Dynamic models of individual and household retirement behavior

Chapter 1: Estimating the Returns of Attending a Selective University on Earnings using Regression Discontinuity with Multiple Admission Cutoffs. Abstract: The first chapter estimates the effect attending a selective university has on earnings. I show that using the admission cutoffs of two related majors offered by selective universities is enough to identify the isolated "university effect" on wages. To do so, I propose a novel identification framework using the cutoffs of two related majors in a regression discontinuity design that distinguishes the effect of graduating from a selective university from the effects of the confounding factors correlated with the student application and enrollment decision. This design requires a system with strict cutoffs and simultaneous decision making of university and major upon application. The university admission system in Chile has a strict admission criteria based solely on the university selection test and high school grades, and has students choose their school and major simultaneously. This admission system leads naturally to a regression discontinuity design because we can compare the earnings of those above and below the cutoff to estimate the "university effect". My main findings suggest that, on average, attending a selective university in Chile significantly increases earnings, that is, selective universities not only select the best students, but also play a role increasing their future earnings. Chapter 2: The Effects of Private High Schools, University Rankings and Employer Learning on Wages in Chile. Abstract: The second chapter studies the effects of attending a private high school, university ranking and employer learning on wages. My empirical strategy is based on the Mincer-type wage regressions. I carry out my analysis using individual-level data from Chile. I find a large and significant effect on wages at the beginning of workers' careers from attending a private high school and from attending a highly ranked university. These findings can be rationalized by the statistical discrimination and employer learning model since the effects of attending a private high school or highly ranked university decrease with experience. I construct an employer learning model to explain these decreases and find employers decrease by fifty percent the weight they place on university ranking when setting wages in three years. My findings further indicate that incorporating university admission test percentile rankings in employment applications can significantly improve the market's ability to appropriately assign wages by decreasing the information gap between potential employees and employers. Chapter 3: College-Major Choice to College-Then-Major Choice. Abstract: Many countries use college-major-specific admissions policies that require a student to choose a college-major pair jointly. Motivated by potential student-major mismatches, we explore the equilibrium effects of postponing student choice of major. We develop a sorting equilibrium model under the college-major-specific admissions regime, allowing for match uncertainty and peer effects. We estimate the model using Chilean data. We introduce the counterfactual regime as a Stackelberg game in which a social planner chooses college-specific admissions policies and students make enrollment decisions, learn about their fits to various majors before choosing one. We compare outcomes and welfare under the two different regimes.

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cross-national comparison

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