Using the universe of high school and college admissions data in Croatia, we geocoded nearly half a million students’ residential addresses to investigate how their college and major choices are influenced by older neighbors and peers. Using an RDD to exploit time and program variation in admission cutoffs, we find that having an older neighbor who was admitted to and enrolled in a program increases a student’s probability of applying to the program by about 20%. We find that this effect consistently holds only for the closest neighbors, both in terms of distance and age difference. Female students are more likely to be influenced by older neighbors’ choices, and male older neighbors’ admission has a larger impact on both male and female students compared to female older neighbors. The effect is stronger if the student-neighbor pair lives in a region that does not have its own university, implying that the value of information in rural areas is higher. We find evidence that students don’t follow their older neighbors to less competitive programs; instead, they are more likely to apply for the same programs their older neighbors were admitted to when the program is more prestigious. Next, we utilize the variation in weight scheme of Croatia’s college study programs to show evidence, beyond college choices, of how older neighbors affect the human capital formation of their younger peers. The main channel through which we observe this effect is during high school, through specialization in the subjects needed to gain admittance to older neighbors’ college programs. These findings shed light on the intricate dynamics shaping educational decisions and underscores the significant role older neighbors play in guiding younger peers toward specific academic pathways.

Wir untersuchen die kurz- und langfristigen Auswirkungen eines starken Anstiegs chinesischer Importe auf Wahlergebnisse in Europa. Populistische sowie links- und rechtsextreme Parteien gewannen erst viele Jahre nach dem Höhepunkt des China-Schocks bedeutenden Zuwachs an Wählerstimmen. Wir zeigen, dass die Auswirkungen von Importschocks überwiegend zugunsten populistischer Parteien ausfallen. In geringerem Maße profitieren in der kurzen Frist zudem linksextreme Parteien, langfristig hingegen rechtsextreme Parteien. Die Effekte auf das Wahlverhalten sind jedoch moderat und wir schlussfolgern, dass Importschocks den Aufstieg der politischen Ränder nur in begrenztem Maße erklären können.

We document and dissect a new stylized fact about firm growth: the shift from labor to intermediate inputs. This shift occurs in input quantities, cost and output shares, and output elasticities. We establish this fact using German firm-level data and replicate it in administrative firm data from 11 additional countries. We also document these patterns in micro-aggregated industry data for 20 European countries (and, with respect to industry cost shares, for the US). We rationalize this novel regularity within a parsimonious model featuring (i) an elasticity of substitution between intermediates and labor that exceeds unity, and (ii) an increasing shadow price of labor relative to intermediates, due to monopsony power over labor or labor adjustment costs. The shift from labor to intermediates accounts for one half to one third of the decline in the labor share in growing firms (the remainder is due to wage markdowns and markups) and rationalizes most of the labor share decline in growing industries.

We document and dissect a new stylized fact about firm growth: the shift from labor to intermediate inputs. This shift occurs in input quantities, cost and output shares, and output elasticities. We establish this fact using German firm-level data and replicate it in administrative firm data from 11 additional countries. We also document these patterns in micro-aggregated industry data for 20 European countries (and, with respect to industry cost shares, for the US). We rationalize this novel regularity within a parsimonious model featuring (i) an elasticity of substitution between intermediates and labor that exceeds unity, and (ii) an increasing shadow price of labor relative to intermediates, due to monopsony power over labor or labor adjustment costs. The shift from labor to intermediates accounts for one half to one third of the decline in the labor share in growing firms (the remainder is due to wage markdowns and markups) and rationalizes most of the labor share decline in growing industries.