Aaron YelowitzApplied economist · University of Kentucky
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Historical

ECO 499 · Spring 2006

Economics Seminar

Historical syllabus; policies and dates reflect this term.

Course materials

Archived syllabus. Policies, dates, assignments, and readings reflect Spring 2006.

Course information

Economics 499-002: Economics of Poverty University of Kentucky Spring Semester 2006 URL: http://gatton.uky.edu/Faculty/yelowitz/499/spring2006.html (archived copy) Lectures Tuesday/Thursday, 12:30-1:45 pm, Business and Economics Building 314. Relevant info on me Professor Aaron Yelowitz Office: 335W Business and Economics Building Office hours: Tuesday/Thursday 2-3:30 pm, and by appointment. Email: aaron@uky.edu My background: I am an associate professor in the economics department. This is my fifth year at UK. Before I joined UK, I was an assistant professor in the economics department at UCLA, from 1994 to 2001. I received my Ph.D. in economics from MIT in 1994, and my B.A. from UC Santa Barbara in 1990. My research interests have focused on low-income households – especially concerning the housing and health insurance decisions that these groups are faced with. In some parts of the course, particularly on the U.S. welfare system, I will incorporate some of my previous research.

Enrolling in this Class

If you want to enroll in this class, you need to talk to Debbie Wheeler in the economics department; she handles that. Due to the nature of ECO 499, class size is limited.

Course Description

This course is will go in-depth into studying some key policy issues broadly related to poverty. Most, but not all, of the emphasis will be on the United States. In particular, we examine issues related to education, crime, welfare programs, and teen childbearing. Among the topics we will cover: How does abortion policy affect crime rates? Is there are labor market penalty to having children as a teenage mother? Is poverty the root cause of terrorism? Do school vouchers improve educational outcomes? Does public housing adversely affect children? In addition to exploring the economic theory, this class will examine recent, high-quality statistical analyses regarding these policy issues. A key objective in doing this is to not only ask what economists have found, but just as importantly, how they got to the answer. It is likely that you may already be familiar with some of the issues we will cover in the class – these issues are often discussed in leading newspapers like the Wall Street Journal and New York Times. Many of you may have already read the Freakonomics book on your own for fun. This class is much more ambitious than that. To do this, we will go beyond the typical undergraduate textbook analysis, and explore some of the original studies in some detail (and some comments on those studies).

Prerequisites

ECO 391 and completion of either ECO 401 or ECO 402. All prerequisites will be enforced, and the class is restricted to upper-division B&E Economics majors and A&S Economics majors.

Required Textbooks

Bradley R. Schiller, The Economics of Poverty and Discrimination, 9th edition (Pearson Prentice Hall, 2004, ISBN 0130385689).

Jonathan Gruber, Public Finance and Public Policy, 1st edition (Worth Publishers, 2004, ISBN 0716786559). Steven D. Levitt and Stephen J. Dubner, Freakonomics, 1st edition (HarperCollins, 2005, ISBN 006073132X). There will also be assigned readings from academic papers, most of which are freely available from National Bureau of Economic Research (NBER). NBER’s web site has downloadable papers if accessed from computers in the B&E building, and possibly elsewhere. Some of the class lectures will be presented in PowerPoint; these slides will be made available on the class website. For those who have difficulty, I will be happy to assist you.

The Internet

The web site will have links to download the PowerPoint slides and occasionally supplemental lecture notes. In addition, I will sometimes send announcements by email.

Preparing for Class

We will generally follow the order of topics on the syllabus. The best way of preparing for the class is to read the textbook chapters ahead of time, as well as any materials that summarize a study. In terms of the academic studies themselves, you should attempt to read through them ahead of time, but there is no expectation that all parts of the study will be completely understandable to you.

Grading

  1. The final is on Thursday, May 4, 2006, at 10:30 am. It will count for 25% of your grade. It lasts 2 hours.
  2. You will be given one midterm, in class, on Tuesday, March 7, 2006. It will count for 25% of your grade. It lasts 75 minutes.
  3. You will be assigned a paper topic during the semester (details will be given later in the semester). It will count for 35% of your grade. It will be due Thursday, April 13, 2006 by 5 pm.
  4. Class participation will count for 15% of your grade. Given the small class size and the intent of this class, it is vital for students to attend, prepare ahead of time, and participate. During the semester, there will also be opportunities to earn extra credit. These opportunities will only be announced during class.

University Holidays / Cancelled Classes

Class will be cancelled on Thursday, February 2, 2006. According to the university calendar, there will be no class on March 14 or March 16, 2006, for Spring Break.

