Essays on the economic effects of human capital investments

Abstract

This thesis is a collection of three essays analyzing the economic effects of human capital investments. The first chapter evaluates the effects of a major educational reform in India called Operation Blackboard. The teacher component of Operation Blackboard increased the number of primary school teachers by ten percent. I find that despite substantial misallocation of teachers appointed under the program, on balance the program reduced the prevalence of single-teacher schools and increased the number of teachers per school. Moreover, the program significantly raised primary school completion and literacy for girls but had no effect on boys. Finally, two-stage least squares estimates obtained using the exogenous variation in school quality provided by the program suggest a higher returns to school quality than their ordinary least squares counterparts. The second chapter, co-authored with Hoyt Bleakley, examines the returns to language skills. We take advantage of the fact that younger children learn languages more easily than older children to generate exogenous variation in language skills. We find a significant positive effect of English-language skills on wages among individuals from the 1990 Census who immigrated to the U.S. as children. We control for non-language effects of age at arrival with immigrants from English-speaking countries. Our estimated effect of English-language skills on wages is larger than the effect suggested by estimates that do not correct for endogeneity. Much of this effect appears to be mediated by years of schooling and occupational choice.

(cont.) The third chapter investigates the long-run economic consequences of a labor market withdrawal induced by the Japanese-American internment during World War II. Internees spent an average of three years in internment camps. I use the Hawaiian Japanese, who were not subject to mass internment like the West Coast Japanese, as a control group. I find that the labor market withdrawal lowered the earnings of Japanese-American men twenty-five years afterwards. Additionally, it raised the probability of self-employment, and reduced the probability of holding higher-status occupations. These findings are consistent with the predictions of economic models involving a loss of civilian labor market experience or a loss of advantageous job matches.