Essays on inequities in labor and education markets

Mocanu, Tatiana

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https://hdl.handle.net/2142/115698 Copy

Description

Title

Essays on inequities in labor and education markets

Author(s)

Mocanu, Tatiana

Issue Date

2022-04-19

Director of Research (if dissertation) or Advisor (if thesis)

Albouy, David

Doctoral Committee Chair(s)

Albouy, David

Committee Member(s)

• Bernhardt, Dan
• Bartik, Alexander
• Weinstein, Russell

Department of Study

Economics

Discipline

Economics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Labor Discrimination
• Employment Decisions
• Education and Inequality

Abstract

This dissertation consists of three chapters that study the inequities in labor and education markets. The first chapter analyzes how different screening practices and the composition of hiring committees affect gender equity in hiring. The chapter uses a large-scale data set of the universe of Brazil’s public sector job processes which have uniquely detailed information on job applicant scores, evaluator reviews, screening methods, and decision-making process. I construct the data from millions of official government records that require the development of a new natural language processing method for extraction. These data overcome a major limitation to the study of hiring decisions, which is usually hampered by the opacity of personnel information. Exploiting a federal policy reform that required the use of more impartial hiring practices, I find that increasing screening impartiality improves women’s evaluation scores, application rates, and probability of being hired. To better understand which design choices reduce gender disparities, I leverage variation in how different hiring processes complied with greater impartiality. I find that the most effective changes to increase women’s hiring odds involve i) adding blind written tests to a hiring process that already uses subjective methods, such as interviews, or ii) converting subjective rounds into only blind written tests. However, when employers remove subjective stages, gender hiring gaps remain unchanged. Finally, more gender-balanced hiring committees induce male evaluators to become more favorable toward female candidates in subjective stages. To interpret these results, I develop a model of hiring in which evaluator bias, tool bias, and screening precision jointly determine relative hiring outcomes by gender. In light of my findings, the model suggests that both evaluator bias and lower screening precision disadvantage female applicants. Screening changes that limit discretion in existing hiring practices or add new impartial screening tools reduce the gender hiring gap, while policies that eliminate subjective screening tools are ineffective because the loss of screening precision outweighs the reduction in evaluator bias. The second chapter studies how policy design and misaligned incentives contribute to adverse student outcomes, particularly those of low socioeconomic status. US legislation requires universities to provide annual estimates of off-campus living expenses, without offering any methodology and with little oversight. Living expenses make up on average 50% of the cost-of-attendance, which caps student eligibility of federal aid and effectively prices colleges. These two margins – how much students can borrow and how expensive a university appears – are likely to be managed differently by schools with varying degrees of reputation concerns and resources. Exploiting how colleges adjust their reported cost of living when exposed to the same exogenous increase in local costs, I find that for-profit institutions are much more likely to under-report living expenses, failing to update estimates for several years. By appearing cheaper than the actual costs incurred by students, for-profits enroll more low-income individuals, have lower student aid, and higher dropout rates. To gauge the importance of college reputation, I study the effect of a policy that promoted transparency in the reporting of separate components of the cost-of-attendance, revealing institutions with inaccurate living expenses to informed students. While 4-year selective schools improved the accuracy of living expenses estimates, for-profits had no change in behavior. The third chapter (joint with Pedro Tremacoldi-Rossi) investigates how university responses to the business cycle generate effects beyond the higher education sector. By increasing international student enrollment amid falling funding during the Great Recession, US colleges provided counter-cyclical positive demand shocks to their local economies. International students consume local goods with home country savings, are not eligible for student federal aid, and have visa-based work restrictions. They usually sort into small urban economies, where local housing markets largely depend on student demand. We construct a sample of American college towns with rich local data from 2005 to 2015 to study how international student inflows affected residential prices, investment, and within-city spatial patterns. Employing two instrumental variable approaches that exploit the historical distribution of foreign enrollment across college towns and country-of-origin specific networks, we show that international students exogenously sustained demand for rentals and residential investment. Our main findings indicate an increase in rents by 1.3% and home prices by 2.5% relative to the housing boom peak, translating into home equity gains of $4,000. Leveraging the housing market structure of college towns, we identify a price transmission mechanism involving the local replacement of single-family housing with apartment rentals to host the increased demand of foreign students.

Graduation Semester

2022-05

Type of Resource

Thesis

Copyright and License Information

Copyright 2022 Tatiana Mocanu

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