Showing papers by "Michael Kremer published in 2015"

Self-Control at Work

Abstract: Self-control problems change the logic of agency theory by partly aligning the interests of the firm and worker: both now value contracts that elicit future effort. Findings from a year-long field experiment with full-time data entry workers support this idea. First, workers increase output by voluntarily choosing dominated contracts (which penalize low output but give no additional rewards for high output). Second, effort increases closer to (randomly assigned) paydays. Third, the contract and payday effects are strongly correlated within workers, and this correlation grows with experience. We suggest that workplace features such as high-powered incentives or effort monitoring may provide self-control benefits.

Education, HIV, and Early Fertility: Experimental Evidence from Kenya.

Abstract: A seven-year randomized evaluation suggests education subsidies reduce adolescent girls' dropout, pregnancy, and marriage but not sexually transmitted infection (STI). The government's HIV curriculum, which stresses abstinence until marriage, does not reduce pregnancy or STI. Both programs combined reduce STI more, but cut dropout and pregnancy less, than education subsidies alone. These results are inconsistent with a model of schooling and sexual behavior in which both pregnancy and STI are determined by one factor (unprotected sex), but consistent with a two-factor model in which choices between committed and casual relationships also affect these outcomes.

Preventives Versus Treatments

Abstract: Preventives are sold ex ante, before disease status is realized, while treatments are sold ex post. Even if the mean of the ex ante distribution of consumer values is the same as that ex post, the shape of the distributions may differ, generating a difference between the surplus each product can extract. If, for example, consumers differ only in ex ante disease risk, then a monopolist would have more difficulty extracting surplus with a preventive than with a treatment because treatment consumers, having contracted the disease, no longer differ in disease risk. We show that the ratio of preventive to treatment producer surplus can be arbitrarily small, in particular when the distribution of consumer values has a Zipf shape and the disease is rare. The firm’s bias toward treatments can be reversed, for example, if the source of private information is disease severity learned ex post. The difference between the producer surplus earned from the products can result in distorted RD the deadweight loss from this distortion can be as large as the entire producer-surplus difference. Calibrations for HIV and heart attacks based on risk factors in the U.S. population suggest that the distribution of disease risk is sufficiently Zipf-similar to generate substantial differences between producer surplus from preventives and treatments. Empirically, we find that proxies for the Zipf-similarity of the disease-risk distribution are associated a significantly lower likelihood of vaccine development but not drug development. JEL Codes: O31, L11, I18, D42.

When Should Governments Subsidize Health? The Case of Mass Deworming

Abstract: We discuss how evidence and theory can be combined to provide insight on the appropriate subsidy level for health products, focusing on the specific case of deworming. Although intestinal worm infections can be treated using safe, low-cost drugs, some have challenged the view that mass school-based deworming should be a policy priority. We review well-identified research which both uses experimental or quasiexperimental methods to demonstrate causal relationships and adequately accounts for epidemiological externalities from deworming treatment, including studies of deworming campaigns in the Southern United States, Kenya, and Uganda. The existing evidence shows consistent positive impacts on school participation in the short run and on academic test scores, employment, and income in the long run, while suggesting that most parents will not pay for deworming treatment that is not fully subsidized. There is also evidence for a fiscal externality through higher future tax revenue, which may exceed the cost of the program. Our analysis suggests that the economic benefits of school-based deworming programs are likely to exceed their costs in places where worm infestations are endemic. This would likely be the case even if the benefits were only a fraction of estimates in the existing literature. JEL codes: H2, H51, I1, I12, I15, I2, I20, I25, I3, O1

Commentary: Deworming externalities and schooling impacts in Kenya: a comment on Aiken et al. (2015) and Davey et al. (2015)

Abstract: Commentary: Deworming externalities and schooling impacts in Kenya: a comment on Aiken et al. (2015) and Davey et al. (2015) Joan Hamory Hicks, Michael Kremer and Edward Miguel* University of California, Center for Effective Global Action, Berkeley, California, USA, Department of Economics, Harvard University and NBER, Cambridge, Massachusetts, USA and Department of Economics, University of California, Berkeley and NBER

The Case for Mass Treatment of Intestinal Helminths in Endemic Areas

Abstract: Two articles published earlier this year in the International Journal of Epidemiology [1,2] have re-ignited the debate over the World Health Organization’s long-held recommendation of mass-treatment of intestinal helminths in endemic areas. In this note, we discuss the content and relevance of these articles to the policy debate, and review the broader research literature on the educational and economic impacts of deworming. We conclude that existing evidence still indicates that mass deworming is a cost-effective health investment for governments in low-income countries where worm infections are widespread.

