Matching Items (20)
Description
This dissertation consists of three essays on education and macroeconomics. The first chapter analyzes whether public education financing systems can account for large differences among developed countries in earnings inequality and intergenerational earnings persistence. I first document facts about public education in the U.S. and Norway, which provide an interesting case study because they have very different earnings distributions and public education systems. An overlapping generations model is calibrated to match U.S. data, and tax and public education spending functions are estimated for each country. The benchmark exercise finds that taxes and public education spending account for about 15% of differences in earnings inequality and 10% of differences in intergenerational earnings persistence between the U.S. and Norway. Differences in private education spending and early childhood education investments are also shown to be quantitatively important. The second chapter develops a life-cycle model to study increases in college completion and average ability of college students born from 1900 to 1972. The model is disciplined with new historical data on real college costs from printed government surveys. I find that increases in college completion for 1900 to 1950 cohorts are due primarily to changes in college costs, which generate large endogenous increases in college enrollment. Additionally, I find strong evidence that post-1950 cohorts under-predicted large increases in the college earnings premium. Modifying the model to restrict perfect foresight of the education premia generates a slowdown in college completion consistent with empirical evidence for post-1950 cohorts. Lastly, I find that increased sorting of students by ability can be accounted for by increasingly precise ability signals over time. The third chapter assesses how structural transformation is affected by sectoral differences in labor-augmenting technological progress, capital intensity, and capital-labor substitutability. CES production functions are estimated for agriculture, manufacturing, and services on post-war U.S. data. I find that sectoral differences in labor-augmenting technological progress are the dominant force behind changes in sectoral labor and relative prices. Therefore, Cobb-Douglas production functions with labor-augmenting technological change capture the main technological forces behind post-war U.S. structural transformation.
ContributorsHerrington, Christopher (Author) / Prescott, Edward C. (Thesis advisor) / Ventura, Gustavo (Thesis advisor) / Herrendorf, Berthold (Committee member) / Schoellman, Todd (Committee member) / Arizona State University (Publisher)
Created2013
Description
These essays attempt to explore how technological change, technology diffusion and economic distortions shape the aggregate economy. The first chapter empirically documents that wage inequality within the group of skilled workers in the U.S. has significantly widened since 2000 and that the changing trend of wage inequality was entirely driven by the non-routine analytic occupation. The model I build demonstrates that the task allocation induced by investment- specific technical change can widen the within-group wage inequality because of the “composition effect”. The quantitative results provide a well-matched timing and magnitude of the non-linear expansion path in wage inequality that is observed in the data. In chapter two I explore the role human capital plays in the convergence of Asian growth miracles. I incorporate the idea that education could facilitate technology diffusion into a growth framework by developing a model of human capital investment, adding a role for human capital in the convergence of productivities towards the technology frontier. I then calibrate my model to the South Korea between 1960 and 2019. My model can remarkably match the ‘S Shaped’ convergence trajectory in South Korea well. More importantly, the quantitative exercises demonstrate that a significant extent of the externality is required to match the transition path of output in South Korea. A series of quantitative experiments suggest that if the externality is removed from the model, then it cannot quantitatively match South Korea’s convergence pattern well. Chapter three documents a fact that that firms in developing economies face both financing constraints and face size-dependent distortions. The two distortions, however, affect firms in opposite ways. I build a model showing that the adverse effects associated with size-dependent distortions drastically reduce, and may even reverse, if firms also face financing constraints. This occurs because the misallocation effects of the two may offset each other. The quantitative analysis shows that size- dependent distortions estimated from data lead to up to 25 percent of output drop if they are implemented alone, but have virtually no effect on aggregate output in the presence of empirically relevant capital financing constraints.
ContributorsQian, Long (Author) / Ventura, Gustavo (Thesis advisor) / Brooks, Wyatt (Thesis advisor) / Vereshchagina, Galina (Committee member) / Arizona State University (Publisher)
Created2023
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
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
Description
This collection of essays attempts to address the question: how does recent technological progress shape inequality in the labor market? In the first chapter, I document and investigate life-cycle profiles of skill premiums across cohorts. My empirical analysis shows that younger cohorts have steeper growth in the skill premium before age 40 but flatter growth after 40. I use a human capital investment model to account for the cross-cohort variation in skill premium profiles. The results indicate that the flattened growth after age 40 is caused by the drop in human capital (of high-skill workers) near the end of the life cycle. Besides, the magnitude of life-cycle growth in the skill premium is mainly driven by the relative skill price. In chapter two and three, I study how technology usage affects earnings growth and earnings inequality over the life-cycle. In chapter 2, I construct a novel index to identify technology usage at the individual level using occupations as the proxy. I document technology usage patterns over the life-cycle and investigate its empirical relationship with labor earnings. I find that technology usage accounts for more than one-third of the growth in life-cycle inequality. In chapter 3, I develop a life-cycle model with endogenous human capital investments and technology choices to quantify the relative importance of technology usage. The model features rich interactions between technology and human capital such that workers with high human capital are more likely to work with advanced technologies and vice versa. I find that technology usage contributes 31% of the growth in mean earnings and 46% of the growth in life-cycle inequality. I also evaluate policy implications of non-linear taxation on labor earnings. When tax progressivity on labor earnings is changed from US to European levels, the college attainment rate drops by 7 percentage points, and the growth in mean earnings decreases by 23%.
