Research

💥"Beyond Particulate Matter: New Evidence on the Causal Effects of Air Pollution on Mortality"💥 

with Maoyong Fan (Ball State) and Maigeng Zhou (Chinese CDC), Journal of Health Economics, Vol 91, September 2023, 102799.
  • Abstract: The increasing global demand for electricity has led to a rise in coal consumption, which has in turn led to an increase in sulfur dioxide (SO2) pollution levels. Despite the severity of this issue, conclusive evidence regarding the causal relationship between SO2 pollution and health, particularly in developing countries, is lacking. We leverage a large national environmental regulation policy, implemented in China to reduce SO2 emissions, to estimate the impacts of SO2 on mortality. We find that 1-µg/m3 reduction in SO2 concentrations leads to 2.40 fewer deaths per 100,000 children under the age of 5 (1.5% decrease) and 20.48 fewer cardiorespiratory deaths per 100,000 people aged 60 years and above (1.1% decrease) annually. The results are consistent across various robustness checks.

💥"Measuring the Value of Rent Stabilization and Understanding its Implications for Racial Inequality: Evidence from New York City"💥

with Ruoyu Chen (UWindsor), Luis Quintero (JHU), Regional Science and Urban Economics, Vol 103, November 2023, 103948.
  • Abstract: Amid a renewed interest in rent control due to the housing affordability crisis, the scope and distribution of its benefits remain underexplored. Using methodological innovations, this study quantifies rent discounts for rent-stabilized units in New York City (NYC) from 2002 to 2017. We estimate an average discount of $410 per month. Additionally, we note that these discounts are: (1) not progressively distributed towards lower-income households; (2) more pronounced in Manhattan and increasing in gentrifying areas; and (3) double for households correctly aware of the policy. The aggregate rent discounts range between $4 and $5.4 billion annually, representing 10%–14% of the federal budget for means-tested housing programs. While White tenants received larger rent discounts in the 2000s, racial disparities in these discounts have largely diminished since 2011, consistent with patterns in spatial sorting and gentrification.

"Does Rent Regulation Affect Tenant Unemployment? Evidence from New York City"

with Luis Quintero (JHU Carey), Xi Yang (UNT), Under Review
  • Abstract: This paper examines the impact of rent regulation on tenants' unemployment in New York City. We provide evidence that rent stabilization increases tenants' unemployment by over five percentage points using data from 2002 and 2017. To address endogeneity concerns, we employ an instrumental variable strategy that exploits the local historical availability of rent-stabilized units when tenants move in as an exogenous source of variation for occupying a rent-stabilized unit. We also develop a job-search model to explain the underlying mechanisms of rent regulation's unemployment effects. Our findings underscore the need for policymakers to consider the unintended consequences of rent regulation.

"Opportunity and Risk"

with Nazmul Ahsan (SLU), Shahe Emran (Columbia IPD), Forhad Shilpi (World Bank), Under Review
  • Latest Version 2023/09 [Working Paper] | First Version 2022/06 
  • Part of the results in this paper was circulated earlier under the title “What the Mean Measures of Mobility Miss: Learning About Intergenerational Mobility from Conditional Variance” as a World Bank Policy Research Working Paper 2022/06. 
  • Abstract: The standard measures of intergenerational mobility in economic literature do not account for risk. The estimates of relative and absolute mobility are usually based on the conditional mean function for children's life outcomes given parent's economic status. The existing literature largely ignores the information captured in conditional variance. We develop a broader approach where conditional variance of children's outcome is a summary statistic for life-time risks. Using data from China, India, and Indonesia, we estimate simultaneously conditional mean and conditional variance functions for children's schooling by a maximum likelihood estimator. Evidence suggests a strong negative association between father's schooling and conditional variance of children's schooling across all three countries. Being born to an educated father confers double advantages: a higher mean and a lower variance. We derive risk-adjusted measures of relative and absolute mobility by accounting for an estimate of the risk premium for the conditional variance faced by children at birth. The estimates of risk-adjusted measures suggest that the standard measure of relative educational mobility, intergenerational regression coefficient, substantially overstates relative mobility of the disadvantaged subgroups: children of low educated parents, daughters, and rural children. For the most disadvantaged children (fathers with no schooling), the overestimation is 35.63% in China, 46.58% in India, and 20.94% in Indonesia. In contrast, the overestimation is negligible for the children of college educated fathers. The methodology developed here is of wider interest as the risk-adjusted measures can be readily applied to intergenerational income mobility analysis.

