We examine the effect of intergroup competition on within-group violent conflict in Indonesia. Using a triple-differences design, we find that higher competition for national government transfers between villages reduces within-village conflict. These effects persist regardless of the competition’s outcome, are stronger in ethnically fractionalized and segregated villages, and are accompanied by higher attendance in village meetings. Our results are consistent with external competition favoring participation and cooperation within otherwise divided communities, suggesting that economic incentives to compete with out-groups combined with forms of civic engagement can be important mechanisms to reduce violence within communities. (JEL D74, H70, O15, O17, O18, Z13)
Received wisdom holds that income rank matters for life satisfaction, but causal evidence on the nature and impact of income comparisons is limited. We randomize individuals from a representative sample of mid-career Finns to receive personal rank information from one of several reference groups. We find strong evidence of the effect of rank information on income satisfaction, but weaker effects on life satisfaction, and some evidence of real effects in experimental and administrative data. Effects are strong in narrow reference groups and weak and insignificant in the national one. Finally, we discuss the implications for income transparency policies. (JEL D31, D63, D83, D91, I31)
Changes in political boundaries aimed at devolving power to local governments are common across many countries. We examine the economic impacts of government unit creation through splitting. Exploiting reforms that led to sharp increases in the number of municipalities in Brazil, we show that voluntary splitting enlarges the public sector, enhances public service delivery, and stimulates long-term economic activity in new local governments. These gains are not offset by losses elsewhere and are stronger in peripheral, remote, and underdeveloped areas neglected by parent governments. Higher fiscal revenues and decentralized decision-making contribute to the positive effects on local economic activity. (JEL D72, H41, H75, H76, H77, Q53, R51)
We conduct a large-scale field experiment in the Swedish pension system to examine to what extent information and search frictions explain dominated high-fee index fund choices. Three findings stand out: (i) Letters that increase awareness of a dominated choice and reduce search costs of finding the dominating alternative improve savers’ investment choices. (ii) While the average effects are positive, a majority of investors are unresponsive to information that essentially removes search costs. The inertia holds across expected gains, rejecting models with fixed adjustment costs. (iii) Lack of awareness and search costs account for at most 45 percent of dominated choices. (JEL C93, D83, G23, G51, G53, J32)
We evaluate a nationwide zero-cost intervention to reduce teacher sorting, where lower-income students are more likely to attend understaffed schools with less qualified teachers. Our approach was grounded in an insight from behavioral economics known as order effects. In the treatment arm, the teacher job application platform showed hard-to-staff schools first, while, in the control group, schools were displayed alphabetically. Treated teachers were more likely to apply to hard-to-staff schools, ranking them their highest priority. Inattentive or less qualified teachers did not influence the results. The intervention helped to reduce the unequal distribution of qualified teachers across schools. (JEL D91, I23, I24, J28, J45, O15)
Is ethnic diversity good or bad for economic development? Most studies find corrosive effects. This paper shows that historical exposure to economic exchange can mitigate these effects in the long run. I collect data from a natural experiment of Peru's colonial history: the forced resettlement of native populations in the sixteenth century. Where the resettlement concentrated ethnically diverse populations with a history of internal crop exchange, contemporary populations perform better systematically. Additional evidence suggests that prior experience with mutually beneficial crop exchange shaped more open attitudes toward out-group members. Economic complementarities helped sustain long-run, market-oriented cooperation and local trade. (JEL F54, J15, N16, N36, N56, O15, Q12)
Despite well-developed economic institutions, premodern Japan, 1600-1868, had among the lowest real wages according to available estimates, around half those in preindustrial England. However, many Japanese peasants owned land, unlike their mostly landless English counterparts, due to institutional differences in land inheritance. Using a Malthusian model, I show that this greater landownership equality paradoxically led to Japan's lower wages and GDP per capita. Evidence from Japanese village censuses supports the mechanism. If, as many historians believe, high wages in Western Europe spurred industrialization, Japan's failure to industrialize first could have been shaped by its unusual preindustrial equality. (JEL D63, E23, J31, N15, N35, N45, N55)
Evidence on school-entry age impacts in lower-income countries is limited. We assess how school starting age affects human capital development in Lesotho, exploiting an enrollment age threshold. Children who start primary school at older ages overcome initial skill deficits as they progress. They are more likely to remain in school, spend less time on economic and household activities, and obtain substantially higher total years of schooling. In adulthood they are more likely to have professional occupations and less likely to be married or have children as teenagers, become HIV infected (men), and experience the death of a child (women). (JEL I12, I21, I25, I26, J13, J24, O15)
I study the long-run economic effects of land concentration on the American frontier. Using quasi-random variation in initial land allocations from a checkerboard formula, I analyze a large database of property assessments and find that historical concentration reduced modern land values by 4.5 percent and fixed capital by 23 percent. Modern effect sizes are 23-64 percent of their historical equivalents, indicating significant rates of both persistence and convergence over the last 150 years. Using archival data on tenant contracts, I argue that the low-powered incentives of share agreements discouraged investment by large-scale owners with long-term effects.
