This dissertation comprises three essays in political economy, presented as separate chapters. They share a focus on labor markets, occupational choice, and the political economy of redistribution and immigration attitudes. Chapter 1 examines the relationship between immigration attitudes and the skills composition of individuals’ occupations. Since immigrants face higher barriers to entry into occupations that rely on social skills, they are less likely to pose a labor market threat to native workers who hold social skill-intensive jobs. I find that individuals in social occupations exhibit more favorable attitudes towards immigration, and favor less restrictive immigration policies. Chapter 2 examines the effect of English language proficiency on the occupational choices of childhood immigrants into the United States. Using an instrumental variables approach based on the critical period hypothesis from linguistics, I find that higher proficiency allows immigrants to work in more lucrative occupations. In addition, a better grasp of the English language leads immigrants to choose occupations in which communication skills are more important. Chapter 3 examines the relationship between social capital and redistribution preferences. I find some evidence that individuals with better-quality social networks tend to oppose increasing taxes on the rich and lowering taxes on the poor. At the same time, higher social network quality does not appear to correlate with an individual’s belief that the government ought to reduce income differences, or increase spending on unemployment benefits.

A key question in the design of public assistance to the needy is how allocation of responsibility for funding and decision-making across different levels of government influences the level and type of assistance provided. The New Deal era was a period in which this allocation changed significantly in the United States, as provision of public assistance shifted from local governments to states and the federal government, accompanied by a large increase in government transfer payments. Focusing on assistance to the elderly and using variation in state laws governing the division of funding between local and state governments for the Old Age Assistance (OAA) Program, this paper investigates the responsiveness of OAA payments and recipiency to local government funding shares. Payments per elderly resident were significantly lower in states with higher local funding shares, driven largely by reductions in recipiency. The baseline results suggest that had local governments needed to fund half of OAA payments in 1939, on the lower end of local funding shares prior to the New Deal, the share of the elderly receiving OAA would have been 5 percent rather than 22 percent, and perhaps even lower. More speculative results suggest that greater local funding led to lower representation of blacks among OAA recipients relative to their share of the population, particularly in the South.

We examine the link between the political participation of the young and fiscal policies in the U.S. The focus is on preregistration laws, which allow the young to register before being eligible to vote. We document that preregistration promotes a de facto youth enfranchisement episode. Moreover, we establish that preregistration shifts state government spending toward higher education, the type of spending for which the young have the strongest preference. The increase in state financial support for higher education is confirmed at the higher education institution level. The results collectively suggest political responsiveness to the needs of the newly enfranchised constituency.

Despite a large literature on unions and inequality, virtually no representative microdata on union membership is available prior to the 1973 CPS. We bring a new source of data, opinion polls, primarily from Gallup (N ≈ 900, 000), to look at the effects of unions on inequality from 1936 to the present. First, we present a new time series of household union membership from this period. Second, we estimate union household income premiums over this same period, finding that despite large changes in union density, the premium holds steady, at roughly 15 log points. For most of this period, it is larger for non-whites and the less-educated. The variance of residual incomes is also more compressed in the union than the non-union sector throughout our sample period. Third, we show that throughout this period, selection into unions with respect to proxies for predicted non-union wages (e.g., education, race, occupational status) was negative and u-shaped, with selection reaching its most negative point in the 1950s and 1960s. Finally, we present a number of results that, across a variety of identifying assumptions, suggest unions have had a significant, equalizing effect on the income distribution over our long sample period: unconditional-quantile regressions using repeated cross-sectional variation across households, time-series regressions using variation over time in national union density and panel regressions using variation over time within states all point to unions reducing income inequality.

What explains labor reallocation out of agriculture? We show that decreases in the supply of agricultural workers, due to younger birth-cohorts having skills which are more valued out of agriculture, play a major, and previously overlooked, role. First, we use micro data from 52 countries to decompose aggregate labor reallocation into year and cohort effects. Cohort effects accounts for more than half of overall reallocation. Then, we develop an overlapping generations model to provide an analytical and parsimonious map from the statistical objects, year and cohort effects, into the structural objects of interest, demand and supply of agricultural workers. The map is modulated by mobility frictions and general equilibrium, which we discipline with micro data. Filtering the data through the model, we conclude that decreases in the supply of agricultural workers account for a sizable fraction, approximately one third, of labor reallocation. Finally, we show that, both within and across countries, larger increases in schooling across cohorts are correlated with faster reallocation out of agriculture, suggesting that human capital determines the supply of agricultural workers. We provide further, and causal, evidence on the role of human capital by showing that a school construction program in Indonesia led to labor reallocation out of agriculture.

