Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1990. / Includes bibliographical references (leaves 94-97). / by Brian Lee Palmer. / Ph.D.

Thesis (Ph.D.)--Massachusetts Institute of Technology, Dept. of Economics, 2002. / Includes bibliographical references. / The first chapter studies Entrepreneurship and the Stigma of Failure. Entrepreneurial activity varies substantially across countries and sectors and appears to be related to the stigma of failure. To understand this phenomenon, I present a multiple-equilibrium model based on endogenous stigma of failure. Using private information, entrepreneurs choose whether to continue a project or to abandon it and raise funds to undertake a new project. Project outcomes depend on luck and ability, and the cost of capital for failed entrepreneurs is determined by the market's expectations about their ability. In the conservative equilibrium failed entrepreneurs face a high cost of capital and thus good entrepreneurs are reluctant to terminate a project. The resulting low quality of the pool of failed entrepreneurs justifies in turn the high cost of capital. The reverse is true in the experimental equilibrium where good entrepreneurs are more willing to start again and the cost of capital for failed entrepreneurs is low. The equilibria differ in the level and nature of entrepreneurial activity, with riskier projects undertaken in the experimental equilibrium. I discuss the relative efficiency of the two equilibria and study from this perspective the role of financial structure and legal environment such as bankruptcy rules and fresh start policy. The second Chapter examines institutions and contracts for start-up finance. I develop a model in which entrepreneurs and investors can hold-up each other once the venture is under way: investors can deny further funding, and entrepreneurs can withdraw from the venture. / (cont.) The entrepreneurs' exit option determines which party needs protection. If the exit option is good, venture capital financing protects the investor through technological monitoring, control rights, and staged financing. If the exit option is bad, bank debt protects the entrepreneur as it involves little technological monitoring, limited control rights, and committed finance. The exit option depends on the legal environment and on the stigma of failure, endogenized in a career concern model. When entrepreneurs can choose project risk, multiple equilibria arise with different financial institutions. Venture capital prevails in the high-risk equilibrium and bank debt in the low-risk equilibrium. The paper investigates why the forms of start-up financing differ across sectors, regions and countries. It offers an explanation for why venture capital has been more prevalent in the US than in Europe. The theory has implications for policy, e.g., regarding the efficiency of non-compete agreements and bankruptcy law. The third chapter, cowritten with Olivier Blanchard, addresses the question of the welfare effects of partial flexibilization of the labor market. Rather than decrease firing costs across the board, a number of European countries have allowed firms to hire workers on fixed-term contracts. At the end of a given term, these contracts can be terminated at little or no cost. If workers are kept on however, the contracts become subject to normal firing costs. We argue in this paper that the effects of such a partial reform of employment protection may be perverse. The main effect may be high turnover in entry-level jobs, leading in turn to higher, not lower, unemployment ... / by Augustin Landier. / Ph.D.

Massachusetts Institute of Technology. Dept. of Economics. Thesis. 1969. Ph.D. / Vita. / Includes bibliographies. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2013. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This dissertation examines the impact of contemporaneous American participation in war on military labor and conflict duration. Chapter one uses variation in occupation-specific retention bonuses and mortality risks observed in the U.S. Army during the war on terror to estimate the rate at which volunteers for active military service are willing to trade wealth and risk of death when making reenlistment decisions. Our estimate of the Value of Statistical Life among first-term soldiers is between $0.1M and $0.5M. Bonus policy is an effective tool for meeting near-term military manpower shortages. Increasing the bonus offer by $1,000 leads to an increase in the probability of reenlistment of 1.5 percentage points. Chapter two documents a substantial increase in the post-service one-year mortality rate of recent veterans using estimates constructed by matching Army administrative data to the Social Security Administration's Death Master File. The total mortality of service in the Army between 2001 and 2010 is likely understated by approximately 10% or over 350 deaths. Approximately 91% of the change in post-service mortality is due to the effect of exposure to high rates of mortality while in-service. The relationship between in-service and post-service mortality has likely always existed, but the higher rates of in-service mortality during the war mean that post-service mortality rates are higher. The third chapter provides empirical evidence linking third-party interventions to increases in the duration of intra-state wars. It also reviews several theoretical constructs underlying this correlation, and it adapts the model of the Swing Voter's Curse to provide a novel explanation. Namely, when third-parties intervene in civil wars, local nationals are more likely to abstain from making a commitment to either the government or rebel side as the intervening party serves to cloud perceptions of the latent balance of power between the primary intra-state contenders. The chapter concludes with an analysis of implications for interventionist policies with regard to the war in Afghanistan. / by Michael F. Yankovich. