Nikhil Rao

Working Papers

The Socioeconomic Consequences of Misdemeanor Conviction [Draft]

with James Reeves

Supported by Arnold Ventures and Policy Impacts

Misdemeanors account for three-quarters of criminal cases filed annually in the United States, yet causal evidence on the impacts of misdemeanor conviction is scarce. We combine administrative and survey data to provide novel evidence of how misdemeanor conviction affects the socioeconomic outcomes of defendants and their families. Using data on nearly seven million defendants from 11 states, we characterize the types of people involved with the misdemeanor system. We estimate causal impacts of a conviction relative to a charge using seven county reforms that sharply reduced conviction rates. Regression discontinuity design estimates yield precise null average effects of the reforms on criminal and labor market outcomes. Defendants dismissed by the reform are unlikely to re-offend if dismissed, but also unlikely to be harmed by conviction---marginal defendants are older and more likely to have been charged with minor crimes than the average defendant. Heterogeneity analyses suggest that conviction harms young and first-time defendants, implying that interventions targeting dismissal toward these groups would be beneficial. Finally, our causal estimates imply a negative Marginal Value of Public Funds of misdemeanor conviction, even under plausible estimates of general deterrence effects.

Measuring Discrimination using Natural Experiments [Draft]

with James Reeves

Disparities between social groups (e.g., gender, race) exist at crucial decision points in many contexts, from hiring to policing. These disparities are difficult to interpret when unobservable factors vary by group. To overcome this challenge, we use a binary instrumental variable (IV) strategy to measure discrimination after adjusting for group differences in unobserved potential outcomes, with extensions to adjust for treatment effects or multiple potential outcomes instead. Assumptions on selection behavior recover the distribution of potential outcomes for each group, which we directly condition on to bound or point identify discrimination. This approach expands where researchers can measure such discrimination since existing tools need randomly assigned decision-makers. We use our method to study racial discrimination in misdemeanor prosecution, the most common form of contact with the United States criminal court system. We use a difference-in-difference IV strategy generated by a budget cut that reduced prosecution rates in King County, Washington, but did not affect adjacent counties. Before the cut, we find no evidence of discrimination in prosecution conditional on unobserved potential recidivism. After the cut, minority defendants became less likely to be prosecuted than white defendants with similar potential recidivism. We find suggestive evidence that this pattern is driven by prosecutors dismissing lower quality, resource-intensive cases. Such cases were more prevalent among minority defendants, perhaps due to disparities created in criminal legal decisions before prosecution.

Network Spillovers and the Social Returns to Crime-Reduction Interventions [Draft undergoing disclosure review] 

with Ashley Craig, Sara Heller, and Kenneth Hofmeister

Supported by NSF, Russell Sage Foundation, J-PAL, and University of Michigan

Randomized controlled trials (RCTs) are influential in shaping policy to reduce the massive social harms of crime. Yet crime-prevention experiments typically ignore peer spillovers, which could cause standard comparisons of treated to control individuals to misrepresent the causal effects of treatment. To estimate how program effects diffuse or displace across social networks, we combine four existing RCTs in Chicago (N ≈ 12,000) with multiple administrative measures of social connections between people: co-arrest, co-victimization, shared classes, and shared households (N ≈ 1.5 million). We quantify spillovers and explore which social ties matter most. Being exposed to at least one treated peer generates 34-50 percent reductions in violence, concentrated among those who were also in the RCTs. Most of this indirect exposure occurs through peers with co-arrest or classroom ties. Standard intent-to-treat estimates considerably understate both the direct impact of treatment and the interventions’ total social impacts accounting for peer influence; spillovers sometimes mask actual behavior change entirely. The net violence decline is at least 175 percent greater than implied by the estimates in the original studies. The results have important implications for how we estimate treatment effects in crime prevention and expand our knowledge of how people affect each other's criminal decision-making.

Parental Resources and College Major Choice [Draft]

with Zsigmond Pálvölgyi and Tyler Radler

If parental resources insure children against negative labor market shocks, access to such informal safety nets might influence children’s decisions of what to study in college. This paper examines how unexpected increases in housing prices affect children’s college major choices. We do this by combining a large survey of United States first-year undergraduates with spatial variation in housing demand growth during the 2000s housing boom. Using variation in the size of the structural break in house prices as an instrument for price changes, we find that overall, unexpected increases in house prices induce first-year students to choose majors that earn more. These effects are concentrated among students from areas with low home-ownership rates, consistent with these students primarily facing a cost of living increase. In contrast, an unexpected increase in house prices induces students from areas with high home-ownership rates to choose majors associated with lower earnings. This pattern is consistent with these students responding to a wealth increase by enrolling in majors that lead to lower-paying careers but potentially better amenities.

In Progress

Peer Socioeconomic Mismatch and Student Achievement

with Micah Y. Baum

This paper studies how exposure to peers of different socioeconomic status (SES) affects academic performance in college, using the conditional random assignment of first-year roommates and administrative records from a large Midwestern university. Random assignment to a very high SES roommate reduces first-year GPA for low SES students by 0.4 SD even though these roommates are better academically prepared, a pattern at odds with standard ability-based peer effects. This GPA reduction is not driven by other characteristics of students or their roommates. We provide suggestive evidence that these GPA reductions stem from changes in the composition of students’ friend groups, using an original survey linked to administrative records. Students randomly assigned a much higher SES roommate report a greater share of affluent friends in their social circle. These students also report that their roommates are less likely to prioritize academics or to positively influence the focal student’s academic outcomes. Our results suggest that exposure to students from different SES backgrounds can alter social experiences in college while amplifying the barriers to achievement that low SES students often face.

Examining Interventions to Improve Outcomes of Justice-involved Individuals, FSRDC Project #2957

with James Reeves

Publications

Inflation Expectations and Nonlinearities in the Phillips Curve

with Alexander Doser, Ricardo Nunes and Viacheslav Sheremirov

Journal of Applied Econometrics 38:4 (2023), 453-471. [Paper] [Published version]

Online Appendix

Sectoral inflation and the Phillips curve: What has changed since the Great Recession? 

with Maria Jose Luengo-Prado and Viacheslav Sheremirov

Economics Letters 172 (2018), 63–68. [Paper] [Published version]