ContributorsShi, Siyu (Author) / Ventura, Gustavo (Thesis advisor) / Bick, Alexander (Committee member) / Kovrijnykh, Natalia (Committee member) / Arizona State University (Publisher)
Created2023
Description
This collection of essays attempts to address the question: what are the main driving forces of the recent changes in entrepreneurship and business dynamics in the US? In the first chapter, I examine changes within businesses in the US by showing that the share of value added by pass-through entities (sole proprietorships, partnerships, LLCs, and S-corporations) almost doubled while that of C-corporations has declined by one-forth. During this period, there have been notable changes in the tax structure and tax avoidance within these entities. I develop a dynamic growth model with endogenous tax avoidance, occupation choice, and uninsurable entrepreneurial risk to study the extent to which changes in taxation can account for the observed reallocation of output. My model results show that changes in tax structure account for 14 percent of the reallocation of output share observed in the US. I also find that the cumulative effect of changes in taxation, borrowing ability, and tax avoidance accounts for about 26 percent of the reallocation of output. In Chapter 2, I examine a different perspective on business dynamics by documenting the decline in business formation and entrepreneurship in the US. In fact, I document that entrepreneurship is more prevalent in married households and amongmen, and that these groups have undergone a greater decline in entrepreneurship since the 1980s. Additionally, I document that changes in the number of married households and the increase in female labor force participation account for over 40 percent of the overall fall in entrepreneurship in this period. To understand the relationship between demographic composition factors and entrepreneurship, I develop a model with an occupation choice for individuals of different marital status, college skills, and gender. The model takes into account important features of the data, including the extent of marital sorting, the skill premium, the gender wage gap, and the gender business income gap. My results indicate that changes in the demographic composition (share of married households, fraction of skilled individuals, marital sorting) account for 76% of the decline in entrepreneurship, 68.4% of the fall in married entrepreneurs, and 70.5% of the decrease in male entrepreneurs. Moreover, considering all changes account for 82.8% of the observed fall in entrepreneurship.
ContributorsDemir, Mehmet Tayyip (Author) / Ventura, Gustavo (Thesis advisor) / Vereshchagina, Galina (Committee member) / Ferraro, Domenico (Committee member) / Arizona State University (Publisher)
Created2024
Description
This dissertation consists in two chapters. In the first chapter I collected and digitized historical tax records from the Spanish colonial regime in Ecuador to estimate the long-run effects of a forced labor institution called concertaje on today’s economic performance. This institution allowed landlords to retain indigenous workers due to unpaid debts, and forced them to work as peasants in rural estates known as haciendas. In order to identify the causal effects of concertaje, I exploit variation in its intensity caused by differences in labor requirements from the crops a region could grow. I first report that an increase in 10 percentage points in concertaje rates is associated with a 6 percentage points increase in contemporary poverty. I then explore several channels of persistence. Districts with higher concertaje rates have been historically associated with higher illiteracy rates, lower school enrollment, and populations with fewer years of education. I also report that concertaje is associated with a higher fraction of people working nowadays in the agricultural sector.
In the second chapter I use administrative data on the ownership, management, and taxes for the universe of all firms in Ecuador to study the role of family management in firm dynamics and its implications for aggregate productivity. A novel finding I document is that family-managed firms grow half as quickly as externally-managed firms. This growth differential implies that family-managed firms account for half of employment, despite comprising 80% of firms. I construct a general equilibrium model of firm dynamics that is consistent with these facts. Entrepreneurs choose whether to utilize family members as managers or hire external managers. External managers allow firms to scale up production, but their efficiency is a affected due to contractual frictions. Changes in the contractual environment that lead to a drop in the presence of family-managed firms by half could increase output on the order of 6%, as firms that abandon family management enjoy rapid growth.
In the second chapter I use administrative data on the ownership, management, and taxes for the universe of all firms in Ecuador to study the role of family management in firm dynamics and its implications for aggregate productivity. A novel finding I document is that family-managed firms grow half as quickly as externally-managed firms. This growth differential implies that family-managed firms account for half of employment, despite comprising 80% of firms. I construct a general equilibrium model of firm dynamics that is consistent with these facts. Entrepreneurs choose whether to utilize family members as managers or hire external managers. External managers allow firms to scale up production, but their efficiency is a affected due to contractual frictions. Changes in the contractual environment that lead to a drop in the presence of family-managed firms by half could increase output on the order of 6%, as firms that abandon family management enjoy rapid growth.
ContributorsRivadeneira Acosta, Alex Pierre (Author) / Ventura, Gustavo (Thesis advisor) / Vereshchagina, Galina (Committee member) / Schoellman, Todd (Committee member) / Arizona State University (Publisher)
Created2019
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