Work in Progress

  • The Causes and Consequences of Self-Employment over the Life Cycle (Job Market Paper)

    This paper investigates the determinants and consequences of entry into and exit from self-employment over the life cycle. It integrates traditional models of dynamic career choice that feature human capital investment with models of business start-up that feature costly capital investment. Applying machine learning methods to matched worker-firm data from Sweden, I isolate seven distinct patterns of participation in self-employment as part of broader life-cycle employment profiles. These patterns are rationalized using a dynamic Roy model with both human capital and physical capital. Using structural methods, I estimate the model and use it to evaluate policies designed to promote self-employment. Cognitive and non-cognitive skills, education, and past work experience are important determinants of which types of businesses individuals start, how much capital they employ, and how long they remain in self-employment. Subsidies that incentivize self-employment are generally ineffective, both in terms of promoting long-lasting firms and in terms of improving the welfare and earnings of those induced to enter self-employment.

  • The Non-Market Benefits of Abilities and Education with James J. Heckman and Gregory Veramendi (submitted, link to latest draft)

    This paper analyzes the non-market benefits of education and ability. Using a dynamic model of educational choice we estimate returns to education that account for selection bias and sorting on gains. We investigate a range of non-market outcomes including incarceration, mental health, voter participation, trust, and participation in welfare. Unlike previous evidence on the monetary benefits of education, the benefits to education for many non-market outcomes appear to be larger for low-ability individuals. College graduation decreases welfare use, lowers depression, and raises self-esteem more for less-able individuals. Accounting for the non-market benefits of education is an important component of any analysis of educational policy.

  • On the Interpretation of Non-cognitive Skills -- What Is Being Measured and Why it Matters with Fabian Kosse (forthcoming at Journal of Economic Behavior & Organization, link to latest draft)

    Across academic sub-fields such as labor, education, and behavioral economics, the measurement and interpretation of non-cognitive skills varies widely. As a result, it is difficult to compare results on the importance of non-cognitive skills across literatures. Drawing from these literatures, this paper systematically relates various prototypical non-cognitive measures within one data set. Specifically, we estimate and compare several different strategies for measuring non-cognitive skills. For each, we compare their relative effectiveness at predicting educational success and decompose what is being measured into underlying personality traits and economic preferences. We demonstrate that the construction of the non-cognitive factor greatly influences what is actually measured and what conclusions are reached about the role of non-cognitive skills in life outcomes such as educational attainment. Furthermore, we demonstrate that, while sometimes difficult to interpret, factors extracted from self-reported behaviors can have predictive power similar to well established taxonomies, such as the Big Five.

  • College Major Choice: Sorting and Differential Returns to Skills with Juanna Joensen and Gregory Veramendi

    Does the college major premium reflect returns to innate abilities, prior skills, or college education? We decompose the college major premium into labor market returns to cognitive and non-cognitive abilities, and skills learned in college. This allows us to quantify how much of the college major premium is due to sorting on abilities and how much is due to the differential labor market value of major-specific skills. We find that sorting on abilities accounts for 10-50% of the college major premium. We also provide novel estimates of complementarities and interaction effects between abilities and skills, since both the returns to abilities and prior skills vary significantly across college majors. We document that 40% of students who enter STEM degrees change major or drop out. We evaluate counterfactual policies to promote STEM degrees, accounting for the the fact that many who start STEM degrees do not finish. (The project is funded by Riksbankens Jubileumsfond through the Stockholm School of Economics).

  • Does Eviction Create Poverty? Quasi-Experimental Evidence from Cook County, IL with Daniel Tannenbaum and Winnie van Dijk

    In Cook County, IL, more than 35,000 eviction cases appear before the circuit court every year, the majority involving tenants from the poorest areas in Chicago. Prior research suggests that eviction may not only be a symptom of poverty but may, in fact, cause or exacerbate poverty by contributing to circumstances that are adverse to economic mobility. Yet those facing eviction are likely to have recently faced negative economic shocks, which makes establishing the proposed causal relationship difficult. This paper proposes the first quasi-experimental design for evaluating the causal impact of eviction on employment, social, and schooling outcomes. Using over 400,000 eviction case histories, our research design leverages Cook County's random assignment of eviction court cases to judges, where some judges are more lenient than others. This provides a source of exogenous variation in eviction outcomes, allowing us to study the effect of eviction on a wide range of short- and long-run household outcomes associated with poverty. This project has been selected as part of the ``Using Linked Data to Advance Evidence-Based Policy making" initiative in partnership with the Census Bureau and the Arnold Foundation to facilitate policy evaluation through linking records to Census Bureau microdata.