"Is Gender Destiny? Gender Bias and Intergenerational Educational Mobility in India"

with Shahe Emran (Columbia IPD), Forhad Shilpi (World Bank), Under Review
  • Latest Version 2023/03 [Working Paper] | First Version 2021/03
  • Part of the results in this paper was circulated earlier under the title “Gender Bias and Intergenerational Educational Mobility: Theory and Evidence from China and India” as a World Bank Policy Research Working Paper 2020/05. 
  • Abstract: We extend the Becker et al. (2015) model to study the implications of gender bias against girls in the family, school and labor market for intergenerational educational mobility. The linear mobility equation generates implausible predictions such as son preference has no impact on relative mobility. In contrast, parental biases such as son preference and a low estimate of a girl's ability affect both relative and absolute mobility when the mobility equation is concave. Evidence from India, using data free of sample truncation, finds a concave relation in both rural and urban areas, indicating the lowest relative mobility in low educated households. Both absolute and relative mobility are lower for girls born to low educated fathers irrespective of location but the gender gap declines with father's education. Among the daughters of college educated fathers, there is no gender gap in urban areas, but a substantial gender gap in absolute mobility exists in rural areas. These contrasting patterns are partially explained by the rural-urban differences in financial investments across gender suggesting that parental investment is an important mechanism. Despite the bias in financial investment, urban daughters of college educated fathers achieve gender parity. Theoretical insights help interpret the evidence suggesting that a larger positive impact of parental nonfinancial inputs is important for this gender parity. Estimates from the first child sample indicate that selective abortion in urban educated households also plays a role. Exploiting the implications of son preference for optimal fertility stopping, we use the last child sample to test and reject the hypothesis that the observed gender convergence reflects a substantially weaker son preference in educated urban households. A contrast of the patrilineal vs. matrilineal states suggests that the bias against girls observed at the country level is driven by the patrilineal states.
  • Media Coverage: Ideas For India "Does gender (still) determine destiny in India?" (May 2021) | World Bank Newsletter "Gender and Development" (September 2020) | IHDS Forum (July 2020) 

"Growing Up Together: Sibling Correlation, Parental Influence, and Intergenerational Educational Mobility in Developing Countries"

with Nazmul Ahsan (SLU), Shahe Emran (Columbia IPD), Qingyang Han (JHU),  Forhad Shilpi (World Bank)
  • Abstract: This paper presents credible and comparable evidence on intergenerational educational mobility in 53 developing countries using sibling correlation as a measure, and data from 230 waves of Demographic and Health Surveys. It is the first paper to provide estimates of sibling correlation in schooling for a large number of developing countries using high quality standardized data. Sibling correlation is an omnibus measure of mobility as it captures observed and unobserved family and neighborhood factors shared by siblings when growing up together. The estimates suggest that sibling correlation in schooling in developing countries is much higher (average 0.59) than that in developed countries (average 0.41). There is substantial spatial heterogeneity across regions, with Latin America and Caribbean having the highest (0.65) and Europe and Central Asia the lowest (0.48) estimates. Country level heterogeneity within a region is more pronounced. The evolution of sibling correlation suggests a variety of mobility experiences, with some regions registering a monotonically declining trend from the 1970s birth cohort to the 1990s birth cohort (Latin America and the Caribbean and East Asia and Pacific), while others remained trapped in stagnancy (South Asia and Sub-Saharan Africa). The only region that experienced monotonically increasing sibling correlation is the Middle East and North Africa. The recent approach of Bingley and Cappellari (2019) is used to estimate the share of sibling correlation due to intergenerational transmission. The estimates show that when the homogeneity and independence assumptions implicit in the standard model of intergenerational transmission are relaxed, the estimated share is much larger. In the sample of countries, on average 74 percent of sibling correlation can be attributed to intergenerational transmission, while there are some countries where the share is more than 80 percent (most in Sub-Saharan Africa). This suggests a dominant role for parents in determining the educational opportunities of their children. Evidence on the evolution of the intergenerational share, however, suggests a declining importance of the intergenerational transmission component in many countries, but the pattern is diverse. In some cases, the trend in the intergenerational share is opposite to the trend in sibling correlation.

