Valuing Primary Schools in Urban China

with Jimmy Chan, Zhi Wang, Qinghua Zhang and Xian Fang, Journal of Urban Economics, January 2020

We study the effect of school quality on housing prices in urban China. Our objective is to provide an estimate of the school quality premium based on the best available data. To account for unobserved neighborhood characteristics, we adopt the boundary-discontinuity design of Black (1999) and the matching strategy proposed by Fack and Grenet (2010). The results suggest that parents value public primary schools that have outstanding records in academic tournaments. The school-quality premium is highly non-linear. While a tournament superstar—a school above the 90th percentile in tournament performance—causes housing prices in its neighborhood to increase by 14 percent, or about 430,000 RMB ($ 60,648), the price difference between non-superstar schools is small.

Graphs of education in China

Working Papers

The Unintended Effect of Medicaid Aging Waivers on Informal Caregiving(with Lauren Jones and Tansel Yilmazer)

Medicaid aging waivers aim to incentivize older adults who need long-term care to stay at home rather than move into a nursing facility. However, this policy may inadvertently shift care burdens onto informal caregivers who would not otherwise be required to care for family members were they to enter nursing homes. This paper tests whether in-home formal care subsidized by aging waivers is a substitute or a complement for informal care provided by adult children to their parents. Using data on state-level Medicaid aging waiver expenditures from 1998 to 2014 linked with the restricted access Health and Retirement Study (HRS), I use two-way fixed effects models to estimate a causal relationship between the program and informal caregiving. The findings reveal that a 10 percent increase in aging waiver expenditures increases the overall likelihood that an adult child becomes an informal caregiver to her parents by 0.1 percentage points (0.3 percent). The overall estimate is composed of differential effects on type of care. While policy expenditures are positively related to the likelihood of providing help with errands, they are negatively related to the likelihood of providing help with personal care (a more intensive form of caregiving). The Medicaid aging waiver funding is positively associated with the likelihood of being a non-intensive caregiver who spends fewer hours providing care, but is unrelated to the likelihood of providing intensive care. Moreover, only female caregivers reduce caregiving for personal care. The results show that non-intensive informal care is a complement to in-home formal care. These results provide the first empirical evidence of the effect of Medicaid aging waivers on the composition of care received by older Americans.

The Effect of Informal Caregiving on Labor Market Outcomes: Evidence from Medicaid Aging Waivers

Informal aregiving has enormous costs on caregivers. However, estimating the exact costs of informal caregiving on caregivers is diffcult due to the fact that caregivers select into caregiving. Existing estimates, therefore, may suffer from selection bias. In this paper, I use a new instrumental variable, policy-induced changes in funding to the Medicaid aging waiver program, to estimate the labor-market costs of informal caregiving. Using the Health and Retirement Study (HRS) from 1998 to 2014, I find that labor force participation decreases with informal care. I also demonstrate large differences in selection bias by type of care, and gender of caregivers. Estimates without accommodating for the differences in endogeneity bias generate findings that conflict with previous estimates in the literature.

The Medicaid Aging Waiver Program and Aging in Place

Medicaid aging waivers subsidize the long-term care of older adults at home or in community-based settings. Little is known about how the Medicaid aging waiver program affects the quality of life among the aging population. Using data from the Health and Retirement Study (HRS), this paper evaluates the effect of the Medicaid aging waiver program on mortality and morbidity of older individuals. The results show that state-level Medicaid aging waiver funding is associated with increases in mortality rate among adults over age 70. The policy is positively associated with the probability of individuals reporting poor health status, and with the probability that individuals report having difficulty in activities of daily living and mobility. Conversely, funding for the aging waiver policy is negatively associated with reports of heart-related disease diagnoses, and positively associated with cognitive skills of older Americans.