Hau Chyi - Research

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Research Statement

I am an applied microeconomist who specializes in topics on labor and public economics. My current research focuses mainly on two areas: the effects of maternal decisions on children’s developments, and the effects of various policies on the decisions of low-skilled, single mothers. Because I am teaching and working in China, I am also working on various issues using Chinese panel and cross-sectional data.

The following topics will be my research focus for the next few years:

Effects of Mothers’ Decisions on Children’s Attainments

Having been raised by a single mother in Taiwan, I have always admired my mother’s decisions on allocating her time between work and taking care of her three children. There has never been a welfare program such as AFDC in Taiwan, and we certainly faced economic hardship while growing up. However, the welfare system in the U.S. is plagued with its negative correlation with welfare dependence and many negative outcomes of its participants. The difference between my own upbringing and the US. system motivated me to investigate the causal correlation between welfare, welfare reform, and participating children’s short- and long-run outcomes in two of my thesis chapters with my coauthor, Orgul Demet Ozturk of University of South Carolina. We continue to work on these pieces for publication.  Additionally, I am also working with some of my students on the effects of decisions of Chinese mothers on their state mandated only child.

Mothers' Welfare Use and Children's Attainments: A Structural Appraoch, (with Orgul Demet Ozturk and Weilong Zhang) current version: January 2011; under review.

The effects of single mothers’ welfare participation and work decisions on children’s outcomes are important. First, theories and empirical studies regarding the effects of mothers’ work on children’s attainments yield ambiguous findings. Second, participating in AFDC also exhibits a negative statistical relationship with the participating children’s possible outcomes of all sorts in the data. We develop a dynamic structural model of a single mother’s work and welfare participation decisions while their children are young. This model is used to measure the effects of mothers’ decisions on children’s attainments in the short run. Using NLSY79 children’s PIAT Math test scores as a measure of attainment, we find that single mother’s work and welfare use in the first five years of her child’s life both have positive effect on her child’s outcome, but this effect declines by the initial ability. The higher the potential ability of child, the lower the positive impact work and welfare have. In fact, in case of welfare the effect is negative if child has more than about median initial ability.. Furthermore, we find that work requirement reduces a single mother’s use of welfare. However, the net effect of work requirement on a child’s test score depends on whether mother’s work brings in enough labor income to compensate for the loss of welfare benefits. We also look at the implications of welfare eligibility time limit, child bonus, and maternal leave, on child’s outcome. The basic finding is as long as a policy initiative increases mothers’ work, it is beneficial to her child’s outcome.

This paper is presented at European Society for Population Economics 2007, and Southern Economic Association 2007 conferences and seminars at Academia Sinica, Taiwan; CCER, Beijing University, China; University of South Carolina; Tsinghua University and WISE, Xiamen University, China.

The Effects of Single Mothers’ Welfare Participation and Work Decisions on Children’s Attainments, (with Orgul Demet Ozturk), current version: February 2010; R&R: Economic Inquiry.

This research examines the effects of mothers' welfare and work decisions on their children's attainments using a random effect instrumental variables (REIV) estimator. The estimator employs sibling comparisons in a random effect framework and an instrumental variables approach to address the unobserved heterogeneity that may influence mothers' work and welfare decisions. The identification comes from the variation in mothers' different economic incentives that arises from the AFDC benefit structures across U.S. states. We focus on children who were born to single mothers with twelve or fewer years of schooling. The short- run child attainments under consideration are the Peabody Individual Achievement Test math and reading recognition scores from the Children of the National Longitudinal Survey of Youth 1979 cohort. Long-run attainments are a child's number of years of schooling by age 25 and his or her early adulthood labor income, drawn from the Panel Study of Income Dynamics. The REIV estimates imply that, relative to no welfare participation, participating in welfare for one to three years provides up to a 5 percentage point gain in a child's Picture Individual Achievement Test (PIAT) scores. The negative effect of childhood welfare participation on adult earnings found by others is not significant if one accounts for mothers' work decisions. At the estimated values of the model parameters, a mother's number of years of work contributes between $3,000 and $7,000 1996 dollars to her child's labor income, but has no significant effect on the child's PIAT test scores. Finally, children's number of years of schooling is relatively unresponsive to mothers' work and welfare participation choices.

