Which parent can be expected to be more altruistic toward their child, the mother or father? All else equal, can we expect older generation members to be more solicitous of younger family members or vice versa? Policy interventions often target recipients by demographic status: more money being put in the hands of mothers, say, or transfers of income from young to old via public pensions. Economics makes predictions about pecuniary incentives and behavior but tends to be agnostic about how, say, a post-menopausal grandmother might behave, just because she is a post-menopausal grandmother. Evolutionary theory fills this gap by analyzing how preferences of family members emerge from the Darwinian exigencies of “survive and reproduce.” Coin of the realm is so-called “inclusive fitness,” reproductive success of oneself plus that of relatives, weighted by closeness of the relationship. Appending basic biological traits onto considerations of inclusive fitness generates predictions about preferences of family members. A post-menopausal grandmother with a daughter just starting a family is predicted to care more about her daughter than the daughter cares about her, for example. Evolutionary theory predicts that mothers tend to be more altruistic toward children than fathers, and that close relatives would be inclined to provide more support to one another than distant relatives. An original case study is provided, which explains the puzzle of diverging marriage rates by education in terms of heterogeneity in preferences for commitment. Economists are justifiably loathe to invoke preferences to explain trends, since preference-based explanations can be concocted to explain just about anything. But the evolutionary approach does not permit just any invocation of preferences. The dictates of “survive and reproduce” sharply circumscribe the kinds of preference-related arguments that are admissible.
Article
Pilar Cuevas Ruiz, Ismael Sanz, and Almudena Sevilla
Descriptive stereotypes such as “girls are not good at mathematics” or prescriptive stereotypes, that is, fixed views about women’s societal roles, can explain the persistent gender gap in mathematics. Stereotypes lower girls’ beliefs, expectations, and incentives to put forth effort, and can constrain girls’ choices in male-dominated high-paying careers that are math-intensive and that require strong math skills. This gap slows progress toward gender equality in the labor market and hinders productivity and economic growth.
Policy interventions to alleviate the negative impacts of descriptive stereotypes aim to prevent girls from internalizing socially constructed behaviors aligned with prevalent gender stereotypes regarding the innate mathematical abilities of boys and girls. Boosting girls’ confidence in their math skills includes introducing them to female role models, such as women math teachers, using gender-neutral language, and providing textbooks and other teaching materials that challenge gender stereotypes. A different set of policies focuses on altering the environment in which girls learn, rather than modifying their beliefs. By adjusting the testing methods (such as reducing the level of competition) or adapting the instructional approach to better align with the learning style of girls, it is possible to create an environment that enables more girls to achieve their maximum potential and to accurately assess their math abilities and interests, rather than simply their test-taking or classroom performance.
However, interventions that aim to modify the beliefs and attitudes of girls and women ex post, as well as those that seek to alter the environment, may not work in the long term because they reinforce preexisting stereotypes and operate within the constraints of those stereotypes. For instance, while modifying the testing environment may result in higher grades for girls, it may not necessarily alter the perception that girls are incapable of excelling in math. In some cases, these interventions may even have negative consequences. Encouraging girls to “lean in” and behave like boys, for example, can lead to unequal, unjust, and inefficient outcomes because the benefits (economic returns) of doing so are lower or even negative for girls in light of existing gender stereotypes.
One popular and affordable approach to combating gender stereotypes involves addressing (unconscious) biases among teachers, parents, and peers through initiatives such as unconscious bias training and self-reflection on biases. The underlying premise is that by increasing awareness of their own (unconscious) biases, individuals will engage their more conscious, non-gender-stereotypical thinking processes. However, such behavioral interventions can sometimes have unintended consequences and result in backlash, and their effectiveness may vary significantly depending on the context, so that their external validity is often called into question.
