Essays in Interpersonal Economics

Do people vary in their ability to work with others? In Chapter 1 I compare a worker's productivity in solitary production to their value-added to team production to identify team skills: the contribution to team production beyond that given by general skills. The identifying assumption is that workers use general skills in both production functions, but team skills only in team production. Professional tennis provides a useful setting to compare solo work (singles) to teamwork (doubles). I find that 50% of variation in team output is explained by team skills. This is robust to nonlinear production specifications. Players sort positively-assortatively along both skill dimensions, yielding indirect returns to skills of about half the magnitude of the direct returns. Team skills matter beyond tennis. An accumulating body of evidence identifies interpersonal skills as a driver of labour market trends in developed economies, including wage polarization and the emergence of the female labour force. Chapter 2 summarizes an interdisciplinary body of evidence on how interpersonal skills predict tangible life outcomes, with a focus on the labour market. There is convincing evidence that interpersonal skills play a primary role among noncognitive skills, and contribute to the execution of nonroutine tasks. Partnerships can thrive or falter also in the personal realm. Nearly 40% of new marriages will end in divorce, and recent divorcees remarry quickly. This prompts re-examination of the gains to marriage in terms of risk sharing. In Chapter 3 myself and my supervisor Laura Turner explore marriage and divorce when individuals can engage in on-the-marriage search (OTMS). Introducing OTMS allows us to match the rapid remarriage rates seen in US microdata and to explore the connections between infidelity, divorce, and remarriage reported in the sociology literature. In a second-best contracting world, OTMS has ambiguous implications for marriage as a consumption smoothing device and platform for raising children. We find that OTMS has variable effects on the first and second moments of consumption, making women worse off and men better off. Counterintuitively, OTMS has a positive effect on fertility because it increases the attractiveness of having children for men in mediocre marriages.Ph.D