Thesis (M.B.A.)--Boston University

<p> Major depression is common, deleterious, and persistent across generations, thus making depression a crucial link between the economic fortunes of parents and children &ndash; albeit one that economists have largely neglected. A biological literature indicates that stressors causing depression in parents also cause depression in offspring through two mechanisms: parenting behaviors caused by parental depression and, potentially, epigenetic endowments. In this thesis, I explore these mechanisms and their relevance for the young adult outcomes of offspring. I utilize the Avon Longitudinal Study of Adults and Children (ALSPAC), which uniquely contains epigenetic data at birth of currently adult children. Furthermore, I develop an economic model of intergenerational mobility featuring depression as a facet of human capital, which aids interpretation of my findings and clarifies potential implications. My empirical findings indicate that parental depression, depression-associated parenting behaviors, and biological endowments play a key role in determining the young-adult outcomes of children. The child's adolescent depression mediates this relationship. Conditional on depression and other covariates, parental household income plays either a more modest role or no role, depending on the outcome variable considered. Meanwhile, child epigenetic data at birth explains twice the variance in the child's adolescent depression as does maternal depression in the subsample for which I have epigenetic data, providing suggestive evidence that biological endowments very early in life may establish a component of depression risk. </p><p> To interpret my findings, I crystalize ideas from the biological literature in a simple economic framework. I treat the mechanisms generating depression as a technology of preference formation. Stress, parenting behaviors, and direct biological endowments form <i>affective capital</i>, where low affective capital manifests as depression. Affective capital enters directly into the utility function to reduce disutility of effortful actions, including labor market effort and parenting effort. Thus, high affective capital both increases earnings and increases parental investment in the affective capital of children. In this way, my model resembles a Becker-Tomes/habit formation hybrid. This model highlights how investments in the child's human capital may be income inelastic. I discuss additional implications of this model.</p><p>

M.Com. (Business Mangement) / Die grootste enkele uitdaging van bestuurders van ontwikkelende lande vandag is om die produktiwiteit van "kenniswerkers" en "dienste werkers" te verhoog. Volgens Drucker (1991:69) sal hierdie uitdaging 'n belangrike punt op die agenda van bestuurders wees vir die volgende dekade en sal dit deurslaggewend wees vir die mededingende prestasies van diensondernemings. Drucker (1991: 70) beweer verder dat produktiwiteitsverhoging die hoof ekonomiese prioriteit van ontwikkelende lande behoort te wees. Produktiwiteitsverbetering is een van die metodes wat aangewend kan word om ekonomiese groei en stabilitiet te bevorder. Die winsmotief in die private sektor dien as 'n aansporing vir bestuur om produktiwiteit te verhoog. Die strewe na produktiwiteitsverhoging is egter volgens Kruger (1991:3) nie 'n einddoel opsig self nie, maar eerder 'n middel tot die doel. Produktiwiteit is 'n bestuursverantwoordelikheid en 'n ondernemingsdoelwit. Die bestuur van ondernemings het verskillende hulpbronne, naamlik mense, tegnologie, grondstowwe en kapitaal tot hulle beskikking. Dit is bestuur se plig om hierdie hulpbronne so produktief moontlik te laat ontvorm tot gevraagde produkte en dienste (De Clerk, 1983:12)...

The media narrative of the ‘contract year effect’ is espoused across all major professional American sports leagues, particularly the MLB and NBA. In line with basic incentive theory, this hypothesis has been shown to be true in baseball, but the analysis in basketball to this point has been flawed. In estimating the contract year effect in the NBA, this paper is the first to define rigorously the various states of contract incentives, the ignorance of which has been a source of bias in the literature thus far. It further expands on previous analyses by measuring individual performance more broadly across a range of advanced metrics. Lastly, it attempts to account for the intrinsic endogeneity of playing in a contract year, as better players get longer contracts and are thus less likely to be in a contract year, by using exogenous variations in the NBA’s contract structure to form an instrument, and by comparing performance to a priori expectations. In this manner, this paper produces the first rigorous finding of a positive contract year phenomenon. The estimated effect is about half that found in baseball, equivalent to a 3-5 percentile boost in performance for the median player in the NBA.

This paper studies the impact of a fragmented labor market on city structure to explain the spatial coexistence of formal and informal labor sectors characteristic of cities in developing countries. I explore reasons for structural differences among cities in developed and developing countries, which current models in urban economics and New Economic Geography have not yet considered. While existing models suggest that poorer people will live in the periphery of the city, I relax assumptions of uniform space requirement and commuting costs to show that clusters of informal labor will form within the city itself because of their dependence on the formal sector for employment. The plausibility of this spatial arrangement, and its consequences, is discussed with examples and supported with qualitative evidence. / Applied Mathematics

This paper considers how the probabilities of transitioning from joblessness to part- versus full-time work change with the duration of joblessness and labor market conditions. Using 1996-2013 Survey of Income and Program Participation data, I estimate these transition probabilities using a Cox proportional hazard model. I find that as the duration of jobless spells increases, the monthly probability of transitioning to full-time employment declines faster than for part-time employment. Additionally, a one percentage point increase in the national unemployment rate is associated with a ten percent decrease in the probability of transitioning to full-time work but unrelated for part-time work. Consequently, the share of individuals transitioning from joblessness to part-time work increases with the duration of joblessness and with increasing labor market slack. Additional evidence suggests these increases are due to behavioral changes rather than unobserved heterogeneity. Finally, compared to their previous employment, individuals who transition from unemployment to part-time work also experience decreases in real hourly wages, private health-care coverage, and occupational skill level. These results provide motivation for considering non-wage aspects of job quality when studying re-employment from joblessness. / Applied Mathematics

