This thesis consists of three chapters. In Chapter I, Effect of forced displacement on health, I analyze health consequences of forced civilian displacement that occurred during the war in Croatia 1991-1995 which accompanied the demise of Yugoslavia. During the Serbo-Croatian conflict a quarter of Croatian territory was ceded, 22,000 people were killed, and more than 500,000 individuals were displaced. Using the Croatian Adult Health Survey 2003 I identify the causal effect of forced migration on various dimensions of measured and self-assessed health. In order to circumvent the self-selection into displacement, I adopt an instrumental variable approach where civilian casualties per county are used as an instrument for displacement. I find robust adverse effects on probability of suffering hypertension, tachycardia as well as on self-assessed health and Short Form Health Survey (SF-36) health dimensions. Comparing OLS to IV estimates yields a conclusion of a positive selection into displacement with respect to latent health. Given the likely violation of the exclusion restriction, I use a method which allows the instrument to affect health outcomes directly and conclude that, even with substantial departures from the exclusion restriction, displacement still adversely affects health.
Chapter II, General versus Vocational Education: Lessons from a Quasi-experiment in Croatia, presents a research which identifies the causal effect of an educational reform implemented in Croatia in 1975/76 and 1977/78 on educational and labor market outcomes. High-school education was split into two phases which resulted in reduced tracking, extended general curriculum for pupils attending vocational training and attaching vocational context to general high-school programs. Exploiting the rules on elementary school entry and timing of the reform, I use a regression discontinuity design and pooled Labor Force Surveys 2000–2012 to analyze the effect of the reform on educational attainment and labor market outcomes. We find that the reform, on average, reduced the probability of having university education, which I contribute to attaching professional context to once purely academic and general high-school programs. I also observe heterogeneity of the effects across gender, as for males we find that the probability of completing high school decreased, while for the females we do not observe any adverse effects, only an increase in the probability of having some university education. We explain this heterogeneity with different selection into schooling for males and females. The reform did not positively affect individuals’ labor market prospects; therefore, we conclude that the observed general-vocational wage differential is mainly driven by self-selection into the type of high school.
Do physicians respond to financial incentives is the research question tackeled in Chapter III named Do Financial Incentives Alter Physician Prescription Behavior? Evidence from Random Patient-GP Allocations. With co-author Alexander Ahammer I address this question by analyzing the prescription behavior of physicians who are allowed to dispense drugs by themselves through onsite pharmacies. Our identification strategy rests on multiple pillars. First, we use an extensive array of covariates along with multi-dimensional fixed effects which account for patient and GP-level heterogeneity as well as sorting of GPs into onsite pharmacies. Second, we use a novel approach that allows us to restrict our sample to randomly allocated patient-GP matches which rules out endogenous sorting as well as principal-agent bargaining over prescriptions between patients and GPs. Using administrative data from Austria, we find evidence that onsite pharmacies have a small negative effect on prescriptions. Although self-dispensing GPs seem to prescribe slightly more expensive medication, this effect is absorbed by a much smaller likelihood to prescribe something at all in the first place, causing the overall effect to be negative.