The recognition of the adaptable nature of both conscious and unconscious stereotypes has led to progress in economics, with the development of social learning and information-based theories. Interventions resulting from these models can effectively counteract prescriptive stereotypes that limit girls’ education to certain fields based on societal expectations of gender roles. However, prescriptive gender stereotypes are often based on biased beliefs about the innate abilities of girls and women. Overcoming deeply ingrained descriptive stereotypes about innate abilities of boys and girls is a fruitful avenue for future economics research and can help close the gender performance gap in mathematics.
Article
Rita Dias Pereira, Pietro Biroli, Titus Galama, Stephanie von Hinke, Hans van Kippersluis, Cornelius A. Rietveld, and Kevin Thom
Nature (one’s genes) and nurture (one’s environment) jointly contribute to the formation and evolution of health and human capital over the life cycle. This complex interplay between genes and environment can be estimated and quantified using genetic information readily available in a growing number of social science data sets. Using genetic data to improve our understanding of individual decision making, inequality, and to guide public policy is possible and promising, but requires a grounding in essential genetic terminology, knowledge of the literature in economics and social-science genetics, and a careful discussion of the policy implications and prospects of the use of genetic data in the social sciences and economics.
Article
Thomas E. Getzen
During the 18th and 19th centuries, medical spending in the United States rose slowly, on average about .25% faster than gross domestic product (GDP), and varied widely between rural and urban regions. Accumulating scientific advances caused spending to accelerate by 1910. From 1930 to 1955, rapid per-capita income growth accommodated major medical expansion while keeping the health share of GDP almost constant. During the 1950s and 1960s, prosperity and investment in research, the workforce, and hospitals caused a rapid surge in spending and consolidated a truly national health system. Excess growth rates (above GDP growth) were above +5% per year from 1966 to 1970, which would have doubled the health-sector share in fifteen years had it not moderated, falling under +3% in the 1980s, +2% in 1990s, and +1.5% since 2005. The question of when national health expenditure growth can be brought into line with GDP and made sustainable for the long run is still open. A review of historical data over three centuries forces confrontation with issues regarding what to include and how long events continue to effect national health accounting and policy. Empirical analysis at a national scale over multiple decades fails to support a position that many of the commonly discussed variables (obesity, aging, mortality rates, coinsurance) do cause significant shifts in expenditure trends. What does become clear is that there are long and variable lags before macroeconomic and technological events affect spending: three to six years for business cycles and multiple decades for major recessions, scientific discoveries, and organizational change. Health-financing mechanisms, such as employer-based health insurance, Medicare, and the Affordable Care Act (Obamacare) are seen to be both cause and effect, taking years to develop and affecting spending for decades to come.
Article
David E. Bloom, Michael Kuhn, and Klaus Prettner
The strong observable correlation between health and economic growth is crucial for economic development and sustained well-being, but the underlying causality and mechanisms are difficult to conceptualize. Three issues are of central concern. First, assessing and disentangling causality between health and economic growth are empirically challenging. Second, the relation between health and economic growth changes over the process of economic development. In less developed countries, poor health often reduces labor force participation, particularly among women, and deters investments in education such that fertility stays high and the economy remains trapped in a stagnation equilibrium. By contrast, in more developed countries, health investments primarily lead to rising longevity, which may not significantly affect labor force participation and workforce productivity. Third, different dimensions of health (mortality vs. morbidity, children’s and women’s health, and health at older ages) relate to different economic effects. By changing the duration and riskiness of the life course, mortality affects individual investment choices, whereas morbidity relates more directly to work productivity and education. Children’s health affects their education and has long-lasting implications for labor force participation and productivity later in life. Women’s health is associated with substantial intergenerational spillover effects and influences women’s empowerment and fertility decisions. Finally, health at older ages has implications for retirement and care.
Article
Jan C. van Ours
There are three main topics in research on the effects of work on health.
The first topic is workplace accidents where the main issues are reporting behavior and workplace safety policies. A worker seems to be less inclined to report a workplace accident for fear of job loss when unemployment is high or when the worker has a temporary contract that may not be renewed. Workplace safety legislation has intended to reduce the incidence and severity of workplace accidents but empirical evidence on this result is unclear.
