Essays in Environmental Economics and the Economics of Higher Education

Maximizing welfare in the economy requires effective policies that mitigate negative externalities and incentivize positive externalities. My first paper concerns emissions at manufacturing plants in the US, a major source of negative externalities. Globalization has created concerns that pollution can move across country boarders. Therefore, I study the environmental performance of foreign manufacturing establishments in the US to test if foreign establishments in pollution intensive industries are heavy emitters. I find that foreign firms are not dirtier than domestic establishments on average. However, they are significantly cleaner in industries with high fixed costs and dirtier in industries with low fixed costs. This is because only the most productive establishments find it profitable to produce abroad in high fixed cost industries and high productivity establishments are generally cleaner. The next two papers focus on higher education, which bears large positive externalities. In the second paper in this dissertation I study the response of student charges to the Post-9/11 GI Bill at 2- and 4-Year public, private, and for-profit institutions. If institutions of higher education increase their student charges in response to increases in student aid, the goals of student aid policies are undermined. I test for supply side responses to the Post-9/11 GI Bill and find statistically significant increases in fees and tuition rates at 4-year public and 2-year private colleges. These increases reduce the effective benefit that students receive which harms their ability to access higher education. The third paper recognizes that the US currently has a shortage of STEM majors and tests whether major contingent loans can incentivize students to select into these fields. That is, if we only offer low interest loans to students studying majors that society values most, do students respond by choosing those majors? Using a natural experiment created by the National Defense Student Loan Program in 1959, which had a provision that teaching, foreign language, science, technology, and math fields receive priority in loan allocation, I find little evidence that students select qualifying majors in response to low-interest loans.