The teenagers in an economics class at the University of Chicago Laboratory School paid close attention when economist Kevin Murphy came to speak—perhaps because he was talking about their future incomes.
Engineers tend to be bothered when they can’t understand a system sitting right before their eyes.
The rural poor in developing countries, once economically isolated, are increasingly being connected to regional markets. Whether these new connections crowd out or encourage educational investment is a central question. We examine the impacts on educational choices of 115,000 new roads built under India’s flagship road construction program. We find that children stay in school longer and perform better on standardized exams.
Two common hypotheses regarding the relative benefits of vocational versus general education are (1) that vocational skills enhance relative short-term earnings and (2) that general skills enhance relative long-term earnings. Empirical evidence for these hypotheses has remained limited. Based on Swedish registry data of individuals in short (2-year) upper secondary school programs, this study provides a first exploration of individuals’ earnings across nearly complete careers. The descriptive earnings patterns indicate support for both hypotheses (1) and (2).
We test whether adverse childhood experiences – exposure to parental maltreatment and its indirect effect on health – are associated with age 30 personality traits. We use rich longitudinal data from a large, representative cohort of young US Americans and exploit differences across siblings to control for the confounding influences of shared environmental and genetic factors. We find that maltreatment experiences are significantly and robustly associated with neuroticism, conscientiousness, and openness to experience, but not with agreeableness and extraversion.
We study the impact of health shocks on domestic violence and illicit drug use. We argue that health is a form of human capital that shifts incentives for risky behaviors, such as drug use, and also changes options outside of violent relationships. To estimate causal effects, we examine chronically ill women before and after a medical breakthrough and exploit differences in these women’s health prior to the breakthrough. We show evidence that health improvements induced by the breakthrough reduced domestic violence and illicit drug use.
Using household-level data from Mexico we document patterns among schooling, entrepreneurial decisions and household characteristics such as assets, talent of household members and age of the household head. Motivated by our findings, we develop a heterogeneous-agent, incomplete-markets, overlapping-generations dynasty model. Households jointly decide over their life cycle on (i) kids' human capital investments (schooling) and (ii) parents' entry, exit and investment into alternative entrepreneurial modes (subsistence and modern). With financial constraints all of these are co-determined.
Many poor households in developing countries are liquidity-constrained. As a result, they may under-invest in the human capital of their children. We provide new evidence on the long-term (10-year) effects of cash transfers using data from Ecuador. Our analysis is based on two separate sources of data and two identification strategies. First, we extend the results from an experiment that randomly assigned children under the age of 6 years to “early” or “late” treatment groups.