Showing papers in "Journal of Human Resources in 2016"

Freshman Year Financial Aid Nudges: An Experiment to Increase FAFSA Renewal and College Persistence

Abstract: In this paper we investigate, through a randomized controlled trial design, the impact of a personalized text messaging intervention designed to encourage college freshmen to refile their Free Application for Federal Student Aid (FAFSA) and maintain their financial aid for sophomore year. The intervention produced large and positive effects among freshmen at community colleges where text recipients were almost 14 percentage points more likely to remain continuously enrolled through the Spring of sophomore year. By contrast, the intervention did not improve sophomore year persistence among freshmen at four-year institutions among whom the rate of persistence was already high.

Heterogeneous Income Profiles and Lifecycle Bias in Intergenerational Mobility Estimation

Abstract: Using short snapshots of income in intergenerational mobility estimation causes “lifecycle bias” if the snapshots cannot mimic lifetime outcomes. We use uniquely long series of Swedish income data to show that this bias is large and to examine current strategies to reduce it. We confirm that lifecycle bias is smallest when incomes are measured around midlife, a central implication from a widely adopted generalization of the classical errors-in-variables model. However, the model cannot predict the ideal age of measurement or eliminate lifecycle bias at other ages. We illustrate how extensions of this model can reduce the bias further.

High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses

Abstract: Financial literacy and cognitive capabilities are convincingly linked to the quality of financial decision-making. Yet, there is little evidence that education intended to improve financial decision-making is successful. Using plausibly exogenous variation in exposure to state-mandated personal finance and mathematics high school courses, affecting millions of students, this paper answers the question “Can high school graduation requirements impact financial outcomes?” The answer is yes, although not via traditional personal finance courses, which we find have no effect on financial outcomes. Instead, we find additional mathematics training leads to greater financial market participation, investment income, and better credit management, including fewer foreclosures.

Effects of the Minimum Wage on Employment Dynamics

Abstract: The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. We argue that the minimum wage will impact employment over time through changes in growth rather than an immediate drop in relative employment levels. We show that commonly used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects. Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years. This finding is supported using several empirical specifications.

Booms, Busts, and Fertility: Testing the Becker Model Using Gender-Specific Labor Demand

Abstract: In this paper, I present estimates of the effect of local labor demand shocks on birth rates. To identify exogenous variation in male and female labor demand, I create indices that exploit cross-sectional variation in industry composition, changes in gender-education composition within industries, and growth in national industry employment. Consistent with economic theory, I find that improvements in men’s labor market conditions are associated with increases in fertility while improvements in women’s labor market conditions have smaller negative effects. I separately find that increases in unemployment rates are associated with small decreases in birth rates at the state level.

Saving Teens: Using a Policy Discontinuity to Estimate the Effects of Medicaid Eligibility

Abstract: We examine the immediate and longer-term mortality effects of public health insurance eligibility during childhood. Our identification exploits expansions in Medicaid eligibility that applied only to children born after September 30, 1983. This feature resulted in a large discontinuity in the cumulative years of eligibility of children at this birth date cutoff. Under the expansions, black children gained twice the years of Medicaid eligibility as white children. We find a later-life decline in the rate of disease-related mortality for black cohorts born after the cutoff. We find no evidence of a similar mortality improvement for white children.

The Early Origins of Birth Order Differences in Children’s Outcomes and Parental Behavior

Abstract: :We document birth order differences in cognitive and noncognitive outcomes and maternal behavior from birth to adolescence using the National Longitudinal Survey of Youth 1979 (NLSY79). As early as age one, later-born children score lower on cognitive tests than their siblings, and the gap increases until school entry and remains statistically significant thereafter. Variations in parental behavior, such as cognitive stimulation by mothers, can explain a large portion of the birth order differences in cognitive abilities before school entry. Our findings suggest that broad shifts in parental behavior are plausible explanations for the observed birth order differences in education and labor market outcomes.

Bridging Education Gender Gaps in Developing Countries: The Role of Female Teachers

Abstract: We study gender gaps in learning and the effectiveness of female teachers in reducing them using a large, representative, annual panel data set from the Indian state of Andhra Pradesh. We find a small but significant negative trend in girls’ test scores in both math and language. Using five years of panel data, we find that teachers are more effective at teaching students of their own gender. Female teachers are more effective at teaching girls than male teachers but no worse at teaching boys. Thus, hiring female teachers on the current margin may reduce gender gaps in test scores without hurting boys.

