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Book Three Essays on Labor Market Inequality and Policy Implications in Search Models

Download or read book Three Essays on Labor Market Inequality and Policy Implications in Search Models written by Jun Lu and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Essays on Local Labor Markets

Download or read book Essays on Local Labor Markets written by Federica Daniele and published by . This book was released on 2018 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis is composed of three essays in which I analyze how heterogeneity in productivity, either on the worker or on the firm side, interacts with the size of local labor markets and a set of outcomes of interest. In the first chapter, I analyze how the presence of firm-level uncertainty affects consumers and cities. I provide evidence supporting entrepreneurial risk-seeking in the non-tradable sector and that this has the strongest consequences for competition in large cities. I show how a reduction in uncertainty dampened entry and competition, and reduced the attractiveness of consumer cities. In the second chapter, I analyze the role of large firms for local labor market volatility. I provide empirical and narrative evidence supporting the existence of granularity- driven business cycles. I discuss the im-portance of size-dependent policies with respect to the systemic risk externality imposed by large firms on the economy. In the third chapter, I analyze how indi-vidual specialization shapes the urban wage premium. I investigate to what extent changes in specialization have accounted for the divergence in US workers loca-tion choices. I show that the evolution of specialization can explain the increase in between-cities wage inequality for high-skilled workers, while it counteracted the increase in the average skill premium.

Book Essays in Expectation Driven Business Cycle and Wage Polarization

Download or read book Essays in Expectation Driven Business Cycle and Wage Polarization written by Quazi Fidia Farah and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation investigates two essential features of the US economy. First, it explores how news about future productivity changes business cycle fluctuations. Using the a representative agent model, it shows that implementation labor in workplace organization could be an important channel through which news about the fundamentals can realistically generate US business cycle fluctuations. Further this idea is extended using the perspective of sunspot fluctuations. In particular, the model can lead to multiple equilibria under specific parameterizations. Second, a general equilibrium model has been developed with heterogeneous agents to explain the wage polarization feature of the US labor market, particularly how the price of an important technology is connected to lifetime earnings of agents and affects their college decisions. The following summarizes the three chapters of my dissertation. The first chapter which I co-authored with Dr. Blankenau, argues that purchasing investment goods does not directly increase the productive capacity of a business. Changes in the business through the installation of capital, worker training, and workplace reorganization are often required. These changes themselves are not easily automated. Change requires workers. We build a model where investment requires a complementary labor input. This mechanism is embedded in a representative agent model with capacity utilization, adjustment costs, and separable preferences. We show that this environment can yield positive co-movement between consumption, investment, and labor hours when the economy experiences a news shock about future productivity, thus providing an additional channel through which news shocks can generate key business cycle features. The second chapter is an extension of the first chapter. I investigate the indeterminacy in a representative agent model with implementation labor and increasing returns in production. First, my analysis shows that a representative agent with implementation labor can exhibit increasing returns to scale. Then I show that self-fulfilling beliefs of agents lead to business cycle fluctuations in which multiple equilibria can arise under specific parameterizations. Specifically, implementation labor in the production of capital is the highly important, necessary condition for the self-fulling equilibrium outcome. The third chapter, which is also a joint work with Dr. Blankenau, discusses the wage polarization feature of the US labor market. We build a general equilibrium model with heterogeneous agents, showing how wage polarization can emerge when the price of computer capital falls. Consequently, we find the share of the population with a college degree decreases. Our findings are consistent with recent empirical data that show a U-shaped wage growth pattern in the US as well as a slower growth rate of college-educated workers despite the high returns of investing in education. In the model, we assume that each agent is born with a portfolio of skills. Specifically, each agent can provide manual labor, routine labor, and abstract labor and must decide how much of each to provide. An agent can increase efficiency in all types of labor by attending college. All three types of labor are valued in the labor market at an endogenously determined wage rate. Computer capital is a substitute for routine labor. As its price falls and its quantity increases, agents with a relative aptitude for routine labor no longer find it advantageous to attend college. Since routinization of tasks harms middle-income agents, the model has government policy implications for observed wage polarization.

Book Essays on Skill Biased Technological Change and Labor Market Inequality

Download or read book Essays on Skill Biased Technological Change and Labor Market Inequality written by Yiheng Huang and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Unequal We Stand

Download or read book Unequal We Stand written by Jonathan Heathcote and published by DIANE Publishing. This book was released on 2010-10 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: The authors conducted a systematic empirical study of cross-sectional inequality in the U.S., integrating data from various surveys. The authors follow the mapping suggested by the household budget constraint from individual wages to individual earnings, to household earnings, to disposable income, and, ultimately, to consumption and wealth. They document a continuous and sizable increase in wage inequality over the sample period. Changes in the distribution of hours worked sharpen the rise in earnings inequality before 1982, but mitigate its increase thereafter. Taxes and transfers compress the level of income inequality, especially at the bottom of the distribution, but have little effect on the overall trend. Charts and tables. This is a print-on-demand publication; it is not an original.

