Seminar Series – Spring 2023

Simone Schaner, University of Southern California

Friday, February 24, 2023 from 1-2:15pm in ICC 550

Information, Intermediaries, and International Migration

Job seekers face substantial information frictions, especially in international labor markets where intermediaries match prospective migrants with overseas employers. We conducted a randomized trial in Indonesia to explore how information about intermediary quality shapes migration outcomes. Holding access to information about the return to choosing a high-quality intermediary constant, intermediary-specific quality disclosure reduces the migration rate, cutting use of low-quality providers. Workers who do migrate receive better pre-departure preparation and have improved experiences abroad, despite no change in occupation or destination. These results are not driven by changes in beliefs about average provider quality or the return to migration. Nor does selection explain improved outcomes for those who migrate with quality disclosure. Together, our findings are consistent with an increase in the option value of search: with better ability to differentiate offer quality, workers
search longer, select higher-quality intermediaries, and ultimately have better migration experiences.

Eoin McGuirk, Tufts University

February 23, 2023

Development Mismatch: Evidence from Land Use Conversions in Pastoral Africa

We study the consequences of a clash between contemporary development initiatives and traditional economic practices of groups within Africa. We examine the effect of land use conversions on conflict in territories that are traditionally occupied by pastoral ethnic groups. Agricultural land use has expanded considerably across the continent in recent years. Much of this expansion has occurred in pastoral areas, where land management systems are often based on customary tenure arrangements that facilitate transhumance, the cyclical movement of grazing animals between pastures. Transhumance allows for an efficient use of resources in dryland areas, since the availability of plant biomass for grazing can vary in patterns that are difficult to predict. Agricultural development projects may undermine this practice by expanding crop cultivation into pastoral areas and thus constraining the area of land available for animal grazing. This process is thought to be a major cause of conflict between pastoral and agricultural ethnic groups. We test this hypothesis using geocoded data on government-led agricultural development projects across Africa in the 20 year period from 1995-2014. Using a variety of identification approaches, we find that implementing agricultural projects in traditionally pastoral areas leads to more than a two-fold increase in the risk of conflict. We find no effect of agricultural projects in traditionally agricultural areas, nor do we find any difference in the effect of non-agricultural projects between both areas. Our estimated effects depend on the distribution of political power at the time a project is planned: when pastoral groups share more power, projects are less likely to incite violence. Taken together, our results indicate that ‘development mismatch’ – i.e., imposing development projects that are culturally misaligned with local communities – can be costly.

Lori Beaman, Northwestern University

March 2, 2023

The Economic Organization of Households: Evidence from Mali

Using a randomized control trial in Mali, we provide cash grants to agricultural households, varying whether the recipient of the cash grant was the male or female. We find that the identity of the recipient reshapes production activities on the plots controlled by women and men in the household, shifts expenditure across different goods, and causes changes in the allocation in productive resources between the nuclear and extended families.

Guy Grossman, University of Pennsylvania

March 16, 2023

When Refugee Presence Increases Incumbent Support through International Development

Studies of higher-income democracies find that the growing presence of refugees has generally been met with electoral backlash, with voters punishing incumbents and increasing support for far-right parties. Yet there is a dearth of studies on the political consequences of refugee-hosting in low-income countries, where the vast majority of refugees reside. Theoretically, we discuss why findings from high-income countries may not generalize to the Global South. We offer an alternative framework rooted in the context of low-income countries. We then test our framework empirically in Uganda, one of the largest and more inclusive refugee-hosting countries. Combining information on refugee settlements with four waves of national elections data, we find that an increase in refugee presence leads to a significant increase in incumbent support. Original panel data on healthcare, schools, and roads coupled with national survey data suggest that the mechanism is positive externalities of inclusive refugee-hosting and foreign humanitarian aid on local public goods.

Diana Moreira, University of California – Davis

March 23, 2023

Who benefits from Meritocracy?

