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Title: EMPIRICAL ESSAYS ON SCHOOL CHOICE AND HUMAN CAPITAL INVESTMENTS
Citation Type: Dissertation/Thesis
Publication Year: 2018
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Abstract: This dissertation explores individuals’ investment in human capital and how that interacts with public policy interventions. I focus on two forms of investment in human capital: investments in skills and health. First, I focus on parents’ investment in children and parental labor supply and asset accumulation decisions as they interact with private schooling. Second, I investigate whether individuals rely on outside sources of information, such as expert reviews and word-of-mouth, when making investments in their health. In the first chapter, “Dynamic Female Labor Supply, Investment in Children and Private Schooling”, I explore how the private schooling investment decision for the child affects maternal labor supply and savings over the life cycle. Women with children face a well-known trade-off between working, which allows greater monetary investments in children, and spending more time with the child. I build and estimates a dynamic model of female labor supply to investigate how the option of private schooling affects this trade-off. The model extends existing work on female labor supply and children by incorporating private versus public schooling choice, allowing for risk aversion and savings, and nesting within the model a child ability production function. Results of the structural estimation show that mother’s time with the child and private schooling are complements, and that the availability of private schooling leads to more work and more saving among less educated women. However, more educated women drop out of the labor force and increase the time they spend with their child when the child is going to private elementary school. In addition, I estimate the price elasticity of private school enrollment to be -0.25. Policy simulations show that targeted private school subsidies to low income and less educated mothers can reduce inequality in children’s outcomes. Moreover, by inducing women to increase their labor supply to be able to top up subsidies and send their children to private schools, targeted subsidies can help women at the margin accumulate higher assets and experience wage growth of up to 20 percent over the life cycle. The second chapter of the dissertation, titled “Housing Demand and Private Schooling ”, studies the effect of house price increases on the choice to enroll children in private schools. I exploit cross-city variation in local housing booms during the 2000s, which increased net worth of households and allowed them to borrow using home equity lines of credit. To establish a causal relationship between the housing boom and the demand for private schooling, I employ instrumental variables tech- niques used in the literature studying the effects of the house price boom on different facets of the economy. Results show that a one standard deviation larger increase in local housing demand shock of 2000-2006 increased average private school enrollment by 18%. However, this increase was counteracted by an equal decline in private school enrollment during the subsequent housing bust starting in 2007. This indicates that changes in parental income can have significant effects on the choice of schooling and that the housing boom of 2000s can potentially have lasting positive effects on the human capital of the next generation. In the third chapter, “Positively Aware? Conflicting Expert Reviews and De- mand for Medical Treatment”, which is joint work with Nicholas Papageorge and Jorge Balat, we study the impact of expert reviews on the demand for HIV treat- ments. Reviews are provided by both a doctor and an activist in the HIV lifestyle magazine Positively Aware, which we merge with detailed panel data on HIV-positive men’s treatment consumption and health outcomes. To establish a causal relationship between reviews and demand, we exploit the arrival of new drugs over time, which provides arguably random variation in reviews of existing drugs. We find that when doctors and activists agree, more positive reviews increase demand for HIV drugs. However, doctors and activists frequently disagree, most often over treatments that are effective but have harsh side effects, in which case they are given low ratings by the activist but not by the doctor. In such cases, relatively healthy consumers favor drugs with higher activist reviews, thus defying the doctor, which is consistent with a distaste for side effects. This pattern reverses for individuals who are in worse health and thus face stronger incentives to choose more effective medication despite side effects. Findings suggest that consumers demand information from experts according to the trade-offs they face when making health investments in the presence of adverse treatment side effects.
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Authors: Qayyum, Shaiza
Institution: Johns Hopkins University
Department: Economics
Advisor: Robert A. Moffitt
Degree: Doctor of Philosophy
Publisher Location:
Pages: 274
Data Collections: IPUMS USA
Topics: Education, Other
Countries: United States