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201237 https://hdl.handle.net/2286/R.2.N.201237 http://rightsstatements.org/vocab/InC/1.0/ All Rights Reserved 2025 238 pages Doctoral Dissertation Academic theses en Merkle, Matthew Chade, Hector Kostøl, Andreas Ventura, Gustavo Arizona State University Partial requirement for: Ph.D., Arizona State University, 2025 Field of study: Economics Over the last 40 years, wage inequality has increased substantially while labor market fluidity has decreased. My dissertation studies how worker mobility and earnings dynamics interact, and how this interaction affects workers’ labor market outcomes, behavior, and welfare. Chapter 1 studies how the responsiveness of wages to changes in firm profitability differs with workers’ tenure in Norway and what role differences in workers’ potential mobility plays in explaining this result. I find that the responsiveness of wages declines by approximately 50 percent across 20 years of tenure and that this decline cannot be explained by selection on observable characteristics. I develop and estimate a structural model with firm-specific human capital, on-the-job search, bargaining over match surplus, and firm-level shocks to productivity and find that differences in workers’ potential mobility by tenure can account for approximately 20 percent of the observed decline in responsiveness. Chapter 2 assesses how self-insurance through job mobility affects the economic costs of employer shutdowns and the results of traditional layoff regressions. Using random assignment of bankruptcy judges as an instrument for employer shutdown and administrative data on petition and quit dates, I examine how the earnings costs of employer shutdown are shaped by worker reallocation. I estimate a job-search model where workers learn about layoff risk and face different local labor market conditions and find that self-insurance through job mobility reduces welfare costs by 12 percent but increases measured earnings losses from traditional layoff regressions by 10 percent. Chapter 3 shows theoretically that hours constraints can induce workers to stop working mid-year as their cumulative taxable income approaches new tax brackets and develops an approach that identifies the intertemporal extensive margin response non-parametrically using data on monthly work decisions and cumulative income. I apply this approach to annual kinks and monthly earnings data in the Norwegian tax and transfer system and find that the labor force participation elasticity is 0.8 for low-earners but less than 0.1 for high-earners. I relate the missing mass of work to excess mass of year-end earnings at the kink and find that 60% of optimizing low-earners are subject to hours constraints. Labor Economics Economics Earnings Dynamics On-the-Job Search Rent-Sharing Tax and Transfer System Worker Mobility Essays on Worker Mobility and Earnings Dynamics