NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER News and Research Archive

23 August 2013

Stock Price Reactions to Index Inclusion

The Russell 1000 is a value-weighted stock index comprising the 1000 largest firms by market capitalization; the Russell 2000 is a similar index that includes firms 1001 to 3000. Small changes in the market capitalizations of firms that are ranked near 1000 can move them from one index to the other. Because the indexes are capitalization-weighted, there is relatively little index buying when a firm enters the Russell 1000 as one of the smallest firms, but there is non-trivial buying when a firm joins the Russell 2000 as one of the index' largest capitalization firms. Yen-cheng Chang, Harrison Hong, and Inessa Liskovich find that when a company moves from the Russell 1000 to the Russell 2000 its share price rises, and that the reverse move triggers a stock price decline.

22 August 2013

Do Workers Work Harder During Recessions?

Edward Lazear, Kathryn Shaw, and Christopher Stanton investigate how worker productivity varies over the business cycle. They analyze data on the time it takes workers to complete a given task at a large, national firm. They find that task time declined by about five percent during the 2007-9 recession, and that the decline was most pronounced at establishments located in high-unemployment-rate areas.

21 August 2013

Need-Based Financial Aid and College Outcomes

Benjamin Castleman and Bridget Terry Long compare the college outcomes of individuals whose economic circumstances led them to just miss qualifying for the Florida Student Access Grant, a need-based aid program, and those who just qualified. Although these individuals had relatively similar economic circumstances, receiving a grant raised the likelihood of receiving a bachelor's degree within six years of high school graduation by 4.6 percentage points, a 22 percent increase relative to the no-aid baseline level.

20 August 2013

Are Women Born Cooperators?

Peter Kuhn and Marie-Claire Villeval construct an experiment in which both men and women can choose between a compensation scheme that is based only on their own output, or one that pays them based on the output of a team of which they are a member. They find that women choose to be part of a team at least as often as men, and that they tend to be more optimistic than men about their teammates' ability.

19 August 2013

Who Becomes an Entrepreneur?

Ross Levine and Yona Rubinstein find that adults who own incorporated business scored above average on learning aptitude tests as teenagers. They also had greater self-esteem and were more likely to engage in aggressive, risk-taking activities than their peers who did not become business owners. Thus a combination of intelligence and willingness to take risks appears to predict the pursuit of an entrepreneurial career.

16 August 2013

State Innovation Incentives Attract Star Scientists

Enrico Moretti and Daniel Wilson estimate that states that adopt subsidies for biotech employers increase the number of in-state star biotech scientists by about 15 percent over three years. They estimate that overall biotech sector employment rises by a similar amount.

15 August 2013

Charter Schools and Preparation for College

Joshua Angrist, Sarah Cohodes, Susan Dynarski, Parag Pathak, and Christopher Walters compare educational attainment of students who were selected by lottery to attend Boston's charter high schools with other students who entered the lottery but did not win a place at a charter school. They find that attending a charter school raises test scores on the state-wide high school graduation exam, and that it raises the student's chance of qualifying for a state-sponsored college scholarship. While charter school attendance has only a modest effect on the likelihood of attending college, it does raise the probability that a student attends a four-year rather than a two-year college.

14 August 2013

Long-Run Effects of the Tennessee Valley Authority (TVA)

Patrick Kline and Enrico Moretti study the economic effects of the TVA by comparing economic development in the Tennessee Valley with that in other regions for which Congress proposed, but never enacted, a TVA-like plan. They find gains in agricultural employment during the time period when TVA subsidies were in place, but limited effects afterward. In contrast, for manufacturing employment, they find positive effects long after subsidies end, which is consistent with the presence of agglomeration economies.

13 August 2013

Wage Effects of Unionization and Occupational Licensing

Maury Gittleman and Morris Kleiner examine the impact of unions and occupational licensing on wages. They use new data on licensing statutes along with data from the National Longitudinal Survey of Youth (NLSY79) for 1979 to 2010. They find that the economic returns to union coverage are greater than those for licensing requirements.

12 August 2013

How Do Defined Benefit vs. Defined Contribution Retirement Plans Affect Employee Mobility?

Gopi Shah Goda, Damon Jones, and Colleen Manchester study the "selection effect" of employer-provided pension plans on employee mobility -- that is, whether employees with different underlying tendencies toward changing jobs select different types of retirement plans if their employers offer that choice, or choose to work at firms that offer a certain type of pension plan that appeals to them. Analyzing data from an employer that allowed some workers to shift from a defined benefit (DB) retirement plan to a defined contribution (DC) plan, the researchers find that employees with a higher mobility tendency self-select into the DC plan. "Selection" thus appears to contribute to the positive relationship between transition from DB to DC plans and to employee mobility. The DC plan has a negative direct effect on turnover, though, relative to the DB plan.
 
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