ESSAYS ON POLICY EVALUATION WITH ENDOGENOUS ADOPTION

Over the last decade, experimental and quasi-experimental methods have been favored by researchers in empirical economics, as they provide unbiased causal estimates. However, when implementing a program, it is often not possible to randomly assign subjects to treatment, leading to a possible endogeneity bias.

This dissertation consists of two empirical policy studies relying on large micro-level datasets to address issues of endogeneity of adoption. The first essay investigates the effect of intellectual property (IP) protection on arms-length licensing of foreign technology using a pooled cross-section of firms from 58 developing economies. While prior investigations have been mostly cross-country analyses relying on proxies for technology adoption, and with technology exporters as a target population, I analyze the determinants of foreign technology licensing for firms in developing countries, thus focusing on the implications of IP protection on economic development.

I use two different measures of IP protection: the Index of Patent Rights, based on the legal framework, and the Intellectual Property Protection index, emphasizing enforcement. I find that the relationship of IP protection and firm-level adoption of foreign technology is contingent on a country's development stage. Enacting stronger IP legislation has a positive effect only on the group of newly industrialized countries and transition economies, whereby a 1% increase in legal protection of intellectual property increases the probability of licensing foreign technology by over 20%. When I focus on small and medium-sized firms, I find evidence that increased enforcement of existing IP rights has a negative impact on foreign technology licensing.

In the second essay, we use a unique dataset from a large urban school district in the southwest United States (LUSD-SW) to assess how uniforms affect student behavior and achievement, as well as other outcomes. While prior literature relies on cross-sectional OLS or first-difference evidence, we exploit the panel nature of our data. Since schools in LUSD are free to set their own uniform policies and most schools adopt uniforms during the time period for which we have data, we are able to produce causal estimates of uniform impacts on student outcomes through the use of school, student and principal fixed effects.

In contrast to most of the prior literature, we find that uniforms generate improvements in attendance in middle and high/school. We also find that uniforms significantly reduce teacher attrition in elementary schools. Nonetheless, uniforms have little impact otherwise. We find no statistically significant effect on disciplinary infractions, achievement, grade retention or student movements between schools.

Although we cannot completely rule out that other contemporaneous policy enactments generate the attendance and teacher attrition effects rather than uniforms, the robustness of our estimates to the inclusion of principal fixed effects, the finding that our estimates are similar when we account for adoption under new principals, and the lack of any increase in disciplinary infractions even in the short term suggest that the results are unlikely to be due to concurrent changes in enforcement policies.