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- Creators: Department of Finance
- Creators: Schoellman, Todd
Description
This dissertation consists of two essays. The first measures the degree to which schooling accounts for differences in industry value added per worker. Using a sample of 107 economies and seven industries, the paper considers the patterns in the education levels of various industries and their relative value added per worker. Agriculture has notably less schooling and is less productive than other sectors, while a group of services including financial services, education and health care has higher rates of schooling and higher value added per worker. The essay finds that in the case of these specific industries education is important in explaining sector differences, and the role of education all other industries are less defined. The second essay provides theory to investigate the relationship between agriculture and schooling. During structural transformation, workers shift from the agriculture sector with relatively low schooling to other sectors which have more schooling. This essay explores to what extent changes in the costs of acquiring schooling drive structural transformation using a multi-sector growth model which includes a schooling choice. The model is disciplined using cross country data on sector of employment and schooling constructed from the IPUM International census collection. Counterfactual exercises are used to determine how much structural transformation is accounted for by changes in the cost of acquiring schooling. These changes account for small shares of structural transformation in all economies with a median near zero.
ContributorsSchreck, Paul (Author) / Herrendorf, Berthold (Committee member) / Lagakos, David (Committee member) / Schoellman, Todd (Committee member) / Arizona State University (Publisher)
Created2011
Description
This dissertation consists of three essays that broadly deal with the growth and development of economies across time and space. Chapter one is motivated by the fact that agricultural labor productivity is key for understanding aggregate cross-country income differences. One important proximate cause of low agricultural productivity is the low use of intermediate inputs, such as fertilizers, in developing countries. This paper argues that farmers in poor countries rationally choose to use fewer intermediate inputs because it limits their exposure to large uninsurable risks. I formalize the idea in a dynamic general equilibrium model with incomplete markets, subsistence requirements, and idiosyncratic productivity shocks. Quantitatively, the model accounts for two-thirds of the difference in intermediate input shares between the richest and poorest countries. This has important implications for cross-country productivity. Relative to an identical model with no productivity shocks, the addition of agricultural shocks amplifies per capita GDP differences between the richest and poorest countries by nearly eighty percent. Chapter two deals with the changes in college completion in the United States over time. In particular, this paper develop a dynamic lifecycle model to study the increases in college completion and average IQ of college students in cohorts born from 1900 to 1972. I discipline the model by constructing historical data on real college costs from printed government reports covering this time period. The main finding is that that increases in college completion of 1900 to 1950 birth cohorts are due primarily to changes in college costs, which generate a large endogenous increase in college enrollment. Additionally, evidence is found that supports cohorts born after 1950 underpredicted sharp increases in the college earnings premium they eventually received. Combined with increasing college costs during this time period, this generates a slowdown in college completion, consistent with empirical evidence for cohorts born after 1950. Lastly, the rise in average college student IQ cannot be accounted for without a decrease in the variance of ability signals. This is attributed the increased precision of ability signals primarily to the rise of standardized testing. Chapter three again deals with cross-country income differences. In particular, it is concerned with the fact that cross-country income differences are primarily accounted for by total factor productivity (TFP) differences. Motivated by cross-country empirical evidence, this paper investigates the importance individuals who operate their own firms because of a lack of other job opportunities (need-based entrepreneurs). I develop a dynamic general equilibrium labor search model with with entrepreneurship to rationalize this misallocation across occupations and assess its role for understanding cross-country income differences. Developing countries are assumed to have tighter collateral constraints on entrepreneurs and lower unemployment benefits. Because these need-based entrepreneurs actually have a comparative advantage as workers, they operate smaller and less productive firms, lowering aggregate TFP in developing countries.
