Search

This is a pre-copy-editing, author-produced PDF file of an article accepted for publication Canadian Journal of Economics following peer review. This accepted manuscript is being archived under the conditions specified in the BU Open Access policy.

We study roughly 11,000 loans from unlicensed moneylenders to over 1,000 borrowers in Singapore and provide basic information about this understudied market. Borrowers frequently expect to repay late. While lenders do rely on additional punishments to enforce loans, the primary cost of not repaying on time is compounding of a very high interest rate. We develop a very simple model of the relational contract between loan sharks and borrowers and use it to predict the effect of a crackdown on illegal moneylending. Consistent with our model, the crackdown raised the interest rate and lowered the size of loans.

This paper studies how the argumentation strategies of participants in deliberative discussions can be supported computationally. Our ultimate goal is to predict the best next deliberative move of each participant. In this paper, we present a model for deliberative discussions and we illustrate its operationalization. Previous models have been built manually based on a small set of discussions, resulting in a level of abstraction that is not suitable for move recommendation. In contrast, we derive our model statistically from several types of metadata that can be used for move description. Applied to six million discussions from Wikipedia talk pages, our approach results in a model with 13 categories along three dimensions: discourse acts, argumentative relations, and frames. On this basis, we automatically generate a corpus with about 200,000 turns, labeled for the 13 categories. We then operationalize the model with three supervised classifiers and provide evidence that the proposed categories can be predicted.

In his valuable contribution, After Civil Rights, John Skrentny shows that in many sectors of the labor market, race is used in ways that were unanticipated when the 1964 Civil Rights Act was enacted. With separate chapters on the professions and business, the public sector, media and entertainment, and the low-skill market, he demonstrates that the new racial realism is widespread, generally has some justification from social scientific research, and is usually inconsistent with judicial decisions. I review the racially realistic practices (racial matching, increasing diversity, racial signaling, and racial characteristics) and discuss their implications for labor economics and for policy. (JEL J15, J24, J71, J81, K31)

We develop a model of self-sustaining discrimination in wages, coupled with higher unemployment and shorter employment duration among blacks. While white workers are hired and retained indefinitely without monitoring, black workers are monitored and fired if a negative signal is received. The fired workers, who return to the pool of job-seekers, lower the average productivity of black job-seekers, perpetuating the cycle of lower wages and discriminatory monitoring. Under suitable parameter values the model has two steady states, one corresponding to each population group. Discrimination can persist even if the productivity of blacks exceeds that of whites.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

The street sex worker market in Geylang, Singapore is a highly competitive market in which clients can search legally at negligible cost, making it ideal for testing Diamond’s hypothesis regarding search and monopoly pricing. As Diamond predicts, price discrimination survives in this market. Despite an excess supply of workers, but consistent with their self-reported attitudes and beliefs, sex workers charge Caucasians (Bangladeshis) more (less), based on perceived willingness to pay, and are more (less) likely to approach and reach an agreement with them. Consistent with taste discrimination, they avoid Indians, charge more and reach an agreement with them less frequently. Accepted version

This article examines nonsequential search when jobs vary with respect to nonpecuniary characteristics. In the presence of frictions in the labor market, the equilibrium job distribution need not show evidence of compensating wage differentials. The model also generates several pervasive features of labor markets: unemployment and vacancies, apparent discrimination, and market segmentation. When workers are homogeneous, restrictions on the range of job offers decrease welfare and cannot reduce unemployment. However, when workers have heterogeneous preferences, such restrictions may lower unemployment, and can even lead to a Pareto improvement in welfare. We consider the impact of policies banning discrimination and regulating working conditions.

Prior to trade liberalization in the l980s, New Zealand heavily protected low-wage industries. Consequently, trade liberalization was desirable from the perspective of both traditional and new trade theories. While liberalization decreased employment in protected industries somewhat, it also significantly affected wages, noticeably diminishing the effect of liberalization on employment in previously protected industries and, thus, reducing the postliberalization shift in the industrial composition of employment. The small effect of liberalization on the composition of employment suggests that the effect of tariffs on wages and firms' monopoly power substantially eliminated any effect of protection on the distribution of employment. Copyright 1998 by University of Chicago Press.

Using the Beginning Post-Secondary Student Survey and Transcript Data, we find no statistically significant differential return to Certificates or Associate's degrees between for-profits and not-for-profits. Point estimates suggest a slightly lower return to a for-profit Certificate and a slightly higher return to a for-profit Associate's degree, largely because more students at not-for-profits earn a BA, making them less likely to have only an Associate's degree. There is considerable variation in the return to Certificates/degrees across majors, including many with negligible or negative returns. Differences across fields are large relative to differences across institution types.

