Cashing Out the Benefits: The Spillover Impact of Cash Transfers on Household Educational Investment
By Mitchell Garrett Ochse and Matheus Dias
Using electricity price, generation, installed capacity, and carbon price data from the European Union from January 2015 to December 2018, this study finds that the carbon pricing in the European Union Emissions Trading Scheme (EU ETS) incentivizes electricity sector carbon emission reductions through renewable energy deployment only for economically advanced EU members. Transitional economies show a weak to modest carbon emission increase despite a common carbon price. This study estimates an electricity supply curve, or merit order, for 24 EU ETS members using a Tobit regression model and analyzes changes in this curve using a linear bspline. These shifts provide insight into how carbon pricing affected energy generation, price, and CO2 emissions for two distinct categories of EU member states. The advanced category as a whole saw a strong electricity sector decrease in carbon emissions, both over time and from carbon pricing, while the transitional category as a whole saw a weak increase. This indicates that advanced EU members in Northern, Western, and Central Europe likely sold permits to transitional ones in Southern and Eastern Europe. While these findings may initially reflect the gains from trade of carbon emissions, permits inherent in the European Union Emissions Trading Scheme’s design, the implications of how these two distinct groups have changed electricity generation present challenges to the ultimate long-term goal of EU-wide carbon neutrality by 2050, particularly in transitional economies’ electricity sectors.
Advisors: Dr. Xiao Yu Wang, Professor Michelle Connolly | JEL Codes: C93; I21; I24
By William J. Battle-McDonald
This paper examines how the quantity and quality of admissions applications to Division 1 colleges and universities were affected by two non-academic factors: (1) performance of a school’s men’s basketball and football teams; and (2) scandals associated with these athletic programs. Admissions data from 2001 – 2017 were compared to team performance during their football and basketball seasons in order to understand how these non-academic factors contribute to an individual’s decisions to apply for admission. A multivariate linear regression model with school and year fixed effects supported the hypothesis that athletic success positively affects the quantity of applications, increasing them by up to 3% in basketball and 11% in football in the following application period. Seasonal football success was also shown to have negative impacts on the distribution of standardized testing scores of future applicant classes, however these scores were shown to increase when a team played their best season in five or more years. Additional analysis of the effects of athletic program scandals reveals a significant negative effect on the number of applications received, although a deep dive into a few of the most prominent scandals suggests that the benefits associated with violating NCAA rules may, under the right circumstances, be well worth the risk.
Advisor: Dr. James Roberts | JEL Codes: I23, J24, L82, L83, Z2
The Impact of Violence in Mexico on Education and Labor Outcomes: Do Conditional Cash Transfers Have a Mitigating Effect?
By Hayley Jordan Barton
This research explores the potential mitigating effect of Mexico’s conditional cash transfer program, Oportunidades, on the education and labor impacts of increased homicide rates. Panel data models are combined with a difference-in-differences approach to compare children and young adults who receive cash transfers with those who do not. Results are very sensitive to specification, but Oportunidades participation is shown to be positively associated with educational attainment regardless of homicide increases. Homicides are associated with decreases in likelihood of school enrollment and compulsory education completion; however, they also correspond with increases in educational attainment, with a larger effect for Oportunidades non-recipients.
Advisors: Dr. Charles Becker, and Dr. Michelle Connolly | JEL Codes: C23; D15; I20; I38; J24
Assessing the Impacts of an Aging Population on Rising Healthcare and Pharmaceutical Expenditures within the United States
By Rahul Sharma
This paper studies the impact of aging on rising healthcare and pharmaceutical expenditures in the United States with the goal of contextualizing the future burden of public health insurance on the government. Precedent literature has focused on international panels of multiple countries and hasn’t identified significant correlation between age and healthcare expenditures. This paper presents a novel approach of identifying this correlation by using a US sample population to determine if age impacts an individual’s consumption of healthcare services and goods. Results suggest that age has a significant impact on healthcare and pharmaceutical expenditures across private and public insurance.
