Research Corner
Research Corner is a new series developed by the Economics with Dr. A team.
is leading this initiative and has been a great contributor on the Discord server.Our goal is to help increase awareness of the diverse questions economists ask, and the areas in which future economists can contribute. Economics is a broad field with diverse interests. If you have published papers to contribute, please share them with us.
Paper Recommendations
The Value of Student Debt Relief and the Role of Administrative Barriers: Evidence from the Teacher Loan Forgiveness Program https://www.nber.org/papers/w31359
This study examines the value of student debt relief for teachers through the federal Teacher Loan Forgiveness (TLF) program. The TLF program offers loan cancellation ranging from $5,000 to $17,500 for teachers who work in high-need schools continuously for five years. The researchers examine whether eligibility for and awareness of the program influence teacher employment decisions.They find that eligibility and information about the program do not affect teacher employment decisions. However, information increases application and receipt rates for eligible teachers. The study suggests that program complexity and administrative barriers limit participation.
The Old Boys' Club: Schmoozing and the Gender Gap https://www.nber.org/papers/w26530
This study explores the social dynamics in office settings and how they can impact employees' careers, specifically regarding the gender pay gap. By analyzing data from a major financial institution and taking advantage of random manager rotations, the researchers found that employees who had more face-to-face interactions with their managers were promoted more frequently. Interestingly, this finding sheds light on a potential explanation for a significant portion of the gender gap in promotions within the company. These results highlight the importance of social interactions in the workplace and their impact on career advancement.
On the Governance of Corrupt Exchange: How Citizens and Officials Build Social Ties to Reduce Corruption’s Transaction Costs https://www.nber.org/papers/w31286
This article explores how social relationships with state officials in the Congo can affect the costs of corruption, specifically in the context of public transport. The researchers find that police stops during transportation routes often result in lengthy bribe negotiations. To bypass this, some drivers have developed relationships with officers, allowing them to attract passengers and negotiate fares without the risk of being stopped, by paying an unofficial toll fee to the officers.
The study conducted a field experiment where drivers were randomly rerouted to different routes on certain days, breaking their existing relationships with officers. This rerouting resulted in a decrease in the drivers' earnings (revenue minus expenses). The researchers also tested the effect of third-party protection against police stops by implementing common practices in the randomization process.
The reduction in earnings due to rerouting was primarily observed on days when drivers did not have protection against police stops. This indicates that the interaction between drivers and the police was the main factor influencing earnings. The study further found that when drivers anticipated being rerouted for only one day, they accepted lower fares and obtained fewer passengers to avoid detection. However, when drivers expected to be rerouted multiple days, they spent time negotiating with the officers and paying larger bribes, which further decreased their earnings. Nevertheless, within three days, these interactions resulted in the development of new relationships and increased revenue for the drivers.
Overall, the findings suggest that establishing relationships with state officials can rapidly reduce the transaction costs of corrupt activities. However, these relationships come at a significant social cost, as they perpetuate corruption and undermine the fairness of public transport systems.
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