Resource Allocation and Preference Differences between Genders
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Previous work finds women are, in many settings, less competitive than men. In chapter 1 I examine how women’s dislike for competition affects their college application choice by exploiting a (surprise) policy intervention in Hungary which drastically altered the competitiveness of college admissions. Using administrative data on applications, from both men and women, pre and post intervention, I find women's choices reveal a strong dislike for heightened competition. In this high-stakes setting, I find both men and women adjust by shifting their application choices towards less competitive programs. The shift in women's choices was however more than 50% larger than that for comparable men and not driven by differences in risk preferences. In chapter 2 I take a step back and investigate how the taste for competition influences men and women’s choices in a competitive setting. A simulation is created for this purpose. The setup mimics the Hungarian college admission process, and it simulates applicants’ responses to a rise in the competitiveness of admission. I focus on the choices of high-achieving applicants and assume among them women are more risk averse than men. The simulation results compare favorably to this group’s response to an actual intervention increasing competitiveness in Hungary. The results show women and men select programs with weaker admission competition if the intervention increases competition more at already very competitive programs. Moreover, women choose programs with much weaker competition than men if women dislike competition more than men. Finally, in chapter 3 I study the effectiveness of monetary incentives to increase fertility, by evaluating the response in fertility decisions of Hungarian households to a 2014 tax policy reform. After the reform, the tax obligation on the labour income of families with three or more children declined substantially while that of one- or two-child families remained unchanged. Using confidential household-level data, I compare the evolution of the decision to have one additional child across families that are differently affected by the policy. I find that families responded differently to the monetary incentives than expected; that is, the likelihood of second- and third births increased to the same extent.