In this paper I use data from Williams College to implement a quasi-experimental empirical strategy aimed at measuring peer effects in academic outcomes. In particular, I use data on individual student's grades, SAT scores, and the SAT scores of their roommates. I argue that first year roommates are assigned randomly with respect to academic ability. This allows me to measure differences in grades of high, medium, or low SAT students living with high, medium or low SAT roommates. With random assignment these estimates would provide compelling estimates of the effect of roommates' academic characteristics on an individual's grades. I also consider the effect of peers at somewhat more aggregated levels. In particular, I consider the effects associated with different "academic environments" in clusters of rooms that define distinct social units. The results suggest that peer effects are almost always linked more strongly with verbal SAT scores than math SAT scores. Students in the middle of the SAT distribution may do somewhat worse in terms of grades if they share a room with a student who is in the bottom 15 percent of the verbal SAT distribution. Students in the top of the SAT distribution are least affected by the SAT scores of their (room or entry) peers. The effects are not large, but are statistically significant in many models.3

Abstract-We use data from the 1993 and 1998 National Surveys of Small Business Finances to examine the existence of racial discrimination in the small-business credit market. We conduct an econometric analysis of loan outcomes by race and nd that black-owned small businesses are about twice as likely to be denied credit even after controlling for differences in creditworthiness and other factors. A series of speci cation checks indicates that this gap is unlikely to be explained by omitted variable bias. These results indicate that the racial disparity in credit availability is likely caused by discrimination.

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This paper examines the extent to which differences in welfare generosity across states lead to interstate migration. Using microdata from the National Longitudinal Survey of Youth between 1979 and 1992, we employ a quasi-experimental design that utilizes the categorical eligibility of the welfare system. The "treatment" group consists of all those in the survey who appear eligible to participate in Aid to Families with Dependent Children. The "control" group contains those who are poor but ineligible for other reasons. The pattern of cross-state moves among poor single women with children who are likely to be eligible for benefits (treatment-group members) is compared to the pattern among other poor households. We find little evidence indicating that welfare-induced migration is a widespread phenomenon.A number of different perspectives exist on the desirability of interstate variation in benefits and its 1 potential consequences. One is that the resulting "variety" of benefit packages could allow people to find locations better matching their preferences (Tiebout, 1956). Alternatively, state governments could react to a perceived inmigration of poor individuals by reducing their welfare benefits. Thus, the threat of "hordes at the gate" could result in a "downward competition," and the final outcome would be a less generous welfare system. Indeed, the belief by several state governments that they are welfare magnets has led to calls for a variety of policy changes, including benefit reductions, residency requirements, or an increased federal role in establishing uniform benefits. Finally, if individuals do not migrate in response to benefit differentials (perhaps due to financial constraints) the system will result in uneven treatment of the poverty population. An Empirical Analysis of the Welfare Magnet DebateUsing the NLSY Recent discussions surrounding welfare reform have stridently asserted the failure of Great Society welfare programs. Much of the hostility has been directed at the joint state-federal program, Aid to Families with Dependent Children (AFDC). Proposals for a "new federalism" currently being advanced would radically alter the balance of power between the federal and state governments by moving much of the authority concerning welfare programs to the state level. States would receive block grants from the federal government and would likely exercise wide discretion in using these funds. This, it is argued, would enhance innovation and ultimately reduce poverty-both by program innovation and by eliminating perverse incentives associated with existing federal policy.The debate over which level of government should design and administer welfare policy has a long history, a crucial issue being the potential for development of interstate inequality in program benefits under a state-dominated system. This inequality could stimulate migration-allegedly generating a variety of potentially negative consequences. Indeed, it is often asserted that traditionally 1 "generous" states such as Wisconsin, New ...