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Report
How do college students form expectations?
This paper focuses on how college students form expectations about various major-specific outcomes. For this purpose, I collect a panel data set of Northwestern University undergraduates that contains their subjective expectations about major-specific outcomes. Although students tend to be overconfident about their future academic performance, they revised their expectations in expected ways. The updating process is found to be consistent with a Bayesian learning model. I show that learning plays a role in the decision to switch majors, and that major-switchers respond to information from ...
Working Paper
Are Central Cities Poor and Non-White?
For much of the 20th century, America's central cities were viewed as synonymous with economic and social hardship, often used as proxy for low-income communities of color. Since the 1990s, however, many metropolitan areas have seen a resurgence of interest in central city neighborhoods. Theoretical models of income sorting lead to ambiguous predictions about where households of different income levels will live within metropolitan areas. In this paper, we explore intra-city spatial patterns of income and race for U.S. metropolitan areas, focusing particularly on the locations of low-income ...
Discussion Paper
Can China Catch Up with Greece?
China’s leader Xi Jinping recently laid out the goal of reaching the per capita income of “a mid-level developed country by 2035.” Is this goal likely to be achieved? Not in our view. Continued rapid growth faces mounting headwinds from population aging and from diminishing returns to China’s investment-centered growth model. Additional impediments to growth appear to be building, including a turn toward increased state management of the economy, the crystallization of legacy credit issues in real estate and other sectors, and limits on access to key foreign technologies. Even ...
Working Paper
Work from Home Before and After the COVID-19 Outbreak
Based on novel survey data, we document a persistent rise in work from home (WFH) over the course of the COVID-19 pandemic. Using theory and direct survey evidence,we argue that three quarters of this increase reflects adoption of new work arrangements that will likely be permanent for many workers. A quantitative model matched to surveydata predicts that twice as many workers will WFH full-time post-pandemic compared to pre-pandemic, and that one in every five instead of seven workdays will be WFH. These model predictions are consistent with survey evidence on workers' own expectations about ...
Report
Double majors: one for me, one for the parents?
At least a quarter of college students in the United States graduate with more than one undergraduate major. This paper investigates how students decide on the composition of their paired majors? In other words, whether the majors chosen are substitutes or complements. Since students use both their preferences and their expectations about major-specific outcomes when choosing their majors, I collect innovative data on subjective expectations, drawn from a sample of Northwestern University sophomores. Despite showing substantial heterogeneity in beliefs, the students seem aware of differences ...
Working Paper
Marriage and Work among Prime-Age Men
Married men work substantially more hours than men who have never been married, even after controlling for observables. Panel data reveal that much of this gap is attributable to an increase in work in the years leading up to marriage. Two potential explanations for this increase are: (i) men hit by positive labor market shocks are more likely to marry; and (ii) the prospect of marriage increases men's labor supply. We quantify the relative importance of these two channels using a structural life-cycle model of marriage and labor supply. Our calibration implies that marriage substantially ...
Working Paper
Work from Home After the COVID-19 Outbreak
Based on rich novel survey data, we document that 35.2 percent of the US workforce worked entirely from home in May 2020, up from 8.2 percent in February. Highly educated, high-income and white workers were more likely to shift to working from home and maintain employment following the pandemic. Individuals working from home daily before the pandemic lost employment at similar rates as daily commuters. This suggests that, apart from the potential for home-based work, demand conditions also mattered for job losses. We find that 71.7 percent of workers that could work from home effectively did ...
Report
Can subjective expectations data be used in choice models? Evidence on cognitive biases
A pervasive concern with the use of subjective data in choice models is that the data are biased and endogenous. This paper examines the extent to which cognitive biases plague subjective data, specifically addressing 1) whether cognitive dissonance affects the reporting of beliefs, and 2) whether individuals exert sufficient mental effort when probed about their subjective beliefs. For this purpose, I collect a unique panel data set of Northwestern University undergraduates that contains their subjective expectations about outcomes specific to different majors in their choice set. I do not ...
Discussion Paper
Understanding the Racial and Income Gap in Covid-19: Health Insurance, Comorbidities, and Medical Facilities
Our previous work documents that low-income and majority-minority areas were considerably more affected by COVID-19, as captured by markedly higher case and death rates. In a four-part series starting with this post, we seek to understand the reasons behind these income and racial disparities. Do disparities in health status translate into disparities in COVID-19 intensity? Does the health system play a role through health insurance and hospital capacity? Can disparities in COVID-19 intensity be explained by high-density, crowded environments? Does social distancing, pollution, or the age ...
Working Paper
Work from Home After the COVID-19 Outbreak
Based on rich novel survey data on almost 5,000 working age adults, we document that 35.2 percent of the workforce worked entirely from home in May 2020, up from 8.2 percent in February 2020. Highly educated, high-income and white individuals were much more likely to shift to remote work and to maintain employment following the virus outbreak. Using available estimates of the potential number of home-based workers suggests that a large majority (71.7 percent) of U.S. workers that could work from home, effectively did so in May. We provide some evidence indicating that apart from the potential ...