ContributorsDonovan, Kevin (Author) / Prescott, Edward C. (Thesis advisor) / Herrendorf, Berthold (Committee member) / Lagakos, David (Committee member) / Schoellman, Todd (Committee member) / Arizona State University (Publisher)
Created2013
Description
This dissertation consists of three essays on education and macroeconomics. The first chapter analyzes whether public education financing systems can account for large differences among developed countries in earnings inequality and intergenerational earnings persistence. I first document facts about public education in the U.S. and Norway, which provide an interesting case study because they have very different earnings distributions and public education systems. An overlapping generations model is calibrated to match U.S. data, and tax and public education spending functions are estimated for each country. The benchmark exercise finds that taxes and public education spending account for about 15% of differences in earnings inequality and 10% of differences in intergenerational earnings persistence between the U.S. and Norway. Differences in private education spending and early childhood education investments are also shown to be quantitatively important. The second chapter develops a life-cycle model to study increases in college completion and average ability of college students born from 1900 to 1972. The model is disciplined with new historical data on real college costs from printed government surveys. I find that increases in college completion for 1900 to 1950 cohorts are due primarily to changes in college costs, which generate large endogenous increases in college enrollment. Additionally, I find strong evidence that post-1950 cohorts under-predicted large increases in the college earnings premium. Modifying the model to restrict perfect foresight of the education premia generates a slowdown in college completion consistent with empirical evidence for post-1950 cohorts. Lastly, I find that increased sorting of students by ability can be accounted for by increasingly precise ability signals over time. The third chapter assesses how structural transformation is affected by sectoral differences in labor-augmenting technological progress, capital intensity, and capital-labor substitutability. CES production functions are estimated for agriculture, manufacturing, and services on post-war U.S. data. I find that sectoral differences in labor-augmenting technological progress are the dominant force behind changes in sectoral labor and relative prices. Therefore, Cobb-Douglas production functions with labor-augmenting technological change capture the main technological forces behind post-war U.S. structural transformation.
ContributorsHerrington, Christopher (Author) / Prescott, Edward C. (Thesis advisor) / Ventura, Gustavo (Thesis advisor) / Herrendorf, Berthold (Committee member) / Schoellman, Todd (Committee member) / Arizona State University (Publisher)
Created2013
Description
A growing number of jobs in the US require a college degree or technical education, and the wage difference between jobs requiring a high school diploma and a college education has increased to over $17,000 per year. Enrollment levels in postsecondary education have been rising for at least the past decade, and this paper attempts to tease out how much of the increasing enrollment is due to changes in the demand by companies for workers. A Bartik Instrument, which is a measure of local area labor demand, for each county in the US was constructed from 2007 to 2014, and using multivariate linear regression the effect of changing labor demand on local postsecondary education enrollment rates was examined. A small positive effect was found, but the effect size in relation to the total change in enrollment levels was diminutive. From the start to the end of the recession (2007 to 2010), Bartik Instrument calculated unemployment increased from 5.3% nationally to 8.2%. This level of labor demand contraction would lead to a 0.42% increase in enrollment between 2008 and 2011. The true enrollment increase over this period was 7.6%, so the model calculated 5.5% of the enrollment increase was based on the changes in labor demand.
ContributorsHerder, Daniel Steven (Author) / Dillon, Eleanor (Thesis director) / Schoellman, Todd (Committee member) / Economics Program in CLAS (Contributor) / Department of Psychology (Contributor) / Sandra Day O'Connor College of Law (Contributor) / School of Politics and Global Studies (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
This paper intends to inform the reader about the current state of crowdfunding, also known as crowdsourced funding, as of early May 2014. Crowdfunding has proven to be an interesting alternate to other more common financing vehicles with its ability to unite people over common ideas and projects without requiring the contribution of large amounts of capital. Further, the changing legal landscape invites a new era of deregulation that makes crowdfunding easier than ever before. This paper contains explanations of the different types of crowdfunding, platforms (websites), and the international landscape particularly of the US and Europe as well as statistics regarding the predicted future growth of the industry.
ContributorsMurphy, Kevin Edward (Author) / Budolfson, Arthur (Thesis director) / Schein, Stephen (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor)
Created2014-05
Description
In a season that spans 162 games over the course of six months, MLB teams that travel more face additional fatigue and jetlag from travel. This factor could negatively impact them on the field. To explore this issue, I tested the significance of different variables by creating four models, which compared travel with a team's ability to win games as well as its ability to hit home runs. Based on these models, it appears as though changing time zones does not affect the outcome of games. However, these results did indicate that visiting teams with a greater time zone advantage over their opponent are less likely to hit a home run in a game.
