Dealing with "Cognitive Closure": Paul Krugman vs. Allan Meltzer
Evening Must-Read: Ann Marie Marciarille: Teeth Whitening at the Supreme Court: Occupational Licensing and Antitrust Law

Afternoon Must-Read: Arindrajit Dube, Laura Giuliano, and Jonathan Leonard: Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior

Afternoon Must-Read: Arindrajit Dube, Laura Giuliano, and Jonathan Leonard: Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior: "At a large U.S. retailer...

...discrete pay steps created discontinuities in raises, where workers initially earning within 1 cent of each other got raises that differed by 10 cents.... We find large causal effects of wages on quits.... The large effects of wages on quits mostly reflects relative-pay concerns and not market comparisons.... After accounting for peer effects, quits do not appear to be very sensitive to wages--suggesting substantial employer wage--setting power.... The relative-pay concerns are asymmetric... driven mainly by workers who are paid below their peers, suggesting concerns about fairness or disadvantageous inequity.

https://dl.dropboxusercontent.com/u/15038936/DGL_2015.pdf

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