Abstracts of Working Papers

• "The Returns to High Skill Human Capital"

Abstract: There is a rather large literature devoted to the puzzle of firms investing in the general training of their workers.  Training involves being on the job, and different tasks involve different degrees of general and firm-specific skills. However, linking specific tasks and skills to job switching remains an area of robust inquiry, yet is virtually unexplored in economic history.  A major question is to what extent are taxpayers subsidizing the general human capital of workers? Because general (as opposed to firm-specific) skills can be employed anywhere, workers must pay for their own training in general human capital (in the form of lower wages) in competitive markets. However, this may not be the case in an organization where wages are rigid and not based on profit maximization. Naval officers are thus the residual claimants of skills that can be used in external industries, and they are subsidized for these investments in the Navy through high wages. 

• "The Longevity of Peer Effects"

Abstract: Random assignment of cadets and midshipmen into brigades and companies within service academies have spurred much research on the academic influences of peers in college. The potential longer-term effects of peers on non-academic factors related to work and family however remain under-explored. Here we attempt to fill this gap in the literature by exploiting the random assignment of students into companies at the United States Naval Academy for the graduating classes of the 1920s and 30s.  To look for different kinds of peer influences, one must first measure the extent of academic peer influences by estimating how one’s company-mates’ math and verbal scores as freshman affect one’s scores in a range of subjects as seniors. This helps establish a kind of “baseline” for peer connections established in college. After this, one can attempt to estimate how the relative strength of peer influence can persist and affect a person’s employment, wages, marital status and location. One way to do this is by linking naval personnel records to the censuses of 1940 and 1950 (the latter becomes available after April 2022). Finally, and from this, we assess what matters more for longer-term career success – grades earned in college, or peers established in college.

• "How Important are Good Leaders for Worker Productivity?"

Abstract: The pseudo-random assignments of officers to various ships and stations allow one to test which traits among those in charge are important for individual success. Success can be measured in four ways – rates of promotion, accumulation of awards or licenses and certifications, eventual command of a ship or station, and external wages for those who exit naval service. Because the vast majority of those awarded command in any naval position are Naval Academy graduates, we have various trait measures for those in charge measured both during and after college. This research asks questions such as: How short-lived are the positive impacts of effective leaders? And are leaders more effective in promoting the success of their workers if the characteristics between leaders and workers are more similar?

• "The Value of the Sheepskin Revisited"

Abstract: How valuable is a college degree, and how has that value changed over time? To help provide answers, we can compare officers in the Navy (during the first half of the twentieth century) who had college diplomas versus those that did not.  President Roosevelt signed into law an act of Congress in May 1933 providing for the Bachelor of Science degree for all service academy graduates (before this date midshipmen commissioned through USNA were granted certificates of completion). Four years later, Congress authorized the superintendent to award a Bachelor of Science degree to all living graduates. This meant that suddenly officers were granted something that didn’t particularly mean anything within the service, but potentially raised the transferability of the officer’s human capital to private sector employment.  To produce a control group with which we can compare our treatment group, we look at those who participate in the Navy ROTC program. This program was established in 1926 with six universities to start (University of California at Berkeley, Georgia Institute of Technology, Northwestern University, University of Washington, and Harvard and Yale Universities.) This means that none of these officers before 1930 held a college degree. During the 1930s, we observe a mix of those with degrees and those without, and then in 1937 every officer in the Navy was granted a degree. Thus we can look at rates of exit (and ultimate employment) both before and after 1937, using a difference-in-difference approach with the ROTC officers as the control group, to measure the value of a sheepskin.

• "How Building the Panama Canal Benefitted Human Capital Investments in the United States"

Abstract: At the turn of the 20th century, malaria and yellow fever were periodic problems in the United States, particularly in areas south of the Mason-Dixon line. Northern cities and rural areas had a built-in human capital advantage from being already large and relatively unscathed by Civil War, but they also benefitted by keeping workers relatively healthy and untouched by the tropical diseases that frequently hit the South.  This paper explores the causal effect of public health on the development of human capital in the post-bellum United States. We use an instrumental variable of doctors who returned from the construction of the Panama Canal to serve as an exogenous control for improvements in local public health.  This enable us to generate clean estimates of the causal effect of public health on human capital development to have empirical bite.