Dissertation Seminar

APPLIED ECONOMICS: ANSWERING MACRO QUESTIONS AND SOLVING SOCIAL PROBLEMS USING MICRO DATA

Academic Year: 2019/2020 Semester: 1st

Instructor: Joana Silva Max. Number of Students: 6

Seminar Description:

The dissertation seminar is designed to help students write their Master thesis on a topic related to Applied Micro and . It comprises a mix of group and individual mandatory sessions. During the course, students will be asked to present their current work and to comment on the work of others. The scientific project may be either empirical or combine theoretical with empirical work.

The seminar begins with group sections showing how micro data from Government programs or firms’ transactions combined with quantitative methods can be used to solve important social problems, answer long-standing questions in macroeconomics and improve public policies. Examples provided will also show how this type of data and methods can be applied to assess the drivers and implications of firm behavior. The second part of the seminar consists of in-depth discussions of empirical papers and class presentations. Students are encouraged and expected to actively participate.

Prerequisites: Understanding of Micro Econometrics and/or Time Series Econometrics, and basic knowledge of Stata and/or R. ______

Seminar Content:

Students will select a topic from the list below (or propose others) in the field of applied economics. Students are expected to develop their skills around the selected topics, develop an original idea and apply it using existing micro data. Please contact the instructor if you want to work in an area related to applied economics that is not mentioned in the list below.

1. Poverty and Inequality: Inequality Trends and Drivers, (Intended and Unintended) Economic Consequences of Social Programs

2. Macroeconomics: Studying Macro Shocks Using (More Disaggregated or Higher Frequency) Micro Data, Transmission of Shocks and Crisis across Countries, and Workers and Firms Adjustment

3. Labor economics: Gender Wage Gap, Labor Market Adjustment to Globalization, firms' investment in human capital/training

4. Education: Causal Effects of Teachers and Education Quality on Students’ Employability and Wages

5. International Economics: Dynamics of Business Formation, Growth, and Productivity and How they are Affected by Globalization; Causal effects of the China (and Other Trade) Shocks on Employment and Productivity

6. Policy Evaluation: Impact of Public Policies on Welfare, Employment Fluctuations, and Long-Term Growth ______

Seminar Objectives:

Students are expected to review the literature, develop their skills to write on their topic of selection, and implement an innovative idea. They are expected to work with the data, perform statistical and economic analysis, make a meaningful contribution to the literature and, if applicable, make policy recommendations.

Writing a thesis proposal will require students to put serious effort and to work independently. Upon successful completion of this project, students should have improved the following generic skills: - Oral communication including presentation skills - Written Communication - Problem solving - Statistical reasoning - Application of theory to practice - Interpretation and analysis - Critical thinking - Evaluation of data and other information - Using the necessary computer software

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Bibliography / Recommended Textbook(s) / Additional Readings:

Textbooks:

**Angrist, J.D. and Pischke, J.S., 2014. Mastering metrics: The path from cause to effect. Press.

Duflo, E., Glennerster, R. and Kremer, M., 2007. Using randomization in development economics research: A toolkit. Handbook of development economics, 4, pp.3895-3962.

Muralidharan, K. and Niehaus, P., 2017. Experimentation at scale. Journal of Economic Perspectives, 31(4), pp.103-24.

Podcast: Planet Money, NPR. What Causes What?; How Many Jobs Has Scott Walker Created?; How Much Should We Trust Economics?; Cash, Cows And The Rise Of Nerd Philanthropy

Academic papers and summary blogs: The reading list is preliminary and may be amended throughout the term. There will be suggestions for podcasts and news articles that will be important to illustrate the main concepts we will discuss.

