Deworming and Development: Asking the Right Questions, Asking the Questions Right

Two billion people are infected with intestinal worms. In many areas, the majority of schoolchildren are infected, and the World Health Organization (WHO) has called for school-based mass deworming. The key area for debate is not whether deworming medicine works—in fact, the medical literature finds that treatment is highly effective, and thus the standard of care calls for treating any patient known to harbor an infection. As the authors of the Cochrane systematic review point out, a critical issue in evaluating current soil-transmitted helminth policies is whether the benefits of deworming exceed the costs or whether it would be more prudent to use the money for other purposes. While in general we think the Cochrane approach is very valuable, we argue below that many of the underlying studies of deworming suffer from three critical methodological problems: treatment externalities in dynamic infection systems, inadequate measurement of cognitive outcomes and school attendance, and sample attrition. We then argue that the currently available evidence from studies that address these issues is consistent with the consensus view expressed by other reviews and by policymakers that deworming is a very cost-effective way to increase school participation and has a high benefit to cost ratio.Economic

On the Market Discipline of Informationally-Opaque Firms: Evidence from Bank Borrowers in the Federal Funds Market

Using plausibly exogenous variation in demand for federal funds created by daily shocks to reserve balances, we identify the supply curve facing a bank borrower in the interbank market and study how access to overnight credit is affected by changes in public and private measures of borrower creditworthiness. Although there is evidence that lenders respond to adverse changes in public information about credit quality by restricting access to the market in a fashion consistent with market discipline, there is also evidence that borrowers respond to adverse changes in private information about credit quality by increasing leverage so as to offset the future impact on earnings. While the responsiveness of investors to public information is comforting, we document evidence that suggests that banks are able to manage the real information content of these disclosures. In particular, public measures of loan portfolio performance have information about future loan charge-offs, but only in quarters when the bank is examined by supervisors. However, the loan supply curve is not any more sensitive to public disclosures about nonperforming loans in an exam quarter, suggesting that investors are unaware of this information management

Ethical and Economic Perspectives on Global Health Interventions

Interventions that improve childhood health directly improve the quality of life and, in addition, have multiplier effects, producing sustained population and economic gains in poor countries. We suggest how contemporary global institutions shaping the development, pricing and distribution of vaccines and drugs may be modified to deliver large improvements in health. To support a justice argument for such modification, we show how the current global economic order may contribute to perpetuating poverty and poor health in less-developed countries

Agglomeration and Job Matching among College Graduates

We study one potential source of urban agglomeration economies: better job matching. Focusing on college graduates, we construct two direct measures of job matching based on how well an individual's job corresponds to his or her college education. Consistent with matching-based theories of urban agglomeration, we find evidence that larger and thicker local labor markets help college graduates find better jobs by increasing both the likelihood and quality of a match. We then assess the extent to which better job matching of college-educated workers increases individual-level wages and thereby contributes to the urban wage premium. While we find that college graduates with better job matches do indeed earn higher wages on average, the contribution of such job matching to aggregate urban productivity appears to be relatively modest

State Tax Differentials, Cross-Border Commuting, and Commuting Times in Multi-State Metropolitan Areas

We examine the effects of differences in income tax rates on commuting times within multi-state MSAs. Our theoretical model introduces a border into a model of an urban area and shows that differences in average tax rates distort commute times and interstate commutes. Empirically examining multi-state MSAs allows us to exploit tax policy discontinuities while holding fixed other characteristics. We identify large effects on commuting times for affluent households and homeowners in MSAs in which taxes are based on the state of residence. We discuss how the model and empirical design can be used to study other policy differences

3 empirical essays on investment in physical and human capital

Thesis (Ph.D.)--Massachusetts Institute of Technology, Dept. of Economics, 2002.Includes bibliographical references.This dissertation consists of three independent essays, all of which are empirical treatments of different types of investment. The first essay evaluates the economic consequences of the successful eradication of hookworm disease from the American South in the early twentieth century. I find that reducing hookworm infection in this region brought about large increases in human capital and earnings. I then place these results in the context of contemporaneous questions about the economic burden of tropical disease. The second essay (joint with Kevin Cowan) examines the role that partial dollarization of debt may have played in recent emerging-market financial crises. Much has been written recently about the problems that result from "mismatches" between foreign-currency denominated liabilities and assets (or income flows) denominated in local currency. Specifically, it is supposed that the expansion in the "peso" value of "dollar" liabilities resulting from a devaluation could, via a net-worth effect, offset the expansionary competitiveness effect. Our results suggest that, for this sample of firms in these episodes, this net-worth channel is likely small in comparison with the more traditional competitiveness effect. The final essay (joint with Aimee Chin) considers the role that English-language skill plays in the economic performance of immigrants to the United States. This study exploits the fact that younger children tend to learn languages more easily than adolescents or adults to construct an instrumental variable for English proficiency. We find that low English proficiency significantly lowers earnings and educational attainment. Indeed, much of the effect of language skills on wages in our sample appears to be mediated by years of schooling.by Crawford Hoyt Bleakley, Junior.Ph.D