Caroline Hoxby

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• PhD
• Professor (Full) at Stanford University

I investigate in this paper the cyclicality of partial equilibrium behavioral responses to unem-ployment insurance (UI) in the US. I use administrative data on the universe of unemployment spells in five states from 1976 to 1984, and identify the effect of both benefit level and po-tential duration in the regression kink (RK) design using kinks in...

This paper examines whether there is a counter-cyclical pattern in the quality of children. In particular, we study the relationship between the unemployment rate and several measures of parental characteristics, parental behavior behavior, and child health. Using data from the Natality files, including panel level data of mothers, we find evidence...

How can price elasticities be identified when agents face optimization frictions such as adjustment costs or inattention? I derive bounds on structural price elasticities that are a function of the observed effect of a price change on demand, the size of the price change, and the degree of frictions. The degree of frictions is measured by the utili...

Views expressed here are solely those of the authors and not of the institutions with which they are affiliated, and all errors are our own.

We test the hypothesis that universities are more productive when they are both more autonomous and face more competition. Using survey data, we construct indices of university autonomy and competition for both Europe and the United States. We show that there are strong positive correlations between these indices and multiple measures of university...

Over the past few decades, the average college has not become more selective: the reverse is true, though not dramatically. People who believe that college selectivity is increasing may be extrapolating from the experience of a small number of colleges such as members of the Ivy League, Stanford, Duke, and so on. These colleges have experienced ris...

Private colleges dominate the higher education market in some countries but not in others. We argue that in Japan private colleges lag behind public colleges in social and educational reputation because of heavy government support and controls on tuition at the public colleges. We propose a simple model of the higher education market in which priva...

Household …nancial market participation a¤ects asset prices and household welfare. Yet, our understanding of the participation decision is limited. Using an instrumental variables strategy and dataset new to this literature, we provide the …rst precise, causal estimates of the e¤ects of education on …nancial market participation. We …nd a large e¤e...

We examine the contribution of human capital to economy-wide tech- nological improvements through the two channels of innovation and imita- tion. In an endogenous growth framework, we show that skilled labor has a higher growth-enhancing effect closer to the technological frontier. Our empirical analysis addresses a central problem in the education...

This paper tests whether providing information about the work incentives created by the Earned Income Tax Credit (EITC) ampli…es its e¤ects on labor supply. We conducted a randomized …eld experiment with 43,000 EITC claimants at H&R Block in which half the clients were provided simple, personalized information about the EITC schedule. We obtain thr...

It is estimated that between ten and twenty percent of children in the United States are exposed to domestic violence annually. While much is known about the impact of domestic violence and other family problems on children within the home, little is known regarding the extent to which these problems spill over to children outside the family. The w...

I examine the impact of taxation on family labor supply and test economic models of the family by analyzing responses to the Tax Reform of 1991 in Sweden, known as the "tax reform of the century" because of its large magnitude. Using detailed administrative panel data on approximately 11% of the married Swedish population, I …nd that husbands and w...

Recent studies have shown that trade liberalization increases skilled wage premi-ums in developing countries. This result suggests globalization may bene…t elite skilled workers relatively more than poor unskilled workers, increasing inequality. This e¤ect may be mitigated, however, if human capital investment responds to new global op-portunities....

Since the introduction of the Shanghai ranking of the worldâ??s universities it has been clear that European universities are underperforming. This blueprint discusses the potential explanations and points at different reform priorities for higher education in Europe.

The two insights behind school choice are that externalities motivate government financing, but not provision, of schools, and that government-run schools will probably, owing to lack of competition, be x-inefficient. Under school choice, students choose among schools that compete for them on a truly level playing field. Governments play a financin...

Summary. Recently published international rankings indicate that the performance gap between European and American universities is large and, in particular, that the best European universities lag far behind the best American universities. The country performance index we construct using the Shanghai ranking confirms that, despite the good performa...

Based on a survey of European universities, this policy brief states that despite the good performance of some countries, Europe as a whole trails the US by a wide margin. The reason is two-fold. First, Europe invests too little in higher education. Second, European universities suffer from poor governance, insufficient autonomy and often perverse...

A remaining obstacle in the literature on peer effects has been the inability to distinguish between peer effects that are determined by a person's reference group behavior (endogenous peer effects), and effects that are generated as a result of specific background characteristics of the groups themselves (contextual peer effects). This paper ident...

When contracting is not possible, a preference for fair exchange can generate efficient ex-change, fully exhausting the potential gains from trade — or no exchange at all, leaving all gains from trade unexploited. A profit-maximizing firm offers a wage to a fair-minded worker, who then chooses how much effort to exert. The Rotten Firm theorem says:...

This paper evaluates the first year of Harvard's Financial Aid Initiative, which increased aid and recruiting for students from low income backgrounds. Using rich data from the Census and administrative sources, we estimate family incomes for the vast major of plausible applicants from the U.S. We find that the Initiative had a significant effect a...

