Online Format vs. Live Mode of Instruction: Do Human Capital Differences or Differences in Returns to Human Capital Explain the Differences in Outcomes?

Our paper asks the question: Does mode of instruction format (live or online format) effect test scores in the principles of macroeconomics classes? Our data are from several sections of principles of macroeconomics, some in live format, some in online format, and all taught by the same instructor. We find that test scores for the online format, when corrected for sample selection bias, are four points higher than for the live format, and the difference is statistically significant. One possible explanation for this is that there was slightly higher human capital in the classes that had the online format. A Oaxaca decomposition of this difference in grades was conducted to see how much was due to human capital and how much was due to the differences in the rates of return to human capital. This analysis reveals that 25% of the difference was due to the higher human capital with the remaining 75% due to differences in the returns to human capital. It is possible that for the relatively older student with the appropriate online learning skill set, and with schedule constrains created by family and job, the online format provides them with a more productive learning environment than does the alternative traditional live class format. Also, because our data are limited to the student s academic transcript, we recommend future research include data on learning style characteristics, and the constraints formed by family and job choices.

Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes

We use a novel dataset and research design to empirically detect the effect of social interactions among neighbors on labor market outcomes. Specifically, using Census data that characterize residential and employment locations down to the city block, we examine whether individuals residing in the same block are more likely to work together than individuals in nearby but not identical blocks. We find significant evidence of social interactions operating at the block level: residing on the same versus nearby blocks increases the probability of working together by over 33 percent. The results also indicate that this referral effect is stronger when individuals are similar in sociodemographic characteristics (e.g., both have children of similar ages) and when at least one individual is well attached to the labor market. These findings are robust across various specifications intended to address concerns related to sorting and reverse causation. Further, having determined the characteristics of a pair of individuals that lead to an especially strong referral effect, we provide evidence that the increased availability of neighborhood referrals has a significant impact on a wide range of labor market outcomes including employment and wages.