Browsing by Author "Cunha, Flavio"
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Item An Equilibrium Model of Wage and Hours Determination: Labor Market Regulation in the Retail Sector(2018-04-06) Frazier, Nick; Cunha, FlavioA recent push to limit the discretion large retailers have over their employee's schedules aims to increase predictability but at an unmeasured cost to market efficiency. Understanding the implications such policies have for a labor market where hours vary and employees have limited control over their own scheduling requires a model of why such jobs exist and also why individuals accept them. This paper formulates and estimates an equilibrium search model with firm and worker heterogeneity that endogenously generates labor contracts, hiring decisions, and search behavior that matches observed patterns in wages, hours, and employment for the U.S. retail sector. I use a novel approach to separately identify the primitives of the supply and demand side optimization problems that incorporates a mixture of stated preference data collected from workers, data on equilibrium retail jobs, and data on employment flows. The empirical results indicate a counterfactual policy that restricts the extent to which hours may vary in a given week does reduce average variability but also results in a two percent decline in aggregate production and leaves most workers worse off in equilibrium.Item Early life height and weight production functions with endogenous energy and protein inputs(Elsevier, 2016) Puentes, Esteban; Wang, Fan; Behrman, Jere R.; Cunha, Flavio; Hoddinott, John; Maluccio, John A.; Adair, Linda S.; Borja, Judith B.; Martorell, Reynaldo; Stein, Aryeh D.We examine effects of protein and energy intakes on height and weight growth for children between 6 and 24 months old in Guatemala and the Philippines. Using instrumental variables to control for endogeneity and estimating multiple specifications, we find that protein intake plays an important and positive role in height and weight growth in the 6ヨ24 month period. Energy from other macronutrients, however, does not have a robust relation with these two anthropometric measures. Our estimates indicate that in contexts with substantial child undernutrition, increases in protein-rich food intake in the first 24 months can have important growth effects, which previous studies indicate are related significantly to a range of outcomes over the life cycle.Item Essays in Economics of Education(2022-04-21) Salvati, Andrea; Cunha, Flavio; Wolpin, Kenneth; Calvi, Rossella; Perrigne, IsabelleThis dissertation consists of two chapters on topics in economics of education. In the first chapter, I develop and estimate an equilibrium model of endogenous instruction and student effort in order to empirically investigate the relationship between instructional choices, classroom composition, and student achievement in elementary school. The model allows teachers to vary in instructional ability and to value differently the achievement of students with different levels of prior knowledge. Using a unique dataset that combines school administrative data with rich information on instructional practices from five US school districts, I find that teachers attach a higher value to the achievement of students at lower quantiles of the distribution. I further explore the model’s implications by simulating a counterfactual scenario where I track students into classrooms based on prior test score performance. Results show that tracking has heterogeneous effects on students with different levels of prior knowledge. Moreover, the distribution of these effects depends on the mechanism used to assign teachers to classrooms. In particular, the combination of tracking with the assignment of high-ability teachers to lower tracks would benefit students at the bottom tercile of the distribution despite the lower level of peer quality. The second chapter (co-authored with Flavio Cunha and Kenneth Wolpin) reports the results of the evaluation of a parenting intervention developed and implemented by the Alief Independent School District in Texas. The goal of the intervention is to encourage and train parents to teach their children foundational skills for Pre-K. The results of a randomized controlled trial based on three yearly cohorts show that the program impacted parental investments and child development as measured by two different tests of school readiness. I go beyond reporting program impacts by building and estimating a model of parental choice of input levels. The model allows for a production function of knowledge that features individual-specific coefficients that capture the marginal productivity of parental inputs. I find that the mechanism posited for the program’s impact is validated by the model estimates.Item Essays in Economics of Education(2024-04-15) Ki Hyung Lee, Marcos; Cunha, FlavioThis dissertation consists of two chapters on topics in economics of education. In the first chapter, I study how parents perceive the uncertainty of the returns to investment of the child development process and how this uncertainty impacts their actual investment in children. To do so, I develop an elicitation procedure of parental subjective belief distributions about the technology of skill production and their subjective investment costs that is guided by a model of parental investment. I collect