Re : Wisconsin Job Market Candidates for 2017 ECONOMICS Positions

Summary: My dissertation examines how public policies shape the financial decisions of firms and households. The first two chapters explore sources of private funding for higher education, how these interact with public policy, and how this affects decisions of both schools and students. The third chapter turns attention to the financial products households use to receive Social Security payments. References: John Karl Scholz, [email protected] Christopher Taber, [email protected] J. Michael Collins, [email protected] Sara Goldrick-Rab, [email protected] Papers: Using Multiple Discontinuities to Estimate Broad Effects of Public Need-based Aid for College. (Job market paper) The Impact of Electronic Payments for Vulnerable Consumers: Evidence from Social Security, with Alexander Strand and J. Michael Collins. Forthcoming in the Journal of Consumer Affairs. What Constitutes Prudent Spending from Private College Endowments? Evidence from Underwater Funds. Conditionally accepted at Education Finance and Policy. Aid After Enrollment: Impacts of a Statewide Grant Program at Public Two-year Colleges, with Sara Goldrick-Rab. Competing Methods of Informing Student Borrowers: A Randomized Field Experiment at a For-profit Online University, with J. Michael Collins and Sara Goldrick-Rab. Direct and Indirect Effects of Policies to Increase Kidney Donations. Can Knowledge Empower Women to Save More for Retirement? With J. Michael Collins. Employment: Postdoctoral Researcher at University of Wisconsin-Madison, jointly at the Wisconsin HOPE Lab and the Center for Financial Security Teaching Experience: Teaching Assistant at University of Wisconsin-Madison – Principles of Micro, Principles of Macro, Intermediate Macro Economics Department Teaching Assistant and Tutor at Augustana College Fields of Interest: Public economics, education policy Drew M. Anderson University of Wisconsin-Madison Using Multiple Discontinuities to Estimate Broad Effects of Public Need-based Aid for College, Drew M. Anderson (Job Market Paper) Among the many policy efforts to bring the benefits of college within reach of lower-income families, statefunded need-based grant aid is one of the largest expenditures that we know the least about. Beyond the efficacy of any one program, an overarching question is whether aid has a greater impact on students with greater financial need. Knowing the answer would provide a guide to targeting public funds to maximize their impact. This study is one of the first, and the largest, to estimate causal effects of grant aid at varying levels of financial need. This is made possible by discontinuities in multiple dimensions of eligibility for the Wisconsin Grant. Updated information will be available at: http://sites.google.com/a/wisc.edu/dmanderson5/research/job-market-paper Working papers on education policy: What Constitutes Prudent Spending from Private College Endowments? Evidence from Underwater Funds, Drew M. Anderson. This study examines how private colleges and universities choose to spend versus reinvest resources in endowment funds that have suffered investment losses. The analysis takes advantage of a public policy shift that revealed how colleges define prudent spending. Investment losses during the financial crisis of 2008 left many endowment gift funds below their original donated values, or “underwater.” Colleges in some states were legally required to cut spending from underwater funds. Other states had recently enacted the Uniform Prudent Management of Institutional Funds Act, which allows prudent spending from underwater funds. A panel difference-in-difference approach shows that the Act loosened financial constraints, and affected colleges responded by spending 22 percent more from their endowments in the fiscal year following the financial crisis. Larger endowments responded most strongly to constraints, even though they are the most likely to have unrestricted endowment funds which could offset constrained spending from underwater funds. Aid After Enrollment: Impacts of a Statewide Grant Program at Public Two-year Colleges, Drew M. Anderson and Sara Goldrick-Rab. Most students who begin at community colleges do not finish with a degree. The net price of college commonly shifts after enrollment, and there is little evidence on how these shifts affect two-year degree completion. This study provides evidence on the impacts of a private program that offers supplemental grant aid to students with demonstrated financial need, who are already enrolled at public two-year colleges in Wisconsin. An evaluation using a randomized control group and data from over 5,000 students in multiple cohorts, fails to confirm substantial increases in persistence or degree completion caused by the grant program. We discuss barriers to effectiveness related to the size and delivery of the grant. Competing Methods of Informing Student Borrowers: A Randomized Field Experiment at a For-profit Online University, Drew M. Anderson, J. Michael Collins, and Sara Goldrick -Rab. The problem of student loan default is particularly acute at for-profit universities, where students are less likely to finish with degrees, take longer to do so, and where degrees have lower labor market returns. Given all this, rates of borrowing at for-profit universities still exceed national averages. Can default be reduced by better informing student borrowers? This study tests competing forms of loan counseling, which were assigned at random for one year to students enrolling online at DeVry University, a large for-profit institution. This study represents one of the only randomized field trials of student loan counseling. It is the only direct test of the widespread Department of Education counseling platform, which we compare to an alternative platform making use of simpler information