This dissertation comprises of three distinct studies that contribute to the field of economic growth in India. First, we investigate patterns of growth at the district level (second level administrative units) using radiance calibrated night lights data for 2000-2010. We examine growth both at the aggregated district level, as well as along the rural and urban dimensions. We find evidence of both absolute and conditional convergence, with convergence among rural areas being the primary driver. However, there is no evidence of convergence among urban areas. Moving further along similar lines, we explore the effect of credit shocks, generated by scheduled commercial banks, on economic growth in districts of India during the years 2000-2010. We exploit the variation in the initial sectoral credit shares to predict the district level credit supply shock using a shift share instrument. We find a strong association between credit growth and growth in economic activity, but when controlled for the district specific demand shocks, the predicted supply shock effect fails to be statistically significant. Lastly, we study distortions in input and output markets as the sources of misallocation in the Indian manufacturing sector, using data from both formal and informal firms. We consider output, capital, raw material, energy, and service sector distortions in a monopolistically competitive framework to measure the aggregate dispersion in total factor revenue productivity (TFPR). Decomposing the variance in TFPR, we show that the raw material and output distortions play the major role in defining aggregate misallocation.

This dissertation consists of three essays examining the implications of human psychology for economic behavior and market outcomes.

A large literature studies the effects of young adult insurance eligibility expansions which is a major provision of the Affordable Care Act (ACA). I provide new evidence on the effects of dependent coverage mandates by compiling original legal data on state mandates from the 1980s to present. Using data from the Current Population Surveys and American Community Surveys, I estimate the effects of state mandates and re-estimate the effects of the ACA mandate controlling for state policies. I find that state mandates had larger effects on insurance coverage than previously thought and that estimates of the ACA mandate are robust to controls for state policies. I find that state mandates led to increased educational attainment, did not affect self-rated health and had some effects on the labor decisions of young adults. I find that single parents who have employer sponsored insurance are more likely to switch to a family plan following a policy which extends eligibility to an adult child. I find that employers did not offset increased costs through wages but rather adjusted by being less likely to pay for insurance plan premiums. Turning to hospitalizations, I use the Nationwide Inpatient Sample to estimate the effects of state mandates on young adult inpatient stays. I find increased payment through private insurance for young adults and a decrease in the likelihood of self-pay. I find evidence of an increase in the intensity of care as length of stay increased, number of procedures increased and charges increased. I find that young adults are more likely to have a mental health visit and the mental health visit sub-sample is more likely to pay with private insurance. Lastly, I explore how the ACA mandate affected HIV testing among young adults. Using the Behavioral Risk Factor Surveillance System I find the mandate increased the likelihood of young adults ever having and HIV test and that they were more likely to be tested at a private doctor or HMO office.

<p> Aggregate total factor productivity (TFP) differences across countries have been widely recognized as the primary source of huge divergence in per capita income across countries. The misallocation literature has found distortions that inefficiently allocate resources across production units can result in a significant aggregate productivity loss, even without deterioration in the underlying productivity distribution. However, with endogenous managerial capital investment decisions, distortions affect the underlying productivity distribution in addition to reallocating resources across production units. </p><p> The first chapter quantifies the effect of progressive taxation in a model with endogenous managerial capital investment decisions. Compared to proportional taxation that raises the same tax revenue, progressive taxation distorts the economy more severely. The more progressive is taxation, the less incentive agents have to invest in their managerial capital. This follows because higher managerial capital implies higher profit, which induces higher tax rates. Thus, compared to a proportional tax regime that raises the same tax revenue, under progressive taxation, agents invest less in their managerial capital and the distribution of income is less dispersed. In addition, the equilibrium values of TFP, total output, employment share of large firms are distorted relative to their values under proportional taxation. Hence, progressive taxation improves equality in the economy in exchange for efficiency. </p><p> In the second chapter I examine the effects of credit constraint in a model with endogenous managerial capital investment decisions. If agents can optimally invest in their managerial capital, limited access to physical capital will encourage managers to substitute away from physical capital to investment in managerial capital. The accumulation of managerial capital and the change in the underlying productivity distribution will mitigate the adverse effects of misallocation caused by the credit constraint on the economy. Using calibration, I show that measured TFP could improve with a tighter credit constraint. </p><p> The third chapter adds stochastic component to the model with endogenous managerial capital investment decision and credit constraints. I find that with sufficiently large second moment shock to the managerial skill accumulation function, the mitigation effect induced by optimal managerial capital investment decision is itself mitigated.</p><p>

