Essays on Applied Microeconomics

Abstract

<p>My dissertation consists of three chapters in the area of applied microeconomics. The first chapter, written jointly with Tanjim Hossain and Haomiao Yu, investigates how strategic concerns and preferences for honesty affect people’s actions using two games.</p> <p>Two players simultaneously make reimbursement claims for the price of a damaged product, where reimbursements depend on players’ claims but not the actual price. In the game <em>Regular</em>, players’ best responses depend on their beliefs about others’ choices and both making the lowest claim is the unique equilibrium. The game <em>Upward</em> is dominance solvable and both making the highest claim the unique equilibrium.</p> <p>Yet, our experimental results show that players’ choices are significantly affected by the price in both games, with a larger impact in <em>Regular</em>. We need both strategic considerations and preferences for honesty to explain these findings. More players can be categorized as honest in <em>Regular</em> than in <em>Upward</em> and more as strategic in Upward than in Regular. Preferences for honesty lead to better coordination and increased earnings among players in <em>Regular</em>.</p> <p>The second chapter studies the impact of news coverage on women’s job mobility rates at the county level in the United States, exploiting the exogenous variation provided by the MeToo Movement. The average tone of news coverage at the county level is measured using novel data on sexual assault news coverage with natural language processing for categorizing the lexical choice of articles. The results show that the MeToo induced tone change of news coverage has a statistically significant impact on women’s propensity to switch jobs. In particular, increasing the tone change by one standard deviation decreases the job mobility rate of women by 12.8 percent.</p> <p>Additionally, the tone change of sexual assault news coverage does have a statistically significant impact on the labour market mobility of men in the sample with a different magnitude compared to women. There is no evidence that other news events, such as news on property crimes, have an impact on the job-to-job transition rates of women. The results suggest that the impact of sexual assault news coverage on women’s labour market decisions is amplified by the MeToo movement, especially when the information about sexual assaults is conveyed more positively compared to pre-MeToo Movement.</p> <p>The third chapter, written jointly with Boubacar Diop, Martino Pelli and Jeanne Tschopp, studies the long-run impacts of unexpected interruptions in regular schooling. Using storms as an exogenous shock, we examine how compulsory schooling disruptions affect educational attainments and the type of activity performed by individuals in young adulthood. We construct a unique continuous measure of childhood exposure to storms that varies by birth-year cohort and district for young adults in rural and urban India. We find that storms have substantial disruptive impacts on education. In the districts exposed to the most powerful winds, the estimates imply that children are 9% more likely to accumulate an educational delay and 6.5% less likely to obtain higher levels of education (beyond secondary school). In the long run, these delays have an impact on the type of labor market activity that these individuals perform. Using childhood exposure to storms as an instrument, we find that a one-year educational delay leads to a 42.6% drop in the probability of accessing regular salaried jobs. We determine that the impact of storms on education works through a permanent negative income shock.</p>