The heart of NYU Wagner's programs is our faculty. An amalgam of full-time, clinical/research/visiting, and adjunct professors, they are outstanding teachers, expert researchers and committed practitioners.
“Best practice” in microfinance holds that interest rates should be set at profit-making levels, based on the belief that even poor customers favor access to finance over low fees. Despite this core belief, little direct evidence exists on the price elasticity of credit demand in poor communities. We examine increases in the interest rate on microfinance loans in the slums of Dhaka, Bangladesh. Using unanticipated between-branch variation in prices, we estimate interest elasticities from − 0.73 to − 1.04, with our preferred estimate being at the upper end of this range. Interest income earned from most borrowers fell, but interest income earned from the largest increased, generating overall profitability at the branch level.
Rajeev Dehejia and Arvind Panagariya 2012. "Entrepreneurship in Services and Socially Disadvantaged in India". Forthcoming in Jagdish Bhagwati and Arvind Panagariya (eds.), Reforms and Economic Transformation in India, New York: Oxford University Press, Chapter 10.
Drusilla Brown, Rajeev Dehejia, and Raymond Robertson 2012. "Retrogression in Working Conditions: Evidence from Better Factories Cambodia". Better Work Discussion Paper No.6.
(Working Paper). (Under Review).
Rajeev Dehejia and Arvind Panagariya 2012. "Services Growth in India: A Look Inside the Black Box". Forthcoming in Jagdish Bhagwati and Arvind Panagariya (eds.), Reforms and Economic Transformation in India, New York: Oxford University Press, Chapter 4.
Dehejia, Rajeev and Alma Cohen. 2012. Financial Incentives and Fertility. Review of Economics and Statistics.
Dehejia, Rajeev, Debra Ang, Drusilla Brown, and Raymond Robertson. 2012. Public Disclosure and Labor Law Compliance: Evidence from Better Factories Cambodia. Review of Development Economics.
Drusilla Brown, Rajeev Dehejia, and Raymond Roberston 2011. "Working Conditions an Factory Survival: Evidence from Better Factories Cambodia". International Labour Organization, Better Work Discussion Paper No.1.
(Working Paper). (Under Review).
Dehejia, Rajeev, Thomas DeLeire, Erzo F. P. Luttmer, and Josh Mitchell 2009. The Role of Religious and Social Organizations in the Lives of Disadvantaged Youth. In The Problem of Disadvantaged Youth: An Economic Perspective (Jonathan Gruber, ed.), Chicago, IL: University of Chicago Press for the National Bureau of Economic Research, 2009.
Beegle, Kathleen, Rajeev Dehejia, and Roberta Gatti. 2009. Why Should We Care About Child Labor? The Education, Labor Market, and Health Consequences of Child Labor.. Journal of Human Resources 44(4): 871-889.
Despite the extensive literature on the determinants of child labor, the evidence on the consequences of child labor on outcomes such as education, labor, and health is limited. We evaluate the causal effect of child labor participation among children in school on these outcomes using panel data from Vietnam and an instrumental variables strategy. Five years subsequent to the child labor experience we find significant negative impacts on education, and also find a higher probability of wage work for those young adults who worked as children while attending school. We find few significant effects on health.
This article demonstrates that minimum wage laws need not induce unemployment even under the classic labor supply-and-demand paradigm. As a result, minimum wage laws can be welfare-enhancing under the basic labor supply and demand model, suggesting the presence of an optimal minimum wage. We discuss conditions under which the optimal minimum wage level is the subsistence wage level. As a consequence, minimum wages should vary across states or countries with the local subsistence levels.
Dehejia, Rajeev 2008. When is ATE Enough? Rules of Thumb and Decision Analysis in Evaluating Training Programs. Advances in Econometrics: Modeling and Evaluating Treatment Effects in Econometrics, Volume 21, D. Millimet, J. Smith, and E. Vytlacil (eds.). New York: Elsevier-Science.
Dehejia, Rajeev, Thomas DeLeire, and Erzo Luttmer 2007. Insuring Consumption and Happiness Through Religious Organizations. Journal of Public Economics, Volume 91 (2007), pp. 259-279.
This paper examines whether involvement with religious organizations can help insure consumption and happiness. Using data from the Consumer Expenditure Survey (CEX), we find that households who contribute to a religious organization are better able to insure their consumption against income shocks. Using the National Survey of Families and Households (NSFH), we find that individuals who attend religious services are better able to insure their happiness against income shocks. Overall, our results suggest that religious organizations provide insurance though the form of this insurance may differ by race.