"When Measures Conflict: Towards a Better Understanding of Intergenerational Educational Mobility"

with Nazmul Ahsan (SLU), Shahe Emran (Columbia IPD), Orla Murphy (DalhousieU), Forhad Shilpi (World Bank)
  • Abstract: A large empirical literature on intergenerational educational mobility measures relative mobility by the slope of a conditional expectation function (CEF) relating children's education to parental education. Three measures are widely used: intergenerational regression coefficient (IGRC) with years of schooling as the indicator of educational attainment, intergenerational correlation (IGC) when years of schooling is normalized by its standard deviation, and intergenerational rank-rank slope (IRRS) when schooling ranks in a generation is adopted. The existing evidence suggests that conclusions from IGRC vs. IGC vary substantially, but there is no systematic evidence on whether the IRRS estimates also lead to conflicting conclusions. Using data free of coresidency bias from three developing countries with 42 percent of world population in 2000 (China, India, Indonesia), we provide evidence that the IRRS estimates may lead to dramatically different conclusions about spatial heterogeneity (rural/urban) and evolution across cohorts, especially when the mobility CEF is concave or convex. The rank-rank CEF is consistently more convex (or less concave) compared to the other two CEFs. When different measures lead to conflicting conclusions it is not clear how to interpret the evidence and advise the policymakers. We develop a simple approach to interpret the IGC estimate in terms of the Becker-Tomes model that provides a foundation for a comparative study of IGC vs. IGRC. We find that the idiosyncratic component of children's schooling variance unrelated to the family background plays an important role in IGC. The elasticity of IGC w.r.t IGRC is less than 1 implying that the IGC estimates are less responsive to changes in economic forces (such as credit constraint and returns to education) raising questions about the suitability of IGC for understanding the role of changing economic conditions in intergenerational mobility. This also provides an explanation for the puzzle in the literature that IGRC estimates across cohorts show substantial improvements, but the IGC estimates suggest no significant changes. When the mobility CEF is quadratic, by construction, the quadratic coefficient of the CEF for IGC is much larger than that of the CEF for IGRC. This implies that IGC estimates mechanically generate much stronger persistence at the top (for convex) or bottom (for concave) of the distribution. We report evidence that, unlike income, calculating schooling ranks by mid-rank method may fail to neutralize the effects of changing inequality across generations, making IGC a preferable measure for tackling changes in cross-sectional inequality. It is difficult to interpret IRRS in terms of the Becker-Tomes model. The inequality of opportunity approach (Roemer (1998)) suggests that policy advice should focus on the causal effects of policies on the influence of inherited circumstances on children's education which is captured by IGRC. From this perspective, a policy such as school construction or trade liberalization should be considered effective in improving relative educational mobility if the causal effect on IGRC is negative even when a policy fails to affect IRRS significantly.

"Parental Migration, Investment in Children, and Children's Non-cognitive Development: Evidence from Rural China"

with Xi Yang (UNT)  
  • Abstract: Many children worldwide are left behind by parents who are migrating for work. While previous literature has studied the effect of parental migration on children’s educational outcomes and cognitive achievements, this study focuses on how parental migration affects children’s non-cognitive development. We use longitudinal data of children in rural China and adopt labor market conditions in destination provinces as instrumental variables for parental endogenous migration choice. We find that parental migration has a significant negative effect on children’s non-cognitive development. Differentiating inter- and intra-provincial migrations suggests that the negative effect of parental migration is mainly driven by inter-provincial migrations. We test four different mechanisms of how parental migration affects child development including parental financial inputs, parental time inputs, household bargaining, and children’s own time input. Our results provide insights into the relative importance of different mechanisms in determining the effect of parental migration on children’s non-cognitive skill formation.