This paper introduces a simple school choice model in which all students have the same ordinal preferences over schools but only some have access to an outside option. Our model predicts that, under a manipulable school choice mechanism, students with the outside option are more likely to apply to popular schools. We show that while students with the outside option beneﬁt from manipulable systems, students without the outside option may experience either welfare gains or welfare losses. We evaluate the positive predictions of the model using a diﬀerence-in-diﬀerences design that leverages a change from the Boston mechanism to a deferred acceptance mechanism in the New Haven, Connecticut school district. Consistent with the theoretical predictions, students with an outside option are more likely to list popular, highly-rated schools under the manipulable mechanism, but this gap disappears after the switch to the deferred acceptance mechanism.
This paper tests a central implication of the theory of equalizing differences, that workers sort into
jobs with different attributes based on their preferences for those attributes. We present evidence
from four new time-use data sets for the United States and France on whether workers who are more
gregarious, as revealed by their behavior when they are not working, tend to be employed in jobs
that involve more social interactions. In each data set we find a significant and sizable relationship
between the tendency to interact with others off the job and while working. People’s descriptions of
their jobs and their personalities also accord reasonably well with their time use on and off the job.
Furthermore, workers in occupations that require social interactions according to the O’Net
Dictionary of Occupational Titles tend to spend more of their non-working time with friends.
Lastly, we find that workers report substantially higher levels of job satisfaction and net affect while
at work if their jobs entail frequent interactions with coworkers and other desirable working
Using method of moments techniques (ref: Chamberlain (1984), Gallant and Jorgenson (1979)),
this paper’s objective is to test the predictions of the theory of job-matching and the theory of
human capital pertaining to the covariance structure of residuals from a typical Mincer log
earnings equation. The selection process implicit to job matching is such that we should observe
a decrease in the contribution of the variance of the job-match component when we follow the
workers as they acquire tenure in their job. Results are generally in agreement with these
predicted patterns, especially in the case of more educated workers. On the other hand, if jobs
are considered as pure experience goods, the predicted increase in the variance at the start of the
employment relationship is not supported by the data, except perhaps for less educated workers.
Turning next to human capital theory, the predicted tradeoff between the job-speciﬁc intercept
and slope parameters is strongly supported by the data, especially in the case of workers having
at least a High School diploma.