WORKING PAPERS:

Intertemporal Substitution or Reference-Dependent Preferences? Evidence from Daily Labor Supply of South Indian Boat-owners,  Job Market Paper

(joint with Xavier Giné and Mónica Martínez-Bravo), November 2009

        We study the labor supply behavior of South Indian boat-owners using daily data on labor force participation and the value of catches from 2000 to 2007. Our panel is among the most extensive ever used for this purpose and the first to pertain to a non-service related occupation in a developing country. Our analysis compares two hypotheses about the response of labor supply to increases in wages and income: the conventional framework of intertemporal substitution versus reference-dependent preferences. We show that boat-owner’s labor force participation depends not only on their expected earnings but also on their recent earnings, supporting income-reference-dependent preferences. In our preferred specifications, participation elasticities with respect to expected earnings range between 0.57 and 0.61 while the responsiveness to changes in recent income is (in absolute value) a tenth the magnitude of the response to changes in expected earnings. The richness of the data allows us to estimate a participation equation conditional on expected earnings, recent earnings, recent effort, and individual effects. We exploit different sets of earnings shifters to identify participation elasticities (internationally-determined prices, lunar phases, and wind direction). Finally, our results also imply that short-term labor supply models should include recent earnings conditional on recent hours or days worked as an explanatory variable. Since recent earnings are positively correlated with expected earnings and negatively related to the probability of participation, omitting this variable yields downwardly-biased elasticity estimates.

No Pass, No Play: The Effects of Minimum Academic Requirements to participate in High

School  Sports on Education

(revise and resubmit at The B.E. Journal of Economic Analysis & Policy), October 2009

During the 1970s, state interscholastic associations imposed rules requiring student athletes to pass a certain number of subjects in order to be allowed to participate in school sports. I use a simple conceptual framework to illustrate the possible effects of the requirement and derive predictions for the data. Then, I test these predictions using the NLSY together with a newly collected dataset on the stringency of the rules. I exploit variation in the stringency of the requirements to estimate its effect on high school graduation. I find that requiring students to pass one additional course is associated with a two-percentage-point increase in the likelihood of graduation. Since minimum academic standards are more likely to be binding for more academically challenged students, it is not surprising that this effect is decreasing in AFQT scores. These findings survive a number of robustness checks, including using female students, who at the time had limited access to interscholastic competitions, as a control group.

Child Care and Female Labor Force Participation: The Role of Grandparents

(joint with Josefina Posadas), August 2009

                                                          

        In this paper we analyze the role of child care provided by grandparents on the labor force participation of mothers (MLFP). This type of informal childcare, which is characterized for being flexible and usually free, can have an important impact on the likelihood that women work. Using European data from SHARE, we find significant differences in characteristics of families who rely on this type of care compared with those who do not. Since it is likely that such traits are related to further unobservable characteristics affecting MLFP, we compare OLS with instrumental variables estimates. Our IV estimates show that the use of grandparental care is associated with an increase in MLFP of around fifteen percent. OLS estimates are downward biased and half as large, which indicates that women who benefit from this source of childcare are also different from their counterparts. 

PUBLICATIONS:

“Activity-based payments and reforms of the English hospital payment system,” (2007) Health Economics, Policy and Law, Vol. 2 (4). pp. 435-444. (joint with Ellis, Randall P.)

WORK IN PROGRESS:

“Education and Teen Driving Accidents: Evidence from No Pass No Drive Laws,” (joint with Rashmi Barua).