This paper is presented at 2008 meeting of the Far Eastern and South Asian Meeting of the Econometric Society and 2008 annual meetings of the European Association of Labour Economists.

Welfare Use and Obesity (with Timothy Classen and Orgul Demet Ozturk), February 2010.

We use previous estimates of responses to food insecurity and consider whether increases in food budgets from the food stamp program (FSP) result in substitution toward healthier foods, possibly due to income effects of benefits.  This allows us to consider policy experiments in which constraints on possible food choices available from the FSP are imposed to require certain minimal nutritional requirements of covered foods.  To estimate substitution effects of policy changes that limit the set of possible food choices based on nutritional content and other potential changes to the FSP, we employ the USDA's Continuing Survey of Food Intake by Individuals (CSFII).  These are detailed food diary data that have previously been used to consider the nutritional choices of FSP participants (e.g., USDA study by Gleason et. al. (2000)).  The policy exercises include targeting the benefit to a smaller set of food choices, perhaps based on nutrient content or other nutritional measures (%of calories from fat, etc.).  The food security issue and substantial increase in consumption around the benefit might be increased if the benefit were limited to increase more fresh foods which are not generally storable.  Another policy experiment considers the effect of offering benefits on a more frequent basis.  This is based on the food insecurity issues and cyclical consumption patterns identified in Shapiro (2005).

This work is presented at seminar at University of South Carolina, 2008 annual meeting of the American Society of Health Economists. 2008 Southern Economic Association Annual Meeting

Policy Effects on Low-Skilled Single Mothers’ Decisions

Since the early 1990s, increasing work among disadvantaged families has been an important policy goal. Among them, the welfare reform 1996 and the 1993 EITC expansion are the most effective ones. The following papers focused on whether and how do policy effects change

Job Quality and Economic Independence of Welfare Users, (with Orgul Demet Ozturk), January 2010.

In this paper, we identify dimensions that make a job a good ``stepping stone'' towards economic independence. We utilize five job characteristics to estimate a duration model of time before achieving economic independence and to generate a quality index for each job using the latest Occupational Projections and Training Database. These characteristics are: median earning level and forecast of employment growth of an occupation, unemployment rate and ratio of part-time workers within an occupation, and degree and certificate requirements of the job. Economic independence is defined as holding a full-time job that pays more than the state minimum wage or a job that pays at least 80 percent of the state minimum wage but has employer provided health insurance, for more than four consecutive months. Using less skilled single mothers who have been on welfare from several Survey of Income and Program Participation (SIPP) panels, we find that controlling for wage and work intensity, employment in high quality jobs is highly correlated with the likelihood of economic independence. Moreover, with high quality stepping stone jobs, these women gain economic independence faster.

This work is presented in WISE, Xiamen Univeristy and the CeMENT workshop after the AEA Atlanta meeting by the Committee on the Status of Women in the Economics Profession (CSWEP).

The 1993 EITC Expansion and Low-Skilled Single Mothers’ Welfare Use Decisions, current version: August 2007; Applied Economics forthcoming.

Previous studies on low-skilled single mothers generally focus on the binary decisions of either welfare use or work. However, work among welfare participants has increased steadily since the mid 1990s. This study estimates the joint probability of the two decisions using a bivariate probit model. I investigate the role of the 1993 EITC expansion on the decline of welfare caseloads. Using monthly welfare use and work information from the Study of Income and Program Participation, I find that the 1993 EITC expansion has at least the same effect on reducing welfare use as the welfare reform initiatives, in particular, welfare time limits. Moreover, the elasticity estimates indicate that single mothers, especially those who were not employed and dependent solely on welfare before the expansion were more responsive to the EITC expansion than to welfare time limits. Finally, the increase in work among welfare participants is due to the relative ineffectiveness of the policies in reducing the net population of those who are on welfare and work simultaneously. 

Issues on Chinese Labor Market

Currently there are three most-widely studied data sets on Chinese issues. The cross-sectional China Household Income Project (CHIP) is a nationally representative data survey that covers both rural and urban areas. China Health and Nutrition Survey (CHNS) is a panel data that has seven waves (1989, 1991, 1993, 1997, 2000, 2004, and 2006) and covers both rural and urban areas in nine Chinese provinces. A newly released data - Chica General Social Survey (CGSS) is quickly rising in its popularity. Using these data sets, I am currently working on several projects with students that I supervise. 

