My first chapter explores the effect of income on health in the context of Social Security and Medicare. Income is a powerful predictor of health among the elderly, but existing research has struggled to identify a causal link. I estimate the causal effect of Social Security income on health care utilization and health outcomes among elderly men. Using Medicare administrative records and a regression discontinuity design, I exploit several changes in the Social Security benefit formula that vary abruptly by date of birth. This feature has been overlooked by prior research and causes workers born one day apart to receive positive and negative income shocks. Over my sample period, I estimate a $100 increase in monthly Social Security benefits leads to a $38 decline in monthly federal Medicare expenditures. To provide evidence the decline in spending is driven by improvements in health, I show income leads to reductions in diagnoses for chronic conditions and mortality. My results suggest cuts to Social Security benefits may have unintended social and fiscal costs. Overall, these findings highlight the importance of examining health outcomes when evaluating the costs and benefits of social insurance programs. My second chapter examines the Qualified Medicare Beneficiary (QMB) program---a means-tested benefit that exempts low-income Medicare beneficiaries from their cost-sharing obligations. Patients enrolled in the QMB program face zero prices for Medicare services, receive monthly premium exemptions, and subsidized Part D prescription drug coverage. However, because providers face administrative burdens and lower reimbursement rates, they may limit access for QMB patients. Given these offsetting features, it is unclear whether patients benefit from enrolling in the program. To examine the effect of QMB enrollment on patient access and outcomes, I study an expansion of QMB eligibility that occurred in Connecticut in 2009. By doubling the income limit and removing the asset test, the state more than doubled enrollment. Using a difference-in-difference design and Medicare administrative records, I estimate the effect of QMB enrollment on health care utilization and health outcomes. I find that the program appears to be successful at reducing beneficiary costs without limiting access to care. I show QMB enrollment leads patients to save $1,300 in annual outpatient cost-sharing liability without any change in the utilization of outpatient services. Overall, my results suggest that within the universe of Medicare, the program transfers a substantial share of producer surplus to consumers. My third chapter studies how cuts to Social Security retirement benefits affect Social Security disability enrollment. Specifically, I exploit a policy change which caused an abrupt decline in the generosity of retirement benefits for workers near certain date of birth cutoffs. Using various regression discontinuity designs, I do not find evidence that cohorts affected by the policy change have higher rates of benefit receipt. My preferred specification estimates a precise null effect. My confidence interval implies the increase in the full retirement age caused disability enrollment to only change between -0.25 and 0.28 percentage points. Relative to existing work, my paper provides evidence that disability enrollment is less sensitive to policy changes. I find there are fewer marginal SSDI applicants implying the program's moral hazard effects are more modest than prior work would suggest.

This dissertation contains three essays in applied microeconomics. In the first chapter paper I test whether the return to college education is the result of human capital accumulation or instead reflects the fact that attending college signals higher ability to employers. I exploit a reform at Universidad de los Andes, which in 2006 reduced the amount of coursework required to earn degrees in economics and business by 20% and 14%, respectively, but did not change the quality of incoming or graduating students. The size of the entering class, their average high school exit exam scores, and graduation rates were not affected by the reform, indicating that selection of students into the degrees remained the same. Using administrative data on wages and college attendance, I estimate that wages fell by approximately 16% in economics and 13% in business. These results suggest that human capital plays an important role in the determination of wages and reject a pure signaling model. Surveying employers, I find that the reduction in wages may have resulted from a decline in performance during the recruitment process, which led students to be placed in lower-quality firms. Using data from the recruitment process for economists at the Central Bank of Colombia, I find that the reform reduced the probability of Los Andes graduates’ being hired by 17 percentage points. The second chapter provides evidence that parental incarceration increases children's educational attainment. I collect criminal records for 90,000 low-income parents who have been convicted of a crime in Colombia, and combine it with administrative data on the educational attainment of their children. I exploit exogenous variation in parental incarceration resulting from the random assignment of defendants to judges with different propensities to convict and incarcerate. I find that conditional on conviction, parental incarceration increases education by 0.7 years for children whose parents are on the margin of incarceration. This positive effect is larger for boys, violent crimes, and cases in which the incarcerated parent is the mother. Finally, in the third chapter I derive a new expression that extends the Local Average Treatment Effect concept, to a setting with two sources of unobserved treatment heterogeneity.

