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Causes and Consequences of Group Disparities

Paper Session

Sunday, Jan. 5, 2025 10:15 AM - 12:15 PM (PST)

Hilton San Francisco Union Square, Union Square 10
Hosted By: Econometric Society
  • Chair: Christopher Walters, University of California-Berkeley

Flexible Analysis of Individual Heterogeneity in Event Studies: Application to the Child Penalty

Dmitry Arkhangelsky
,
Center for Monetary and Financial Studies
Kazuharu Yanagimoto
,
Center for Monetary and Financial Studies
Tom Zohar
,
Center for Monetary and Financial Studies

Abstract

We provide a practical toolkit for analyzing effect heterogeneity in event studies. We develop an estimation algorithm and adapt existing econometric results to provide its theoretical justification. We apply these tools to Dutch administrative data to study individual heterogeneity in the child-penalty (CP) context in three ways. First, we document significant heterogeneity in the individual-level CP trajectories, emphasizing the importance of going beyond the average CP. Second, we use individual-level estimates to examine the impact of childcare supply expansion policies. Our approach uncovers nonlinear treatment effects, challenging the conventional policy evaluation methods constrained to less flexible specifications. Third, we use the individual-level estimates as a regressor on the right-hand side to study the intergenerational elasticity of the CP between mothers and daughters. After adjusting for the measurement error bias, we find the elasticity of 24\%. Our methodological framework contributes to empirical practice by offering a flexible approach tailored to specific research questions and contexts. We provide an open-source package ('unitdid') to facilitate widespread adoption.

Effect of Childbirth on Intra-Household Bargaining, Resource Allocations, and Women’s Welfare: Revisit Child Penalty from a Household Perspective

Naijia Guo
,
University of Hong Kong
Anning XIE
,
Chinese University of Hong Kong

Abstract

This paper investigates the impact of childbirth on wives' bargaining power and welfare by examining labor market responses and adjustments in intra-household resource allocations. Using data from the Japanese Panel Survey of Consumers (1993-2019) and employing an event study approach, we find that wives, compared to their husbands, experience a 34.89% decrease in private consumption and a 7.48% decrease in leisure following the first birth. We then develop a collective bargaining framework to estimate the effects of parenthood on bargaining power, preferences for consumption and leisure, and productivity in producing public goods for both wives and husbands. Our estimation reveals that the wife's bargaining power declines by 34.30% after childbirth, while the preferences for public goods for both spouses increase. Consequently, the arrival of a child leads to a 12.16% decline in welfare for wives but a 6.97% increase for husbands. In our counterfactual analysis, we find that if a wife's bargaining power remains unaffected by fertility or wage effects, her welfare would increase by 2.60 percentage points compared to the baseline. Furthermore, if no wage penalties were imposed on wives, her welfare would increase by 7.78 percentage points.

School Competition, Classroom Formation, and Academic Quality

Angela Crema
,
Yale University

Abstract

Racial segregation is an enduring feature of U.S. K-12 education. Up to half of it originates within schools due to how classrooms are formed. This paper develops an empirical framework to understand the implications of discretionary classroom formation in competitive education markets. I leverage a school competition reform to document via an event-study that in anticipation of a competitive shock, public schools both raise their academic quality and change students’ assignments to classrooms such that classroom segregation increases. I then estimate an empirical model of school choice and competition to understand whether schools choose their level of classroom segregation so as to differentiate horizontally, thereby relaxing vertical competition on costly academic quality. The model's novelty is that it embeds classroom segregation both on the demand side, as a dimension that parents have preferences over, and on the supply side, as a margin of differentiation that schools choose directly alongside academic quality. I estimate preferences for classroom segregation so as to rationalize the reduced-form effects of competition identified through the event-study. I use the model to evaluate a policy that requires schools to form racially integrated classrooms, given the composition of the student body at the school. I find that the policy raises aggregate academic quality and the average test score in equilibrium. Magnitude-wise, present value lifetime earnings rise by up to $1,620 per student. Since the schools that increase academic quality the most are located in non-white areas, learning gains accrue mostly to non-white students, decreasing the racial test score gap by 2%.

Are Patent Examiners Gender Neutral?

Hadar Avivi
,
Princeton University

Abstract

This paper studies the prevalence and evolution of gender bias in the United States Patent and Trademark Office (USPTO) examination process and assesses the consequences of this bias on economic outcomes. Applying Natural Language Processing tools to patent applications submitted between 2001 and 2013, I estimate gender gaps conditional on the content of the patent application, comparing allowance probabilities between teams of inventors with different gender compositions but similar inventions. Despite a substantial raw gender gap in the probability of initial allowance, I document that there is no average difference in initial allowance rates between mixed-gender and all-male teams. This average masks important heterogeneity. Allowance rates for mixed-gender teams were significantly lower between 2001 and 2003, a gap that shrank to zero by 2005. Gender gaps also vary substantially across examiners, with bias against mixed-gender patents concentrated among senior examiners and bias in favor of women concentrated among young examiners. A mean zero gender gap with positive variance generates economic loss due to the misallocation of granting rights. Building on the methodology of Kogan et al. (2017), I estimate that these biases depressed the value of approved patents by $12.6 million per year.

Discussant(s)
Kirill Borusyak
,
University of California-Berkeley
Arthur Lewbel
,
Boston College
Robert Ainsworth
,
University of Florida
Raviv Murciano-Goroff
,
Boston University
JEL Classifications
  • J7 - Labor Discrimination