College of Behavioral & Social Sciences
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Item ESSAYS ON DISPLACED WORKERS AND RESIDENTIAL MIGRATION(2016) Ueda, Ken Masahiro; Hellerstein, Judith; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this dissertation, I explore how workers’ human capital, local industry composition, and business cycles affect employment outcomes and residential migration for job losers and other workers. I first examine whether the poor employment outcomes of job losers are due to a lack of jobs that require their human capital within their local labor market. I answer this question by analyzing the extent to which the industry composition in the job loser’s local labor market affects employment outcomes when job loss occurs during expansions and during recessions. I find that if job losers reside in an area with a high employment concentration of their original industry of employment, they are 2.1-2.8 percent more likely to be re-employed at another job if job loss occurs during an expansion; I find an insignificant relationship in most specifications when job loss occurs during a recession, and in some specifications I even find a negative relationship between industry concentration and employment. I conclude that the industry composition within an area matters for job losers, since firms are more willing to hire workers from within their own industry, as these workers have more relevant accumulated human capital. However, firms are less likely to hire during a recession, making job losers’ human capital less important for job finding. Next, Erika McEntarfer, Henry Hyatt, and I examine whether the business cycle affects earnings changes for job losers, and the factors that explain these differences across time. We find that job losers who lost their job during the Great Recession have earnings changes that are 10 percent more negative relative to other job losers from other periods. This result is driven primarily by longer nonemployment lengths and worse subsequent job matches. Finally, Erika McEntarfer, Henry Hyatt, Alexandria Zhang, and I explore the extent to which residential migration is driven by job opportunities. We use four databases and find that changes in job moves explain some of the changes in residential migration, but the relationship is not as strong as previously documented. We find that migration patterns differ across databases, with some databases documenting steeper declines and more cyclicality.Item Shocks and Human Capital in Developing Countries(2015) Szott, Aaron; Hellerstein, Judith K; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)I begin my dissertation by introducing the following two chapters. I start out by describing the basic theory underlying economists' historical interest in the effects of shocks in developing countries. I then briefly review the empirical literature on household responses to shocks and outline how it is reasonable to expect that even recurring, non-exotic shocks have substantial permanent effects on affected young peoples' completed human capital stocks. Next, I describe the contributions that the following two chapters of this dissertation make and how they are similar with respect to their use of nationally representative household survey data, their policy relevance, and the way they use basic economic theory and contextual knowledge to uncover meaningful impacts of shocks on different groups of young people. Finally, I conclude this introductory chapter by considering whether or not it should be regarded as a surprise that shocks in developing countries can be allowed by households to impact affected children's human capital stocks the way they do, despite the large returns associated with human capital investments. The second chapter considers the permanent effects of rainfall shocks on adults' completed human capital stocks. Existing research suggests that health and education investments in children are affected by aggregate income shocks, but there is considerably less evidence on what the effects of many years' worth of such shocks are on individuals' completed human capital stocks. I contribute to this literature by studying the effects of the number and timing of all the unusually wet and dry years over the first 21 years of rural West African individuals' lives on their likelihood of being literate and their completed educational attainment. I use historical rainfall data merged with nationally representative household surveys conducted in 12 countries, and I find that both wet and dry years have substantial negative impacts on women's human capital and smaller positive impacts on men's: The average effect of wet and dry rainfall shocks over the first 21 years of life is a 22 percent decrease in females' likelihood of being literate and a 10 percent increase in males'. I argue that this pattern of results is consistent with existing research on how West African females and males work and acquire human capital. The third chapter provides evidence on how children in different types of households are affected by food price shocks. While people in poor countries report that inflation is one of their primary concerns, there is not much evidence on how they are actually affected by it. In particular, it is not clear how food (along with other) price inflation affects individuals in net food producing and net food consuming households. I use four highly comparable household surveys collected in Egypt to examine how children's weights-for-height evolved over time and in the face of the food price crisis of 2008, and I utilize data on region of residence and parents' occupation to examine how changes over time differed by household net food consumption status. I find that despite several years' worth of solid economic growth in the run-up to 2008, most region- and parental occupation-based groups of Egyptian children's weights-for-height had not increased at all since 2005 (for example). Quantile regression results reveal that the lightest children in 2008 were considerably lighter than the lightest children in 