This was my job market webpage. Please visit my personal website at:

https://sites.google.com/view/heyu-xiong-economics

Contact Information

Department of Economics
Northwestern University
2001 Sheridan Road
Evanston, IL 60208

heyuxiong2018@u.northwestern.edu

Education

Ph.D., Economics, Northwestern University, 2019 (expected)
B.A., Economics and Mathematics cum laude, Cornell University, 2012

Primary Fields of Specialization

Economic History

Secondary Fields of Specialization

Job Market Paper

“Displacement in the Criminal Labor Market: Evidence from Drug Legalizations” 

It is widely hypothesized that legalization disrupts illicit markets and displaces illegal suppliers,  but the consequences for those who are displaced remain poorly understood. In this paper, I use comprehensive administrative data from three states that legalized marijuana covering all individuals released from prison in the years immediately before and after the policy change to estimate the effect of legalization on the subsequent criminality of convicted dealers. I find that marijuana legalization increased the 9-month recidivism rate of marijuana offenders by 6 percentage points relative to a baseline rate of 10 percent. The increased recidivism is largely driven by a substitution to the trafficking of other drugs, which is consistent with a Becker-style model where individuals develop human capital specific to the drug industry. To learn about potential mechanism behind these results, I use detailed drug transaction price data to estimate the effect of legalization on average prices and price dispersion, and I find suggestive evidence that both the average level and residual variance decline following legalization, which is consistent with legalization eroding rents earned in the illicit marijuana market. Lastly, I explore the generalizability of my findings in a distinct legalization experiment from history: the end of National Prohibition. I replicate the main insights at an organizational level and show that, in response to the repeal of Prohibition, the Italian-American Mafia shifted personnel from bootlegging to narcotics. Overall, the results in this paper suggest that an unintended consequence of drug legalization is a re-allocation of drug criminals to other illicit activity

Other Research Papers

“The Political Premium of Television Celebrity” 

This paper examines the career of Ronald Reagan to study the political consequences of television celebrity. I exploit quasi-experimental variation in television reception to provide causal estimates of celebrity media exposure on political outcomes. I find that Ronald Reagan’s tenure as the host of a 1950s entertainment television program translated into electoral support during his initial bids for the presidency nearly two decades after the show’s last airing. The effect is especially pronounced in Republican primaries relative to the general election and dissipates entirely in locations where Reagan was a known political entity. I find evidence consistent with two distinct, but not necessarily exclusive, mechanisms. For those who are relatively politically uninformed, non-political media acted through the channel of name recognition. For the uninformed and informed alike, celebrity exposure idealized perception of Reagan’s traits and personalized political considerations in elections featuring him.

“Mass Persuasion and the Ideological Origins of the Chinese Cultural Revolution” with Susan Ou 

We study the role of media in the transmission of ideology during the Cultural Revolution. We develop a novel identification strategy by interacting the strength of radio signals and linguistic compatibility of local dialects to the broadcast language, Mandarin. A stronger signal is found to increase revolutionary intensity in counties where Mandarin was better understood. Through investigation of participation in the Send Down Movement, we provide evidence that one mechanism underlying our findings is the direct effect of exposure on individuals, even absent differences in local policies induced by media. The effects of propaganda are persistent, as evidenced by Communist Party membership in later life.

“Sectarian Competition and the Market Provision of Human Capital” with Yiling Zhao 

In the latter half of the 19th century, America experienced a significant expansion in its collegiate infrastructure. By 1890, more institutions of higher learning existed in the United States than all of Europe. In this paper we study the role of denominational competition in the market provision of higher education. Specifically, we document nearly all colleges established in this time period had denominational roots or origins. The empirical analysis reveals a robust positive relationship between an area’s religious fragmentation and the number of colleges established locally. We argue that denominational affiliation facilitated enthusiasm to build colleges through gains to differentiation from standard Hotelling channels. We formulate a model of school choice, entry, and denominational affiliation. We find evidence that differentiation softened the extent of tuition competition and mediated an “excess” entry of colleges. We conclude by showing that the higher equilibrium quantity of schools, associated with increased entry, had persistent effect on institutional quality; thus, religious diversity precipitated educational investment.

“Do School Spending Cuts Matter? Evidence from The Great Recession” with Kirabo Jackson and Cora Wigger
During the Great Recession, public-school per-pupil spending fell by roughly seven percent nationally, and some states experienced declines of over fifteen percent. While increased public-school spending has been linked to improved student outcomes, the impact of large education funding cuts is not well- understood. To examine this, first, we document that the drop in spending after the recession coincided with the end of decades-long national test score growth. Next, we show this stalled educational progress was particularly pronounced in those states that experienced larger recessionary budget cuts for plausibly exogenous reasons. Specifically, to isolate school budget cuts that were unrelated to (a) other ill-effects of the recession or (b) endogenous state policies, we use State’s historical reliance on State taxes to fund public schools interacted with the timing of the recession as instruments for reductions in school spending. Cohorts exposed to these spending cuts had lower test scores and lower high-school completion rates. Our effects are similar in magnitude to those in studies based on spending increases. Surprisingly, these spending cuts had similar impacts on both high- and low- income children.

Teaching

Teaching Assistant, Northwestern University, 2014-2015. American Economic History Before 1865, Environmental Economics, and History of Economic Thought

References

Prof. Joel Mokyr (Committee Chair)
Prof. Matthew Notowidigdo (Committee Chair)
Prof. Nancy Qian
Prof. Joseph Ferrie