For the last sixty years, African-Americans have been 75% more likely to die during infancy as whites. From the mid-1960s to the early 1970s, however, this racial gap narrowed substantially. We argue that the elimination of widespread racial segregation in Southern hospitals during this period played a causal role in this improvement. Our analysis indicates that Title VI of the 1964 Civil Rights Act, which mandated desegregation in institutions receiving federal funds, enabled 5,000 to 7,000 additional black infants to survive infancy from 1965-1975 and at least 25,000 infants from 1965-2002. We estimate that by themselves these infant mortality benefits generated a welfare gain of more than $7 billion (2005$) for 1965-1975 and more than $27 billion for 1965-2002. These findings indicate that the benefits of the 1960s Civil Rights legislation extended beyond the labor marker and were substantially larger than recognized previously.
MIT Department of Economics Working Paper No. 07-04, February 2007. Accepted subject to minor revisions at American Economic Review.
Increasingly, local governments compete by offering substantial subsidies to industrial plants to locate within their jurisdictions. This paper uses a novel research design to examine the consequences of successfully bidding for a plant on county-level labor earnings, property values, and public finances. Each issue of the corporate real estate journal Site Selection includes an article titled The Million Dollar Plant that describes how a large plant decided where to locate. These articles report the county where the plant chose to locate (i.e., the ‘winner’), as well as the one or two runner-up counties (i.e., the ‘losers’). The losers are counties that have survived a long selection process, but narrowly lost the competition. We use these revealed rankings of profit-maximizing firms to form a counterfactual for what would have happened in the winner counties in the absence of the plant opening. We find that a plant opening is associated with a 1.5% trend break in labor earnings in the new plant’s industry in winning counties (relative to losing ones) after the opening of the plant (relative to the period before the opening). Property values may provide a summary measure of the net change in welfare, because the costs and benefits of attracting a plant should be capitalized into the price of land. We find a positive, relative trend break of 1.1% in property values. Further, we fail to find any deterioration in local governments’ financial position. Overall, the results undermine the popular view that the provision of local subsidies to attract large industrial plants reduces local residents’ welfare.
November 2004.
In the last century Irish, German, Italian, Jewish and other immigrant groups have tended to congregate in ethnic enclaves upon their arrival in the U.S. Over time members of these groups moved away from enclaves and assimilated into the mainstream society and economy. Today, Hispanics appear to be following this same pattern. While these broad patterns of movement are well documented, little is known about immigrants’ labor market experience inside the enclave that might motivate them.
This paper uses the 1980 and 1990 5% Census samples to investigate the wage consequences of enclave residences for Hispanic males. There are three principal findings. First, there are important citywide and Hispanic-specific demand shocks that influence where Hispanics choose to settle and affect their wage rates. Any examination of Hispanics’ wages should control for these factors. Second, on average Hispanics choose to live in cities with a large existing stock of Hispanics. There is heterogeneity, however, across Hispanics sub-populations; the lesser skilled (i.e., immigrants and the English deficient) aggregates are drawn to enclaves, while natives and the English proficient tend to leave high-Hispanic cities. Third across a number of specifications, I find that enclave residence reduces the relative (compared to white natives) wages of Hispanics. In the least restrictive specification, I instrument for the 1980 to 1990 change in Hispanics’ citywide share of the labor force with the 1980 share and find that a 1-percentage point increase in the share Hispanics in a city reduces the Hispanic citywide relative wage by approximately 1%. This result holds across broadly defined Hispanic sub-populations, although the evidence is strongest among the least skilled.
University of California-Berkeley, Center for Labor Economics Working Paper No. 6, November 1998.
We examine data from a serological study that randomized participation incentives ($0, $100, $500). Minority and poor households are underrepresented at lower incentives. We develop a framework that uses randomized incentives to disentangle non-contact and hesitancy and find that underrepresentation occurs because minority and poor households are more hesitant to participate, not because they are harder to contact. In particular, reservation payments for contacted households in minority and poor neighborhoods are substantially more likely to exceed $100. The $500 incentive closes hesitancy gaps and restores representativeness on observable dimensions including hospitalization and insurance rates, and a COVID-19 risk index.
American Economic Review: Insights (Forthcoming)
We use data from a serological study that experimentally varied financial incentives for participation to detect and characterize selection bias. Participants are from neighborhoods with substantially lower COVID-19 risks. Existing methods to account for the resulting selection bias produce wide bounds or estimates that are inconsistent with the population. One explanation for these inconsistent estimates is that the underlying methods presume a single dimension of unobserved heterogeneity. The data suggest that there are two types of nonparticipants with opposing selection patterns. Allowing for these different types may lead to better accounting for selection bias.
American Economic Association Papers and Proceedings, May 2023, 113: 526-566.