The second topic is employment and health where the focus is on how job characteristics and job loss affect health, in particular mental health. Physically demanding jobs have negative health effects. The effects of working hours vary and the effects of job loss on physical and mental health are not uniform. Job loss seems to increase mortality.
The third topic concerns retirement and health. Retirement seems to have a negative effect on cognitive skills and short-term positive effects on overall health. Other than that, the effects are very inconsistent, that is, even with as clear a measure as mortality, it is not clear whether life expectancy goes up, goes down, or remains constant due to retirement.
Article
Gregory Colman, Dhaval Dave, and Otto Lenhart
Health insurance depends on labor market activity more in the U.S. than in any other high-income country. A majority of the population are insured through an employer (known as employer-sponsored insurance or ESI), benefiting from the risk pooling and economies of scale available to group insurance plans. Some workers may therefore be reluctant to leave a job for fear of losing such low-cost insurance, a tendency known as “job lock,” or may switch jobs or work more hours merely to obtain it, known as “job push.” Others obtain insurance through government programs for which eligibility depends on income. They too may adapt their work effort to remain eligible for insurance. Those without access to ESI or who are too young or earn too much to qualify for public coverage (Medicare and Medicaid) can buy insurance only in the individual or nongroup market, where prices are high and variable. Most studies using data from before the passage of the Patient Protection and Affordable Care Act (ACA) in 2010 support the prediction that ESI reduced job mobility, labor-force participation, retirement, and self-employment prior to the ACA, but find little effect on the labor supply of public insurance. The ACA profoundly changed the health insurance market in the U.S., removing restrictions on obtaining insurance from new employers or on the individual market and expanding Medicaid eligibility to previously ineligible adults. Research on the ACA, however, has not found substantial labor supply effects. These results may reflect that the reforms to the individual market mainly affected those who were previously uninsured rather than workers with ESI, that the theoretical labor market effects of expansions in public coverage are ambiguous, and that the effect would be found only among the relatively small number on the fringes of eligibility.
Article
Brant Abbott and Giovanni Gallipoli
This article focuses on the distribution of human capital and its implications for the accrual of economic resources to individuals and households. Human capital inequality can be thought of as measuring disparity in the ownership of labor factors of production, which are usually compensated in the form of wage income.
Earnings inequality is tightly related to human capital inequality. However, it only measures disparity in payments to labor rather than dispersion in the market value of the underlying stocks of human capital. Hence, measures of earnings dispersion provide a partial and incomplete view of the underlying distribution of productive skills and of the income generated by way of them.
Despite its shortcomings, a fairly common way to gauge the distributional implications of human capital inequality is to examine the distribution of labor income. While it is not always obvious what accounts for returns to human capital, an established approach in the empirical literature is to decompose measured earnings into permanent and transitory components.
A second approach focuses on the lifetime present value of earnings. Lifetime earnings are, by definition, an ex post measure only observable at the end of an individual’s working lifetime. One limitation of this approach is that it assigns a value based on one of the many possible realizations of human capital returns. Arguably, this ignores the option value associated with alternative, but unobserved, potential earning paths that may be valuable ex ante. Hence, ex post lifetime earnings reflect both the genuine value of human capital and the impact of the particular realization of unpredictable shocks (luck).
A different but related measure focuses on the ex ante value of expected lifetime earnings, which differs from ex post (realized) lifetime earnings insofar as they account for the value of yet-to-be-realized payoffs along different potential earning paths. Ex ante expectations reflect how much an individual reasonably anticipates earning over the rest of their life based on their current stock of human capital, averaging over possible realizations of luck and other income shifters that may arise. The discounted value of different potential paths of future earnings can be computed using risk-less or state-dependent discount factors.
