Essays on Regional Inequality and Mobility

Abstract

This dissertation studies sources and consequences of regional inequality and mobility. Chapter 1 uses individual-level longitudinal survey data from the Indonesian Family Life Survey to produce estimates of mobility in Indonesia. I find that intergenerational income persistence is low relative to other developed countries. I explore mechanisms of mobility such as education, location, and sector of work. Contrary to previous evidence in the United States, I find no evidence of neighborhood effects between urban and rural areas. Chapter 2, joint with Yu (Alan) Yang and Xiaoyang Ye, studies the effects of region-based education and migration policies in China that produce regional inequities in quality of and access to opportunity. We build and calibrate a structural spatial overlapping generations model that captures China's institutional setting. We then use the calibrated model to quantify the effects of changing these policies on intergenerational mobility, welfare, education, and the income distribution, with particular interest in outcomes for children born at the bottom of the parental income distribution. We find that lifting migration restrictions and equalizing public spending levels increases intergenerational mobility and improves outcomes for the poorest born in poor provinces at the expense of children born in rich provinces. Modifying college admissions to a merit-based or equity-based system has modest aggregate effects, with positive (and negative) effects concentrated among children born to high-income parents. Chapter 3, joint with Janet Currie and Molly Schnell, uses quarterly county-level data from 2006–2014 to examine the direction of causality in the relationship between per capita opioid prescription rates and employment-to-population ratios in the United States. We address concerns of simultaneity between economic conditions and opioid prescription rates using instrumental variables. We instrument for opioid prescription rates of the working-age population using opioid prescription rates of the elderly, and we instrument for employment-to-population ratios using a shift-share instrument. Our findings suggest that after controlling for province-level fixed effects, there is no simple causal relationship between economic conditions and opioid abuse, and thus improving economic conditions is unlikely on its own to curb the opioid epidemic.