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Effects of Public Policies

Paper Session

Friday, Jan. 5, 2024 10:15 AM - 12:15 PM (CST)

Convention Center, 305
Hosted By: American Economic Association
  • Chair: John Anders, Trinity University

Long-Run Impacts of Public Investments in Children's Nutrition on Education: Evidence from Rural China

Yongli Chen
,
Nankai University

Abstract

The long-term impacts of school meal programs on educational attainment and intergenerational mobility in education are under-investigated, particularly for developing countries. To fill this gap, this paper explores a nutrition improvement program implemented in rural China. Using the data from China Family Panel Studies and a Difference-in-Differences identification strategy, my results show that the policy improved educational attainment for rural students: one additional year of policy exposure led to a 0.14-year increase in schooling, a 2.3 percentage point increase in middle school graduation, and a 1 percentage point decrease in illiteracy rate. Girls and students from poverty-stricken counties and low-income families benefited most. The improvements in educational attainment were associated with better health status, fewer absence days, a lower likelihood of absence for illness, and better academic performance. Further analysis shows that this policy also promoted intergenerational mobility in education in rural China, and this effect was more pronounced for aforementioned socioeconomically disadvantaged groups.

Scaling Up the American Dream: A Dynamic Analysis

Alessandra Fogli
,
Federal Reserve Bank of Minneapolis
Veronica Guerrieri
,
University of Chicago
Mark Ponder
,
Nera
Marta Prato
,
Yale University and Bocconi University

Abstract

The Moving to Opportunity program implemented in the ’90s in five US cities has offered vouchers to low-income people living in high-poverty neighborhoods to move to richer neighborhoods. We use a general equilibrium model with three neighborhoods, residential choice, and endogenous local spillovers to explore the effects of scaling up this type of voucher programs. We show that, as we scale up the policy, the income gain for the kids of the voucher receivers first increases, but then ends up decreasing because of general equilibrium effects. In particular, we explore the effects, both on impact and over time, on local spillovers, rental rates, inequality, and segregation. We also compare voucher policies with place-based type of policies and show that, while place-based policies may be more effective in reducing income
inequality, they would be much less effective in reducing residential segregation by income, and may in fact make the economy more segregated.

The Cyclicality of Births and Babies' Health, Revisited: Evidence from Unemployment Insurance

Lisa Dettling
,
Federal Reserve Board
Melissa Schettini Kearney
,
University of Maryland

Abstract

We revisit the cyclical nature of birth rates and infant health and investigate to what extent the
relationship between aggregate labor market conditions and birth outcomes is mitigated by the
consumption smoothing income assistance delivered through unemployment insurance (UI).
We introduce a novel empirical test of standard neoclassical models of fertility that directly tests
the prediction of opposite-signed income and intertemporal substitution effects of business
cycles by examining the interaction of the aggregate unemployment rate with a measure of
potential income replacement from UI. Our results show that as UI benefit generosity reaches
100 percent income replacement, there is no effect of the unemployment rate on fertility rates.
This implies that the well-documented cyclical nature of fertility rates is about access to
liquidity. We also provide novel evidence that infant health is countercyclical based on timing
of conception, but procyclical based on time in utero. The negative relationship between the in
utero aggregate unemployment rate and infant health also disappears when potential UI
replacement rates reach 100 percent. Our results indicate that the social insurance provided by
UI has a pro-natalist effect and improves babies’ health.

The Effects of Public Housing on Children’s Educational: Evidence from a National Experiment in Colombia

Valentina Duque
,
American University
Adriana Camacho
,
University of the Andes
Michael Gilraine
,
New York University
Fabio Sanchez
,
University of the Andes

Abstract

We analyze the effect of Colombia’s ambitious “Free Housing” program on children’s educational outcomes. The program was generous, giving free housing to 30,000 beneficiaries in desirable areas of nearly 200 municipalities. We evaluate the program by leveraging housing lotteries and linking applicants to their children. Using a myriad of administrative sources and survey data we find that four years after the lotteries, public housing increases high school graduation by seven percentage points – a seventeen percent increase relative to the control mean – and boosts exit exam scores and college-going. Exploring mechanisms, lottery winners attend better schools, their families become wealthier, and they live in higher income neighborhoods with less crime.

Trends in the Distribution of Social Safety Net Support among Parents with and without Children

Carolina Cardona
,
Johns Hopkins University
Robert Moffitt
,
Johns Hopkins University
Gwyn C. Pauley
,
University of Wisconsin-Madison

Abstract

Over the past 30 years, our past work has shown that the U.S. safety net has experienced a long-term decrease in support for the lowest income families (e.g., less than $15000) and an increase in support for somewhat higher income families (e.g., $15000-$35000) (e.g., Scholz et al. (2009) and Moffitt (2013, 2015) as a result of declines in AFDC/TANF and housing benefits and increases in EITC and SNAP benefits for higher income families. The long-term trend is punctuated by recessions where the opposite shift occurred. Our work uses the Survey of Income and Program Participation (SIPP) data and adjusts for transfer underreporting by bringing up participation and benefits to administrative control totals. We have mainly focused on the adult population, but our proposed paper shifts to focus on children to see if the same shift has occurred for them. We will make the following additional contributions: (i) Our past work has only gone through 2017 and we will extend it through 2021 and the Pandemic, when major shifts in transfers occurred, many going to the poorest families (like the Child Tax Credit); (ii) we will add Medicaid to our calculations using the Medical Expenditure Panel Survey, which has data on family transfers from that program, an important addition because many Medicaid recipients are the lowest income families; and (iii) we will estimate linear regression models for transfer receipt as a function of policy changes using staggered DID designs to estimate the impact of policy changes on changes in transfers between lower and higher income families (and with and without children). Our preliminary results through 2019 show that the poorest families with children have continued to receive less support than those with higher incomes. Our work for the AEA will report how these findings change when the above-noted contributions are made.
JEL Classifications
  • H4 - Publicly Provided Goods