In this dissertation, I present three distinct essays in health and public economics. In chapter 2, using Vital Statistics data from National Center for Health Statistics (NCHS) and a Difference in Difference methodology, I investigate the impact of the Paid Family Leave (PFL) of California on birth delay, infant health, and labor market outcomes of mothers after first childbirth. I find that PFL of California reduces birth delay by encouraging women to have their first child earlier. Results are more pronounced for older women who are over the age of 35. This policy also improves infant health by reducing incidence of low birth weight (<2500 grams), premature (<37 weeks of gestation), and cesarean-born infants of older mothers. Furthermore, results show that PFL policy improves labor market attachment by increasing the likelihood of employment after childbirth for college educated women who are more likely to exit the labor force after childbirth. Chapter 3, investigates the impact of the biggest oil spill in the U.S. history in the Gulf of Mexico in 2010 on air quality and health outcomes of newborns. Using Vital Statistics data from National Center for Health Statistics (NCHS), air quality data from the U.S. Environmental Protection Agency, and a Difference in Difference methodology, I find that oil spill of 2010 reduces air quality and increases the incidence of low birth weight and premature newborns. Heterogeneity effects show higher adverse health impacts for black mothers, less educated mothers, unmarried, and mothers less than 20 years old. Chapter 4 examines whether the party affiliation of governors (Democrat or Republican) has an impact on the allocation of state expenditures. Exploiting gubernatorial election results from 1960 to 2012 and a Regression Discontinuity Design (RDD), we find that Democratic governors allocate a larger share of their budget to health/hospitals and education sectors. We find no significant impact of the political party of governors on total spending, only on the allocation of funds. The results are robust to a wide range of controls and model specifications.

In Chapter 1, I provide new impossibility results for the problem of selecting a committee of a fixed number of members out of a set of candidates in the presence of veto power. I show that even limited veto power makes many committee selection mechanisms of interest manipulable. This applies in particular (i) to mechanisms the range of which contains a degenerate lottery in which a committee is chosen for sure and (ii) to mechanisms that are constructed from extensive game forms with a finite number of strategies. These impossibilities hold on a large set of domains including the domain of additive preferences and even when probabilistic mechanisms are allowed. In Chapter 2, I introduce the dominance threshold, a new measure of strategic complexity based on âlevel-kâ thinking. I use this measure to compare mechanisms used in practice to select juries in jury trials. In applying this measure, I overturn some commonly held beliefs about which jury selection mechanisms are strategically simple. In particular, I show that sequential mechanisms tend to be strategically simpler than mechanisms that involve simultaneous moves: By generating imperfect information games, simultaneous mechanisms increase the amount of guesswork needed to determine optimal strategies. In Chapter 3, I show that, in the context of one-to-one two-sided matching, the deferred acceptance mechanism cannot be improved upon in terms of manipulability in the sense of Pathak and S¨onmez (2013) or Arribillaga and Mass´o (2015) without compromising stability. I also identify conflicts between manipulability and fairness. Stable mechanisms that minimize the set of individuals who match with their least preferred achievable mate are shown to be maximally manipulable among the stable mechanisms. These mechanisms are also more manipulable than the deferred acceptance mechanism. I identify a similar conflict between fairness and manipulability in the case of the median stable mechanisms.

<p>Economic risks of many sorts are prevalent in developing countries. In this dissertation I exploit rainfall variation, a particularly prominent form of risk, to study three related topics in development economics. Because many households in developing countries still depend in large part on agriculture for their livelihood, variation in rainfall provides a natural experiment to study topics related to local economic shocks.</p><p>In the first chapter, I provide evidence on how economic shocks that occur during school age can have long-term negative consequences on adult well-being. Using data from a large household survey in Indonesia, I link a sample of adults to rainfall that they experienced many years ago during school age. I find that both low and high levels of rainfall during school age lead to permanent decreases in completed schooling and adult earnings. I then provide evidence on the mechanisms behind these results, showing that the impact of low rainfall is driven by an income effect, whereas the impact of high rainfall is driven by a labor substitution effect.</p><p>In the second chapter, I use rainfall variation as an instrumental variable for school attainment in order to provide a new estimate for the returns to schooling in a developing setting. In chapter one I showed that both low and high rainfall during school age lead to permanently decreased schooling and earnings. In chapter two, I link these findings by estimating the implied returns to schooling. The instrumental variables estimation yields a 25 percent return per year of additional schooling. A serious concern, though, is that the exclusion restriction may not hold. In other words, rainfall may affect earnings through channels other than years of schooling. Thus, in this chapter I also employ a novel method to account for violation of the exclusion restriction, which leads to a substantially different estimate of the returns to schooling.</p><p>Finally, in the third chapter I study whether a large microfinance initiative in Thailand was able to help households cope with the effects of rainfall variation. Much of the previous microfinance literature has focused on its potential to aid household business entrepreneurship. Another potential benefit is that it could help households cope with economic shocks if they are able to borrow in response. Using household-level data from 7 rounds of a panel survey in rural Thailand, I find that consumption levels strongly decrease in response to low rainfall. However, at the average level of borrowing from the microfinance program, the negative impact on consumption is completely mitigated. Furthermore, I show these findings do not seem to be driven by changes in household composition, changes in prices of consumption goods, or household attrition from the survey.</p> / Dissertation

