"Intergenerational Effects of a Negative Wealth Shock: Evidence from the Closure of the Freedman’s Bank" [PDF] (Job Market Paper) This paper investigates the intergenerational effects of negative shock in wealth for African Americans by examining an historical episode, the failure of the Freedman's Bank (1865-1874). The bank failure resulted in the loss of deposit wealth for approximately 100,000 depositors. I collect and match individual-level bank depositor records to the 1880 and 1900 Censuses to obtain information on their descendants' literacy and occupation outcomes. To estimate the causal effect of depositing, I employ an instrumental variable strategy which exploits county-level differences in the take-up rate in banking. Children of depositors were 17.6 percentage points more likely to be literate than children of non-depositors after the bank failure. However, there is no statistically significant difference in labor force participation or occupation quality between children of depositors and non-depositors. The positive literacy effect is explained by an increase in school attendance and literacy for the depositors' children prior to the bank failure. I find that the bank was able to promote education for the depositors' children through its connection with a Christian educational organization, the American Missionary Association (AMA). While children from families who lost a higher proportion of wealth were less likely to attend school after the bank failure, the human capital gains which occurred prior to the bank failure outweigh and outlast the adverse effect of wealth loss.
“The Freedman’s Bank and the Persistence of Mistrust” Survey data show large and persistent racial gaps in the utilization of banks. Historians have long hypothesized that the collapse of the Freedman’s bank in 1874 contributed significantly to the mistrust and underutilization of financial institutions by African Americans today. I will be the first to test this hypothesis using data. Using present day survey data, I find that African Americans are less likely to be banked if they reside in a county with higher exposure to knowledge of the bank collapse. In addition, for unbanked households, those who reside in a county with higher exposure to knowledge of the bank collapse are more likely to report “mistrust” in bank as the primary reason to be unbanked. Placebo effects are not present in the sample of white survey respondents, suggesting that the collapse of the Freedman’s Bank can partly explain persistent gaps in the utilization of financial services by African Americans.
Works-in-Progress:
“Can Free Health Care Save Infants? The Effect of the Emergency Maternity and Infant Care Program on Mortality” This paper estimates the causal impact of free maternity health care on infant mortality. The maternity health care program analyzed is the Emergency Maternity Infant Care Program (EMIC), a war time measure that became one of the largest public health care programs undertaken by the U.S. government. Under this program, free hospital delivery and infant care were provided to the wives and children of enlisted men. I plan to exploit the plausibly exogenous timing of the passing of this program in Congress and compare outcomes of the children born to enlisted men drafted during WWII versus those born to civilians. Individual level results pending. Preliminary results using county-level data show that EMIC reduced infant mortality by inducing women to deliver with medical doctors, rather than with midwives.
“Does Representation Matter for Loan Outcomes? Evidence from Close Elections” I explore whether minority representation in lending groups improves loan outcomes for minority borrowers. This question is studied in the context of lending decisions by county committees under the U.S. Department of Agriculture (USDA). Many of USDA’s programs are overseen locally through county committees, where the elected members hold considerable power in administrating USDA loans. Using close elections between white and minority candidates in county committee elections, I analyze whether minority representation in lending group matters for loan outcomes, and how much representation is needed for loan outcomes to change.