ESSAYS ON APPLIED MICROECONOMICS: APPLICATIONS TO GOVERNMENT REGULATIONS

Abstract

This dissertation comprises three chapters that examine the causal impact of public policies and regulations on market outcomes in childcare and digital platforms. Chapter 2: The Earned Income Tax Credit, Family Income, and Child Care Arrangement of Single MothersUsing child-level survey data and exploiting the federal and state Earned Income Tax Credit (EITC) variation between 1996 and 2010, I study how single mothers alter their child care decisions after being exposed to higher EITC benefits. I show that single mothers with children under age 14 are more likely to switch from relative care to professional childcare centers or other paid non-relative care, and are more likely to pay for professional child care. I also do not find any evidence that single mothers reduce time spent caring for their own children after receiving the EITC. Using the EITC exposure as an instrument, I quantify the change in child care arrangements for every $1,000 increase in family income. My findings suggest that upgraded child care may be another channel through which the EITC positively affects children's future performance. Chapter 3: Universal Preschool and Supply-Side Responses: Evidence from Vermont The United States aims for providing universal access to high-quality pre-kindergarten (Pre-K) to promote holistic child development and long-run education and earning outcomes. However, limited funding has constrained the scope of state-level universal Pre-K (UPK) programs, and therefore little is known about providers’ responses to UPK policies. This chapter fills in the knowledge gap by examining the supply-side market impacts of Vermont’s UPK program, which provides a uniform per-child subsidy for all 3- and 4-year-olds. I find heterogeneous responses to the policy. I then estimate a static demand and supply model, and use the model to simulate consequences of alternative policies. I find that the current part-time UPK successfully increased high-quality child care supply across the state, encourages enrollment from middle-income and low-income families, but generates less quality upgrade incentives for providers in lower-income counties compared to higher-income counties. I also compare the current UPK policy with means-tested demand subsidies to an expanded pure UPK subsidy, and find that the pure UPK results in fewer child care supply and fewer quality upgrades, especially among low-income counties, indicating that a combined UPK and demand subsidy for lower-income families is more cost-effective in generating high-quality enrollment and provider upgrade. These findings highlight the importance of subsidy design for aligning family access with policy goals of expanding high-quality early education and reducing inequality. Chapter 4: The GDPR and SDK Usage In Android Mobile Apps (with Ginger Jin and Liad Wagman)Using data on Software Development Kits (SDKs), we study SDKs in Android apps vis-a`-vis the adoption of the General Data Protection Regulation (GDPR) by the European Union in May 2018. Relative to US-only apps, the number of non-Google SDKs used per app in 5 major European countries (EU5) exhibits a 1.3% decline in EU5-only apps after GDPR, and a 6.3% decline in apps multihoming US and EU5. These effects are mostly driven by lower-ranked apps. Using apps’ monthly active users as weights in computing average user exposure to SDKs in app category and country groups, we find no significant change in the average SDK exposure in EU5-only relative to US-only apps. The only significant change in multihoming apps is a 4.2% drop in exposure to SDKs developed by minor SDK providers, although SDKs from Google and major SDK providers were independently assessed as riskier than those from minor SDK providers.