ASU Electronic Theses and Dissertations
This collection includes most of the ASU Theses and Dissertations from 2011 to present. ASU Theses and Dissertations are available in downloadable PDF format; however, a small percentage of items are under embargo. Information about the dissertations/theses includes degree information, committee members, an abstract, supporting data or media.
In addition to the electronic theses found in the ASU Digital Repository, ASU Theses and Dissertations can be found in the ASU Library Catalog.
Dissertations and Theses granted by Arizona State University are archived and made available through a joint effort of the ASU Graduate College and the ASU Libraries. For more information or questions about this collection contact or visit the Digital Repository ETD Library Guide or contact the ASU Graduate College at gradformat@asu.edu.
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Description
This dissertation studies two wide ranging phenomena and their socio-economic impacts: urban divergence in terms of geographical skill sorting and fast rising housing prices. The first essay explores the empirical pattern as well as the driving forces behind the American cities’ diverging path over the past forty years. Compared to the rest of the U.S. cities, the top 20 largest cities have been growing faster in several aspects, such as city-average wage, housing price, and measured innovation intensity (e.g., patents, venture capital). In addition, this geographical divergence has contributed substantially to the rising inequality in America. To explore the causes of this divergence, this paper constructs a spatial sorting model where entrepreneurs with different talents can freely move across cities. The key idea is that cities with advantages in innovation attract more productive entrepreneurs and more workers, thereby driving up wages and housing prices. Two things distinguish my models from others: 1. Large cities are having endogenous innovation advantage in equilibrium; 2. I can freely explore the driving forces behind the divergence, with an emphasis on how technology changes can reinforce the spatial sorting mechanism. Specifically, three types of technological changes have increased the benefits of skill clustering in innovative cities: general productivity increases; improvements in communications technologies; and declines in trade costs.
The second essay studies how heterogeneous households respond to the fast rising housing prices through their life-cycle behaviors. Chinese housing market has been undergoing a rapid booming period since 1998, causing the house prices increasing significantly. As a result, households endured severe financial burdens to buy homes at price-to-income ratios of around six. Along with the rising house prices, household savings rate has been increasing consistently since 1998. Can the rising house prices be an important factor to explain the increase in household saving rate? This paper develops a life cycle dynastic model with endogenous choice on housing, coresidence and intergenerational transfer, then quantitatively analyze the effect of housing price on household saving. It shows that housing is an important motive for saving, and it accounts for about 35% of the increase in household savings rate. The housing situation affects households’ saving behavior through three channels. First, households are financially constrained due to the down payment requirement and they choose to limit their consumption in order to buy houses. Second, young adults live in their parents’ houses for a long time and save more intensively, since they get to pay less for the housing expenses under coresidence. Thirdly, older parents make large sum of intergeneration transfer in aid of the children’s housing purchase, indicating the housing affordability issue also has influence on old parents’ saving decisions.
The second essay studies how heterogeneous households respond to the fast rising housing prices through their life-cycle behaviors. Chinese housing market has been undergoing a rapid booming period since 1998, causing the house prices increasing significantly. As a result, households endured severe financial burdens to buy homes at price-to-income ratios of around six. Along with the rising house prices, household savings rate has been increasing consistently since 1998. Can the rising house prices be an important factor to explain the increase in household saving rate? This paper develops a life cycle dynastic model with endogenous choice on housing, coresidence and intergenerational transfer, then quantitatively analyze the effect of housing price on household saving. It shows that housing is an important motive for saving, and it accounts for about 35% of the increase in household savings rate. The housing situation affects households’ saving behavior through three channels. First, households are financially constrained due to the down payment requirement and they choose to limit their consumption in order to buy houses. Second, young adults live in their parents’ houses for a long time and save more intensively, since they get to pay less for the housing expenses under coresidence. Thirdly, older parents make large sum of intergeneration transfer in aid of the children’s housing purchase, indicating the housing affordability issue also has influence on old parents’ saving decisions.
ContributorsSun, Minjuan (Author) / Schoellman, Todd (Thesis advisor) / Ventura, Gustavo (Committee member) / Vereshchagina, Galina (Committee member) / Arizona State University (Publisher)
Created2018
Description
This dissertation focuses on consequences of public policy on consumption responses.
