Economics - Theses
Permanent URI for this collection
Search Results
1 - 3 of 3
-
ItemMoment Condition Verification and Treatment Effects Estimation in the BETEL Framework( 2022)In this thesis, we expand upon the literature to develop new advancements to the BETEL method, and we demonstrate them in the context of well-studied empirical problems. The first two chapters address the issue of moment condition validity. In Chapter 1, we develop a moment condition verification procedure by expanding on the Chib et al. (2018) framework with a hierarchical spike-and-slab prior similar to that by Geweke (1996). This allows us to test joint and elaborate hypotheses based on moment conditions in the Bayesian framework, which is shown to exhibit ideal properties under simulation. Additionally, the contributions in this chapter allows for a broader application of BETEL in complex empirical problems, including in structural VAR analysis, as considered in the following chapter. In Chapter 2, we apply the methodology developed in Chapter 1 to macroeconomic structural VAR models, verifying multiple sources of identification presented as moment conditions for the fiscal policy model of Blanchard and Perotti (2002) and Mertens and Ravn (2014). Verifying and comparing different sources of identification sheds new light on the validity of different identification strategies proposed in the literature. In Chapter 3, we depart from moment condition validity and introduce a BETEL-based estimator for causal treatment effects in the presence of skewness due to an unobserved state variable. This is motivated by previous studies, e.g. by Oreopoulos (2006) and Devereux and Hart (2010), showing returns to schooling for females to be statistically insignificant under standard approaches. This is driven by standard instrumental variables analysis not considering the differences in the female and male earnings distributions. In particular, the considerable negative skew in the female earnings distribution can be attributed to much higher, but unobserved part-time status, which is not accounted for by standard IV methods. Individuals in the left tail of the earnings distribution tend to have a lower return to schooling than others, for example, due to part time work (Ermisch and Wright, 1993; Connolly and Gregory, 2008; Hirsch, 2005). We show that this skewness is informative to identifying the treatment effect in the proposed BETEL-IV framework for the “subpopulation” of females from the non-skewed part of the earnings distribution, or that with comparable skew to males. Extending the method of Liu et al. (2017) to the IV setting, we are able to exploit this skewness, yielding a positive and significant return to schooling for females. This method is robust when applied to the male population, yielding similar results to the current literature, and when compared to other existing methods. Additionally, extensive simulation studies illustrate the performance of the estimator in identifying treatment effects for the relevant subpopulation, down-weighting the contribution of individuals in the tail due to the unobserved state variable. The methodological contributions in this thesis exploit and demonstrate the flexibility of the BETEL method and show how the BETEL framework can be expanded to address different empirical problems. Furthermore, this thesis presents empirical contributions arising from the BETEL framework, moving beyond illustrative examples to answering important empirical questions currently addressed in the literature, showing how developments in the BETEL framework can shed new light on existing empirical problems.
-
ItemThree essays investigating the effect of youthful delinquency on education using econometric techniques( 2016)This thesis investigates the impact of juvenile delinquency on educational attainment. It includes three chapters that do so (chapters 2, 3 and 4), all of which make use of data on males from the National Longitudinal Survey of Youth 1997. The second chapter investigates the effect of engaging in delinquency on an adolescent's decision to remain enrolled in high school until completion. Accounting for time-invariant unobserved individual-specific characteristics that potentially influence both high school enrolment and delinquency, we find that enrolment is reduced by an individual's cumulative history of delinquency, and in particular, his cumulative history of income generating delinquency. These results are consistent with predictions based on the economic model of crime, in which crime is viewed as a (risky) occupation. They provide support for the use of school-based crime prevention programs to reduce delinquency among teenage boys, decreasing their propensity to choose crime as an alternative to education. The third chapter investigates the effect of delinquency in youth on subsequent educational attainment. To do so, we focus on delinquent acts committed by age 16 and examine their impact on two measures of educational attainment: high school graduation and college graduation. Our empirical approach follows a method based on the bivariate probit model developed by Altonji et al. (2005), which allows us to evaluate the plausibility and potential strength of a relationship running from delinquency to education in the absence of exclusion restrictions. We find plausible evidence that delinquency by age 16 reduces the likelihood of graduating from high school and college. This effect is driven by early initiators, those who offend intensely, and by those whose delinquent activities involve income generating acts. Importantly, the impact of delinquency on education is not confined to those who have interaction with the criminal justice system, or gang members. Further analysis suggests that a channel through which delinquency impacts on education is expected returns to crime, as reflected by subjective beliefs about the probability of arrest for a property crime. The fourth chapter investigates the effects of delinquency and arrest on school leaving using a multivariate mixed proportional hazard framework to account for common unobserved confounders and reverse causality in these relationships. Our key finding is that delinquency as well as arrest leads to early school leaving. Further investigation reveals that the effect of delinquency is largely driven by income generating crimes, and the effect of both income generating crime and arrest are greater when onset occurs at younger ages. These findings are consistent with a criminal capital accumulation mechanism. On the basis of our sample, we show that taking into account the proportion of young men affected by delinquency and arrest, the overall reduction in education due to delinquency is at least as large as the reduction due to arrest. This highlights the need for crime prevention efforts to extend beyond youth who come into contact with the justice system.
-
ItemEducation: tests of whether it enhances productivity or merely conveys information on individual productivity in the labour market( 2001-04)Human capital and screening theories of the role of education in the labour market have similar predictions about individual behaviour and labour market outcomes. This makes it difficult to test between the theories. Nevertheless, the task of doing so is important since the social return to education is likely to be small unless education adds to productivity as human capital theory, but not screening theory, assumes. Education may only convey information about likely individual productivity under screening. It serves this function because individual productivity is difficult for employers to observe. In fact, there is very little evidence from existing tests of the theories that education does not add to productivity. However, few of the tests that have been undertaken between the theories are convincing. The three empirical chapters of this thesis contain tests of some aspects of the theories.