My dissertation contributes towards our understanding of effects of trade liberalization on institutional, economic and environmental outcomes. It consists of three chapters. The first, ``International Trade Liberalization and Domestic Institutional Reform: Effects of WTO Accession on Chinese Internal Migration Policy" studies the effect of trade liberalization on migration regulations. I study how trade affects labor institutions in the context of China?s Hukou system that regulates internal migration. Chinese local governments were allowed to relax internal migration restrictions after China entered the WTO in 2001. I collect a new dataset on Chinese prefecture-level migration regulations that shows each region?s friendliness to migrant workers. Using these data, I document an increase in pro-migrant regulation around the time of WTO entry. I then consider the role of international trade in triggering this increase by estimating the impact of prefecture-level export and import shocks on migration regulations across 250 Chinese prefectures from 2001 to 2007. I find a positive and significant impact of export shocks on regulations that encourage in-migration. 17% of the impact of export shocks on migration and 9%-15% of their impact on growth operated through changes in regulation.

In my second chapter, ``Was Entry into the WTO Worth it: Environmental Consequences of Trade Liberalization'', I document that despite the enormous economic benefits from China's accession to the WTO in 2001, the overall welfare gains from trade liberalization may be compromised since pollution from production has also increased. Using plausibly exogenous tariff reductions on Chinese goods caused by the WTO accession, variation in industry composition across cities and variation in pollution intensity levels across industries, I study the effect of trade liberalization on income, pollution, and health in China from 2000 to 2005. Using regional tariff shocks as instruments for changes in income and pollution levels, I show that cities which faced a 10% larger GDP per capita increase experienced a 6%-7% larger total mortality rate decline, and regions that faced a 10% larger increase in air pollution levels experienced a 4%-13% larger total mortality rate increase. Overall, if all exports were generated from non-polluting industries, the total mortality rate would have declined by 3.6% more. However, in terms of overall welfare, the gains from income growth outweigh losses from increases in pollution levels.

In the third and last chapter, ``Hukou and Labor Misallocation in China", I propose to quantify the changes in misallocation cost due to the Hukou reform. The Hukou system impedes labor mobility across regions, and the marginal productivity of labor may not be equalized spatially. Following Hsieh and Moretti (2017), I plan to use a general equilibrium Rosen-Roback model to measure the effect of Hukou regulations on aggregate growth.

In these essays, I study the following three topics in Applied Microeconomics using datasets of China: (1) The impact of political movements in the first thirty years of People's Republic of China on the intergenerational and multigenerational transmission of education; (2) The relationship between health insurance and households' consumption; (3) The effect of health insurance on out-of-pocket medical expenditures. The first chapter investigates the effect of family class origin on educational attainment and intra-family educational transmission process by using the newly released China Family Panel Study (CFPS) data. The paper focuses on three typical generations, those that completed their education before the beginning of the Maoist era, during the Land Reform and the Cultural Revolution, and after the end of the Cultural Revolution. Suffering from the class-based violence and discrimination, the members of landlord and rich-peasant families, who completed their education during the political movements, attained significantly lower education than the members of other families did. However, the offspring of landlord and rich peasant families are more likely to have higher educational achievement after the end of the Cultural Revolution. I also find evidence of a direct effect of grandfather's education on grandson's education beyond intervening causal mechanisms through fathers. This multigenerational effect on education is particularly strong within former landlord and rich-peasant families. The second chapter discusses the relationship between medical insurance and consumption. I set up a simple theoretical model to show that medical insurance acts as a buffer against possible health shocks, which makes precautionary saving less necessary and thus stimulates consumption. The China Health and Nutrition Survey is utilized in empirical tests. I find that the coefficient of insurance is significantly positive and that it is robust to alternative specifications. Moreover, I notice that cooperative insurance has the smallest effect among all kinds of insurance, which indicates that it is necessary to allocate more resources to this kind of insurance. I also provide evidence that the effect of insurance is greater for people with low income or who face a greater danger of health shock. The third chapter examines the effect of health insurance on out-of-pocket medical expenditures. In 1998, the Chinese government launched a health insurance reform to expand the health insurance coverage in urban China. The reform aimed at putting all urban employees into a new health insurance scheme, Urban Employee Health Insurance (UEHI). The new scheme was rolled out sequentially across different working units including government, state-owned enterprises, and private enterprises. This paper employs a difference-in-difference strategy to make use of this variation of eligibility across different working units and over time to identify the impact of reform. I find that the reform substantially increased the probability of being covered by health insurance and reduced the out-of-pocket medical expenditures of the employees of private enterprises. Besides, the reform significantly reduced the risk of exposure to catastrophic medical expenditures of the employees of both private enterprises and SOEs.