Article
Alessandra Bonfiglioli, Rosario Crinò, and Gino Gancia
International trade is dominated by a small number of very large firms. Models of trade with heterogeneous firms have been developed to study the causes and consequences of this observation. The canonical model of trade with heterogeneous firms shows that trade leads to between-firm reallocations and selection: It shifts employment toward firms with the best attributes and forces marginal firms to exit. The model also illustrates the role of heterogeneity, and its various sources, in explaining the volume of trade and the firm-level margins of adjustment. Consistent with the model, the empirical literature has documented that exporting is a rare activity, that exporting firms are larger and more productive than other firms, and that trade liberalization reallocates market shares toward the best-performing firms in various countries. Studies using transaction-level data have unveiled additional salient features of trade flows. First, sales by foreign firms are very heterogeneous and highly concentrated. Second, both the extensive margin (number of exporting firms) and the intensive margin (average export per firm) are important in explaining the level of exports and its changes over time. More heterogeneity in sales across firms is associated with a higher volume of trade along both margins. Third, increased foreign competition reallocates market shares toward top firms and hence can increase concentration from any country of origin. Numerous extensions of the benchmark model have been proposed to study other important aspects, such as the relevance of multi-product and multinational firms, the import behavior of firms, and the extent to which heterogeneity is endogenous to firms’ choices, but some open challenges still remain.
Article
Joni Hersch and Blair Druhan Bullock
The labor market is governed by a panoply of laws, regulating virtually all aspects of the employment relation, including hiring, firing, information exchange, privacy, workplace safety, work hours, minimum wages, and access to courts for redress of violations of rights. Antidiscrimination laws, especially Title VII, notably prohibit employment discrimination on the basis of race, color, religion, sex, and national origin. Court decisions and legislation have led to the extension of protection to a far wider range of classes and types of workplace behavior than Title VII originally covered.
The workplace of the early 21st century is very different from the workplace when the major employment discrimination statutes were enacted, as these laws were conceived as regulating an employer–employee relationship in a predominantly white male labor market. Prior emphasis on employment discrimination on the basis of race and sex has been superseded by enhanced attention to sexual harassment and discrimination on the basis of disability, sexual orientation, gender identity, and religion. Concerns over the equity or efficiency of the employment-at-will doctrine recede in a workforce in which workers are increasingly categorized as independent contractors who are not covered by most equal employment laws. As the workplace has changed, the scholarship on the law and economics of employment law has been slow to follow.
Article
Terra McKinnish
Marriage and labor market outcomes are deeply related, particularly for women. A large literature finds that the labor supply decisions of married women respond to their husbands’ employment status, wages, and job characteristics. There is also evidence that the effects of spouse characteristics on labor market outcomes operate not just through standard neoclassical cross-wage and income effects but also through household bargaining and gender norm effects, in which the relative incomes of husband and wife affect the distribution of marital surplus, marital satisfaction, and marital stability.
Marriage market characteristics affect marital status and spouse characteristics, as well as the outside option, and therefore bargaining power, within marriage. Marriage market characteristics can therefore affect premarital investments, which ultimately affect labor market outcomes within marriage and also affect labor supply decisions within marriage conditional on these premarital investments.
Article
Serena Canaan, Anne Sophie Lassen, Philip Rosenbaum, and Herdis Steingrimsdottir
Labor market policies for expecting and new mothers emerged at the turn of the 19th century. The main motivation for these policies was to ensure the health of mothers and their newborn children. With increased female labor market participation, the focus has gradually shifted to the effects that parental leave policies have on women’s labor market outcomes and gender equality. Proponents of extending parental leave rights for mothers in terms of duration, benefits, and job protection have argued that this will support mothers’ labor market attachment and allow them to take time off from work after childbirth and then safely return to their pre-birth jobs. Others have noted that extended maternity leave can work as a double-edged sword for mothers: If young women are likely to spend months, or even years, on leave, employers are likely to take that into consideration when hiring and promoting their employees. These policies may therefore end up adversely affecting women’s labor market outcomes. This has led to an increased focus on activating fathers to take parental leave, and in 2019, the European Parliament approved a directive requiring member states to ensure at least 2 months of earmarked paternity leave.
