Publications

Zhou, Kit. "Choosing Sides in a Two-Sided Matching Market." The BE Journal of Theoretical Economics 23.2 (2023): 781-807. [Link]

Abstract: I model a competitive labor market in which agents of different skill levels decide whether to enter the market as a manager or as a worker. After roles are chosen, a two-sided matching market is realized and a cooperative assignment game occurs. There exists a unique rational expectations equilibrium that induces a stable many-to-one matching and wage structure. Positive assortative matching occurs if and only if the production function exhibits a condition that I call role supermodularity, which is stronger than the strict supermodularity condition commonly used in the matching literature because a high skilled agent with a role choice is only willing to enter the market as a worker if she expects that it is more profitable to cluster with only other high skilled agents than to exclusively manage. The wage structure in equilibrium is consistent with empirical evidence that the wage gap is driven both by increased within-firm positive sorting as well as between-firm segregation.

Working Papers

Zhou, Kit. "Performance Funding and Equity of Access to Public Universities" [Job Market Paper - PDF]

Abstract: While state appropriations to public universities have historically been determined by enrollment, an alternative is to fund based on performance metrics such as degree completions (performance funding, "PF"). Advocates argue that PF incentivizes universities to decrease inefficient over-enrollment, while critics argue that PF incentivizes universities to admit fewer under-represented minority applicants, as they are less likely to graduate. I develop a framework in which a social planner and universities systematically differ in their expected returns to enrolling students and show that there exist many EF and PF rules that realign the university's enrollment problem with the social planner's problem. Ultimately, level of funding affects enrollment, not structure of the funding rule. I also identify conditions such that funding changes disproportionately affect under-represented minority enrollment. To assess model predictions, I estimate changes in selectivity and demographic composition of incoming first-time, full-time cohorts at public four-year universities in Ohio and Tennessee, states that switched from EF to PF in 2009 and 2010 respectively. Ohio decreased funding in the long-run, while Tennessee did not; as expected, I find evidence of increased long-run selectivity in Ohio but not in Tennessee. I also find the proportion of Black enrollment in Ohio decreased by 1.13 percentage points in the long-run, while it increased by 2.93 percentage points in Tennessee.

Zhou, Kit. "Crowding Out Community Colleges? The Enrollment Effects of Regional Campuses on Higher Education" [PDF]
Abstract: The Ohio public university system has several institutions, including the flagship school Ohio State University (OSU), that are split between “main” and “regional” campuses. While OSU’s regional campuses are independently accredited institutions, they also have a strong transfer function: if a regional campus student has a minimum 2.0 GPA and 30 credit hours, they are guaranteed the option to transfer into the main campus. In this paper, I build a general theoretical framework of first-time and transfer admissions with multiple institutions; the model predicts that opening a regional campus causes community colleges to enroll a less academically prepared first-time student body, and may cause community college students to be crowded out by less prepared regional campus students in transfer admissions. As such, there are always both students who are strictly better and worse off after a regional campus opens, and opening a regional campus is not always welfare increasing. I show that a social planner prefers to modestly expand enrollment at a main campus over opening a larger regional campus if the regional campus is insufficiently differentiated from a community college.

Research Assistance

Graduate: Hanzhe Zhang, Assistant Professor of Economics at Michigan State University (website) - Summer 2020, Summer 2021

Papers worked on:

1. "Taking Credit for Others' Good Deeds: A Lab Experiment on Serial Reciprocity,"  with Amanda Chuan (experimental economics. behavioral economics)

2. "Decentralized Matching with Transfers: Experimental and Noncooperative Analyses," with Simin He and Jiabin Wu (experimental economics, two-sided matching)

Undergraduate: Patricia Jones (website), David Kennett (website)