A key open question for theories of reference-dependent preferences is what determines the reference point. One candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment, we manipulate the rational expectations of subjects...

We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that...

This paper provides a unified theory of the economic and demographic transition. Individualsmake optimal decisions about fertility, education of their children and the type and intensity ofthe investments in their own education. These decisions are affected by different dimensionsof mortality...

We study long-run trends in market hours of work and employment shifts across economicsectors driven by uneven TFP growth in market and home production. We focus on thesubstitutions between market and home production and on the structural transformationbetween agriculture, manufacturing and...

In this paper we show that vocational training is an important determinant of productivitygrowth. We construct a multi-country, multi-sectoral dataset, and quantify empirically to whatextent vocational training has contributed to increase the growth rate of labor productivity inEurope between...

Carbon pricing is increasingly used by governments to reduce emissions. The effect of carbon pricing on economic outcomes as well as mitigating factors has been studied extensively since the early 1990s. One mitigating factor that has received less attention is education quality. If...

We study the impact of intra-industry trade and capital mobility on steady state welfare and on the stability properties of two countries with identical technologies and preferences. We consider a two-factor overlapping generations model, featuring one-sector of differentiated goods with taste...

This article examines pollution and environmental mortality in an economy where fertility is endogenous and output is produced from labor and capital by two sectors, dirty and clean. An emission tax curbs dirty production, which decreases pollution-induced mortality but also shifts resources to...

We test whether the growth experience of a sample of 21 OECD countries over the past three decades is more consistent with the augmented Solow model or the Uzawa-Lucas model, by exploiting the different non-linear restrictions implied by them as regards the relationship between factor shares and...

This paper develops a two-sector model that illuminates the role played by agricultural modernization in the transition from stagnation to growth. When agriculture relies on traditional technology, industrial development reduces the relative price of industrial products, but has a limited effect...