This thesis consists of three essays in which I seek to understand how internal firm practices affect long-term outcomes for workers. In each essay, I exploit variation in external labor market conditions to help identify changes inside the firm. In the first chapter, I explore whether employer learning about worker quality is asymmetric. Do incumbent employers learn faster about their workers than does the outside market? I develop a methodology to measure the extent to which employers learn by relating the pay change distribution to various features of ability distributions. I exploit three distinct external labor market factors to generate differences in ability distributions, including the reason why workers left the previous job, economic conditions when entering a job, and occupational differences. I find that asymmetric learning is prevalent in the labor market with effects on wage-change distributions that are significant, both statistically and in terms of economic magnitudes.
This dissertation examines how the changing nature of work and organizations has altered the U.S. labor market to influence employment outcomes for job seekers (1) in alternative work arrangements and (2) of different genders. The first essay describes recent developments in the labor market for nonstandard workers, that is, an increase in the variety of pathways through which nonstandard workers are assigned to work. I suggest that changes in the regulatory environment, the rhetoric around competition, and technological developments have shaped inter-organizational relationships and norms in the industry to bring about a very different system of labor markets than was traditionally understood. I contend that such a multifaceted employment model with a diverse set of exchanges among multiple actors has profound implications for the future of IR research. The second essay examines the "multi-layered labor contracting" structure in which the recruitment of nonstandard workers is outsourced to an intermediating organization, who then selects workers from a group of competing suppliers. Drawing on power-dependence theories, I examine the link between these new contractual relationships and economic outcomes for lead firms and workers. Using proprietary data from employment records of nonstandard workers in Fortune 500 firms, I find that an additional contracting layer between lead firms and workers is associated with higher returns to firms and lower returns to workers. The loss from an additional contracting layer is reduced when workers gain bargaining power through pre-existing relationships with the firm. The third essay addresses how interactional processes between employers and job seekers at an initial recruitment phase online influence gender sorting of job seekers. We use unique data from a field study and (Study 1) a field experiment (Study 2) of online job postings to test two distinct interactional mechanisms: gendered language (as experienced by job seekers) and in-group preferences (as exercised by job seekers). We mostly find support for our predictions that, compared to male job seekers, female job seekers are more likely to show interest in and apply to a job when the job is described using more stereotypically feminine words or by female recruiters.
My dissertation contributes towards our understanding of the determinants of wage inequality and to the causes of the emergence of jobless recoveries. It consists of two chapters. The first, "Identifying Labor Market Sorting with Firm Dynamics" studies the determinants of wage inequality, which requires understanding how workers and firms match. I propose a novel strategy to identify the complementarities in production between unobserved worker and firm attributes, based on the idea that positive (negative) sorting implies that firms upgrade (downgrade) their workforce quality when they grow in size. I use German matched employer-employee data to estimate a search and matching model with worker-firm complementarities, job-to-job transitions, and firm dynamics. The relationship between changes in workforce quality and firm growth rates in the data informs the strength of complementarities in the model. Thus, this strategy bypasses the lack of identification inherent to environments with constant firm types. I find evidence of negative sorting and a significant dampening effect of worker-firm complementarities on wage inequality. Worker and firm heterogeneity, differential bargaining positions, and sorting contribute 71\%, 20\%, 32\% and -23\% to wage dispersion, respectively. Reallocating workers across firms to the first-best allocation without mismatch yields an output gain of less than one percent.\\ My second chapter, "Does the Cyclicality of Employment Depend on Trends in the Participation Rate?" studies the fact that the past three recessions were characterized by sluggish recovery of the employment to population ratio. The reasons behind these "jobless recoveries" are not well understood. Contrary to other post-WWII recessions, these "jobless recoveries" occurred during times with downward trending labor force participation rate(LFPR). I extend the directed search setup of Menzio et al. (2012) with a labor force participation decision to study whether trends in LFPR cause jobless recessions. I then show that that recoveries during times of declining LFPR look very different to recoveries during positive LFPR trend. The basic intuition is as follows: During downward trending LFPR, many low productivity workers cling on to their jobs, but once separated, it does not pay off for them to pay the search cost to re-enter the market. If the recession happens during increasing trend LFPR, then the employment recovery is helped by persons entering the labor market. Thus, I highlight that contrary to the usual approach in the literature, it is important to explicitly account for the trend of the LFPR.
This book focuses on the aspects of the changing U.S. labor market, including the role that the export of advanced business services from the United States plays in the increasing globalization of the world's economy and the reemergence of national employment policy.