delivery through short videos. There is little evidence of differential impacts on borrowing, major choice, grades, or early repayment between the two counseling platforms. There is some evidence of a reduction in early dropouts for students exposed to the alternative counseling platform. This finding is consistent with the alternative platform making more salient the investment value of education relative to its costs. University of Wisconsin – Madison Department of Economics NAME: Mark Colas Citizenship: USA Address: Department of Economics Cell phone: (415) 794-3191 University of Wisconsin-Madison Home: (415) 794-3191 1180 Observatory Drive E-mail: [email protected] Madison, WI 53706 https://sites.google.com/site/markyaucolas/ Degrees: Ph.D., Economics, University of Wisconsin-Madison, expected 2017 M.S., Economics, University of Wisconsin-Madison, 2013 B.A., Economics, University of California-Davis, 2009 Dissertation Title: “Essays in Labor Economics” Abstract Summary: My first paper analyzes the dynamic effects of US immigration on worker outcomes by estimating an equilibrium model of local labor markets. Immigrant inflows affect wages by changing factor ratios. Over time, workers respond to these wage changes by migrating across labor markets or by switching sectors. Counterfactuals show that the wage effects immediately after an immigrant inflow greatly exceed the long run wage effects and that a gradual inflow of immigrants leads to much smaller wage effects than a sudden inflow. In my second paper, joint with Kevin Hutchinson, we use a spatial equilibrium model to measure the extent to which progressive income taxes provide a disincentive for workers to live in high cities, potentially leading to a spatial misallocation of labor. In the third chapter, I estimate a model to analyze how changes in majorspecific tuition levels would affect college and major choice.Summary: My first paper analyzes the dynamic effects of US immigration on worker outcomes by estimating an equilibrium model of local labor markets. Immigrant inflows affect wages by changing factor ratios. Over time, workers respond to these wage changes by migrating across labor markets or by switching sectors. Counterfactuals show that the wage effects immediately after an immigrant inflow greatly exceed the long run wage effects and that a gradual inflow of immigrants leads to much smaller wage effects than a sudden inflow. In my second paper, joint with Kevin Hutchinson, we use a spatial equilibrium model to measure the extent to which progressive income taxes provide a disincentive for workers to live in high cities, potentially leading to a spatial misallocation of labor. In the third chapter, I estimate a model to analyze how changes in majorspecific tuition levels would affect college and major choice. References: John Kennan (Main Advisor) – [email protected] Chris Taber – [email protected] Jesse Gregory – [email protected] Papers: “Dynamic Responses to Immigration” – Job Market Paper “Heterogeneous Workers and Federal Income Taxes in a Spatial Equilibrium” with Kevin Hutchinson “Differential Tuition and College Major Choice” Teaching Experience: UW-Madison, Teaching Assistant Econometrics III (Master’s Level): 1 Semester Human Resources and Economic Growth: 1 Semester Principles of Microeconomics: 3 Semesters (2 as Head TA) Principles of Macroeconomics: 2 Semesters (1 as Head TA) Research Experience: Project Assistant: Professors Chris Taber and Nicolas Roys Project Assistant: Professor Robert Meyer, Value-Added Research Center Fields of Interest: Labor Economics, Public Economics Essays in Labor Economics Dissertation Abstract Mark Colas University of Wisconsin-Madison Dynamic Responses to Immigration This paper analyzes the dynamic effects of US immigration on worker outcomes by estimating an equilibrium model of local labor markets. The model incorporates multiple industries which combine capital, skilled and unskilled labor in production, and workers who choose their optimal industry and location each period as a dynamic discrete choice. I develop a novel estimation strategy which leverages differences in wages and labor supply quantities across local labor markets in the merged CPS Outgoing Rotation Groups to identify the key parameters of the model. Counterfactual simulations yield the following main results: (1) an economy responds to a sudden inflow of unskilled immigrants by expanding the sectors which extensively utilize unskilled labor; (2) an unskilled immigration inflow leads to an initial wage drop for unskilled workers which gradually subsides as a result of workers migrating and switching industries; (3) a gradual immigration inflow leads to significantly smaller effects on native wages than a sudden inflow of the same magnitude. Heterogeneous Workers and Federal Income Taxes in a Spatial Equilibrium (with Kevin Hutchinson) Progressive income taxes provide a disincentive for workers to live in high productivity local labor markets, potentially leading to a spatial misallocation of labor. To quantify these effects, we augment an empirical spatial equilibrium model (Diamond, 2015) to incorporate taxes and estimate it using Census data. Relative to previous work, we relax two key assumptions: (1) that workers are perfectly mobile and (2) that workers are homogeneous. These generalizations allow us to better quantify the impact of federal income taxes, as well as analyze the associatedequity-efficiency trade-off, which has not previously beenstudied in a spatial context. We find that the optimal federal income tax code is substantially more progressive than the current tax code, i.e. that redistribution concerns outweigh the efficiency costs of income taxes in a spatial equilibrium. Differential Tuition and College The practice of differential tuition, or allowing tuition to vary by college major, has become