Chapter 1 evaluates the effect of Thailand's car tax rebate scheme in 2012 on household consumption by examining aggregate and administrative data. Car sales doubled during the policy and dramatically declined afterwards while domestic household spending was sluggish following the policy, suggesting a substantial dampening effect of the policy on future household consumption.
Chapter 2 develops a formal model to evaluate Thai household consumption responses. A life-cycle model of consumption and saving is developed with features including uninsured income risks, liquidity constraints, durable goods with embedded adjustment costs and non-homothetic preference in durable goods. Adjustment costs and liquidity constraints are important frictions in the evaluation of the shorter-term responses to changes in relative prices, while non-homotheticity captures the income effect given that cars are luxury goods in the Thai economy context. Key parameters and the partial equilibrium responses, which are key inputs to inform the aggregate outcome of the policy, are estimated. The results show that the car-tax rebates had a sizable impact on slowing Thai household consumption following the policy due to high level of elasticity of intertemporal substitution among Thai households.
Chapter 3 examines the effect of public smoking bans in the EU countries. Using individual-level data, this chapter investigates whether nationwide smoke-free laws in Europe lead to higher smoking reduction and cessation rates among mature smokers. Exploiting the different timing in imposing smoking ban laws and using a difference-in-differences approach, I find that light smokers and heavy smokers were more likely to quit smoking after comprehensive bans were in place while there was no significant effect on average smokers. The results confirm that smoking bans, particularly when enforced more strictly and comprehensively, lead to higher smoking cessation rates even among mature smokers with well-established addiction.
Chapter 1 evaluates the effect of Thailand's car tax rebate scheme in 2012 on household consumption by examining aggregate and administrative data. Car sales doubled during the policy and dramatically declined afterwards while domestic household spending was sluggish following the policy, suggesting a substantial dampening effect of the policy on future household consumption.
Chapter 2 develops a formal model to evaluate Thai household consumption responses. A life-cycle model of consumption and saving is developed with features including uninsured income risks, liquidity constraints, durable goods with embedded adjustment costs and non-homothetic preference in durable goods. Adjustment costs and liquidity constraints are important frictions in the evaluation of the shorter-term responses to changes in relative prices, while non-homotheticity captures the income effect given that cars are luxury goods in the Thai economy context. Key parameters and the partial equilibrium responses, which are key inputs to inform the aggregate outcome of the policy, are estimated. The results show that the car-tax rebates had a sizable impact on slowing Thai household consumption following the policy due to high level of elasticity of intertemporal substitution among Thai households.
Chapter 3 examines the effect of public smoking bans in the EU countries. Using individual-level data, this chapter investigates whether nationwide smoke-free laws in Europe lead to higher smoking reduction and cessation rates among mature smokers. Exploiting the different timing in imposing smoking ban laws and using a difference-in-differences approach, I find that light smokers and heavy smokers were more likely to quit smoking after comprehensive bans were in place while there was no significant effect on average smokers. The results confirm that smoking bans, particularly when enforced more strictly and comprehensively, lead to higher smoking cessation rates even among mature smokers with well-established addiction.
ContributorsTawichsri, Tanisa (Author) / Silverman, Daniel (Thesis advisor) / Kuminoff, Nicolai (Committee member) / Ventura, Gustavo (Committee member) / Arizona State University (Publisher)
Created2018
Description
This dissertation consists of three essays on modern economic growth and structural transformation, in particular touching on the reallocation of labor across industries, occupations, and employment statuses.
The first chapter investigates the quantitative importance of non-employment in the labor market outcomes for the United States. During the last 50 years, production has shifted from goods to services. In terms of occupations, the routine employment share decreased, giving way to increases in manual and abstract ones. These two patterns are related, and lower non-employment had an important role. A labor allocation model where goods, market services, and home services use different tasks as inputs is used for quantitative exercises. These show that non-employment could significantly slow down polarization and structural transformation, and induce significant displacement within the labor force.
