requirements substantially increase black students’ completed math coursework and their later earnings. The marginal student’s return to an additional math course is 10%, roughly half the return to a year of high school, and is partly explained by a shift toward more cognitively skilled occupations. White students’ coursework and earnings are unaffected. Rigorous standards for quantitative coursework can close meaningful portions of racial gaps in economic outcomes.

We explore whether fetal and postnatal exposure to tropical cyclones affects education and income in adulthood by using World War I draft records linked to census data. Difference-in-differences estimates indicate that white males born in hurricane-prone US states who experienced a hurricane in utero or as infants had 5% lower income. Labor force participation was unaffected, while education and migration account for a small portion of the effects on income. Empirical tests suggest the persistent impact of damage is an unlikely channel. Thus, we attribute the findings to lower health capital stemming from temporary disruption in the aftermath of storms.

This paper compares the performance of teachers hired on the basis of a standardized exam to those hired at the union’s discretion in Mexico. My results show that the discretionary hires perform considerably worse than the rule-based hires (as measured by value added to student achievement). The evidence presented here shows the impact of personnel selection mechanisms on the quality of public service delivery.

Young children are thought to be vulnerable to separation from their primary caregiver. This raises concern about whether early childcare enrollment may harm child development. We use childcare assignment lotteries to estimate the effect of enrollment at age 1–2 on cognitive development in Norway. Estimates show significant gains in language and mathematics at age 6–7 and a substantial drop in scores below publicly set thresholds for low performance. Across subsamples, we find a pattern of stronger effects on underperforming groups. We find little support for childcare quality or family income as drivers of our results.