This paper documents that rotation group bias -- the tendency for labor force statistics to vary systematically by month in sample in labor force surveys -- in the Current Population Survey (CPS) has worsened considerably over time. The estimated unemployment rate for earlier rotation groups has...

This paper takes a retrospective look at the U.S. government’s effort to rescue and restructure General Motors and Chrysler in the midst of the 2009 economic and financial crisis. The paper describes how two of the largest industrial companies in the world came to seek a bailout from the U.S....

This paper examines evidence on the effect of class size on student achievement. First, it is shown that results of quantitative summaries of the literature, such as Hanushek (1997), depend critically on whether studies are accorded equal weight. Hanushek summarizes 277 estimates extracted from...

This paper reinvestigates the evidence on the impact of the minimum wage on employment in Puerto Rico. The strongest evidence that the minimum wage had a negative effect on employment comes from an aggregate time series analysis. The weakest evidence comes from cross-industry analyses. The main...

In recent decades, the US wage structure has been transformed by a rising college premium, a narrowing gender gap, and increasing persistent and transitory residual wage dispersion. This paper explores the implications of these changes for cross-sectional inequality in hours worked, earnings and...

This paper examines the relationship between price growth and skill intensity across 150 manufacturing industries between 1989 and 1995. There are two main findings. First, wage growth and intermediate goods price increases are passed through to final product prices roughly in proportion to...

Standard search and matching models of equilibrium unemployment, once properly calibrated, can generate only a small amount of frictional wage dispersion, i.e., wage differentials among ex-ante similar workers induced purely by search frictions. We derive this result for a specific measure of...

Using a model with constant relative risk-aversion preferences, endogenous labor supply and partial insurance against idiosyncratic wage risk, we provide an analytical characterization of three welfare effects: (a) the welfare effect of a rise in wage dispersion, (b) the welfare gain from...

This paper studies consumption and labor supply in a model where agents have partial insurance and face risk and initial heterogeneity in wages and preferences. Equilibrium allocations and variances and covariances of wages, hours and consumption are solved for analytically. We prove that all...

The method of instrumental variables was first used in the 1920s to estimate supply and demand elasticities, and later used to correct for measurement error in single-equation models. Recently, instrumental variables have been widely used to reduce bias from omitted variables in estimates of...