In this dissertation I examine the impacts of market forces and government programs on households' demand for human capital in India. The first chapter examines the impact of ITES Centers on school enrollment using administrative enrollment data from three states in India, and finds that when these centers open, enrollment in primary school increases significantly. The effects are very localized, and using supplementary survey evidence we argue that this is driven by limited information diffusion. The second chapter introduces a simple model of human capital production which predicts that wages can negatively impact human capital under reasonable assumptions. Using data on test scores and schooling from rural India, we show that human capital investment is procyclical in early life (in utero to age 3) but then becomes countercyclical. We argue that, consistent with our model, this countercyclical effect is caused by families investing more time in schooling when outside options are worse. The final chapter applies the findings from this study to understand how workfare programs (a common anti-poverty strategy in the developing world) can impact school enrollment through their effects on wages. We examine the effect of the largest anti-poverty workfare program in world: NREGA in India. Using a fixed effects estimator, I show that the introduction of NREGA caused increases in child employment, and decreases in school enrollment, particularly among children ages 13-17. / Economics

The first chapter in this dissertation discusses the results of a field experiment that lasted three weeks at a firm in Saudi Arabia where we randomized an attention to variability or mindfulness training program. We conducted a baseline and end-line survey 3 months post training, collecting measures on non-cognitive skills, beliefs, affect, and employee performance and productivity. The training program was incentivized as managers’ reports on employees’ performance get reflected in future raises and bonus pay. We converted the measures to z-scores (unit standard deviation, mean zero) to standardize the scaling across measures. We found that mindfulness improved by 0.485 standard deviations in the treatment group. This effect is mediated by an increase in employees’ engagement. The extent to which locus of control is internal improved by 0.344 standard deviations, meaning that employees who took the training gave a greater weight to effort verses luck in determining their life outcomes. On the other hand, we found that work locus of control became more external by 0.646 standard deviations, and that employees perceived a greater degree of ethnic discrimination. On average, employees’ performance improved by about 0.5 standard deviations as measured by managers’ direct reports and punctuality. We explain the improvement in general locus of control but decrease in work locus of control with the gains in productivity and performance through a compensating story. Being more aware of variability has arguably led employees to perceive more discrimination in the environment, resulting in employees perceiving their work locus of control as more external. But employees improved their performance as a compensatory measure for perceived discrimination. The second chapter discusses the results of two lab experiments where we measure the effects of a negative shock on wage under uncertainty on subsequent efforts decisions under certainty. We found that students in the negative shock treatment do not optimize their effort, decreasing their total payout. This is explained through a tax in beliefs on the relationship between effort and reward in life, and trust in life. Even though the lab experiment was local, the students generalize what they learnt to their life beliefs. Furthermore, we conduct a second experiment to test that it is the uncontrollability of the negative shock rather than the negative shock per se that caused this. While this is a lab experiment and it is likely that these effects do not last in the long term, these results can be put in perspective when one thinks about the uncontrollability of the shocks that the poor are exposed to in the long-term, and their effect on life beliefs and effort decisions. The final chapter provides support to how the poor are more likely to experience learned helplessness and larger magnitude of learned helplessness. The effects of initial levels of capital, institutions, and differences in expected utility on learned helplessness is explored. We also provide evidence that once learned helplessness occurs, it is more likely that it will occur in the future providing evidence for poverty traps. We discuss the effects of noncognitive skills in decreasing the probability that learned helplessness will materialize, and in breaking the cycle. / Public Policy

The first essay estimates the impact of a challenging, six-week-long summer program for rising high school seniors that is hosted annually at a selective private university which graduates a majority of its students in a science, technology, engineering, or math (STEM) field. Using applications to the program between 2005 and 2011, and records from the National Student Clearinghouse (NSC) and 31 universities, the analysis explores the effect of the summer program on college application, admission, matriculation, and STEM major rates. Records from the summer pro- gram’s selection process reduce bias when using OLS regression and propensity score techniques. The estimates show admission to the summer program increased enrollment at the host institution by 30 percentage points, and shifted students from less selective universities. There were no detectable differences in graduation rates, and STEM major rates increased. This indicates that interventions preceding college application season can influence application and enrollment at selective universities, and that matriculation and major choices are coupled in ways that are important for increasing STEM access. The second essay uses data from a randomized trial of three programs: the six-week summer program explored in the first chapter, a one-week version of the same program, and a program that takes place online over six months. Applicants in 2014 and 2015 were randomly assigned to one of the three programs or a control. Early results from surveys and host institution (HI) records confirm a large effect of the six-week program on application rates at the HI. The programs also improved application strategy beyond inducing application to the HI. For early outcomes such as college application and acceptance rates, there were no sharp distinctions between the one-week, online, and six-week treatments. If later outcomes do not diverge, this will have future policy implications. The third essay measures the effect of oversubscribed courses at a community college using a fuzzy regression discontinuity (FRD). The FRD relies on reconstructed enrollment queues, and exploits the discontinuity in enrollment at the waitlist cutoff. Using data from a large community college and the NSC, findings indicate that students substitute for unavailable courses with other courses in the same subject. We find no significant effects on later performance or transfer to other colleges. / Economics

This dissertation consists of three independent essays in labor and public economics. Chapter 1 presents evidence on how exogenous worker exits affect a firm’s demand for incumbent workers and new hires. Using matched employer-employee data based on the universe of German social security records, I analyze the effects of unexpected worker deaths and show that these worker exits affect the remaining workers’ wages and retention probabilities. Chapter 2 (with Peter Ganong) proposes a permutation test for the Regression Kink (RK) design. 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 of RK estimates. Chapter 3 (with Johannes Abeler) analyzes a laboratory experiment to study how tax complexity affects the reaction to tax changes. / Economics