The medical community argues that physician fear of legal liability increases health care spending. Theoretically, though, the effect could be positive or negative, and empirical evidence has supported both cases. Previous studies, however, have ignored the fact that physicians face risk from industry oversight groups like state-level medical licensing boards in addition to civil litigation risk. This article addresses this omission by incorporating previously unused data on punishments by oversight groups against physicians, known as adverse actions, along with malpractice payments data to study state-level health care spending. My analysis suggests that, contrary to conventional wisdom, spending does not rise in response to increased risk. An increase in adverse actions of 16 (the year-to-year average) is associated with statistically significant, annual decreases in state spending on hospital care of approximately $22 million, and on prescription drugs of nearly $10 million. Malpractice payments are estimated to have smaller, statistically insignificant effects.

Despite receiving less attention than their childless counterparts, low-income parents also experienced significant expansions of Medicaid eligibility under the Affordable Care Act (ACA). We used data for the period 2010-15 from the National Health Interview Survey to examine the impacts of the ACAs Medicaid expansion on coverage, access and use, affordability, and health status for low-income parents. We found that eligibility expansions increased coverage, reduced problems paying medical bills, and reduced severe psychological distress. We found only limited evidence of increased use of care among parents in states with the smallest expansions, and no significant effects of the expansions on general health status or problems affording prescription drugs or mental health care. Together, our results suggest that the improvements in mental health status may be driven by reduced stress associated with improved financial security from insurance coverage. We also found large missed opportunities for low-income parents in states that did not expand Medicaid: If these states had expanded Medicaid, uninsurance rates for low-income parents would have fallen by an additional 28 percent.

BACKGROUND: PM2.5 precursor emissions have declined over the course of several decades, following the implementation of local, state, and federal air quality policies. Estimating the corresponding change in population exposure and PM2.5-attributable risk of death prior to the year 2000 is made difficult by the lack of PM2.5 monitoring data. OBJECTIVES: We used a new technique to estimate historical PM2.5 concentrations, and estimated the effects of changes in PM2.5 population exposures on mortality in adults (age ≥30 y), and on life expectancy at birth, in the contiguous United States during 1980–2010. METHODS: We estimated annual mean county-level PM2.5 concentrations in 1980, 1990, 2000, and 2010 using universal kriging incorporating geographic variables. County-level death rates and national life tables for each year were obtained from the U.S. Census and Centers for Disease Control and Prevention. We used log-linear and nonlinear concentration–response coefficients from previous studies to estimate changes in the numbers of deaths and in life years and life expectancy at birth, attributable to changes in PM2.5. RESULTS: Between 1980 and 2010, population-weighted PM2.5 exposures fell by about half, and the estimated number of excess deaths declined by about a third. The States of California, Virginia, New Jersey, and Georgia had some of the largest estimated reductions in PM2.5-attributable deaths. Relative to a counterfactual population with exposures held constant at 1980 levels, we estimated that people born in 2050 would experience an ∼1-y increase in life expectancy at birth, and that there would be a cumulative gain of 4.4 million life years among adults ≥30 y of age. CONCLUSIONS: Our estimates suggest that declines in PM2.5 exposures between 1980 and 2010 have benefitted public health.

Institutional theories of education highlight the increasing importance of education as a driver of social change. As education expands, for example, it may take precedence over family in determining where people live and whether they leave their place of birth. This internal migration, in turn, may be a mechanism through which education influences other aspects of society. Both the industrialization thesis and institutional theories of education hypothesize that early educational expansion increased internal migration. We take advantage of state variation in early U.S. compulsory schooling laws and use a regression discontinuity approach to test this hypothesis in 1860-1950 Census data. Results indicate that those required to attend school were more likely to leave their state of birth than others. Those who moved were more likely to move to a non-farm area, from East to West, and longer distances compared to those who were not required to attend school. Furthermore, effects were stronger in states with low occupational status scores. Results may inform current educational expansion efforts in developing countries and offer implications for contemporary efforts to extend compulsory schooling in the U.S.