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1994. Includes bibliographical references.

We investigate whether political jurisdictions form in response to the trade-off between economies of scale and the costs of a heterogeneous population. We consider heterogeneity in income, race, ethnicity, and religion, and we test the model using American school districts, school attendance areas, municipalities, and special districts. We find st...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...

Intestinal helminths – including hookworm, roundworm, whipworm, and schistosomiasis – infect more than one-quarter of the world's population. Studies in which medical treatment is randomized at the individual level potentially doubly underestimate the benefits of treatment, missing externality benefits to the comparison group from reduced disease t...

This collection of essays grew out of a series of conferences held by the National Bureau of Economic Research on school finance, public economics, and school choice. After an introduction by Carolyn M. Hoxby, the papers are: (1) "Does Public School Competition Affect Teacher Quality?" (Eric A. Hanushek and Steven G. Rivkin); (2) "Can School Choice...

Now that the U.S. Supreme Court has declared school voucher programs constitutional, the many unanswered questions concerning the potential effects of school choice will become especially pressing. Contributors to this volume draw on state-of-the-art economic methods to answer some of these questions, investigating the ways in which school choice a...

A school that is more productive is one that produces higher achievement in its pupils for each dollar it spends. In this paper, I comprehensively review how school choice might affect productivity. I begin by describing the importance of school productivity, then explain the economic logic that suggests that choice will affect productivity, and fi...

School finance equalization has probably affected American schools more than any other reform of the last 30 years. Understanding it is a prerequisite for making optimal social investments in human capital. Yet, it is poorly understood. In this paper I explain why: it differs from conventional redistribution because it is based on property values,...

This paper investigates whether schools that face stronger choice-based incentives have greater demand for certain teacher characteristics and (if so) which teacher characteristics. Schools that face choice-based incentives should demand teachers who raise a schools' ability to attract students. Thus, in the long term, school choice would affect wh...

Peer effects are potentially important for understanding the optimal organization of schools, jobs, and neighborhoods, but finding evidence is difficult because people are selected into peer groups based, in part, on their unobservable characteristics. I identify the effects of peers whom a child encounters in the classroom using sources of variati...

I identify the effects of class size on student achievement using longitudinal variation in the population associated with each grade in 649 elementary schools. I use variation in class size driven by idiosyncratic variation in the population. I also use discrete jumps in class size that occur when a small change in enrollment triggers a maximum or...

I use natural population variation to identify the effects of class size and composition on student achievement. I isolate the credibly random component of population variation in each grade and school district and use this component to generate instrumental variables for class size and composition. I also exploit the discontinuous changes in class...

This paper examines the validity of overidentification tests and exogeneity tests in the presence of grouped data. We find that even a small intra-group correlation, when instruments do not vary within groups, may generate a substantial bias in the standard overidentification tests described in textbooks.

This study helps to explain why measured school inputs appear to have little effect on student outcomes, particularly for cohorts educated since 1960. Teachers' unionization can explain how public schools simultaneously can have more generous inputs and worse student performance. Using panel data on United States school districts, I identify the ef...

This paper analyzes cases made for local and centralized school finance and policies such as vouchers, categorical aid, and equalization aid. An ideal system of school finance would achieve efficiency and equity by ensuring every person invests in the amount of schooling that is socially optimal for him. The author evaluates the empirical evidence...

Many school choice proposals would enable parents to choose among public school districts in their area, though not among private schools. Theory predicts three reactions to easier choice among public schools: increased sorting of students and parents among schools; easier choice will encourage competition among schools, forcing them into higher pr...

A variety of early experiences shape individuals in ways that are later rewarded or punished in the labor market. This paper asks whether early labor market conditions have persistent effects on adult outcomes and whether the impact differs with education. I show that negative shocks to early labor market conditions depress adult wages but that the...

The goal of this paper is to improve our understanding of educational decisions in two dimensions: First, we investigate what are important determinants of schooling decisions and whether they differ for male and female youths. In particular, we are interested in the role of expectations about monetary returns to schooling, perceived risks of earni...

This paper provides the first empirical evidence on the impact of middle school quality on housing prices in Paris, using comprehensive data on both school zoning and real estate transactions over the period 1997-2003. Be-cause it is closely linked to spatial mobility, the willingness to pay for better schools is a crucial parameter for the calibra...

Over fifty developing countries have attempted to reduce smuggling by implementing preshipment inspection (PSI) programs. I first show that PSI is not associated with lower overall smuggling rates in two settings: in a cross-country panel, and during the program's staggered implementation in the Philippines. In a simple model of smuggling displacem...

Since the introduction of the Shanghai ranking of the world’s universities it has been clear that European universities are underperforming. This blueprint discusses the potential explanations and points at different reform priorities for higher education in Europe.