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2008. / Includes bibliographical references (p. 135-138). / This thesis consists of three separate essays related to international economics and labor markets. The first essay, with Francisco Gallego, looks at sudden stops, a main feature of developing countries in the last decades, and their effects on these countries. Using sector-level data on job flows for four Latin American countries, we find that sudden stops are associated with lower job creation and increased job destruction. Sectoral effects are related to financial indicators: sectors with higher dependence on external financing experience lower creation and sectors with high indicators of liquidity needs experience larger destruction. These results provide evidence of financial conditions being an important transmission channel of sudden stops within a country. The second essay, with Patricia Cortés, studies whether low-skilled immigration has led high-skilled American women to change their time use decisions. We find evidence that low-skilled immigration has increased hours worked by women with a graduate degree, especially those with a professional degree or a PhD and those with children. Our estimates suggest that the low-skilled immigration flow of the 1990s increased by 7 and 33 minutes a week the average time of market work of women with a Master's and a professional degree or a PhD, respectively. Low-skilled immigration increases the fraction of high-skilled women working more than 50 (and 60) hours a week, but decreases their labor force participation. Consistently, for these women, a decrease in the time spent in household work and an increase in reported expenditures on housekeeping services. Low-skilled immigration does not affect other education groups, except for a negative effect on labor supply. / (cont.) The third essay focuses on the effects of trade in services, modeled as formation of international production teams, in a diversity and trade model a la Grossman and Maggi (2000). For the two country case it is shown that when the tails of the countries' talent distributions satisfy a "similarity" condition, then free trade in goods replicates the integrated equilibrium. However, this condition is strong and it implies that generally international teams will change the allocation of agents, when trade in goods is already possible. / José A. Tessada. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2016. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This thesis is divided in three chapters. The first two chapters explore the role of structural changes and skill mismatches in generating unemployment. In the first chapter, I present a model in which technological change creates a mismatch between the skill requirements in novel jobs and workers' current skills. Although the economy adjusts as workers are retrained and learn these skills, I argue that the adjustment may be sluggish and inefficient. Moreover, along this adjustment the economy becomes more responsive to aggregate shocks. The key mechanism behind these results is that, due to matching frictions and because skills are not yet standardized, firms face a high cost to recruit workers with the requisite skills for novel jobs and they respond by creating fewer novel jobs. In the second chapter, I document that the decline in routine-cognitive jobs outside manufacturing-a pervasive structural change that has affected U.S. labor markets since the mid 90s-accelerated during the Great Recession and contributed to the long-lasting increase in unemployment since 2007. I show that the local labor markets that were more exposed to this structural change experienced worst outcomes during the Great Recession. Moreover, at the local labor market, this structural change interacted with temporal shocks to the demand for goods and services. In the third chapter, which is joint work with Daron Acemoglu, we study how the automation of jobs performed by labor affects employment, wages and the share of labor in national income. / by Pascual Restrepo Mesa. / Ph. D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2011. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 141-146). / This dissertation is a collection of three independent essays in theoretical and applied econometrics. The first chapter analyzes dynamic games with continuous states and controls. There are two main contributions. First, we give conditions under which the payoff function is nonparametrically identified by the observed distribution of states and controls. The identification conditions are fairly general and can be expected to hold in many potential applications. The key identifying restrictions include that one of the partial derivatives of the payoff function is known and that there is some component of the state space that enters the policy function, but not the payoff function directly. The second contribution of the first chapter is to propose a two-step semiparametric estimator for the model. In the first step the transition densities and policy function are estimated nonparametrically. In the second step, the parameters of the payoff function are estimated from the optimality conditions of the model. We give high-level conditions on the first step nonparametric estimates for the parameter estimates to be consistent and parameters to be v/fn-asymptotically normal. Finally, we show that a kernel based estimator satisfies these conditions. The second chapter, which is coauthored with Liran Einav and Amy Finkelstein, analyzes the welfare cost of adverse selection in the U.K. annuity market. We develop a model of annuity contract choice and estimate it using data from the U.K. annuity market. The model allows for private information about mortality risk as well as heterogeneity in preferences over different contract options. We focus on the choice of length of guarantee among individuals who are required to buy annuities. The results suggest that asymmetric information along the guarantee margin reduces welfare relative to a first best symmetric information benchmark by about 2 percent of annuitized wealth. We also find that by requiring that individuals choose the longest guarantee period allowed, mandates could achieve the first-best allocation. The third chapter develops a test for the exogeneity assumptions of classical factor models based on the fixed interactive effects estimator of Bai (2005). The exact form of the test is given for simple linear models. Simulations are used to asses the test's performance. The application of the test to more complicated models is also considered. The test is applied to a model of education as an example. / by Paul Schrimpf. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2010. / "September 2010." Cataloged from PDF version of thesis. / Includes bibliographical references (p. 146-157). / This dissertation consists of three essays on the behavior of political elites and their effect on economic development. The first two chapters focus on political dynasties in the Philippines while the third chapter analyzes the long-run economic effects of the concentration of political power in the state of Cundinamarca, Colombia. In Chapter 1, I use a regression discontinuity design based on close elections to estimate the causal effect of entering the political system on dynastic persistence. I find that candidates who barely win their first election are four times (22 percentage points) more likely to have a future relative in office than those who barely lose and never serve. The magnitude of the effect is remarkable and substantially larger than the effect on the intensive margin reported by Dal Bo, Dal Bo and Snyder (2009) for the United States. These results suggest that the prevalence of dynastic politicians does not simply reflect the existence of a fixed set of historically powerful families, but rather that the political system itself creates persistence. In Chapter 2, I study whether the introduction of term limits in 1987 by the Philippine Constitution