Abstracts Economics

Essays in Labor and Education Economics

by Tam Mai

This dissertation consists of three essays in the fields of labor economics and education economics. The first chapter examines the effect of residential segregation on neighbor-based informal hiring. Existing works in the neighborhood effects literature have documented mixed evidence of community characteristics on employment and earnings. Yet most studies are silent on or unable to pinpoint the exact mechanisms that drive their results, making it hard to reconcile the conflicting findings. As a departure, in the first chapter, I start with a specific mechanism—job search via neighbor networks—and explore how segregation at the place of residence affects employment through this channel. In the remaining essays, I turn to the economics of education. The second chapter homes in on a specific unintended consequence of standardized testing: cheating between students on exams. While outright cheating is a common tactic to cope with grade pressure, it has received little attention from economists. My second chapter thus contributes to the sparse literature on how inordinate emphasis on exams can distort student behavior even to the test day. Finally, the third chapter revisits the popular belief that education necessarily improves cognitive skills. Insofar as one of the primary goals of school is to develop student intellect, are all years of schooling created equal? Along these lines, I question the value of the first year of high school to Chinese students in the context of the Program for International Student Assessment (PISA), an educational initiative of the Organization for Economic Cooperation and Development (OECD). To briefly recap, the first chapter studies how residential segregation by race and by education affects job search via neighbor networks. Using confidential data from the US Census Bureau, I measure segregation for each characteristic at both the individual level and the neighborhood level. Causality is achieved by interweaving a spatial framework with a mover-stayer design. The spatial component entails comparison between individuals across different hyperlocal neighborhoods (blocks) within the same reference area (block group). The focus of the comparison is existing residents on a block (stayers) with respect to newcomers (movers). Specifically, I ask: what is the likelihood that an incumbent resident—conditional on changing jobs—will join a firm that has employed a new neighbor on their block? How is this probability mediated by residential segregation? My answers to these questions are manifold. At the individual level, I find that future coworkership with new block neighbors is less likely among segregated stayers than among integrated stayers, irrespective of races and levels of schooling. The impacts are heterogeneous in magnitude, being most adverse for the most socioeconomically disadvantaged demographics: Blacks and those without a high school education. At the block level, however, higher segregation along either dimension raises the likelihood of “any” future coworkership with…