  • The Dot-Com Bubble and the Redistribution of High-Skill Labor in Sweden

    This paper studies the reallocation of highly skilled labor following the 2001 ``dot-com’’ crash in Sweden. The crash resulted in bankruptcy or substantial downsizing in many technology and communication related businesses. Many of these businesses were also subject to ``last-in-first-out'' hiring policies under Swedish law, requiring businesses to fire the most recently hired workers first. The companies affected by the dot-com crash disproportionately employed young high-skill individuals with STEM or engineering degrees. By studying the mass lay-offs and subsequent reallocation of young highly skilled workers, this paper jointly evaluates how labor market shocks impact the careers of high skill workers and how the reallocation of highly skilled labor affects industry growth and the creation of new businesses. The data allows this research to be conducted at the population level and provides rich information on education, IQ, non-cognitive skills, and leadership ability.

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Returns to Education: The Causal Effects of Education on Earnings, Health and Smoking

Journal PaperJournal of Political Economy, forthcoming.

Abstract

This paper estimates returns to education using a dynamic model of educational choice that synthesizes approaches in the structural dynamic discrete choice literature with approaches used in the reduced form treatment effect literature. It is an empirically robust middle ground between the two approaches which estimates economically interpretable and policy-relevant dynamic treatment effects that account for heterogeneity in cognitive and non-cognitive skills and the continuation values of educational choices. Graduating college is not a wise choice for all. Ability bias is a major component of observed educational differentials. For some, there are substantial causal effects of education at all stages of schooling.

Dynamic Treatment Effects

Journal Paper Journal of Econometrics, Volume 191, Issue 2, April 2016, Pages 276-292

Abstract

This paper develops robust models for estimating and interpreting treatment effects arising from both ordered and unordered multi-stage decision problems. Identification is secured through instrumental variables and/or conditional independence (matching) assumptions. We decompose treatment effects into direct effects and continuation values associated with moving to the next stage of a decision problem. Using our framework, we decompose the IV estimator, showing that IV generally does not estimate economically interpretable or policy-relevant parameters in prototypical dynamic discrete choice models, unless policy variables are instruments. Continuation values are an empirically important component of estimated total treatment effects of education. We use our analysis to estimate the components of what LATE estimates in a dynamic discrete choice model.

The Myth of Achievement Tests, The GED and the Role of Character in American Life

Book University of Chicago Press | January 9, 2014 | ISBN-10: 022610009X
image Achievement tests play an important role in modern societies. They are used to evaluate schools, to assign students to tracks within schools, and to identify weaknesses in student knowledge. The GED is an achievement test used to grant the status of high school graduate to anyone who passes it. GED recipients currently account for 12 percent of all high school credentials issued each year in the United States. But do achievement tests predict success in life?

The Myth of Achievement Tests shows that achievement tests like the GED fail to measure important life skills. James J. Heckman, John Eric Humphries, Tim Kautz, and a group of scholars offer an in-depth exploration of how the GED came to be used throughout the United States and why our reliance on it is dangerous. Drawing on decades of research, the authors show that, while GED recipients score as well on achievement tests as high school graduates who do not enroll in college, high school graduates vastly outperform GED recipients in terms of their earnings, employment opportunities, educational attainment, and health. The authors show that the differences in success between GED recipients and high school graduates are driven by character skills. Achievement tests like the GED do not adequately capture character skills like conscientiousness, perseverance, sociability, and curiosity. These skills are important in predicting a variety of life outcomes. They can be measured, and they can be taught.

Using the GED as a case study, the authors explore what achievement tests miss and show the dangers of an educational system based on them. They call for a return to an emphasis on character in our schools, our systems of accountability, and our national dialogue.

Taking the Easy Way Out: How the GED Testing Program Induces Students to Drop Out

Journal Paper Journal of Labor Economics, Volume 30, Issue 3, July 2012, Pages 495-520

Abstract

The option to obtain a General Educational Development (GED) certificate changes the incentives facing high school students. This article evaluates the effect of three different GED policy innovations on high school graduation rates. A 6-point decrease in the GED pass rate produced a 1.3-point decline in high school dropout rates. The introduction of a GED certification program in high schools in Oregon produced a 4% decrease in high school graduation rates. Introduction of GED certificates for civilians in California increased the dropout rate by 3 points. The GED program induces students to drop out of high school.

Identification Problems in Personality Psychology

Journal Paper Personality and Individual Differences, Volume 51, Issue 3, August 2012, Pages 315-320

Abstract

This paper discusses and illustrates identification problems in personality psychology. The measures used by psychologists to infer traits are based on behaviors, broadly defined. These behaviors are produced from multiple traits interacting with incentives in situations. In general, measures are determined by these multiple traits and do not identify any particular trait unless incentives and other traits are controlled for. Using two data sets, we show, as an example, that substantial portions of the variance in achievement test scores and grades, which are often used as measures of cognition, are explained by personality variables.

