Three essays on economics of public policy

My dissertation focuses on developing and applying program evaluation techniques to better understanding how public policies affect low-income households and social mobility. In general, my research attempts to address three questions regarding the effect of public policies: (1) What is the long-term effect of the policy? (2) Does the policy foster social mobility? (3) Is there an unintended consequence of the policy? In my view, equality of opportunity is one of the pillars of a free society. I favor the idea that poor children have equal opportunities for success. Since children from low-income families grow up in a relatively disadvantaged environment, public policies that redistribute resources to poor children can foster social mobility. However, as well-documented in the literature, redistribution policies lead to a change in incentives. In some cases, these unintended consequences offset the "benevolence" of the policy. As a labor economist interested in policy analysis, I focus on evaluating a policy from these three perspectives.;In the three essays in my dissertation, I answer the policy-relevant questions using different econometric approaches. When an exogenous policy change is available, a simple econometric model with few assumptions can provide credible answers. If we do not have a natural experiment in the context of the question, I model the selection process so that we can still learn from the data. In the first essay, I investigate whether exam preparatory programs in Taiwan are effective. I set up a Bayesian selection model that formalizes the selection process and explicitly takes into account parameter heterogeneity. In the second essay, I study the effect of the expansions of Medicaid in 1990 on childhood obesity. The Omnibus Budget Reconciliation Act 1990 expanded eligibility to children who were born after September 30, 1983 from families below the poverty line. I employ the birth date discontinuity to study the policy effect. In the third essay, I develop a new test based on the empirical distribution functions of the compliers in the Local Average Treatment Effect (LATE) model. This method tests the validity of the LATE model, which is a common empirical strategy when endogeneity is an issue.