The second chapter, coauthored with Bart Hobijn and Todd Schoellman, looks at the demographic structure of structural transformation. More than half of labor reallocation during structural transformation is due to new cohorts disproportionately entering growing industries. This suggests substantial costs to labor reallocation. A model of overlapping generations with life-cycle career choice under switching costs and structural transformation is studied. Switching costs accelerate structural transformation, since forward-looking workers enter growing industries in anticipation of future wage growth. Most of the impact of switching costs shows on relative wages.
The third chapter establishes that job polarization is a global phenomenon. The analysis of polarization is extended from a group of developed countries to a sample of 119 economies. At all levels of development, employment shares in routine occupations have decreased since the 1980s. This suggests that routine occupations are becoming increasingly obsolete throughout the world, rather than being outsourced to developing countries. A development accounting framework with technical change at the \textit{task} level is proposed. This allows to quantify and extrapolate task-specific productivity levels. Recent technological change is biased against routine occupations and in favor of manual occupations. This implies that in the following decades, world polarization will continue: employment in routine occupations will decrease, and the reallocation will happen mostly from routine to manual occupations, rather than to abstract ones.
The first chapter investigates the quantitative importance of non-employment in the labor market outcomes for the United States. During the last 50 years, production has shifted from goods to services. In terms of occupations, the routine employment share decreased, giving way to increases in manual and abstract ones. These two patterns are related, and lower non-employment had an important role. A labor allocation model where goods, market services, and home services use different tasks as inputs is used for quantitative exercises. These show that non-employment could significantly slow down polarization and structural transformation, and induce significant displacement within the labor force.
The second chapter, coauthored with Bart Hobijn and Todd Schoellman, looks at the demographic structure of structural transformation. More than half of labor reallocation during structural transformation is due to new cohorts disproportionately entering growing industries. This suggests substantial costs to labor reallocation. A model of overlapping generations with life-cycle career choice under switching costs and structural transformation is studied. Switching costs accelerate structural transformation, since forward-looking workers enter growing industries in anticipation of future wage growth. Most of the impact of switching costs shows on relative wages.
The third chapter establishes that job polarization is a global phenomenon. The analysis of polarization is extended from a group of developed countries to a sample of 119 economies. At all levels of development, employment shares in routine occupations have decreased since the 1980s. This suggests that routine occupations are becoming increasingly obsolete throughout the world, rather than being outsourced to developing countries. A development accounting framework with technical change at the \textit{task} level is proposed. This allows to quantify and extrapolate task-specific productivity levels. Recent technological change is biased against routine occupations and in favor of manual occupations. This implies that in the following decades, world polarization will continue: employment in routine occupations will decrease, and the reallocation will happen mostly from routine to manual occupations, rather than to abstract ones.
ContributorsVindas Quesada, Alberto José (Author) / Hobijn, Bart (Thesis advisor) / Bick, Alexander (Committee member) / Ventura, Gustavo (Committee member) / Arizona State University (Publisher)
Created2019
Description
This dissertation consists of two essays that deal with the development of open developing economies. These economies have experienced drastic divergence in terms of economic growth from the 1970s through the 2010s. One important feature of those countries that have lagged behind is their failure to build up their domestic innovation capacity.
Abstract The first chapter discusses the policies that may have an impact on the long-run innovation capacity of developing economies. The existing literature emphasizes that the backward linkage of foreign-owned firms is a key to determining whether FDI is beneficial or detrimental to a domestic economy. However, little empirical evidence has shown which aspects of FDI policies lead to a strong backward linkage between foreign-owned and domestic firms. This paper focuses on the foreign ownership structure of these foreign-owned firms. I show that joint ventures (i.e, firms with 1%-99% foreign share) have stronger backward linkages than MNC affiliates (i.e, firms with 100% foreign share) with domestic firms. I also find that the differences in backward linkages are strong enough to translate into a positive correlation between domestic innovation and the density of joint ventures and a negative correlation between domestic innovation and the density of MNC affiliates. Finally, I find that the channel through which foreign ownership structure affects domestic innovation raises innovation TFP in domestic firms. My results suggest that policies that affect the foreign ownership structure of foreign-owned firms could have a persistent effect on domestic innovation because they shift the comparative advantage of an developing economy towards the innovation sector in the long run.
