support@economics.utoronto.ca (IT Support) support@economics.utoronto.ca (IT Support) Tue, 30 Apr 2024 16:59:26 EDT Department of Economics, University of Toronto en-ca 720 Research https://www.economics.utoronto.ca/index.php/index/research/workingPapers Working Papers http://www.dev.economics.utoronto.ca/templates/images/rss_deptlogo.jpg https://www.economics.utoronto.ca/index.php/index/research/workingPapers http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/774 http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/774 Fri, 19 Apr 2024 00:00:00 EDT We propose a new specification test to assess the validity of the judge leniency design. We characterize a set of sharp testable implications, which exploit all the relevant information in the observed data distribution to detect violations of the judge leniency design assumptions. The proposed sharp test is asymptotically valid and consistent and will not make discordant recommendations. When the judge's leniency design assumptions are rejected, we propose a way to salvage the model using partial monotonicity and exclusion assumptions, under which a variant of the Local Instrumental Variable (LIV) estimand can recover the Marginal Treatment Effect. Simulation studies show our test outperforms existing non-sharp tests by significant margins. We apply our test to assess the validity of the judge leniency design using data from Stevenson (2018), and it rejects the validity for three crime categories: robbery, drug selling, and drug possession. http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/773 http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/773 Tue, 16 Apr 2024 00:00:00 EDT We exploit substantial variation in land-market institutions across Indian states and detailed household-level panel data to assess the effect of land-market distortions on agricultural productivity. We develop a model of heterogeneous farms and distorted land markets, featuring (a) state-level barriers to land-market participation and (b) idiosyncratic (farm-level) distortions to farm size. We use the framework to separately identify and estimate the two sources of land-market distortions in each state using farm data on productivity, land endowment, land-market participation, and operational farm size. We find substantial differences across states in rental barriers with large negative effects on agricultural productivity. An efficient reallocation of land in India increases agricultural productivity by 65 percent and by more than 100 percent in some states, with more than 50% of these effects attributed to state-level rental barriers. Distortions associated with land-market participation contribute substantially to agricultural productivity differences across Indian states. http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/771 http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/771 Wed, 13 Mar 2024 00:00:00 EDT Total factor productivity (TFP) growth has been the primary driver of China's GDP growth. From 1978 to 2007, China experienced an average TFP growth rate of over 4% per year, thanks to economic reforms and decentralization that led to consistent policy and institutional changes initiated from local levels. However, since 2007, the Chinese government has shifted towards a top-down approach, prioritizing policy design at the national level and resource mobilization. While this approach yielded some short-term benefits, such as temporary growth recovery in 2010 following the global financial crisis and the rapid expansion of infrastructure projects, it came at a significant cost to economic efficiency. Without comprehensive bottom-up policy reforms, China's TFP growth rate between 2007 and 2022 averaged only 1% per year, significantly lower than the 4% achieved prior to 2007. The key challenge facing China now is whether it will revert to a decentralized decision-making process. http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/770 http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/770 Fri, 8 Mar 2024 00:00:00 EST We study the evolution of patenting in China from 1985-2019. We use a Large Language Model to measure patent importance based on patent abstracts and classify patent ownership using a comprehensive business registry. We highlight four insights. First, average patent importance declined from 2000-2010 but has increased more recently. Second, private Chinese firms account for most of patenting growth whereas overseas patentees have played a diminishing role. Third, patentees have greatly reduced their dependence on foreign knowledge. Finally, Chinese and foreign patenting have become more similar in technological composition, but differences persist within technology classes as revealed by abstract similarities. http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/769 http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/769 Tue, 20 Feb 2024 00:00:00 EST We examine empirically whether the level of data aggregation affects the assessment of misallocation in agriculture. Using data from Ugandan farmers, we document a substantial discrepancy between misallocation measures calculated at the plot and at the farm levels. Estimates of misallocation at the plot level are much higher than those estimated with the same data but aggregated at the farm level. Even after accounting for measurement error and unobserved heterogeneity, estimates of misallocation at the plot level are extremely high, with nationwide agricultural productivity gains of 562%. Furthermore, we find suggestive evidence that granular data may be more susceptible to measurement error in survey data and that data aggregation can attenuate the relative magnitude of measurement error in misallocation measures. Our findings suggest caution in generalizing insights on measurement error and misallocation from plot-level analysis to those at the farm level. http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/767 http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/767 Mon, 29 Jan 2024 00:00:00 EST This paper identifies a "health premium" of insurance coverage that the insured is more likely to stay healthy or recover from unhealthy status. We introduce this feature into the prototypical macro-health model and estimate the baseline economy by matching the observed joint distribution of health insurance purchase, health status and income over the life cycle. Quantitative analysis reveals that an individual’s insurance status has substantial and persistent impact on health, which will be reinforced by and subsequently amplify the feedback effect of health on labor earnings and income inequality. Providing "Universal Health Coverage" would narrow health and life expectancy gaps, with a mixed effect on income distribution in absence of any additional redistribution of income or wealth. http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/766 http://www.economics.utoronto.ca/index.php/index/research/workingPaperDetails/766 Mon, 15 Jan 2024 00:00:00 EST This paper presents the results of the first large-scale correspondence study estimating hiring discrimination against applicants who disclose pronouns. A resume audit design is leveraged, where two fictitious resumes are sent in response to each job posting: in each pair, the treatment resume contains pronouns listed below the name and the control resume does not list any pronouns. Two treatments are considered: nonbinary "they/them" pronouns and binary "he/him" or "she/her" pronouns congruent with the sex implied by the applicant's name. Strong evidence is found that disclosing "they/them" pronouns reduces positive employer response: discrimination estimates are robust to the Heckman-Siegelman critique and magnitude is statistically larger compared to those disclosing "he/him" or "she/her" pronouns. Further, there is suggestive evidence that discrimination is higher in Republican than Democratic geographies. By comparison, there is limited evidence that disclosing "he/him" or "she/her" pronouns results in discrimination.