Maternal Stress and Child Outcomes: Evidence from Siblings

Abstract: We study how maternal stress affects offspring outcomes. We find that in utero exposure to elevated levels of the stress hormone cortisol negatively affects offspring cognition, health, and educational attainment. These findings are based on comparisons between siblings that limit variation to short-lived shocks and controls for unobserved differences between mothers that could bias estimates. Our results are consistent with recent experimental results in the neurobiological literature linking exogenous exposure to stress hormones in utero with declines in offspring cognitive, behavioral, and motor development. Moreover, we find that not only are mothers with low levels of human capital characterized by higher and more variable cortisol levels but that the negative impact of elevated cortisol on their offspring is greater. These results suggest that maternal stress may play a role in the intergenerational persistence of poverty.

Why Have Divorce Rates Fallen?: The Role of Women’s Age at Marriage

Abstract: American divorce rates rose from the 1950s to the 1970s peaked around 1980, and have fallen ever since. The mean age at marriage also substantially increased after 1970. I explore the extent to which the rise in age at marriage can explain the decrease in divorce rates for cohorts marrying after 1980 using data from the Survey of Income and Program Participation, 1979 National Longitudinal Survey of Youth, and National Survey of Family Growth. Three different empirical approaches suggest that the increase in women’s age at marriage is the main proximate cause of the fall in divorce rates.

Effects of Early-Life Exposure to Sanitation on Childhood Cognitive Skills: Evidence from India’s Total Sanitation Campaign

Abstract: Early life health and net nutrition shape childhood and adult cognitive skills and human capital. In poor countries -- and especially in South Asia -- widespread open defecation without making use of a toilet or latrine is an important source of childhood disease. This paper studies the effects on childhood cognitive achievement of early life exposure to India's Total Sanitation Campaign, a large government program that encouraged local governments to build and promote use of inexpensive pit latrines. In the early years of the program studied here, the TSC caused six-year-olds exposed to it in their first year of life to be more likely to recognize letters and simple numbers. The results suggest both that open defecation is an important threat to the human capital of the Indian labor force, and that a program feasible to low capacity governments in developing countries could improve average cognitive skills.

Women's earnings reexamined

Abstract: Since a discussion of details may obscure important general issues, we start by restating what we consider to be the two major contributions of our 1974 study [5]: 1. The methodological contribution lies in the specification of an earnings function when human capital investment occurs at different rates (including zero) over various segments of the life cycle. Such specifications are appropriate for persons when market work does not continue throughout the usual working age, or for analyses of continuous work histories segmented by some relevant criteria such as job change and occupational or geographic mobility. Applied work on these subjects continues [1], and specifications are undergoing refinement. In retrospect, the model we used to analyze earnings of women is not the best, but it is serviceable, which permits us to refrain from injecting new matters into the present discussion. 2. The substantive interest in our study of earnings of women focuses on several propositions: (a) Even with identical current characteristics, women whose past experience was shorter have currently lower wages, as their total job-investments were smaller. (b) Total investments are smaller not only because they are spread over fewer years of work experience, but also because persons who spend less time in market work invest less per year worked than persons with longer work experience. (c) If work experience is interrupted for any significant length of time, job skills tend to erode, so the human capital stock is reduced by depreciation or "atrophy." The relevance of these propositions to the analysis of the sexual wage gap is obvious. In part, women's wages are lower than men's because their labor force attachment is shorter and often discontinuous. Also, the gap widens over the life cycle, since initial differences in experience are necessarily small.

The Effect of Safety-Net Programs on Food Insecurity

Abstract: We investigate to what extent major safety-net program benefits affect food insecurity in families. We impute program eligibility and benefits in each state for 2001–2009, accounting for cross-program eligibility rules. We use simulated eligibility and benefits for a nationally representative sample as instruments for imputed eligibility and potential benefits. Among nonimmigrant, low-income, single-parent families, $1,000 in potential cash or food benefits reduces the incidence of food insecurity by 1.1 percentage points on a base of 33 percent. Cash and food both reduce food insecurity. The results highlight the importance of jointly considering a full range of safety-net programs.

The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansions

Abstract: Although a sizable literature analyzes the effects of public health insurance programs on short-run health outcomes, little prior work has examined their long-term effects We examine the effects of public insurance expansions among children in the 1980s and 1990s on their future educational attainment We find that expanding health insurance coverage for low-income children increases the rate of high school and college completion These estimates are robust to only using federal Medicaid expansions and mostly are due to expansions that occur when the children are not newborns Our results indicate that the long-run benefits of public health insurance are substantial

The Impact of Test Score Labels on Human-Capital Investment Decisions

Abstract: Students receive abundant information about their educational performance, but how this information affects future educational-investment decisions is not well understood. Increasingly, results from state-mandated standardized tests are an important source of information. Students receive a score and a label that summarizes their performance on these tests. Using a regression-discontinuity design, we find persistent effects of earning a more positive label on the college-going decisions of urban, low-income students. These findings are important not only for understanding students’ educational-investment decisions and the consequences of state testing practices but also for researchers using the regression-discontinuity design.

