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Journal Article
Opinion: Why Is Returning to the Office Contentious?
A trusted colleague recently relayed an article about CEOs taking a harder line on bringing staff back to the office. I found the employers' views expressed in the article understandable. When it comes to bringing people together in the workplace, it's often the case in specialized teamwork settings that what I as a leader am looking for is simple availability. Stuff needing quick attention comes up in any organization, especially when others are waiting for one team member to dispose of an issue. It is bad for business, and personally frustrating, when such agility is compromised. A rigid ...
Working Paper
State Capacity and Public Goods: Institutional Change, Human Capital, and Growth in Early Modern Germany
What are the origins and consequences of the state as a provider of public goods? We study legal reforms that established mass public education and increased state capacity in German cities during the 1500s. These fundamental changes in public goods provision occurred where ideological competition during the Protestant Reformation interacted with popular politics at the local level. We document that cities that formalized public goods provision in the 1500s began differentially producing and attracting upper tail human capital and grew to be significantly larger in the long-run. We study ...
Working Paper
Misallocation, informality, and human capital: understanding the role of institutions
Accepted for publication, Journal of Economic Dynamics and Control The aim of this paper is to quantify the role of formal-sector institutions in shaping the demand for human capital and the level of informality. We propose a firm dynamics model where firms face capital market imperfections and costs of operating in the formal sector. Formal firms have a larger set of production opportunities and the ability to employ skilled workers, but informal firms can avoid the costs of formalization. These firm-level distortions give rise to endogenous formal and informal sectors and, more importantly, ...
Journal Article
Research Spotlight: Assessing Unemployment Insurance
Unemployment insurance (UI) programs assist unemployed workers but can also reduce their incentive to search for a new job. This trade-off has led to multiple studies about whether the benefits of UI programs outweigh the costs. Most microeconomic analyses of these programs have determined that these programs do benefit society. In contrast, many macroeconomic analyses disagree, noting that unemployment benefits often tend to reduce production, reduce private savings, and increase prices. Recent research by Richmond Fed economist Nicholas Trachter, along with Facundo Piguillem of the Einaudi ...
Working Paper
Human capital dynamics and the U.S. labor market
Working Paper
Driving, Dropouts, and Drive-Throughs: Mobility Restrictions and Teen Human Capita
We provide evidence that graduated driver licensing (GDL) laws, originally intended to improve public safety, impact both high school completion and teen employment. Many teens use automobiles to commute both to school and to employment. Because school and work decisions are interrelated, the effects of automobile-specific mobility restrictions are ex ante ambiguous. Combining variation in the timing of both GDL law adoption and changes in compulsory school laws into a triple-difference research design shows that restricting teen mobility significantly reduces high school dropout rates and ...
Working Paper
Taxing Capital? The Importance of How Human Capital is Accumulated
This paper considers the impact of how human capital is accumulated on optimal capital tax policy in a life cycle model. In particular, it compares the optimal capital tax when human capital is accumulated exogenously, endogenously through learning-by-doing, and endogenously through learning-or-doing. Previous work demonstrates that in a simple two generation life cycle model with exogenous human capital accumulation, if the utility function is separable and homothetic in each consumption and labor, then the government has no motive to condition taxes on age or tax capital. In contrast, this ...
Working Paper
Who Values Access to College?
At first glance, college appears to be of great value to most, given its mean returns and sharply subsidized tuition. An empirically-disciplined human capital model that allows for variation in college readiness suggests otherwise: Nearly half of high school completers place zero value on access to college. This renders blanket subsidies potentially inefficient. As proof of principle, we show that redirecting subsidies away from those who would nonetheless enroll--towards a stock index retirement fund for those who do not even when college is subsidized--increases ex-ante welfare by 1 percent ...
Discussion Paper
Human Capital and Education in Puerto Rico
Educational attainment is an important element of human capital; however a series of recent papers highlights the crucial role of the quality of education?which determines the skills actually learned, rather than the number of years spent in a classroom?as a main driver of growth. In fact, Hanushek and Woessmann argue that the importance of more appropriately measuring skills is seen in the very tight relationship between quality of skills, or knowledge capital, and growth. Moreover, the researchers state, ?The knowledge capital?growth relationship suggests little mystery for East Asia, Latin ...
Working Paper
The Impact of Juvenile Conviction on Human Capital and Labor Market Outcomes
This article documents the long-term relationship among juvenile conviction, occupation choices, employment, wages, and recidivism. Using data from NLSY97, we document that youths who are convicted at or before age 17 have lower full-time employment rate and lower wage growth rate even after 10 years into the labor market. Merging the NSLY97 with occupational characteristics data from O*NET, we show that youths with a juvenile conviction are less likely to be employed in occupations that have a higher on-the-job (OTJ) training requirement and these high OTJ occupations have higher wage and ...