The literature on parental leave has proliferated during the past two decades. The increased number of studies on the topic has brought forth some consistent findings. First, the introduction of short maternity leave is beneficial for both maternal and child health and for mothers’ labor market outcomes. Second, there appear to be negligible benefits from a leave extending beyond 6 months in terms of health outcomes and children’s long-term outcomes. Furthermore, longer leaves have little, or even adverse, influence on mothers’ labor market outcomes. However, evidence suggests that there may be underlying heterogeneous effects from extended leave among different socioeconomic groups. The literature on the effect of earmarked paternity leave indicates that these policies are effective in increasing fathers’ leave-taking and involvement in child care. However, the evidence on the influence of paternity leave on gender equality in the labor market remains scarce and is somewhat mixed. Finally, recent studies that focus on the effect of parental leave policies for firms find that in general, firms are able to compensate for lost labor when their employees go on leave. However, if firms face constraints when replacing employees, it could negatively influence their performance.
Article
Gill Wyness
The first studies of higher education mismatch were motivated by a desire to understand the consequences of affirmative action policies, which lowered academic admission requirements for underrepresented students (typically disadvantaged racial and ethnic groups). This is the so-called “mismatch hypothesis,” which suggests that affirmative action may actually be harmful because it enables students to attend colleges they are academically underprepared for (“mismatched” to) while squeezing out students who would otherwise have enrolled and succeeded. At its heart, the study of mismatch is motivated by the proposed existence of complementarities between students and courses—the assumption that the highest-achieving students would get the most benefit from attending the highest-quality schools, and vice versa. Both undermatch—where high-attaining students attend low-quality universities—and overmatch—where low-attaining students attend high-quality universities—have been studied.
Only a very small number of studies have been able to causally examine the impact of mismatch. A major challenge is that unobserved factors that influence individuals’ decisions to attend a particular college (and for the college to accept them) are likely to affect their likelihood of completion and their probability of doing well in the labor market. Several recent studies have made progress in this area, but the evidence on the impact of mismatch still shows mixed results, suggesting that more research is needed, for example, in studying different policy shocks (e.g., natural experiments such as the use of affirmative action bans, which create exogenous variation in mismatch) for students at different margins. There is also a need to expand the study of mismatch beyond the United Kingdom and the United States, which has been the main focus of studies so far, and also beyond higher education into other contexts such as further education colleges.
Article
Aparajita Dasgupta and Anisha Sharma
One of the most egregious manifestations of gender bias is the phenomenon of “missing women.” The number of missing women is projected to increase to 150 million by 2035, as a result of prenatal sex selection and excess female mortality relative to men, and is reflected in male-biased sex ratios at all ages. The economics literature identifies several proximate causes of the deficit of females, including the widespread use of prenatal sex selection in many Asian countries, which has been fueled by the diffusion of ultrasound and other fetal sex-detection technology. The use of prenatal sex selection has become even more expansive with a decline in fertility, as parents with a preference for sons are less likely to achieve their desired sex composition of children at lower levels of fertility. Gender discrimination in investments in health and nutrition also leads to excess female mortality among children through multiple channels.
The deeper causes of son preference lie in the socioeconomic and cultural norms embedded in patriarchal societies, and recent literature in economics seeks to quantify the impact of these norms and customs on the sex ratio. Particularly important are the norms of patrilineality, in which property and assets are passed through the male line, and patrilocality, in which elderly parents coreside with their sons, whereas their daughters move to live with their husbands’ families after marriage. Another strand of the literature explores the hypothesis that the devaluing of women has roots in historical agricultural systems: Societies that have made little use of women’s labor are today the ones with the largest female deficits. Finally, economic development is often associated with a decline in son preference, but, in practice, many correlates of development, such as women’s education, income, and work status, have little impact on the sex ratio unless accompanied by more extensive social transformations.
