“Reputation of Quality in International Trade: Evidence from Consumer Product Recalls” (Job Market Paper)
This paper quantitatively examines the impact of exporting countries’ reputations for product quality on aggregate trade flows. I introduce a novel data set in which recall incidences retrieved from the Consumer Product Safety Commission are matched to U.S. import data from 1990-2009. Using a model of learning I construct a measure for exporter reputation where consumers internalize product recalls as bad signals. Structural estimation of the model finds that reputation is important and especially impactful for products used by children. The market share elasticity of exporter’s reputation is around 1.49 across products, similar in magnitude to the average price elasticity, which is around 1.51. Improving reputation can increase export value, but reputation is sluggish: increasing reputation by 10% can take decades for most exporters. Counterfactual exercises confirm that quality inspection institutions are welfare improving, and quality inspection is especially important for consumers of toys.
“When Opportunity Knocks: China’s Open Door Policy and Declining Educational Attainment” (Updated May 2019)
At the end of 1978, China decided to open up to the outside world. We analyze how China’s industrialization and the immediate export growth due to the Open Door Policy change Chinese teenagers’ education decisions, which explains the education decline. We find that middle school completion rates increased and high school completion rates decreased in response to export growth. This suggests a tradeoff between education and labor market opportunities in China. These education effects are more prominent for cohorts who were younger when China’s Open Door Policy began, even though these teenagers also faced a stronger education system compared to the earlier cohorts.