Ph.D. Spotlight: Essays in Public Economics

The essays in this dissertation explore the intersection of public policy and personal decisions: attending college, adopting a child, or choosing the right neighborhood. These selections have an enduring effect on an individual’s life and are constantly influenced by government policy. In three essays, this dissertation examines policy-induced variation of personal decisions and the effects of these decisions. Specifically, this dissertation examines the role of information as it pertains to the higher education attainment gap between Appalachia and the rest of the nation, how the generosity of tax credits affects adoption, and how place-based neighborhood improvement programs influence crime.

Chapter 1. The first chapter explores the relationship between information availability and higher educational attainment in a historically underperforming region, Appalachian Ohio. Appalachia has consistently ranked as one of the poorest regions in the nation, and a possible explanation for this lack of intergenerational income mobility could be the region’s chronically low levels of postsecondary educational attainment.

In response to persistently low college attendance rates within Appalachian Ohio, the Ohio General Assembly created a program in 1993 with the express goal of reducing informational barriers to all forms of postsecondary education. An element of the program involved awarding competitive grants to high schools within the region. These grants were specifically designated to encourage college enrollment by funding campus visits, seminars, college fairs, etc. This dissertation estimates the impact of these targeted, high school-level grants on college attendance using a difference-in-differences framework.

For the project, the researchers utilized policy-induced variation in treatment eligibility and timing to compare college attendance rates for high schools that received the grants with those of similar high schools that were ineligible for the program. In doing so, the researchers digitized historical student inventory data reports from the 1990’s to examine treatment effects by institution type. Findings show: i) no evidence suggests that the grants increased college enrollment overall; ii) there is no evidence that attendance patterns shifted to higher-quality institutions; and iii) estimates suggest the program increased enrollment at previously unattended colleges, expanding students’ choice sets upon high school graduation. While information interventions often offer a low-cost option for combating disparities in college enrollment, this paper joins a growing body of literature demonstrating that more direct measures may be needed to successfully increase postsecondary attendance in certain challenging settings.

Chapter 2. This chapter examines how the federal Adoption Tax Credit affects adoptions and is co-authored with Luke P. Rodgers. The value of the credit varies with many factors, but adoptions from foster care (public adoptions) are the most heavily subsidized. It is unclear if the credit incentivizes the marginal adopter or if it is a simple transfer to those who would have adopted from foster care without the subsidy.

To identify the effect of the tax credit, we leverage variation induced by a period of increased tax credit generosity in 2010 and 2011. Prior to 2010, the credit was nonrefundable, but the credit became refundable in 2010 and 2011 and reverted back to a nonrefundable credit in 2012. Most public adoptions during these two years qualified for the full value of the credit (over $13,000 per child) regardless of one’s tax liability, representing a tremendous increase in the value of the credit for parents adopting from foster care.

Using county-level data from Florida, we document an average increase of 3.2 additional public adoptions (68 percent) per county immediately before the refundable period ended. While this effect is large, estimates show relative decreases in average adoptions in the first months of 2012, suggesting a retiming of adoptions rather than new adoptions. Importantly, the response appears to be concentrated in higher-income, more populated areas. Poorer, rural counties exhibited no response to the credit’s expiration.

Chapter 3. The final chapter documents the effect of targeted federal spending at the neighborhood level on crime and is co-authored with Carl Kitchens. This dissertation analyzes the Los Angeles Promise Zone, a five square-mile area in Central Los Angeles that received Promise Zone designation in January 2014. An initiative of the U.S. Department of Housing and Urban Development, the Promise Zone program provides areas with preferred access to grants from federal agencies. Both urban and rural locales are selected based on need; the place-based program targets communities with high unemployment, high poverty, high housing costs, high crime, and poor educational opportunities.

The Los Angeles Promise Zone focuses on four primary pillars: economic activity, education, public safety, and neighborhood revitalization. In its first two years, it received more than $100 million in federal grants and received more than $300 million by the end of 2019. To identify the impacts of the Promise Zone designation on criminal outcomes, the researchers combine crime-level data with geographic identifiers and information on the location and timing of the LAPZ designation. Then, the researchers compared the change in reported crimes for areas just inside and just outside the Promise Zone perimeter in a spatial difference-in-differences approach.

This results indicate that the total number of reported crimes within the Promise Zone fell after its creation in 2014 relative to nearby areas outside the boundary. Estimates indicate this fall may have been driven by decreases in the number of reported property crimes. Both of these reductions manifested three to four years after treatment. This net decrease in crime is attributed to indirect forces, such as improved educational and economic opportunity, and direct forces, including specific crime-reduction initiatives implemented by the Promise Zone.

Dr. Wallace is a graduate of Florida State University’s economics Ph.D. program, and is currently an assistant professor at Georgia College & State University. This post was based on Dr. Wallace’s dissertation abstract. You can learn more about this project here. You can learn more about Dr. Wallace here.

The feature image is from Pexels.

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