Yichen Wang

Low-skilled emigration is generally construed as benign and even beneficial for the migrant-sending countries. However, it can also lead to a disincentive effect on human capital formation in the source countries. Using a panel bilateral migration dataset that captures the surge of low-skill migrants in OECD countries in the 2000s, we study how low-skilled emigration affects human capital formation in the migrant-sending countries. We find that the expected returns to low-skilled emigration reduce long-run human capital formation as measured by the average years of schooling and the human capital index of the migrant-sending countries in the subsequent decade. This negative effect on overall human capital formation is manifested through a substantial reduction in tertiary educational attainment, which is both statistically significant and robust to various sensitivity tests and alternative model specifications. Additionally, there is some evidence of a positive association between the expected returns to low-skilled emigration and secondary educational attainment in the subsequent decade. An important qualification is that only middle- and high-income countries are strongly affected by low-skilled emigration, while low-income countries show little to no disincentive effect.

We study how local governments use equity stakes in banks as a political and fiscal instrument to expand off-budget credit. We develop a novel city-bank-year measure of Chinese local government ownership from banks’ shareholder registries and link it to transaction-level borrowing by local government financing vehicles (LGFVs). We find that a one-standard-deviation increase in a local government’s ownership stake in a bank raises that bank’s credit to local government borrowers by 11%. We exploit a regulatory reform that forced private shareholders to unwind bank holdings to support a causal interpretation. This effect is stronger when political competition is intense, officials near the end of their terms, and fiscal constraints are tighter. Greater local-government ownership also makes LGFV investment more responsive to industry performance, yet these projects are more likely to fail, indicating that ownership directs credit to attractive industries at the cost of project quality.

We study political ideology as a driver of heterogeneous durable spending. Research in psychology suggests that conservatives' personality traits lead them to focus on the investment properties of durables, whereas liberals focus on consumption value. Combining U.S. voter registration records with housing transactions, which capture both consumption and investment motives, we show that conservatives transact more frequently, especially in secondary properties, which do not necessarily provide any consumption value. Conditional on transacting, conservatives more often trade down and realize capital gains, while liberals trade up and increase housing consumption. Conservatives' transactions, but not liberals', respond more strongly to financial incentives: interest rates, the opportunity cost of housing investments relative to equities, and house-price appreciation. Within households, ideology does not combine linearly: mixed-ideology couples transact less than ideologically homogeneous ones of either color, and their choices align more closely with the man's ideology.

We document how access to a government credit program shapes Chinese exporters' adjustment to AD investigations by combining firm-product-destination customs data with hand-collected adoption dates of a VAT rebate loan program in 325 prefecture-level cities. AD investigations chill exports of the targeted product to the initiating destination and induce cross-destination diversion. The loan program, which allows exporters to pledge unfulfilled VAT rebate receivables as collateral for short-term bank loans, enables AD-hit firms to continue serving the targeted market and reduces their diversion to non-hit destinations. We explain these patterns through higher prices in initiating destinations and increased short-term borrowing among firms with higher rebate-delay ratios. Our results suggest that financial access shapes firms' product-destination investment decisions, and domestic credit policy can moderate the impact of foreign trade barriers.