This paper studies the effect of pretrial electronic monitoring (EM) relative to both pretrial release and pretrial detention (jail). EM often involves a defendant wearing an electronic bracelet, which aims to reduce pretrial misconduct at a low cost. Using the quasi-random assignment of bond court judges, I estimate the effect of EM versus release and EM versus detention on pretrial misconduct, case outcomes, future recidivism, and aggregate total costs. Results indicate that EM reduces overall costs relative to detention. However, EM does not prevent enough high-cost crime to justify its use relative to release. (JEL K14, K41, K42)
Influenza causes substantial illness among children. RCTs demonstrate that the influenza vaccine reduces active-surveillance-detected influenza but have insufficient samples to examine outcomes such as health care provider visits. This study documents that children whose well-child visits occur when the seasonal influenza vaccine is broadly available are 23.4 pp more likely to be vaccinated than children whose visits do not. Using large administrative health care datasets, we leverage this vaccination-rate variation to show that the vaccine reduces outpatient and ED visits significantly. The results imply that making pediatric influenza vaccinations more convenient could substantially increase vaccination rates and reduce health care expenditures. (JEL I11, I12, I18, J13)
Would workers apply to better firms if they were more informed about firm quality? Collaborating with 26 science-based start-ups, we create a custom job board and invite business school alumni to apply. The job board randomizes across applicants to show coarse expert ratings of all start-ups' science and/or business model quality. Making ratings visible strongly reallocates applications toward higher-rated firms. This reallocation holds, restricting to high-quality workers. Treatments operate in part by shifting worker beliefs about firms' right-tail outcomes. Despite these benefits, workers make posttreatment bets indicating highly overoptimistic beliefs about start-up success, suggesting a problem of broader informational deficits. (JEL D22, D83, J22, J23, J24, M13, M51)
We analyze nearly 70 million scientific articles to estimate the gender dynamics in the commercialization of science. We report a gender gap of 14 percent, which does not appear to be explained either by the quality of the science or by its commercial potential. The gap is widest among papers with female last authors (i.e., lab head or principal investigator), even when publishing high-quality science. However, the gap vanishes when authors self-commercialize discoveries via new ventures, and the gap is reduced when commercializing in cooperation with firms that are smaller or that have more female inventors. (JEL D22, I23, J16, O31, O34)
To what extent is economic success determined by with whom individuals interact socially? We tackle this question by exploiting a large-scale natural experiment in the Finnish conscription. Our research design is based on the alphabetization of dorms, which is shown to induce as good as random variation in peer composition. Dormmates from high-income families have a positive impact on earnings, with the largest effect among individuals from high-income families. For them, a one standard deviation increase in dormmates' parental income increases long-term earnings by 5.7 percent. The results support labor market networks among the rich as the key mechanism. ( (JEL D12, D31, G51, I32, J31, J45)
Online dating apps have transformed the dating market, yet their broader effects remain unclear. We study Tinder's impact on college students using its initial marketing focus on Greek organizations for identification. We show that the full-scale launch of Tinder led to a sharp, persistent increase in sexual activity, but with little corresponding impact on the formation of long-term relationships or relationship quality. Dating outcome inequality, especially among men, rose, alongside rates of sexual assault and STDs. However, despite these changes, Tinder's introduction did not worsen students' mental health on average and may have even led to improvements for female students. (JEL I12, I23, J13, J16, L86)
Can policies shape personal values and beliefs? To examine, we exploit the staggered introduction of faith-based initiatives across US states. Our difference-in-differences analysis reveals that the initiatives strengthened religiosity and conservative-religious social views, such as attitudes against homosexuals. The evidence points to causal effects; we find no systematic differences prior to implementation, the results are robust to restricting comparison to contiguous counties and to conducting triple-differences estimation exploiting treatment heterogeneity. A key explanation, in line with standard models of religion and supported by data on nonprofit organizations, is that the initiatives facilitated the establishment of faith-based organizations. (JEL D72, L31, Z12, Z13)
We investigate the nature and relevance of physical capital in knowledge production. Exploiting adverse events in research laboratories, we find that scientists experience a persistent reduction in research output if they lose specialized physical capital-equipment and material they created over time for a particular research purpose. In contrast, they recover in productivity if they only lose generic physical capital. Scientists in older laboratories, who presumably lose more obsolete physical capital, are more likely to change their research direction and recover. These findings suggest that scientists' investments into their own physical capital yield lasting returns but also create path dependence. (JEL D24, D83, E22, G31, I23, O31)