Dehejia, R.H. & Lleras-Muney, A. 2007. Financial development and pathways of growth: State branching and deposit insurance laws in the United States from 1900 to 1940. Journal of Law and Economics 50 (2007) 239-272.
This paper studies the effect of state-level banking regulation on financial development and on components of state-level growth in the United States from 1900 to 1940. We use these banking laws to assess the findings of a large recent literature that has argued that financial development contributes to economic growth. We contend that the institutional mechanism leading to financial development is important in determining its consequences and that some types of financial development can even retard economic growth.
For the United States from 1900 to 1940, we argue that the financial expansion induced by expanded bank branching accelerated the mechanization of agriculture and spurred growth in manufacturing. In contrast, financial expansions induced by state deposit insurance had negative consequences for both the agricultural and manufacturing sectors.
This paper examines the relationship between household income shocks and child labor. In particular, we investigate the extent to which transitory income shocks lead to increases in child labor and whether household access to credit mitigates the effects of these shocks.
Using panel data from a survey in Tanzania, we find that both relationships are significant. Our results suggest that credit constraints play a role in explaining child labor and consequently that child labor is inefficient, but we also discuss alternative interpretations.
Dehejia, R.H. & Gatti, R. 2005. Child labor: The role of income variablity and access to credit in a cross section of countries. Economic Development and Cultural Change, Col. 53, Number 4 (July 2005), pg. 913-932.
Even though access to credit is central to child labor theoretically, little work has been done to assess its importance empirically. Dehejia and Gatti examine the link between access to credit and child labor at a cross-country level. The authors measure child labor as a country aggregate, and proxy credit constraints by the level of financial market development.
These two variables display a strong negative (unconditional) relationship. The authors show that even after they control for a wide range of variables-including GDP per capita, urbanization, initial child labor, schooling, fertility, legal institutions, inequality, and openness-this relationship remains strong and statistically significant. Moreover, they find that, in the absence of developed financial markets, households resort to child labor to cope with income variability.
This evidence suggests that policies aimed at increasing households'access to credit could be effective in reducing child labor.
This paper discusses propensity score matching in the context of Smith and Todd's (Does matching overcome Lalonde's critique of nonexperimental estimators, J. Econom., in (press) reanalysis of Dehejia and Wahba (J. Am. Statist. Assoc. 97 (1999) 1053; National Bereau of Economics Research working Paper No. 6829, Rev. Econom. Statist., 2002, forthcoming).
Propensity score methods require that a separate propensity score specification be estimated for each treatment group-comparison group combination. Furthermore, a researcher should always examine the sensitivity of the estimated treatment effect to small changes in the propensity score specification; this is a useful diagnostic on the quality of the comparison group.
When these are borne in mind, propensity score methods are useful in analyzing all of the subsamples of the NSW data considered in Smith and Todd (Does matching overcome Lalonde's critique of nonexperimental estimators, J. Econom., in press).
I argue for thinking of program evaluation as a decision problem. There are two steps. First, a counselor determines which program (treatment or control) each individualjoins,based for example on maximizing the probability of employment or expected earnings.
Second, the policymaker decides whether: to assign all individuals to treatment or to control, or to allow the counselor to choose.This framework has two advantages. Individualized assignment rules (known as profiling) can raise the average impact, improving cost effectiveness by exploiting treatment-impact heterogeneity. Second, it accounts systematically for inequality and uncertainty, and the policymaker's attitude toward these, in the evaluation.
Dehejia, R.H. & Cohen, A. 2004. Uninsured motorists and unsafe drivers: The role of compulsory insurance regulations. Journal of Law and Economics, Volume 47, Number 2 (October 2004), pp. 357-394.
In this paper we study the relationship between the unemployment rate at the time of a baby's conception and health outcomes at birth, and we explore whether this relationship is due to the effect of the unemployment rate on fertility decisions or on the health-related behavior of pregnant women. Economic models of fertility suggest that women who choose to have children in recessions may differ from women who choose to postpone fertility.
