This paper estimates the effect of education on participation in criminal activity among men accounting for endogeneity of schooling. Crime is a negative externality with enormous social costs, so if education reduces crime, then schooling may have large social benefits that are not taken into account by individuals.The paper begins by analyzing the effect of schooling on incarceration using Census data and changes in state compulsory attendance laws over time as an instrument for schooling. Changes in these laws have a significant effect on educational achievement, and we reject tests for reverse causality. Moreover, increases in compulsory schooling ages are not correlated with increases in state resources devoted to fighting crime. Both OLS and IV estimates agree and suggest that additional years of secondary schooling reduce the probability of incarceration with the greatest impact associated with completing high school. Differences in educational attainment between black and white men can explain as much as 23% of the black-white gap in male incarceration rates.We corroborate our findings on incarceration using FBI data on arrests that distinguish among different types of crimes. The biggest impacts of education are associated with murder, assault, and motor vehicle theft. We also examine the effect of schooling on self-reported crime in the NLSY and find that our estimates for imprisonment and arrest are caused by changes in criminal behavior and not educational differences in the probability of arrest or incarceration conditional on crime. Given the consistency of our estimates, we calculate the social savings from crime reduction associated with high school graduation among men. The externality is about 14-26% of the private return, suggesting that a significant part of the social return to completing high school for men comes in the form of externalities from crime reduction. * We are grateful to Daron Acemoglu and Josh Angrist for their data on compulsory attendance laws and useful suggestions. We thank

We examine the effect of maternal education on birth outcomes using Vital Statistics Natality data for 1970 to 1999. We also assess the importance of four channels through which maternal education may improve birth outcomes: use of prenatal care, smoking, marriage, and fertility. In an effort to account for the endogeneity of educational attainment, we use data about the availability of colleges in the woman's county in her seventeenth year as an instrument for maternal education. We nd that higher maternal education improves infant health, as measured by birth weight and gestational age. It also increases the probability that a new mother is married, reduces parity, increases use of prenatal care, and reduces smoking, suggesting that these may be important pathways for the ultimate effect on health. Our results add to the growing body of literature which suggests that estimates of the returns to education which focus only on increases in wages understate the total return.

for many useful suggestions on this and an earlier draft. All errors are naturally my own. Financial support from the A. P. Sloan Dissertation Scholarship is gratefully acknowledged. The views expressed herein are those of the author and not necessarily those of the National Bureau of Economic Research.

We study peer effects in the workplace. Specifically, we investigate whether, how, and why the productivity of a worker depends on the productivity of coworkers in the same team. Using high-frequency data on worker productivity from a large supermarket chain, we find strong evidence of positive productivity spillovers from the introduction of highly productive personnel into a shift. Worker effort is positively related to the productivity of workers who see him, but not workers who do not see him. Additionally, workers respond more to the presence of coworkers with whom they frequently interact. We conclude that social pressure can partially internalize free-riding externalities that are built into many workplaces. (JEL J24, L81, M54)

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Do parents have preferences over the gender of their children, and if so, does this have negative consequences for daughters versus sons? In this paper, we show that child gender affects the marital status, family structure, and fertility of a significant number of American families. Overall, a first-born daughter is significantly less likely to be living with her father compared to a first-born son. Three factors are important in explaining this gap. First, women with first-born daughters are less likely to marry. Strikingly, we also find evidence that the gender of a child "in utero "affects shotgun marriages. Among women who have taken an ultrasound test during pregnancy, mothers who have a girl are less likely to be married at delivery than those who have a boy. Second, parents who have first-born girls are significantly more likely to be divorced. Third, after a divorce, fathers are much more likely to obtain custody of sons compared to daughters. These three factors have serious negative income and educational consequences for affected children. What explains these findings? In the last part of the paper, we turn to the relationship between child gender and fertility to help sort out parental gender bias from competing explanations for our findings. We show that the number of children is significantly higher in families with a first-born girl. Our estimates indicate that first-born daughters caused approximately 5500 more births per year, for a total of 220,000 more births over the past 40 years. Taken individually, each piece of empirical evidence is not sufficient to establish the existence of parental gender bias. But taken together, the weight of the evidence supports the notion that parents in the U.S. favour boys over girls. Copyright © 2008 The Review of Economic Studies Limited.

We quantify agglomeration spillovers by estimating the impact of the opening of a large manufacturing plant on the total factor productivity (TFP) of incumbent plants in the same county. We use the location rankings of profit-maximizing firms to compare incumbent plants in the county where the new plant ultimately chose to locate (the "winning county"), with incumbent plants in the runner-up county (the "losing county"). Incumbent plants in winning and losing counties have similar trends in TFP in the seven years before the new plant opening. Five years after the new plant opening, TFP of incumbent plants in winning counties is 12% higher than TFP of incumbent plants in losing counties. Consistent with some theories of agglomeration economies, this effect is larger for incumbent plants that share similar labor and technology pools with the new plant. Consistent with a spatial equilibrium model, we find evidence of a relative increase in skill-adjusted labor costs in winning counties. This indicates that the ultimate effect on profits is smaller than the direct increase in productivity.

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