PROGRAM | Economics

By: Yiran Duan Chair: Parag Mahajan

ABSTRACT

This study examines three key areas where economic policy intersects with development: the influence of international student enrollments on the academic major choices of domestic students in the U.S., the effects of high-speed railroad infrastructure on employment in China, and the influence of monetary policy on housing prices in China. Each area provides insight into the broader effects of economic policies in a globally interconnected environment.

The first section of the dissertation assesses how international student enrollment in higher education institutions affects the choice of majors by domestic students. As a lead- ing destination for international students, the U.S. relies heavily on the tuition fees they provide, which becomes crucial for maintaining university operations, particularly when financial resources are constrained. The study specifically investigates the aftermath of the 2008 financial crisis and its impact on domestic students’ choice of majors. Data re- veals an associated increase in domestic student enrollment with the rise of international student numbers, which is align with other research in this area. This paper revealed that the distribution of this impact is not uniform across all fields of study, majors such as Engineering, Business, and Physical/Life Sciences see a positive correlation, whereas Mathematics displays a decline, suggesting a crowding-out effect possibly due to increased competition. A further analysis of this trend through demographic lenses, such as ethnicity and gender. This study associates a thorough understanding of how international student presence within U.S. higher education influences domestic students’ academic preferences. The study contributes to the discussion on the role of international students in U.S. education, with a focus on undergraduate levels as opposed to the graduate levels, which is more frequently studied. It seeks to clarify the influence of international students on domestic students’ selection of majors within U.S. universities.

The second topic investigates the transformative role of high-speed railroad (HSR) infrastructure on employment in China, a country that has rapidly expanded its HSR network to be the largest in the world. This paper studies the impact of high-speed-railway (HSR) on employment in China by utilizing data from the China Regional Employment Statistics Yearbooks (2005-2017) and the Chinese Research Data Services Platform (CNRDS). Employing the CSDID method developed by Callaway and Sant’Anna (2020), we identify the treatment effect of HSR on local employment and find that HSR on average increases employment by 6.8%. This paper further shows heterogeneity in the impact of HSR on different types of employment. HSR on average contributes to 14% rise in self-employment and employment in private businesses, whereas the impact of HSR on employment in public sector or state-owned firms is insignificant. Our interpretation suggests that HSR stimulates industries like retail, catering, travel, and hospitality, where private employment is concentrated where the more pronounced impact on private employment. This is supported by empirical evidence within the retail industry.

Lastly, this study examines the relationship between monetary policy and housing prices in China. China’s house-to-income ratio ranks among the top ten globally, with several of its tier one cities positions in the top ranking in international comparisons. The elevated levels of housing costs are associated with significant economic and sociological effects, including increased rates of divorce, decreased fertility rates, and reduced marriage rates. The macroeconomic literatures suggests that one potential drive for escalated housing prices may be attributed to the excessive issuance of M2, indicative of a heightened money supply. Through the application of an exclusion restriction, the impact of different monetary policies on housing prices is shown to be consistent with the established economic principles. This analysis reveals that expansionary monetary policies are correlated with a surge in housing prices. Moreover, the response to monetary policy shocks exhibits regional variance within China: in the eastern region, such shocks influence the demand aspect of the housing market, whereas in the mid-region, the supply side is more significantly affected. This differentiation provide evidence for policymakers to craft and implement strategies aimed at tempering housing prices, informed by these regional dynamics.

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