1. Poverty and inequality

**David, H., 2014. Skills, education, and the rise of earnings inequality among the" other 99 percent". Science, 23: 344 (6186), 843-851. Banerjee, A.V. and Duflo, E., 2007. The economic lives of the poor. Journal of economic perspectives, 21(1), pp.141-168. Banerjee, A.V., Banerjee, A. and Duflo, E., 2011. Poor economics: A radical rethinking of the way to fight global poverty. Public Affairs. Card, D., Heining, J. and Kline, P., 2013. Workplace heterogeneity and the rise of West German wage inequality. The Quarterly journal of economics, 128(3), pp.967-1015. Chetty, R., Hendren, N., Kline, P. and Saez, E., 2014. Where is the land of opportunity? The geography of intergenerational mobility in the United States. The Quarterly Journal of Economics, 129(4), pp.1553-1623. **Chetty, R., Friedman, J.N., Olsen, T. and Pistaferri, L., 2011. Adjustment costs, firm responses, and micro vs. macro labor supply elasticities: Evidence from Danish tax records. The Quarterly Journal of Economics, 126(2), pp.749-804. Websites: Using big data solve economic and social problems and Equality of Opportunities Project by Podcast. The BBC Inquire. How Much Inequality Is Too Much? **Blog: Silva, J. and Messina, J. 2018. Wage Inequality in Latin America: Understanding the Past to Prepare for the Future **Blog: Piketty, T., Saez, E. and Stantcheva, S. 2011 Taxing the 1%: Why the top tax rate could be over 80% News: How Norwegians and Americans See Inequality Differently (The Atlantic), World's eight richest people have same wealth as poorest 50% (The Guardian)

2. Applied macroeconomics

Pritzker, P., Doms, M. and Moyer, B., 2014. Measuring the economy: A primer on GDP and the national income and product accounts. Bureau of Economic Analysis, US Department of Commerce. (https://www.bea.gov/resources/methodologies/measuring-the-economy) **Di Giovanni, J., Levchenko, A.A. and Mejean, I., 2018. The micro origins of international business- cycle comovement. , 108(1), pp.82-108. **Nakamura, E. and Steinsson, J., 2008. Five facts about prices: A reevaluation of menu cost models. The Quarterly Journal of Economics, 123(4), pp.1415-1464. **Blog: Broadberry, S. and Wallis, J. 2017. “Growing, shrinking, and long run economic performance.” VoxEU **Blog: Lagarde, C. and Ostry, J. 2018. “The macroeconomic benefits of gender diversity” VoxEU **Blog: American Economic Association 2019. “Emi Nakamura, Clark Medalist 2019”

3. Labor economics

**Bastos, P., Proenca, R. and Silva, J. 2018. Exports and Job Training. Review of International Economics, 24(4), 737-756, 2016. Cook, C., Diamond, R., Hall, J., List, J.A. and Oyer, P., 2018. The gender earnings gap in the gig economy: Evidence from over a million rideshare drivers (No. w24732). National Bureau of Economic Research. **Dix-Carneiro, R. and Kovak, B.K., 2019. Margins of labor market adjustment to trade. Journal of International Economics, 117, pp.125-142. McCaig, B. and Pavcnik, N., 2015. Informal employment in a growing and globalizing low-income country. American Economic Review, 105(5), pp.545-50. **Blog: Wren-Lewis, Simon. 2019. “Views on the minimum wage show economics to be an inexact science,” VoxEU.

4. Education

**Chetty, R., Friedman, J.N. and Rockoff, J.E., 2014. Measuring the impacts of teachers I: Evaluating bias in teacher value-added estimates. American Economic Review, 104(9), pp.2593- 2632. Chetty, R., Friedman, J.N. and Rockoff, J.E., 2014. Measuring the impacts of teachers II: Teacher value-added and student outcomes in adulthood. American economic review, 104(9), pp.2633-79. Duflo, E., Hanna, R. and Ryan, S.P., 2012. Incentives work: Getting teachers to come to school. American Economic Review, 102(4), pp.1241-78. **Lavy, V., 2009. Performance pay and teachers' effort, productivity, and grading ethics. American Economic Review, 99(5), pp.1979-2011.

5. International economics

**Autor, D.H., Dorn, D., Hanson, G.H. and Song, J., 2014. Trade adjustment: Worker-level evidence. The Quarterly Journal of Economics, 129(4), pp.1799-1860. **Bastos, Paulo & Silva, Joana, 2012. Networks, firms, and trade. Journal of International Economics, Elsevier, vol. 87(2), pages 352-364. **Bastos, P. and Silva, J., 2010. The quality of a firm's exports: where you export to matters. Journal of International Economics, 82(2), pp.99-111. Goldberg, P.K., Khandelwal, A.K., Pavcnik, N. and Topalova, P., 2010. Imported intermediate inputs and domestic product growth: Evidence from India. The Quarterly journal of economics, 125(4), pp.1727-1767. McCaig, B. and Pavcnik, N., 2018. Export markets and labor allocation in a low-income country. American Economic Review, 108(7), pp.1899-1941. **Bastos, P., Silva, J. and Verhoogen, E., 2018. Export destinations and input prices. American Economic Review, 108(2), pp.353-92. **Blog: Acemoğlu, Autor, Dorn, Hanson, and Price (2014). “The rise of China and the future of US manufacturing.” Voxeu