A number of policies have been implemented by governments throughout the world to tackle this issue, including legislative bans on different forms of gender discrimination, financial incentives for families to compensate them for the perceived additional costs of having a daughter, and media and advocacy campaigns that seek to increase the inherent demand for daughters by shifting the norm of son preference. Quantitative evaluations of some of these policies find mixed results. Where policies are unable to address the root causes of son preference, they often simply deflect discrimination from the targeted margin to another margin, and in some cases, they even fail in their core objectives. On the other hand, the expansion of social safety nets has had a considerable impact in reducing the reliance of parents on their sons. Similarly, media and advocacy campaigns that aim to increase the perceived value of women have also shown promise, even if their progress appears slow. Analysis of the welfare consequences of such interventions suggests that governments must pay close attention to underlying sociocultural norms when designing policy.
Article
Aida Farmand and Teresa Ghilarducci
Most monopsony research leaves out the employer as an active agent. The cause of monopsony rests solely on the workers: Their idiosyncratic preferences, their lack of information, and their geographical isolation create the monopsony conditions. Employers are viewed as mainly passive and only choose to exploit their monopsony potential when the conditions allow. The theoretical passivity of employers leaves out a whole class of behaviors necessary to identify and understand the persistence of monopsony.
For instance, the models consider gender as a monopsony factor because wives and mothers are presumed to have intensely inelastic labor supply functions. Women’s attachment to children and the children’s schools and to their husband’s locational decisions means women are less likely to leave a geographical area to pursue a competitor’s better offer. Again, it is the woman’s idiosyncratic choices that allow for monopsony exploitation.
However, it is likely employers consciously use race and gender stratification to segregate and divide workers to create differential labor supply elasticities and, thus, create monopsony conditions to the firm. A firm would maintain practices that use race to allocate jobs and separate men from women workers to maintain divisions among the workforce. Moreover, government policies that make it difficult for workers to unionize, keep minimum wages low, and subsidize low-paid work through the earned income tax credit help employers create and maintain monopsony power among subaltern groups, nonwhite workers, and women. Future research on monopsony should focus on specific employers’ practices that create monopsony conditions such as providing firm specific childcare, perpetuating occupational segregations, limiting opportunities of promotion for women and nonwhite workers, and lobbying for the wage subsidy programs such as the earned income tax credit.
Article
Andrés Barrios-Fernandez
The identification of peer effects is challenging. There are many factors not related to social influences that could explain correlations among peers. Peers have been shown to affect many important outcomes, including academic performance and educational trajectories. Confirming the existence of peer effects is important from a policy perspective. Both the cost-benefit analysis and the design of policies are likely to be affected by the existence of social spillovers. However, making general policy recommendations from the current evidence is not easy. The size of the peer effects documented in the literature varies substantially across settings and depends on how peers are defined and characterized. Understanding what is behind this heterogeneity is thus key to extract more general policy lessons. Access to better data and the ability to map social networks will likely facilitate investigating which peers and which characteristics matter the most in different contexts. Conducting more research on the mechanisms behind peer effects is also important. Understanding these drivers is key to take advantage of social spillovers in the design of new educational programs, to identify competing policies, and to gain a deeper understanding of the nature and relevance of different forms of social interactions for the youth.
Article
Kevin Kuruc, Mark Budolfson, and Dean Spears
Nearly all large policy decisions influence not only the quality of life for existing individuals but also the number—and even identities—of yet-to-exist individuals. Accounting for these effects in a policy evaluation framework requires taking difficult stances on concepts such as the value of existence. These issues are at the heart of a literature that sits between welfare economics and philosophical population ethics. Despite the inherent challenges of these questions, this literature has produced theoretical insights and subsequent progress on variable-population welfare criteria. A surprisingly bounded set of coherent alternatives exists for practitioners once a set of uncontroversial axioms is adopted from the better-studied welfare criteria for cases where populations are assumed to be fixed. Although consensus has not yet been reached among these remaining alternatives, their recommendations often agree. The space has been sufficiently restricted and well explored that applications of the theoretical insights are possible and underway in earnest.
