Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application

Researchers have long recognized that the non-random sorting of individuals into groups generates correlation between individual and group attributes that is likely to bias naïve estimates of both individual and group effects. This paper proposes a non-parametric strategy for identifying these effects in a model that allows for both individual and group unobservables, applying this strategy to the estimation of neighborhood effects on labor market outcomes. The first part of this strategy is guided by a robust feature of the equilibrium in vertical sorting models - a monotonic relationship between neighborhood housing prices and neighborhood quality. This implies that under certain conditions a non-parametric function of neighborhood housing prices serves as a suitable control function for the neighborhood unobservable in the labor market outcome regression. This control function transforms the problem to a model with one unobservable so that traditional instrumental variables solutions may be applied. In our application, we instrument for each individual’s observed neighborhood attributes with the average neighborhood attributes of a set of observationally identical individuals. The neighborhood effects model is estimated using confidential microdata from the 1990 Decennial Census for the Boston MSA. The results imply that the direct effects of geographic proximity to jobs, neighborhood poverty rates, and average neighborhood education are substantially larger than the conditional correlations identified using OLS, although the net effect of neighborhood quality on labor market outcomes remains small. These findings are robust across a wide variety of specifications and robustness checks.

Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes

We use a novel data set and identification strategy to empirically detect the presence and magnitude of local social interactions effects in the labor market. We argue that the use of informal referrals has implications for the spatial distribution of residential and work locations, that can then be used to test for the presence of such effects. Restricted access Census Bureau data for the Boston metropolitan area are usedSocial Interactions, Job Search, Geography

Costs, payments and incentives in family planning programs

A variety of monetary policies regarding contraception exists around the world. These range from high user charges in some countries, to free contraceptives in many, to incentives and disincentives in others. This paper examines these policies, focuses on charges and payments as they existed in early 1988, looks at the consistency of monetary policies within countries, and considers the ethical issues raised by each kind of incentive.Health Monitoring&Evaluation,Adolescent Health,Reproductive Health,Economic Theory&Research,Pharmaceuticals&Pharmacoeconomics

Discrimination in Metropolitan Housing Markets: Phase 3 - Native Americans

This paper documents the results of a pilot paired testing program to examine the treatment of Native Americans by real estate agents in rental housing markets in three states and owner-occupied housing markets in one state. The study finds that the level of discrimination experienced by Native Americans in rental markets exceed those experienced by Hispanics, Blacks, and Asian-Americans.

Discrimination in Metropolitan Housing Markets Phase II: Asians and Pacific Islanders

This report documents the results of a an 11-city paired testing study by the Department of Housing and Urban Development of housing discrimination against Asian- Americans and Pacific Islanders. The study shows that one out of every five Asians and Pacific Islanders attempting to buy or rent a home are discriminated against, a rate similar to that of African Americans and Hispanics.

Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes

We use a novel dataset and research design to empirically detect the effect of social interactions among neighbors on labor market outcomes. Specifically, using Census data that characterize residential and employment locations down to the city block, we examine whether individuals residing in the same block are more likely to work together than those in nearby blocks. We find evidence of significant social interactions operating at the block level: residing on the same versus nearby blocks increases the probability of working together by over 33 percent. The results also indicate that this referral effect is stronger when individuals are similar in sociodemographic characteristics (e.g., both have children of similar ages) and when at least one individual is well attached to the labor market. These findings are robust across various specifications intended to address concerns related to sorting and reverse causation. Further, having determined the characteristics of a pair of individuals that lead to an especially strong referral effect, we provide evidence that the increased availability of neighborhood referrals has a significant impact on a wide range of labor market outcomes including employment and wages.Neighborhood Effects, Job Referrals, Social Interactions, Social Interactions, Social Networks, Labor Supply

Does Less Income Mean Less Representation?

We assemble a novel dataset of matched legislative and constituent votes and demonstrate that less income does not mean less representation. We show 1) The opinions of high and low income voters are highly correlated; the legislator’s vote often reflects the desire of both. 2) What differences in representation by income exist, vary by legislator party. Republicans more often vote the will of their higher income over their lower income constituents; Democratic legislators do the reverse. 3) Differences in representation by income are largely explained by the correlation between constituent income and party affiliation.

Wage Premia in Employment Clusters: Agglomeration Economies or Worker Heterogeneity?

The correlation between wage premia and concentrations of firm activity may arise due to agglomeration economies or workers sorting by unobserved productivity. A worker\u27s residential location is used as a proxy for their unobservable productivity attributes in order to test whether estimated work location wage premia are robust to the inclusion of these controls. Further, in a locational equilibrium, identical workers must receive equivalent compensation so that after controlling for residential location (housing prices) and commutes workers must be paid the same wages and only wage premia arising from unobserved productivity differences should remain unexplained. The models in this paper are estimated using a sample of male workers residing in 33 large metropolitan areas drawn from the 5% Public Use Microdata Sample (PUMS) from the 2000 U.S. Decennial Census. We find that wages are higher when an individual works in a location that has more workers or a greater density of workers. These agglomeration effects are robust to the inclusion of residential location controls and disappear with the inclusion of commute time suggesting that the effects are not caused by unobserved differences in worker productivity. Extended model specifications suggest that wages increase with the education level of nearby workers and the concentration of workers in an individual\u27s own industry or occupation