Knowledge that Transforms

Do foreign students affect the likelihood that domestic students obtain a STEM degree and occupation? Using administrative student records from a US university, we exploit idiosyncratic variation in the share of foreign classmates in introductory math classes and find that foreign classmates displace domestic students from STEM majors and occupations. However, displaced students gravitate toward high-earning social science majors, so their expected earnings are not penalized. We explore several mechanisms. Results indicate that displacement is concentrated in classes where foreign classmates possess weak English language ability, suggesting that diminished in-class communication and social interactions might play an important role.

China shifted its controversial one-child policy (1979–2015) to a two-child policy in 2016. We take advantage of this unexpected policy change and the heterogeneities in the prechange environment to investigate labor market discrimination against expected family responsibilities. In a two-wave correspondence study before and after the policy change, we sent 8,848 fictitious resumes with ages 22–29 in response to online job advertisements. Their gender and only-child/siblinged status were systematically varied. We find that women—but not men—are subject to labor market discrimination for expected family responsibilities. This discrimination worsens with the increase in women’s reproductive age.

This paper estimates the causal effect of equalizing revenues across school districts on students’ intergenerational mobility. I exploit cohort differences in exposure to equalization generated by state-level reforms. To address the endogeneity of postreform revenues due to household sorting after a reform, I use a simulated-instruments approach that uses newly collected data on states’ funding formulas to simulate revenues without sorting. I find that equalization has a large effect on the mobility of low-income students. Reductions in input gaps between low-income and high-income districts are likely channels behind this effect.

We examine the labor market effects of Secure Communities (SC), a police-based immigration enforcement policy implemented in 2008–13. Using variation in implementation across local areas and over time, we find that SC decreased the employment of likely undocumented immigrants. These effects are driven not only by deportations but also by adjustments among immigrants who remain in the United States. Importantly, SC also decreased the employment and hourly wages of US-born individuals. We provide support for two mechanisms that could explain this decline in labor demand: an increase in labor costs that decreases job creation and a reduction in local consumption.

Monthly wage inequality in Germany continued to increase in the early 2000s, which is mainly explained by a rising part-time employment share. After 2010, inequality returned to the level of 2000. About half of the recent decrease is due to the introduction of the national minimum wage in 2015. While employment effects of the minimum wage are negligible, we find strong wage increases among the existing workforce. The minimum wage lowered wage inequality within eastern and western Germany but also led to a convergence of the east-west wage differential. The increased labor incomes were not offset by decreasing social benefits.

Many studies use matched employer-employee data to estimate a statistical model of earnings determination with worker and firm fixed effects. Estimates based on this model have produced influential yet controversial conclusions. The objective of this paper is to assess the sensitivity of these conclusions to the biases that arise because of limited mobility of workers across firms. We use employer-employee data from the United States and several European countries while taking advantage of both fixed effects and random effects methods for bias correction. We find that limited mobility bias is severe and that bias correction is important.

Eric Chaney of University of Oxford reviews “Conquests and Rents: A Political Economy of Dictatorship and Violence in Muslim Societies” by Faisal Z. Ahmed. The Econlit abstract of this book begins: “Examines how the institutional legacy of Muslim conquest is a robust determinant of less cohesive institutions in contemporary Muslim societies, detailing how variation in economic rents explain ebbs and flows of dictatorship and propensity for civil wars in these societies.”

Editor's Note Our policy is to annotate all English-language books on economics and related subjects that are sent to us. A very small number of foreign-language books are called to our attention and annotated by our consulting editors or others. Our staff does not monitor and order books published; therefore, if an annotation of a book does not appear six months after the publication date, please write to us or the publisher concerning the book.

The list below specifies doctoral degrees conferred by U.S. and Canadian universities during academic year July 2022 to June 2023. Lists of degree recipients and subject classifications are provided by the university. Note: Dissertations without classifications may be found under “Y Miscellaneous Categories.”

Kelly Vosters of University of North Carolina at Charlotte reviews “The Myth That Made Us: How False Beliefs about Racism and Meritocracy Broke Our Economy (and How to Fix It)” by Jeff Fuhrer. The Econlit abstract of this book begins: “Examines the ways that false narratives concerning race, poverty, and the sources of success in the United States negatively affect the economy, detailing how those with wealth and power have used such narratives to maintain the status quo in a system that slants outcomes toward the already successful.”