Does screening applicants using exams help or hurt the chances of lower-SES candidates? Because individuals from lower socioeconomic backgrounds fare, on average, worse than those from richer backgrounds in standardized tests, a common concern with this “meritocratic” approach is that it might have a negative impact on the opportunities of lower-SES individuals. However, an alternative view is that, even if such applicants underperformed on exams, other (potentially more discretionary and less impersonal) selection criteria might put them at an even worse disadvantage. We investigate this question using evidence from the 1883 Pendleton Act, a landmark reform in American history which introduced competitive exams to select certain federal employees. Using newly assembled data on the socioeconomic backgrounds of government employees and a difference-in-differences strategy, we find that, although the reform increased the representation of “educated outsiders” (individuals with high education but limited connections), it reduced the share of lower-SES individuals. This decline was driven by a higher representation of the middle class, with little change in the representation of upperclass applicants. The drop in the representation of lower-SES workers was stronger among
applicants from states with more unequal access to schooling as well as in offices that relied more heavily on connections prior to the reform. These findings suggest that, although using exams could help select more qualified candidates, these improvements can come with the cost of increased elitism.

Gaurav Khanna, University of California – San Diego

March 30, 2023

Spatial Mobility, Economic Opportunity, and Crime

Neighborhoods are strong determinants of both economic opportunity and criminal activity. Does improving connectedness between segregated and unequal parts of a city predominantly import opportunity or export crime? We use a spatial general equilibrium framework to model individual decisions of where to work and whether to engage in criminal activity, with spillovers across the criminal and legitimate sectors. We match at the individual level various sources of administrative records from Medellín, Colombia, to construct a novel, granular dataset recording the origin and destination of both workers and criminals needed to identify key parameters of the model. We leverage the rollout of a cable car system to identify key parameters of the model, informing how changes in transportation costs causally affect the location and sector choices of workers and criminals. Our counterfactual exercises indicate that, when improving the connectedness of almost any neighborhood, overall criminal activity in the city is reduced, and total welfare is improved.

Namrata Kala, MIT

April 13, 2023

Environmental Permits, Regulatory Capacity, and Firm Outcomes

The trade-off between jobs and environmental quality is of major concern for policymakers. We construct a novel dataset of applications made by firms seeking to establish firms in five Indian states. We combine these data with a natural experiment that reduced the environmental regulatory burden in select industries. We use a difference-in-difference strategy that compares industries with the same pollution potential but subject initially to different environmental regulation to estimate the impact of this regulation on the size of the marginal entering firm. Moving from a high to intermediate level of regulatory burden induces smaller firms to enter, and increases entry in the longer term. We show that standard firm data sources would miss these sizable effects. Moving from a medium to low regulatory burden on the other hand, has no effect.  Our results indicate that environmental permit regulations act as entry barriers, but only at the higher end of the regulatory burden distribution. Finally, we show considerable dispersion in measures of regulatory capacity across officers and districts, even for the same set of the regulations.

Saad Gulzar, Princeton University

April 20, 2023

Command and Can’t Control: An Evaluation of Centralized Accountability in the Public Sector

By reducing information asymmetries across the hierarchy, the digitization of government services presents an opportunity for centralized management of frontline staff. In particular, high-frequency granular data can enable senior government officials to hold poorly performing members of the service delivery chain to account. To be effective, however, centralized management must translate large volumes of data into appropriate management actions. This paper studies this tension by evaluating a large-scale centralized accountability approach to managing education carried out at scale in Punjab, Pakistan. We find that a system that automatically identified poorly performing schools and jurisdictions for the attention of central management had no appreciable impact on the trajectory of school outcomes across any area of its focus. We contrast this result with the significant impact that frontline managers (head teachers)can have on school outcomes across the same areas and the potential for using centralized information systems to optimize the allocation of managerial talent across the public sector.

Sandra Sequeira, London School of Economics

April 27, 2023

Zero-sum thinking and the Roots of U.S. Political Divides

We examine the causes and consequences of an important cultural and psychological trait: the extent to which one views the world in zero-sum terms – i.e., that benefits to one person or group tend to come at the cost of others. We implement a survey among approximately 15,000 individuals living in the United States that measures zero-sum thinking, political preferences, policy views, and a rich set of characteristics about their ancestry. We find that a more zero-sum mindset is strongly associated with more support for government redistribution, less support for immigration, and more support for race- and gender-based affirmative action. We find that zero-sum thinking can be explained by the experiences of an individual’s ancestors (parents and grandparents), including the amount of intergenerational upward mobility they experienced, whether they immigrated to the United States or lived in a location with more immigrants, and whether they were enslaved or lived in a location with more enslavement. The findings underscore the importance of psychological traits, and how they are transmitted intergenerationally, in explaining current political divides in the United States.

Fred Finan, University of California – Berkeley

May 4, 2023