Curtis J. Simon

Human capital and the rise of American cities, 1900–1990

Abstract We propose that cities that start out with proportionately more knowledgeable people grow faster in the long run because (a) knowledge spillovers are geographically limited to the city and (b) much knowledge is most productive in the city within which it is acquired. We found that city-aggregates and metropolitan areas with higher average levels of human capital grew faster over the 20th century. The estimated effects of human capital were large: a standard deviation increase in human capital in 1900 was associated with a 38% increase in average annual employment growth of city-aggregates over the period 1900–86. The estimated effects for metropolitan areas were smaller but still economically significant: a standard deviation increase in 1940 human capital was associated with an increase in average annual employment growth over the period 1940–90 of about 15%. Although the rise of the automobile appears to have overwhelmed the importance of human capital in cities dominated by manufacturing early on, human capital seems to have been economically more important in manufacturing cities than in non-manufacturing cities later on. Moreover, the estimated effects of human capital persisted for very long periods of time, suggesting either that adjusting to the steady state is very lengthy, or that shocks to growth are correlated with the presence of human capital.

Customer Racial Discrimination in the Market for Memorabilia: The Case of Baseball

Because consumer discrimination can reduce productivity, it is often impossible to tell whether differential productivity is the effect of discrimination or of differential ability. Detailed data for the sports labor market make it possible to separate consumer discrimination from ability. We use a unique approach to determine whether the entertainment value of baseball players is related to their race: we examine whether race directly affects the value of a player in the market for baseball cards. In contrast to studies that use salaries, there is no room for owner or coworker discrimination. Our evidence supports the hypothesis of consumer discrimination.

Industrial Specialization and the Returns to Labor

Comparative advantage and the division of labor make geographic concentration of production within a nation profitable and cause many cities to be specialized in one or a few main industries. Specialized cities, however, suffer greater unemployment risk. The theory of compensating wage differentials predicts that individuals living in more specialized cities will be compensated in the form of higher wage rates. We study the effects of specialization on wages and unemployment in the United States. We find evidence of compensating wage differentials. That firms choose to locate in more specialized, higher-wage cities is indirect evidence of the gains to specialization.

Frictional Unemployment and the Role of Industrial Diversity

Since many individuals are immobile between city labor markets in the short run, the industrial structure of cities plays an important role in determining the national rate of unemployment. This paper argues that a citys frictional unemployment rate will be lower, the more industrially diversified is the city; that is, the more evenly distributed is employment across industries. The empirical work on 91 large SMSAs strongly supports the hypothesis. The difference in frictional unemployment rates between the twenty most and least diverse cities is estimated at about 2.4 percentage points.

Fertility Decline, Baby Boom, and Economic Growth

We present new data on fertility, schooling, and child survival in fertility in the United States between 1800 and 2000. Over that period, fertility, childrens schooling, and child survival converged across states and regions. Falling child mortality, rising parental education, and increased population density are all associated with falling fertility and rising childrens schooling. Our data reveal two baby boom regimes. Regions that experienced large baby booms had smaller increases in child schooling, whereas regions that experienced small baby booms had larger increases. We parameterize a model that appears to fit well the broad trends in our data.

Do higher rents discourage fertility? Evidence from U.S. cities, 1940-2000

This paper documents the existence of a negative cross-sectional correlation between the price of living space as measured by rent per room and fertility using U.S. Census data over the period 1940-2000, the effect strengthening from 1940 to 1970 and weakening thereafter. The negative correlation does not merely reflect the tendency of larger families to locate within less-expensive areas of a given metropolitan area. Our study focuses on younger households, but analysis of completed fertility among older households reinforces the findings for younger households. Estimates for 36 CMSAs using the American Housing Survey, which permit us to construct persquare-foot measures of the price of living space, indicate that our findings are not merely an artifact of larger families occupying houses with more rooms. Durbin-Wu-Hausman tests reveal little evidence of endogeneity bias.

The military recruiting productivity slowdown: The roles of resources, opportunity cost and the tastes of youth*

After a decade of successful recruiting, the US military began experiencing recruiting difficulties in the 1990s. Cyclical factors as well as trend factors may have played a role. This paper uses monthly data by state over the period 1989-1997 to estimate models of enlistment and evaluate the various explanations for the recruiting slowdown. Estimates of the impact of economic variables - relative military pay and unemployment - and recruiting resource variables - recruiters and advertising - are similar to those in previous studies. Two trend factors, rising college attendance and declining adult veteran population (influencers), are found to be important factors explaining the decline in enlistment.

A multinomial probability model of size income distribution

Abstract Applying a multinomial model, family income distributions are related to various family characteristics, using data from the March 1971 and 1985 Current Population Surveys. The relationships of the estimated probabilities to composite indexes and incomplete moments of the income distribution are described. Estimates of the structural relationship between family income and characteristics were markedly different in the two years, suggesting caution when using the estimates for purposes of prediction over time. Simulation results reveal little sensitivity of composite measures of income inequality to changes in the distribution of family characteristics in the cross-section.

Cash Incentives and Military Enlistment, Attrition, and Reenlistment

Abstract : Between FY 2000 and FY 2008, the real Department of Defense (DoD) budget for enlistment and reenlistment bonuses increased substantially, from

THE SUPPLY PRICE OF COMMITMENT: EVIDENCE FROM THE AIR FORCE ENLISTMENT BONUS PROGRAM

266 million to