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Title: Essays in Applied Microeconomics
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1. Pakaluk, Catherine Ruth
Essays in Applied Microeconomics
Ph.D. Dissertation, Department of Economics, Harvard University, 2010
Cohort(s): NLSY97
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): Contraception; Educational Outcomes; Household Models; Marital Status; Parental Influences; Peers/Peer influence/Peer relations; Religion; Schooling; Test Scores/Test theory/IRT

Permission to reprint the abstract has not been received from the publisher.

This dissertation is composed of three chapters, each of which applies aspects of standard microeconomic theory to a modem policy question of social importance.

The first chapter proposes and tests a new theory for the effectiveness of religious schools, specifically, the school as an extension of the culture of the home. I introduce the notion of "fit" between students and schools, and ask whether students and schools may make better or worse matches which have observable effects on student outcomes. Using NLSY97 data, I find that students matched to schools of their own religious preference enjoy an advantage of about 5-8 percentile points in math and reading. This is equivalent to about one third of a standard deviation in test scores, or half the size of the black-white test-score gap.

The second chapter explores the micro-level effects of changes in contraceptive technology. We develop a two-stage model with endogenous household decisions regarding sex, fertility, marriage, and the consumption of other goods. We examine changes in behavior in response to marginal changes in contraceptive efficacy. We find that an increase in contraceptive efficacy, such as the Pill, leads to increased sexual activity but has ambiguous effects on the children per household, where married households will have fewer children and unmarried households will have more. These results correspond to recent historical trends which characterize the so-called "second demographic transition", such as declining total fertility rates and rising non-marital fertility.

The third chapter proposes a theory of parental investment in education based on strategic interactions with other parents. When parents are viewed as suppliers of an important complementary good, the school setting provides a difficulty for parents and policy makers characterized by problems of both a public goods nature and a moral hazard nature. I show that when households differ in cost of supply or private valuation of the educational good, underinvestment may arise in school settings, especially when schools are unable to sort students according to characteristics correlated with parental efforts. These results may provide a mechanism for observed peer effects and help to explain declining educational outcomes in some settings.

Bibliography Citation
Pakaluk, Catherine Ruth. Essays in Applied Microeconomics. Ph.D. Dissertation, Department of Economics, Harvard University, 2010.