data using this procedure and extend existing measurement error correction methods that are necessary in the belief estimation. I show that parents hold downward-biased mean beliefs about returns to investment. Moreover, parents who have higher mean beliefs also hold lower levels of uncertainty about their beliefs. Both mean beliefs and uncertainty correlate with actual investment measures. Finally, I estimate a model of parental investment with reference-dependent preferences and show that even though parents hold low mean beliefs, they have a strong incentive to invest if their child is at risk of having a developmental delay. The second chapter (co-authored with Flavio Cunha), I study the child care workforce in Texas. The quality of the early environment children experience influences their human capital development. I investigate retention and compensation in the Early Care and Education workforce by merging datasets from three different government agencies in Texas. I employ non-structural methods to compare turnover and pay in Early Care and Education with those in other sectors that employ similar workers. I estimate a dynamic discrete choice occupational model to quantify the labor supply and turnover elasticities in this industry. In addition, I simulate the impact of wage supplementation programs.Item Embargo Essays in Education Economics and Family Economics(2024-04-18) Hu, Qinyou; Cunha, Flavio; Calvi, Rossella; Tang, Xun; Perrigne, Isabelle; Thirkettle, Matthew; Fiel, JeremyThis dissertation contains three chapters in the fields of development economics and labor economics. In the first chapter, I highlight the social impact of empathy on school bullying reduction. I collect unique data by conducting a randomized control trial---a parent-directed empathy education intervention in middle schoolers in China. Program evaluation shows it reduces bullying by indirectly changing the network structure, making bullies less popular in the classrooms. I estimate a unified framework incorporating an empathy production function, a network formation model, and a social interaction model of the final bullying outcomes. I find that the social channel of empathy accounts for almost half of its human capital effect. Policy counterfactuals suggest that targeting bullies’ friends is more effective than targeting bullies directly. The second chapter (co-authored with Flavio Cunha, Yiming Xia, and Naibao Zhao) provides the context and a comprehensive introduction to the empathy intervention program. The program leads to more parental investment and higher empathy levels. Using a state-of-the-art generalized random forest method, we find more reductions in bullying for those with lower parental investment and academic stress. Cost analysis shows that reducing one bullying incident costs $16.30 for the intervention, suggesting a scalable and low-cost strategy to inform public policy on bullying prevention in other similar settings. In the third chapter, I develop a new approach to identify intrahousehold resource allocation and the extent of joint consumption for extended families using a collective household model. It allows for endogenous living arrangement decisions with fewer data requirements. Application to nationally representative household survey data in China reveals that the elderly are allocated the least resource shares, and women tend to be more altruistic in consumption sharing than men. I also confirm that co-residence households enjoy economic efficiency gains compared to nuclear households, but there is still room for explanations on why multi-generations choose to live together.Item Essays in the Economics of Education(2023-04-13) Telli, Rabia; Cunha, FlavioThis dissertation consists of two chapters that examine the impact of educational and positive youth development programs on students’ academic and behavioral outcomes. In the first chapter, I evaluate the effect of the Community Eligibility Provision (CEP) program, a school meal provision allowing schools meeting the eligibility requirements to provide free meals to all students. I empirically investigate the extent to which the program influences school meal participation and students’ behavioral and academic outcomes using individual-level administrative data sets from Texas and a synthetic difference-in-differences strategy. I show that CEP increases per-student breakfast consumption by 10% and lunch consumption by 5% and improves reading and math test scores. However, most schools implementing CEP have another type of free meal provision before CEP, such as Universal Free Breakfast and Provision 2. I find that the presence of these substitute programs biases the effect of CEP. After accounting for such program substitution, implementing CEP increases per-student breakfast consumption by 40% and lunch consumption by 10%. In addition, I provide evidence for an improved suspension rate for students from schools that never implemented alternative free meal provisions. Overall, CEP generates smaller test score gains for the students in these schools. In the second chapter, I evaluate the impact of one of Texas’s long-standing positive youth development programs. The Community Youth Development (CYD) program, created in 1995 and implemented at the zip code level, aims to prevent juvenile delinquency and improve school performance and engagement. In this study, I