increasingly widespread since the early 1990s. While proponents believe that the policy increases efficiency by allowing tuition to better reflect the cost of and demand for majors, opponents argue that differential tuition will discourage borrowing constrained agents from majoring in high earning majors. In this paper, I construct and estimate a model to analyze how changes in major-specific tuition levels would affect college and major choice. I find that increasing tuition for Business and Engineering majors by 10% at public colleges decreases the number of agents in these majors at public schools by about 1%. Of these agents, about one third choose other majors at public colleges while the rest substitute into other colleges or enter the workforce directly. University of Wisconsin – Madison Department of Economics NAME: Kyle P. Dempsey Citizenship: USA Address: Department of Economics Cell phone: (914) 806-0406 University of Wisconsin-Madison E-mail: [email protected] 1180 Observatory Drive https://sites.google.com/site/kylepatrickdempsey/ Madison, WI 53706 Degrees: Ph.D., Economics and Finance, University of Wisconsin-Madison, exp. 2017 M.S., Economics, University of Wisconsin-Madison, 2015 B.S., Mathematics, University of Notre Dame, magna cum laude, 2010 Dissertation Title: “Essays on Financial Contracting in Macroeconomics” Abstract Summary: In the first chapter, I study how the optimal bank capital requirement changes when the economy includes non-bank sources of financing. Regulators must balance increased safety in the banking sector with decreased lending. I show that excluding non-bank lenders leads to overstatement of both the increase in safety and the decrease in lending, and therefore a misevaluation of the optimal capital requirement. The second chapter shows how pre-committed lines of credit can smooth investment in small downturns, but can exacerbate financial crises in severely adverse states. In the third chapter, we explore how borrower reputation affects future loan rates and deters default.Summary: In the first chapter, I study how the optimal bank capital requirement changes when the economy includes non-bank sources of financing. Regulators must balance increased safety in the banking sector with decreased lending. I show that excluding non-bank lenders leads to overstatement of both the increase in safety and the decrease in lending, and therefore a misevaluation of the optimal capital requirement. The second chapter shows how pre-committed lines of credit can smooth investment in small downturns, but can exacerbate financial crises in severely adverse states. In the third chapter, we explore how borrower reputation affects future loan rates and deters default. References: Dean Corbae (Primary Adviser) – [email protected] Erwan Quintin – [email protected] Mark Ready – [email protected] Papers: “Safer Banks, Riskier Economy? Capital Requirements with Non-Bank Finance,” Job Market Paper, UW-Madison, September 2016 “A Theory of Credit Scoring and the Competitive Pricing of Default Risk,” with Satyajit Chatterjee, Dean Corbae, and José-Víctor Ríos-Rull, UWMadison, April 2016 “Amplification of Financial Shocks through Committed Financing Contracts,” UWMadison, April 2015 Teaching Experience: Teaching Assistant, Macroeconomic Theory I and II (UW-Madison, 2 semesters, first-year Ph.D. course) Fields of Interest: Macroeconomics, Corporate Finance, Industrial Organization ESSAYS ON FINANCIAL CONTRACTING IN MACROECONOMICS Dissertation Abstract KYLE P. DEMPSEY University of Wisconsin-Madison Chapter 1: Safer Banks, Riskier Economy? Capital Requirements with Non-Bank Finance Firms obtain financing from two external sources: banks and non-banks. Banks are required to maintain a minimum capital to asset ratio, intended to help withstand distress and encourage safe lending; non-banks are not. When setting these capital requirements, regulators must balance the benefits of decreasing riskiness in the banking sector with the cost of reducing lending. In this paper, I show that the presence of the non-bank sector crucially changes both sides of this tradeoff. Specifically, tightening the capital requirement induces lending activity to shift out of the bank sector and into the non-bank sector. Since banks have a comparative advantage in monitoring borrowers to mitigate risk, the aggregate default risk in the economy rises even though bank loans become safer. On the other hand, the non-bank sector almost completely offsets the reduction in bank lending. After calibrating the model, I find that the welfaremaximizing capital requirement with both banks and non-banks is significantly higher than with banks only. Chapter 2: Amplification of Financial Shocks through Committed Financing Contracts I explore theoretically and quantitatively how committed lines of credit extended by banks to non-financial firms amplify shocks to the financial sector, and the real impact of these shocks on the macro-economy. To explore this effect, I construct a model in which banks provide insurance to firms against credit rationing through lines of credit. For small shocks, credit lines smooth investment and the banking sector provides effective insurance with low ex post costs; with large shocks, however, firms draw down extensively. As a result, banks can experience significant losses that curtail lending in subsequent periods and prolong the downturn. Chapter 3: A Theory of Credit Scoring and the Competitive Pricing of Default Risk with Satyajit Chatterjee, Dean Corbae, and José-Víctor Ríos-Rull We provide a theory of the punishment that follows upon filing for bankruptcy. In our theory, households possess private information about their type and repaying one’s debts enhances lenders’ perception of a household being a good (i.e. creditworthy) type. A public recordkeeping of actions is used to learn about a household’s type