What Do Grades and Achievement Tests Measure

Journal PaperProceedings of the National Academy of Science, forthcoming.

Abstract

Intelligence quotient (IQ), grades, and scores on achievement tests are widely used as measures of cognition, but the correlations among them are far from perfect. This paper uses a variety of datasets to show that personality and IQ predict grades and scores on achievement tests. Personality is relatively more important in predicting grades than scores on achievement tests. IQ is relatively more important in predicting scores on achievement tests. Personality is generally more predictive than IQ on a variety of important life outcomes. Both grades and achievement tests are substantially better predictors of important life outcomes than IQ. The reason is that both capture personality traits that have independent predictive power beyond that of IQ.

The GED

Handbook Chapter Elsevier: Handbook of Economics of Education, Volume 3, Issue 3, 2011, Pages 423-483

Abstract

The General Educational Development (GED) credential is issued on the basis of an eight hour subject-based test. The test claims to establish equivalence between dropouts and traditional high school graduates, opening the door to college and positions in the labor market. In 2008 alone, almost 500,000 dropouts passed the test, amounting to 12% of all high school credentials issued in that year. This chapter reviews the academic literature on the GED, which finds minimal value of the certificate in terms of labor market outcomes and that only a few individuals successfully use it as a path to obtain post-secondary credentials. Although the GED establishes cognitive equivalence on one measure of scholastic aptitude, recipients still face limited opportunity due to deficits in noncognitive skills such as persistence, motivation and reliability. The literature finds that the GED testing program distorts social statistics on high school completion rates, minority graduation gaps, and sources of wage growth. Recent work demonstrates that, through its availability and low cost, the GED also induces some students to drop out of school. The GED program is unique to the United States and Canada, but provides policy insight relevant to any nation's educational context.

Who are the GEDs?

Book Chapter University of Chicago Press | January 9, 2014 | ISBN-10: 022610009X

Chapter 4 in: The Myth of Achievement Tests, The GED and the Role of Character in American Life

The Economic and Social Benefits of GED Certification?

Book Chapter University of Chicago Press | January 9, 2014 | ISBN-10: 022610009X

Chapter 5 in: The Myth of Achievement Tests, The GED and the Role of Character in American Life

Growth in GED Testing

Book Chapter University of Chicago Press | January 9, 2014 | ISBN-10: 022610009X

Chapter 3 in: The Myth of Achievement Tests, The GED and the Role of Character in American Life

The GED Testing Program Induces Students to Drop Out?

Book Chapter University of Chicago Press | January 9, 2014 | ISBN-10: 022610009X

Chapter 7 in: The Myth of Achievement Tests, The GED and the Role of Character in American Life

What Should Be Done?

Book Chapter University of Chicago Press | January 9, 2014 | ISBN-10: 022610009X

Chapter 10 in: The Myth of Achievement Tests, The GED and the Role of Character in American Life

Design and Implementation of a Privacy Preserving Electronic Health Record Linkage Tool in Chicago

Abel N Kho, John P Cashy, Kathryn L Jackson, Adam R Pah, Satyender Goel, Jörn Boehnke, John Eric Humphries, Scott Duke Kominers, Bala N Hota, Shannon A Sims, Bradley A Malin, Dustin D French, Theresa L Walunas, David O Meltzer, Erin O Kaleba, Roderick C Jones, William L Galanter
Journal Paper Journal of the American Medical Informatics Association, Issue 22, Volumen 5, 2015, Pages 1072-1080.

Abstract

Objective: To design and implement a tool that creates a secure, privacy preserving linkage of electronic health record (EHR) data across multiple sites in a large metropolitan area in the United States (Chicago, IL), for use in clinical research.

Methods: The authors developed and distributed a software application that performs standardized data cleaning, preprocessing, and hashing of patient identifiers to remove all protected health information. The application creates seeded hash code combinations of patient identifiers using a Health Insurance Portability and Accountability Act compliant SHA-512 algorithm that minimizes re-identification risk. The authors subsequently linked individual records using a central honest broker with an algorithm that assigns weights to hash combinations in order to generate high specificity matches.

Results: The software application successfully linked and de-duplicated 7 million records across 6 institutions, resulting in a cohort of 5 million unique records. Using a manually reconciled set of 11 292 patients as a gold standard, the software achieved a sensitivity of 96% and a specificity of 100%, with a majority of the missed matches accounted for by patients with both a missing social security number and last name change. Using 3 disease examples, it is demonstrated that the software can reduce duplication of patient records across sites by as much as 28%.

Conclusions: Software that standardizes the assignment of a unique seeded hash identifier merged through an agreed upon third-party honest broker can enable large-scale secure linkage of EHR data for epidemiologic and public health research. The software algorithm can improve future epidemiologic research by providing more comprehensive data given that patients may make use of multiple healthcare systems.