American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Front Matter i ii http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.i 10.1257/app.2.3.i American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Does Wage Persistence Matter for Employment Fluctuations? Evidence from Displaced Workers Johannes F.SchmiederColumbia U and IZA Tillvon WachterColumbia U and IZA 1 21 Previous literature has found that tight labor market conditions during a job raise wages. Using the Displaced Worker Survey from 1984 to 2006, we show that wage gains associated with good labor market conditions disappear at job loss. We also find that workers with higher wages due to tight past labor market conditions face higher risk of layoff. These findings suggest an important role of persistent rigidities in the wage setting process that are related to layoff decisions. This supports the notion that downward rigid employment contracts help explain the Shimer (2005) "puzzle" of low wage relative to employment fluctuations. (JEL J31, J41, J63) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.1 10.1257/app.2.3.1 http://www.aeaweb.org/aej/app/data/2009-0126_data.zip http://www.aeaweb.org/aej/app/app/2009-0126_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Information, Direct Access to Farmers, and Rural Market Performance in Central India AparajitaGoyalWorld Bank 22 45 This paper estimates the impact of a change in procurement strategy of a private buyer in the central Indian state of Madhya Pradesh. Beginning in October 2000, Internet kiosks and warehouses were established that provide wholesale price information and an alternative marketing channel to soy farmers in the state. Using a new market-level dataset, the estimates suggest a significant increase in soy price after the introduction of kiosks, supporting the predictions of the theoretical model. Moreover, there is a robust increase in area under soy cultivation. The results point toward an improvement in the functioning of rural agricultural markets. (JEL O13, O18, Q12, Q13) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.22 10.1257/app.2.3.22 http://www.aeaweb.org/aej/app/data/2009-0087_data.zip http://www.aeaweb.org/aej/app/app/2009-0087_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Information from Markets Near and Far: Mobile Phones and Agricultural Markets in Niger Jenny C.AkerTufts U and Center for Global Development 46 59 Price dispersion across markets is common in developing countries. Using novel market and trader-level data, this paper provides estimates of the impact of mobile phones on price dispersion across grain markets in Niger. The introduction of mobile phone service between 2001 and 2006 explains a 10 to 16 percent reduction in grain price dispersion. The effect is stronger for market pairs with higher transport costs. (JEL O13, O33, Q11, Q13) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.46 10.1257/app.2.3.46 http://www.aeaweb.org/aej/app/data/2009-0141_data.zip http://www.aeaweb.org/aej/app/app/2009-0141_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Microfinance Games XavierGinéWorld Bank PamelaJakielaWashington U in St Louis DeanKarlanYale U JonathanMorduchNYU 60 95 Microfinance banks use group-based lending contracts to strengthen borrowers' incentives for diligence, but the contracts are vulnerable to free-riding and collusion. We systematically unpack microfinance mechanisms through ten experimental games played in an experimental economics laboratory in urban Peru. Risk-taking broadly conforms to theoretical predictions, with dynamic incentives strongly reducing risk-taking even without group-based mechanisms. Group lending increases risk-taking, especially for risk-averse borrowers, but this is moderated when borrowers form their own groups. Group contracts benefit borrowers by creating implicit insurance against investment losses, but the costs are borne by other borrowers, especially the most risk averse. (JEL D82, G21, G31, O16) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.60 10.1257/app.2.3.60 http://www.aeaweb.org/aej/app/data/2007-0006_data.zip American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from "Work First" David H.AutorMIT Susan N.HousemanUpjohn Institute for Employment Research, Kalamazoo, MI 96 128 Temporary-help jobs offer rapid entry into paid employment, but they are typically brief and it is unknown whether they foster longer term employment. We utilize the unique structure of Detroit's welfare-to- work program to identify the effect of temporary-help jobs on labor market advancement. Exploiting the rotational assignment of welfare clients to numerous nonprofit contractors with differing job placement rates, we find that temporary-help job placements do not improve and may diminish subsequent earnings and employment outcomes among participants. In contrast, job placements with direct-hire employers substantially raise earnings and employment over a seven quarter follow-up period. (JEL J22, J23, J24, J31, J68) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.96 10.1257/app.2.3.96 http://www.aeaweb.org/aej/app/data/2008-0231_data.zip http://www.aeaweb.org/aej/app/app/2008-0231_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources JohnBoundU MI Michael F.LovenheimCornell U SarahTurnerU VA 129 57 Rising college enrollment over the last quarter century has not been met with a proportional increase in college completion. Comparing the high school classes of 1972 and 1992, we show declines in college completion rates have been most pronounced