and, thus, its creditworthiness, and resembles very tightly a credit score. Episodes that lead to bankruptcy involve a deterioration of the credit score and the terms of credit. Our theory is capable of replicating the main features of unsecured credit in the U.S. using only a U.S. like legal system without any need of exogenous punishments upon defaults. University of Wisconsin – Madison Department of Economics NAME: Zach Flynn Citizenship: USA Address: Department of Economics Office: (608) 443 9988 University of Wisconsin-Madison Home: (608) 443 9988 1180 Observatory Drive E-mail: [email protected] Madison, WI 53706 http://www.zflynn.com Degrees: PhD, Economics, University of Wisconsin-Madison, Expected 2017 Bachelor of Science, Economics and Mathematics, Tulane University, 2012 Dissertation Title: “Market Structure and Plant Productivity” Abstract Summary: I study how market structure and market rules interact with plant productivity, plant-level differences in technology. I take the perspective that productivity is not a gift from nature; it is a choice that plant owners, managers, and workers make, subject to the incentives they face, including the market structure and rules that govern the market (productivity is an unobserved input choice). From this perspective, current methods to identify productivity either do not work or require strong restrictions on how plants choose productivity. In my job market paper, I propose a partial identification approach which puts only weak restrictions on productivity choice that hold in a broad class of economic models and implement the approach using an econometric method I develop in the second paper of the thesis. My job market paper uses the new identification argument to revisit how restructuring changed productivity at power plants, arguing that previous estimates of restructuring’s effect on productivity did not allow productivity to be a choice the plant makes (and if restructuring changes productivity at the plant level, it must be a choice). My third paper uses the new method to learn whether productivity acts as an endogenous sunk cost, preventing industries from becoming fragmented even as market size becomes large.Summary: I study how market structure and market rules interact with plant productivity, plant-level differences in technology. I take the perspective that productivity is not a gift from nature; it is a choice that plant owners, managers, and workers make, subject to the incentives they face, including the market structure and rules that govern the market (productivity is an unobserved input choice). From this perspective, current methods to identify productivity either do not work or require strong restrictions on how plants choose productivity. In my job market paper, I propose a partial identification approach which puts only weak restrictions on productivity choice that hold in a broad class of economic models and implement the approach using an econometric method I develop in the second paper of the thesis. My job market paper uses the new identification argument to revisit how restructuring changed productivity at power plants, arguing that previous estimates of restructuring’s effect on productivity did not allow productivity to be a choice the plant makes (and if restructuring changes productivity at the plant level, it must be a choice). My third paper uses the new method to learn whether productivity acts as an endogenous sunk cost, preventing industries from becoming fragmented even as market size becomes large. References: Amit Gandhi [email protected] Alan Sorensen [email protected] Kenneth Hendricks [email protected] Papers: Partial Identification of power plant productivity, an unobserved input (job market paper) Inference on functions of parameters partially identified by the intersection of countably many linear inequalities Concentration and the depreciation rate of productivity Teaching Experience: Teaching Assistant: Introduction to Microeconomics, Fall 2012; Introduction to Macroeconomics, Spring 2012; Economic Statistics, Fall 2013; Introduction to Macroeconomics, Spring 2013 Fields of Interest: Industrial Organization, Econometrics, Energy Economics. Market Structure and Plant Productivity Dissertation Abstract Zach Flynn University of Wisconsin--Madison Chapter 1: Partial identification of power plant productivity, an unobserved input (job market paper) Traditionally, productivity, the part of output that is not a result of input use, is modeled as a plantspecific parameter. When productivity is not a parameter but an unobserved input choice, many production function identification arguments do not work; they assume something changes inputs but not productivity, but productivity is an input. I argue questions we want to ask presume productivity is an input because when productivity is a parameter, it is policy-invariant. Current methods that work when productivity is an input require that we make assumptions on how plants chose productivity and when they choose it, but we do not know even what productivity is so it is difficult to judge whether the assumptions are good or bad. I present a partial identification approach that makes few assumptions about how plants choose productivity, assuming only that productivity and input use are positively related. I show a class of economic models where the assumption I make is true and apply the method to study the effect of electricity restructuring on power plant productivity choice. Previous estimates of the productivity effect of restructuring used demand to instrument for productivity, but if productivity is a choice, then it is chosen on the basis of the power plant’s demand curve, so demand is not an instrument. I find restructuring lowered fuel productivity but by less in larger states, that greater market size encourages greater productivity choice, and that restructuring