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This paper discusses the prevalence of Silicon Valley–style localizations of individual manufacturing industries in the United States. A model in which localized industry-specific spillovers, natural advantages, and pure random chance all contribute to geographic concentration is used to develop a test for whether observed levels of concentration are(More)
Immigration is not evenly balanced across groups of workers who have the same education but differ in their work experience, and the nature of the supply imbalance changes over time. This paper develops a new approach for estimating the labor market impact of immigration by exploiting this variation in supply shifts across education-experience groups. I(More)
This paper develops and estimates an overlapping generations general equilibrium model of labor earnings, skill formation, and physical capital accumulation with heterogenous human capital. The model analyzes both schooling choices and post-school on-the-job investment in skills in a framework in which different schooling levels index different skills. A(More)
We investigate whether individual experiences of macroeconomic shocks affect financial risk taking, as often suggested for the generation that experienced the Great Depression. Using data from the Survey of Consumer Finances from 1960-2007, we find that individuals who have experienced low stock-market returns throughout their lives so far report lower(More)
Small and informal firms account for a large share of employment in developing countries. The rapid expansion of microfinance services is based on the belief that these firms have productive investment opportunities and can enjoy high returns to capital if given the opportunity. However, measuring the return to capital is complicated by unobserved factors(More)
This paper investigates the optimal income transfer problem at the low end of the income distribution. The paper models labor supply behavioral responses along the intensive margin (hours or intensity of work on the job) and along the extensive margin (participation in the labor force). Optimal tax formulas are derived as a function of the behavioral(More)
Demand for less skilled workers decreased dramatically in the US and in other developed countries over the past two decades. We argue that pervasive skill-biased technological change, rather than increased trade with the developing world, is the principal culprit. The pervasiveness of this technological change is important for two reasons. Firstly, it is an(More)
Growing concerns over the inadequate achievement of U.S. students have led to proposals to reward good teachers and penalize (or fire) bad ones. The leading method for assessing teacher quality is “value added” modeling (VAM), which decomposes students’ test scores into components attributed to student heterogeneity and to teacher quality. Implicit in the(More)
The Americans with Disabilities Act (ADA) requires employers to accommodate disabled workers and outlaws discrimination against the disabled in hiring, firing, and pay. Although the ADA was meant to increase the employment of the disabled, the net theoretical effects are ambiguous. For men of all working ages and women under 40, Current Population Survey(More)