Labor Studies

February 12, 2016
David Card of the University of California, Berkeley, Organizer

Sebastian Calonico, University of Miami, and Jeffrey Smith, University of Michigan and NBER

The Women of the National Supported Work Demonstration

Eunice Han, Wellesley College

The Myth of Unions' Overprotection of Bad Teachers: Evidence from the District-Teacher Matched Panel Data on Teacher Turnover

In this study, Han offers a simple two-period job matching model linking teachers unions to both voluntary and involuntary teacher turnover. The model predicts that teachers unions, by negotiating higher wages for teachers, lower the quit probability of high-ability teachers but raise the dismissal rate of under-performing teachers, as higher wages provide districts greater incentive to select better teachers. As a result, unions help the educational system reach an efficient equilibrium where high-quality teachers are matched with high wages. The unique district-teacher matched panel data for 2003-2012 enables the researcher to use within-state and within-district variations, as well as instrumental variables, to identify union effects on teacher turnover. The data confirms that, compared to districts with weak unionism, districts with strong unionism dismiss more low-quality teachers and retain more high-quality teachers. The empirical analysis shows that this dynamic of teacher turnover in highly unionized districts raises average teacher quality and improves student achievement.

Adriana D. Kugler, Georgetown University and NBER; Maurice Kugler, IMPAQ International LLC; Juan Saavedra, University of Southern California; and Luis Omar Herrera Prada, Inter American Development Bank

Long Term Direct and Spillover Effects of Job Training: Experimental Evidence from Colombia (NBER Working Paper No. 21607)

Kugler, Kugler, Saavedra, and Prada use administrative data to examine medium and long-term formal education and labor market impacts among participants and family members of a randomized vocational training program for disadvantaged youth in Colombia. In the Colombian program, vocational training and formal education are complementary investments: relative to non-participants, randomly selected participants are more likely to complete secondary school and to attend and persist in tertiary education eight years after random assignment. Complementarity is strongest among applicants with high baseline educational attainment. Training also has educational spillover effects on participants' family members, who are more likely to enroll in tertiary education. Between three and eight years after randomization, participants are more likely to enter and remain in formal employment, and have formal sector earnings that are at least 11 percent higher than those of non-participants.

Sarena Goodman, Federal Reserve Board of Governors, and Adam Isen, Department of the Treasury

Un-Fortunate Sons: Effects of the Vietnam Draft Lottery on the Next Generation's Labor Market

Goodman and Isen study how randomized variation from the Vietnam draft lottery affects the next generation's labor market. Using the universe of federal tax returns, the researchers link fathers from draft cohorts to their sons and offer two primary findings. First, sons of men called by the lottery have lower earnings and labor force participation than their peers. Second, they are more likely to volunteer for military service themselves. Similar but smaller effects are uncovered for daughters. The researchers' findings demonstrate that manipulating parents' circumstances can alter children's later-life outcomes and, more specifically, are consistent with two separately operating channels: (1) parental inputs as important determinants of human capital development and (2) intergenerational transmission of occupation.

Giovanni Peri, University of California at Davis and NBER, and Vasil Yasenov, University of California at Davis

The Labor Market effects of a refugee Wave: Applying the Synthetic Control Method to the Mariel Boatlift (NBER Working Paper No. 21801)

Peri and Yasenov apply the synthetic control method to re-examine the wage and employment effect of the Mariel Boatlift in Miami. The researchers focus exclusively on workers with no high school degree. They are the group competing more closely in the labor market with the newly arrived. The researchers compare Miami's labor market outcomes with those in a control group of cities chosen using the synthetic control method so as to match Miami's wages and other labor market features in the period 1972 to 1979. Using most samples and different outcomes they find no departure between Miami and its control between 1979 and 1983. Significant noise exists in many samples but the authors never find significant negative effects especially right after the Boatlift, when they should have been the strongest. The researchers point out that the very different conclusions in a recent reappraisal by George Borjas (2015) stem from the use of a small sub-sample of high school dropouts in the already very small March-CPS sample. That sample is subject to substantial measurement error and no other sample provides the same findings. Being imprecise about the timing of the data and the choice and validation of the control sample further contribute to the impression of an effect from the boatlift in Borjas (2015). The researchers also revisit the non-Boatlift of 1994, considered by Angrist and Krueger (1999), and do not find consistent deviations of Miami outcomes from the appropriate control that could be mistaken for labor market effects of a Cuban inflow.

Alberto Abadie, Harvard University and NBER; Susan Athey and Guido Imbens, Stanford University and NBER; and Jeffrey Wooldridge, Michigan State University

Clustering as a Design Problem

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