"Fiscal Multipliers in Advanced and Developing Countries: Evidence from Military Spending"
Slavik Sheremirov
Journal of Public Economics, Vol. 208 (2022), 104631.
[Draft] [Online Appendix]

Abstract: This paper provides new evidence on the effects of government spending on output from a large panel of advanced and developing countries. We identify government spending shocks using variation in international military spending. We estimate a one-year fiscal multiplier, pooled across all countries in the sample, in the vicinity of 0.8. The pooled cumulative multiplier reaches its peak at 0.86 two years after the shock. We find substantial heterogeneity across economic environments as well as across countries: The multipliers are relatively large (above one) in advanced economies, in recessions, for negative shocks, under a fixed exchange rate, and in closed economies. We also analyze scenarios in which the identifying restrictions may not hold, highlighting the possible limitations of the military-spending approach and providing a wider range of possible effects.

"The Long-Run Spillover Effects of Pollution: How Exposure to Lead Affects Everyone in the Classroom"
Ludovica Gazze and Claudia Persico
Journal of Labor Economics, accepted for publication
Media mentions: FutureEd
Draft] [NBER working paper]

Abstract: Children exposed to pollutants like lead have lower achievement in school and are more likely to engage in risky behavior. However, little is known about whether lead-exposed children affect the long-run outcomes of their peers. We estimate these spillover effects using unique data on preschool blood lead levels (BLLs) matched to education data for all students in North Carolina public schools. We compare siblings whose school-grade cohorts differ in the proportion of children with elevated BLLs, holding constant school and peers’ demographics. Having more lead-exposed peers is associated with lower high-school graduation and SAT-taking rates and increased suspensions and absences. Peer effects are larger for black students. Based on the lower likelihood of graduating high school alone, we estimate that the spillover effect of lead exposure is $8 billion per birth-year cohort.

Working Papers

"Migration Opportunities, College Enrollment and College Major Choice"

Abstract: I explore how migration opportunities affect college enrollment and major choice in migrant-sending countries in the presence of open borders. My identification strategy exploits exogenous variation in migration costs during the 2004 European Union (EU) enlargement to compare enrollment in newly admitted sending countries and incumbent destination countries. I use microlevel data from the EU Labor Force Survey and an event study framework to show that college enrollment in new states increased 15-25% in anticipation of better migration opportunities, and up to 30% once borders opened. College students in new states were more likely to enroll in college majors related to occupations with labor shortages in destination countries. To disentangle the effects of migration costs and wages on enrollment, I develop a model of college major choice with a migration option. Counterfactual policy experiments indicate that sending country enrollment is highly sensitive to migration penalties, but less sensitive to domestic college wage increases.

"The Effect of Migration on Wages and the Gender Wage Gap in Sending Locations"

Best Poster Award at Population Association of America 2019

[Updated draft coming soon][Poster]

Abstract: This paper estimates the short–run net effect of emigration on real gross monthly earnings in 10 Central and Eastern European countries by estimating a simple structural factor demand model. The model assumes that workers across education, workers within education and across age, and workers within education–age groups and across gender are imperfect substitutes. I find that the large emigration occurring due to EU accession increases average wages as much as 3.5%. In most countries, these gains are concentrated among young and highly educated female and male workers, while workers with an intermediate level of education see negligible wage gains or even losses. Finally, female workers exhibit higher wage gains than men, which indicates a possible decrease in the gender wage gap as a result of emigration.

Works in Progress

"How do Providers Respond to Changes in Medicaid Reimbursement Rates? Evidence from Wisconsin's Dental Pilot Program"

with Gwyn Pauley and Donna Friedsam

"The Impact of Changes in the U.S. Optional Practical Training Policy on College Major Choice"

with Arpita Patnaik and Hans Schwarz