re-allocated output to the more productive plants. Chapter 2: Inference on functions of parameters partially identified by the intersection of countably many linear inequalities I develop a consistent estimator of bounds on functions of parameters partially identified by the intersection of countably many linear inequalities. Aside from allowing for an infinite number of constraints, an advantage of the estimator is that it can be used to compute a closed form confidence interval, without numerically inverting a hypothesis test. So it is easy to compute confidence intervals even if the number of parameters is very large, especially when we are interested in a linear function of parameters. (I use the estimator in my job market paper). Chapter 3: Concentration and the depreciation rate of productivity I argue the depreciation rate of productivity is a key driver of industry structure and present empirical evidence that it is the case. When productivity depreciates slowly, early investments in productivity lower a plant's future cost curve, making it more difficult for potential firms to enter. I use economic theory to argue the lower bound on concentration is increasing as the depreciation rate of productivity decreases. I measure the depreciation rate of productivity using plant-level data for 74 industries in Chile and test the theory, finding it true. University of Wisconsin – Madison Department of Economics NAME: Joel Kaiyuan Han Citizenship: Singapore Address: Department of Economics UW-Madison Cell phone: (608) 556-6502 Home: 933 E Gorham St 1180 Observatory Drive Madison, WI 53703 Madison, WI 53706 E-mail: [email protected] http://www.joelkyhan.com Degrees: Ph.D., Economics, UW-Madison, expected 2017 M.A., Economics, UW-Madison, 2013 B.A., Economics, The University of Chicago, 2011 (honors) B.S., Mathematics, The University of Chicago, 2011 Dissertation Title: “Essays on Neighborhood Change and Parental Responses” Abstract Summary: The first chapter investigates neighborhood tipping: the rapid, non-linear change in neighborhood characteristics. Using methods for detecting discontinuities in multiple dimensions, I consider whether reported patterns in neighborhood tipping appear to be primarily driven by race or income composition. The second chapter studies how parents choose neighborhoods by estimating the effect of neighborhood decline on patterns of neighborhood exit by parents. The empirical analysis makes use of unexpected neighborhood composition changes, which were caused by the large-scale closure of public housing projects in Chicago. Using the same set of neighborhood changes, the third chapter studies how parents respond to changing neighborhood quality by changing their parenting behavior. This chapter estimates the effect of neighborhood quality on parental involvement, accounting for the endogenous mobility of parents across neighborhoods.Summary: The first chapter investigates neighborhood tipping: the rapid, non-linear change in neighborhood characteristics. Using methods for detecting discontinuities in multiple dimensions, I consider whether reported patterns in neighborhood tipping appear to be primarily driven by race or income composition. The second chapter studies how parents choose neighborhoods by estimating the effect of neighborhood decline on patterns of neighborhood exit by parents. The empirical analysis makes use of unexpected neighborhood composition changes, which were caused by the large-scale closure of public housing projects in Chicago. Using the same set of neighborhood changes, the third chapter studies how parents respond to changing neighborhood quality by changing their parenting behavior. This chapter estimates the effect of neighborhood quality on parental involvement, accounting for the endogenous mobility of parents across neighborhoods. References: Steven Durlauf (Main Advisor) – [email protected] Christopher Taber – [email protected] Jesse Gregory – [email protected] Papers: Trends and Patterns in Intergenerational Mobility in Education (with Jason Fletcher) Teaching Experience: Teaching Assistant Econ 101: Introduction to Microeconomics, Fall 2011, Spring 2012 Fields of Interest: Public Economics, Applied Microeconomics, Social Interactions Essays on Neighborhood Change and Parental Responses Dissertation Abstract Joel Kaiyuan Han University of Wisconsin-Madison Chapter 1: Neighborhood Tipping by Race and Income This chapter extends the work of Card, Mas, and Rothstein (2008), who document empirical evidence of discontinuous changes in racial composition based on the initial minority share of the neighborhood. While neighborhood tipping could be driven by racial preferences, it is unclear whether income preferences could also be describing the same phenomenon. Using the method of Seo and Linton (2007), I estimate a model of neighborhood tipping that depends on an additive index of minority share and mean neighborhood income. I find substantial variation between cities in the relative importance of income to race. Furthermore, I find some variation in the sign of the weight on income. This reflects the dual nature of neighborhood income, on one hand, higher neighborhood income is associated with increased residential mobility, making richer neighborhoods more likely to tip in response to a minority influx. On the other, an influx of low-income neighbors may be undesirable to existing residents, which suggests that lower income neighborhoods should tip first. Chapter 2: Patterns in Exit from a Declining Neighborhood: Evidence from Public Housing Closures in Chicago Neighborhood tipping is generally characterized as a non-linear or discontinuous change in aggregate neighborhood characteristics. However, most evidence of neighborhood tipping relies on discontinuities across thresholds. In this chapter, I use panel data on individual residents to examine