Bargaining with Grandma: The Impact of the South African Pension on Household Decision-Making

Abstract: I examine how an exogenous change in individual income affects decision-making in the household. Using the age discontinuity in eligibility for the South African pension, I find that eligible women are 15 percentage points more likely to be the primary decision-maker in the household than noneligible women. This corresponds with a large increase in their share of household income. There are no parallel effects for men. Due to labor force withdrawal, male income does not increase with eligibility, suggesting that their status in the household is unchanged.

On the Production of Skills and the Birth-Order Effect

Abstract: First-born children tend to outperform their younger siblings on measures such as cognitive exams, wages, educational attainment, and employment. Using a framework similar to Cunha and Heckman (2008) and Cunha, Heckman, and Schennach (2010), this paper finds that differences in parents’ investments across siblings can account for more than one-half of the gap in cognitive skills among siblings. The study’s framework accommodates for endogeneity in parents’ investments, measurement error, missing observations, and dynamic impacts of parental investments.

Parental Responses to Public Investments in Children: Evidence from a Maximum Class Size Rule

Abstract: We study differential parental responses to variation in class size induced by a maximum class size rule in Swedish schools. In response to an increase in class size: (1) only high-income parents help their children more with homework; (2) all parents are more likely to move their child to another school; and (3) only low-income children find their teachers harder to follow when taught in a larger class. These findings indicate that public and private investments in children are substitutes, and help explain why the negative effect of class size on achievement in our data is concentrated among low-income children.

Quantile Treatment Effects of College Quality on Earnings

Abstract: We use administrative data from Texas to estimate how graduating from a state flagship or a community college relative to a nonflagship university affects the distribution of earnings. We control for the selection of students across sectors using a rich set of observable ability and background characteristics and find evidence of substantial heterogeneity in the returns to quality. Returns increase with earnings among UT–Austin graduates but decline among Texas A&M graduates. For community colleges, returns are negative for lower earners but go to zero for higher earners. Our estimates also point to differences in the distribution of returns by race/ethnicity.

Heterogeneous Economic Returns to Post-Secondary Degrees: Evidence from Chile

Abstract: We analyze the economic returns to post-secondary degrees in Chile. We posit a schooling decision model with unobserved ability, degree-specific tuition costs, and earnings. We use administrative records to carry out our empirical analysis. Our results show positive average returns to post-secondary education, especially for five-year degrees. However, we also uncover significant heterogeneity. We document how unobserved characteristics (ability) determine the economic benefits of first- and second-best choices, even leading to negative returns to post-secondary degrees. Our findings illustrate the importance of allowing for heterogeneous treatment effects and individuals’ choices when examining the returns to education.

Saying, "I Don't": The Effect of the Affordable Care Act Young Adult Provision on Marriage

Abstract: This paper investigates the effect of the Affordable Care Act young adult provision on the propensity to marry. The young adult provision expanded options for obtaining insurance coverage outside of marriage. Young adults affected by the provision might have less incentive to marry since one avenue for obtaining health insurance coverage is through marriage. This paper examines this question by applying difference-in-differences-type methods using the 2008–2013 American Community Survey. Results suggest that the provision is associated with decreases in the likelihood of marrying, cohabitation, and spousal health insurance coverage and an increase in the probability of divorce.

When measure matters: coresidency, truncation bias, and intergenerational mobility in developing countries

Abstract: Biases from truncation caused by coresidency restriction have been a challenge for research on intergenerational mobility. Estimates of intergenerational schooling persistence from two data sets show that the intergenerational regression coefficient, the most widely used measure, is severely biased downward in coresident samples. But the bias in intergenerational correlation is much smaller, and is less sensitive to the coresidency rate. The paper provides explanations for these results. Comparison of intergenerational mobility based on the intergenerational regression coefficient across countries, gender, and over time can be misleading. Much progress on intergenerational mobility in developing countries can be made with the available data by focusing on intergenerational correlation.