**Blog: Wood (2017). “How globalization affected manufacturing around the world.” Voxeu **Blog: Verhoogen, E., Bastos, P. and Silva, J., 2018. “Upgrading outputs means upgrading inputs” VoxDev

6. Policy evaluation

Baird, S., Hicks, J.H., Kremer, M. and Miguel, E., 2016. Worms at work: Long-run impacts of a child health investment. The Quarterly Journal of Economics, 131(4), pp.1637-1680. Oates, W.E. and Schwab, R.M., 2015. The window tax: A case study in excess burden. Journal of Economic Perspectives, 29(1), pp.163-80. **Gerard, F. and Gonzaga, G., 2016. Informal labor and the efficiency cost of social programs: Evidence from the brazilian unemployment insurance program (No. w22608). National Bureau of Economic Research. (R & R, American Economic Journal: Economic Policy). Naritomi, J., 2018. Consumers as tax auditors. CEPR Discussion Paper No. DP13276. (forthcoming American Economic Review) Serrato, J.C.S. and Wingender, P., 2016. Estimating local fiscal multipliers. National Bureau of Economic Research. (R&R Econometrica) **Blog: Belluz, J., 2015. Worm wars: The fight tearing apart the global health community, explained

New York Times: Better Government one Tweak at a Time The list above includes the link to each textbook, paper and blog. Please contact the instructor if you need access to mentioned resources. Students are expected to read the books and papers marked with ** BEFORE the seminar begins in September.

______Biography: Joana Silva is an Associate Professor at Católica Lisbon School of Business and Economics. Before joining Católica, Joana worked for 12 years at the World Bank. She has expertise in labor economics, wage inequality, international trade, economics of education, poverty and inequality, firm productivity and policy evaluation. She has led several World Bank lending operations and has extensive experience advising governments, in particular on the design and implementation of economic reforms, social programs and monitoring and evaluation systems. Her research has been published in academic journals, including the American Economic Review, Journal of International Economics, Economics Letters and Review of World Economics. She is author of four books “Wage Inequality in Latin America: Understanding the past to prepare for the future”, “Sustaining Employment and Wage Gains in Brazil”, “Inclusion and Resilience: The Way Forward for Social Safety Nets in the Middle East and North Africa” and “Striving for Better Jobs: The Challenge of Informality in the Middle East and North Africa”. Before joining the World Bank she has worked for the Globalization and Economic Policy Research Center and taught at the University of Nottingham, Georgetown and George Mason. She holds a Ph.D. in Economics from the University of Nottingham.

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Contact(s) and Office Hours:

Email, office and phone number are to be announced. ______

Grading:

Grading will be based on the quality of the written document and final presentation. Active participation is expected. Attendance of all sessions is required. Students are expected to deliver the thesis in the first submission deadline. Illness or related motives are the only reasons to deliver in the late submission deadline. Students must deliver the first draft of the thesis a month before the deadline. The final draft should be delivered no later than 10 days before the deadline. Due dates are non-negotiable. In signing up for this seminar, each participant commits to meet the proposed deadlines. There are no exceptions. In each session all students will present their findings using PowerPoint slides.

Each student must complete the following steps:  Read background papers and attend group sessions  Present Main Idea/Motivation/Objectives  Write an individual research proposal  Attend Research Group Progress Meeting: Main Idea/Data/Methodology  Write draft thesis  Attend Research Group Progress Meeting: Summarize Method use to make causal inference and results  Final Presentation  Final Thesis delivered

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Schedule:

 5th September - 11:00-12:30 – Room TBD  12th September - 11:00-12:30 – Room TBD  19th September - 11:00-12:30 – Room TBD  26th September - 11:00-12:30 – Room TBD  3rd October - 11:00-12:30 – Room TBD  10th October - 11:00-12:30 – Room TBD

Individual support is available by appointment. A maximum of 3 hours total per individual is allowed. ______

Deadlines:

The full list of dates and deadlines will be available here.