Ongoing Faculty Research

Working Papers in the Department of Economics

Eric Hilt

Hilt, Eric, "Wall Street's First Corporate Governance Crisis: The Panic of 1826" , National Bureau of Economic Research working paper 14892, April 2009.

In July of 1826, several prominent Wall Street firms abruptly went bankrupt, amid scandalous revelations of fraudulent financial practices by their management. This paper analyzes the causes of the failures, and the evolution of the law in response. The analysis highlights the critical role played by scandal-driven legislation in the evolution of investor protections and financial regulations.

Hilt, Eric and O'Banion, Katherine, "The Limited Partnership in New York, 1822-1853: Partnerships without Kinship", National Bureau of Economic Research Working Paper 14412, October 2008.

In 1822, New York became the first common-law state to authorize the formation of limited partnerships, and over the ensuing decades, many other states followed. Most prior research has suggested that these statutes were utilized only rarely, but little is known about their effects. Using newly collected data, this paper analyzes the use of the limited partnership in nineteenth-century New York City.


Hilt, Eric, "When Did Ownership Separate from Control? Corporate Governance in the Early-Nineteeth Century", National Bureau of Economic Research Working Paper 13093, May 2007.

This paper analyzes the ownership and governance of the business corporations of New York State in the 1820s. Using a new dataset collected from the manuscript records of New York's 1823 capital tax, and from the charters of the corporations, I analyze the ownership structures of the firms, and investigate the degree to which ownership was separated from control at the time.

Phil Levine

Coile, Courtney and Levine, Phillip B. "Recessions, Reeling Markets and Retiree Well-Being," National Bureau of Economic Research working paper 16066, June 2010

This paper examines the impact of late-career investment returns and job loss on subsequent retiree well-being. Specifically, we explore whether there is a link between the income of retirees aged 70 to 79 and the stock market and labor market conditions that existed around the time of their retirement.

Coile, Courtney and Levine, Phillip B. "The Market Crash and Mass Layoffs: How the Current Economic Crisis May Affect Retirement", National Bureau of Economic Research working paper 15395, October 2009.

Recent dramatic declines in U.S. stock and housing markets have led to widespread speculation that shrinking retirement accounts and falling home equity will lead workers to delay retirement. Yet the weakness in the labor market and its impact on retirement is often overlooked. If older job seekers have difficulty finding work, they may retire earlier than expected. The net effect of the current economic crisis on retirement is thus far from clear. In this paper, we use 30 years of data from the March Current Population Survey to estimate models relating retirement decisions to fluctuations in equity, housing, and labor markets.

Levine, Phillip B., McKnight, Robin, and Heep, Samantha, "Public Policy, Health Insurance and the Transition to Adulthood", National Bureau of Economic Research working paper 15114, June 2009.

This paper assesses the impact of two recent policies designed to increase insurance coverage for older teens and young adults. The introduction of SCHIP in 1997 enabled low and moderate income teens up to age 19 to gain access to public health insurance. More recent policies adopted by a number of states have enabled young adults between the ages of 19 and (typically) 24 to remain covered under their parents’ health insurance. We take advantage of the discrete break in coverage at age 19 to evaluate the impact of SCHIP. We also use quasi-experimental variation across states and years along with the targeted nature of eligibility to evaluate the impact of these “extended parental coverage” laws.

Robin McKnight

Levine, Phillip B., McKnight, Robin, and Heep, Samantha, "Public Policy, Health Insurance and the Transition to Adulthood", National Bureau of Economic Research working paper 15114, June 2009.

This paper assesses the impact of two recent policies designed to increase insurance coverage for older teens and young adults. The introduction of SCHIP in 1997 enabled low and moderate income teens up to age 19 to gain access to public health insurance. More recent policies adopted by a number of states have enabled young adults between the ages of 19 and (typically) 24 to remain covered under their parents’ health insurance. We take advantage of the discrete break in coverage at age 19 to evaluate the impact of SCHIP. We also use quasi-experimental variation across states and years along with the targeted nature of eligibility to evaluate the impact of these “extended parental coverage” laws.

Chandra, Amitabh, Gruber, Jonathan and McKnight, Robin, "Patient Cost-Sharing, Hospitalization Offsets, and the Design of Optimal Health Insurance for the Elderly", National Bureau of Economic Research Working Paper 12972, March 2007.

Patient cost-sharing for primary care and prescription drugs is designed to reduce the prevalence of moral hazard in medical utilization. Yet the success of this strategy depends on two factors: the elasticity of demand for those medical goods, and the risk of downstream hospitalizations by reducing access to beneficial health care. Surprisingly, we know little about either of these factors for the elderly, the most intensive consumers of health care in our country. We remedy both of these deficiencies by studying a policy change that raised patient cost-sharing for retired public employees in California.

Kartini Shastry

Human Capital Response to Globalization: Education and Information Technology in India (forthcoming in the Journal of Human Resources )

Recent studies have shown that trade liberalization increases skilled wage premiums in developing countries. This result suggests globalization may benefit elite skilled workers relatively more than poor unskilled workers, increasing inequality. I study how the impact of globalization varies across Indian districts with different costs of skill acquisition.

Smart Money:  The Effect of Education, Cognitive Ability, and Financial Literacy on Financial Market Participation (with Shawn Cole; revise and resubmit, The Review of Financial Studies)

Household financial market participation affects asset prices and household welfare. Yet, our understanding of this decision is limited. Using an instrumental variables strategy and dataset new to this literature, we provide the first precise, causal estimates of the effects of education on financial market participation.

Grain Inflation: Identifying Agent Discretion in Response to a Conditional School Nutrition Program (with Leigh Linden) 

Many incentive programs rely on local agents with significant discretion to allocate benefits. We estimate the degree of discretion exercised by teachers within a conditional transfer program designed to encourage student attendance.

Olga Shurchkov

"Under Pressure: Gender Differences in Output Quality and Quantity under Competition and Time Constraints" (forthcoming, Journal of the European Economic Association)

One explanation for gender inequality in the workplace stems from the effects of the interaction between competition and two pressure sources, namely, task stereotypes and time constraints. This study uses a laboratory experiment to …find that the gender gap in performance under competition and preferences for competition can be partly explained by the differential responses of men and women to the above pressures.

  “Coordination and Learning in Dynamic Global Games: Experimental Evidence” (with Ernst Fehr), Wellesley College Department of Economics Working Paper.

This paper uses a laboratory experiment based on the dynamic global games framework to test the effects of heterogeneous information and belief formation on coordination behavior in a speculative attack.

"Gender Differences in Output Quality and Quantity under Competition and Time Constraints:  Evidence from a Pilot Study", Fondazione Eni Enrico Mattei Working Paper 356, December 2009.

Gender gaps in income and level of position in the workplace are widespread. One explanation for this inequality is that the genders perform differently under competitive conditions, as previous experimental studies have found a significant gender gap in competitive tasks that are perceived to favor men. In this paper, we use a verbal task that is perceived to favor women and find no gender difference under competition per se.

Susan Skeath

A Step Ahead? Experienced Play in the p-Beauty Game, Livingston, Jeffrey and Skeath, Susan, Wellesley College Working Paper, June 2010

In the "p-beauty" contest, contestants choose a number between zero and 100 and the winner is the player who has selected the number that is closest to some fraction p of the average chosen by the group.   The decision process in this game is widely viewed as representative of the decision process in financial markets, because both require the ability to successfully anticipate and react to average opinions faster than the general public.  This study examines how players who are experienced with the game behave when competing against opponents who they know have never seen the game before.