Flexible spending accounts (FSAs) are a widely used arrangement that allow employees to pay for qualified out-of-pocket health expenses with pre-tax dollars. The original structure of FSAs included a significant forfeiture risk if households had unused funds in their accounts at the end of the...

The rate at which racial gaps in pre-collegiate academic achievement can plausibly be expected to erode is a matter of great interest and much uncertainty. In her opinion in Grutter v. Bollinger, Supreme Court Justice O’Connor took a firm stand: “We expect that 25 years from now, the use of...

Racial segregation is often blamed for part of the achievement gap between blacks and whites. In this paper we study the effects of school and neighborhood segregation on the relative SAT scores of black students across different metropolitan areas, using large microdata samples for the...

The EITC is designed to encourage work. But EITC-induced increases in labor supply may drive wages down, shifting the intended transfer toward employers and hurting non- EITC low-skill workers. I exploit variation across family types and skill levels to identify the eect of a large EITC...

Nearly two years after the official end of the "Great Recession," the labor marketremains historically weak. One candidate explanation is supply-side effects driven bydramatic expansions of Unemployment Insurance (UI) benefit durations, to as many as 99 weeks. This paper investigates the effect...

Teacher contracts that condition pay and retention on demonstrated performance can improve selection into and out of teaching. I study alternative contracts in a simulated teacher labor market that incorporates dynamic self-selection and Bayesian learning. Bonus policies create only modest...

Recent proposals would strengthen the dependence of teacher pay and retention on performance, in order to attract those who will be effective teachers and repel those who will not. I model the teacher labor market, incorporating dynamic self-selection, noisy performance measurement, and Bayesian...

Four years after the beginning of the Great Recession, the labor market remains historically weak. Many observers have concluded that "structural" impediments to recovery bear some of the blame. This paper reviews such structural explanations. I find that there is little evidence supporting...