Job Market Paper

It's Dolly's World, We're Just Living in It: The Effects of an Early Childhood Literacy Program


2 Minute Job Market Video | Poster presented at APPAM 2020

High quality preschool and other early childhood interventions are an integral part of the early human capital model, but there is little known about the impacts of inputs at home, such as parental time or attention and material resources. This paper examines how small capital investments affect early human capital development. Using the national roll out of an early childhood literacy program that gives away new books for free, I assess the effects on elementary academic achievement. I find that having access to the program leads to extremely small effects on both third and fourth grade English Language Art and Math standardized tests. However, interpreting this as a precise null effect, these results suggest that capital alone is not an effective input into the early human capital model; time and attention from parents or guardians is also necessary.

Works in Progress

Do Benefit Phase-outs and Cliffs Create a Poverty Trap?

Using nationally representative household data, I provide one of the first analyses of the effective marginal tax rates families enrolled in social welfare programs face. I then assess labor supply responses across changes in marginal tax rates and explore bunching at common kinks and notches in the marginal tax rate schedule across states and years. Descriptive results suggest that families beneath 200 percent of the Federal Poverty Limit (FPL) face similar marginal tax rates to families in the highest federal income tax bracket, regardless of program participation status. Conditional on enrolling in Medicaid, the average MTR increases to 70 percent and is over 100 for families between 150 and 200 percent FPL, where many families lose coverage. It has been well documented how households respond to changes in marginal tax rates in income tax systems, however, it is unknown if similar responses hold for voluntary social welfare programs. Using the marginal tax rates that I calculated and state-specific program guidelines, I will assess the labor supply responses to the three largest programs: Medicaid, Food Stamps, and Temporary Aid to Needy Families. This work complements the earlier research on income bunching in the income tax schedule by expanding our knowledge on who bunches and where.

Does Payday Lending Reduce Crime?

Economic theory suggests that any form of credit allows households to smooth their consumption patterns over time, however, a nontrivial number of households are credit constrained, and thus unable to take part in widely accepted credit markets. These households often turn to expensive forms of credit, such as payday lending services, to provide for their families. Using changes in statewide policy, I assess the impact of a seemingly exogenous shift of a household’s budget constraint, via changes in payday lending legislation, on criminal behavior. Since widespread geographic adoption in the late 1990s, several state governments have banned the practice or severely restricted the maximum interest rates non-bank organizations can charge, effectively running the payday loan industry into the ground. Families who relied on high-interest cash loans, and especially those who can’t access other traditional forms of credit, are no longer able to balance their household budget legally and may turn to illicit measures. Not only will my results assess the effects of removing this “lender of last” resort from a household’s budget on local property crime but will also speak to the broader understanding of household’s behaviors under financial constraints.