The disability system in the United States spends approximately $120 billion a year to keep millions of working-aged people on poverty-level stipends while essentially banning them from working. A reinvented system would focus on moving people from dependence to independence with flexible vocational rehabilitation vouchers, work-oriented assessments, and simple rules that guarantee that nobody would ever be made worse off by working. A problem with creating a system that combines work and partial disability benefits is that it may attract new entrants onto the disability rolls. A key insight of this proposal is that these generous work incentives can be tested on the current six million working-age recipients without inducing entry that raises costs.

This paper uses the General Social survey and the comparison between the National Longitudinal Survey of Young Men and of Youth to measure how returns to young men's family background have changed from the late 1970's to the late 1980's and early 1990's. Coming from a wealthy family and having a well-educated father who worked in a high-prestige occupation were much more powerful predictors of a young man's success in the later period. In contrast, maternal education was less important in determining a young man's income and educational attainment. Rising returns to education coupled with a constant relation between family background and education explains most of the rising importance of family background.

This paper utilizes a rich data set on workers and their employers in the US and Japan to test several predictions of efficiency wage theories. The data set incorporates numerous objective and subjective performance measures including turnover, effort, absences, satisfaction, and commitment. It also contains extremely good measures of establishment, worker, and job characteristics. For almost all of the performance measures in both countries efficiency wage theories are supported; that is, workers receiving particularly high wages given their observable characteristics report that they are less likely to quit, more satisfied with their pay, and so forth. The between-establishment component of wages is a more reliable predictor of performance than the within-establishment component.

This paper utilizes a rich data set on workers and their employers in the US and Japan to test several predictions of human capital theory. The data set incorporates both prospective and retrospective measures of turnover, includes multiple measures of training, and provides a basis for calculating plant-specific returns to tenure. Contrary to human capital theory, there is no evidence that establishments with high levels of training have either high returns to tenure or low levels of turnover. Surprisingly, establishments with high returns to tenure do not have low levels of turnover.

Youth sharing a school and neighborhoods often have similar academic achievement. This correlation between neighborhood quality and youth achievement holds even when controlling for many observable features of a family. Nevertheless, the correlation is not entirely causal because families and youth are sorted into relatively homogeneous groups. Thus, the quality of the school or neighborhood in part acts as a proxy for hard-to-measure attributes of the family.

To enable separate estimation of sorting and school effects, we use the characteristics of the high school students will attend as an additional indicator of family background. When we compare youth who are at the same junior high school, the above measure is an appropriate instrument to identify family background separately from neighborhood and junior high school effects. Even after this correction, the point estimate of school effects on student achievement remains large and is statistically significant.

Growing up in a family that lacks a biological father is correlated with a number of poor outcomes for youths. This study uses the National Educational Longitudinal Survey of 1988 to examine the extent to which differences in income or in parental involvement measurement error in income from single-parent homes affects the results in a large way because of the variability in income earned over a youth's teen years. Overall, we find that both lower income and lower parental involvement explain most of the disadvantages of youth in single-parent homes, but neither explains the disadvantages of families with stepfathers.