Three Essays in Applied Microeconomics

Abstract

The first essay investigates the role social environment plays in the development of life satisfaction during childhood and adolescence. Life satisfaction is high among children and declines during adolescence. This decline is steeper among children who grow up in low compared to high socio-economic status (SES) families, resulting in a sizable SES gap at the end of adolescence. A one year mentoring intervention in mid childhood changes the life satisfaction trajectories of low SES children to be very similar to those of high SES children. This result highlights the critical role high-quality relationships play for the formation of life satisfaction during childhood and adolescence. <br /> The second essay develops an agent-based simulation model for the spread of infectious diseases. It accounts for heterogeneous and assortative meeting patterns through different contact networks, such as work or schools. This makes it easy to implement different contact reduction policies, such as work from home mandates or school closures. The model also includes a sophisticated model for the demands of rapid antigen and PCR tests. This allows for different and endogenous detection rates over time and between age groups. <br /> The third essay uses the previous model to quantify the effects of seasonality, vaccinations and antigen rapid tests during the CoViD-19 pandemic. Most parameters can be calibrated. The remaining are estimated with German infection data from fall 2020 until June 2021 using the method of simulated moments. During this period where vaccination rates rose from 5% to 40%, seasonality and rapid testing had the largest effect on reducing infection numbers. Furthermore, antigen rapid test strategies can substitute contact reduction policies that come at a much larger cost to individuals, society, and the economy.