Abstract The second chapter provides a unified theory to study what causes the divergence in economic growth of developing economies and how the innovation sector emerges in the developing countries. I show that open developing economies become trapped at the middle-income level because they tend not to specialize in sectors that generate spillover or factor accumulation (the innovation sector). Using a dynamic Heckscher-Ohlin (H-O) model, I show that the fast growth of developing economies tends to end before they can fully catch up with the developed world, and the innovation sector will not operate in the developing countries. However, the successful growth stories of Korea and Taiwan challenge this view. In order to explore the economic miracle that happened in Korea and Taiwan, I generalize a dynamic Heckscher-Ohlin (H-O) model by introducing technology adoption and explore how it generates spillovers to domestic innovation. I show that countries with policies that encourage technology adoption will benefit most from FDI: in addition to the fact that foreign technology raises productivity in the host country, the demand for skilled labor to adopt these technologies raises the education level in equilibrium, which benefits domestic innovation and leads to catch-up in the long run.
Abstract The first chapter discusses the policies that may have an impact on the long-run innovation capacity of developing economies. The existing literature emphasizes that the backward linkage of foreign-owned firms is a key to determining whether FDI is beneficial or detrimental to a domestic economy. However, little empirical evidence has shown which aspects of FDI policies lead to a strong backward linkage between foreign-owned and domestic firms. This paper focuses on the foreign ownership structure of these foreign-owned firms. I show that joint ventures (i.e, firms with 1%-99% foreign share) have stronger backward linkages than MNC affiliates (i.e, firms with 100% foreign share) with domestic firms. I also find that the differences in backward linkages are strong enough to translate into a positive correlation between domestic innovation and the density of joint ventures and a negative correlation between domestic innovation and the density of MNC affiliates. Finally, I find that the channel through which foreign ownership structure affects domestic innovation raises innovation TFP in domestic firms. My results suggest that policies that affect the foreign ownership structure of foreign-owned firms could have a persistent effect on domestic innovation because they shift the comparative advantage of an developing economy towards the innovation sector in the long run.
Abstract The second chapter provides a unified theory to study what causes the divergence in economic growth of developing economies and how the innovation sector emerges in the developing countries. I show that open developing economies become trapped at the middle-income level because they tend not to specialize in sectors that generate spillover or factor accumulation (the innovation sector). Using a dynamic Heckscher-Ohlin (H-O) model, I show that the fast growth of developing economies tends to end before they can fully catch up with the developed world, and the innovation sector will not operate in the developing countries. However, the successful growth stories of Korea and Taiwan challenge this view. In order to explore the economic miracle that happened in Korea and Taiwan, I generalize a dynamic Heckscher-Ohlin (H-O) model by introducing technology adoption and explore how it generates spillovers to domestic innovation. I show that countries with policies that encourage technology adoption will benefit most from FDI: in addition to the fact that foreign technology raises productivity in the host country, the demand for skilled labor to adopt these technologies raises the education level in equilibrium, which benefits domestic innovation and leads to catch-up in the long run.
ContributorsGe, Zhizhuang (Author) / Vereshchagina, Galina (Thesis advisor) / Schoellman, Todd (Committee member) / Ventura, Gustavo (Committee member) / Arizona State University (Publisher)
Created2015
Description
This dissertation consists of two chapters. Chapter one studies distortionary effects of tax exemption of employer-sponsored health insurance (ESHI) premiums. First, I argue that, in the competitive labor market, tax deductibility of ESHI premiums generates an implicit labor cost subsidy to the employers sponsoring health insurance (HI) which distorts the allocation of labor across employers. Second, I quantify the extent of this misallocation measured as output loss in a general equilibrium model of firm dynamics extended to incorporate tax exemption of ESHI premiums and endogenous provision of HI by the employers. The calibrated model shows that elimination of tax exemption increases aggregate output by 1.73%. About two-thirds of this effect comes from removing the misallocation of labor across existing establishments, and the remaining one-third comes from the increase in the number of operating establishments. Third, I use the model to analyze how tax exemption interacts with the employer mandate of the Affordable Care Act imposing a tax on large employers not sponsoring HI. Quantitative results show that implementing the employer mandate when the tax exemption is present reduces output by 0.13%.