<p> In this dissertation, I present three essays on labor share.</p><p> The first chapter studies the effect of offshoring on the relative share of income going to labor and capital. It introduces offshoring in a model of heterogeneous firms with two intermediate inputs. The intermediate inputs are produced with a CES technology using two factors of production: labor and capital. Given the direction of labor-saving technical change, offshoring decreases the relative demand for labor, which thereby decreases labor share. Empirical studies of the World Input-Output Database (WIOD) show that in manufacturing industries in developed countries, the share of imported intermediate inputs, especially those that originate in developing countries, negatively affects labor share.</p><p> The second chapter studies the effect of trade liberalization on labor share. It introduces technology upgrading in a model of trade in which heterogeneous firms use two inputs: labor and capital. The model allows for non-neutral technology upgrading and it uses a CES production function. The joint treatment of technology upgrading and export choices shows that trade liberalization can induce efficient firms to upgrade their technology. Given the direction of labor-saving technology upgrading, trade liberalization increases the relative demand for capital and decreases labor share. This model also explains why exporting firms are more capital intensive.</p><p> The third chapter studies the effect of ICT use on the labor share in South Korean firms employing Workplace Panel Survey (WPS). The results robustly show that increasing ICT use decreases labor share in both manufacturing firms and non-manufacturing firms. It also finds that the decreasing the bargaining position of labor negatively affects labor share.</p><p>

In this dissertation, I offer three independent studies. The first examines the impact of foreign direct investment (FDI) on entrepreneurial activities over the period 1996-2008. We find that FDI has no discernible effect on entrepreneurial activity in probusiness states identified by the existence of Right-to-Work (RTW) states. In non-RTW states, however, we find that an increase in FDI decreases the average monthly rate of business creation and destruction. The second study assesses the impact of breastfeeding on early childhood outcomes. Using Birth Cohort of Early Childhood Longitudinal Survey (ECLS-b) data and employing a recently developed econometric technique, I estimate the upper and lower bounds of the effect of breastfeeding on early childhood health and cognitive ability. I find that even a small fraction of selection on unobservables explains the full effect of breastfeeding on early childhood outcomes. The third study evaluates the effect of Ban-the-Box (BTB) policy on recidivism. BTB policies restrict employers from conducting background checks on employment applications and delay them until interviews are completed. I examine if BTB policies prevent ex-offenders from returning to prison. Using the National Correctional Reporting Program 2000-2014 dataset in a differences-in-differences framework, I find that BTB policies reduce one-year rates of recidivism. I also observe a large reduction in recidivism for black males in BTB counties but do not detect any evidence for females. Finally, I find that employment opportunities in industries which employ more ex-offenders are complements with BTB policies.

In this dissertation, I present three distinct essays in economics of education and health economics that can be read independently from one another. These studies investigate the non-pecuniary benefits of extended primary schooling in a developing country setting. I exploit the 1997 education reform in Republic of Turkey, which extended the duration of mandatory schooling from 5 to 8 years, to address the endogeneity of educational attainment levels of individuals. Chapter 2 provides robust evidence in favor of the argument that increasing the duration of mandatory primary education among women who have a low interest in receiving more schooling may have substantial non-pecuniary benefits in terms of the health of their offspring measured by birth weight outcomes and child mortality in developing country setting. In Chapter 3, I examine the impact of mandatory extended primary schooling on happiness of young adults. My analysis reveals that, for females, obtaining at least a middle school degree increases the likelihood of being happy and propensity of being satisfied with various life domains. Descriptive analysis suggests that being hopeful about ones future plays an important role behind this finding. For the case of males, although relatively imprecisely estimated, I find evidence that obtaining at least a middle school degree leads to a decline in happiness. Auxiliary analysis documents the imbalance between aspirations and attainments may be the reason behind this finding among men. In Chapter 4, I examine the impact of extended primary schooling on a set of health indicators among young individuals. In this study I document that; extending schooling may impact women and men differentially, and education does not necessarily promote health and health behaviors. More specifically, while increased education increases male body weight indicators (i.e., overweight, obese), it lowers the propensity of being overweight among women. Findings of this study also indicate that while the effect of extending primary schooling on smoking is positive among females, its negative for the case of males. Further investigation suggests peer effects, and time use play important roles in explaining these findings.