The Effects of Three Education Subsidies on Enrollment Rates of Rural Chinese, with Bo Zhou, April 2010, R&R: Journal of Development Economics.

In this study we estimate the effects of three sequential reforms from 2000 to 2006 in China on tuitions of primary and junior high schools for poor and rural families on school enrollment. Using difference-in-difference approaches and sample children from China Health and Nutrition Survey 2000, 2004 and 2006 waves, we find that tuition control has little effect on primary and junior-high school enrollment. Furthermore, a policy that includes tuition waivers, free text books and living expense subsidies for children who live in rural poor families starting from 2003 has a positive and statistically significant effect on school enrollment, especially on that of rural girls. Finally, tuition waive for all rural children since 2006 has a statistically significant gender differential effect on school enrollment in girls' favor.

Determinants of Marriages in Rural and Urban China

There are several characteristics that distinguish Chinese marriage issues from those of developed countries. First, one child policy and the traditional emphasis on male children make China one of the countries with the worst gender ratio - in 2007, the ratio is 119 to 100. This implies a huge difference in bargaining powers between genders in the marriage market. Second, the rapid economic growth in the past three decades generates a significant income difference between families. Furthermore, the residency (Hukou) system restricts migration and confines the pool of potential candidates. Using data from CHNS, we find that for rural men, owing a car among other things; significantly increase their chance of marrying early. The fact that none of the observed differences (including annual income and education level) explain the variation in marrying ages of urban men imply that they are benefited by the hukou system - that is, rural women may want to marry men with relatively lower socio-economic status to acquire the urban residency.

Determinants of Happiness of the Chinese Elderly (with Cherish Mao) April 2010, Journal of Happiness Studies, forthcoming.

We study the determinants of the happiness of Chinese elderly. We are particularly interested in how living with elder people’s own children and their grandchildren affect their complacence. Our regressors are motivated by the implications of indirect utility function, which controls local price level as well as permanent income measures. Using Chinese General Social Survey, we find that grandparents who live with their grandparents are much happier than their counterparts who do not live with grandparents. Conditional on living with their grandchildren, living with their children does not increase their indirect utility. Furthermore, Chinese elderly men living with own their children are associated with lower indirect utility. These findings are in coherent with the old Chinese sayings that a good life of an elderly is “to mouth malt sugars and dally with one’s grandson.”

Health Insurance Reform and Female Labor Supply in Urban China (with Yunsen Li); R&R World Economic Paper (Chinese).

The reform of Chinese Health Insurance since 1998 greatly expanded health insurance coverage among employees who lived in urban areas in China. The new, Urban Employee Basic Health Insurance (UEBHI) requires both employers and employees to share the cost through contributing different percentages in terms of employee wages to personal as well as universal overall accounts. Under certain thresholds determined by individual cities, employees can choose to pay their medical expenses through their personal accounts or by cash; while more than 85% of the medical expenditure will be paid by the universal account if that expenditure is more than the threshold. Using data from CHNS, we employ the variation in the timing of the implementation of UEBHI at the city level to identify the effect of health insurance on female labor supply.

Intergenerational Income Mobility in China (with Bo Zhou); April 2010., submitted to Economic Research Journal (Chinese)

Previous studies of income inequality in China have shown that Gini coefficient has increased dramatically in recent years. However, using this result as an indicator for income equality changes implicitly requires that people stick to their initial economic positions, and hence overshadows the impact of income mobility on income distribution. To further expose the long run aspect of income equality in China, this paper uses intergenerational data from CHNS to identify the correlation in lifetime earnings between fathers and sons. By far, the OLS estimates we have conducted are reported to be 0.6 in 1989 and converge to around 0.2 in 2000. It implies that intergenerational income mobility in China is extremely low in late 1980s, and it now comes to a normal level comparing to developed countries. However, these OLS estimates are downward biased due to the error-contaminated measures of using current income to proxy permanent income. In order to solve this endogeneity problem, we are now working on finding an instrumental variable which only correlates with father’s economic status but not the son’s. 

Hau Chyi,
Aug 3, 2010, 10:05 AM
Hau Chyi,
Aug 3, 2010, 10:18 AM
Hau Chyi,
May 24, 2010, 5:50 PM