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Discussion Paper
Valuing Workplace Benefits
Workplace benefits?such as parental leave, sick leave, and flexible work arrangements?are increasingly being recognized as important determinants of differences in labor supply behavior, education and occupation choice, inequality in wages, and gender disparities in labor market outcomes. Researchers have argued that the failure of the United States to keep pace in providing more generous workplace benefits accounts for 29 percent of the decline in the nation?s labor force participation rate for women relative to that of other high-income countries in the Organisation for Economic ...
Report
The sensitivity of housing demand to financing conditions: evidence from a survey
The sensitivity of housing demand to mortgage rates and available leverage is key to understanding the effect of monetary and macroprudential policies on the housing market. However, since there is generally no exogenous variation in these variables that is independent of confounding factors (such as economic conditions or household characteristics), it is difficult to cleanly estimate these sensitivities empirically. We circumvent these issues by designing a strategic survey in which respondents are asked for their willingness to pay (WTP) for a home comparable to their current one, under ...
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Determinants of college major choice: identification using an information experiment
This paper studies the determinants of college major choice using an experimentally generated panel of beliefs, obtained by providing students with information on the true population distribution of various major-specific characteristics. Students logically revise their beliefs in response to the information, and their subjective beliefs about future major choice are associated with beliefs about their own earnings and ability. We estimate a rich model of college major choice using the panel of beliefs data. While expected earnings and perceived ability are a significant determinant of major ...
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Stereotypes and madrassas: experimental evidence from Pakistan
Madrassas (Islamic religious seminaries) have been alleged to be responsible for fostering Islamic extremism and violence, and for indoctrinating their students in narrow worldviews. However, we know very little about the behavior of Madrassa students, and how other groups in their communities interact with them. To investigate this, we use unique experimental and survey data that we collected in Madrassas and other educational institutions in Pakistan. We randomly match male students from institutions of three distinct religious tendencies and socioeconomic background?Madrassas, Islamic ...
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Belief updating among college students: evidence from experimental variation in information
We investigate how college students form and update their beliefs about future earnings using a unique ?information? experiment. We provide college students true information about the population distribution of earnings and observe how this information causes respondents to update their beliefs about their own future earnings. We show that college students are substantially misinformed about population earnings and logically revise their self-beliefs in response to the information we provide, with larger revisions when the information is more specific and is good news. We classify the ...
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What would you do with $500? Spending responses to gains, losses, news, and loans
We use survey questions about spending to investigate features of propensities to consume that are useful for distinguishing between consumption theories. Asking households about their intended spending under various scenarios, we find that 1) responses to unanticipated gains are vastly heterogeneous (either zero or substantially positive), 2) responses to losses are much larger and more widespread than responses to gains, and 3) even those with large responses to gains do not respond to news about future gains. These three findings suggest that limited access to disposable resources is an ...
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Intended college attendance: evidence from an experiment on college returns and costs
Despite a robust college premium, college attendance rates in the United States have remained stagnant and exhibit a substantial socioeconomic gradient. We focus on information gaps?specifically, incomplete information about college benefits and costs?as a potential explanation for these patterns. For this purpose, we conduct an information experiment about college returns and costs embedded within a representative survey of U.S. household heads. We show that, at the baseline, perceptions of college costs and benefits are severely and systematically biased: 75 percent of our respondents ...
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An experimental investigation of why individuals conform
Social interdependence is believed to play an important role in how people make individual choices. This paper presents a simple model constructed on the premise that people are motivated by their own payoff as well as by how their actions compare with those of other people in their reference group. I show that conformity of actions may arise either from learning about the norm (social learning), or from adhering to the norm because of image-related concerns (social influence). To disentangle the two empirically, I use the fact that image-related concerns can be present only if actions are ...
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Personal experiences and expectations about aggregate outcomes
We use novel survey data to estimate how personal experiences affect household expectations about aggregate economic outcomes in housing and labor markets. We exploit variation in locally experienced house prices to show that individuals systematically extrapolate from recent locally experienced home prices when asked for their expectations about U.S. house price changes over the next year. In addition, higher volatility of locally experienced house prices causes respondents to report a wider distribution over expected future national house price movements. We find similar results for labor ...
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College major choice and the gender gap
Males and females are markedly different in their choice of college major. Two main reasons have been suggested for the gender gap: differences in innate abilities and differences in preferences. This paper addresses the question of how college majors are chosen, focusing on the underlying gender gap. Since observed choices may be consistent with many combinations of expectations and preferences, I use a unique data set of Northwestern University sophomores that contains the students' subjective expectations about choice-specific outcomes. I estimate a choice model where selection of college ...