patterns of neighborhood exit over time. Evidence on neighborhood tipping is gathered with two methods. The first is a descriptive analysis of nonlinearities and discontinuities in the hazard function for neighborhood exit. The second is the estimation of the effect of prior exit on the current likelihood of exit, similar to the study of adoption curves (Goolsbee and Klenow, 2002; Brock and Durlauf, 2010). Retrospective information on previous moves is used to control for heterogeneity in household residential mobility. In addition, neighborhood composition changes caused by public housing closures in Chicago is used to provide unanticipated variation in neighborhood quality. Finally, I also examine whether more concerned parents move out of a declining neighborhood faster. Chapter 3 (Job Market Paper): Parental Involvement and Neighborhood Quality: Evidence from Public Housing Closures in Chicago This chapter studies whether, and how, parents respond to changing neighborhood quality by adjusting parental involvement. Empirical measurement of this response is complicated by neighborhood selection: unobserved changes in the family environment are likely to be correlated with changes in neighborhood quality. To deal with this endogeneity problem, I utilize a natural experiment: the mass closing of public housing projects in Chicago, which displaced public housing residents into various neighborhoods across Chicago. I estimate the effect of relocations by these displaced residents on families already living in the receiving neighborhood. I find that parents tend to increase the overall intensity of parental involvement as an immediate response to decreasing neighborhood quality. Additionally, I find that the direction of the response is different for parents with different initial involvement levels. Less-involved parents actually decrease parental involvement when neighborhoods deteriorate. This surprising reversal of direction has substantial implications on the structure of the parental decision problem, which are explored further in this paper. Overall, the results suggest that conventional estimates of neighborhood quality effects on child behavior may be understated. Furthermore, these results also suggest that policies targeting neighborhoods may have very different impact on resident children, due to parental mediation. Finally, the results also establish the impact of public housing closure policy on an unexpected population. University of Wisconsin – Madison Department of Economics NAME: Brandon Hoffman Citizenship: USA Address: Department of Economics Cell: (715)-741-0325 University of Wisconsin-Madison Home: (715)-741-0325 1180 Observatory Drive E-mail: [email protected] Madison, WI 53706 http://sites.google.com/a/wisc.edu/brandon-hoffman/home Degrees: Ph.D. Economics, University of Wisconsin-Madison, Expected 2017 M.Sc. Economics, University of Wisconsin-Madison, 2013 B.S. Economics and Mathematics, University of Wisconsin-Madison, 2010 Dissertation Title: “Comparing Direct-to-Consumer Sales with Vertical Markets” Abstract Summary: This dissertation seeks to show the effects of forcing vertical markets to exist by comparing the results of direct-to-consumer sales to vertical sales in a theoretical framework. A model is designed with one level of differentiation and comparisons are drawn across the equilibria with different numbers of products and different levels of vertical structure. I will show the ability to sell to an authorized retailer can have positive impacts on the profits of the manufacturer. In addition, I will show that the absence of laws requiring manufacturers sell to authorized retailers may not necessarily change the market structure. In the second chapter, I compare the two structures with quality differentiation and entry decisions.Summary: This dissertation seeks to show the effects of forcing vertical markets to exist by comparing the results of direct-to-consumer sales to vertical sales in a theoretical framework. A model is designed with one level of differentiation and comparisons are drawn across the equilibria with different numbers of products and different levels of vertical structure. I will show the ability to sell to an authorized retailer can have positive impacts on the profits of the manufacturer. In addition, I will show that the absence of laws requiring manufacturers sell to authorized retailers may not necessarily change the market structure. In the second chapter, I compare the two structures with quality differentiation and entry decisions. References: Ken Hendricks [email protected] Alan Sorensen – [email protected] Papers: “Modeling Vertical Markets of Differentiated Goods” – (job market paper) October 2016 “Estimating the Returns to Billboard Advertising: A Quasi-Experiment in the Dock and Boat-Lift Market” – Spring 2017 “Vertical Product Differentiation, Price Markups, and First-Mover Advantage with Consumers, Retailers, and Manufacturers” – June 2013 Teaching Experience: UW-Madison Teaching Assistant Principles of Microeconomics (8 semesters) UWMadison Teaching Assistant Principles of Macroeconomics (1 semester) UWMadison Teaching Assistant Industrial Organization (1 semester) Professional Experience: Vice President and CFO of MSC Inc. 2008-2016 Fields of Interest: Industrial Organization Comparing Direct-to-Consumer sales with Vertical Markets Dissertation Abstract Brandon Hoffman University of Wisconsin – Madison I study the impact of intermediate sales in vertical markets on consumer and producer welfare. Vertical markets can provide a number of benefits to both producer and consumer alike. However, double marginalization is often seen as a problem for producers and consumers with vertical markets, whereby firms on different levels both have market power and thus are both able to charge a markup over cost. Contracts and implicit agreements can mitigate