This paper estimates the effects of pro-natalist cash transfers (baby bonus) on birth outcomes conditional on fertility. I exploit rich spatial and temporal variation in these conditional cash transfers and administrative data on the universe of births and deaths in South Korea. The total fertility rate in 2015 would have been 3% lower without the cash transfers. The cash-transfer elasticities of birth rates vary widely across birth order and mother's age. These financial incentives encouraged working mothers to have 2nd and 3rd children. This selection lowered gestational age, which in turn led to overall reduction in birth weight. There is no evidence of changes in early-life mortality, but the cash transfers shifted the male-skewed sex ratio towards its natural level.
conditionally accepted at American Economic Review: Insights
We study optimal dynamic lockdowns against Covid-19 within a commuting network. Our framework integrates canonical spatial epidemiology and trade models, and is applied to cities with varying initial viral spread: Seoul, Daegu and NYC-Metro. Spatial lockdowns achieve substantially smaller income losses than uniform lockdowns, and are not easily approximated by simple centrality-based rules. In NYM and Daegu—with large initial shocks—the optimal lockdown restricts inflows to central districts before gradual relaxation, while in Seoul it imposes low temporal but large spatial variation. Actual commuting responses were too weak in central locations in Daegu and NYM, and too strong across Seoul.
“The Valuation of Local Government Spending: Gravity Approach and Aggregate Implications”, June 2020. Draft
How much do people value local government spending? What are the effects of fiscal transfers that finance this spending? I develop a spatial equilibrium framework where people’s simultaneous (internal) migration and commuting choices reveal preferences. I combine this framework with administrative data from South Korea and leverage the plausibly exogenous variation in local government spending across districts induced by national tax reforms in 2008 and 2012. The estimated mobility responses imply that workers value each additional dollar of per-capita local government spending by 75 cents of their after-tax income. The general-equilibrium counterfactuals imply that a fiscal arrangement with lower redistribution would result in aggregate gains. A key aspect of my analysis is that bilateral migration and commuting decisions are made jointly. I show that ignoring any one of these margins biases the estimates of preferences for public goods, distance elasticities of migration or commuting, and the aggregate effects of alternative fiscal arrangements.