Chapter two studies macroeconomic implications of a higher cost of health services faced by the unemployed which arise because 1) workers lose access to ESHI when they leave their jobs and 2) the uninsured face inflated health care prices. First, I provide evidence suggesting that the cost of health services for the privately insured is about 50% lower than for the uninsured. Second, I quantify the effects of higher cost of health services for the unemployed in the Lucas and Prescott (1974) island model extended to allow the workers to pay an extra cost of health services contingent on their employment status. Calibration procedure uses the differences between costs of health services for the privately insured and uninsured inferred from the data as a gap between costs of health services for the employed and unemployed. Quantitative results show that equalizing these costs across workers increases labor productivity by 1.2% and unemployment rate by 1.5 percentage points. The increased unemployment dominates quantitatively leading to a decrease in aggregate output by 0.26%.
Chapter two studies macroeconomic implications of a higher cost of health services faced by the unemployed which arise because 1) workers lose access to ESHI when they leave their jobs and 2) the uninsured face inflated health care prices. First, I provide evidence suggesting that the cost of health services for the privately insured is about 50% lower than for the uninsured. Second, I quantify the effects of higher cost of health services for the unemployed in the Lucas and Prescott (1974) island model extended to allow the workers to pay an extra cost of health services contingent on their employment status. Calibration procedure uses the differences between costs of health services for the privately insured and uninsured inferred from the data as a gap between costs of health services for the employed and unemployed. Quantitative results show that equalizing these costs across workers increases labor productivity by 1.2% and unemployment rate by 1.5 percentage points. The increased unemployment dominates quantitatively leading to a decrease in aggregate output by 0.26%.
ContributorsKrukava, Nastassia (Author) / Vereshchagina, Galina (Thesis advisor) / Herrendorf, Berthold (Committee member) / Ventura, Gustavo (Committee member) / Arizona State University (Publisher)
Created2017
Description
The welfare consequences of price versus quantity-based regulation are known to differ when information about marginal benefits or costs of abatement is imperfect. Does uncertainty about demand for the polluting good also matter for welfare of these two approaches to regulation? In chapter 1, I use plant-level survey data and high frequency variation in power consumption to assess the dynamic implications of uncertainty about future demand for the relative welfare consequences of carbon taxes and cap-and-trade regulation. I address this question in the context of the electricity sector where demand risk is particularly salient. I show that the choice between policy instruments depends on how firms and consumers balance unpredictable output volatility (higher with carbon taxes) vs. price volatility (higher with cap-and-trade regulation). Over a wide range of policy-relevant abatement targets, I find carbon taxes outperform cap-and-trade in terms of welfare. Financial incentives like the Production Tax Credit are central initiatives behind wind power as the leading renewable energy source in the U.S. But do institutional design features of energy markets matter for cost-effectiveness of subsidies to wind investments? In chapter 2, I answer this question by investigating how the design of procurement contracts that are typically used by wind developers affects their investment incentives. Using unit-level data from wind farm production and installed capacity, I find that structuring subsidies based on key features of the type of procurement contracts associated to wind projects leads to major reductions in public expenditures in terms of subsidy payments to wind developers without undermining their investment incentives. The U.S. federal government is known to have a history of heavily subsidizing the wind power industry. Subsidies either to output (Production Tax Credit) or investment goods (Investment Tax Credit) have been critical to replace emissions-intensive technologies with wind power. Which type of subsidy is best to incentivize wind investments at the least cost? In chapter 3, I use plant-level data of wind facilities from the Texas electricity market to develop and estimate a model of investment decisions that accounts for productivity shocks at the wind farm level and prudent behavior of developers. I find that subsidizing production can increase average yearly investment rates in wind capacity up to 2.5 percentage points over mean investment rates under alternative subsidies to capital. This is driven by precautionary savings that developers accumulate to smooth out potential future shocks to investment income when adverse weather conditions lead to low subsidy payments.
