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IEB Report 4/2023: Education Policy: Quality and Equality of Opportunity

Market economies inevitably come with economic inequality. However, economic inequality today depends not only on the current generation, but on pre-existing economic inequality inherited from earlier ones. Inequality persists across generations, and this is a challenge for society for several reasons. First, because of fairness: what family we are born into is a lottery; our starting conditions, which condition our life outcomes, are thus beyond our control. Second, because of efficiency: adverse conditions early on can prevent individuals from contributing to society according to their potential and from attaining high levels of well-being. Hence, a crucial question is how to reward the merits of the current generation, which results in greater societal welfare, without allowing them to condition the development of subsequent ones.

SEMINAR: Elaine M. Liu (University of Houston & NBER) – “Externalities of Marijuana Legalization:Marijuana Use in Non-Legalizing States”

March 5, 2024 – 14.30h – Room 1038

SEMINAR: Jason Sockin (IZA) – “We’ve Got You Covered: Employer and Employee Responses to Dobbs v. Jackson”

February 27, 2024 – 14.30h – Sala de Recepcions

2023/13: Gender differences in high-stakes performance and college admission policies

The Gale-Shapley algorithm is one of the most popular college allocation mechanism around the world. A crucial policy question in its setting is designing admission priorities for students, understanding how they disadvantage certain demographic groups, and whether these di_erences are related to di_erences in college performance potential (i.e., whether these di_erences are fair). Studying a policy change in Spain, we find a negative e_ect of increasing the weight of standardized high-stakes exams on female college admission scores, driven by students expected to be at the top. The effect on admission scores does not affect enrolment, but the percentage of female students in the most selective degrees declines, along with their career prospects. Using data on college performance of pre-reform cohorts, we find that female students most likely to lose from the reform tend to do better in college than male students expected to benefit from the reform. The results show that rewarding high-stakes performance in selection processes may come along with gender differences unrelated to the determinants of subsequent performance.

2023/10: Birds of a feather earn together. Gender and peer effects at the workplace

Utilizing comprehensive administrative data from Brazil, we investigate the impact of peer effects on wages, considering both within-gender and cross-gender dynamics. Since the average productivity of both individuals and their peers is unobservable, we estimate these values using worker fixed effects while accounting for occupational and firm sorting. Our findings reveal that within-gender peer effects have approximately twice the influence of cross-gender peer effects on wages for both males and females. Furthermore, we observe a reduction in the disparity between these two types of peer effects in settings characterized by greater gender equality.

2023/09: How do labels and vouchers shape unconditional cash transfers? Experimental evidence from Georgia

We implemented a randomized control trial in Georgia to study how labels and food vouchers affect household expenditure among low-income recipients of unconditional cash transfers. Households were randomly assigned to receive only an unconditional cash transfer, a label indicating an amount intended for children’s expenses in addition to the transfer, or a portion of the transfer as a food voucher usable exclusively at designated stores. We find that labelling increases the share of expenditure on children. Meanwhile, food vouchers reduce total consumption, this being likely due to the increased cost associated with shopping at voucher-accepting shops.