Christopher Neilson

First name
Christopher
Last name
Neilson
Abstract
In markets with private options, the optimal level of public provision may require balancing a tradeoff between reducing private options’ market power with the possibility of crowding out potentially high-quality products. These considerations are particularly relevant in many developing countries’ education systems where state capacity is increasing but low levels of past public provision mean many private schools already exist. We study the equilibrium effects of public provision in the context of a large expansion of public schools in the Dominican Republic. Over a five-year period, the government aimed to increase the number of public school classrooms by 78%. Using an event study framework, we estimate the effect of a new public school on neighborhood outcomes and competing private schools, where we instrument for how quickly the public school construction project finished with the characteristics of the contractor randomly assigned to build the project. We find that a new public school increased public sector enrollment significantly. As public enrollment increased, a large number of private schools closed while the surviving schools lowered prices and increased school quality. To study how the level of public provision affects the overall level of quality in the market, we specify and estimate an empirical model of demand (students choosing schools) and supply (schools choosing whether to enter, stay open and what price to charge). We use the model estimates to calculate the level of public provision that maximizes learning. Due to equilibrium competitive effects, we find that the optimal level is non-monotonic in the quality of the increased public schooling.
Year of Publication
2020
Number
645
Date Published
11/2020
Publication Language
eng
Neilson, C., Dinerstein, M., & Otero, S. (2020). The Equilibrium Effects of Public Provision in Education Markets: Evidence from a Public School Expansion Policy. Retrieved from http://arks.princeton.edu/ark:/88435/dsp0170795b707 (Original work published 11/2020AD)
Working Papers
Abstract
In many settings, market designers must contend with the presence of firms who participate in the broader game surrounding a market but do not participate in the portion under the designer’s control. In this paper, we study the empirical relevance of the configuration of on- and off-platform options in the context of a centralized college-major choice system. We quantify significant negative externalities generated by off-platform options and measure the aftermarket frictions that contribute to generating them in practice. Our empirical application uses administrative data from the centralized assignment system for higher education in Chile and leverages a recent policy change that increased the number of on-platform slots by approximately 40%. We first present a policy analysis which shows that expanding the centralized platform leads students to start college sooner and raises the share of students who graduate within six years. We develop an empirical model of college applications, aftermarket waitlists, and matriculation choices. We estimate the model using students’ ranked-ordered applications, on- and off-platform enrollment, and on-time graduation outcomes. We use the estimated model to quantify welfare impacts, decompose different mechanisms and to con-duct counterfactual exercises. We find that when more programs are available on the centralized platform, welfare increases substantially. These externalities are driven by students who receive and decline on-platform offers, and are amplified by substantial frictions in waitlists. Our results indicate that expanding the scope of a higher education platform can have real impacts on welfare and human capital. Importantly, the effects are larger for students from lower SES backgrounds, suggesting the design of platforms can have effects on both efficiency and equity.
Year of Publication
2020
Number
635a
Date Published
10/2020
Publication Language
eng
Neilson, C., Kapor, A., & Karnani, M. (2020). Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms. Retrieved from http://arks.princeton.edu/ark:/88435/dsp017s75dg424 (Original work published 10/2020AD)
Working Papers
Abstract
This paper introduces a simple school choice model in which all students have the same ordinal preferences over schools but only some have access to an outside option. Our model predicts that, under a manipulable school choice mechanism, students with the outside option are more likely to apply to popular schools. We show that while students with the outside option benefit from manipulable systems, students without the outside option may experience either welfare gains or welfare losses. We evaluate the positive predictions of the model using a difference-in-differences design that leverages a change from the Boston mechanism to a deferred acceptance mechanism in the New Haven, Connecticut school district. Consistent with the theoretical predictions, students with an outside option are more likely to list popular, highly-rated schools under the manipulable mechanism, but this gap disappears after the switch to the deferred acceptance mechanism.