ContributorsGómez Trejos, Felipe Alberto (Author) / Silverman, Daniel (Thesis advisor) / Fried, Stephie (Committee member) / Ventura, Gustavo (Committee member) / Kuminoff, Nicolai (Committee member) / Arizona State University (Publisher)
Created2023
Description
The demographic transition from high birth to low birth is a fundamental process that countries undertake. It can create substantial challenges for economic growth and social policy by straining public finance. This dissertation explores the sources of low fertility and examines the effects of government policies that aim to affect fertility behavior.In the first chapter, I use a static model of fertility choices to estimate to what extent different factors contribute to low fertility in South Korea and examine the effects of child-related policies on fertility. In the model, two key factors affect fer- tility choices: the minimum consumption level required to have a child and women’s opportunity cost of raising children. The model is calibrated to match the fertility behavior of Korean women and used to examine the impact of lump-sum transfers and childcare subsidies on their fertility. I find that transfers to households per child are more cost-effective than child care subsidies. Transfers per child can reach the target fertility at a lower cost by targeting women who already have children and whose wage is sufficiently low to choose to have another child rather than work. In the case of child care subsidies, on the other hand, women who are childless or have one child and whose wage is sufficiently high to choose working over having a child are the most responsive to the policy. Thus, transfers can achieve the target fertility most cost-effectively by inducing higher-order fertility among relatively lower-wage women.
In the second chapter, I document the empirical relationships between homeown- ership and fertility in South Korea. First, there is a positive relationship between the home price and fertility among homeowners. A rise in home prices by 7,346,000 KRW, equivalent to 8734.94 USD in 2010, is associated with a 2.95% increase in the mean likelihood of giving birth. Second, for renters, the same increase in the local home price in the prior year is related to a 1.24% decrease in the mean likelihood of giving birth.
ContributorsJeong, Minju (Author) / Bick, Alexander (Thesis advisor) / Vereshchagina, Galina (Thesis advisor) / Ventura, Gustavo (Committee member) / Arizona State University (Publisher)
Created2022
Description
This dissertation consists of two chapters. The first chapter studies children's skill formation technology while endogenizing the maternal age and child investments. I estimate the effect of a mother's age at childbirth on her child's health, skill level, educational attainment, and adulthood earnings. There is a tradeoff between delaying childbirth to provide a more secure economic environment for mother and child versus the potential negative biological consequences for a child of having an older parent. I quantify this tradeoff. The results indicate that a five-year decrease in the maternal age of educated women, ceteris paribus, results in over 0.50 std increase in the child’s skill level due to an increase in the child’s ability to acquire skills. However, if one adjusts child investment according to individuals’ wage profile conditional on reduced maternal age, the average child’s skill level decreases by 0.07 std. This reduction in children’s skill highlights the impact of lower inputs that children of younger mothers receive. The negative effect of foregone wages may be reduced through policy approaches. My policy analysis indicates implementing a two-year maternity leave policy that freezes mothers’ wages at the level before childbirth would reduce average maternal age at the first birth by about two years, while also increasing the average child’s skill level by about 0.22 std and future earnings by over 6%.
In chapter two, I study the impact of females' perceptions regarding their future fertility behavior on their human capital investments and labor market outcomes. I exploit a natural experiment to study the causal effect of fertility anticipation on individual's investments in human capital. I use the arguably exogenous variation in gender mix of children as an exogenous shock to the probability of further fertility. I document that having two children of the same gender is associated with about 5% lower wages for the mother compared to having two children of the opposite sexes. Mothers with same-sex children perceive themselves as more likely to bear one more child, and so less attached to the labor market, so invest less in human capital, and this is reflected in wages today.
In chapter two, I study the impact of females' perceptions regarding their future fertility behavior on their human capital investments and labor market outcomes. I exploit a natural experiment to study the causal effect of fertility anticipation on individual's investments in human capital. I use the arguably exogenous variation in gender mix of children as an exogenous shock to the probability of further fertility. I document that having two children of the same gender is associated with about 5% lower wages for the mother compared to having two children of the opposite sexes. Mothers with same-sex children perceive themselves as more likely to bear one more child, and so less attached to the labor market, so invest less in human capital, and this is reflected in wages today.
