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You searched for: Content Type Working Paper Remove constraint Content Type: Working Paper Publishing Institution Centre for Human Capital and Productivity (CHCP), Western University Remove constraint Publishing Institution: Centre for Human Capital and Productivity (CHCP), Western University Publication Year within 10 Years Remove constraint Publication Year: within 10 Years Topic Economics Remove constraint Topic: Economics
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  • Author: Yuet-Yee Linda Wong, Audra J. Bowlus
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: We present the first study of the high school-to-work transition for American Millennial males and females. Using data from the PSID Transition to Adulthood from 2005-2011, we estimate the Burdett and Mortensen (1998) model and study changes between Generation X and Millennials. We find convergence in racial differences in transition patterns across the generations and in gender earnings by the Great Recession. These patterns are driven by a large decline in search efficiencies for white males. Finally, we show the labor market deteriorated for high school graduates prior to, with a further decline during, the Great Recession.
  • Topic: Economics, Education, Global Recession, Human Capital, Labor Market, Productivity
  • Political Geography: United States
  • Author: Victor H. Aguiar, Roy Allen, Nail Kashaev
  • Publication Date: 03-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: This paper studies nonparametric identification and counterfactual bounds for heterogeneous firms that can be ranked in terms of productivity. Our approach works when quantities and prices are latent rendering standard approaches inapplicable. Instead, we require observation of profits or other optimizing-values such as costs or revenues, and either prices or price proxies of flexibly chosen variables. We extend classical duality results for price-taking firms to a setup with discrete heterogeneity, endogeneity, and limited variation in possibly latent prices. Finally, we show that convergence results for nonparametric estimators may be directly converted to convergence results for production sets.
  • Topic: Economics, Human Capital, Profit, Productivity, Price
  • Political Geography: Canada, Global Focus
  • Author: Martin Gaynor, Nirav Mehta, Seth Richards-Shubik
  • Publication Date: 05-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: We study physician agency and optimal payment policy in the context of an expensive medication used in dialysis care. Using Medicare claims data we estimate a structural model of treatment decisions, in which physicians differ in their altruism and marginal costs, and this heterogeneity is unobservable to the government. In a novel application of nonlinear pricing methods, we theoretically characterize the optimal unrestricted contract in this screening environment with multidimensional heterogeneity. We combine these results with the estimated model to construct the optimal contract and simulate counterfactual outcomes. The optimal contract is a flexible fee-for-service contract, which pays for reported treatments but uses variable marginal payments instead of constant reimbursement rates, resulting in substantial health improvements and reductions in costs. Our structural approach also yields important qualitative findings, such as rejecting the optimality of any linear contract, and may be employed more broadly to analyze a variety of applications.
  • Topic: Economics, Government, Health, Health Care Policy, Human Capital, Productivity, Medicare
  • Political Geography: United States
  • Author: Elizabeth Caucutt, Lance Lochner, Joseph Mullins, Youngmin Park
  • Publication Date: 08-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: This paper studies the multidimensional nature of investments in children within a dynamic framework. In particular, we examine the roles of parental time investments, purchased home goods/services inputs, and market-based child care services. We first document strong increases in total investment expenditures by maternal education; yet expenditure shares, which skew heavily towards parental time, vary little with parental schooling. Second, we develop an intergenerational lifecycle model with multiple child investment inputs to study these patterns and the impacts of policies that alter the prices of different inputs. We analytically characterize investment behavior, focusing on the substitutability of different investment inputs and the way parental skills affect the productivity of family-based inputs. Third, we develop an estimation strategy that exploits intratemporal optimality conditions based on relative demand to estimate substitutability between inputs, the relative productivity of different inputs, and the role played by parental education. This approach requires no assumptions about the dynamics of skill investment, preferences, or credit markets. We also account for mismeasured inputs and wages, as well as unobserved heterogeneity in parenting skills. We further show how noisy measures of child achievement (measured several years apart) can also be incorporated in a generalized method of moments approach to additionally identify the dynamics of skill accumulation. Fourth, we use data from the Child Development Supplement of the Panel Study of Income Dynamics to estimate the skill production technology for children ages 12 and younger. Our estimates suggest complementarity between parental time and home goods/services inputs as well as between these family-based inputs and market-based child care, with elasticities of substitution ranging from 0.2 to 0.5. We find no systematic effects of parental education on the relative productivity of parental time and other home inputs. Finally, we use counterfactual simulations to explore the extent and sources of variation in investments across families, as well as investment responses to changes in input prices. We find that variation in prices explains 48% of the overall variance in investment expenditures, and differences in wages explain more than half of the investment expenditure gap between college-educated and non-college-educated parents. We further show that accounting for the degree of input complementarity implied by our estimates has important implications for the responses of individual inputs to any price change and for the responses in total investments and skill accumulation to large (but not small) price changes.
  • Topic: Economics, Labor Issues, Children, Human Capital, Economic Mobility, Credit, Productivity, Skilled Labor, Price
  • Political Geography: Global Focus
  • Author: Jacob Bastian, Lance Lochner
  • Publication Date: 08-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: Parents spend considerable time and resources investing in their children's development. Given evidence that the Earned Income Tax Credit (EITC) aects maternal labor supply, we investigate how the EITC aects a broad array of time-use activities, focusing on the amount and nature of time spent with children. Using 2003-2018 time-use data, we nd that federal and state EITC expansions increase maternal work time, which reduces time devoted to home production, leisure, and time with children. However, for children of all ages, almost none of the reduction comes from time devoted to investment activities, such as active learning and development activities.