empirically investigate to what extent being eligible for the CYD program influences students’ absence rate, suspension rate, and math and reading test scores using individual-level administrative data sets and employing matching and difference-in-differences empirical strategies. I find no significant evidence that being eligible for the CYD program positively impacts behavioral and academic outcomes.Item Essays on Marriage, Gender Inequality and Poverty in India(2022-04-19) Keskar, Ajinkya; Cunha, Flavio; Calvi, RosellaMy research aims to shed light on the foremost determinants of economic development and individual well-being. The essays that comprise my dissertation study marriage, gender inequality, and poverty in India. Below, I provide summaries of the chapters of my dissertation. The first chapter of my dissertation is titled "Matching on Height in India". In India, height is greatly valued in the marriage market. The child stunting rate remains strikingly high, with one in three children being too short for their age. In this paper, I juxtapose these two seemingly unrelated facts and investigate the role of parents' marital sorting and matching in determining children's height. The paper consists of two main parts. First, I estimate a structural static two-sided transferable utility model of the marriage market to understand the role of height preferences in the Indian marriage market. I do so while considering other critical drivers of marital sorting and matching, such as education and family wealth. I find significant positive assortative matching on height in religion-caste specific groups in India, indicating that taller men and women find each other mutually attractive in the marriage market. I find cross-complementarity in men's education and women's height for most religion-caste groups. The results also suggest that more educated men and women from wealthier families find each other mutually attractive in the marriage market. In the second part of the paper, using the model estimates, I perform counterfactual simulations to study the link between preferences for height in the marriage market and children's height. Using the concept of potential height from the medical literature, which measures a child's growth potential as a function of parental height, I simulate marriage markets with counterfactual preferences for height and compute children's hypothetical potential height (and hence their risk of being stunted). I find marital sorting and matching to have a limited impact on children's average height but a significant one on the level of inequality in children's height. Specifically, my analysis indicates that complementarities in height in the marriage market can increase the standard deviation of the distribution of height potential by up to 3\% and increase the prevalence of stunting by up to 4 percentage points. In the second chapter of my dissertation, titled"' Til Dowry Do Us Part: Bargaining and Violence in Indian Families" (with Rossella Calvi), we develop a non-cooperative bargaining model with incomplete information linking dowry payments – wealth transfers from the bride's family to the groom or his family at the time of marriage, domestic violence, resource allocation between a husband and a wife, and separation. Our model generates several predictions, which we test empirically using amendments to the Indian anti-dowry law as a natural experiment. We document a decline in women's decision-making power and separations and a surge in domestic violence following the amendments. These unintended effects are attenuated when social stigma against separation is low and, in some circumstances, when gains from marriage are high. Whenever possible, parents increase investment in their daughters' human capital to compensate for lower dowries. In the third chapter of my dissertation, "Dowries, Resource Allocation, and Poverty" (with Rossella Calvi), we study the relationship between dowries and individual-level poverty in rural India. Based on the estimates of a collective household model, we show that the share of household consumption expenditure allocated to a woman is strongly associated with the dowry she paid at the time of her marriage. Using the model estimates, we compute poverty rates separately for women and men and find that women's poverty relative to men decreases with dowry payment. Moreover, women who paid dowries are less likely to be poor relative to women who did not, even when their households' consumption expenditures are the same. Our counterfactual policy analysis indicates that abolishing or reducing dowries (through anti-dowry laws or taxes, for example) may have the unintended effect of aggravating intrahousehold inequality and increasing women's risk of living in poverty after marriage.Item Essays on Parental Migration and Child Development(2020-04-22) Li, Bolun; Cunha, Flavio; Wolpin, KenLarge-scale rural-to-urban economic migration in developing countries leaves millions of rural-origin children growing up separated from their migrant parents. Due to the limited parent-child interaction, parental migration poses developmental challenges for left-behind children. This dissertation consists two chapters that study children's cognitive development and parental migration in developing countries. In the first chapter, I develop a structural model of household migration to understand the