Year of Publication
2020
Number
644
Date Published
09/2020
Neilson, C., Akbarpour, M., Kapor, A., van Dijk, W., & Zimmerman, S. (2020). Centralized School Choice with Unequal Outside Options. Retrieved from http://arks.princeton.edu/ark:/88435/dsp015d86p323r (Original work published 09/2020AD)
Working Papers
Abstract
While it is widely believed that family and social networks can influence important life decisions, identifying causal effects is notoriously difficult. This paper presents causal evidence from three countries that the educational trajectories of older siblings can significantly influence the college and major choice of younger siblings. We exploit institutional features of centralized college assignment systems in Chile, Croatia, and Sweden to generate quasi-random variation in the educational paths taken by older siblings. Using a regression discontinuity design, we show that younger siblings in each country are significantly more likely to apply and enroll in the same college and major that their older sibling was assigned to. These results persist for siblings far apart in age who are unlikely to attend higher education at the same time. We propose three broad classes of mechanisms that can explain why the trajectory of an older sibling can causally affect the college and major choice of a younger sibling. We find that spillovers are stronger when older siblings enroll and are successful in majors that, on average, have higher scoring peers, lower dropout rates and higher earnings from graduates. The evidence presented shows that the decisions, and even random luck, of your close family members and peer network, can have significant effects on important life decisions such as the choice of specialization in higher education. The results also suggest that college access programs such as affirmative action, may have important spillover effects through family and social networks.
Year of Publication
2020
Number
633a
Date Published
01/2020
Publication Language
eng
Citation Key
11556
Neilson, C., Altmejd, A., Barrios-Fernandez, A., Drlje, M., & Kovac, D. (2020). Siblings’ Spillover Effects on College and Major Choice: Evidence from Chile, Croatia and Sweden. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01z890rx142 (Original work published 01/2020AD)
Working Papers
Abstract
Family and social networks are widely believed to influence important life decisions but identifying their causal effects is notoriously difficult. Using admissions thresholds that directly affect older but not younger siblings’ college options, we present evidence from the United States, Chile, Sweden and Croatia that older siblings’ college and major choices can significantly influence their younger siblings’ college and major choices. On the extensive margin, an older sibling’s enrollment in a better college increases a younger sibling’s probability of enrolling in college at all, especially for families with low predicted probabilities of enrollment. On the intensive margin, an older sibling’s choice of college or major increases the probability that a younger sibling applies to and enrolls in that same college or major. Spillovers in major choice are stronger when older siblings enroll and succeed in more selective and higher-earning majors. The observed spillovers are not well-explained by price, income, proximity or legacy effects, but are most consistent with older siblings transmitting otherwise unavailable information about the college experience and its potential returns. The importance of such personally salient information may partly explain persistent differences in college-going rates by geography, income, and other determinants of social networks.
Year of Publication
2020
Number
641
Date Published
05/2020
Publication Language
eng
Citation Key
11696
Neilson, C., Altmejd, A., Barrios-Fernandez, A., Drlje, M., Goodman, J., Hurwitz, M., et al. (2020). O Brother, Where Start Thou? Sibling Spillovers on College and Major Choice in Four Countries. Retrieved from http://arks.princeton.edu/ark:/88435/dsp018623j164m (Original work published 05/2020AD)
Working Papers
Abstract
The Paycheck Protection Program (PPP) extended over 650 billion dollars of forgivable loans in an unprecedented effort to support small businesses affected by the COVID-19 crisis. This paper provides evidence that information frictions and the “first-come, first-served” design of the PPP program skewed its resources towards larger firms and may have permanently reduced it’s effectiveness. Using new daily survey data on small businesses in the U.S., we show that the smallest businesses were less aware of the PPP and less likely to apply. If they did apply, the smallest businesses applied later, faced longer processing times, and were less likely to have their application approved. These frictions likely mattered, as businesses that received aid re-port fewer layoffs, higher employment, and improved expectations about the future.
Year of Publication
2020
Number
643
Date Published
05/2020
Publication Language
eng
Citation Key
11706
Neilson, C., Humphries, J., & Ulyssea, G. (2020). Information Frictions and Access to the Paycheck Protection Program. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01p2676z45h (Original work published 05/2020AD)
Working Papers
Abstract
This paper studies how welfare outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. Using a survey of school choice
participants in a strategic setting, we show that beliefs about admissions chances differ from
rational expectations values and predict choice behavior. To quantify the welfare costs of belief
errors, we estimate a model of school choice that incorporates subjective beliefs. We evaluate
the equilibrium effects of switching to a strategy-proof deferred acceptance algorithm, and of
improving households' belief accuracy. Allowing for belief errors reverses the welfare comparison
to favor the deferred acceptance algorithm.