To the extent that these parental characteristics are related to children's health, differential fertility may result in differences in the health of children over the business cycle. At the same time, evidence suggests that individuals' health may improve during recessions, because the overall effect of recessions is to increase health-related activities (and to decrease risky behaviors). Therefore, changes in parental behavior over the business cycle could also affect the health of infants, even in the absence of compositional change.
This paper discusses the problem of evaluating and predicting the treatment impact of a program that is implemented at multiple sites. Two issues arise: is information from other sites relevant in estimating the impact at a given site? and how can we account for predictive uncertainty in the site effects? Using data from the Greater Avenues for Independence evaluation, I develop a hierarchical model for earnings which allows both for site effects and for smoothing the estimated impact across sites.
I show that the degree to which the estimated impact is smoothed across sites does not affect the estimate; i.e. most of the differences across sites are due to differences in the composition of participants. Second I show that predictive uncertainty regarding site effects is important; for example, when the predictive uncertainty regarding site effects is ignored, the treatment impact at the Riverside sites is significant, but when we consider predictive uncertainty, the impact for the Riverside sites is insignificant.
Third, I show that the hierarchical model is able to extrapolate site effects with reasonable accuracy when the site for which the prediction is being made does not differ substantially from the sites already observed. For example, the San Diego treatment effects could have been predicted based on observable site characteristics, but the Riverside effects are consistently underestimated.
Dehejia, R.H. & Wahba, S. 2002. Propensity score matching methods for non-experimental causal studies. Review of economics and statistics, Volume 84, Number 1 (February 2002), pp. 151-161.
This paper considers causal inference and sample selection bias in nonexperimental settings in which (i) few units in the nonexperimental comparison group are comparable to the treatment units, and (ii) selecting a subset of comparison units similar to the treatment units is dif? cult because units must be compared across a high-dimensional set of pretreatment characteristics. We discuss the use of propensity score-matching methods, and implement them using data from the National Supported Work experiment.
Following LaLonde (1986), we pair the experimental treated units with nonexperimental comparison units from the CPS and PSID, and compare the estimates of the treatment effect obtained using our methods to the benchmark results from the experiment. For both comparison groups, we show that the methods succeed in focusing attention on the small subset of the comparison units comparable to the treated units and, hence, in alleviating the bias due to systematic differences between the treated and comparison units.
Dehejia, R.H. & Wahba, S. 1999. Causal effects in non-experimental studies: Re-evaluation of training programs. Journal of the American Statistical Association, Volume 94, Number 448 (December 1999), pp. 1053-1062.
The need to use randomized experiments in the context of manpower training programs, and in analyzing causal effects more generally, has been a subject of much debate. Lalonde (1986)considers experimental data from the National Supported Work (NSW) Demonstration and nonexperimental comparison groups drawn from the CPS and PSID, and argues that econometricmethods fail to replicate the benchmark experimental treatment effect.
This paper applies propensity score methods, which have been developed in the statistics literature, to Lalonde'sdataset. In contrast with Lalonde's findings, using propensity score methods, we are able closely to replicate the experimental training effect. The methods succeed because they are able flexibly to control for the wide range of observable differences between the (experimental) treatment group and the (non-experimental) comparison group.
Dehejia, R.H. & Dehejia, V. 1993. Religion and economic activity in India: An historical perspective. American journal of economics and sociology, Volume 52, Number 2 (May 1993), pp.145-154.
It is suggested that there has been and continues to be, a deep interrelationship between religious thought and economic activity in India. this claim is evaluated, first in the context of ancient India (the Mauryan empire), where self-reliance was stressed, both economically and religiously. In the context of medieval India, the ossification of the once flexible caste system had profound economic implications. Based on this historical perspective, it is contended any attempt to understand the economic realities of contemporary India must also take account of its religious realities.
Dehejia, R.H. & Wood, B. 1992. Economic sanctions and econometric policy evaluation: A cautionary note. Journal of World Trade, Volume 26, Number 1 (February 1992), pp. 73-84.
Econometric predictions of the success or failure of sanctions against a nation need to be modified with political considerations. The models proposed by Gary Hufbauer and Kimberly Ann Elliott, and by San Ling Lam, were mistakenly used by Hufbauer and Elliott in 1990 to suggest sanctions would drive Iraq out of Kuwait. These models can be made more accurate by the inclusion of factors such as the regime's internal vulnerability and whether the goals of the sanctions are of ultimate importance to the boycotted nation. A model incorporating these factors does not predict success of sanctions in the Iraqi question.