Lassoing Welfare Dynamics with Cross-Sectional Data” with Leonardo Lucchetti, Paul Corral, and Santiago Garriga. [World Bank Policy Research Working Paper 8545] (R&R at The Review of Income and Wealth)

This paper introduces, validates, and applies a Least Absolute Shrinkage and Selection Operator with multiple imputation by Predictive Mean Matching (LASSO-PMM) method to estimate intra- generational welfare dynamics using cross-sectional data. Compared to previous welfare dynamic prediction methods, the LASSO-PMM makes fewer and less restrictive assumptions and allows estimating poverty transitions and income changes. We validate the method using 36 harmonized panel data sets in four Latin American countries and then apply it to cross-section data from 43 countries across the world. To the best of our knowledge, this is the first paper that uses these many datasets to validate and estimate welfare and mobility predictions. Validation results indicate that LASSO-PMM predictions are in general statistically indistinguishable from actual household poverty rates, mobility indicators, and income or consumption changes; results which are further supported by a series of sensitivity tests and robustness checks. These findings are sufficiently encouraging to suggest that estimating economic mobility using a LASSO-PMM approach may accurately approximate actual welfare dynamics in settings where panel data are unavailable. This application provides useful policy information on the dynamics of individual welfare in countries where two or more rounds of cross-section data are available.

How accurately are household surveys measuring the size and inequalities for the LGBT population in Bogotá, Colombia? Evidence from a list experiment” with Ángela Guarín and Juanita Ruiz [IDB Working Paper Series No. IDB-WP-01439]. (R&R at Labour Economics)

This paper studies whether household surveys precisely identify the LGBT population and are suitable to measure labor market discrimination in Colombia. We first quantify the size of the LGBT population and estimate labor market inequalities from these data, highlighting potential pitfalls from using this approach. We then present findings from a list experiment in Bogotá, Colombia. Results show that household surveys underestimate the size of the LGBT population and may yield biased estimates of labor market inequalities. While survey estimates range between 1-4%, we find that the LGBT community constitutes around 12-22% of the total population. We find heterogeneous reporting by sex, age groups, educational attainment, and marital status. Our findings suggest that while current measurement practices are a step forward for the LGBT community’s statistical visibility, additional steps are required before household surveys may be used to consistently estimate discrimination and guide policy responses to protect this population.

*Media Coverage: Foco Económico (April 2023).

The effects of differential exposure to COVID-19 on educational outcomes in Guatemala” with Emmanuel Vazquez and Monica Yanez-Pagans. [World Bank Policy Research Working Paper 10308] (R&R at Education Economics)

We study the effects of differential exposure to COVID-19 on educational outcomes in Guatemala. The government adopted a warning index (ranging from 0-10) to classify municipalities by infection rates in 2020, which was then used by the Ministry of Education in 2021 to establish a “stop-light” system for in-person instruction. Using administrative panel data for all students in Guatemala, we employ a difference-in-differences strategy that leverages municipal differences over time in the warning index to estimate the effects of the pandemic on dropout, promotion, and school switching. Results show that municipalities with a higher warning index had significantly larger dropout, lower promotion rates, and a greater share of students switching from private to public schools. These effects were more pronounced during the first year of the pandemic. We also find differential effects by the level of instruction, with greater losses for younger children in initial and primary education. Our results are robust to specification choice, multiple hypothesis adjustments, and placebo experiments, suggesting heterogeneous consequences of the pandemic.

Promoting in-person attendance for early childhood services to low income families after the COVID-19 pandemic using text messages” with Juanita Ruiz, Oscar Iván Pineda-Diaz, Natalia Iriarte-Tovar, Juan Sebastián Cifuentes, María Fernanda Rodríguez-Camacho, and Laura Feliza Vélez. (Under Review) [Project website] [Pre-Analysis Plan]

This paper investigates whether text messages can encourage caregivers of young children to increase their intention to use in-person early childhood services and subsequently, actual attendance. We randomly assign 719 educational centers that cover 15,100 low-income beneficiaries into one control and two treatment groups, the first in which caregivers receive four text messages designed to target risk and loss aversion for three weeks, while the second group receives the same number of messages reinforcing social norms that early childhood education is a civic duty. Results show greater reported intent from caregivers who receive text messages for their children to attend but no significant differences by the framing of the messages. However, this increased willingness to attend does not translate into greater effective attendance. These findings suggest that while text messages are useful to communicate information, these nudges may be insufficient to change behavior and require additional efforts to turn intentions into actions.

Reducing Pretrial Detention: A Randomized Intervention with Public Defenders in El Salvador” with Javier Osorio and Michael Weintraub.

Over-reliance on pretrial detention exposes defendants to harsh conditions, exacerbates jail overcrowding, increases recidivism, and favors criminal governance. What policies can resource-strapped countries implement to effectively address excessive pretrial detention? Based on a theoretical framework integrating focal concerns and inhabited institutions, we evaluate an experimental intervention implemented to increase pretrial release requests and reduce pre- trial detention in El Salvador. The intervention randomly assigned public defenders to receive specialized legal training, an improved interview protocol, material resources, and increased communication channels. We find that this program increased pretrial release requests from public defenders by nearly 10 percent (0.228 standard deviations) and increased the success in securing pretrial release by 4.4 percent (0.114 standard deviations). Heterogeneous treatment effect analyses suggest that the program increased strategic litigation among the most experienced public defenders and has distinct effects for those accused of minor and severe crimes. We find no evidence that the mechanism explaining our results involves changes in public defenders’ attitudes or perceptions about their work environments. Criminal justice programs focusing on pretrial detention may help reduce prison overcrowding in high crime countries.

Can’t Stop the One-Armed Bandits: The Effects of Access to Gambling on Crime with Nicolas Bottan and Ignacio Sarmiento-Barbieri.

We study the effect of a large increase in access to gambling on crime by exploiting the expansion of video gambling terminals in Illinois since 2012. Even though video gambling was legalized by the State of Illinois, local municipalities were left with the decision whether to allow it within their jurisdiction. The City of Chicago does not allow video gambling, while many adjacent jurisdictions do. We take advantage of this setting along with detailed incident level data on crime for Chicago to examine the effect of access to gambling on crime. We use a difference-in-differences strategy that compares crime in areas that are closer to video gambling establishments with those that are further away along with the timing of video gambling adoption. We find that (i) access to gambling increases violent and property crimes; (ii) these are new crimes rather than displaced incidents; and (iii) the effects seem to be persistent in time.

*Media Coverage: The Inquirer, News-Gazette, Illinois News Network.

How important is spatial correlation in randomized controlled trials? with Kathy Baylis.

Randomized controlled trials (RCTs) have become the gold standard for impact evaluation since they provide unbiased estimates of causal effects. This paper focuses on RCTs that allocate treatment status over clusters in geographical proximity. We study how omitting spatial correlation in outcomes or unobservables at the cluster-level affects difference-in-difference estimates at the individual-level. Using Monte Carlo experiments, we identify bias and efficiency problems and propose solutions to overcome them. Our framework is then tested on data from Mexico’s Progresa program. Results show that spatial correlation may affect both the precision of the estimate and the estimate itself, especially when geographic dependence is high.