effects of parental migration decisions on the dynamics of children's cognitive skill formation from birth until the end of the developmental stage at age 14. I estimate the model using data from the Indonesian Family Life Survey via Simulated Maximum Likelihood. I find that children's cognitive skill formation is sensitive to the duration of parental migration: being left behind for one year during childhood reduces cognitive skill by 0.02 standard deviations per year. Using the estimated model, I estimate a 0.30 standard deviations increase in left-behind children's skills at age 14 had their parents not left them behind. I also simulate a series of counterfactual migration policies that are aimed at improving children's cognitive development. I show that migration policies that incentivize family migration with their children to urban destinations are effective in fostering children's cognitive development: an annual migration subsidy of $150 lifts children's cognitive skills by 0.14 standard deviations at the end of the developmental stage. In the second chapter, I turn the phenomenon of left-behind children in China. I propose a different set of migration policies due to the unique institutional migration constraint in China. To quantify the impacts of these policies prior to implementation, I specify a static household migration model embedding a cognitive skill production function of their child. I use the model solution to construct a nonparametric matching estimator to directly evaluate the impacts of counterfactual migration policies. The proposed estimation strategy is computationally inexpensive because it does not require to estimate the full structural model, as described in the first chapter. By exploiting income variation using data from the China Family Panel Studies, I find that a non-migration subsidy is most effective in improving children's cognitive achievements when it targets low-income families and younger children. When associated with middle school graduation, the policy-induced change in cognitive achievements translates into an 8.6 percentage points increase in graduation rate for children from low-income households.Item Essays on the Social and Parental Determinants of Early Child Development(2018-04-16) Pham, Van Ngoc Thu; Cunha, FlavioThe thesis includes our works on measuring inequalities in parental investment captured by a variety of environmental conditions, such as home, language, and child care environments. Chapter one explains the importance of research in inequality in early human capital. The consequence of this disparity includes gaps in skills, education, employment, and earning. In addition, this chapter highlights how environmental contexts, such as home, language, and child care environments, can be used to measure parental investment and consequently influence child development. The second chapter estimates inequality in parental investments in children as measurements through the Home Observation for the Measurement of the Environment (HOME) and the language environment as measured by the Language Environment Analysis (LENA). We contribute to the literature in several ways. First, we introduce a new form to estimate the HOME Score based on Item Response Theory. Our results suggest that the HOME can identify low from not-low levels of investments, but does not have enough power to separate medium from high levels of investments. Second, we develop a model for the estimation of the quality of language environment that controls for measurement error and hour-by-hour fluctuation. The measures of quality of language environment are based on the Adult Word Counts (AWC) and Conversation Turn Counts (CTC) reported hour-by-hour by the LENA System. Armed with these three measures, we are able to investigate not only the correlations across measures, but also how to produce estimates of quality of adult-children interaction that minimizes measurement error. In the third chapter, I aim to evaluate the impact of maternal care and out-of-home day care on child development. Doing so requires the estimation of the causal impact of childcare type on developmental outcomes. The empirical challenge is to account for why mothers choose a specific type of child care arrangement. To correct this situation, I apply the Generalized Roy model by constructing maternal choice sets, modeling the choice explicitly, and estimating the child outcomes conditional on the selection. Using a sample of 7-9 months old infants from Philadelphia, I evaluate child development by using different developmental dimensions, Motor-Social Development (MSD) and temperament. I also provide information about actual average price and state-evaluated quality of the day care providers that are located within close proximity of the families from the sample. These cost and quality indicators play a crucial role in the mothers' decision and child outcome models. By applying the consistent estimators from the Generalized Roy model to produce the average treatment effect (ATE), the results suggest that infants who receive day care tend to have lower scores in MSD and higher scores in temperament than infants who are cared by their mothers. Furthermore, I construct a counterfactual exercise by setting the average full-time price at zero to detect any change in maternal decision and consequently infant's outcome scores. Initial results suggest