ContributorsAronson, Sean Matthew (Author) / MacFie, Brian (Thesis director) / Eaton, John (Committee member) / Barrett, The Honors College (Contributor) / Department of Economics (Contributor) / WPC Graduate Programs (Contributor) / Department of Finance (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / W. P. Carey School of Business (Contributor)
Created2014-05
Description
An integral part of the financial system, the evolutionary history of commercial banking remains largely uncharted and is often grouped into banking development as a whole. Previous research on banking has primarily relied on economic analysis or has placed banking in a larger social context. This work aims to bridge the two by classifying commercial banking growth into four cycles of expansion, application, and decline. Drawing from historical accounts and growth cycle theory, this framework for classification is developed to better synthesize its progress and the fundamental innovations that changed the banking system. Beginning in 1150 with the foundation for deposit banking, the next three cycles of 1500, 1750, and 1933 mark periods of great innovation and a push toward the regulatory environment, technology, and globalization that define modern commercial banking. Paralleling the economic, financial, and political development of the Western World, its evolution is guided by three themes: the increased accumulation and flow of capital, regulation, and market expansion.
ContributorsSinger, Andrea Cayli (Author) / Licon, Wendell (Thesis director) / Hoffmeister, Ron (Committee member) / Brooks, Dan (Committee member) / Barrett, The Honors College (Contributor) / School of Historical, Philosophical and Religious Studies (Contributor) / W. P. Carey School of Business (Contributor) / Department of Finance (Contributor)
Created2013-05
Description
The situation in the Euro-Zone is fluctuating daily with various efforts to curb the contagion of certain Euro-Zone member states. In the effort to focus on the greater macroeconomic and social impact of the Euro-Zone, this paper concentrates on the history of the Euro-Zone, the causes of the crisis, outlines potential solutions, discusses individual perspectives on the issue, and describes a prediction for the future of the Euro-Zone.
ContributorsTom, Bryan (Co-author) / Smith, Kelley (Co-author) / Mendez, Jose (Thesis director) / Datta, Manjira (Committee member) / Roberts, Nancy (Committee member) / Barrett, The Honors College (Contributor) / School of International Letters and Cultures (Contributor) / Department of Finance (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Economics Program in CLAS (Contributor) / W. P. Carey School of Business (Contributor)
Created2013-05
Description
With aggregate background knowledge and best methodology practices from the literature review, this exploratory study seeks to further gather and advance knowledge on the subject of birthrate trends with respect to the economic conditions affecting the decisions to reproduce. The scope of the study particularly investigates the possible effects of the 2008 downturn of the economy and the concurring home mortgage crisis on birthrates in Arizona.
ContributorsGuseynov, Ruslan Saidovich (Author) / Fey, Richard (Thesis director) / Reesing, Amy (Committee member) / Hayford, Sarah (Committee member) / Barrett, The Honors College (Contributor) / T. Denny Sanford School of Social and Family Dynamics (Contributor) / Department of Finance (Contributor)
Created2013-05
Description
As temperatures increase across the United States, some populations are more at risk for heat-related death and illness than others. One of these at-risk demographics is mobile home and trailer park inhabitants, who are disproportionately represented among indoor heat-related deaths (Solís, “Heat, Health”). In this paper, we outline a cost-benefit analysis that was used to calculate the net present economic value of projects related to reducing heat burden on mobile home owners and parks in Maricopa County. We use this model to assess solutions developed by student teams under the Knowledge Exchange for Resilience’s Summer Heat Resilience Challenge. We find that one of the seven solutions has a positive net present value (NPV) even in the lowest effectiveness (10%), while three more solutions have a positive NPV in the mid-level (50%) effectiveness scenario, showcasing their economic viability.
ContributorsRobinson, Jacob (Author) / Solís, Patricia (Thesis director) / Markolf, Samuel (Committee member) / Department of Psychology (Contributor) / Department of Finance (Contributor) / Department of Economics (Contributor) / Barrett, The Honors College (Contributor)
Created2021-05