American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Journal Article Front Matter i vi http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.i 10.1257/app.3.3.i American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Government Transfers and Political Support MarcoManacordaQueen Mary, U London and London School of Economics EdwardMiguelU CA, Berkeley AndreaVigoritoU Republica, Montevideo 1 28 This paper estimates the impact of a large anti-poverty cash transfer program, the Uruguayan PANES, on political support for the government that implemented it. Using the discontinuity in program assignment based on a pretreatment eligibility score, we find that beneficiary households are 11 to 13 percentage points more likely to favor the current government relative to the previous government. Political support effects persist after the program ends. Our results are consistent with theories of rational but poorly informed voters who use policy to infer politicians' redistributive preferences or competence, as well as with behavioral economics explanations grounded in reciprocity. (JEL D72, H23, H53, I38, O15, O17) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.1 10.1257/app.3.3.1 http://www.aeaweb.org/aej/app/data/2010-0121_data.zip http://www.aeaweb.org/aej/app/app/2010-0121_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Do Value-Added Estimates Add Value? Accounting for Learning Dynamics TahirAndrabiPomona College JishnuDasWorld Bank and Center for Policy Research, New Delhi Asim IjazKhwajaHarvard U TristanZajoncHarvard U 29 54 This paper illustrates the central role of persistence in estimating and interpreting value-added models of learning. Using data from Pakistani public and private schools, we apply dynamic panel methods that address three key empirical challenges: imperfect persistence, unobserved heterogeneity, and measurement error. Our estimates suggest that only one-fifth to one-half of learning persists between grades and that private schools increase average achievement by 0.25 standard deviations each year. In contrast, value-added models that assume perfect persistence yield severely downward estimates of the private school effect. Models that ignore unobserved heterogeneity or measurement error produce biased estimates of persistence. (JEL I21, J13, O15) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.29 10.1257/app.3.3.29 http://www.aeaweb.org/aej/app/data/2009-0259_data.zip American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Financial Constraints and Inflated Home Prices during the Real Estate Boom ItzhakBen-DavidOH State U 55 87 During the housing boom, financially constrained home buyers artificially inflated transaction prices in order to draw larger mortgages. Using transaction data from Illinois that includes sellers' offers to inflate prices, I estimate that in 2005-2008, up to 16 percent of highly leveraged transactions had inflated prices of up to 9 percent. Inflated transactions were common in low-income neighborhoods and when intermediaries had a greater stake or an informational advantage. Borrowers who inflated prices were more likely to default, but their mortgage rates were not materially higher. Property prices in areas with a high rate of past price inflation exhibited momentum and high volatility. (JEL D14, E31, R31) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.55 10.1257/app.3.3.55 http://www.aeaweb.org/aej/app/data/2010-0207_data.zip http://www.aeaweb.org/aej/app/app/2010-0207_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Low-Skilled Immigration and the Labor Supply of Highly Skilled Women PatriciaCortésBoston U JoséTessadaPontificia U Catolica de Chile 88 123 Low-skilled immigrants represent a significant fraction of employment in services that are close substitutes of household production. This paper studies whether the increased supply of low-skilled immigrants has led high-skilled women, who have the highest opportunity cost of time, to change their time-use decisions. Exploiting cross-city variation in immigrant concentration, we find that low-skilled immigration increases average hours of market work and the probability of working long hours of women at the top quartile of the wage distribution. Consistently, we find that women in this group decrease the time they spend in household work and increase expenditures on housekeeping services. (JEL J16, J22, J24, J61) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.88 10.1257/app.3.3.88 http://www.aeaweb.org/aej/app/data/2009-0171_data.zip http://www.aeaweb.org/aej/app/app/2009-0171_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Marrying Up: The Role of Sex Ratio in Assortative Matching RanAbramitzkyStanford U AdelineDelavandeNew U Lisbon and RAND Corporation LuisVasconcelosNew U Lisbon 124 57 We assemble a novel dataset to study the impact of male scarcity on marital assortative matching and other marriage market outcomes using the large shock that WWI caused to the number of French men. Using a difference-in-differences approach, we find that postwar in regions with higher mortality rates: men were less likely to marry women of lower social classes; men were more likely and women less likely to marry; out-of-wedlock births