Father Presence and the Intergenerational Transmission of Educational Attainment

Abstract: We use administrative data from Norway to analyze how fathers’ presence affects the intergenerational transmission of educational attainment. Our empirical strategy exploits within family variation in father exposure that occurs across siblings in the event of father death. We find that longer paternal exposure amplifies the father-child association in education and attenuates the mother-child association. These changes in the intergenerational transmission process are economically significant, and stronger for boys than for girls. We find no evidence these effects operate through changes in family economic resources or maternal labor supply. This lends support for parental socialization as the likely mechanism.

The 9/11 Dust Cloud and Pregnancy Outcomes: A Reconsideration

Abstract: The events of 9/11 released a million tons of toxic dust into lower Manhattan, an unparalleled environmental disaster. It is puzzling, then, that the literature has shown little effect of fetal exposure to the dust. However, inference is complicated by preexisting differences between the affected mothers and other NYC mothers as well as heterogeneity in effects on boys and girls. Using all births in-utero on 9/11 in NYC and comparing them to their siblings, we show that residence in the affected area increased prematurity and low birth weight, especially for boys.

Incentivizing Schooling for Learning: Evidence on the Impact of Alternative Targeting Approaches

Abstract: We evaluate a primary school scholarship program in Cambodia with two different targeting mechanisms, one based on poverty level and the other on baseline test scores (“merit”). Both approaches increased enrollment and attendance. Only the merit-based targeting induced positive effects on test scores. This asymmetry is unlikely to have been driven by differences in recipients’ characteristics. We marshal evidence suggesting that the framing of the scholarships might have led to different impacts. In order to balance equity and efficiency, a two-step targeting approach might be preferable: first, identify low-income individuals, and then, among them, target based on merit.

The Mechanisms of Alcohol Control

Abstract: A substantial economics literature documents that tighter alcohol controls reduce alcohol-related harms but far less is known about mechanisms. We use the universe of Canadian mortality records to document that Canada’s Minimum Legal Drinking Age (MLDA) significantly reduces mortality rates of young men but has much smaller effects on women. Using drinking data that are far more detailed than in prior work, we document that the MLDA substantially reduces “extreme” drinking among men but not women. Our results suggest that alcohol control efforts targeting young adults should focus on reducing extreme drinking behavior.

Peer Effects in Disadvantaged Primary Schools: Evidence from a Randomized Experiment

Abstract: Using data from a well-executed randomized experiment, we find that the average classroom peer achievement adversely influences own student achievement in math and reading in primary schools in disadvantaged neighborhoods. In addition, using a unique feature of our data, we provide tentative evidence that our focus on students in primary schools in disadvantaged neighborhoods may potentially be the driving force behind the divergence in our results and the results in the existing literature. Finally, we show that these different peer dynamics in disadvantaged neighborhoods can potentially be explained by the frame of reference and the invidious comparison models.

Prenatal Testosterone and the Earnings of Men and Women

Abstract: Testosterone, which induces sexual differentiation of the male fetus, is believed to transfer from males to their littermates in placental mammals. Among humans, individuals with a male twin have been found to exhibit greater masculinization of sexually dimorphic attributes relative to those with a female twin. We therefore regard twinning as a plausible natural experiment to test the link between prenatal exposure to testosterone and labor market earnings. For men, the results suggest positive returns to testosterone exposure. For women, however, the results indicate that prenatal testosterone does not generate higher earnings and may even be associated with modest declines.

Teachers' Labor Market Responses to Performance Evaluation Reform: Experimental Evidence from Chicago Public Schools

Abstract: Traditional teacher evaluation systems have come under scrutiny for not identifying, supporting, and, if necessary, removing low-performing teachers from the classroom. Leveraging the experimental rollout of a pilot evaluation system in Chicago, we find that, while there was no main effect of the pilot on teacher exit, the pilot system increased exit for low-rated and nontenured teachers. Furthermore, teachers who exited were lower performing than those who stayed and those who replaced them. These findings suggest that reformed evaluation systems can induce low-performing teachers to exit schools and may also improve the overall quality of the teacher labor force.

Changes in Returns to Task-Specific Skills and Gender Wage Gap

Abstract: :What role did skilled-biased technological change play in narrowing the gender wage gap? To answer that question this paper constructs a task-based Roy model in which workers possess a bundle of basic skills and occupations are characterized as a bundle of basic tasks. The model is estimated using the task data from the Dictionary of Occupational Titles (DOT) and the Panel Study of Income Dynamics (PSID). The main empirical finding is that men have more motor skills than women, but the returns to motor skills have dropped significantly, accounting for a major part of the narrowed gender wage gap from 1980 to 2000.