Essays on Inequality and Market Failure
Contributors: Chetty, Raj; Shleifer, Andrei; Katz, Lawrence
Published: 2013
Language: eng
Description: This dissertation comprises three chapters. The first chapter develops a research design to estimate the causal effect of parental layoffs and income during adolescence on children's college outcomes, and implements this design on administrative data for the United States. The design compares outcomes of children whose fathers lose jobs before college decisions with outcomes of children whose fathers lose jobs after college decisions. I find that layoffs and unanticipated income losses during adolescence have very small adverse effects on future college outcomes. These effects are smaller than estimates in prior work based on firm closures rather than timing of layoffs. I replicate these larger estimates and show they are driven by selection of workers into closing firms. The findings suggest that relaxing parental liquidity constraints during adolescence will do little to increase enrollment compared to improvements in financial aid, especially for low-income children.
Notes: Keywords: Credence Goods, Economics, Education, Inequality, Mobility.

Thesis Ph.D. Harvard University 2013