Three essays in development economics
OA Version
Citation
Abstract
This dissertation consists of three chapters studying topics in education, labor market reforms, and gender inequality in China.
The first chapter investigates the impacts of the largest primary school consolidation ever implemented, using the China Health and Nutrition Survey between 1989 and 2015. Employing a generalized Difference-in-Differences (DID) framework that is robust to heterogeneous treatment effects, I find that school consolidations increased educational attainment of females but not of males. In contrast, treated individuals of both genders achieved higher earnings. I provide suggestive evidence consistent with the mechanisms of enhanced labor market proximity and gender equity resulting from school consolidations. The analysis of the distributional effects indicates that individuals in the middle part of income distribution benefited more, and the increase in inequality was small relative to the rise in average earnings.
The second chapter provides evidence on how talent reallocation from the public sector to the private sector contributed to entrepreneurship and innovation, in a unique Chinese public sector reform in the 1990s. The reform terminated guaranteed public sector job allocation for tertiary graduates, reducing labor mobility costs across sectors. I construct a novel dataset of the tertiary graduate number in different majors across prefectures and pair it with administrative data of firm entry in particular industries. I combine both the DID and Regression-Discontinuity Design (RDD) identification strategy and find that after the reform, tertiary graduate earnings decreased, and more tertiary graduates worked in the private sector or became entrepreneurs. The resulting talent reallocation led to a boom in the private sector. After the reform, prefectures with more tertiary students who graduated from industry-related majors experienced greater entry of private firms in those industries. The reform also stimulated market-oriented innovation activities such as market design patents and trademarks.
The third chapter (joint with Wenyu Zhou) highlights that the difference in exploiting destination information between male and female drivers perpetuates gender earning inequality in the ride-hailing industry. Using order-level data in December 2018 in Hangzhou City, we find a 3% hourly earning gap across genders. The gender earning gap is larger for platforms displaying the destination information to drivers before accepting the ride. We argue this difference is caused by gender differences in the utilization of destination information. Male drivers are more likely to select more profitable rides because of greater experience. Consistent with this mechanism, we find the gender gap in speed is also larger on platforms that show destination information.