For reasons both theoretical and empirical, the applied literature studying optimal policy and its robustness to welfare criteria has documented a surprising degree of convergence between recommendations under quite different ethical stances on existence value. This convergence has appeared even in cases where population size itself is the choice variable. Although it may not always be the case that policy recommendations are invariant to population welfare criteria, tools have been developed that allow researchers to easily and transparently move between such criteria to study the robustness in their context of interest. The broader point is that the remaining theoretical uncertainties need not prevent population ethics from playing a role in policy evaluation—the tools are available for determining whether and which policies are broadly supported among a range of ethical views.
Article
James P. Ziliak
The interaction between poverty and social policy is an issue of longstanding interest in academic and policy circles. There are active debates on how to measure poverty, including where to draw the threshold determining whether a family is deemed to be living in poverty and how to measure resources available. These decisions have profound impacts on our understanding of the anti-poverty effectiveness of social welfare programs. In the context of the United States, focusing solely on cash income transfers shows little progress against poverty over the past 50 years, but substantive gains are obtained if the resource concept is expanded to include in-kind transfers and refundable tax credits. Beyond poverty, the research literature has examined the effects of social welfare policy on a host of outcomes such as labor supply, consumption, health, wealth, fertility, and marriage. Most of this work finds the disincentive effects of welfare programs on work, saving, and family structure to be small, but the income and consumption smoothing benefits to be sizable, and some recent work has found positive long-term effects of transfer programs on the health and education of children. More research is needed, however, on how to measure poverty, especially in the face of deteriorating quality of household surveys, on the long-term consequences of transfer programs, and on alternative designs of the welfare state.
Article
Carlos Lamarche
For nearly 25 years, advances in panel data and quantile regression were developed almost completely in parallel, with no intersection until the work by Koenker in the mid-2000s. The early theoretical work in statistics and economics raised more questions than answers, but it encouraged the development of several promising new approaches and research that offered a better understanding of the challenges and possibilities at the intersection of the literatures. Panel data quantile regression allows the estimation of effects that are heterogeneous throughout the conditional distribution of the response variable while controlling for individual and time-specific confounders. This type of heterogeneous effect is not well summarized by the average effect. For instance, the relationship between the number of students in a class and average educational achievement has been extensively investigated, but research also shows that class size affects low-achieving and high-achieving students differently. Advances in panel data include several methods and algorithms that have created opportunities for more informative and robust empirical analysis in models with subject heterogeneity and factor structure.
Article
Gregory N. Price
In 1894, W. E. B. Dubois completed coursework for a doctorate in economics at the University of Berlin, and in 1921, Sadie Alexander was the first Black American to earn a doctorate in economics at the University of Pennsylvania. Notwithstanding these rare early accomplishments by Black Americans in economics, there seems to be a more than one century “color line” in the hiring of Black economists in the United States academic labor market. The persistence of Black economist underrepresentation in economics faculties in the United States suggests that a color line constraining the hiring of Black economics faculty endures. In general, and in particular among economics doctorate–granting institutions in the United States, when sorting them by the number of Black Americans on the economics faculty, the median economics department has no Black economics faculty. Findings from the extant literature on the hiring and representation of Black economists suggest that the underrepresentation of Black PhD economists in economics faculties is consistent with, and conforms to, a history of racially discriminatory employment exclusion. This color line could be constraining the production of economics knowledge that can inform public policies that would reduce racial inequality and improve the material living standards of Black Americans in the United States. Future research on the underrepresentation of Black PhD economists in economics faculties in the United States could potentially benefit from accounting for unobservables that may matter for the supply and demand of Black PhD economists. This includes, but is not limited to, what is not observed about individual PhD economist mentoring experiences and parental occupational backgrounds.