Advisors: Gilliam D. Saunders-Schmidler and Grace Kim | JEL Codes: H51, H53, I12, I13, I18, I38
By Justin T. Rosenblum and John H. Zipf
We investigate the efficiency of the current financial aid system for prospective college students. The Free Application for Federal Student Aid (FAFSA) form reviews a family’s financial information and universities review a student’s academic prowess, but neither fully examines students and their family’s qualitative factors such as parents’ highest education level or intended major. Using the National Center for Education Statistics’ National Postsecondary Student Aid Study, we investigate academic, financial, and familial characteristics to determine if they impact a student’s level of private loans relative to their total cost of attendance. We find that students with parents who did not receive a college degree are adversely affected by the current financial aid system. In particular, these students take out a greater amount of private loans relative to their total cost of attendance all else equal. Our finding has wider policy implications; changing the current financial aid system to assist disadvantaged students could help reduce intergenerational education inequalities. In addition, colleges could reach a broader range of students by helping
the students that currently struggle the most to pay tuition.
Advisors: Michelle Connolly, Hugh Macartney and Kent Kimbrough | JEL Codes: I2, I22, I23
Benefit Spillovers and Higher Education Financing: An Empirical Analysis of Brain Drain and State-Level Investment in Public Universities
By Chinmany G. Pandit
This paper analyzes the impact of out-migration of college graduates on state higher education investment. A three-stage least squares regression model with state and year fixed effects is developed and estimated, addressing the relationship between state legislative appropriations, tuition, and educated out-migration across 49 U.S. states from 2006-2015. The results support the notion that states respond negatively to benefit spillovers in higher education: for every one percent increase in the rate of educated out-migration, state appropriations decrease by 1.92 percent (roughly $140 per student). These findings suggest that an education subsidy
provided to states may be necessary to prevent underinvestment in higher education.
Advisor: Thomas Nechyba | JEL Codes: H7, H75, I22, I28, R23
By Michael Karamardian
Because Medicare’s prospective payment system for long-term acute-care hospitals (LTCHs) makes a large lump-sum form of payment once patients reach a minimum length-ofstay threshold, LTCHs have a unique opportunity to maximize profits by strategically discharging patients as soon as the payment is received. This analysis explores how the level of competition between LTCHs in geographic markets affects the probability of a patient being strategically discharged. The results show that patients at LTCHs in more competitive markets have a lower probability of being strategically discharged than at those in less competitive markets, suggesting increased competition could help save Medicare funding.
Advisors: Kent Kimbrough and James Roberts | JEL Codes: D22, I11, I18
By Aakash Jain
Previous research has shown that ambient temperature affects human metabolism and behavior. Inspired by these findings, this study examines the effect of lagged annual temperatures in the United States on average reported BMI. The results indicate that higher temperatures in the future will lead to increases in average BMI. A conservative estimate suggests that a 1 °C increase in temperature sustained for 10 years would result in a 0.15 unit increase in average BMI and an additional $15.5 billion in annual health care expenditure.
Advisor: Billy Pizer | JEL Codes: Q5, Q54, I1, I10
By Nicholas Thomas Gardner
This paper works towards developing the narrative of orphans whose parent or parents died from natural disaster. By taking advantage of the unanticipated nature of death from the 2004
Indonesian tsunami, orphanhood can be treated as much closer to random than similar literature using data centered on HIV/AIDS related deaths. We use a community level fixed effects model to attempt to derive a causal relationship between orphanhood and both education and log wages. Our models suggest that orphaned males aged 14 and older at baseline complete 1-2 fewer years of education than their cohorts. The adverse effects persist in the long-term, as these orphans earn 26% less than non-orphan cohorts.
Advisors: Duncan Thomas and Kent Kimbrough | JEL Codes: I24, I25, I31, J24, J31
By Maya Durvasula
Household resource allocation in response to economic shocks is of central importance for policy makers, especially given widely documented evidence of gender biases. In this paper, I exploit a
plausibly exogenous shock to maternal asset holdings in Indonesia to examine gender biases in resource allocation in the wake of the 1998 East Asian Financial Crisis. Using insights from
anthropology, I separate assets in the hands of women from those controlled by men and interpret findings in the context of a household decision-making framework that allows preferences of parents to differ. Taking household-specific heterogeneity into account with fixed effects, I find significant evidence of efforts to shield male children from the effects of the crisis in both contemporaneous educational attainment and longer-term labor market outcomes, a remarkable trend given minimal evidence of a pro-son bias in Indonesia prior to the crisis. Finally, inferring preferences from maternal resource allocation, I find suggestive evidence of an old age security motive in women’s investment decisions.
Advisor: Duncan Thomas | JEL Codes: D13, I0, J13, J16