This dissertation describes the functioning of credit markets in both developed and developing nations, and provides empirical evidence on the relevance of such markets to the real economy.

In Chapter 1, I empirically analyze the unintended effects of microlending on children's test scores and time allocation. By making credit available to poor entrepreneurs, microlending has the potential to increase the borrower's opportunity cost of participating in other activities, including household activities and parental involvement. To identify the causal effects, I explore the variation in the expansion of the largest microlending program in Brazil, that occurs over the years and across municipalities. More specifically, I rely on a unique feature that arbitrarily prevented the program from operating beyond certain boundaries within that country. I find that children in different grades are affected differently. Fifth graders underperform in standardized math exams and are less likely to work hard in their homework assignments. Their parents are also less likely to attend parent-teacher meetings at school. Ninth graders spend more time in household chores on a typical school day, but that does not necessarily translate into worse test scores. But otherwise, I do not find any impact on dropout rates in these grades.

In Chapter 2, I explore rainfall fluctuations in Brazil to measure the long-term effects of early life conditions on entrepreneurial productivity. I focus on the performance of low-income entrepreneurs, who are also borrowers from the largest microlender in that country. I match newly collected individual-level administrative data from the microlending institution to their clients' year, month, and municipality of birth data on rainfall. Thus, through the date and place of birth, I am able to link the prevailing weather conditions, specifically water scarcity, during the entrepreneur's in utero and early life, to the performance of his business during adulthood. I find that being exposed to a drought is associated with about 2 percent lower revenue.

Chapter 3 describes the role of credit markets predicting recessions in the United States. Key financial variables, such as the prices of financial instruments, are commonly associated with expectations of future economic events. During periods of credit market turmoil, financial asset prices are especially informative of linkages between the real and financial sides of the economy: Movements in asset prices can provide early warning signals for such economic downturns. In this chapter, I analyze the predictive content of real stock returns, term spreads and credit spreads. Using dynamic probit models to forecast the real economy fluctuations, I show that credit spreads are an important predictors of future recessions, in particular, of the sharp decline in 2008. I also confirm that term spreads are the primary predictive variables.

Over half of the US states have adopted "medical marijuana" laws (MMLs), and 58% of Americans now favor marijuana legalization. Despite public support, federal law continues to prohibit the use and sale of marijuana due to public health concerns of increased dependence and abuse, youth access, and drugged driving. These essays contribute toward understanding the likely health consequences of marijuana liberalization using evidence from MMLs.

Chapter 1 -- Growing Like Weed: Explaining Variation in Medical Marijuana Market Size provides a comprehensive analysis of the determinants of growth in legal medical marijuana markets. Newly collected data on medical marijuana patient registration rates shows that there is substantial heterogeneity in medical marijuana participation over time and across states. This variation is primarily driven by the combined effects of federal enforcement policy and state supply restrictions on legal production costs. Chapter 2 -- The Kids Aren't Alright: Effects of Medical Marijuana Market Growth on Marijuana Use then studies the effect of growth in legal medical marijuana markets on recreational use. Findings show that expansion of legal medical marijuana market size significantly increases the prevalence of recreational cannabis use by both adults and adolescents. Reaching the median state's legal market size would increase the prevalence of marijuana use in the past month by 6% for adolescents aged 12-17, by 9% for 18-25 year-olds, and by 18% for adults over age 25.

