“Economic Consequences of the U.S. Convict Labor System”, 2018 [Upd. May 2018 Version ] [New Version !] Coverage: [Economist], [EHS] [1st Chapter of the Dissertation]
Abstract: I study the economic externalities of U.S. convict labor on local labor markets. Using newly collected panel data on U.S. prisons and convict-labor camps from 1886 to 1940, I show that competition from cheap prison-made goods led to higher unemployment, lower labor-force participation, and reduced wages (particularly for women) in counties that housed competing manufacturing industries. At the same time, affected industries had higher patenting rates. I find that the introduction of convict labor accounts for 16% slower growth in U.S. manufacturing wages. The introduction of convict labor also induced technical changes and innovations that account for 6% of growth in U.S. patenting in affected industries.
Abstract: This paper investigates the role of national institutions on the persistence of cultural norms and traditions. In particular, I examine why the harmful tradition of female genital mutilation (FGM) persists in certain African countries while in others it has been eradicated. I argue that people are more willing to abandon their institutions and traditions if they are sure that the government is durable enough to set up long-term replacements for them. Conversely, people living under weak regimes revert to their traditional cultural norms. I exploit the fact that ethnic groups in Africa were artificially partitioned by national borders and, using a country-ethnicity panel dataset spanning 23 countries over the period of 1970-2013, I show that one standard deviation in political regime durability explains 10 percent of the standard deviation of the share of circumcised women, conditional on the presence of an anti-FGM policy. The results are robust to an array of control variables and robustness checks. I confirm that the results are unlikely to be spurious by using within-nation variation in regime durability induced by leaders' deaths from natural causes.
Abstract: What role do elections play in nondemocracies? We propose an empirical test that can distinguish between two major families of theories on authoritarian elections: that elections can be used to maintain an image of invincibility of the regime (Influence Theory), and that elections can be used to get information about the popularity of the regime (Information Theory). While these theories might not be mutually exclusive, we show that they generate different predictions about the spatial allocation of electoral manipulations. Under the Influence Theory, electoral manipulations happen in areas where protest sentiments are high. Under the Information Theory, electoral manipulation should happen only in places where the potential for a successful protest is low. Using data from the 2011 parliamentary election in Russia and a regionally representative public opinion survey conducted before the election, we find that electoral manipulations were more likely to happen in regions where the level of protest potential is lower. When the protest potential goes up by 10 percentage points, the estimates of electoral manipulation in a subsequent election go down by a half of their standard deviation, thus corroborating the Information Theory.
“Nation-Building and Civil Conflict: Theory and Evidence from Tuareg Insurgency”, co-authored with Maxim Ananyev, 2017 [August 2017 Version ] [New Version Coming in July]
Abstract: Why is civil conflict so costly for development? We argue that civil conflict undermines the legitimacy of the nation-state and empowers traditional sources of authority. In particular, we demonstrate, using recent instances of an insurgency in West Africa, that civil conflict erodes national identities, replacing them by ethnic identities. Based on the existing historical, anthropological, and ethnographic evidence, we model the choice of loyalty (national or ethnic) as a coordination game with strategic complementarities (``global game''). This model allows us to show how the instances of civil conflict can break up that coordination and impede nation-building. We perform several estimation strategies (including difference-in-difference and instrumental variables) to quantify the effect of civil conflict on national identity in Mali. The identification of the effect comes from using pre-independence data on the location of ethnic homelands of rebellious groups of Tuareg. Our key assumption is that the location of those groups in colonial times is independent of the ``potential outcome'': potential changes in national identity between years 2010 and 2012. We explore the plausibility of this assumption using pre-treatment trends, placebo tests, and robustness checks. We also find that our estimates are resilient to the violation of exclusion restrictions (even the violation is large as our most important individual-level predictor of national identity does not revert our findings). Our theory and evidence contribute to the study of state formation and state capacity by exploring the roots of people's self-identification with a state.
“U.S. Convict Labor System and Racial Discrimination”, 2018 [Available upon request][New Version Coming in Mid May] [2nd Chapter of the Dissertation]
Abstract: After the demise of the slavery and rise of crime after the end of the Civil War, convict labor system evolved in the United States in order to finance state penitentiary institutions. It provided monetary incentives to the police to arrest more people. Black and other minorities became an easy target for a police that used a variety of minor crime laws to increase the supply of coerced labor. Using the geographical variation of convict labor camps in the United States in 1886 I show that counties exposed to a more severe exploitation of convict labor experienced higher rates of incarceration among minorities in 1920, and 1930. Moreover, after the abolishment of the old convict labor system in 1941, the racial discrimination in policing remained: the same variation of convict labor camps predicts excessive arrests of Black and Hispanic for non-violent crimes (drugs and vagrancy). To show that the results are causal I use the exogenous shock of first massive expansion of the U.S. convict labor system in 1870 that had happened when the National Prison Association was founded in Cincinnati, Ohio. I use distance to Cincinnati as an instrument for the value of goods produced by convict labor. It correlates with the likelihood of attending the Congress by the wardens of prisons, and cost of getting information about the profitability of convict labor. I perform a series of sensitivity checks and placebo tests to ensure that results are indeed causal. I document that this reallocation of welfare from wage earners to capital owners had a long-lasting effect on equality of opportunities: intergenerational mobility of the bottom income quintile got worse, while it improved for the other quintiles.
