Christopher Neilson

Another Pass-Through Bites the Dust? Oil Prices and Inflation

This paper presents evidence of an important decline during recent decades in the pass-through from the price of oil to the general price level. We find that this decline is a generalized fact for a large set of countries. After documenting correlations between the consumer price index and oil prices, we use two estimation strategies in an attempt to properly identify the effect of oil shocks on inflation. First, we estimate the traditional Phillips curve augmented to include oil and test for structural breaks in 34 countries. This methodology shows a fall in the average estimated pass-through for industrial economies and, to a lesser degree, for emerging economies. Second, we estimate rolling vector autoregressions for a subsample of countries for which we have sufficient data. We derive impulse response functions of inflation to oil shocks and interpret the integrals as estimates of pass-through. We find that the effect of oil shocks on inflation has weakened for most of the 12 countries in the sample. Among the factors that might help to explain this decline, we argue that the most important are a reduction in the oil intensity of economies around the world, a reduction in the exchange rate pass-through, a more favorable inflation environment, and the fact that the current oil price shock is largely the result of strong world demand. These factors help to explain not only why the current shock has had limited inflationary effects, but also why it has had limited consequences for output.

Gray Matters: Fetal Pollution Exposure and Human Capital Formation

This paper examines the impact of fetal exposure to air pollution on fourth-grade test scores in Santiago, Chile. We rely on comparisons across siblings which address concerns about locational sorting (for nonmovers) and all other time-invariant family characteristics that can lead to endogenous exposure to poor environmental quality. We also exploit data on air quality alerts to help address concerns related to short-run time-varying avoidance behavior, which has been shown to be important in a number of other contexts. We find a strong negative effect from fetal exposure to carbon monoxide (CO) and correlated pollutants (like PM10) on math and language skills measured in fourth grade. These effects are economically significant, and our back-of-the-envelope calculations suggest that the 50% reduction in CO in Santiago between 1990 and 2005 increased lifetime earnings by approximately US

Health at Birth, Parental Investments and Academic Outcomes

100 million per birth cohort.

The Gender Gap in Mathematics: Evidence from Chile

This paper explores the relationship among health at birth, academic outcomes, and the potential role of parental investments using administrative panel data from Chile. Using detailed data on parental investments, we find that investments are compensatory regarding initial health, but not across twins. Twins fixed effects models estimate a persistent effect of birth weight on academic achievement, while ordinary least squares and siblings fixed effects models find this relationship to decline over time. We view these findings in the context of a model of human capital accumulation where parental investments respond to initial endowments and spill over to siblings.

Heterogeneous Beliefs and School Choice Mechanisms

Using a large administrative data set from Chile, we find that on average boys perform better than girls in math. In this article, we document several features of boys versus girls’ relative performance in math. First, we note that the gender gap appears to increase with age (doubles between fourth grade and eighth grade). Second, we test whether commonly proposed explanations such as parental background and investments, unobserved ability, and classroom environment (including teacher gender) help explain a substantial portion of the gap. While none of these explanations help in explaining a large portion of the gender gap, we show that boys and girls differ significantly in perceptions about their own ability in math. Conditional on math scores, compared to boys, girls are much more likely to state that they dislike math or find math difficult. We highlight differences in self-assessed ability as areas for future research that might lead to a better understanding of the gender gap in math.

The Gender Gap in Mathematics: Evidence from a Middle-Income Country

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. We find that a switch to truthful reporting in the DA mechanism offers welfare improvements over the baseline given the belief errors we observe in the data, but that an analyst who assumed families had accurate beliefs would have reached the opposite conclusion. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Early Life Health Interventions and Academic Achievement

Using a large administrative data set from Chile, we find that, on average, boys perform better than girls in mathematics. In this paper, we document several features of their relative performance. First, we note that the gender gap appears to increase with age (it doubles between fourth grade and eighth grade). Second, we test whether commonly proposed explanations such as parental background and investment in the child, unobserved ability, and classroom environment (including teacher gender) help explain a substantial portion of the gap. While none of these explanations help in explaining a large portion of the gender gap, we show that boys and girls differ significantly in perceptions about their own ability in math. Conditional on math scores, girls are much more likely to state that they dislike math, or find math difficult, compared to boys. We highlight differences in self-assessed ability as areas for future research that might lead to a better understanding of the gender gap in math.