for men who first enroll in less selective public universities and community colleges. We decompose the decline into the components due to changes in preparedness of entering students and due to changes in collegiate characteristics, including type of institution and resources per student. While both factors play some role, the supply-side characteristics are most important in explaining changes in college completion. (JEL I23) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.129 10.1257/app.2.3.129 http://www.aeaweb.org/aej/app/data/2008-0059_data.zip http://www.aeaweb.org/aej/app/app/2008-0059_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article US Environmental Regulation and FDI: Evidence from a Panel of US-Based Multinational Firms RemaHannaHarvard U 158 89 This paper measures the response of US-based multinationals to the Clean Air Act Amendments (CAAA). Using a panel of firm-level data over the period 1966-1999, I estimate the effect of regulation on a multinational's foreign production decisions. The CAAA induced substantial variation in the degree of regulation faced by firms, allowing for the estimation of econometric models that control for firm-specific characteristics and industrial trends. I find that the CAAA caused regulated multinational firms to increase their foreign assets by 5.3 percent and their foreign output by 9 percent. Heavily regulated firms did not disproportionately increase foreign investment in developing countries. (JEL F23, K32, L51, Q52, Q53, Q58) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.158 10.1257/app.2.3.158 http://www.aeaweb.org/aej/app/data/2008-0155_data.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Service Delivery and Corruption in Public Services: How Does History Matter? PriyankaPandeyWorld Bank 190 204 This paper provides microlevel evidence of how past institutions impact present economic outcomes. It looks at the impact of colonial land tenure institutions on local governance and education outcomes in northern India. Outcomes are worse in villages that belong to areas with a history of concentration of power with the elites. Such areas continue to retain a greater political presence of socially and economically dominant classes. Future research should examine the success of policies that attempt to break such persistence through empowerment of nonelite groups. (JEL D02, H70, I20, N35, N45, O15, O18) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.190 10.1257/app.2.3.190 http://www.aeaweb.org/aej/app/data/2009-0154_data.zip American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Teacher Incentives PaulGlewweU MN, St Paul NaumanIliasCompass Lexecon, Washington, DC MichaelKremerHarvard U 205 27 We analyze a randomized trial of a program that rewarded Kenyan primary school teachers based on student test scores, with penalties for students not taking the exams. Scores increased on the formula used to reward teachers, and program school students scored higher on the exams linked to teacher incentives. Yet most of the gains were focused on the teacher reward formula. The dropout rate was unchanged. Instead, exam participation increased among enrolled students. Test scores increased on exams linked to the incentives, but not on other, unrelated exams. Teacher attendance and homework assignment were unaffected, but test preparation sessions increased. (JEL I21, I28, J13, O15) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.205 10.1257/app.2.3.205 http://www.aeaweb.org/aej/app/data/2008-0221_data.zip American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors MarianneBertrandU Chicago and IZA ClaudiaGoldinHarvard U Lawrence F.KatzHarvard U 228 55 The careers of MBAs from a top US business school are studied to understand how career dynamics differ by gender. Although male and female MBAs have nearly identical earnings at the outset of their careers, their earnings soon diverge, with the male earnings advantage reaching almost 60 log points a decade after MBA completion. Three proximate factors account for the large and rising gender gap in earnings: differences in training prior to MBA graduation, differences in career interruptions, and differences in weekly hours. The greater career discontinuity and shorter work hours for female MBAs are largely associated with motherhood. (JEL J16, J22, J31, J44) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.228 10.1257/app.2.3.228 http://www.aeaweb.org/aej/app/data/2009-0244_data.zip http://www.aeaweb.org/aej/app/app/2009-0244_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 2 3 July 2010 http://www.aeaweb.org/issue.php?journal=APP&volume=2&issue=3 Journal Article Freedom Fries GuyMichaelsLondon School of Economics XiaojiaZhiGuangzhou, China 256 81 Do firms always choose the cheapest suitable inputs, or can group attitudes affect their choices? To investigate this question, we examine the deterioration of relations between the United States and France from 2002-2003, when France's favorability rating in the US fell by 48 percentage points. We estimate that the worsening attitudes reduced bilateral trade by about 9 percent and that trade in inputs probably declined similarly, by about 8 percent. We use these estimates to calculate the average decrease in firms' willingness to pay for French (or US) commodities when attitudes worsened. (JEL D24, F13, F14, L14, L21) http://www.aeaweb.org/articles.php?doi=10.1257/app.2.3.256 10.1257/app.2.3.256 http://www.aeaweb.org/aej/app/data/2009-0180_data.zip http://www.aeaweb.org/aej/app/app/2009-0180_app.pdf