or lessen the negative externality associated with double marginalization, but I develop a model to show that double-marginalization can actually be a good thing for producers, while simultaneously being bad for consumers. In the first chapter, I develop a model with a single dimension on product differentiation and different levels of vertical markets. In this model, firms either sell to consumers or other firms. How far removed the manufacturer of the good is from the final consumer determines the number of vertical markets. In general, a market with one level consists of a manufacturer who sells directly to consumers, while a market with 2 levels consists of a manufacturer who sells to a reseller who in turn sells to consumers. I find that the profits of the manufacturer of the good can be up to three times as high when there are 2 levels instead of 1. Applying a simple solution to double-marginalization, allowing the manufacturer to set its price and the resellers price, is shown to actually make manufacturers worse off. An extension of the model shows that when a single manufacturer sells a product to multiple markets, it charges a weighted average of the prices it would charge in the markets it competes. In the second chapter, I develop a quality choice competition model between two firms. The markup of high quality goods is generally higher than the low quality good, and this model seeks to reaffirm that. However, it also seeks to explain cases where the low quality good has the higher markup without changing the basic assumptions on cost and demand. Here I compare the equilibrium with two products and directto-consumer sales to one where two manufacturers choose the quality of the product they produce and the price they charge their reseller. I show that a market with manufacturers and resellers results in higher prices paid by consumers, greater profits for manufacturers, and a greater differentiation in quality choice. The results are shown to be similar when the firms compete simultaneously as when they compete sequentially. The results of this model are compared to a number of anecdotal examples of quality choice and movement timings and offer an explanation for the different equilibria seen both in model and anecdotally. In the third chapter, I estimate the effect on sales of a billboard advertisement using a linear probability model. A quasi-experiment is utilized to estimate the effect of driving past a billboard advertisement had on sales of docks and boat lifts. The data consists of all consumer purchases of docks, boat lifts, and accessories from 2009-2016 on 3 lakes that represent roughly half of all sales. I control for differences among consumers through data gathered from property records. The property record data allows me to identify which consumers will drive past the billboard on the way to their waterfront property (if they do not live on the lake). The billboard was first made visible for the 2016 year, where only a portion of the roughly 1,200 homeowners drive by. Data from before the billboard installation is used to estimate trends and controls on consumer differences. Lastly, I create counterfactuals where the billboard is placed in different locations and visible to different potential consumers. This is done to address the concern over which billboard advertising location is optimal. University of Wisconsin – Madison Department of Economics NAME: Akio Ino Citizenship: Japan Address: Department of Economics Home: (608) 403-4778 University of Wisconsin-Madison E-mail: [email protected] 1180 Observatory Drive https://sites.google.com/site/inoakio/ Madison, WI 53706 Degrees: Ph.D. in Economics, University of Wisconsin-Madison, expected 2017 M.A. in Economics, University of Tokyo, 2011 B.A. in Business and Commerce, Keio University, 2009 Dissertation Title: “Essays on banking and macroeconomics” Abstract Summary: In the first chapter I build a model of banking industry dynamics where banks engage in merger and acquisition activity endogenously. Banks are either small or big, and when a small bank merges with another small bank, they become a big bank. The benefit of being a big bank is that the volatility of deposits is lower than that of small banks which can be thought of as the benefit of geographic diversification. In equilibrium, cash-rich banks will acquire cash-poor banks as in the data. In the second chapter, I introduce imperfect competition and entry and exit in the banking sector into an otherwise standard DSGE model. Since profits are pro-cyclical, entry drops in recessions which decreases competition in the banking sector and amplifies countercyclical loan rate markups. In recessions, this further reduces the investment, amplifying the recession. This provides a new amplification mechanism for business cycles.Summary: In the first chapter I build a model of banking industry dynamics where banks engage in merger and acquisition activity endogenously. Banks are either small or big, and when a small bank merges with another small bank, they become a big bank. The benefit of being a big bank is that the volatility of deposits is lower than that of small banks which can be thought of as the benefit of geographic diversification. In equilibrium, cash-rich banks will acquire cash-poor banks as in the data. In the second chapter, I introduce imperfect competition and entry and exit in the banking sector into an otherwise standard DSGE model. Since profits are pro-cyclical, entry drops in recessions which decreases competition in the banking sector and amplifies countercyclical loan rate markups. In recessions, this further reduces the investment, amplifying the recession. This provides a new amplification mechanism for business cycles. References: Dean Corbae (Chair) [email protected] Enghin Atalay [email protected] Oliver Levine [email protected] Papers: "Consolidations in