2005, and also that children in those households most likely to have been net food producing seem to have been more negatively affected by high food prices than children in most other kinds of households. High food prices seem to have offset any possible beneficial effects of growth for children in the poorest households.Item Essays on Transatlantic Differences in Taxation, Redistribution and Provision of Public Goods(2013) Torul, Orhan; Drazen, Allan; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation investigates differences between the U.S. and Europe in the levels of taxation, redistribution, provision of public goods, and perception of fairness in income inequality. The first chapter concentrates on the differences between the U.S. and Scandinavia in higher education, and asks how it is possible that the U.S. has considerably more unequal higher educational attainment, higher reliance on private education and lower taxes than Nordic Europe, given similar political institutions. To address this question, I develop a parsimonious overlapping generations model in which agents can choose between public and private education. I first show that for a given tax rate difference of 7 percent, the model can deliver the observed educational Transatlantic differences, without having to rely on cross-country differences in preferences, parameters or other unorthodox elements. Next, I show the model can provide insight into how either the U.S. or the Nordic tax regimes could receive political consent. My explanation is due to the fact that per-capita output and other macroeconomic variables are U-shaped in taxes, both in the model and in the cross-country data. The economic intuition behind this finding is that while at low tax rates an increase in taxes and public education provision dampen human capital accumulation due to marked drops in private education attainment, at high tax rates public education provision gets sufficiently large that a majority of the population prefers public over private education, and further increases in taxes boost public education attainment more than they reduce private one. The second chapter incorporates the Transatlantic differences in perceptions into the picture and asks how the fact that a majority of Europeans believe income differences are primarily due to luck while a majority of Americans attribute such differences to the role of effort and skill reconciles with Transatlantic macroeconomic differences. I extend the model from the first chapter to include two sources of individual income differences: an inborn competence shock which affects labor supply choice and education decisions, and a luck shock on income, which is orthogonal to decision rules and inborn abilities. I find that low taxes coupled with low public education provision, as in the U.S. case, induce a large impact of inborn competence on schooling and labor supply, which in turn implies that a large share of the U.S. income differences are due to skill, education and effort. By contrast, a combination of high taxes and high public education, as in Europe, minimizes total income inequality and differences due to effort and inborn competence, and magnifies the impact of luck on inequality, in accordance with the existing beliefs. I also show that the U-shaped behavior of macro variables and welfare gains in taxes, as documented in the first chapter, carries over to this model, thereby providing insight into the political sustainability of macroeconomic variables and perceptions.Item WORKING FOR PAY OR RAISING A FAMILY? THREE PAPERS ON WOMEN'S WORK EXPECTATIONS AND MARKET OUTCOMES(2013) García-Manglano, Javier; Bianchi, Suzanne M; Kahn, Joan R; Sociology; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Since the gender revolution of the 1970s, we have learned a great deal about the determinants of female employment. One of the themes most frequently discussed in the literature refers to the role played by work expectations in shaping women's market achievement. As a supply-side explanation for women's market performance, work expectations emphasize women's internalized attitudes and preferences, which might lead some of them to make work and family decisions that will curtail their options down the road. To this point, most scholars have favored demand-side and contextual accounts of women's market achievement; these highlight mechanisms such as workplace discrimination against women or mothers, and similar structural constraints embedded in the larger cultural, social and economic systems. In this dissertation, I use longitudinal data to expand our understanding of women's work expectations in three directions. First, I revisit the neoclassical human capital argument's claim that individuals with low work expectations will invest less in human capital and choose jobs with lower penalties for work interruptions. I find support for this argument: work expectations are relatively good predictors of early baby-boom women's human capital accumulation, job characteristics, employment rates, hourly wages, and occupational prestige. Second, I explore variation in the role of work expectations across two cohorts of American women, early and late baby boomers. I find that rapid social change made it easier for later cohorts to absorb the negative market consequences of holding low work expectations in young adulthood. Third, I model the life-course employment trajectories of early baby boomers from ages 20 to 54, and find that a significant proportion of them exhibited intricate work patterns throughout adulthood, with periods in which they were focused on their career and other periods in which they seemed to pursue other life interests. My research shows that -when observed over time- most women's work behavior is characterized by a high degree of complexity. This calls for a more nuanced approach to the study of women's market performance, one that -together with the structural forces constraining their action- explicitly accounts for women's subjective expectations, preferences and attitudes towards work and family.