On March 24, 2020, the Prime Minister of India announced the world’s largest COVID-19 lockdown. We summarize the initial impacts of the lockdown for a representative sample of mostly poor and non-migrant workers in Delhi. Using Facebook mobility data, we show that intra-city movement dropped 80 percent following the announcement. Using microeconomic survey data, collected before and during the crisis, we highlight three patterns. First, the lockdown resulted in significant economic costs, with income and days worked falling by 57 and 73 percent, respectively. Second, the lockdown resulted in widespread compliance with public health directives: mask usage rose by 73 percentage points (pp); time spent indoors increased by 51 pp; smoking decreased by 13 pp; and handwashing rose by 10 pp. Third, the economic impacts of the lockdown were somewhat mitigated by government food assistance, which 36 percent of our sample accessed. Over the first seven weeks of the lockdown, we do not observe alarming levels of hunger, scarcity, access to medical care, or security. Yet in our data, concerns remain about mental health, supply chains, and personal savings, against the backdrop of a rising infection rate. Moreover, it remains to be seen whether public health compliance will persist, as the novelty, fear, and media coverage of COVID-19 subside.
COVID Economics, October 2020, 51: 134-158.
This paper develops and implements a method to monetize the impact of moderate social distancing on deaths from COVID-19. Using the Ferguson et al. (2020) simulation model of COVID-19’s spread and mortality impacts in the United States, we project that 3-4 months of moderate distancing beginning in late March 2020 would save 1.7 million lives by October 1. Of the lives saved, 630,000 are due to avoided overwhelming of hospital intensive care units. Using the projected age-specific reductions in death and age-varying estimates of the United States Government’s value of a statistical life, we find that the mortality benefits of social distancing are about $8 trillion or $60,000 per US household. Roughly 90% of the monetized benefits are projected to accrue to people age 50 or older. Overall, the analysis suggests that social distancing initiatives and policies in response to the COVID-19 epidemic have substantial economic benefits.
COVID Economics, April 2020, 7: 1-22.
Using nationally representative data files from 1970s and 1990s college attendees, we find that in the 1970s matriculation at historically black colleges and universities (HBCUs) was associated with higher wages and an increased probability of graduation, relative to attending a traditionally white institution. By the 1990s, there is a wage penalty resulting in a 20 percent decline in the relative wages of HBCU graduates between the two decades. There is modest support for the possibility that the relative decline in wages associated with HBCU matriculation is partially due to improvements in TWIs’ effectiveness at educating blacks.
American Economic Journal: Applied Economics, 2010, 2(1): 116-148.
We quantify agglomeration spillovers by estimating the impact of the opening of a large manufacturing plant on the total factor productivity (TFP) of incumbent plants in the same county. We use the location rankings of profit-maximizing firms to compare incumbent plants in the county where the new plant ultimately chose to locate (the “winning county”), with incumbent plants in the runner-up county (the “losing county”). Incumbent plants in winning and losing counties have similar trends in TFP in the seven years before the new plant opening. Five years after the new plant opening, TFP of incumbent plants in winning counties is 12% higher than TFP of incumbent plants in losing counties. Consistent with some theories of agglomeration economies, this effect is larger for incumbent plants that share similar labor and technology pools with the new plant. Consistent with a spatial equilibrium model, we find evidence of a relative increase in skill-adjusted labor costs in winning counties. This indicates that the ultimate effect on profits is smaller than the direct increase in productivity.
Journal of Political Economy, 2010, 118(3): 536-598.
This paper argues that an increased application of quasi-experimental and experimental techniques will improve understanding about core environmental economics questions. This argument is supported by a review of the limitations of associational evidence in assessing causal hypotheses. The paper also discusses the benefits of experiments and quasi-experiments, outlines some quasi-experimental methods, and highlights some threats to their validity. It then illustrates the quasi-experimental method by assessing the validity of a new one in environmental economics that seeks to estimate the impact of the Endangered Species Act on property markets in North Carolina. Ultimately, the greater application of experimental and quasi-experimental techniques has the potential to identify efficient policies that increase social welfare.
Journal of Environmental Economics and Management, 2009, 57(1): 21-44.
American Economic Review Papers and Proceedings, 2000, 90(2): 326-332.
It is well known that air pollution is harmful to human health. What is much less known is how it specifically affects people over the long term. China’s Huai River policy, which dispensed free coal to northern China for winter heating, has inadvertently revealed to us that air pollution literally shaves years off our lives. But China has made considerable progress in confronting this pollution.
Asia Global Online, July 2018
Issues in Science and Technology, 2011.
For most of the past century, a good job was a ticket to the middle class. Hitched to the locomotive of rapid economic growth, the wages of the typical worker seemed to go in only one direction: up. From 1950 to 1970, the average earnings of male workers increased by about 25 percent each decade. And these gains were not concentrated among some lucky few. Rather, earnings rose for most workers, and almost every prime-aged male (ages 25-64) worked.
Milken Institute Review, 2011, 13(3): 8-16.
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