ContributorsEshaghnia, Seyed Mohammad Sadegh (Author) / Zafar, Basit (Thesis advisor) / Aucejo, Esteban (Thesis advisor) / Wiswall, Matthew (Committee member) / Ventura, Gustavo (Committee member) / Arizona State University (Publisher)
Created2019
Description
This dissertation consists of three essays on the task approach to labor markets. In the first chapter, I document that since 2000 the polarization of wages in the U.S. labor market stopped, as the wages of non-routine manual occupations fell in relative and absolute terms. I analyze the end of wage polarization through the lens of a dynamic general equilibrium model with occupation-biased technical change, human capital accumulation, and occupational mobility. I show that wage polarization ended because workers in non-routine manual occupations had lower initial human capital and lower human capital accumulation over time, and because after 2000 mobility across occupations fell, which magnified the differences in human capital accumulation across occupations. The second chapter estimates the effect of the import competition from China on the intensity of tasks performed by workers within U.S. manufacturing establishments between 2002 and 2017. I measure the changes in the intensity of these tasks by linking information on occupational employment from the Occupational Employment Statistics to the occupational characteristics from the Occupational Information Network (O*NET). I find that this “China shock” led establishments to significantly decrease the intensity of cognitive and interpersonal tasks, and to increase the intensity of manual and routine tasks. These estimations are consistent with US establishments reallocating employment to become more similar to their Chinese competitors and have important implications for the design of public policies. The third chapter explores the importance of changes in the intensity of tasks performed by workers to explain the evolution of wages. Despite changes in the workplace, the literature is based on the questionable assumption that the intensity of tasks remains constant over time. I harmonize and compare over time the intensity of non-routine cognitive, non-routine manual, interpersonal, and routine tasks in the Dictionary of Occupation Title (DOT) and the O*NET. I find the new fact that a sizable part of wage changes is due to increases in the return and the intensity of cognitive tasks. I show that this fact has implications for three well-documented wage trends during the last decades: wage polarization, increasing college premium, decreasing gender-wage gap.
ContributorsGarcia-Couto, Santiago (Author) / Herrendorf, Berthold (Thesis advisor) / Ventura, Gustavo (Committee member) / Ferraro, Domenico (Committee member) / Arizona State University (Publisher)
Created2021
Description
A central concern for modern macroeconomics is incorporating and understanding worker heterogeneity. The following two essays explore labor market dynamics along the dimensions of worker heterogeneity, search frictions, and policy. In each essay, I construct a macroeconomic model of the labor market, calibrate the model using micro data, and use the model to interpret labor market outcomes and evaluate policy. In the first chapter, I build an equilibrium lifecycle model of wages in which heterogeneous workers endogenously invest in human capital accumulation and on-the-job search effort while firms post jobs. I discipline the model using microdata from the Survey of Income and Program Participation. The calibrated model shows that on-the-job search drives lifecycle wage growth while heterogeneous human capital accumulation drives lifecycle wage dispersion. Then, I use the model as a laboratory to study the effects of tax and transfer progressivity. An increase in progressivity decreases wages, primarily due to reduced on-the-job search effort. Interactions between human capital, search, and job posting amplify the decrease in wages. Surprisingly, an increase in progressivity has little effect on wage dispersion because the effects from the human capital and search channels offset each other. The second chapter deals with the persistence of the unemployment rate over the business cycle. Standard search models contain little internal propagation and predict that, after shocks, the unemployment rate quickly converges to its steady state level. I show that duration dependence in unemployment (the fact that unemployed workers with longer unemployment spells are less likely to find jobs) helps explain the persistence of the unemployment rate. I embed duration dependence in an otherwise standard search model and show that it significantly increases the unemployment rate persistence, reconciling the model to the data. Intuitively, after recessions, the composition of the unemployment pool shifts to the long-term unemployed. Because of duration dependence, the long-term unemployed have lower job finding rates, and the shift in composition decreases the aggregate job finding rate, slowing recovery. The magnitude of the effect depends on the extent to which duration dependence is causal rather than a consequence of worker heterogeneity.
ContributorsMillington, Matthew John (Author) / Ferraro, Domenico (Thesis advisor) / Ventura, Gustavo (Committee member) / Chade, Hector (Committee member) / Arizona State University (Publisher)
Created2024