the banking sector" UW-Madison, September 2016 (Job market paper) “Simple DSGE Model of Banking Industry Dynamics" (with Dean Corbae) May 2015 Teaching Experience: Teaching Assistant at UW-Madison: PhD Computational Economics (3 semesters) PhD Corporate Finance (3 semesters) Masters Macroeconomics, Intermediate Macroeconomics (2 semesters) Teaching Assistant at University of Tokyo: Graduate Macroeconomics (2 semesters) Fields of Interest: Macroeconomics, Banking, Corporate Finance Essays on banking and macroeconomics Dissertation Abstract Akio Ino University of Wisconsin-Madison Consolidations in the banking sector This paper builds a model of banking industry dynamics where banks engage in merger and acquisition activity endogenously. Mergers and Acquisitions are the most important source of the decline in the number of banks in the United States, so it is important to understand how mergers occur. Banks are either sma l l or big, and when a sma l l bank merges with another sma l l bank, they become a big bank. The benefit of being a big bank is that the volatility of deposits is lower than that of sma l l banks which is consistent with U.S. data and can be thought of as the benefit of geographic diversification. We assume that there is a search friction in the M&A market as in the work by David (2014) who studies nonfinancial firms. Banks randomly become an acquirer or a target, and negotiate how much the acquirer pays to the target when they match through Nash bargaining. In equilibrium, cash-rich banks wi l l acquire cash-poor banks as in the data. A Simple DSGE Model of Banking Industry Dynamics (with Dean Corbae) The banking industry is characterized by countercyclical markups, incomplete passthrough of costs to prices, and procyclical entry and countercyclical exit. These characteristics are absent in most DSGE models with a competitive banking sector. In this paper we introduce imperfect competition and entry and exit in the banking sector into an otherwise standard DSGE model. There is a continuum of regions, and in each region there is a finite number of banks who Cournot compete in the loan market. Banks can enter into regional markets by paying a fixed cost and in the equilibrium the number of banks is determined by the zero profit condition of entrants. Since profits are procyclical, entry drops in recessions which decreases competition in the banking sector and amplifies countercyclical loan rate markups consistent with data. In recessions, this further reduces the investme nt, amplifying the recession. This provides a new amplification mechanism for business cycles which is not present in perfectly competitive loan markets. University of Wisconsin – Madison Department of Economics NAME: Taehoon Kim Citizenship: South Korea Address: Department of Economics University of Wisconsin-Madison 1180 Observatory Drive Madison, WI 53706 Cell phone: (608) 609-2794 Home: (608) 609-2794 E-mail: [email protected] http://sites.google.com/site/taehoonkim226/ Degrees: Ph.D. in Economics, University of Wisconsin-Madison, Expected 2017 M.S. in Economics, University of Wisconsin-Madison, 2014 M.A. in Economics, Seoul National University, 2010 B.A. in Economics, Seoul National University, 2008 Dissertation Title: “Three Essays in Labor Economics” Abstract Summary: My dissertation consists of three essays in labor economics. The first chapter explores the changes of educational attainment and wage structure over the last 35 years in South Korea using a dynamic general equilibrium model focusing on the role of the College Enrollment Quota Policy. The second chapter separately estimates the effects of kindergarten-entry age, age-at-test and schooling on educational achievement. The third chapter investigates the motivation for deliberate selection on birth month and school-entry timing in Korea focusing the roles of the distinctive age reckoning and the age culture by Confucianism.Summary: My dissertation consists of three essays in labor economics. The first chapter explores the changes of educational attainment and wage structure over the last 35 years in South Korea using a dynamic general equilibrium model focusing on the role of the College Enrollment Quota Policy. The second chapter separately estimates the effects of kindergarten-entry age, age-at-test and schooling on educational achievement. The third chapter investigates the motivation for deliberate selection on birth month and school-entry timing in Korea focusing the roles of the distinctive age reckoning and the age culture by Confucianism. References: Christopher R. Taber (Primary Advisor) – [email protected] John Kennan – [email protected] James R. Walker –[email protected] Papers: “The Changes of Educational Attainment and Wage Structure in South Korea, 1980-2014: A Dynamic General Equilibrium Approach,” UW-Madison, 2016, Job Market Paper “The Separate Estimation of the Effects of Kindergarten-Entry Age, Age-atEvaluation and Schooling on Educational Achievement,” UW-Madison, 2016 “Estimating Pecuniary and Nonpecuniary Returns to Education: Evidence from College Enrollment Quota Policy in South Korea,” UW-Madison, 2016 “Age Culture, School-Entry Cutoff and the Choices of Birth Month and SchoolEntry Timing in South Korea,” UW-Madison, 2016 “The Effects of Changes in Kindergarten Entry Age Policies on Educational Achievement,” (with Jason Fletcher), Economics of Education Review, 50:4562, Feb. 2016 “Signaling Effect of Layoffs,” Seoul National University, 2011 Teaching Experience: Teaching Assistant: Principles of Microeconomics, Principles of Macroeconomics, Econometrics III Fields of Interest: Labor Economics, Public Economics, Health Economics, Demographic Economics Three Essays in Labor Economics Dissertation Abstract Taehoon Kim University of Wisconsin-Madison Chapter 1. The Changes of Educational Attainment and Wage Structure in South Korea, 198