Year of Publication
2017
Number
612
Date Published
04/2017
Publication Language
eng
Citation Key
10241
Kapor, A., Neilson, C., & Zimmerman, S. (2017). Heterogeneous Beliefs and School Choice Mechanisms. Retrieved from http://arks.princeton.edu/ark:/88435/dsp015d86p2856 (Original work published 04/2017AD)
Working Papers
Abstract
This paper studies the potential small and large scale effects of a policy designed to produce more in-formed consumers in the market for primary education. We develop and test a personalized information provision intervention that targets families of public Pre-K students entering elementary schools in Chile. Using a randomized control trial, we find that the intervention shifts parents’ choices toward schools with higher average test scores, higher value added, higher prices, and schools that tend to be further from their homes. Tracking students with administrative data, we find that student academic achievement on test scores was approximately 0.2 standard deviations higher among treated families five years after the intervention. To quantitatively gauge how average treatment effects might vary in a scaled up version of this policy, we embed the randomized control trial within a structural model of school choice and competition where price and quality are chosen endogenously and schools face capacity constraints. We use the estimated model of demand and supply to simulate policy effects under different assumptions about equilibrium constraints. In counterfactual simulations, we find that capacity constraints play an important role mitigating the policy effect but in several scenarios, the supply-side response increases quality, which contributes to an overall positive average treatment effect. Finally, we show how the estimated model can inform the design of a large scale experiment such that reduced form estimates can capture equilibrium effects and spillovers.
Year of Publication
2019
Number
628
Date Published
07/2019
Publication Language
eng
Citation Key
11236
Neilson, C., Allende, C., & Gallego, F. (2019). Approximating the Equilibrium Effects of Informed School Choice. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01fj2364948 (Original work published 07/2019AD)
Working Papers
Abstract
While it is a widely held belief that family and social networks can influence important life decisions, identifying causal effects is notoriously difficult. This paper presents causal evidence from three countries at different stages of economic development that the educational trajectories of older siblings can significantly influence the college and major choice of younger siblings. We exploit institutional features of centralized college assignment systems in Chile, Croatia, and Sweden to generate quasi-random variation in the educational paths taken by older siblings. Using a regression discontinuity design, we show that younger siblings in each country are significantly more likely to apply and enroll in the same college and major that their older sibling was assigned to. These results persist for siblings far apart in age who are unlikely to attend higher education at the same time. We propose three broad classes of mechanisms that can explain why the trajectory of an older sibling can causally affect the college and major choice of a younger sibling. We find that spillovers are stronger when older siblings enroll and are successful in majors that on average have higher scoring peers, lower dropout rates and higher earnings from graduates. The evidence presented shows that the decisions, and even random luck, of your close family members and peer network, can have significant effects on important life decisions such as the choice of specialization in higher education. The results also suggest that college access programs such as affirmative action, may have important spillover effects through family and social networks.
Year of Publication
2019
Number
633
Date Published
11/2019
Publication Language
eng
Citation Key
11466
Neilson, C., Altmejd, A., Barrios-Fernandez, A., Drlje, M., & Kovac, D. (2019). Siblings’ Effects on College and Major Choices: Evidence from Chile, Croatia and Sweden. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01h128nh58q (Original work published 11/2019AD)
Working Papers
Abstract
We study the efficiency of a centralized college admissions platform that operates jointly with a decentralized “off-platform” aftermarket. We exploit a policy change in 2012 in which a significant number of off-platform higher education options joined a centralized assignment system for higher-education programs in Chile. We show evidence that this policy change had impacts on real outcomes finding that the share of students declining their placed spot de-creased by 8% and dropout rates at the end of the first year of college dropped by 2 percentage points (a 16% drop) following this event. To quantify the welfare impacts of the aftermarket on the efficiency of the match, we develop and estimate an empirical model of college applications, aftermarket waitlists and matriculation choices, using individual-level administrative data from Chile on almost half a million applications, including test scores and enrollment decisions at all on- and off-platform higher education options. According to model estimates, welfare increases substantially, students begin their studies sooner, and fewer students drop out by the end of the first year of study when top off-platform programs join the platform. These benefits are greater for less advantaged students and for women. Counterfactual analysis suggests that more desirable options generate larger negative externalities when not on the platform. These externalities are mostly driven by students admitted on on-platform options that decline their spots to pursue off-platform programs; and are amplified by frictions in waitlists that yield socially inefficient allocations. Our results indicate that platform design can have real impact on outcomes of interest. Specifically, our findings suggest policymakers need to consider the implications of off platform options and their characteristics when designing regulation surrounding centralized assignment systems.
Year of Publication
2019
Number
635
Date Published
12/2019
Publication Language
eng
Citation Key
11546
Kapor, A., Neilson, C., & Karnani, M. (2019). Negative Externalities of Off Platform Options and the Efficiency of Centralized Assignment Mechanisms. Retrieved from http://arks.princeton.edu/ark:/88435/dsp016t053j863 (Original work published 12/2019AD)
Working Papers