title: Essays in applied microeconomics
Creators: name: Zanella, Martina
Publisher: name: London School of Economics and Political Science (LSE)
Year: 2022

description: This thesis consists of three chapters in which I study how to design effective policies to address inequality in performance and opportunities in education and the labor market. In the first chapter, I explore the effect of minority status in explaining disparities in performance. Stereotypes shape the distribution of traits across occupations and majors, influencing payoffs from economic choices. As a consequence, the individuals that we observe in the minority are often individuals who decided to bear the cost of making a choice against stereotypes, a condition that might matter on its own. This margin has remained mostly unexplored due to the difficulty of finding a setting characterized by an independent variation in the two dimensions, which often overlap in real-world environments. In my paper, I disentangle these two effects by combining a choice with well-defined stereotypes (university major) with variation in peer identity across small, exogenously formed classes within the same course. Evidence from the performance of 14,000 students in an elite university indicates that those who go against stereotypes do not suffer from being in the minority, but they impose negative externalities on those who select on stereotypes. This might explain why the majority upholds stereotypes and why targeting minorities to foster inclusion might not be enough and even backfire. The second and third chapters focus on affirmative action policies, one of the primary policy recommendations to fight the under-representation of women in decision-making bodies. The context is South Korean municipal councils, where gender quotas were introduced shocking a status quo where women were nearly absent. Chapter two explores the effect of the policy on parties’ selection of candidates by exploiting the discontinuity in the intensity of the quota at specific cut-offs of council size. Quotas were implemented in only one of the two independent election arms, leaving space for adjustment in selecting candidates in the arm unaffected by the policy. We find that higher gender quotas in the constrained arm induce municipalities to elect fewer women in the unconstrained arm. However, this pattern gradually reverses over time. The reversal is driven by parties learning about women’s competence after having experienced a female councilor. This paper highlights the risk of gender quotas being not effective or even counterproductive if they are introduced before attitudes have changed sufficiently to accommodate them. The third chapter presents the preliminary findings of a project exploring how group interactions, the decision-making process, and its outcomes change after the introduction of gender quotas. South Korean municipal councils are required to publish transcripts of each meeting, allowing us to speak to the evolution of group dynamics by analyzing rich text data spanning &gt;150,000 meet- 3 ings. We find that equality in numbers did not immediately translate into equality in voice in decision-making. The women introduced by the quota start their term less vocal than men, even when compared to rookie men equally lacking experience. However, the gap between rookie men and women nearly fully closes by the end of the term, suggesting that differences in talent are not why women are less vocal and that rookie women gradually gain influence as councilors work together during the years.