National Bureau of Economic Research

About: National Bureau of Economic Research is a nonprofit organization based out in Cambridge, Massachusetts, United States. It is known for research contribution in the topics: Monetary policy & Population. The organization has 2626 authors who have published 34177 publications receiving 2818124 citations. The organization is also known as: NBER & The National Bureau of Economic Research.

Using Maimonides' Rule to Estimate the Effect of Class Size on Scholastic Achievement

Abstract: The twelfth century rabbinic scholar Maimonides proposed a maximum class size of 40. This same maximum induces a nonlinear and nonmonotonic relationship between grade enrollment and class size in Israeli public schools today. Maimonides’ rule of 40 is used here to construct instrumental variables estimates of effects of class size on test scores. The resulting identiecation strategy can be viewed as an application of Donald Campbell’s regression-discontinuity design to the class-size question. The estimates show that reducing class size induces a signiecant and substantial increase in test scores for fourth and efth graders, although not for third graders. When asked about their views on class size in surveys, parents and teachers generally report that they prefer smaller classes. This may be because those involved with teaching believe that smaller classes promote student learning, or simply because smaller classes offer a more pleasant environment for the pupils and teachers who are in them [Mueller, Chase, and Walden 1988]. Social scientists and school administrators also have a longstanding interest in the class-size question. Class size is often thought to be easier to manipulate than other school inputs, and it is a variable at the heart of policy debates on school quality and the allocation of school resources in many countries (see, e.g., Robinson [1990] for the United States; OFSTED [1995] for the United Kingdom; and Moshel-Ravid [1995] for Israel). This broad interest in the consequences of changing class size

The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation

Abstract: In 2003, a new law required that 40 percent of Norwegian firms’ directors be women – at the time only nine percent of directors were women. We use the pre-quota cross-sectional variation in female board representation to instrument for exogenous changes to corporate boards following the quota. We find that the constraint imposed by the quota caused a significant drop in the stock price at the announcement of the law and a large decline in Tobin’s Q over the following years, consistent with the idea that firms choose boards to maximize value. The quota led to younger and less experienced boards, increases in leverage and acquisitions, and deterioration in operating performance, consistent with less capable boards.

Measuring Economic Growth from Outer Space

Abstract: GDP growth is often measured poorly for countries and rarely measured at all for cities or subnational regions. We propose a readily available proxy: satellite data on lights at night. We develop a statistical framework that uses lights growth to augment existing income growth measures, under the assumption that measurement error in using observed light as an indicator of income is uncorrelated with measurement error in national income accounts. For countries with good national income accounts data, information on growth of lights is of marginal value in estimating the true growth rate of income, while for countries with the worst national income accounts, the optimal estimate of true income growth is a composite with roughly equal weights. Among poor-data countries, our new estimate of average annual growth differs by as much as 3 percentage points from official data. Lights data also allow for measurement of income growth in sub- and supranational regions. As an application, we examine growth in Sub Saharan African regions over the last 17 years. We find that real incomes in non-coastal areas have grown faster by 1/3 of an annual percentage point than coastal areas; non-malarial areas have grown faster than malarial ones by 1/3 to 2/3 annual percent points; and primate city regions have grown no faster than hinterland areas. Such applications point toward a research program in which "empirical growth" need no longer be synonymous with "national income accounts."

Exchange Rates and Foreign Direct Investment: an Imperfect Capital Markets Approach

Abstract: We examine the connection between exchange rates and foreign direct investment that arises when globally integrated capital markets are subject to informational imperfections. These imperfections cause external financing to be more expensive than internal financing, so that changes in wealth translate into changes in the demand for direct investment. By systematically lowering the relative wealth of domestic agents, a depreciation of the domestic currency can lead to foreign acquisitions of certain domestic assets. we develop a simple model of this phenomenon and test for its relevance in determining international capital flows.