Abstract
We construct publicly available statistics on parents’ incomes and students’ earnings outcomes for each college in the United States using deidentified data from tax records. These ...statistics reveal that the degree of parental income segregation across colleges is very high, similar to that across neighborhoods. Differences in postcollege earnings between children from low- and high-income families are much smaller among students who attend the same college than across colleges. Colleges with the best earnings outcomes predominantly enroll students from high-income families, although a few mid-tier public colleges have both low parent income levels and high student earnings. Linking these income data to SAT and ACT scores, we simulate how changes in the allocation of students to colleges affect segregation and intergenerational mobility. Equalizing application, admission, and matriculation rates across parental income groups conditional on test scores would reduce segregation substantially, primarily by increasing the representation of middle-class students at more selective colleges. However, it would have little effect on the fraction of low-income students at elite private colleges because there are relatively few students from low-income families with sufficiently high SAT/ACT scores. Differences in parental income distributions across colleges could be eliminated by giving low- and middle-income students a sliding-scale preference in the application and admissions process similar to that implicitly given to legacy students at elite private colleges. Assuming that 80% of observational differences in students’ earnings conditional on test scores, race, and parental income are due to colleges’ causal effects—a strong assumption, but one consistent with prior work—such changes could reduce intergenerational income persistence among college students by about 25%. We conclude that changing how students are allocated to colleges could substantially reduce segregation and increase intergenerational mobility, even without changing colleges’ educational programs.
Using exogenous wealth shocks stemming from the collapse of the housing market, we show that managers who experience substantial losses in their home values subsequently reduce risk in their ...delegated funds. The decline in fund risk comes through reductions in idiosyncratic risk and tracking error, suggesting that the behavior is likely driven by career concerns. Our paper provides evidence that idiosyncratic personal preferences affect mutual fund managers’ professional decisions and offers a methodology for testing for manager effects that is not subject to the selection critique of Fee, Hadlock, and Pierce (2013).
Hurricane Katrina destroyed over 200,000 homes and led to massive economic and physical dislocation. Using a panel of tax return data, we provide one of the first comprehensive analyses of the ...hurricane’s long-term economic impact on its victims. Hurricane Katrina had large and persistent impacts on where people live, but small and surprisingly transitory effects on employment and income. Within just a few years, Katrina victims’ incomes actually surpass that of controls from similar unaffected cities. The strong economic performance of Hurricane Katrina victims is particularly remarkable given that the hurricane struck with essentially no warning.
CREDIT RISK IN THE EURO AREA Gilchrist, Simon; Mojon, Benoit
The Economic journal (London),
February 2018, Letnik:
128, Številka:
608
Journal Article
Recenzirano
We construct credit risk indicators for euro area banks and non-financial corporations. These indicators reveal that the financial crisis of 2008 dramatically increased the cost of market funding for ...both banks and non-financial firms. In contrast, the prior recession following the 2000 US dot-com bust led to widening credit spreads of non-financial firms but had no effect on the credit spreads of financial firms. The 2008 financial crisis also led to a systematic divergence in credit spreads for financial firms across national boundaries. Credit spreads provide substantial predictive content for real activity and lending measures for the euro area as a whole and for individual countries.
I consider a small open economy model where international financial markets are imperfect and the exchange rate is determined by capital flows. I use this framework to study the effects of portfolio ...flow shocks, derive the optimal foreign exchange intervention policy, and characterize its interaction with monetary policy. I derive the optimal intervention rule in closed form as a function of three implicit targets. Finally, using Swiss data, I estimate the model to quantify the inefficiencies generated by capital flow shocks and the optimal size of the intervention.
We examine matched point and density forecasts of output growth, inflation and unemployment from the ECB Survey of Professional Forecasters. We construct measures of uncertainty from individual ...histograms, and find that the measures display countercyclical behavior and have increased across all forecast horizons since 2007. We also derive measures of forecast dispersion and forecast accuracy, and find that they are not reliable proxies for uncertainty. There is, however, evidence of a meaningful co-movement between uncertainty and aggregate point predictions for output growth and unemployment. These results are robust to changes in the composition of the survey respondents over time.
Demand for long‐term care services is growing strongly. Using a rich administrative data set for Germany, we examine strategic interaction between nonprofit and for‐profit nursing homes. The ...estimated competitive effects imply that competition is much stronger within type, suggesting that they provide differentiated products. Over time, the entry behavior of for‐profit homes has converged to that of the more established nonprofits and between‐type competition has become stronger. Counterfactual simulations of proposed changes in government policy indicate that even moderate changes have a large impact on the fraction of markets that remain unserved or only served by a single type.
Developing democracies are experiencing unprecedented increases in primary and secondary schooling. To identify education’s long-run political effects, we use a difference-in-differences design that ...leverages variation across local government areas and gender in the intensity of Nigeria’s 1976 universal primary education reform—one of Africa’s largest ever educational expansions—to instrument for education. We find large increases in basic civic and political engagement: better educated citizens are more attentive to politics, more likely to vote, and more involved in community associations. The effects are largest among minority groups and in fractionalized areas, without increasing support for political violence or own-group identification.
We study the effects of a policy aimed at attracting experienced teachers in primary schools in disadvantaged neighborhoods in Uruguay. Teachers in these schools could earn higher salaries. Program ...eligibility was based on a poverty index with a cutoff rule. Estimates from regression discontinuity models show that the policy increased teacher experience. Overall, the effect on student outcomes was small. The program may have increased experience in ways that are not strongly associated with improved student outcomes. Consistent with this, we do find achievement gains for students in schools that saw a reduction in the share of very inexperienced teachers.
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