We evaluate the effects of high school exit exams on high school graduation, incarceration, employment and wages. We construct a state/graduation-cohort dataset using the Current Population Survey, Census and information on exit exams. We find relatively modest effects of high school exit exams except on incarceration. Exams assessing academic skills below the high school level have little effect. However, more challenging standards-based exams reduce graduation and increase incarceration rates. About half the reduction in graduation rates is offset by increased GED receipt. We find no consistent effects of exit exams on employment or the distribution of wages.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Little is known about how the miscarriage rate has changed over the past few decades in the United States. Data from Cycles IV to VI of the National Survey of Family Growth (NSFG) were used to examine trends from 1970 to 2000. After accounting for abortion availability and the characteristics of pregnant women, the rate of reported miscarriages increased by about 1.0% per year. This upward trend is strongest in the first seven weeks and absent after 12 weeks of pregnancy. African American and Hispanic women report lower rates of early miscarriage than do whites. The probability of reporting a miscarriage rises by about 5% per year of completed schooling. The upward trend, especially in early miscarriages, suggests awareness of pregnancy rather than prenatal care to be a key factor in explaining the evolution of self-reported miscarriages. Any beneficial effects of prenatal care on early miscarriage are obscured by this factor. Differences in adoption of early-awareness technology, such as home pregnancy tests, should be taken into account when analyzing results from self-reports or clinical trials relying on awareness of pregnancy in its early weeks.

We show that increasing the probability of obtaining a job offer through the network should raise the observed mean wage in jobs found through formal (non-network) channels relative to that in jobs found through the network. This prediction also holds at all percentiles of the observed wage distribution, except the highest and lowest. The largest changes are likely to occur below the median. We test and confirm these implications using a survey of recent immigrants to Canada. We also develop a simple structural model, consistent with the theoretical model, and show that it can replicate the broad patterns in the data. For recent immigrants, our results are consistent with the primary effect of strong networks being to increase the arrival rate of offers rather than to alter the distribution from which offers are drawn.

One of the potential strengths of the No Child Left Behind (NCLB) Act enacted in 2002 is that the law requires the production of an enormous amount of data, particularly from tests, which, if used properly, might help us improve education. As an economist and as someone who served 13 years on the School Committee1 in Brookline Massachusetts, until May 2009, I have been appalled by the limited ability of districts to analyze these data; I have been equally appalled by the cavalier manner in which economists use test scores and related measures in their analyses. The summary data currently provided are very hard to interpret, and policymakers, who typically lack statistical sophistication, cannot easily use them to assess progress. In some domains, most notably the use of average test scores to evaluate teachers or schools, the education community is aware of the biases and has sought better measures. The economics and statistics communities have both responded to and created this demand by developing value-added measures that carry a scientific aura. However, economists have largely failed to recognize many of the problems with such measures. These problems are sufficiently important that they should preclude any automatic link between these measures and rewards or sanctions. They do, however, contain information and can be used as a catalyst for more careful evaluation of teachers and schools, and as a lever to induce principals and other administrators to act on their knowledge.

We develop a model in which firms hire heterogeneous workers but must offer all workers insurance benefits under similar terms. In equilibrium, some firms offer free health insurance, some require an employee premium payment and some do not offer insurance. Making the employee contribution pre-tax lowers the cost to workers of a given employee premium and encourages more firms to charge. This increases the offer rate, lowers the take-up rate, increases (decreases) coverage among high (low) demand groups, with an indeterminate overall effect. We test the model using the expansion of section 125 plans between 1987 and 1996. The results are generally supportive.

We examine the effect of teenage childbearing on the adult outcomes of a sample of women who gave birth, miscarried or had an abortion as teenagers. If miscarriages are (conditionally) random, then if all miscarriages occur before teenagers can obtain abortions, using the absence of a miscarriage as an instrument for a live birth provides a consistent estimate of the effect of teenage motherhood on women who give birth. If all abortions occur before any miscarriage can occur, OLS on the sample of women who either have a live birth or miscarry provides an unbiased estimate of this effect. Under reasonable assumptions, IV underestimates and OLS overestimates the effect of teenage motherhood on adult outcomes. For a variety of outcomes, the two estimates provide a narrow bound on the effect of teenage motherhood on adult outcomes and which is relatively modest. The bounds can also be combined to provide consistent estimates of the effects of teen motherhood. These effects are generally adverse but modest.

Since applying for jobs is costly, workers prefer applying where their employment probability is high and, therefore, to jobs attracting fewer higher quality applicants. Since creating vacancies is expensive, firms create more vacancies when job-seeking is high. Our model captures these ideas and accounts for worker heterogeneity by assuming three types of nearly identical workers. These infinitesimal quality differences generate a discrete wage distribution. For some parameter values lower quality workers have discretely lower wages and higher unemployment than better workers. Moreover, increasing the number of the lowest quality workers can make all workers better off.