Family and Friends : Essays on Applied Microeconometrics

Abstract: This doctoral thesis consists of 4 self-contained chapters, bound together by their focus on household behavior and social interaction: Bargaining over Risk: The Impact of Decision Power on Household Portfolios. This paper provides an analysis of the internal financial decision-making process of households, employing a unique panel of household finances of the entire Swedish population. Exploitation of a source of exogenous variation in sex-specific labor demand reveals that the distribution of decision power among spouses is a driving force behind the aggregation of spouses’ preferences on financial decision making. Peer Effects and Academic Achievement: Regression Discontinuity Approach. The estimation of peer effects in schools has received much attention in recent years but convincing estimates are hard to produce due to self-selection. This paper overcomes this problem by employing a regression discontinuity design where student assignment into high-ability classes constitutes the source of identifying information. Domestic Equality and Marital Stability: Does More Equal Sharing of Childcare affect Divorce Risk? There is an unanimity that divorce wreaks havoc upon families in which it occurs and individuals growing up in a one-parent family are more likely to deal with term economic and social difficulties. Identifying means by which divorces can be reduced is therefore an important task from a public policy perspective and this paper investigates whether more equal sharing of childcare is successful in doing so. Do Classroom Peers Matter in an Early Tracking System? The potential for peers to affect educational achievement of students is central to many important policy debates, for instance on the impacts of ability tracking. Whether tracking affects efficiency and equality of opportunities depends on how peers enter the educational production function and this paper provides estimates of this.