Contributions in Merlin

This paper provides evidence of a novel facet of peer effects by showing how peer personality affects educational achievement. We exploit random assignment of students to university sections and find that students perform better in the presence of more persistent peers and more risk-averse peers. In particular, low-persistence students benefit from highly-persistent peers without devoting additional efforts to studying. However, highly-persistent students are not affected by the persistence of their peers. The personality peer effects that we document are distinct from other observable peer characteristics and suggest that the personality traits of peers causally affect human capital accumulation.

There is substantial evidence that women tend to support different policies and political candidates than men. Many studies also document gender differences in a variety of important preference dimensions, such as risk-taking, competition and pro-sociality. However, the degree to which differential voting by men and women is related to these gaps in more basic preferences requires an improved understanding. We conduct an experiment in which individuals in small laboratory “societies” repeatedly vote for redistribution policies and engage in production. We find that women vote for more egalitarian redistribution and that this difference persists with experience and in environments with varying degrees of risk. This gender voting gap is accounted for partly by both gender gaps in preferences and by expectations regarding economic circumstances. However, including both these controls in a regression analysis indicates that the latter is the primary driving force. We also observe policy differences between male- and female-controlled groups, though these are substantially smaller than the mean individual differences - a natural consequence of the aggregation of individual. preferences into collective outcomes.

We evaluate the long-term impact of treating maternal depression on women’s financial empowerment and parenting decisions. We leverage experimental variation induced by a cluster-randomized control trial that provided psychotherapy to perinatally depressed mothers in rural Pakistan. It was one of the largest psychotherapy interventions in the world, and the treatment was highly successful at reducing depression. We locate mothers seven years after the end of the intervention to evaluate its long-run effects. We find that the intervention increased women’s financial empowerment, increasing their control over household spending. Additionally, the intervention increased both time- and monetaryintensive parental investments, with increases in investments tending to favor girls.

This paper develops an experimental approach to measure competition among intermediaries in agricultural markets, based on the random allocation of subsidies to traders. We show that, in individual-level randomizations with competitive spillovers, treatment-control differences in prices can inform an intuitive test of the degree of differentiation among firms. In the context of the Sierra Leone cocoa industry, traders compete by providing farmers credit, as well as through prices. Even when accounting for both the price and the credit margin, differentiation among traders is low. By combining the experimental results with quasi-experimental estimates of the pass-through rate, we then estimate market size the effective number of traders competing for farmers' supply and we find it to be substantially larger than the village. These results are consistent with a view of competitive agricultural markets.

The competitive shock to the U.S. manufacturing sector spurred by rising China import competition could either catalyze or stifle innovation. Using three distinct sources of variation to identify rising trade exposure, we provide a causal analysis of the effect of surging import competition on U.S. innovative activities. Applying a novel internet-based matching algorithm to map all U.S. utility patents granted by 2013 to firm-level data, and carefully accounting for the shifting concentration of patenting activity across sectors, we document a robust, negative impact of rising Chinese competition on firm-level and technology class-level patent production. Accompanying this fall in innovation, global employment, sales, profitability, and R&D expenditure all decline within trade-exposed firms. The trade-induced contraction along all margins of adjustment and for all measures of valuation suggest that the primary response of firms to greater import competition is to scale back their global operations.

The fall of labor's share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments of trends in labor's share typically have relied on industry or macro data, obscuring heterogeneity among firms. In this paper, we analyze micro panel data from the U.S. Economic Census since 1982 and international sources and document empirical patterns to assess a new interpretation of the fall in the labor share based on the rise of \superstar firms." If globalization or technological changes advantage the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms with high profits and a low share of labor in firm valueadded and sales. As the importance of superstar firms increases, the aggregate labor share will tend tofall. Our hypothesis offers several testable predictions: industry sales will increasingly concentrate in a small number of firms; industries where concentration rises most will have the largest declines in the labor share; the fall in the labor share will be driven largely by between-firm reallocation rather than (primarily) a fall in the unweighted mean labor share within firms; the between-firm reallocation component of the fall in the labor share will be greatest in the sectors with the largest increases in market concentration; and finally, such patterns will be observed not only in U.S. firms, but also internationally. We find support for all of these predictions.

We study how multigrading, which is mixing students of different grades into a single class, affects children’s cognitive achievement in primary school. We build instruments to identify the causal effect of multigrading by exploiting an Italian law that controls class size and grade composition. Results suggest that attendance in multigrade versus single-grade classes increases students’ performance on standardized tests by 19 percent of a standard deviation for second graders, and it has zero effect for fifth graders. The positive impact of multigrading for second graders appears to be driven by children sharing their class with peers from higher grades. This last finding rationalizes the absence of a multigrade effect for fifth graders.

Institutions are an important means for fostering prosocial behaviors, but in many contexts their scope is limited and they govern only a subset of all socially desirable acts. We study experimentally how the presence and nature of an institution that enforces prosocial behavior in one domain affects behavior in a similar but unregulated domain. Groups play two identical public good games, with cooperation institutionally enforced in one game. The presence of an institution in one game generally enhances cooperation in the other game, thus documenting a positive spillover effect. These indirect spillover effects are economically substantial, amounting up to 30 to 40 percent of the direct effect of institutions. In addition, we find evidence for sequential spillover effects, meaning that behavior is affected by the institution even after it is removed. We also observe that institutions enhance prosocial preferences and beliefs about others’ prosocial behavior, even toward strangers, suggesting that both factors are drivers of the observed spillover effects. We further explore other aspects influencing spillover effects, including characteristics of an institution, such as whether it is exogenously imposed or endogenously determined.

We experimentally investigate behavior and beliefs in a sequential prisoner’s dilemma. Each subject had to choose an action as first-mover and a conditional action as second-mover. All subjects also had to state their beliefs about others’ second-mover choices. We find that subjects’ beliefs about others’ choices are fairly accurate on average. Using the elicited beliefs, we compare the explanatory power of a few current models of social and moral preferences. The data show clear differences in explanatory power between the preference models, both without and with control for the number of free parameters. The best-performing models explain about 80% of observed behavior. We use the estimated preference parameters to identify biases in subjects’ expectations. We find a consensus bias (whereby subjects believe others behave like themselves) and a certain optimism (whereby subjects overestimate probabilities for favorable outcomes), the former being about twice as strong as the second.

The existing literature assumes that unemployment insurance (UI) affects the labor market through the job finding rate of eligible workers. I argue that this focus is too narrow. I show evidence for UI effects through three other margins: (i) search externalities; (ii) takeup of other welfare state programs; and (iii) job separations. This suggests that the analysis of optimal UI should take a more comprehensive view of how UI affects the labor market.