Book Causes and Consequences of Income Inequality

Download or read book Causes and Consequences of Income Inequality written by Ms.Era Dabla-Norris and published by International Monetary Fund. This book was released on 2015-06-15 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.

Book Three Essays on Labor Market Transitions

Download or read book Three Essays on Labor Market Transitions written by Huanan Xu and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Three Essays on Labor Indivisibility and the Business Cycle

Download or read book Three Essays on Labor Indivisibility and the Business Cycle written by Gary Duane Hansen and published by . This book was released on 1986 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Essays in Labor Market Inequality

Download or read book Essays in Labor Market Inequality written by Ariella Kahn-Lang and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Dissertation Abstracts International

Download or read book Dissertation Abstracts International written by and published by . This book was released on 2009-07 with total page 576 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Three essays on labor indivisibility and the business cycle

Download or read book Three essays on labor indivisibility and the business cycle written by Gary D. Hansen and published by . This book was released on 1988 with total page 115 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Essays in Quantitative Macroeconomics

Download or read book Essays in Quantitative Macroeconomics written by Philipp Grübener and published by . This book was released on 2021 with total page 191 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis contains four independent essays in heterogeneous agent macroeconomics. They explore the sources of income inequality and income risk and study the optimal design of public redistribution and insurance. The first chapter, joint with Filip Rozsypal, studies the origins of idiosyncratic earnings risk in frictional labor markets, with a particular focus on the role of firms for worker earnings risk. First, using administrative matched employer-employee data from Denmark, we document key properties of the worker earnings growth distribution, the firm revenue growth distribution, and their joint distribution. The worker earnings and firm revenue growth distributions exhibit strong deviations from normality, in particular excess kurtosis, with many workers and firms experiencing very small changes to their earnings/revenues, but a significant minority experiencing very large changes. Large earnings losses are more likely for workers in firms with negative revenue growth, driven both by separations to unemployment and earnings losses on the job. Second, we develop a model framework consistent with the data, with four key features: i) frictional labor markets and on the job search to capture unemployment risk and wage growth through a job ladder, ii) multi-worker firms to capture gross and net worker flows, iii) risk averse workers such that earnings risk matters, and iv) contracting with two-sided limited commitment because earnings of job stayers are changing infrequently in the data. Third, we use the model to explore policies designed to mitigate earnings fluctuations. The second chapter, joint with Annika Bacher and Lukas Nord, studies one particular private insurance margin against individual income risk only available to couples, which is the so called added worker effect. Specifically, we study how this intra-household insurance against individual job loss through increased spousal labor market participation varies over the life cycle. We show in U.S. data that the added worker effect is much stronger for young than for old households. A stochastic life cycle model of two-member households with job search in a frictional labor market is capable of replicating this finding. The model suggests that a lower added worker effect for the old is driven primarily by better insurance through asset holdings. Human capital differences between employed young and old contribute to the difference but are quantitatively less important, while differences in job arrival rates play a limited role. In the third chapter, joint with Axelle Ferriere, Gaston Navarro, and Oliko Vardishvili, we study optimal redistribution, taking into account not just the large income and wealth inequality in the data, but also the distribution of income risk that is key in the first two chapters. The U.S. fiscal system redistributes through a rich set of taxes and transfers, the latter accounting for a large part of the income of the poor. Motivated by this, we study the optimal joint design of transfers and income taxes. Within a simple heterogeneous-household framework, we derive analytical results on the optimal relationship between transfers and tax progressivity. Higher transfers are associated with lower optimal income tax progressivity. Redistribution is achieved with generous transfers while efficiency is preserved via a lower progressivity of income taxes. As such, the optimal tax-and-transfer system features larger progressivity of average than of marginal tax rates. We then quantify the optimal tax-and-transfer system in a rich incomplete-market model with realistic distributions of income, wealth, and income risk. The model features a novel flexible functional form for progressive income taxes and means-tested transfers. Relative to the current U.S. fiscal system, the optimal policy consists of more generous means-tested transfers, which phase-out at a slower rate. These larger transfers are financed with higher tax rates, but the taxes are not more progressive than the current system. The fourth chapter, joint with Axelle Ferriere and Dominik Sachs, also studies optimal redistribution, but instead of considering a stationary environment it analyzes the dynamics of the equity-efficiency trade-off along the growth path. To do so, we incorporate the optimal income taxation problem into a state-of-the-art multi-sector structural change general equilibrium model with non-homothetic preferences. We identify two key opposing forces. First, long-run productivity growth allows households to shift their consumption expenditures away from necessities. This implies a reduction in the dispersion of marginal utilities, and therefore calls for a welfare state that declines along the growth path. Yet, economic growth is also systematically associated with an increase in the skill premium, which raises inequality and the desire to redistribute. We quantitatively analyze these opposing forces for two countries: the U.S. from 1950 to 2010, and China from 1989 to 2009. Optimal redistribution decreases at early stages of development, as the role of non-homotheticities prevails. At later stages of development the rising income inequality dominates and the welfare state should become more generous.