We test for customer discrimination with data from more than 800 retail stores employing over 70,000 individuals matched to census data on the demographics of each store's community. While our tests detect some increase in sales when the workforce more closely resembles potential customers, the effects we find are modest in magnitude. Customer discrimination is neither strong nor pervasive. We find little payoff to matching employee demographics to those of potential customers except when the customers do not speak English.

A new stylized fact in development economics is the importance of social capital in promoting economic growth. This paper examines the effect of social capital on industrialization in Indonesia. We analyze a rich set of social capital and social interaction measures, including voluntary associational activity and levels of trust and informal cooperation. The main finding is that initial social capital does not predict subsequent industrial development across 274 Indonesian districts. Though these findings are for only a single nation and may not apply everywhere, they call into question recent claims regarding social capital and economic development.

Loss of a parent is one of the most traumatic events a child can face. If loss of a parent reduces investments in children, it can also have long-lasting implications. This study uses parametric and seminonpara-metric matching techniques to estimate how one human capital investment, school enrollment, is affected by a parent's recent death. We analyze data from 600,000 households from Indonesia's National Socioeconomic Survey (Susenas) during 1994–1996. We find a parent's recent death has a large effect on a child's enrollment. We also use this shock to test several theories of intrahousehold allocation and find little differential treatment based on the gender of the child or the deceased parent.

Teen out-of-wedlock mothers have lower education and earnings than do peers who have children later. This study uses the National Educational Longitudinal Survey of 1988 to examine the extent to which the apparent effects of out-of-wedlock teen childbearing are due to preexisting disadvantages of the young women and their families. We use a novel method that matches teen mothers to similar young women in their junior high school (that is, prior to pregnancy). We find that out-of-wedlock fertility reduces education substantially, although far less than the cross-sectional comparisons of means suggest. We further find that this effect is larger among those with lower probabilities of having a child out of wedlock.