Course outline and readings

I. Introduction and Background

A. Empirical tools for studying poverty issues

Gruber, Chapter 3, including appendix

II. Education: Overview

A. Education and ability

Schiller, Chapter 9

B. Discrimination in education

Schiller, Chapter 10

C. Education

Gruber, Chapter 11

III. Education: Vouchers and School Choice

  • A. Cecilia Elena Rouse, “Private School Vouchers and Student Achievement: An Evaluation of the Milwaukee Parental Choice Program,” The Quarterly Journal of Economics, Vol. 113, No. 2. (May, 1998), pp. 553-602. Stable URL (from www.jstor.org, available from campus computers): JSTOR record Also available as NBER working paper 5964, see http://www.nber.org/papers/w5964 A readable write-up of this article is available in the November 1997 NBER digest: http://www.nber.org/digest/nov97/w5964.html

  • B. Julie Berry Cullen, Brian A. Jacob, Steven Levitt, "The Effect of School Choice on Student Outcomes: Evidence from Randomized Lotteries,” NBER Working Paper No. 10113, November 2003, see http://papers.nber.org/papers/w10113.

  • C. Caroline M. Hoxby, “Does Competition among Public Schools Benefit Students and Taxpayers?” The American Economic Review, Vol. 90, No. 5. (Dec., 2000), pp. 1209-1238. Stable URL (from www.jstor.org, available from campus computers): JSTOR record Also available as NBER working paper 4979, see http://papers.nber.org/papers/4979 (updated link). Jesse Rothstein, “Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000),” NBER Working Paper No. 11215, March 2005, see http://papers.nber.org/papers/w11215. Caroline M. Hoxby, “Competition Among Public Schools: A Reply to Rothstein (2004),” NBER Working Paper No. 11216, March 2005, see

http://papers.nber.org/papers/w11216. See also a Wall Street Journal summary of this debate: http://www.post-gazette.com/pg/05297/594198.stm (archived copy)

IV. Education: School accountability and high stakes testing

A. What do schoolteachers and sumo wrestlers have in common?

Levitt and Dubner, Chapter 1

B. What makes a perfect parent?

Levitt and Dubner, Chapter 5

  • C. Brian A. Jacob, Steven D. Levitt, “Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating,” NBER Working Paper No. 9413, January 2003, see http://papers.nber.org/papers/w9413. Published: Quarterly Journal of Economics, 2003, v118(3,Aug), 843-878. Brian A. Jacob, Steven D. Levitt, “Catching Cheating Teachers: The Results of an Unusual Experiment in Implementing Theory” NBER Working Paper No. 9414, January 2003, see http://papers.nber.org/papers/w9414 A readable write-up of these articles is available in the July 2003 NBER digest: http://www.nber.org/digest/jul03/w9413.html.

  • D. Eric A. Hanushek, Margaret E. Raymond, “Does School Accountability Lead to Improved Student Performance?” NBER Working Paper No. 10591, June 2004, see http://papers.nber.org/papers/10591 (updated link). A readable write-up of this article is available in the February 2005 NBER digest: http://www.nber.org/digest/feb05/w10591.html.

  • E. Brian A. Jacob, “Accountability, Incentives and Behavior: The Impact of High-Stakes Testing in the Chicago Public Schools,” NBER Working Paper No. 8968, May 2002, see http://papers.nber.org/papers/8968 (updated link).

V. Education: The return to education

  • A. Joshua D. Angrist and Alan B. Krueger, “Does Compulsory School Attendance Affect Schooling and Earnings?” The Quarterly Journal of Economics, Vol. 106, No. 4. (Nov., 1991), pp. 979-1014. Stable URL (from www.jstor.org, available from campus computers): JSTOR record Also available as NBER working paper 3572, see http://papers.nber.org/papers/3572 (updated link)

  • B. Orley Ashenfelter and Alan Krueger, “Estimates of the Economic Return to Schooling from a New Sample of Twins,” The American Economic Review, Vol. 84, No. 5. (Dec., 1994), pp. 1157-1173.