Education, HIV, and Early Fertility: Experimental Evidence from Kenya

Abstract: A seven-year randomized evaluation suggests education subsidies reduce adolescent girls’ dropout, pregnancy, and marriage but not sexually transmitted infection (STI). The government’s HIV curriculum, which stresses abstinence until marriage, does not reduce pregnancy or STI. Both programs combined reduce STI more, but cut dropout and pregnancy less, than education subsidies alone. These results are inconsistent with a model of schooling and sexual behavior in which both pregnancy and STI are determined by one factor (unprotected sex), but consistent with a two-factor model in which choices between committed and casual relationships also affect these outcomes.

Worms at work: Long-run impacts of a child health investment

Abstract: This study estimates long-run impacts of a child health investment, exploiting community-wide experimental variation in school-based deworming. The program increased education among women and labor supply among men, with accompanying shifts in labor market specialization. Ten years after deworming treatment, women who were eligible as girls are 25% more likely to have attended secondary school, halving the gender gap. They reallocate time from traditional agriculture into cash crops and entrepreneurship. Men who were eligible as boys stay enrolled for more years of primary school, work 17% more hours each week, spend more time in entrepreneurship, are more likely to hold manufacturing jobs, and miss one fewer meal per week. We estimate an annualized financial internal rate of return of at least 32.2%.

Comment on Macartan Humphreys’ and Other Recent Discussions of the Miguel and Kremer (2004) Study

Abstract: The replication of the Miguel and Kremer 2004 Econometrica paper, “Worms: Identifying Impacts on Education and Health In the Presence of Treatment Externalities”, carried out by Aiken et al. and Davey et al. and our responses to the replication, which can be found here and here, triggered discussions by scholars and media taking an interest in the evidence base for mass deworming policies in regions where intestinal worm infection are endemic.

When Should Governments Subsidize Health? The Case of Mass Deworming

Abstract: We discuss how evidence and theory can be combined to provide insight on the appropriate subsidy level for health products, focusing on the specific case of deworming. Although intestinal worm infections can be treated using safe, low-cost drugs, some have challenged the view that mass school-based deworming should be a policy priority. We review well-identified research which both uses experimental or quasi-experimental methods to demonstrate causal relationships and adequately accounts for epidemiological externalities from deworming treatment, including studies of deworming campaigns in the Southern United States, Kenya, and Uganda. The existing evidence shows consistent positive impacts on school participation in the short run and on academic test scores, employment, and income in the long run, while suggesting that most parents will not pay for deworming treatment that is not fully subsidized. There is also evidence for a fiscal externality through higher future tax revenue, which may exceed the cost of the program. Our analysis suggests that the economic benefits of school-based deworming programs are likely to exceed their costs in places where worm infestations are endemic. This would likely be the case even if the benefits were only a fraction of estimates in the existing literature.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Preventives Versus Treatments

Abstract: Preventives are sold ex ante, before disease status is realized, while treatments are sold ex post. Even if the mean of the ex ante distribution of consumer values is the same as that ex post, the shape of the distributions may differ, generating a difference between the surplus each product can extract. If, for example, consumers differ only in ex ante disease risk, then a monopolist would have more difficulty extracting surplus with a preventive than with a treatment because treatment consumers, having contracted the disease, no longer differ in disease risk. We show that the ratio of preventive to treatment producer surplus can be arbitrarily small, in particular when the distribution of consumer values has a Zipf shape and the disease is rare. The firm's bias toward treatments can be reversed, for example, if the source of private information is disease severity learned ex post. The difference between the producer surplus earned from the products can result in distorted RD the deadweight loss from this distortion can be as large as the entire producer-surplus difference. Calibrations for HIV and heart attacks based on risk factors in the U.S. population suggest that the distribution of disease risk is sufficiently Zipf-similar to generate substantial differences between producer surplus from preventives and treatments. Empirically, we find that proxies for the Zipf-similarity of the disease-risk distribution are associated a significantly lower likelihood of vaccine development but not drug development.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Worms at Work: Long-Run Impacts of a Child Health Investment

Abstract: This study estimates long-run impacts of a child health investment, exploiting community-wide experimental variation in school-based deworming. The program increased labor supply among men and education among women, with accompanying shifts in labor market specialization. Ten years after deworming treatment, men who were eligible as boys stay enrolled for more years of primary school, work 17% more hours each week, spend more time in non-agricultural self-employment, are more likely to hold manufacturing jobs, and miss one fewer meal per week. Women who were in treatment schools as girls are approximately one quarter more likely to have attended secondary school, halving the gender gap. They reallocate time from traditional agriculture into cash crops and non-agricultural self-employment. We estimate a conservative annualized financial internal rate of return to deworming of 32%, and show that mass deworming may generate more in future government revenue than it costs in subsidies.