Three Essays in Applied Microeconomics

Abstract

This dissertation consists of three papers that examine issues related to economic mobility and equitable and efficient public good provision. The first chapter studies the effects of exposure to negative labor demand shocks during youth and adolescence on human capital accumulation and later-life earnings. I use student-level administrative data from Texas and a modified difference-in-differences design to show that students from counties exposed to Chinese import competition were 4% more likely to enroll in college and 8% more likely to earn a bachelor's degree. I provide evidence that these adjustments, along with shifts of fields of study away from those directly exposed to import competition in both high school and college, shielded students from 90% of the shock's potential negative effects on later-life earnings. The second chapter examines whether household sorting in response to changes in K-12 school funding inhibits spending from reaching targeted students with a case study in Metro-Nashville Public Schools of the School Improvement Grant (SIG) program, which invested $7 billion in the nation's lowest-achieving schools. Using a boundary-discontinuity difference-in-differences design and home sales data, we estimate that households were willing to pay more than three times the average per-pupil grant award to live in SIG school zones. However, evictions in these neighborhoods increased by 35%, and non-white enrollment at SIG schools declined by 15%. The third chapter studies a federal grant program that funded upgrades to municipal wastewater treatment facilities through the Clean Water Act (CWA). We leverage variation in the timing of grant receipt to show that grants caused a dollar-for-dollar increase in sewerage capital spending up to the amount needed to cover the costs of capital upgrades newly mandated by the CWA. After municipalities met these requirements, or if the requirements were not binding, reductions in local spending crowded out grant funds. On average, each dollar of grant revenue caused a $0.45 increase in sewerage capital spending. Our results suggest that the CWA grant dollars that municipalities spent on sewerage capital have a benefit/cost ratio of 1.01.