Unintended consequences of education and housing reform incentives

Abstract

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This thesis measures some unintended consequences of government education and housing policies. Chapter 1 estimates the net educational effect, measured by student test scores, of the California Class Size Reduction Program on second and third graders. This program inadvertently created incentives for schools to combine students in multiple grade classrooms as well as reduce class size. Using the non-linear relationship between enrollment and combination classes I estimate that students placed in combination classes by the program suffered a large, significant drop in test scores. I also find little evidence of positive achievement effects due to smaller class size suggesting that the program's net effect may have been negative. Chapter 2 seeks to identify the effects of rent control on cities in the Boston area using the variation provided by a 1995 Massachusetts ballot initiative banning rent control. My findings support the intuition economist derive from simple economic models of price ceilings. Though rent controls achieve their stated aim of lowering rents, they also decrease the willingness of owners to rent apartments, lead to housing unit deterioration, and result in inefficiently long tenancy durations. I also find suggestive evidence that the deterioration in rent controlled housing quality may lower the rent in nearby non-controlled units. Chapter 3 examines an unintended strategic response of school districts to accountability testing. Using Wisconsin data I show that some school districts advance the starting date of their school year to allow their students more time to prepare for state accountability tests. I find that this leads to small test score gains in math, but may lead to higher absence rates and reduced reading scores among