The purpose of this paper is to study how education shapes the allocation of talent. To model the link between education and the allocation of talent, we add two features to a Spence (1974) type of two-sector education model. First, performance contracts give a worker incentives to choose the...

We use detailed product- and firm-level data to study the sources of innovation and the patterns of productivity growth over the period from 2007 to 2013. We document several new facts on product reallocation. First, every quarter around 8 percent of products are reallocated in the economy, and...

Employment protection affects aggregate productivity via several channels in potentially contradicting ways, which makes it difficult to establish the relationship between the two. This study focuses on the misallocation of production factors across plants, which has been shown in past studies...

In this paper, we discuss the role that data processing and collection have for the measurement of misallocation. First, we turn to the raw self-reported data for the US, reflecting what can be found in most developing countries. In the raw data, measured misallocation (following Hsieh and...