was effective at breaking the dynastic pattern in Philippine politics documented in chapter 1. In particular, I explore the potential countervailing effects created by dynasties in response to the introduction of term limits: (1) replacement of term-limited incumbents by relatives and (2) running for a different office. I find that term limits are not effective in reducing the probability that the same family remains in power both in the short and long-run. Moreover, term limits made incumbents safer in their early terms before term limits bind, by deterring high-quality challengers who prefer to wait for the incumbent to be termed-out and run in an open-seat race. These results suggest that political reforms that do not modify the underlying sources of power of dynasties will be ineffective in changing the political equilibrium. In Chapter 3, which was co-authored with Daron Acemoglu, Maria Angelica Bautista and James Robinson, we explore the relative importance of political and economic inequality in explaining long-run development outcomes in the state of Cundinamarca, Colombia. Using micro data on land ownership we find that municipalities that were more unequal in the 19th century (as measured by the land gini) are more developed today. However, we argue that political rather than economic inequality might be more important in understanding long-run development paths and we document that municipalities with greater political inequality, as measured by political concentration, are less developed today. We also show that during this critical period the politically powerful were able to amass greater wealth, which is consistent with one of the channels through which political inequality might affect economic allocations. Overall our findings shed doubt on the conventional wisdom and suggest that research on long-run comparative development should investigate the implications of political inequality as well as those of economic inequality. / by Pablo Querubín. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2011. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This thesis studies the economics of technology adoption in the healthcare industry. The first chapter analyzes the impact of health information technology (HIT) on the quality and intensity of care delivered to Medicare inpatients. Building an organizational model, I show how the adoption of HIT may improve patient health and may either increase or decrease medical expenditures. Using Medicare claims data from 1998-2005, I estimate the effects of HIT by exploiting variation in hospitals' adoption statuses over time, analyzing 2.5 million inpatient admissions across 3900 hospitals. HIT is associated with an initial 1.3% increase in billed charges. Additionally, HIT adoption appears to have little impact on the quality of care, measured by patient mortality, medical complication rates, adverse drug events, and readmission rates. These results are robust to the addition of rich controls for pre-trends. The findings suggest that HIT is not associated with improvements in either the efficiency or quality of hospital care for Medicare patients, through five years after adoption. In the second chapter, I investigate the scope for physician learning about the value and applications of new medical technologies across geographic regions. In particular, I analyze the diffusion of positron emission tomography and deep brain stimulation, using data on Medicare claims from 1998-2005. The mix of patient diagnoses treated with the new technologies changes substantially during the early stages of diffusion. Moreover, states that are late to adopt these technologies do not repeat the process of experimental learning undertaken by early adopters to discover which patients should receive the new treatment In the third chapter, I analyze several policy initiatives that aim to manage the usage of medical technologies and discuss key determinants of technology adoption that may be fruitful targets for future research and policy intervention. Effective technology policy must balance cost, control with a recognition that new medical technologies have been associated with tremendous health and longevity gains. I find that existing Medicare coverage determinations and state certificate of need programs appear to have little influence on actual resource utilization, in part driven by lack of enforcement of existing policies. / by Leila Agha. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2016. / Cataloged from PDF version of thesis. "with Eric Sodomka and Nicolas E. Stier-Moses"--Page 6 [Below title of Chapter 1]. / Includes bibliographical references. / Chapter 1 focuses on the problem of predicting equilibrium outcomes in large online auction markets. For online retailers, content publishers, and search engines, predicting how the behavior of their auction markets might respond to policy changes is an important business problem. However, this problem is challenging due to both the size and the complexity of such real-world markets. We introduce a method for predicting how various statistics of such markets adjust to changes in supply and demand by: (1) modeling the auction market mechanism as a Walrasian mechanism, (2) coarsening the resulting Walrasian market via a stochastic block model, (3) computing the Walrasian equilibrium of this coarsened market through sampling, and (4) using the resulting equilibrium, together with some reduced-form adjustments, to approximate the equilibrium of the initial auction market. We demonstrate the internal consistency of this method through formal proofs and synthetic experiments, and demonstrates its accuracy by comparison with the equilibrium outcomes of a more realistic pacing-based model of auction markets. Chapter 2 introduces a model of consumer choice in which consumers simplify their latent high-dimensional preference vector into a low-dimensional one used for choosing products. This assumption induces a particular population structure over consumers' simplified preferences, which allows for tractable estimation in high dimensional settings. Estimation is performed via a stochastic gradient descent-based algorithm, and we evaluate its performance through a variety synthetic benchmarks. We also estimate the model on consumer consideration data, finding that the average consumer uses only 6 of 16 product attributes when forming their consideration set, and that this leads to a utility of loss of 2 - 3% on average. Chapter 3 uses admissions data from the University of Bologna's medical school to analyze how students' entrance exam rankings affect their subsequent academic performance. We find that: (1) worse rankings lead to worse academic performance, (2) this impact is more negative for worse-ranked students, (3) this impact on academic performance operates mostly through courseload rather than through GPA, and (4) male and female students' academic performance do not respond differentially to rank. / by J. Mark Hou. / Ph. D.