2025 Theses Doctoral

Connected to one and all: Role of social and family networks in shaping individual outcomes

Bhargava, Palaash

This dissertation examines how an individual’s social environment — defined broadly by their peers, family members, and ethnic ancestry — shapes outcomes across human capital, financial, and preference-related domains. Across three chapters, I show that an individual’s position within a network, and the experiences and decisions of those to whom they are connected, influence their own development—whether in the classroom, within the household, or across generations. These interdependencies are crucial to understand not only for designing effective policy interventions, but also for reflecting on the deeper social forces that shape who we become.

The first chapter focuses on peer relationships in classrooms. Using a sample of 12,842 students from India, I show that relatively isolated students face a host of socio-emotional and academic disadvantages. I then implement a two-tier randomized deskmate matching intervention aimed at improving the outcomes of these isolated students. The results reveal a notable trade-off. Within the classroom, matching isolated students with each other improves their social connections with peers, interactions with teachers, and social/non-cognitive skills. However, at the classroom level, this comes at the cost of broader classroom-level negative externalities. Specifically, deskmate plans that pair a majority of isolated students with the most popular deskmates improve the overall social integration and academic performance of isolated students but have no impact on their social and non-cognitive skills.

To explain these patterns, I build a model of network formation and academic spillovers in which returns to social and academic effort are shaped by both endogenously determined peer interactions and sociological mechanisms such as negative social comparisons and proximity effects. Consistent with the empirical findings, the model shows that outcomes for isolated students, in equilibrium, depend on both their immediate deskmate and the overall composition of matches—where the negative externalities of matching more isolated students with each other emerge after a particular threshold. Optimal matching strategies must therefore weigh direct versus group-level impacts, which may move in opposite directions, giving rise to equity-efficiency trade-offs.

The second chapter, based on joint work, shifts the focus to the family, studying the effects of college on household finances. Using administrative data on the universe of federal aid applicants in California linked to credit records, we provide the first comprehensive analysis of how both students and their parents use debt with college attendance, and how prices affect those decisions. We start by using an event-study framework to explore how parents’ use of debt and credit outcomes change after their child first submits a federal aid application. While total debt does not change, higher-income parents shift balances from other debt to educational loans. We find that lower-income parents take out more education loans, experience less delinquency on non-educational debt, and see their credit scores rise. We then use discontinuities in eligibility for generous financial aid to test how an exogenous change in the price of college affects parental debt and financial health. We find that parents finance increases in the price of college through educational loans as well as home equity loans. Higher prices increase parental delinquency on debt. The findings highlight an important channel by which college and its rising cost may spill over into the broader financial health of families and the economy.

The third chapter, also based on joint work, turns to the intergenerational transmission of preferences, examining how the climatic experience of previous generations affects today’s attention to environmental questions. Using self-reported beliefs and environmental themes in folklore, we show empirically that the realized intensity of deviations from typical climate conditions in ancestral generations influences how much descendants care about the environment. The effect exhibits a U-shape: both more stable and more unstable ancestral climates lead to higher environmental attention today, with a dip for intermediate realizations. We propose a theoretical framework in which the value of costly attention to environmental conditions depends on the perceived stability of the environment, prior beliefs about which are shaped through cultural transmission by the experience of ethnic ancestors. The U-shape is rationalized by a double purpose of learning about the environment: optimal utilization of typical conditions and protection against extreme events.

Together, these three studies show that individual outcomes are deeply shaped by the social, familial and historical networks in which people are embedded. Understanding how these connections mediate policy effects—whether through peer spillovers, family dynamics, or cultural inheritance—is critical not only for generating immediate impact, but also for enabling enduring change across generations. Policies designed with these interdependencies in mind are better positioned to create outcomes that are both effective and sustained.