“Convict Labor as a Determinant of Intergenerational Mobility in the United States”, 2018 [Available upon request][New Version Coming in Late May] [3rd Chapter of the Dissertation]
Abstract: Using historical distribution of the prison and convict labor camps in the United States, study the long-run effect of convict labor on equality of opportunities. Convict labor negatively affected wages of low-skilled workers and had positive effects on firms in affected industries (Poyker (2018)). I document that this reallocation of welfare from wage earners to capital owners had a long-lasting effect on equality of opportunities: intergenerational mobility of the bottom income quintile got worse, while it improved for the other quintiles. Presentation Mode:
“Do Private Prisons Influence Judicial Decision Making?”, co-authored with Christian Dippel [First Draft Coming in September]
Abstract: The emergence of the private prison system in the U.S. in the mid-1980s was followed by an unprecedented increase in incarceration rates. In this paper, we investigate to what extent the latter was caused by the former. Combining a novel geo-located panel-set of private prisons with circuit-court panel data on sentencing behavior, we ask whether the construction of a new private prison (or the privatization of a public one) changes the sentencing behavior of neighboring courts. We use rich auxiliary cross-sectional variation in how judges are appointed or elected and time-series variation in judges' electoral and appointment cycles to pin down likely mechanisms by which the private prison industry influences sentencing behavior.
“Who Reaps Gains From Trade? Trade and Inequality in Diverse Societies: Evidence from Africa”, co-authored with Maxim Ananyev
Abstract: This paper investigates the determinants of income inequality between different ethnic groups in Sub-Saharan Africa. We make two contributions: first, we offer a Bayesian latent variable approach of estimating income inequality from survey data where the direct data on personal incomes are either lacking or unreliable. Secondly, we demonstrate statistically, that countries that export more manufacturing goods and natural resources have larger disparities in incomes between ethnic groups, but have no systematic differences in incomes within ethnic groups. Using panel data, we find that one standard deviation of reduction in an average tariff is associated with 0.43 standard deviation in the increase of between-ethnic inequality. In an attempt to investigate the mechanism of this statistical association, we use enterprise survey data to test if exporting firms face fewer regulatory restrictions (both formal and informal) and preferential tax treatment. Our study offers new evidence on the effect of international trade on income inequality in developing world.
“Estimating Socioeconomic Status from Survey Data Using Models of Hierarchical Consumption”, co-authored with Maxim Ananyev [First Draft Coming in July]
Abstract: Estimating material well-being of households in developing countries is as difficult as it is important for many questions in economics and political science -- especially, for the theories of voting, redistribution, public opinion, “greed and grievance” in political action, and many others. This paper offers a simple two-step procedure for estimating consumption from survey data: on the first step, a researcher should estimate prices using an item-response model that we develop, and in the second step, calculate a weighted average of assets for every household using estimated prices as weights. We show with Monte Carlo simulations that this procedure yields relatively precise estimates. Our method opens a way to innovative use of survey data for answering many substantive questions.
Work in progress:
“Political Economy of Private Prisons in the United States”
“Does Language Matter in Economic Behavior? Eliciting Language Effects from an Experiment with Bilinguals”, co-authored with Stefano Fiorin, Vasily Korovkin and Yuan Tian
“Effects of Student Diversity on Education and Later-Life Outcomes: Evidence from Chile”, co-authored with Juan Angel Matamala González
“Abolishment of Harmful Practices: A Comparison of Foot-binding and Female Genital Mutilation”, co-authored with Lingwei Wu
Book Chapters and Policy Papers:
“Media in Russia: Between Modernization and Monopoly”, co-authored with Maria Lipman and Anna Kachkaeva, book chapter, pp. 159-190, in Daniel Treisman ed., “The New Autocracy: Information, Politics, and Policy in Putin's Russia”, Brookings Institution Press, Washington DC, 2018 [Available upon request] [Order link] Coverage: [Choice Reviews], [Washington Post]
Abstract: In this chapter, we explain the amazing efficiency of the "TV mobilization" of the past two or three years. We will not focus, however, on the linguistic, psychological or other effects of the government propaganda; we will instead look into various aspects and mechanisms of the government media policy; its development over time; the broad range of methods the government has used to achieve control over the media operation. We will examine concrete cases illustrating various stages, events and phenomena; we will cite journalists, editors and media organizers who have been (or were) part of this process. We will provide rigorous analysis of the quantitative data illustrating the effect of media controls on shaping the public opinion. Finally, we will look at how the Russian TV industry adjusts to the new, “network” audiences and the rapid progress of communications technologies.
“Developing Mechanisms to Enhance the Russian Development Innovation Institutions”, co-authored with J. Lerner, A. Leamon, C. Allen, V. Bosiljevac, S. Guriev, M. Gorban, A. Semenov and A. Suvorov, 2012