Essays on the economics of education and health

• Main Author: Cohen, Jessica Lee
• Other Authors: David Autor and Esther Duflo.
• Format: Others
• Language: English
• Published: Massachusetts Institute of Technology 2008
• Subjects: Economics.
• Online Access: http://hdl.handle.net/1721.1/42394

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, February 2008. === "October 2007." === Includes bibliographical references. === This dissertation is a collection of three essays exploring the impact of incentives on participation in public education and health programs. The first two essays analyze the demand for Special Education (a program for disabled children) in the U.S., while the third essay explores the demand for subsidized anti-malaria products in Kenya. The first chapter attempts to estimate the direct impact of Special Education (SE) placement on students' social and academic outcomes. Despite the fact that one out of every seven U.S. public school students receives SE services, little is known about the impact of this program on future outcomes. I exploit the strategic incentive to increase SE enrollment induced by a 1996 accountability policy in Chicago Public Schools to identify the impact of SE placement on high school completion, absenteeism and GPA. Pre-accountability performance characteristics of the school determined to what extent sanctions could be avoided by increasing SE placement, since SE students' scores were excluded from accountability measures. I construct an instrument that captures the strength of strategic incentives, and show that low-achieving students in high-incentive schools experienced the largest increase in SE placement. Using instrumental variables analysis and a panel of student data from Chicago Public Schools, I find that SE placement in elementary school reduces the probability of dropping out of high school and absenteeism for the marginal low-achieving student, while results on GPA are inconclusive. I provide evidence that these results are not driven by other changes taking place at high-incentive schools. The results suggest that low-achieving students benefit from SE placement for mild mental disabilities. === (cont.) While the first chapter explores school-level incentives to increase SE enrollment, the second chapter analyzes the impact of financial incentives on parental demand for SE placement. A number of studies have shown the importance of school-based incentives on the supply of SE services made available to students. However, the extent to which parental demand for SE services responds to incentives, and how much of the variation in SE enrollment can be explained by these incentives, is unknown. The 1990 Supreme Court Zebley decision led to a substantial widening of child eligibility criteria for SSI. I use this legislative change, in combination with cross-state variation in the financial gain to enrolling in SSI, as an instrument for child SSI enrollment. This estimation strategy allows me to isolate the direct impact of shifts in SSI benefit supply on SE enrollment. I find that the financial incentives brought on by the Zebley decision led to a 15 percent increase in SE enrollment. I also estimate that a modest 1.5 percent of the cross-state variation in SE enrollment can be explained by differences in financial incentives to enroll in SSI. These results suggest that parents respond to incentives to have their child screened for a disability and placed in SE. The third chapter in this series of essays is joint with Pascaline Dupas and explores how variation in the level of subsidy of health goods impacts the ability of public health campaigns to target vulnerable populations. It is widely believed that cost-sharing-charging a subsidized, positive price-for a health product is necessary to avoid wasting resources on those who will not use the product. We explore this argument in the context of a field experiment in Kenya, in which we randomized the price at which pregnant women could buy anti-malarial insecticide-treated nets (ITNs) at prenatal clinics. === (cont.) We find no evidence that cost-sharing reduces wastage on those that will not use the good: women who received free nets are not less likely to use them than those who paid subsidized positive prices. Cost-sharing does, however, considerably dampen demand. We find that uptake drops by 75 percent when the price of ITNs increases from zero to 75 cents, the price at which ITNs are currently socialmarketed. When the price is between 15 and 30 cents, we observe that pregnant women who purchase an ITN are, on average, in poorer health than those who receive a free ITN. However, in absolute terms, the number of sick women getting access to an ITN at these prices is roughly the same as under free distribution, and the number of sick women getting access to an ITN at the current cost-sharing price is at least 47 percent lower than under free distribution. We use these estimates in a cost-effectiveness analysis of ITN prices on infant mortality that incorporates both private and social returns of ITN usage. Overall, given the large positive externality associated with widespread usage of insecticide-treated nets, our results suggest that free distribution is both more effective and more cost-effective than cost-sharing. === by Jessica Lee Cohen. === Ph.D.