ESSAYS ON SKILLS AND VICTIMIZATION

Abstract

Recent literature has shown that skills are not only essential for the development of successful adults, but also that they are malleable and prone to be affected by many experiences. In this dissertation, I explore these two sides of skills and development. I use skills as a vehicle to study the consequences victimization events have on adult outcomes, and as the channels through which the gaps in those adult outcomes materialize. I use novel longitudinal surveys and rely on an empirical strategy that recognizes skills as latent constructs. First, I estimate the treatment effects being bullied and being a bully in middle school have on several outcomes measured at age 18. I find that both, victims and bullies, have negative consequences later in life. However, they differ in how non-cognitive and cognitive skills palliate or exacerbate these consequences. Then, I move on to investigate the channels that open the gaps in adult outcomes between victims and non-victims. I estimate a structural dynamic model of skill accumulation. I allow skill formation to depend on past levels of skills, parental investment and bullying. Also, I allow bullying itself to depend on each student's past skills and those of his or her classmates. I find that being bullied at age 14 depletes current skill levels by 14% of a standard deviation for the average child. This skill depletion causes the individual to become 25% more likely to experience bullying again at age 15. Therefore bullying triggers a self-reinforcing mechanism that opens an ever-growing skill gap that reaches about one standard deviation by age 16. Finally, under the light of skills, I explore how other type of victimization, namely discrimination against sexual minorities, creates income gaps against non- heterosexual workers. I estimate a structural model that relies on the identification of unobserved skills to allow schooling choices, occupational choices and labor market outcomes to be endogenously determined and affected by the sexual preference of the worker. The results show that difference in skills, observable characteristics, and tastes for tertiary education and type of occupation, contribute to at least half of the income gaps non-heterosexuals face.