  • Topic: Economics, Labor Issues, Children, Women, Income Inequality, Tax Systems, Human Capital, Family, Productivity
  • Political Geography: United States
  • Author: Yifan Gong, Todd Stinebrickner, Ralph Stinebrickner
  • Publication Date: 04-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: While a large literature is interested in the relationship between family and labor supply outcomes, little is known about the expectations of these objects at earlier stages. We examine these expectations, taking advantage of unique data from the Berea Panel Study. In addition to characterizing expectations, starting during college, the data details outcomes for ten years after graduation. Methodological contributions come from approaches to validate quality of survey expectations data and the recognition that expectations data, along with longitudinal data, can potentially help address endogeneity issues arising in the estimation of the causal effect of family on labor supply.
  • Topic: Economics, Labor Issues, Human Capital, Family, Labor Market, Productivity
  • Political Geography: Canada, Global Focus
  • Author: Yifan Gong, Ralph Stinebrickner, Todd Stinebrickner
  • Publication Date: 08-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: An important feature of post-secondary schooling is the experimentation that accompanies sequential decision-making. Specifically, by entering college, a student gains the option to decide at a future time whether it is optimal to remain in college or to drop out, after resolving uncertainty that existed at entrance about factors that affect the return to college. This paper uses data from the Berea Panel Study to quantify the value of this option. The unique nature of the data allows us to make a distinction between “actual” option values and “perceived” option values and to examine the accuracy of students’ perceptions. We find that the average perceived option value is 65% smaller than the average actual option value ($8,670 versus $25,040). A further investigation suggests that this understatement is not due to misperceptions about how much uncertainty is resolved during college, but, rather, because of overoptimism at entrance about the returns to college. In terms of policy implications related to college entrance, we do not find evidence that students understate the overall value of college, which depends on the sum of the option value and expectations at entrance about the returns to college.
  • Topic: Economics, Labor Issues, Human Capital, Higher Education, Economic Mobility, Productivity
  • Political Geography: Global Focus
  • Author: Juan Herreno, Sergio Ocampo
  • Publication Date: 11-2020
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: Selection into self-employment among the poor is dominated by subsistence concerns, which leads to high levels of unproductive self-employment in developing countries. We incorporate this view into an otherwise benchmark macro-development model by allowing for labor frictions. Standard models that rely only on financial frictions are at odds with crucial features of the data, including large self-employment rates among the poor and the response of labor markets after well-identified labor demand shocks. We study the efficacy of a wide range of development policies on occupational choices, prices, and productivity. We find that providing unemployment benefits improves selection into self-employment, increasing total-factor productivity (TFP). Self-employment grants and unconditional transfers lower TFP by making self-employment more attractive to low-productivity individuals. Finally, financial reforms that improve access to credit succeed in raising productivity, but they do not address the subsistence concerns of poor individuals. Self-employment is still concentrated among the poor after the reforms take place.
  • Topic: Economics, Labor Issues, Employment, Human Capital, Macroeconomics, Economic Development , Productivity
  • Political Geography: Global Focus
  • Author: Amit Gandhi, Salvador Navarro, David Rivers
  • Publication Date: 05-2018
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: We study the nonparametric identification of gross output production functions under the environment of the commonly employed proxy variable methods. We show that applying these methods to gross output requires additional sources of variation in the demand for flexible inputs (e.g., prices). Using a transformation of the firm’s first-order condition, we develop a new nonparametric identification strategy for gross output that can be employed even when additional sources of variation are not available. Monte Carlo evidence and estimates from Colombian and Chilean plant-level data show that our strategy performs well and is robust to deviations from the baseline setting.
  • Topic: Economics, Human Capital, Econometrics, Productivity
  • Political Geography: Colombia, Latin America, Chile
  • Author: Lance Lochner, Todd Stinebrickner, Utku Suleymanoglu
  • Publication Date: 07-2018
  • Content Type: Working Paper
  • Institution: Centre for Human Capital and Productivity (CHCP), Western University
  • Abstract: Using unique survey and administrative data from the Canada Student Loans Program, we document that parental support and personal savings substantially lower student loan repayment problems. We develop a theoretical model for studying student borrowing and repayment in the presence of risky labor market outcomes, moral hazard, and costly earnings verification. This framework demonstrates that non-monetary costs of applying for income-based repayment assistance are critical to understanding why resources other than earnings lead to greater repayment. We further show that eliminating these non-monetary costs may be inefficient and lead to undesirable redistribution. Empirically, we demonstrate that expanding Canada’s income-based Repayment Assistance Plan to automatically cover all borrowers would likely reduce program revenue by nearly one-half over early years of repayment. Finally, we show how student loan programs can be more efficiently designed to address heterogeneity in parental transfers in the presence of non-monetary earnings verification costs and moral hazard.
  • Topic: Debt, Economics, Human Capital, Higher Education, Productivity, Student Loans
  • Political Geography: United States, Canada