Mary Eschelbach Hansen

The role of path dependence in the development of US bankruptcy law, 1880–1938

This paper provides an illustration of the mechanisms that can give rise to path dependence in legislation. Specifically it shows how debtor-friendly bankruptcy law arose in the United States as a result of a path dependent process. The 1898 Bankruptcy Act was not regarded as debtor-friendly at the time of its enactment, but the enactment of the law gave rise to changes in interest groups, beliefs about the purpose of bankruptcy law, and political party positions on bankruptcy that set the United States on a path to debtor-friendly bankruptcy law. Analysis of the path dependence of bankruptcy law produces an interpretation that is more consistent with the evidence than the standard interpretation that debtor-friendly bankruptcy law was the result of a political compromise in 1898.

Religion, Social Capital, and Business Bankruptcy in the United States, 1921-1932

We consider the value of social capital that derives from membership in a church. American states with larger churchgoing populations had lower business bankruptcy rates from 1921 to 1932, and states in which the churchgoing population was concentrated in few churches had business bankruptcy rates that were lower still. Both voluntary and involuntary bankruptcy were lower in states with higher church membership. The evidence suggests that church membership acted on bankruptcy through a safety net mechanism and not solely through indicating a preference for honouring commitment.

Crisis and Bankruptcy: The Mediating Role of State Law, 1920–1932

The onset of the Great Depression did not spark a surge in personal bankruptcy. For debtors in default, state garnishment law played a significant role in the decision to file for bankruptcy. Only states that made it easy to garnish a debtors wages experienced significant increases in bankruptcy as a consequence of the Depression.

The Structure of Families Who Adopt Children From Foster Care

ABSTRACT The 1997 Adoption and Safe Families Act (ASFA) gave incentives to states to expedite the adoption of children from foster care. Administrative data describe the changes in adoptive families from 1996 to 2003 in terms of the marital status and sex of the household head and in terms of the relationship of the parents to the child prior to adoption. Patterns in the way children with special needs were matched with different kinds of families are described. The data show that agencies have tapped the resources of families headed by single parents to provide permanency for older children and that older children adopted by fathers have spent more time as legal orphans than children adopted by single mothers.

The Standard of Proof at Adjudication of Abuse or Neglect: Its Influence on Case Outcomes at Key Junctures

We measure the extent to which the standard of proof a state child protection agency must meet at trial in a child abuse or neglect case influences the outcomes in the case. In the United States, the government of each of the 50 states and the District of Columbia sets its own standard of proof. We measure the influence of the standards of proof using survey data. We find that a higher standard of proof — one requiring the government to present clear and convincing evidence of abuse or neglect rather than only requiring a preponderance of the evidence of abuse or neglect — decreases the probability that the judge rules in favor of CPS. A clear and convincing standard also affects decisions before trial: it increases the number of visits made by CPS during an investigation; it lowers the odds that CPS substantiates the case; and it lowers the odds that a case reaches trial. After trial, it increases the probability of an out-of-home placement.

Don't Put the Cart Before the Horse: Teaching the Economic Approach to Empirical Research

When students are taught how to do original research in courses outside economics, they are taught to begin with the collection of data. This is not the approach followed by economists, who typically begin an answer to a research question by developing a model. The model then guides the search for evidence. We argue that the economic approach is more likely to lead to the development of a persuasive argument, and that greater awareness of the contrast between the economic approach and its alternatives can enable economists to improve the teaching of the research process.

Sexual identity and the lesbian earnings differential in the U.S.

Abstract Two decades of research on wage differentials by sexual orientation uses data-sets that do not ask respondents about their own sexual orientation, even though sexual identity is key to theories that explain why a wage differential might exist. We show that many women who claim a lesbian identity for themselves are not classified as lesbian by researchers using the behavioral proxies typically available in the data. Conversely, many women who describe themselves as heterosexual are classified as lesbian because they report sexual experiences with women. Misclassification may lead to erroneous conclusions about changes in labor market outcomes. The results highlight the need to develop robust methods for collecting data on sexual identity and for more research on the interrelationship between sexual identity and behavior, especially occupational choice.

The historian's craft and economics

History refers both to the past and to the systematic study of the past. Attempts to make a case for history in economics generally emphasize the first definition. There are benefits from increased attention to the past. This paper argues that significant benefits can be gained from increased attention to the systematic study of the past, the historians craft. The essence of the historians craft is the critical evaluation of sources. Failure to critically evaluate sources has the potential to lead to erroneous conclusions, whether one is using historical documents or more recently created data.

Legal Rules and Bankruptcy Rates: Historical Evidence from the States

Since the early twentieth century, observers have attributed the wide variation in state bankruptcy rates to variation in state legal rules such as garnishment and bankruptcy exemptions. Recent econometric analyses, however, conclude that legal rules do not matter. We explore the impact of legal rules on bankruptcy rates using a new technique—fixed effects vector decomposition—to exploit historical variation in legal rules. The technique allows us to estimate the impact of timeinvariant legal rules in a fixed effects framework. We find that the variation in state legal rules explains much of the variation in state wage earner bankruptcy rates for 1926 to 1932.