Essays on the Role of Government Incentives in the Private Provision of Social Goods

The economic rationale for public intervention into private markets through price mechanisms is twofold: to correct market failures and to redistribute resources. Financial incentives are one such price mechanism. In this dissertation, I specifically address the role of financial incentives in providing social goods in two separate contexts: a redistributive policy that enables low income working families to access affordable childcare in the US and an experimental pay-for-performance intervention to improve population health outcomes in rural India. In the first two papers, I investigate the effects of government incentives for providing grandchild care on grandmothers’ short- and long-term outcomes. In the third paper, coauthored with Manoj Mohanan, Grant Miller, Katherine Donato, and Marcos Vera-Hernandez, we use an experimental framework to consider the the effects of financial incentives in improving maternal and child health outcomes in the Indian state of Karnataka.

Grandmothers provide a significant amount of childcare in the US, but little is known about how this informal, and often uncompensated, time transfer impacts their economic and health outcomes. The first two chapters of this dissertation address the impact of federally funded, state-level means-tested programs that compensate grandparent-provided childcare on the retirement security of older women, an economically vulnerable group of considerable policy interest. I use the variation in the availability and generosity of childcare subsidies to model the effect of government payments for grandchild care on grandmothers’ time use, income, earnings, interfamily transfers, and health outcomes. After establishing that more generous government payments induce grandmothers to provide more hours of childcare, I find that grandmothers adjust their behavior by reducing their formal labor supply and earnings. Grandmothers make up for lost earnings by claiming Social Security earlier, increasing their reliance on Supplemental Security Income (SSI) and reducing financial transfers to their children. While the policy does not appear to negatively impact grandmothers’ immediate economic well-being, there are significant costs to the state, in terms of both up-front costs for care payments and long-term costs as a result of grandmothers’ increased reliance on social insurance.

The final paper, The Role of Non-Cognitive Traits in Response to Financial Incentives: Evidence from a Randomized Control Trial of Obstetrics Care Providers in India, is coauthored with Manoj Mohanan, Grant Miller, Katherine Donato and Marcos Vera-Hernandez. We report the results from “Improving Maternal and Child Health in India: Evaluating Demand and Supply Side Strategies” (IMACHINE), a randomized controlled experiment designed to test the effectiveness of supply-side incentives for private obstetrics care providers in rural Karnataka, India. In particular, the experimental design compares two different types of incentives: (1) those based on the quality of inputs providers offer their patients (inputs contracts) and (2) those based on the reduction of incidence of four adverse maternal and neonatal health outcomes (outcomes contracts). Along with studying the relative effectiveness of the different financial incentives, we also investigate the role of provider characteristics, preferences, expectations and non-cognitive traits in mitigating the effects of incentive contracts.

We find that both contract types input incentive contracts reduce rates of post-partum hemorrhage, the leading cause of maternal mortality in India by about 20%. We also find some evidence of multitasking as output incentive contract providers reduce the level of postnatal newborn care received by their patients. We find that patient health improvements in response to both contract types are concentrated among higher trained providers. We find improvements in patient care to be concentrated among the lower trained providers. Contrary to our expectations, we also find improvements in patient health to be concentrated among the most risk averse providers, while more patient providers respond relatively little to the incentives, and these difference are most evident in the outputs contract arm. The results are opposite for patient care outcomes; risk averse providers have significantly lower rates of patient care and more patient providers provide higher quality care in response to the outputs contract. We find evidence that overconfidence among providers about their expectations about possible improvements reduces the effectiveness of both types of incentive contracts for improving both patient outcomes and patient care. Finally, we find no heterogeneous response based on non-cognitive traits.

The Roles of Phenotypic Plasticity and Plant-Microbe Interactions in the Evolution of Complex Traits in Boechera stricta

All organisms live in complex habitats that shape the course of their evolution by altering the phenotype expressed by a given genotype (a phenomenon known as phenotypic plasticity) and simultaneously by determining the evolutionary fitness of that phenotype. In some cases, phenotypic evolution may alter the environment experienced by future generations. This dissertation describes how genetic and environmental variation act synergistically to affect the evolution of glucosinolate defensive chemistry and flowering time in Boechera stricta, a wild perennial herb. I focus particularly on plant-associated microbes as a part of the plant’s environment that may alter trait evolution and in turn be affected by the evolution of those traits. In the first chapter I measure glucosinolate production and reproductive fitness of over 1,500 plants grown in common gardens in four diverse natural habitats, to describe how patterns of plasticity and natural selection intersect and may influence glucosinolate evolution. I detected extensive genetic variation for glucosinolate plasticity and determined that plasticity may aid colonization of new habitats by moving phenotypes in the same direction as natural selection. In the second chapter I conduct a greenhouse experiment to test whether naturally-occurring soil microbial communities contributed to the differences in phenotype and selection that I observed in the field experiment. I found that soil microbes cause plasticity of flowering time but not glucosinolate production, and that they may contribute to natural selection on both traits; thus, non-pathogenic plant-associated microbes are an environmental feature that could shape plant evolution. In the third chapter, I combine a multi-year, multi-habitat field experiment with high-throughput amplicon sequencing to determine whether B. stricta-associated microbial communities are shaped by plant genetic variation. I found that plant genotype predicts the diversity and composition of leaf-dwelling bacterial communities, but not root-associated bacterial communities. Furthermore, patterns of host genetic control over associated bacteria were largely site-dependent, indicating an important role for genotype-by-environment interactions in microbiome assembly. Together, my results suggest that soil microbes influence the evolution of plant functional traits and, because they are sensitive to plant genetic variation, this trait evolution may alter the microbial neighborhood of future B. stricta generations. Complex patterns of plasticity, selection, and symbiosis in natural habitats may impact the evolution of glucosinolate profiles in Boechera stricta.

Hydrological Response of East China to the Variation of East Asian Summer Monsoon

Copyright © 2016 Fuxing Li et al.The sensitivity of hydrologic variables in East China, that is, runoff, precipitation, evapotranspiration, and soil moisture to the fluctuation of East Asian summer monsoon (EASM), is evaluated by the Mann-Kendall correlation analysis on a spatial resolution of 1/4° in the period of 1952-2012. The results indicate remarkable spatial disparities in the correlation between the hydrologic variables and EASM. The regions in East China susceptible to hydrological change due to EASM fluctuation are identified. When the standardized anomaly of intensity index of EASM (EASMI) is above 1.00, the runoff of Haihe basin has increased by 49% on average, especially in the suburb of Beijing and Hebei province where the runoff has increased up to 105%. In contrast, the runoff in the basins of Haihe and Yellow River has decreased by about 27% and 17%, respectively, when the standardized anomaly of EASMI is below -1.00, which has brought severe drought to the areas since mid-1970s. The study can be beneficial for national or watershed agencies developing adaptive water management strategies in the face of global climate change.