The aim of this paper is to study whether schooling choices are affected by social interactions. Such social interactions may be important because children enjoy spending time with other children or parents learn from other parents about the ability of their children. Identification is based on...

The aim of this paper is to study whether schooling choices are affected by social interactions. Such social interactions may be important because children enjoy spending time with other children or parents learn from other parents about the ability of their children. Identification is based on...

Economists often analyze cross-sectional data to estimate the value people implicit place on attributes of goods using hedonic methods. Usually strong enough assumptions are made on the functional form of utility to point identify individuals' willingness-to-pay (WTP) for changes in attribute...

We examine theoretically and empirically the properties of the equilibrium wage function and its implications for policy. Our emphasis is on how the researcher approaches economic and policy questions when there is labor market heterogeneity leading to a set of wages. We focus on the application...

We estimate the earnings premium for beauty in an occupation where returns to physical attractiveness are likely to be important: commercial sex work. In the commercial sex market, perhaps more so than any other sector in the labor market, the beauty premium should be at the extreme due to the...

Simple OLS estimates of the effect of school-imposed penalties for drug use on a student's consumption of marijuana are biased if both are determined by unobservable school or individual attributes. The potential reverse causality is also a challenge to retrieving estimates of the causal...

We analyze the extent to which endogenous cultural amenities affect the spatial equilibrium share of high-human-capital employees. To overcome endogeneity, we draw on a quasi-natural experiment in German history and exploit the exogenous spatial distribution of baroque opera houses built as a...

We analyze theoretically and empirically the impact of the shadow economy on entrepreneurial entry, utilising 1998-2005 individual-level Global Entrepreneurship Monitor data merged with macro level variables. A simple correlation coefficient suggests a positive linear link between the size of...

Two ubiquitous empirical regularities in pay distributions are that the variance of wages increases with experience, and innovations in wage residuals have a large, unpredictable component. The leading explanations for these patterns are that over time, either firms learn about worker...