Research
Working Papers
On the Spatial Distribution of Colleges
(Job Market Paper)
Given the decentralized nature of American higher education, there is substantial cross-state heterogeneity in: (1) in-/out-of-state tuition, (2) spending per student, and (3) in-/out-of-state capacity. Empirically, I show that larger and wealthier states charge higher in-/out-of-state tuition, spend more per student, and offer fewer seats to out-of-state students. I develop a novel model that embeds a heterogeneous-agent lifecycle structure within a quantitative spatial framework, featuring an endogenous distribution of college quality and firm activity across locations, as well as migration-based sorting of students and workers. I estimate the model to replicate cross-state dynamics of migration and education choices, wages, and college characteristics. The model rationalizes key empirical observations and provides a clear economic understanding of why college policies differ across states. For a fixed level of college expenditures, optimal federal policy increases aggregate welfare by 3.3%. The federal solution guides a policy analysis, which shows that spatial policies are markedly more effective at increasing welfare than standard proposals.
While the United States and Canada share many similarities, there are stark differences in their levels of income inequality and intergenerational earnings persistence. This paper investigates college quality distributions, tuition subsidies, student loan systems, and tax policies as possible sources of these differences. A heterogeneous agent model is developed where human capital investments occur over the lifecycle and across generations. The model is calibrated to the U.S. economy and is able to match key moments on intergenerational mobility, lifetime inequality, and higher education. The benchmark counterfactual exercise finds that the system of higher education accounts for approximately 22% of the differences in income inequality and 11% of the differences in intergenerational mobility between the U.S. and Canada. The distribution of college qualities accounts for the majority of differences in inequality, whereas its net effect on intergenerational mobility is small.
From Kindergarten to College:
The Impact of Education Policies over the Lifecycle
with Angela Zheng (submitted)
Across all education levels, recent policies aim to diversify the socioeconomic composition of student bodies. We study the interactions among these integration policies and their effects on intergenerational mobility. We develop a heterogeneous-agent where households sort into public schools through residential location and into college via a competitive admissions process. Empirically, we causally establish a key model mechanism in which increased college competition affects parental investment in children and sorting across school zones. At the public school level, we examine a rezoning policy that increases the proportion of low-income students at the highest-quality school. For college, we examine an income-based affirmative action policy. Public school integration weakens the link between residential location and school quality, increasing intergenerational mobility by 2.2%. The college policy, by contrast, decreases intergenerational mobility by 2.3%. When the high-quality college reserves seats for low-income students, college admissions become more competitive, which increases income sorting at the public school level.
Declining Teen Employment: Causes and Consequences
with Alex Wurdinger
Employment among high school students in the United States has fallen by 50 percent since the late 1990s. We provide causal evidence attributing the majority of this decline to crowding out by adults. To determine the consequences of this decline, we begin by estimating the effect of teenage employment on lifecycle wages. Among those who do not attend college, adolescents who worked earn significantly higher wages. We then develop a general equilibrium model in which teenagers allocate time between human capital accumulation on-the-job and in school, while adults choose between ``teen" and ``non-teen" occupations. Crowded-out teenagers suffer substantial income and welfare losses, though some substitute toward college, partially offsetting these effects. A decomposition exercise shows that minimum wages are central to transmitting rising adult competition into lower teen employment. Vocational training policies can mitigate these adverse effects for crowded-out teenagers.
On the Changing Relationship
between Net Public Foreign Assets and Growth
with Juliana Gamboa-Arbelaez (submitted)
replication package
This paper documents novel stylized facts and illustrates a simple mechanism explaining patterns of net public foreign assets across countries and time. Previous literature found an unexpected negative correlation between growth and net public foreign assets from 1980 to the mid-2000s. Analyzing data up to 2019 we find that this result no longer holds. We document a significant reversal since 2004, with the correlation now zero or weakly positive. Empirically, we attribute this shift to a substantial substitution from public debt towards international reserves, particularly for slower-growing countries. Simultaneously, low-growth countries experienced heightened productivity volatility. Augmenting an open economy neoclassical growth model to include uncertainty, we demonstrate that this increased risk faced by low-growth economies explains 46% of the change in correlation.