Using Big Data to Solve Economic and Social Problems Professor Raj Chetty Stanford University, Spring 2017 Format: This course consists of eleven (11) one hour and twenty minute lectures delivered at Stanford University in Spring 2017 (Economics 45). Description: This introductory course shows how "big data" can be used to understand and solve some of the most important social and economic problems of our time. The course gives students an introduction to frontier research in applied economics and social science that does not require prior coursework in Economics or Statistics. Topics include equality of opportunity, education, health, the environment, and criminal justice. In the context of these topics, the course provides an introduction to basic statistical methods and data analysis techniques, including regression analysis, causal inference, quasi-experimental methods, and machine learning. When taught at Stanford in 2017, the course also included guest lecturers David Leonhardt, Alex Laskey, Jini Kim, Sendhil Mullainathan, and Matthew Gentzkow, who discussed real-world applications of data science; these guest lectures are not included in the online version. Goals: The course has three principal learning objectives: 1) to introduce students to frontier social science research on key social and economic issues in the United States, 2) to teach students how to understand and analyze quantitative data, and 3) to show students to how practitioners use “big data” to analyze social problems. Prerequisites: None. Some prior background in statistics is recommended but not required. Acknowledgements: I am indebted to Rebecca Toseland, the Head Section Leader for the course, for her assistance in helping prepare course materials and organize the class and to the Equality of Opportunity Project research team for developing much of the content in these lectures. 1 Course Outline Part I: Equality of Opportunity 1 Introduction and the Geography of Upward Mobility 2 Policies to Improve Upward Mobility 3 Opportunity, Innovation, and Economic Growth Part II: Education 4 Higher Education 5 Primary Education 6 Do Charter Schools Work? Part III: Health 7 Improving Health Outcomes 8 The Economics of Health Care and Insurance Part IV: Environment 9 Social Costs of Climate Change and Pollution 10 Policies to Mitigate Climate Change Part V: Justice 11 Criminal Justice and Discrimination 2 Reading List Part I: Equality of Opportunity 1 - Introduction and the Geography of Upward Mobility *Einav, Liran, and Jonathan Levin. 2014. “Economics in the Age of Big Data.” Science 346 (6210): 715. *Leonhardt, David. 2013. “In Climbing Income Ladder, Location Matters.” The New York Times. *Leonhardt, David, Amanda Cox, and Claire Cain Miller. 2015. “An Atlas of Upward Mobility Shows Paths Out of Poverty.” The New York Times. *Aisch, Gregor, Eric Buth, Matthew Block, Amanda Cox, and Kevin Quealy. 2015. “The Best and Worst Places to Grow Up: How Your Area Compares.” The New York Times. *Chetty, Raj, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez. 2014. “Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States.” Quarterly Journal of Economics 29 (4): 1553–1623. Non-technical summary * Non-technical summary “The Impacts of Neighborhoods on Intergenerational Mobility ” Optional Reading Badger, Emily and Christopher Ingraham. 2016. “The Striking Power of Poverty to Turn Young Boys into Jobless Men.” The Washington Post. Chetty, Raj, Nathaniel Hendren, Frina Lin, Jeremy Majerovitz, and Benjamin Scuderi. 2016. “Childhood Environment and Gender Gaps in Adulthood.” American Economic Review Papers and Proceedings 106 (5): 282–88. Non-technical summary Chetty, Raj, and Nathaniel Hendren. 2016. “The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects.” NBER Working Paper No. 23001. Chetty, Raj, and Nathaniel Hendren. 2016. “The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates.” NBER Working Paper No. 23002. 3 2 - The Geography of Upward Mobility cont’d and Policies to Improve Upward Mobility *Chetty, Raj, Nathaniel Hendren, and Lawrence F Katz. 2016. “The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment.” American Economic Review 106 (4): 855–902. Non-technical summary *Davis, Bob. 2016. “Barely Half of 30-Year-Olds Earn More Than Their Parents.” The Wall Street Journal. *Non-technical summary “The Fading American Dream: Trends in Absolute Income Mobility Since 1940.” Optional Reading Chetty, Raj, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang. 2016. “The Fading American Dream: Trends in Absolute Income Mobility Since 1940.” NBER Working Paper No. 22910. 