Essays on Applied Microeconomics

This dissertation consists of three essays. In the first essay, I study the interactions of students with limited English proficiency (LEP). It is vital to study these LEP students’ (LEPs) interactions because immigration into the United States continues to usher many foreign students with LEP into American schools. Additionally, U.S.-born children from immigrant homes enter schools knowing little English. In order to understand how best to instruct these limited English proficient (LEP) students, it is important to examine how concentration of LEP students (LEPs) affects educational outcomes of the LEPs themselves. On one hand, having a larger number of LEPs allows teachers to deliver a more focused instruction. On the other hand, LEPs may speak in their native languages more often and practice speaking English less when they are surrounded by many other LEPs. In this paper, I examine the effects of classmate English proficiency on the educational outcomes of LEP 5th graders using administrative data from an urban school district. Specifically, I study how exposure to LEPs affects the achievement, mainstreaming and grade retention of LEPs using the idiosyncratic variation in LEP shares across cohorts in a school. I find having more LEPs in a cohort leads to higher math achievement, faster mainstreaming and less grade retention amongst LEP students. In the second essay, I partnered with Scott Imberman and Steven Craig. We identify the impact of gifted and talented services on student outcomes by exploiting a discontinuity in eligibility requirements and find no impact on standardized test scores of marginal students even though quality of peers and classes improve substantially. We then use randomized lotteries to examine the impact of attending a GT magnet program, relative to programs in other schools, and find that, despite exposure to higher quality teachers and peers, only science achievement improves. We find that the relative ranking of the students change, as do their grades, indicating that either invidious comparison peer effects or teaching targeting may be important. ! iv! ! In the third essay (with Adriana Kugler), we examine the impact of remittances on households’ investments and consumption in Vietnam using the Living Standards Surveys. Given that households likely face budget constraints in Vietnam, one may expect for remittances to affect the decisions of households to invest and consume. In addition, since the unitary model of the household is particularly unlikely to represent households in developing countries, we also look at differential impacts when women receive a larger fraction of the remittances. We use an instrumental variables strategy to address the fact that households receiving different amounts of remittances and sending different amounts of remittances to women are likely to differ in terms of their observable and unobservable characteristics that correlate with investments and spending. We instrument the amount of remittances and the share of remittances going to women with the 1992 migration rate from the household's region of residence and the interaction between this variable and the share of women in the household. OLS results show that remittances are associated with better health of young, adult and older individuals, while the fraction of remittances received by women is associated with greater educational attainment and attendance, and less child labor while changing the composition of consumption expenditures from all categories towards health expenditures. However, when we use an IV strategy, we find that remittances increase education expenditure while reduce food expenditure. More importantly, the fraction of remittances received by women increases the household expenditure on health relative to other household expenditures. The results thus show not only the amount of remittances but also the identity of the receiver matters in terms of increasing human capital investments for children and their family members.