22 March 2013

Technical Change and the Relative Demand for Skilled Labor

Lawrence Katz and Robert Margo describe shifts that have taken place over time in the United States in the relative demand for skilled labor. They find that beginning in the 1800s, the share of “middle-skill” jobs, such as artisans, declined while the share of “high-skill” white collar, non-production workers and “low-skill” operatives and laborers increased. From 1850 to the early 1900s, different sectors of the economy were affected differently: the total share of low-skill jobs decreased, the share of middle-skill jobs remained steady, and there were more high- skill jobs. This pattern continued through much of the 1900s until the recent “polarization” of labor demand that began in the late 1980s.

21 March 2013

Does Federal Financial Aid Affect College Enrollment?

The Higher Education Act was amended in 2001 to make individuals convicted of drug offenses ineligible for federal financial aid for up to two years following their conviction. Michael Lovenheim and Emily Owens find that this change in the law increased the amount of time between high school graduation and college enrollment by about two years for those affected. They also suggest that individuals affected by the 2001 change were less likely to ever enroll in college than they would have been in the absence of this new rule.

20 March 2013

Gender Differences in Generosity

Stefano DellaVigna, John List, Ulrike Malmendier, and Gautam Rao analyze the results of a field experiment on charitable giving. They find that men and women are equally generous when they are solicited for donations in person at home, where they cannot easily avoid the individual asking for support. However, women become less generous when they can easily avoid the solicitation, for example by not walking near an outdoor fundraising outpost. The researchers find similar results when the experiment involves completing an unpaid survey.

19 March 2013

The Long-Run Effects of High-School Class Gender Composition

Massimo Anelli and Giovanni Peri use a newly collected dataset covering 30,000 Italian students who graduated from high school between 1985 and 2005 to analyze whether the gender composition of high school classmates affected the students' choice of major and their long-run earning potential. Controlling for family, cohort, teacher, and school effects, they find that having more peers of the same sex in a class increases the probability of choosing majors associated with high earning jobs (Economics/Business, Medicine, and Engineering). For women, having a large percentage of female classmates increases both long-run performance in college and earnings.

18 March 2013

Reallocation and Technology: Evidence from the U.S. Steel Industry

Allan Collard-Wexler and Jan De Loecker find that the sharp increase in the productivity of the steel industry between 1963 and 2002 was linked to a new technology for producing steel: the minimill. Minimills displaced an older technology, vertically integrated production, and were responsible for one-third of the increase in the industry's productivity. Increased competition via the expansion of minimills also drove reallocation of production for the vertically integrated producers, leading to a resurgence in their productivity, and consequently to the industry's productivity as a whole.

15 March 2013

Air Pollution and Infant Mortality: Evidence from the Expansion of Natural Gas Infrastructure

Natural gas is a clean, abundant, and highly-efficient source of energy. When Resul Cesur, Erdal Tekin, and Aydogan Ulker analyze variation in the expansion of natural gas infrastructure in Turkish provinces between 2001 and 2011, they find that the increased use of natural gas has resulted in a significant reduction in the rate of infant mortality in Turkey. They estimate that a one-percentage point increase in the rate of subscriptions to natural gas services could cause the infant mortality rate to decline by 4 percent in Turkey.

14 March 2013

Do Economists Disagree?

Roger Gordon and Gordon Dahl analyze responses to a series of questions posed to a distinguished panel of economists that were designed to determine the degree to which economists agree or disagree about key economic questions. They find a broad consensus on many different economic issues, and they find it difficult to explain observed differences using obvious characteristics of the panel members, such as their current institutional affiliation, or the university from which they received their Ph.D. The authors do find that men who participated in the panel were slightly more likely to express an opinion on any given question than were women.

13 March 2013

Nominal Exchange Rates and Inflation Indexed Bond Yields

Richard Clarida analyzes data on exchange rates between the dollar, pound, euro, and yen and finds a structural relationship between the nominal exchange rate, national price levels, and the observed yields on long maturity inflation-indexed bonds. He interprets this as a fair value relationship between exchange rates that must prevail across economies in which inflation-indexed bonds are traded. He also shows that a 1 percent rise in the foreign currency risk premium relative to the dollar is associated with a 50-basis point rise in the inflation-indexed bond return differential in favor of the foreign country and a 50-basis point appreciation of the dollar.

12 March 2013

Which News Moves Stock Prices?

In order to study the relationship between stock prices and news, Jacob Boudoukh, Ronen Feldman, Shimon Kogan, and Matthew Richardson classify news articles by topic (such as analyst recommendations, financial information, acquisitions and mergers, and so on) and tone, then compare the market reaction on days with "no-news" versus days with what they term "unidentified news" and "identified news." They show that stock-level volatility is similar on no-news days and unidentified news days, consistent with the idea that the intensity and importance of information arrival is the same across those days. However, on "identified news days" the volatility of stock prices is more than double what it is on other days. They estimate that identified news days are approximately 30 percent more likely to be associated with extreme returns (defined by the bottom and top 10 percent of the return distribution) and that unidentified and no-news days are slightly more likely to be associated with moderate returns (in the middle 30-70 percent range of the returns distribution).

11 March 2013

The Transmission of Democracy from Village to Nation-State

Paola Giuliano and Nathan Nunn find that a tradition of local-level democracy – that is, having the local leader chosen through consensus rather than other methods, such as hereditary appointment – is associated with more democratic national institutions today. They surmise that a tradition of village-level democracy may affect people’s attitudes about the appropriateness of democratic institutions, and in turn affect the stability of such institutions at the national level. Finally, they show that countries with a past experience of local democracy have a stronger rule of law, less corruption, and higher per capita income today.
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