that there is no change in MSD scores when the infants receive the nonmaternal care instead of maternal care. However, the results suggest a positive increase in temperament score among the infants after the price reduction. This result is consistent with the ATE estimate.Item Essays on women's labor supply, financial well-being and marriage market outcomes(2023-03-30) Farooqi, Hira; Cunha, Flavio; Calvi, RossellaThis dissertation consists of three chapters addressing questions related to women’s socioeconomic outcomes. In scope, it covers the context of both developed and developing economies. In the first chapter I study the extent to which greater availability of remote work opportunities alleviates childbirth related costs for women’s careers and affects their fertility choices. I formulate a structural dynamic life-cycle model that incorporates women’s joint decision-making regarding fertility and employment type choices. The model is estimated through simulated method of moments using NLSY97 data. I find that mothers of children under 5 years old face a significantly higher disutility of work when they work in jobs which require on-site presence compared to jobs that allow the flexibility of working from home. I use the estimated model to simulate the effect of policies that affect the availability of remote work jobs. I find that extending the flexibility of remote work to all mothers of pre-school children increases their employment by 4%, albeit with negligible gains in women’s overall labor market participation. In contrast, increased supply of remote work jobs improves labor market participation for all women unconditional on fertility status. The model also implies that increased availability of remote jobs leads to increased fertility rates, confirming the upward fertility trend recently observed during COVID-19. The second chapter is joint work with Brielle Bryan. Qualitative research suggests that mothers play a critical role in supporting adult children both during and after experiences of incarceration, yet the implications of incarceration for the parents of incarcerated individuals have been relatively unexplored in existing research. Using mother-child linked data from the National Longitudinal Survey of Youth 1979 and the NLSY79 Child and Young Adult study, we investigate whether and why child incarceration appears to influence maternal wealth. We find a significantly negative relationship between child incarceration and maternal wealth. This relationship, however, is highly heterogeneous across forms of wealth. Separate models by race and ethnicity suggest that child incarceration may be much more detrimental in dollar terms for white women, but the financial asset penalty associated with child incarceration is larger in percentage terms for black women. The third chapter studies the marriage market in Pakistan. In Pakistan, parents and elder members of a family exert a significant amount of influence in searching for marriage matches for their daughters and deciding who their daughters will marry. In this joint work with Rossella Calvi and Eeshani Kandpal, we use a hypothetical choice methodology to estimate parental preferences for various marital attributes. Our results show that parents in Pakistan prefer grooms who belong to their family which is consistent with the high prevalence of consanguineous marriages in Pakistan. We also show that parents have a high preference for marriage offers which grant their daughters a greater degree of decision making power in their marital households.Item Optimal Subsidies for Increasing Two-Year and Four-Year College Graduation Rates(2020-04-24) Gul, Mehreen; Cunha, Flavio; Wolpin, Kenneth I.In 2015, the Texas Education Agency (TEA) in collaboration with the Texas Higher Education Coordinating Board (THECB) undertook an ambitious 60 30 TX plan as a part of its implementation of House Bill 22, introduced by the 85th Texas House of Representatives to enhance public school accountability. The 60 x30TX is a higher education plan that focuses on attaining a postsecondary graduation rate of 60% amongst the 25-34 age demographic in Texas by the year 2030. In this paper, I estimate the cost per high school graduate of attaining this target. I also compare the per student cost of this policy objective with that of two other counterfactual policies; the fi rst being one in which community colleges are made tuition-free for all high school graduates and the second being one in which public four-year college tuition is subsidized annually by $2,000 only for those who have completed an AA tuition free under the former policy. I find that a policy in which community colleges are made tuition free will increase the postsecondary graduation rate by age 29 to 26.6%, relative to a baseline of 22.6%, and will cost $2,114 per student. I find that a $2,000 public four-year college subsidy for those who have fi rst completed an AA tuition free will boost the postsecondary graduation rate to 29.4% and increase the per student cost to $10,594. Finally, I fi nd that a conditional cash transfer of $5,320 and $3,640 for two-year and four-year college enrollment, respectively, attains the targeted postsecondary graduation rate of 60% by age 29 and costs $16,569 per student with an estimated total cost of $2.3 billion. This is far in excess of the THECB's FY2018 operating budget of $807million.