title: Essays in Applied Causal Analysis : Development, Real Estate, and International Economics
Creators: name: Steffen, Daniel
Publisher: name: Universität Bern
Year: 2021
Subjects: subject: 330 Economics

description: This thesis consists of four essays on three different topics in real estate, development and international economics using three different (quasi-)experimental methods.

Essays 1 and 2 are field experiments addressing the question of how the problem of low education quality in many low- and middle-income countries can be tackled. Basic education is recognized as a key factor for economic development and the fight against poverty. Yet, the quality of education is alarmingly low in many low- and middle-income countries despite an impressive increase in enrollment rates in the last two decades. El Salvador - where both experiments take place - is an example of this situation: Sixth graders, after having attended more than 1000 math lessons, are on average only able to answer 57 percent of first and second grade math questions correctly and a mere 14 percent of questions at their current level. We argue that teachers are the key to quality education and therefore, we focus on the often insuffcient content knowledge of teachers. Computer-Assisted Learning (CAL) has proven to be a very promising approach to improve education quality, because it mitigates many of the challenges public education systems in low- and middle-income countries face. We designed two experiments that allow us to gain further insights into how CAL might enhance quality learning in an environment of poorly qualified teachers and how policy-makers and NGO leaders can create more cost-effective education interventions.

Essay 1 provides novel evidence on the relative effectiveness of CAL software and traditional teaching. Based on a randomized controlled trial in Salvadoran primary schools, we evaluate three interventions that aim to improve learning outcomes in mathematics: (i) teacher-led classes, (ii) CAL classes monitored by a technical supervisor, and (iii) CAL classes instructed by a teacher. As all three interventions involve the same amount of additional mathematics lessons, we can directly compare the productivity of the three teaching methods. The main contributions of this study are the assessment of the value-added of CAL software compared to traditional lessons as well as the complementarities between CAL software and teachers. CAL lessons lead to larger improvements in students' mathematics skills than traditional teacher-centered classes. Also, teachers add little to the effectiveness of learning software. Overall, our results highlight the value of CAL approaches in an environment of poorly qualified teachers. 

Essay 2 addresses the poor mathematics content knowledge of primary school teachers directly. At baseline, the primary school teachers participating in this study master on average 43 percent of the offcial Salvadoran curriculum that they are supposed to teach. Based on a randomized controlled trial, we study the impact of an in-service teacher training program in El Salvador that targets the content knowledge of primary school teachers. The five-month training combines (i) computer-assisted self-studying and (ii) monthly workshops. It is the first study that examines an intervention that explicitly focuses on teachers' content knowledge. After the training, program teachers score significantly higher in mathematics than their peers from the control group. The teacher training program proved more successful in raising the competence for concepts taught in higher grades (i.e. grades five and six) compared to lower grades (i.e. grades two to four), and it was particularly effective among young teachers.

Essay 3 follows a quasi-experimental approach and examines the effects of a drastic real estate regulation in Switzerland, the Second Home Initiative (SHI). The SHI prevents the construction of second homes in all municipalities with a second home share of 20 percent or more. This initiative is drastic because one in five municipalities in Switzerland is affected and a total of 17 percent of all housing units are second homes. This setup allows applying Difference-in-Differences (DD) type methods to estimate the causal effects: Municipalities affected by SHI form the treatment group, while unaffected municipalities build the control group. In a first step, I show that a classical DD approach is not valid in this context. Therefore, I use an extension of the synthetic control method (SCM) in which I deal with multiple treatment units instead of one treatment unit as in the classic approach. By analyzing the SHI, this study contributes to a small but growing literature investigating the effects of interventions that aim at restricting non-local real estate demand. It is also one of the first studies to apply the SCM with multiple treatment units and develops an innovative approach to compute precise statistical significance. Results show that the SHI caused a delayed decrease in real estate prices by -10 percent to -19 percent three to five years after the acceptance of the SHI. The decrease in prices is likely to be caused by adverse effects on local economies and due to a "lock-in" effect caused by the SHI.

Essay 4 investigates the effect of outward foreign direct investments (FDI) of Swiss multinational enterprises on home employment. In this chapter, we do not explicitly build a control group as a counterfactual, but we try to come as close as data and the setup allow to a causal interpretation of the relationship by applying an instrumental variable approach. In a context where the debate on globalization is reviving, we aim at providing empirical findings that allow for an evidence-based discussion about the effects of internationalization of firms on the domestic labor market. Using Swiss firm-level data we construct a novel instrument to identify a direct negative displacement effect and an indirect positive output effect. Our study contributes to the literature by investigating the effect of outward FDI in the context of a small but relatively heavily exposed economy - Switzerland. We find that FDI to high-income countries have a positive effect on domestic jobs, while FDI to lower middle-income countries are associated with a loss of domestic jobs. Overall, the effect of outward FDI on home employment is small and tends to create more domestic jobs than it relocates.