Economics
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Item Essays On Labor Economics: Human Capital Risk And Labor Market Outcomes And Learning By Doing In Medicine(2006-06-06) Tristao, Ignez Miranda; Rust, John P.; Sanders, Seth; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation consists of two essays. In the first essay I show that there are substantial differences in unemployment durations and reemployment outcomes for workers coming from different occupations. I argue that this variation can be explained by differences in occupational employment risk, arising from two sources: (1) the diversification of occupational employment across industries; and (2) the volatility of industry employment fluctuations, including sectoral co-movements. I define and estimate a measure of occupational employment risk (OER), which I relate to unemployment durations and wage losses. My results indicate that unemployed workers in high employment risk occupations, as defined by the OER measure, have 5 percent lower hazard ratios of leaving unemployment to a job in the same occupation and have 5 percent higher wage losses upon reemployment than workers in low OER occupations. Among occupational switchers, workers in higher OER occupations have 11.5 percent higher wage losses than workers in lower OER occupations. In my second essay, I and my co-authors estimate the effect of physician's experience on health outcomes. It is a common belief that experience can improve the level of skills, which suggests that there may be some learning by doing with practice. Economists have tried to empirically determine the existence of learning by doing in the medical area, because of its important policy implications. However, it is difficult to define and measure health outcomes since they are affected by patient selection and underlying conditions, making it hard to disentangle learning by doing from other effects. In this paper, we use a 'clean-cut' medical procedure that allows us to overcome those confounding issues. We use refractive eye surgery, an operation with a well-defined eligibility criterion and objective measures of previous condition and posterior outcome, which depend minimally on post-surgical care. The data used in the study is a two-year longitudinal census of refractive surgery patients collected by us from individual patients' chart. We find that the learning is coming more from the improvement in the surgical center's ability to translate the surgical plan into the desired eyesight correction rather than from the accumulation of the physician experience.Item Labor Market Skill, Firms and Workers(2004-08-23) Nestoriak, Nicole; Haltiwanger, John C; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)The role of skilled labor in the modern economy and its importance in explaining trends in wage inequality and productivity has been a focus of a broad strand of research in economics. Labor is an input into production that is very different from capital or materials. One key difference is that workers must decide where they are going to live, and in making that decision, they thereby limit the opportunity set of jobs available to them. In turn, firms must also make a location decision that affects their access to labor and potentially affects their decisions on the technology they will adopt. While many economists have studied issues related to technology adoption and worker skill broadly, the geographic element is rarely developed. This dissertation exploits the variation in the concentration in skilled labor across local labor markets in a sample of U.S. States to study how movements of workers affect the distribution of skill across geography, the investment decisions by firms in reaction to the variation in skill and finally the effect of this variation on worker's wages across local labor markets. Given that skilled labor is an important force in the economy, variation in the concentration of skilled workers across local labor markets may also play an important role. The research set out here confirms this hypothesis. Workers locate non-randomly across geography and their movements reinforce the existing distribution of skill across local labor markets. As predicted by a model of endogenous technology, firms react to the skill level of their local labor market. Variation in firm level investment can be partially explained by variation in the availability of skilled labor. The empirical work shows that among a sample of manufacturing firms in 1992, a one standard deviation increase in county skill leads to a 10% increase in firm level investment in computers. Finally, highly skilled workers receive higher wages in metro areas with strong concentrations of skill. Deeper examination of the data shows that this wage gap is largely due to higher returns to skill in highly skilled areas.Item The Role of Capital-Skill Complementarities in Child Labor & Schooling(2004-06-18) Chamarbagwala, Rubiana Merwan; Betancourt, Roger R; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)We explore complementarities between parents' investment in their children's human capital and firms' investment in physical capital as a determinant of child labor and schooling in developing economies. In the first essay, we develop a theoretical model where human and physical capital investments are shown to be decreasing in firms' cost of investing in skill-biased capital, increasing in the quality of education, and decreasing in the cost of education. Our contribution is two-fold. First, when there is a unique equilibrium, there is an unambiguous improvement in the welfare of all agents in response to policies that improve the quality of education or lower the cost of education or skill-biased capital. Second, this welfare improvement can be achieved by policies that target only a proportion of workers or firms. In the second essay, we test the theoretical proposition that human capital investments respond to changes in the returns to education in India. Using National Sample Survey data, we first estimate the rates of return to primary, middle, high school, and college education for males and females in each Indian state for four separate years - 1983, 1988, 1993, and 1999. The response of children's participation in child labor and schooling to the rates of return to primary and middle school is then examined. We find that child labor amongst both boys and girls, falls in response to higher rates of return to education. However, only boys' participation in school increases in response to higher rates of return to education. In the third essay, we first examine changes in relative wages and returns to education in India from 1983 to 1999, which coincides with India's liberalization of trade and investment. We then conduct a simple demand and supply analysis using the non-parametric method proposed by Katz & Murphy (1992) to examine alternative explanations for changes in relative wages in India. We find that relative demand changes contributed significantly to changes in relative wages and that international trade in manufactures predicts increases in the relative demand for both high-skilled men and women.