increased; divorce rates decreased; and the age gap decreased. These findings are consistent with men improving their position in the marriage market as they become scarcer. (JEL J12, J16, N34) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.124 10.1257/app.3.3.124 http://www.aeaweb.org/aej/app/data/2010-0041_data.zip American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Are High-Quality Schools Enough to Increase Achievement among the Poor? Evidence from the Harlem Children's Zone WillDobbieHarvard U Roland G.FryerHarvard U 158 87 Harlem Children's Zone (HCZ), an ambitious social experiment, combines community programs with charter schools. We provide the first empirical test of the causal impact of HCZ charters on educational outcomes. Both lottery and instrumental variable identification strategies suggest that the effects of attending an HCZ middle school are enough to close the black-white achievement gap in mathematics. The effects in elementary school are large enough to close the racial achievement gap in both mathematics and ELA. We conclude with evidence that suggests high-quality schools are enough to significantly increase academic achievement among the poor. Community programs appear neither necessary nor sufficient. (JEL H75, I21, I28, J13, R23) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.158 10.1257/app.3.3.158 http://www.aeaweb.org/aej/app/data/2010-0191_data.zip http://www.aeaweb.org/aej/app/app/2010-0191_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Subsidizing Vocational Training for Disadvantaged Youth in Colombia: Evidence from a Randomized Trial OrazioAttanasioU College London AdrianaKuglerGeorgetown Public Policy Institute, Georgetown U CostasMeghirYale U and U College London 188 220 This paper evaluates the impact of a randomized training program for disadvantaged youth introduced in Colombia in 2005. This randomized trial offers a unique opportunity to examine the impact of training in a middle income country. We use originally collected data on individuals randomly offered and not offered training. The program raises earnings and employment for women. Women offered training earn 19.6 percent more and have a 0.068 higher probability of paid employment than those not offered training, mainly in formal-sector jobs. Cost-benefit analysis of these results suggests that the program generates much larger net gains than those found in developed countries. (JEL I28, J13, J24, O15) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.188 10.1257/app.3.3.188 http://www.aeaweb.org/aej/app/data/2009-0168_data.zip American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Returns to Local-Area Health Care Spending: Evidence from Health Shocks to Patients Far from Home Joseph J.DoyleMIT 221 43 Health care spending varies widely across markets, and previous research finds little evidence that higher spending translates into better health outcomes. The main innovation in this paper exploits this cross-sectional variation in hospital spending in a new way by considering emergency patients who are exposed to healthcare systems when they are far from home. Visitors to Florida who become ill in high-spending areas have significantly lower mortality rates compared to visitors in lower spending areas. The results are robust within groups of similar visitors and within groups of destinations that appear to be close demand substitutes -- areas that likely attract similar visitors. (JEL H75, I11, I18) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.221 10.1257/app.3.3.221 http://www.aeaweb.org/aej/app/data/2010-0047_data.zip http://www.aeaweb.org/aej/app/app/2010-0047_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Do Social Connections Reduce Moral Hazard? Evidence from the New York City Taxi Industry C. KiraboJacksonNorthwestern U Henry S.SchneiderCornell U 244 67 This study investigates the role of social networks in aligning the incentives of agents in settings with incomplete contracts. Specifically, the study examines the New York City taxi industry where taxis are often leased and lessee-drivers have worse driving outcomes than owner-drivers due to moral hazard. Using within-driver variation and instrumental variable strategies to remove selection, we find that drivers leasing from members of their country-of-birth community exhibit significantly reduced effects of moral hazard, representing an improvement of almost one-half of a standard deviation of the outcome measures. Screening is ruled out as an explanation, and other mechanisms are investigated. (JEL D82, D86, L92, Z13) http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.244 10.1257/app.3.3.244 http://www.aeaweb.org/aej/app/data/2010-0200_data.zip http://www.aeaweb.org/aej/app/app/2010-0200_app.pdf American Economic Association Nashville, TN 1945-7782 1945-7790 American Economic Journal: Applied Economics http://www.aeaweb.org/aej-applied/ 3 3 July 2011 http://www.aeaweb.org/issue.php?journal=APP&volume=3&issue=3 Articles Corrigendum: Mechanisms and Impacts of Gender Peer Effects at School VictorLavyHebrew U Jerusalem and Royal Holloway, U London AnalíaSchlosserTel Aviv U and IZA, Bonn 268 268 http://www.aeaweb.org/articles.php?doi=10.1257/app.3.3.268 10.1257/app.3.3.268