| Home > Research > Research Publications |
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| Research Update |
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| New Titles in the Staff
Reports Series |
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| Number 4, 2009 |
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| Microeconomics |
| No. 401, October 2009 |
| Do Colleges and Universities Increase Their Region’s Human Capital? |
| Jaison R. Abel and Richard Deitz |
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| Abel and Deitz investigate whether the degree-production and research-and-development (R&D) activities of colleges and universities are related to the amount and types of human capital present in the metropolitan areas where the institutions are located. They find that degree production has only a small positive relationship with local stocks of human capital, suggesting that migration plays an important role in the geographic distribution of human capital. Moreover, the authors show that spillovers from academic R&D activities tilt the structure of local labor markets toward occupations requiring innovation and technical training. These findings demonstrate that colleges and universities raise local human capital levels by increasing both the supply of and demand for skill. |
| No. 410, December 2009 |
| Real-Time Search in the Laboratory and the Market |
| Meta Brown, Christopher J. Flinn, and Andrew Schotter |
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| While widely accepted models of labor market search imply a constant reservation wage policy, the empirical evidence strongly suggests that reservation wages decline in the duration of search. This paper reports the results of the first real-time-search laboratory experiment. The controlled environment that subjects face is stationary, and the payoff-maximizing reservation wage is constant. Nevertheless, the subjects’ reservation wages decline sharply over time. The authors investigate two hypotheses to explain this decline: 1) searchers respond to the stock of accruing search costs and 2) searchers experience nonstationary subjective costs of time spent searching. The study’s data support the latter hypothesis, and the authors substantiate this conclusion both experimentally and econometrically. |
| No. 417, December 2009 |
| Second Chances: Subprime Mortgage Modification and Re-Default |
| Andrew Haughwout, Ebiere Okah, and Joseph Tracy |
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| Mortgage modifications have become an important component of public interventions designed to reduce foreclosures. Haughwout, Okah, and Tracy examine how the structure of a mortgage modification affects the likelihood of the modified mortgage re-defaulting over the next year. Using data on subprime modifications that precede the government’s Home Affordable Modification Program, the authors focus on those modifications in which the borrower was seriously delinquent and the monthly payment was reduced as part of the modification. The data indicate that the re-default rate declines with the magnitude of the reduction in the monthly payment, but also that the re-default rate declines relatively more when the payment reduction is achieved through principal forgiveness as opposed to lower interest rates. |