3 - Opportunity, Innovation, and Economic Growth *Cimpian, Andrei and Sarah-Jane Leslie. 2017. “Why Young Girls Don’t Think They Are Smart Enough.” The New York Times. *Bian, Lin, Sarah-Jane Leslie, and Andrei Cimpian. 2017. “Gender Stereotypes about Intellectual Ability Emerge Early and Influence Children’s Interests.” Science 391 (6323): 389–91. Optional Reading Alex Bell, Raj Chetty, Xavier Jaravel, Neviana Petkova, John Van Reenen. 2016. “The Lifecycle of Inventors.” Working Paper. Part II: Education 4 – Higher Education * Aisch, Gregor, Larry Buchanan, Amanda Cox, and Kevin Quealy. 2017. “Some Colleges Have More Students From the Top 1 Percent Than the Bottom 60. Find Yours.” The New York Times. *Leonhardt, David. 2017. “America’s Great Working Class Colleges.” The New York Times. 4 *Chetty, Raj, John N Friedman, Emmanuel Saez, Nicholas Turner, and Danny Yagan. 2017. “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility.” Working Paper. Non-technical summary *Hoxby, Caroline Minter, and Christopher Avery. 2013. “The Missing ‘One-Offs’: The Hidden Supply of High-Achieving, Low Income Students.” Brookings Papers on Economic Activity, 1–66. Optional Reading Hoxby, Caroline Minter, and Sarah E. Turner. 2015. “What High-Achieving Low-Income Students Know About College.” American Economic Review: Papers & Proceedings 105 (5): 514–17. Hoxby, Caroline, and Sarah Turner. 2013. “Expanding College Opportunities for High- Achieving, Low Income Students.” Stanford Institute for Economic Policy Research Discussion Paper, no. 12-014: 1–57. 5 - Primary Education *Porter, Eduardo. 2015. “Education Gap Between Rich and Poor is Growing Wider.” The New York Times. *Leonhardt, David. 2010. “The Case for $320,000 Kindergarten Teachers.” The New York Times. *Chetty, Raj, John N. Friedman, Nathaniel Hilger, Emmanuel Saez, Diane Whitmore Schanzenbach, and Danny Yagan. 2011. “How Does Your Kindergarten Classroom Affect Your Earnings? Evidence from Project STAR.” Quarterly Journal of Economics 126 (4): 1593–1660. Non-technical summary. *Non-technical summary “Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates.” *Reardon, Sean. 2016. “School Segregation and Racial Academic Achievement Gaps.” Russell Sage Foundation Journal of the Social Sciences 2 (5): 34–57. Optional Reading Lowrey, Annie. 2012. “Big Study Links Good Teachers to Lasting Gain.” The New York Times. Chetty, Raj, John N Friedman, and Jonah E Rockoff. 2014. “Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates.” American Economic Review 104 (9): 2593–2632. 5 Chetty, Raj, John N Friedman, and Jonah E Rockoff. 2011. “Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood.” American Economic Review 104 (9): 2633–79. Fredriksson, Peter, Björn Öckert, and Hessel Oosterbeek. 2013. “Long-Term Effects of Class Size.” The Quarterly Journal of Economics 128 (1): 249–85. Reardon, Sean, Demetra Kalagrides, and Kenneth Shores. 2016. “The Geography of Racial/ Ethnic Test Score Gaps.” CEPA Working Paper, no. 16. Guest Lecture #1: David Leonhardt, Columnist & Founding Editor of The Upshot, The New York Times David Leonhardt is an Op-Ed columnist for The New York Times. David was previously the Washington bureau chief and the founding editor of The Upshot, a Times website covering politics and policy. In 2011, he received the Pulitzer Prize for commentary, for his columns on the financial crisis and its aftermath. As a staff writer for The Times Magazine, he won the Gerald Loeb Award in 2009 for the story, “Obamanomics.” He is the author of the best-selling e- book, “Here’s the Deal: How Washington Can Solve the Deficit and Spur Growth.” 6 – Do Charter Schools Work? *Leonhardt, David. 2016. “Schools That Work.” The New York Times. *Chabrier, Julia, Sarah Cohodes, and Philip Oreopoulous. 2016. “What Can We Learn From Charter School Lotteries?” Journal of Economic Perspectives 30 (3): 57–84. Optional Reading Abdulkadiroǧlu, Atila, Joshua D. Angrist, Susan M. Dynarski, Thomas J. Kane, and Parag A. Pathak. 2011. “Accountability and Flexibility in Public Schools: Evidence from Boston’s Charters and Pilots.” Quarterly Journal of Economics 126 (2): 699–748. Dobbie, Will, and Roland G. Fryer. 2011. “Are High-Quality Schools Enough to Increase Achievement among the Poor? Evidence from the Harlem Children’s Zone.” American Economic Journal: Applied Economics 3 (3): 158–87. Baude, Patrick, Marcus Casey, Eric A Hanushek, and Steven G Rivkin. 2014. “The Evolution of Charter School Quality.” NBER Working Paper 20645. 6 Part III: Health 7 – Improving Health Outcomes *Irwin, Neil and Quoctrung Bui. 2016. “The Rich Live Longer Everywhere. For the Poor, Geography Matters.”