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Abstract:
Marriage data show a strong degree of positive assortative mating along a variety of attributes. But since marriage is an equilibrium outcome, it is unclear whether positive sorting is the result of preferences rather than opportunities. We assess the relative importance of preferences and opportunities in dating behaviour, using unique data from a large commercial speed dating agency. While the speed dating design gives us a direct observation of individual preferences, the random allocation of participants across events generates an exogenous source of variation in opportunities and allows us to identify the role of opportunities separately from that of preferences. We find that both women and men equally value physical attributes, such as age and weight, and that there is positive sorting along age, height, and education. The role of individual preferences, however, is outplayed by that of opportunities. Along some attributes (such as occupation, height and smoking) opportunities explain almost all the estimated variation in demand. Along other attributes (such as age), the role of preferences is more substantial, but never dominant. Despite this, preferences have a part when we observe a match, i.e., when two individuals propose to one another.

mate selection, assortative mating, marriage market, speed dating, randomized experiments

Abstract:
The development of the unemployment rate differs substantially between OECD countries. In recent years some countries experienced a mild increase, other countries had a stable unemployment rate, while there are also "successful" countries in which the unemployment rate decreased a lot. A common feature of the successful countries is that they implemented a comprehensive set of institutional reforms. In this paper we present a theoretical and empirical framework to investigate how unemployment is affected by different labour market institutions (LMI) such as labour taxes, unemployment benefits, employment protection, union bargaining power and (de)centralisation of bargaining. We argue that complementarities between LMI can be exploited to improve labour market performance. In our empirical analysis of annual data over the period 1960-1995 of eighteen OECD countries we show that interactions between LMI are indeed important.

OECD, unemployment, institutions, complementarities, reforms

Abstract:
This paper considers the effects of migration costs on human capital investments. We argue that migration costs hurt high-skilled workers relatively more than low-skilled workers. High-skilled workers often have specific skills that oblige them to consider a wider market than low-skilled workers. In such a context, migration costs discourage investments in tertiary education. However, human capital investments include other types of investment, namely on-the-job specific training provided by firms. We show that migration costs have exactly the opposite effect on this type of investment. Migration costs increase the probability of continuing the relationship after a probation period and therefore stimulate firm-specific training. The overall effect on welfare depends among others on the respective productivities of each investment.

Migration costs, human capital, matching

Abstract:
In this paper, we argue that the reason why the United States prefer a lower level of employment protection than the European countries lies in the differences in gains and costs from geographical mobility. We present a model where labor migration and employment protection are both determined endogenously. The labor market is modeled within a matching framework, where the employment protection reduces both the job finding and firing rates. Countries with low migration costs and high economic heterogeneity may prefer no employment protection so that workers can move quickly to better horizons rather than being maintained in low productive activities.

Geographic labor mobility, employment protection, search frictions, voting

Abstract:
A common finding in analyses of geographic mobility is a strong association between past movement and current mobility, a phenomenon that has given rise to the so called "moverstayer model." We argue in this paper that one of the driving forces behind this heterogeneity is the strength of local social ties. We use data from the BHPS on the location of the three closest friends and the frequency of contacts. We estimate the processes of friendship formation and residential mobility jointly, allowing for correlation between the two processes. Our results show that the location of the closest friends matters substantially in the mobility decision, and matters more than the frequency of contacts.

geographical mobility, social ties, friendship formation

Abstract:
We analyze a large stakes prisoner's dilemma game played on a TV show. Players cooperate 40% of the time, demonstrating that social preferences are important; however, cooperation is significantly below the 50% threshold that is required for inequity aversion to sustain cooperation. Women cooperate significantly more than men, while players who have earned more of the stake cooperate less. A player's promise to cooperate is also a good predictor of his decision. Surprisingly, a player's probability of cooperation is unrelated to the opponent's characteristics or promise. We argue that inequity aversion alone cannot adequately explain these results; reputational concerns in a public setting might be more important.

prisoner's dilemma, social preferences, inequity aversion, cheap talk, gender differences

Abstract:
Both in the UK and in the US, we observe puzzling gender asymmetries in the propensity to outmarry: Black men are substantially more likely to have white spouses than Black women, but the opposite is true for Chinese: Chinese men are half less likely to be married to a White person than Chinese women. We argue that differences in height distributions, combined with a simple preference for a taller husband, can explain a large proportion of these ethnic-specific gender asymmetries. Blacks are taller than Asians, and we argue that this significantly affects their marriage prospects with whites. We provide empirical support for this hypothesis using data from the Health Survey for England and the Millenium Cohort Study, which contains valuable and unique information on heights of married couples.

Intermarriage, gender, height

Abstract:
Both in the UK and in the US, we observe puzzling gender asymmetries in the propensity to outmarry: Black men are substantially more likely to have white spouses than Black women, but the opposite is true for Chinese: Chinese men are half less likely to be married to a White person than Chinese women. We argue that differences in height distributions, combined with a simple preference for a taller husband, can explain a large proportion of these ethnic-specific gender asymmetries. Blacks are taller than Asians, and we argue that this significantly affects their marriage prospects with whites. We provide empirical support for this hypothesis using data from the Health Survey for England and the Millenium Cohort Study, which contains valuable and unique information on heights of married couples.

Intermarriage, gender, height

Abstract:
This paper analyzes behaviour on a TV game show where players' monetary payoffs depend upon an array of factors, including ability in answering questions, perceived cooperativeness and the willingness of other players to choose them. We find a substantial beauty premium and are able to disentangle contributing factors. Attractive players perform no differently from less attractive ones, on every dimension. They also exhibit and engender the same degree of cooperativeness. Nevertheless, attractive players are substantially less likely to be eliminated by their peers. Our results suggest a consumption value basis for the beauty premium, and it appears that this is a form of insidious discrimination.

