Essays in Behavioral and Labor Economics
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vira-kvira-phd-economics-2026-thesis.pdf
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15.62 MB
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8736ccc1031e87d20c3b558140f2905d
Author(s)
Vira, Kartik
Advisor(s)
Schilbach, Frank
Acemoglu, Daron
Date Issued
May 2026
Publisher
Massachusetts Institute of Technology
Abstract
This thesis comprises three essays in behavioral and labor economics, focusing in particular on the determinants and consequences of selection in markets where assignment is consequential. The first chapter studies barriers to access to elite higher education institutions in the UK, particularly testing the extent to which students' expectations of social exclusion may discourage applications from low-income students, and consequences of this for their earnings. The second chapter, in the same setting, asks whether standardized testing requirements act as a barrier to university access for students on the margin of attending university, and also studies the labor market consequences for students on this margin. The third turns to the labor market for senior managers, asking how much individual CEOs matter for the markups of the firms that they are hired to.
In the first chapter, joint with Nagisa Tadjfar, we study whether low-income students' lower propensity to apply to elite universities reflects a lack of exposure to students who have attended top universities, and how exposure affects students' perceptions. Using UK administrative data, we exploit ``breakthrough'' events when a school first sends a student to a top university; we find evidence that applications to that university from that school increase persistently, and that the marginal entrants to these universities see substantially higher earnings. To understand the mechanisms for this effect, we conduct an RCT with students at schools across the UK. We find that students’ perceptions of their social fit at elite universities is an important barrier to disadvantaged students’ applications, but that showing students videos of past university attendees improves students’ perceptions and encourages applications.
The second chapter, also joint with Nagisa Tadjfar, focuses on a different margin: students who may not attend university at all due to standardized testing requirements. We study the staggered removal of a pre-university standardized test in the UK. Removal of the test increased university enrollment for low-performing students. Although these students saw high dropout rates from university, we estimate that the marginal students encouraged to go to university would earn £50,000-£100,000 more over their lifetime. These costs of testing emerge despite the fact that we find no evidence of bias in standardized tests, highlighting costs to standardized testing requirements that emerge as a result of selection even for unbiased standardized tests.
In the third chapter, joint with Aroon Narayanan, I turn from student-to-university matching to CEO-to-firm matching. We study the influence that individual CEOs can have on the markups of their firms, finding that CEO effects account for 10-14\% of the variance in overall firm effects; a placebo exercise verifies that this is substantially higher than would be expected by chance. We show that total costs fall upon the arrival of a high-markup CEO. We then use both narrative evidence derived from text analysis of earnings calls and product-level quantity data from India to demonstrate that this is because high-markup CEOs induce cost discipline and that these cost savings are passed on to output prices at low rates, producing an increase in markups.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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