The welfare implications of these changes largely depend on the externalities and internalities associated with marijuana use. To study this, Chapter 3 -- On the Health Consequences of Increased Medical Marijuana Access examines the effects of increased marijuana availability on traffic fatalities and mortality related to opioid and alcohol poisonings. In the aggregate, greater medical marijuana access decreases mortality from these causes. However, the aggregate effect masks an important welfare trade-off generated by age differences in the elasticity of substitution between marijuana and alcohol. For adults aged 45-64, greater marijuana availability reduces mortality related to alcohol and opioid poisonings by 7-11% and 12-16% respectively. In contrast, for youths aged 15-20, marijuana access generates negative externalities in the form of a 6% increase in traffic fatalities, with large and significant effects on alcohol- and cannabis-related accidents.

This thesis examines how ownership structure and climate change issues affect farmers in developing countries in three chapters. The first chapter surveys the theoretical and empirical literature on how ownership structure and industry competitiveness interact. The second chapter examines the role of sugar mill ownership and regulations on farmers in one region of India. The third chapter studies how climate change has affected agricultural yields over a 50-year period in India, accounting for the role that farmer adaptations may play in mitigating these effects. This thesis finds substantial ownership effects on farmer outcomes, due ultimately to the unexpected ways in which regulatory restrictions affect the incentives of privately-owned firms. It does not find that climate change impacted crop yields during the period of study, perhaps due to farmer adaptations that mitigated any adverse climate effects.

This dissertation consists of three essays on human capital. In Chapter 1, I investigate the impact of collaborating with robots on human capital, focusing on professional baseball umpires who were provided with and then deprived of robot assistance. Umpires displayed enhanced accuracy with robot assistance, but experienced significant declines in performance once it was removed. I argue that these findings can extend beyond baseball, suggesting broader implications for occupations sharing similar skill sets. In Chapter 2, joint with Felipe Goncalves and Emily Weisburst, we investigate the effects of changes in workplace risk awareness on police behavior and public safety, focusing on incidents of police officer fatalities while on duty. Our findings reveal that following the death of a fellow officer, police officers reduce arrest activity for one to two months, indicating heightened fear. This reduction is most prominent for minor offenses and is more pronounced in smaller cities. Yet, we find no evidence of increased crime rates during this period, suggesting that reduction in arrests does not adversely impact public safety. In Chapter 3, joint with Anna Aizer, Shari Eli and Adriana Lleras-Muney, we utilize newly gathered data of 16,000 women who applied for Mothers' Pensions, America's first welfare program, to explore the impact of means-tested cash transfers on lifetime family dynamics and maternal welfare. In the short term, these transfers led to postponed marriage and reduced geographical mobility. However, in the long run, they had no discernible effect on remarriage probability, spouse quality, fertility, or maternal well-being, as measured by longevity and family income in 1940. With the absence of significant negative behavioral outcomes, we suggest that the benefits of such transfers may outweigh the costs, particularly if they yield even modest positive impacts on children.

I study three separate questions in this dissertation. In Chapter 1, I investigate the extent to which credit and insurance market constraints affect occupational choice in rural Kenya. Using data I collected on individuals' subjective beliefs about the returns, costs, and risks associated with the occupations they typically choose from, I find that insurance market constraints prevent people from entering into high-profit but also high-risk occupations. In contrast, I do not find any evidence that credit market failures affect this choice. In Chapter 2, we conduct a randomized experiment to provide improved access to formal financial services in Western Kenya. We find low take-up and use of savings accounts and loans even after we waived account opening fees, provided information about loans, and lowered eligibility requirements to get credit. Survey evidence suggests people remain unbanked mainly due to the poor quality of banking services offered in the area (high fees, lack of trust, and unreliable service). In Chapter 3, I examine the effect of women's education on fertility and child health outcomes in Uganda. Women who get additional schooling reduce their preferences for family size: they delay the onset of fertility and reduce the total number of children they have overall. At the same time, mothers with more education invest more in their children's health and their children are better nourished. I find evidence that this child quantity-quality trade-off is driven by educated women's improved employment opportunities. In addition, schooling helps women exert more control over their reproductive lives. However, I find no evidence that more educated women increase bargaining power over other household decisions.