The effect of school inputs on labor market outcomes is an important and controversial topic, both in the United States and in developing countries. A large literature about American schools has not settled debate on the issue. Card and Krueger (1992) estimate the effect of pupil/teacher ratios...

The effect of school inputs on labor market outcomes is an important and controversial topic, both in the United States and in developing countries. A large literature about American schools has not settled debate on the issue. Card and Krueger (1992) estimate the effect of pupil/teacher ratios...

This paper contributes to what is known about the impact of school quality, by documenting its effect on the incomes of Black South Africans, using data from the 1996 South African census and two national surveys of school quality. South Africa provides an interesting laboratory for studying the...

Weak instruments arise when the instruments in linear instrumental variables (IV) regression are weakly correlated with the included endogenous variables. In generalized method of moments (GMM), more generally, weak instruments correspond to weak identification of some or all of the unknown...

Movements in the value of corporate assets are justified by changes in expected future cash flow. The appropriate measure of cash flow for valuing assets is net payout, which is the sum of dividends, interest, and net repurchases of equity and debt. When discount rates are low and equity...

Conventional tests of the predictability of stock returns could be invalid, that is reject the null too frequently, when the predictor variable is persistent and its innovations are highly correlated with returns. We develop a pretest to determine whether the conventional t-test leads to invalid...

Liabilities ceded by life insurers to shadow reinsurers (i.e., affiliated and less regulated off-balance-sheet entities) grew from $11 billion in 2002 to $364 billion in 2012. Life insurers using shadow insurance, which capture half of the market share, ceded 25 cents of every dollar insured to...

During the financial crisis, life insurers sold long-term policies at deep discounts relative to actuarial value. The average markup was as low as -19 percent for annuities and -57 percent for life insurance. This extraordinary pricing behavior was due to financial and product market frictions,...

We develop an asset pricing model with rich heterogeneity in asset demand across investors, designed to match institutional holdings data. The equilibrium price vector is uniquely determined by market clearing, which equates the supply of each asset to aggregate demand. We estimate the model on...