Essays in Applied Microeconomics

open_access
Open Access
Author:
Frisancho Robles, Veronica Cecilia
Graduate Program:
Economics
Degree:
Doctor of Philosophy
Document Type:
Dissertation
Date of Defense:
May 18, 2012
Committee Members:
Kala Krishna, Dissertation Advisor/Co-Advisor
Bee Yan Roberts, Committee Member
Mark John Roberts, Committee Member
John Raymond Moran Jr., Committee Member
Keywords:
Access to Credit
Credit Bureaus
Microfinance
Learning gains
Higher education
Selection
Labor regulation
Productivity
Abstract:
CHAPTER 1: Signaling Creditworthiness in Peruvian Microfinance Markets: The Role of Information Sharing Using borrower-level data from FINCA, one of the leading microfinance institutions (MFI) in Peru, I evaluate the effect of FINCA’s decision to share information on individual outstanding debt records (positive information), in addition to group default records (negative information), on borrowers' access to credit. Since all borrowers were exposed to the same policy, I develop a creative identification strategy that relies on the exogenous variation of the opening and closing dates of loan cycles across lending groups. I identify a credit expansion effect for some borrowers in FINCA who looked more creditworthy after their positive records were exposed, suggesting that other lenders targeted FINCA’s clients with good credit records. This credit expansion effect seems to have hurt FINCA through higher default rates as its better clients were skimmed off. CHAPTER 2 (with Kala Krishna and Cemile Yavas): Learning Gains among Repeat Takers of the Turkish College Entrance Exam Every year, 1.5 million students take the centralized annual college entrance exam (OSS) in Turkey. This system sets very high standards to get into college and competition for a seat is extremely fierce. The placement rate in college is as low as 30% and it is partly explained by the large proportion of repeat takers each year. Using a unique dataset on a random sample of 115,000 students who took the OSS in 2002 we investigate if a system like the Turkish one is conducive to learning over multiple attempts. We estimate the cumulative learning gains (in terms of score improvement) between the first and the nth attempt. Even though we only have a cross section of students, we show how to use information on repeat takers to estimate learning across attempts while controlling for selection into retaking in terms of observed and unobserved characteristics. Our main assumptions are: i) students know their own ability, ii) performance is a function of observables, unobservables, randomness, and learning, iii) learning is a draw from a distribution that may vary with observables and/or unobservables, and iv) steady state. We identify important learning gains among repeat takers, especially for students from less advantaged backgrounds. If less privileged students learn more than the more privileged upon retrying then allowing students to take the entrance exam as many times as they want may reduce the effects of background inequalities on college admission. CHAPTER 3 (with Sean Dougherty and Kala Krishna): Employment Protection Legislation and Plant-Level Productivity in India Using plant-level data from the Annual Survey of Industries (ASI) for all the fiscal years between 1998-99 and 2007-08, this study provides plant-level cross-state/time-series evidence of the impact of employment protection legislation (EPL) on total factor productivity (TFP) and labor productivity in India. Identification of the effect of EPL follows from a difference-in-difference estimator that takes advantage of the state-level variation in labor regulation and heterogeneous industry characteristics. The fundamental identification assumption is that EPL is more likely to restrict firms operating in industries with higher labor intensity and/or higher sales volatility. Our results show that firms in labor intensive or more volatile industries benefited the most from labor reforms at the state level, suggesting that the high labor costs and rigidities imposed through Indian federal labour laws may be limited by labor market reforms at the state level.