Linh T. Tô

This paper theoretically and empirically examines the timing of information about consumption opportunities. We present a model in which consumers form intertemporal plans and experience utility from anticipating future consumption. We show that more time to anticipate leads to more patient decisions. Anticipation therefore provides a role for the timing of information as a novel policy instrument. We test the model in two distinct domains. Using Nielsen Consumer Panel data to examine responses to the 2008 Economic Stimulus Payments, we find higher marginal propensities to spend for households that receive payments sooner after they are announced. Using data from randomized experiments in Kenya and Malawi which induced variation in the timing of lump-sum unconditional cash transfers, we find higher savings and lower spending on temptation goods among households that wait longer to receive payment.

This paper provides empirical tests based on signaling theory in the context of workers choosing to forgo paid parental leave to signal value to employers. Using administrative data from Denmark and an unanticipated increase in the maximum allowed duration of parental leave, I show how signaling contributes to a divergence in wages due to the information that workers’ choices convey upon a leave extension. In contrast to human capital theory, an individual can take longer leave but gain in wages as long as their relative leave position in the population decreases. The results demonstrate unanticipated impacts of parental leave policies and highlight the importance of asymmetric information in the labor market.

This paper provides field evidence on how reference points adjust, a degree of freedom in reference-dependence models. Examining this in the context of cabdrivers’ daily labor-supply behavior, we ask how the within-day timing of earnings affects decisions. Drivers work less in response to higher accumulated income, with a strong effect for recent earnings that gradually diminishes for earlier earnings. We estimate a structural model in which drivers work towards a reference point that adjusts to deviations from expected earnings with a lag. This dynamic view of reference dependence reconciles conflicting “neoclassical” and “behavioral” interpretations of evidence on daily labor-supply decisions.