This research examines the effects of state laws banning access to in-state resident tuition for unauthorized immigrant students in the United States. These laws were implemented between 2005 and 2012. We evaluate the policy effects on (a) college enrollment, (b) school dropout rates of unauthorized immigrants, and (c) the enrollment of U.S. citizens in higher education. Multivariate triple-differences models are used. We find significant negative effects on the college attendance rates of unauthorized immigrants. Policies have primarily affected recent high school graduates. With regard to dropping out of school, we find no evidence of dynamic effects. Nor do we find evidence of benefits in college attendance for non-Hispanic, Hispanic, or Mexican naturalized citizens.

This paper examines the role of agricultural diversity in the process of development. Using data from U.S. counties and exploiting climate-induced variation in agricultural production patterns, I show that mid-19th century agricultural diversity had positive long-run effects on population density and income per capita. Examining the effects on development outcomes over time, I find that early agricultural diversity fostered structural change during the Second Industrial Revolution. Besides stimulating industrialization, agricultural diversity boosted manufacturing diversification, patent activity, and new labor skills, as well as knowledge- and skill-intensive industries. These results are consistent with the hypothesis that diversity spurs the acquisition of new ideas and new skills because of the presence of cross-sector spillovers and complementarities.

Although Couchsurfing and Airbnb are both online communities that help users host strangers in their homes, they differ in an important sense: Couchsurfing prohibits monetary payment while Airbnb is built around it. We conducted interviews with users experienced on both Couchsurfing and Airbnb (“dual-users”) to better understand systemic differences between the platforms. Based on these interviews we propose that, compared to Couchsurfing, Airbnb: (1) appears to require higher quality services, (2) places more emphasis on places over people, and (3) shifts social power from hosts to guests. Using public profiles from both platforms, we present analyses exploring each theme. Finally, we present evidence showing that Airbnb’s growth has coincided with a decline in Couchsurfing. Taken together, our findings paint a complex picture of the changing character of network hospitality.

By identifying fiscal policy shocks from a narrative approach, we investigate the employment effects of fiscal policy innovations for different racial/ethnic groups by using both micro and macro data. Moreover, following the recent literature on fiscal policy, we examine whether the effects of fiscal policy shocks on the unemployment rate differ between expansions and recessions. Our results show that (i) tax shocks have larger effects, both in terms of magnitude and significance, on the unemployment rate compared to defense spending shocks, ii.) changes in the tax structure have varying employment effects depending on the stage of the business cycle, and (iii) the employment effects of fiscal policy instruments varies across racial and ethnic subgroups especially during recessionary periods.

This thesis consists of three papers that belong to the broad realm of Applied Economics. The first chapter studies the causal connection between trade and development, using one of the earliest massive trade expansions in prehistory: the first systematic crossing of open seas in the Mediterranean during the time of the Phoenicians. For each point on the coast, we construct the ease with which other points can be reached by crossing open water. We show that an association between better connected locations and archaeological sites emerges during the Iron Age when sailors routinely crossed open water. We corroborate these findings at the world scale. In the second chapter, we use oil discoveries in the US South between 1900 and 1940 to analyse whether male-biased demand shocks reduce women’s labour force participation. We find that oil wealth has a zero net effect on female labour force participation due to two opposing channels. Oil discoveries raise male wages, which leads to an increased marriage rate of young women and thus could have depressed female labour supply. But oil wealth also increases demand for women in services, which counterbalances the marriage effect. Our findings demonstrate that when the nontradable sector is open to women, male-biased demand shocks in the tradable sector need not reduce female labour force participation. The third chapter analyses whether the German National Socialists used economic policies to reward their voters after coming to power in 1933. Using newly-collected data on public employment from the German censuses in 1925, 1933, and 1939 and addressing the potential endogeneity of the NSDAP vote share in 1933 by way of an instrumental variables strategy based on a similar party in Imperial Germany, I find that cities with higher NSDAP vote shares experienced a relative increase in public employment: for every additional percentage point in the vote share, the number of public employment jobs increased by around 2.5%.