Stable URL (from www.jstor.org, available from campus computers): JSTOR record Also available as NBER working paper 4143, see http://papers.nber.org/papers/4143 (updated link)

VI. Education: School Quality

  • A. Alan B. Krueger, “Experimental Estimates of Education Production Functions,” The Quarterly Journal of Economics, Vol. 114, No. 2. (May, 1999), pp. 497-532 Stable URL (from www.jstor.org, available from campus computers): JSTOR record

  • B. Joshua D. Angrist and Victor Lavy, “Using Maimonides' Rule to Estimate the Effect of Class Size on Scholastic Achievement,” The Quarterly Journal of Economics, Vol. 114, No. 2. (May, 1999), pp. 533-575. Stable URL (from www.jstor.org, available from campus computers): JSTOR record

  • C. Sandra E. Black, “Do Better Schools Matter? Parental Valuation of Elementary Education,” The Quarterly Journal of Economics, Vol. 114, No. 2. (May, 1999), pp. 577-599. Stable URL (from www.jstor.org, available from campus computers): JSTOR record

VIII. Crime: United States

A. Why do drug dealers still live with their moms?

Levitt and Dubner, Chapter 3

B. Where have all the criminals gone?

Levitt and Dubner, Chapter 4

  • C. Steven D. Levitt and Sudhir Alladi Venkatesh, “An Economic Analysis of a Drug-Selling Gang's Finances,” The Quarterly Journal of Economics, Vol. 115, No. 3. (Aug., 2000), pp. 755-789. Stable URL (from www.jstor.org, available from campus computers): JSTOR record Also available as NBER working paper 6592, see http://papers.nber.org/papers/6592 (updated link)

  • D. John J. Donohue, III and Steven D. Levitt, “The Impact of Legalized Abortion on Crime,” The Quarterly Journal of Economics, Vol. 116, No. 2 (May 2001), pp. 379 - 420.

Available for download at: http://mitpress.mit.edu/journals/pdf/qjec_116_02_379_0.pdf (NBER working-paper version) Ted Joyce, “Did Legalized Abortion Lower Crime?” NBER Working Paper No. 8319, June 2001, see http://www.nber.org/papers/8319 (updated link). John J. Donohue III and Steven D. Levitt, “Further Evidence that Legalized Abortion Lowered Crime: A Reply to Joyce,” NBER Working Paper No. 9532, March 2003, see http://www.nber.org/papers/9532 (updated link). See also http://pricetheory.uchicago.edu/levitt/Papers/DonohueLevittReply2004.pdf. See also a New York Times article: “New Attention for the Idea That Abortion Averts Crime,” By Alexander Stille, April 14, 2001, URL: http://www.nytimes.com/2001/04/14/arts/14ABOR.html?ei=5070&en=b1874084a8cbe053&ex=1136955600&pagewanted=print Christopher L. Foote and Christopher F. Goetz, “Testing Economic Hypotheses with State-Level Data: A Comment on Donohue and Levitt (2001),” Federal Reserve Bank of Boston Working Paper No. 05-15, November 22, 2005, available from http://www.bos.frb.org/economic/wp/wp2005/wp0515.pdf (archived copy). “Back to the drawing board for our latest critics…and also the Wall Street Journal and (Oops!) the Economist.” Posted by Steven D. Levitt @ 11:02 pm on Monday, December 5, 2005 in General, see http://www.freakonomics.com/blog/2005/12/05/back-to-the-drawing-board-for-our-latest-criticsand-also-the-wall-street-journal-and-oops-the-economist/ See also a Wall Street Journal article, “'Freakonomics' Abortion Research Is Faulted by a Pair of Economists,” By Jon E. Hilsenrath, November 28, 2005, Page A2, URL: http://online.wsj.com/public/article/SB113314261192407815-7O0CuSR0RArhWpc9pxaKd_paZU0_20051228.html?mod=tff_article

IX. Crime: International

X. Welfare Policy

A. Income distribution and welfare programs

Gruber, Chapter 17

B. Welfare programs

Schiller, Chapter 12

XI. Teenage Childbearing

  • A. Stephen G. Bronars and Jeff Grogger, “The Economic Consequences of Unwed Motherhood: Using Twin Births as a Natural Experiment,” The American Economic Review, Vol. 84, No. 5. (Dec., 1994), pp. 1141-1156. Stable URL (from www.jstor.org, available from campus computers): JSTOR record

  • B. V. Joseph Hotz, Seth G. Sanders, Susan Williams McElroy, “Teenage Childbearing and Its Life Cycle Consequences: Exploiting a Natural Experiment,” NBER Working Paper No. 7397, October 1999. Published: Journal of Human Resources, Volume 40, Number 3 (Summer) 2005, pp. 683-715. Available at: http://www.nber.org/papers/W7397

  • C. Arline T. Geronimus; Sanders Korenman, “The Socioeconomic Consequences of Teen Childbearing Reconsidered,” The Quarterly Journal of Economics, Vol. 107, No. 4. (Nov., 1992), pp. 1187-1214. Stable URL (from www.jstor.org, available from campus computers): JSTOR record Also available as NBER working paper 3701, see http://www.nber.org/papers/3701 (updated link)

Course materials