Working papers

Canonical human capital theories posit that education, by enhancing worker skills, reduces the likelihood that a worker will be laid-off during times of economic change. Yet, this has not been demonstrated \textit{causally}. We link administrative education records from 1987 through 2002 to nationally representative surveys conducted before and after COVID-19 onset in Barbados to explore the causal impact of improved education on job loss during this period. Using a regression discontinuity (RD) design, Beuermann and Jackson (2020) show that females (but not males) who score just above the admission threshold for more selective schools in Barbados attain more years of education than those that scored just below (essentially holding initial ability fixed). Here, in follow-up data, we show that these same females (but not males) are much less likely to have lost a job after the onset of COVID-19. We show that these effects are not driven by sectoral changes, or changes in labor supply. Because employers observe incumbent worker productivity, these patterns are inconsistent with pure education signalling, and suggest that education enhances worker skill.

We experimentally test the relative effect of two methods to induce the timely renewal of identification cards in Panamá: reminders and digitization of the renewal process. Simply sending reminders increased the probability of on-time renewals by 12 percentage points while also allowing individuals to renew their ID remotely only increased renewals by 8 percentage points, relative to a control group. We provide suggestive evidence that a poor user experience with the online platform deterred individuals from renewing their IDs at all and partially offset the positive effects of reminders. Despite these nuances, the intervention translated into higher access to government benefits delivered through digital vouchers linked to IDs. This result was driven by lower-income individuals. The results suggest that policies to increase the availability of valid identity documentation can affect access and targeting of social benefits.

In village economies, it is well known that networks can smooth shocks. Less acknowledged is that local production networks can propagate shocks. In Thailand, a significant idiosyncratic shock to one household propagates via supply-chain and labor networks. Imperfectly insured households adjust production decisions---cutting input spending and reducing hiring---affecting households with whom they trade inputs and labor. Those linked to shocked households experience reduced local transactions, earnings, and consumption. These declines persist over several years. The total magnitude of indirect effects may be larger than direct effects. Social gains from expanding safety nets may be substantially higher than private gains.