ECI network leader Petra Todd recently sat down with HCEO to discuss her research in labor and development economics.
Much of Todd's work in recent years has focused on evaluating social programs, and in particular conditional cash transfer (CCT) programs in developing countries. Such programs give money to families who send their children to school. They are intended to reduce child labor and come with some requirements, such as mandating that children receive health care.
"They're designed to stimulate more investment in education in these families and also to improve the health of children," she says.
Todd likes the concept behind CCT programs because the money goes directly to families, as opposed to a third party such as a non-governmental organization, so there is not a lot of opportunity for leakage, or misallocation of funds. Designing these programs for optimal results is crucial, as resources as scarce. Todd stresses the importance of planning and using economic frameworks to analyze how participants are likely to respond to programs.
"I feel pretty passionately about these types of programs - that they're pretty effective. It's important to consider them in different contexts, to design the optimal payment schedules, and to make sure that the right people are receiving the benefits," she says.
More recently, Todd has been combining psychology with economics to examine how one's personality traits affect their economic behavior. Using data from Australia, she is studying how personality traits influence allocation of resources in the household, and what the implications are for gender wage gaps.
"This is an area that's new for me," Todd says, noting that she was inspired to pursue the topic by recent work by HCEO Co-director James Heckman. "It bridges between economics and psychology."
Todd is the Alfred L. Cass Term Professor of Economics at the University of Pennsylvania. She is also on the faculty at this year's NES-HCEO Summer School on Socioeconomic Inequality in Moscow.