Working Papers

Can Relief Programs Compensate Affected Populations? Evidence from the Great Depression and the New Deal  (with Tommy Morgan) NEW DRAFT COMING SOON!

This paper explores the short- and long-run effects of the Great Depression and the New Deal on the well-being of the population, measured by longevity. We use a novel dataset that allows us to track a large number of individuals alive in 1930 until their deaths and match it to information on the severity of the economic crisis and the extent of transfers provided by the New Deal at the county level. First, we document the dynamic effects of the Great Depression (GD) on survival rates and longevity and we show that individuals, in particular young men, living in the most several affected locations lived substantially shorter as a result of the GD. Second, we assess whether the New Deal compensated individuals for the negative effects of the GD. To identify the causal effects of the New Deal programs, we leverage variation across counties in New Deal spending that was politically motivated. More specifically, we use an instrumental variable strategy based on voting culture. Intuitively our approach compares outcomes of individuals in counties that were equally affected by the GD but who received more money as a result of politicians’ desire to be re-elected. We find that the New Deal increased longevity and more than offset the negative effects of the recession. In the absence of the New Deal, on average individuals would have lived 6 months less. The benefits of the New Deal were larger for men, and for those aged 15-25 in 1930.  

The Falling College Premium: The Role of Composition (with Tomás Guanziroli)Draft upon request.

Recent studies show that the college premium has flattened in the last two decades in many Latin American countries. At the same time, there was a great expansion in the number of college graduates and college institutions in the region. This paper shows that the college premium in Brazil has not flattened, instead it is increasing. We do this by matching novel data with the names of around one million college graduates from 42 schools and 20 different cohorts with the Brazilian employer-employee matched dataset. First, the increase in the supply of college workers came from newer, lower ranked, and lower wage-premium universities. Second, the college premium has increased for workers from our constant sample of universities. Combining these two facts, we infer that there are more workers with a college degree but lower quality degrees, reflecting lower average wages. The findings in this paper are relevant for any study that uses college premium proxies in countries, or periods, with increasing access to lower-quality colleges. More precisely, we are concerned that the market equilibrium effects of college access have been overestimated by not accounting for these changes in quality.

Work in Progress

The Intergenerational Effects of the Great Depression  (with Nathaniel Barlow)
Education, Health, and Genetic Confounding (with Silvia H. Barcellos, Titus J. Galama,  Hans van Kippersluis,  Adriana Lleras-Muney and Andries Marees)


Housing Wealth, Health and Deaths of Despair  (with Nuria Mas and Carles Vergara-Alert)Journal of Real Estate Finance and Economics (2020).We use household-level data to study the causal effects of exogenous changes in housing wealth on health and the drug crisis in the US attributed to “deaths of despair”. We find that a one standard deviation positive shock in housing wealth increases the probability of an improvement in self-reported health (mental health) by 1.0 (1.10) percentage points, decreases the change in drug-related mortality rate by 4.3%, and has no effect on alcohol- or suicide-related deaths. The opposite effect also holds, such that a negative shock on wealth increases the probability of a decline in health. We also find that the impact of housing wealth on health varies across socioeconomic groups and is more pronounced in MSAs in which housing supply is more inelastic, which explains the differential effect of economic cycles across geographical areas. Our results suggest that housing-related policies could have important implications for general health outcomes as well as for the opioid crisis.