We analyze the consequences of economic freedom on economic dynamism across U.S. states and over time. Using data from the Economic Freedom of North America index, we show that states with greater economic freedom have higher rates of gross and net job creation and establishment entry. The results are robust to the inclusion of many different control variables and alternative specifications, suggesting a connection between freedom and dynamism. This evidence supports theories in which government policies may impede business dynamism.

Energy consumption is one of the main source of air pollution, greenhouse gas emission, and global warming. Reducing household energy consumption is a key goal of policymakers. We develop statistical models using socio-economics and demographics, building characteristics, location, temperature, and energy prices to estimate household energy expenditure in the U.S. We use household energy expenditure for more than 560,000 households in the U.S. from 2010 to 2012. We first employ multivariate regression models to investigate and identify the impacts of the explanatory variables on household energy expenditure. Next, we use Principal Component Analysis (PCA) to convert correlated co-linear explanatory variables into orthogonal components and estimate household energy expenditure by principal component regression. We find newer attached buildings to be effective in decreasing household energy expenditure, particularly among educated people in metropolitan areas. With sufficient data availability, our model could be used by state, regional, or even city-level policymakers and planners to optimize their infrastructural investments.

In the United States, many of the most important policies to address climate change have come from the states. As a result, there is a strong need to understand the drivers of public concern about climate change and support for policies to address it at the state level. But there is no existing measure of how public concern about climate change is changing at the state level; nor is there a consensus about the link between changes in the climate and public concern about global warming. Here, we develop a new, comprehensive index of the mass public’s latent concern about climate change in each state from 1999-2016. We show that climate concern peaked in 2000 and again in 2016. Next, we show that state-level climate concern is responsive to changes in average temperatures. But we find no evidence that annual changes in drought, wildfires, and precipitation have an effect on public opinion at the state level. Overall, these results suggest that continued increases in temperature are likely to cause public concern about climate change to grow in the future. Thus, a warming climate is likely to make it more feasible to pass new policies that address climate change.

The theory of local economics suggests that each time a job is added into the local economy, additional jobs may be created locally due to the increase in demand for local goods and services. The magnitude of the local multiplier at very local (neighborhood) level is theoretically ambiguous, because workers do not necessarily choose to settle and consume local goods and services around the neighborhoods in which they work. This is further demonstrated by the fact that city-wide labor demand shock generates heterogeneous multipliers across neighborhoods. In this paper, I empirically estimate the neighborhood-level multiplier in response to local employment demand shocks. I exploit the sources of variation for local demand shocks from large revenue growth of large Compustat companies. I show that local labor demand shocks from Compustat headquarters have positive impact on employment in nontradable goods and services in the immediate vicinity, and the effect is larger in initially poorer neighborhoods. Currently, I am in the process of obtaining access to Longitudinal Business Database (LBD) at the U.S. Census RDC facility, which would give me employment and payroll information on the universe of all businesses in the U.S.. With LBD data, I will evaluate the local multipliers using growth episodes in both Compustat Örms and Inc. 500 fastest growing young private companies.

In 1978, Californians approved Proposition 13, which fixed property tax rates at 1% of housing prices at the time of purchase. Beyond its fiscal consequences, Proposition 13 created a lock-in effect on housing choice because of the implicit tax break enjoyed by homeowners living in the same house for a long time. In this paper, I provide estimates of this lock-in effect, using a natural experiment created by two subsequent amendments to Proposition 13-Propositions 60 and 90. These amendments allow households headed by an individual over the age of 55 to transfer the implicit tax benefit to a new home. I show that mobility rates of 55-year old homeowners are approximately 25% higher than those of 54 year olds. The second contribution of this paper is the incorporation of transaction costs, due to Proposition 13, into a household location decision model. The key insight of this model is that because of the property tax laws, different potential buyers have different user costs for the same house. The exogenous property tax component of this user cost then works as an instrument to solve the main identification problem of revealed preference models-the correlation between price and unobserved quality of the product. I find that marginal willingness to pay estimates for housing characteristics are approximately 100% upward biased when the model estimates do not account for the price endogeneity.