It is important to understand the individual behavioral responses to public policies and the corresponding social consequences because they are key parameters to evaluate and design efficient social policies. In this dissertation, I examine the effects of a series of public policies in China by investigating the policy-induced individual behaviors and social consequences in different stages over lifetime. Chapter 1 examines the impact of fertility policies on the education investment in girls; Chapter 2 shows how the ethnic-specific terms in the OCP distorted individual behaviors and equilibrium outcomes in marriage market; Chapter 3 examines an unintended outcome of birth control policies - more reported twins; Chapter 4 uses the compulsory schooling laws (CSL) as exogenous shocks to estimate the causal effects of education on health at prime ages; Chapter 5 examines the effects of new social pension provision on the outcomes of the elderly, including income, expenditure health and mortality. I conclude that the public policies have significant and remarkable effects on the behaviors and welfare outcomes of individuals. In addition, these lessons from China may shed lights on the some important and general interested questions in economics. / Economics

This dissertation studies the behavior of institutional investors, who control a large share of the world's investment capital, with the goal of shedding light on when and how those investors reveal information. Guided by economic intuition, I highlight instances in which the trades of fund managers are particularly informative. I focus on hedge funds and present evidence that in these instances funds' decisions predict future asset price movements. These results demonstrate that fund managers possess valuable information. At the same time, my findings support a view of the world in which fund managers have more capital than what they allocate to opportunities with high expected returns. Hedge funds may be “smart” -- they may be able to identify mispriced securities -- while still delivering poor returns to their investors. Chapter 1 presents evidence that price impact is an important consideration even at the quarterly time horizon of the trades I observe. If fund trades generate price impact, and if price impact is a function of volume, then funds should only be willing to trade a large share of volume when their information is compelling. Indeed, I find that hedge funds predict future stock returns when they purchase a large share of volume. I also provide evidence that the price impact of fund trades incorporates information into stock prices. If informative prices impact real economic decision making then these findings support the welfare relevance of the active management industry. Chapter 2 shows that funds avoid adding to losing positions. When they do, however, they predict future stock-level outperformance. These results are consistent with a career risks mechanism, as adding to a losing position corresponds to reverse window dressing. They also suggest a position-level limits-to-arbitrage effect. Chapter 3 demonstrates that hedge funds frequently buy back into stocks they have held in the past. This phenomenon occurs much more often than it would by chance. I use these findings to argue that fund managers develop company-specific expertise that persists over time. When funds establish expert positions after poor past stock-level performance, they predict future stock-level excess returns. / Economics

This dissertation studies labor and public economics. Chapter 1 is titled “How Does Unemployment Affect Consumer Spending?” and is coauthored with Pascal Noel. We study the spending of unemployed individuals using anonymized data on 210,000 checking accounts that received a direct deposit of unemployment insurance (UI) benefits. Unemployment causes a large but short-lived drop in income, generating a need for liquidity. At onset of unemployment, monthly spending drops by 6%, and work-related expenses explain one- quarter of the drop. Spending declines by less than 1% with each additional month of UI receipt. When UI benefits are exhausted, spending falls sharply by 11%. Unemployment is a good setting to test alternative models of consumption because the change in income is large. We find that families do little self-insurance before or during unemployment, in the sense that spending is very sensitive to monthly income. We compare the spending data to three benchmark models; the drop in spending from UI onset through exhaustion fits the buffer stock model well, but spending falls much more than predicted by the permanent income model and much less than the hand-to-mouth model. We identify two failures of the buffer stock model relative to the data – it predicts higher assets at onset, and it predicts that spending will evolve smoothly around the largely predictable income drop at benefit exhaustion. Chapter 2 is titled “The Incidence of Housing Voucher Generosity” and is coauthored with Rob Collinson. Most housing voucher recipients live in low-quality neighborhoods. We study how changes in voucher generosity affect neighborhood poverty, unit-quality and rents using administrative data. We examine a policy making vouchers more generous across a metro area. This policy had no impact on neighborhood poverty, little impact on observed quality, and increased rents. A second policy, which indexed rent ceilings to neighborhood rents, led voucher recipients to move to higher quality neighborhoods with lower crime, poverty and unemployment. These results are consistent with a model where the first policy acts as an income effect and the second as a substitution effect. Chapter 3 is titled “A Permutation Test for the Regression Kink Design” and is coau- thored with Simon Jaeger. This chapter proposes a permutation test for the Regression Kink (RK) design—an increasingly popular empirical method for causal inference. Analo- gous to the Regression Discontinuity design, which evaluates discontinuous changes in the level of an outcome variable with respect to the running variable at a point at which the level of a policy changes, the RK design evaluates discontinuous changes in the slope of an outcome variable with respect to the running variable at a kink point at which the slope of a policy with respect to the running variable changes. Using simulation studies based on data from existing RK designs, we document empirically that the statistical significance of RK estimators based on conventional standard errors can be spurious. In the simulations, false positives arise as a consequence of nonlinearities in the underlying relationship between the outcome and the assignment variable. As a complement to standard RK inference, we propose that researchers construct a distribution of placebo estimates in regions with and without a policy kink and use this distribution to gauge statistical significance. Under the assumption that the location of the kink point is random, this permutation test has exact size in finite samples for testing a sharp null hypothesis of no effect of the policy on the outcome. We document using simulations that our method improves upon the size of standard approaches. / Economics

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China has been experiencing considerable growth following the economic reforms and open doors policy of 1978. The whole country has not benefited from these changes, however. A significant socioeconomic gap has been created between the developed Eastern coast and the poor hinterlands of the Western regions. Although the Chinese Government has made the development of the Western provinces' social and economic conditions a national priority (China's Western Development Priority), since the year 2000, progress has been hindered due to the lack of understanding of the many factors that have created the disparity of Western China. This thesis applies a statistical and geographical approach to understanding the evolution and spatial distribution of urban-rural income disparity in the minority counties of Gansu, Western China over the last 15 years. The quantitative analysis between this disparity and the socioeconomic variables reveal that minority counties are significantly affected by less favourable socio-economic environments. Moreover, urban-rural income disparity resuits in reduced access to basic education for school-aged children, particularly girls, in minority counties. This thesis adds a new perspective---statistical and geographical---to previous studies of urban-rural income disparity in Western China's minority regions.