Beauty premium, discrimination

Abstract:
We analyze behavior on a TV game show where players' earnings depend upon several factors. Attractive players fare better than less attractive ones, even though they perform no differently on every dimension. They also exhibit and engender the same degree of cooperativeness. Nevertheless, they are substantially less likely to be eliminated by their peers, even when this is costly. Our results suggest that discrimination arises due to consumption value considerations. We investigate third party perceptions of discrimination by asking experimental subjects to predict elimination decisions. Subjects' predictions implicitly assign a role for attractiveness but underestimate its magnitude.

beauty premium, discrimination

Abstract:
We analyze experimental evidence on whether untrained subjects can predict how trustworthy an individual is. Two players on a TV show play a high stakes prisoner's dilemma with pre-play communication. Our subjects report probabilistic beliefs that each player cooperates, before and after communication. Subjects correctly predict that women, and players who voluntarily promise that they will cooperate, are more likely to cooperate. They are also able to distinguish truth from lies when a player is asked about his or her intentions by the host. In consequence, and in contrast with the psychology literature, our naive subjects are able to distinguish defectors from cooperators, with the latter inducing beliefs that are 7 percentage points higher. We also study Bayesian updating in the natural and complex context, and find mean reversion in beliefs, and reject the martingale property.

trust, promises, Bayesian updating, detecting deception, martingale property of beliefs

Abstract:
Employment protection is often related to costs incurred by firms when they fire a worker. The stability of the employment relationship, enhanced by employment protection, is also favourable to the productivity of the job. We analyse employment protection focusing on this trade-off between adjustment costs and productivity. We show that from a welfare point of view there is an optimal degree of employment protection.

Employment protection, human capital, hold-up, reforms, welfare

Abstract:
This study presents evidence from a field experiment on the prevalence of favoritism among children. Children compete in groups in a tournament in a real effort experiment with two rounds. The children report which group member they prefer to do the task in the second round, providing them with a small privilege. Using information about their social network and their individual performance, we are able to identify the importance of friendship ties. We find that friendships are very important for all age groups. Performance is an important criterion for the older children, but not for the young. While favoritism can in principle be costly by selecting friends that are not best performers, reducing the likelihood of winning the tournament, we find that there is an offsetting effect: children that are favored tend to increase effort subsequently, thereby reducing the costs of favoritism and possibly making favoritism beneficial.

Favoritism, performance, social network, friendship ties

Abstract:
Marriage data show a strong degree of positive assortative mating along a variety of attributes. But since marriage is an equilibrium outcome, it is unclear whether positive sorting is the result of preferences rather than opportunities. We assess the relative importance of preferences and opportunities in dating behaviour, using unique data from a large commercial speed dating agency. While the speed dating design gives us a direct observation of individual preferences, the random allocation of participants across events generates an exogenous source of variation in opportunities and allows us to identify the role of opportunities separately from that of preferences. We find that both women and men equally value physical attributes, such as age and weight, and that there is positive sorting along age, height, and education. The role of individual preferences, however, is outplayed by that of opportunities. Along some attributes (such as occupation, height and smoking) opportunities explain almost all the estimated variation in demand. Along other attributes (such as age), the role of preferences is more substantial, but never dominant. Despite this, preferences have a part when we observe a match, i.e., when two individuals propose to one another.

Mate selection, assortative mating, marriage market, speed dating, randomized experiments

Abstract:
This paper derives new results on the welfare effects of employment protection. Using data from 17 OECD countries, we show that there exists an inverse U-shape relationship between employment protection and economic growth. Using a simple theoretical model with non-contractible specific investments, we show that over some range increasing employment protection does indeed raise welfare. We also show that the optimal level of employment protection depends on other labour market features, such as the bargaining power of workers and the existence of wage rigidities like the minimum wage.

Abstract:
I argue that the reason why the United States prefers a lower level of employment protection than the European countries lies in the differences in gains and costs from geographical mobility. I present a model in which labour migration and employment protection are both determined endogenously. The labour market is modelled within a matching framework, where the employment protection reduces both the job finding and job firing rates. Countries with low migration costs and high economic heterogeneity may prefer no employment protection so that workers can move quickly to better horizons rather than being maintained in low productive activities.

Abstract:
The selection of immigrants by skill and education is a central issue in the analysis of immigration. Since highly educated immigrants tend to be more successful in host country labour markets and less of a fiscal cost it is important to know what determines the skill-selectivity of immigration. In this paper we examine the proportions of highly educated among migrants from around 80 source countries who were observed as immigrants in each of 29 OECD countries in 2000/1. We develop a variant of the Roy model to estimate the determinants of educational selectivity by source and destination country. We also estimate the determinants of the share of migrants from different source countries in each destination country's immigrant stock. Two key findings emerge. One is that the effects of the skill premium, which is at the core of the Roy model, can be observed only after we take account of poverty constraints operating in source countries. The other is that cultural links and distance are often more important determinants of the proportion of high educated immigrants in different OECD countries than wage incentives or policy.

Immigration, Skill Selection

Abstract:
Both in the UK and in the US, we observe puzzling gender asymmetries in the propensity to outmarry: Black men are substantially more likely to have white spouses than Black women, but the opposite is true for Chinese: Chinese men are half less likely to be married to a White person than Chinese women. We argue that differences in height distributions, combined with a simple preference for a taller husband, can explain a large proportion of these ethnic-specific gender asymmetries. Blacks are taller than Asians, and we argue that this significantly affects their marriage prospects with whites. We provide empirical support for this hypothesis using data from the Health Survey for England and the Millenium Cohort Study, which contains valuable and unique information on heights of married couples.

Gender, Height, Intermarriage