Working Paper Series

  • Social Experiments in the Labor Market

    Jesse Rothstein, Till von Wachter

    Goldman School of Public Policy Working Paper (November 2015)

    Large-scale social experiments were pioneered in labor economics, and are the basis for much of what we know about topics ranging from the effect of job training to incentives for job search to labor supply responses to taxation. Yet, many important questions about these topics require going beyond random assignment. This applies to questions pertaining to both internal and external validity, and includes effects on endogenously observed outcomes, such as wages and hours; spillover effects; site effects; heterogeneity in treatment effects; multiple and hidden treatments; and the mechanisms producing treatment effects. In this Chapter, we review the value and limitations of randomized social experiments in the labor market, with an emphasis on these design issues and approaches to addressing them. These approaches expand the range of questions that can be answered using experiments by combining experimental variation with econometric or theoretical assumptions. We also discuss efforts to build the means of answering these types of questions into the ex ante design of experiments. Our discussion yields an overview of the expanding toolkit available to experimental researchers.

  • Revisiting the Impacts of Teachers

    Jesse Rothstein

    Goldman School of Public Policy Working Paper (October 2015)

    Chetty, Friedman, and Rockoff (2014a and 2014b) study value-added (VA) measures of teacher effectiveness. Exploiting teacher switches as a sort of quasi-experiment, the first paper investigates potential bias from student sorting to teachers, and concludes that any such bias is negligible. The second paper finds that VA scores are useful proxies for teachers’ effects on students’ long-run outcomes. I successfully reproduce both sets of analyses and results in data from North Carolina. But I find that teacher switching is correlated with changes in student preparedness, leading quasi-experimental estimates to understate bias in VA scores. Estimates that adjust for this indicate moderate bias. The long-run effects results are sensitive to controls and cannot support strong conclusions.

  • Deaths in Custody in California: 2005 through 2014

    Steven Raphael, Justin McCrary

    Goldman School of Public Policy Working Paper: GSPP (September 2015)

  • City Policies, City Interests:  An Alternative Theory of Interest Group Systems

    Sarah F. Anzia

    Goldman School of Public Policy Working Paper (August 2015)

    To understand the extent to which interest groups are active in politics—and which groups are active, under what conditions—I argue that we should start by focusing on the policies governments make.  I use such an approach, which Hacker and Pierson (2014) call a “policy-focused approach,” to develop hypotheses about how the amount of interest group involvement in city politics varies with city characteristics, as well as hypotheses about how the kinds of interest groups that are active depends on group- and city-level factors.  I test these hypotheses using data from a survey of elected officials in over 500 U.S. municipal governments, providing the first-ever bird’s-eye view of interest group activity in a diverse set of American cities.  My findings reveal that the size and composition of city interest group systems vary in ways consistent with my hypotheses, demonstrating the promise of this theoretical approach.   

  • The Great Recession and its Aftermath: What Role for Structural Changes?

    Jesse Rothstein

    Goldman School of Public Policy Working Paper (August 2015)

    The last eight years have been disastrous for many workers, and particularly so for those with low human capital or other forms of disadvantage. Although the Great Recession officially ended in 2009, the labor market has been very slow to recover. One explanation attributes the ongoing poor labor market outcomes of young and non-college workers to the combination of deficient aggregate labor demand and greater sensitivity of marginal workers to cyclical conditions. A second attributes the recent outcomes to structural changes in the labor market. These have importantly different policy implications: Cyclical explanations imply that the main challenge is to raise aggregate labor demand and that if this is done many of the patterns seen in the last several years will revert to their prior trends. Structural explanations, by contrast, suggest the recent experience is the “new normal,” absent policy responses to encourage more (or different) labor supply. This paper reviews recent data for evidence on the two explanations, focusing on wage trends as an indicator of the relative importance of labor supply and demand. I find little evidence of wage pressure in any quantitatively important labor markets before 2015. The most recent data is more mixed, but still suggests substantial ongoing slack. 

  • The New Self-Governance: A Theoretical Framework

    Stephen M. Maurer

    Goldman School of Public Policy Working Paper: GSPP15-002 (May 2015)

    Industry has organized increasingly effective self-governance initiatives since the 1980s. Almost all of these are based on large retailers’ economic leverage over global supply chains. This article documents commonalities in six of the best-studied examples – coffee, dolphin-safe tuna, fisheries, lumber, food processing, and artificial DNA – and offers straightforward economic and political theories to explain them. The theories teach that oligopoly competition can strongly constrain private power so that firms are answerable to a shadow electorate of consumers. Furthermore, rational retailers will find cede significant power to suppliers and NGOs. The arguments generalize traditional claims that free markets constrain private power and suggest an explicit framework for deciding when private politics are legitimate.

  • The Economics of Memory: How Copyright Decides Which Books Do (and Don’t) Become Classics

    Stephen M. Maurer

    Goldman School of Public Policy Working Paper: GSPP15-001 (April 2015)

    Legal scholars usually analyze copyright as an incentive and sometime obstacle to creation. This encourages us to see publishers as middlemen who siphon off rents that would be better spent on authors. By comparison, recent social science research emphasizes that word-of-mouth markets are highly imperfect. This means that many deserving titles will never find readers unless some publisher takes the trouble to market them. But this second view is deeply subversive. After all, the need for publishers – and reward – does not end when a book is published. At least in principle, copyright should last forever. 

    The trouble with this argument is that it assumes what ought to be proven. How much effort do publishers really invest in finding forgotten titles? And does vigorous marketing attract more readers than high copyright prices deter? This article looks for answers in the history of 20th Century print publishers and today’s Print-on-Demand and eBook markets. We argue that, far from promoting dissemination, copyright frequently operates to suppress works that would otherwise erode the price of new titles. This pathology has gotten dramatically worse in the Age of eBooks. Meanwhile, public domain publishers are facing their own crisis. Mid-20th Century books had large up-front costs. This deterred copyists. By comparison, digital technologies make it easy for copyists to enter the market. This has suppressed profits to the point where many public domain publishers spend little or nothing on forgotten titles.

    The article concludes by reviewing possible reforms. Partial solutions include clarifying antitrust law so that firms have more freedom to implement price discrimination; modifying copyright so that consumers can re-sell used eBooks; letting on-line markets limit the number of publishers allowed to post redundant public domain titles on their sites; and strengthening non-commercial institutions for finding, curating, and delivering quality titles to readers.

  • Tropical Economics

    Solomon Hsiang, Kyle C. Meng

    Goldman School of Public Policy Working Paper (February 2015)