In this dissertation I study the labor market behavior of sciences and engineering (S & E) doctorates trained and employed in the US. The first essay is an empirical study of task-to-task transitions based on the Survey of Doctorate Recipients (1973-2001). It first assesses the relevance of the careers of doctorates to S & E in general, and research and development (R & D) in particular. Second, it evaluates the participation rates and mobility patterns of doctorates in careers of different types using a transition model with independent competing risks. The second essay extends the empirical framework described above and specifies a dynamic model of occupational choices with symmetric learning about one of the task- specific abilities and dependence on past performance to explain the empirical career patterns described in the first essay. The predictions of the model are used to evaluate the effects of two counterfactual experiments on the supply of research skill. The third essay studies geographic choices for first employment of doctorates using the Survey of Earned Doctorates (SED) 1957-2005. Decisions of Americans, Canadians, and third country nationals to stay in the US after their PhD versus moving to Canada are compared. Individual characteristics and differences in political and economic conditions and career opportunities in the US versus Canada are evaluated to explain the observed differences in the choice of location.
This dissertation consists of three essays on how health and education affect the labor market outcomes of workers. Health and education issues have been key determinants of labor demand and supply. In light of increasing incidence of health problems and the rapid growth of post-baccalaureate certificates in the US, this dissertation seeks to answer questions about labor market outcomes of workers with poor health history and with post-baccalaureate certificates. The first essay which I co-authored with Dr. William Blankenau and Dr. Benjamin Schwab uses a résumé-based correspondence test to compare the employment consequences of an illness-related employment gap to those of an unexplained employment gap. The results of the experiment show that while the callback rate of applicants with an illness-related employment gap is lower than that of the newly unemployed, applicants with illness-related employment gaps are 2.3 percentage points more likely to receive a callback than identical applicants who provide no explanation for the gap. Our research provides evidence that employers use information on employment gaps as additional signals about workers' unobserved productivity. Co-authored with Dr. Amanda Gaulke and Dr. Hugh Cassidy, the second essay tests how employers perceive the value of post-baccalaureate certificates using the same methodology in the first essay. We randomly assign a post-baccalaureate certificate credential to fictitious résumés and apply to real vacancy postings for managerial, administrative and accounting assistant positions on a large online job board. We find that post-baccalaureate certificates are 2.4 percentage points less likely to receive a callback than those without this credential. However, this result is driven by San Francisco, and there is no effect in Los Angeles or New York. By occupation, we also find that there is only significant negative effect in administrative assistant jobs, and there is none in managerial or accounting assistant jobs. A typographical error made in the résumés of certificate holders regarding the expected year of completion of the certificate may also contribute to negative effects of a certificate. Using NLSY79 data, the third essay tests whether the source of health insurance creates incentives for newly-diagnosed workers to remain sufficiently employed to maintain access to health insurance coverage. I compare labor supply responses to new diagnoses of workers dependent on their own employment for health insurance with the responses of workers who are dependent on their spouse's employer for health insurance coverage. I find that workers who depend on their own job for health insurance are 1.5-5.5 percentage points more likely to remain employed and for those employed, are 1.3-5.4 percentage points less likely to reduce their labor hours and are 2.1-6.1 percentage points more likely to remain full-time workers.
"This dissertation consists of three chapters. The first chapter evaluates the effectiveness of targeted rental subsidies and their impact on neighborhoods. The second chapter studies the impact that local labor market composition changes have on local post-secondary institutions. The last chapter analysis how worker whose abilities are underestimated or overestimated choose occupations when employers differ in the speed in which they learn about workers. Despite the benefits of residing in low-poverty neighborhoods, rental assistance recipients are disproportionately located in high-poverty neighborhoods. However, it is unclear whether efforts to promote their relocation will be successful or whether it will introduce adverse effects on neighborhoods. Using a novel treatment magnitude in a triple difference design that leverages a reform to the largest rental assistance program in the US, this paper finds a significant causal effect on the number of rental assistance recipients residing in each neighborhood that varies across broad geographical areas. Furthermore, this study finds improvements in recipients' average neighborhood quality of residence, with the effects remaining significant 5 years after the reform. Lastly, no evidence of adverse effects on neighborhoods were found as measured by home appreciation rates. The second chapter examines the responsiveness of major specific completions to its employment share at the local level. The dynamic effect is identified by exploiting quasi-random variation that is constructed using shift-share instruments which leverage both changes in the occupational composition and the composition of majors within occupations at the national level. Using data for the time period of 2009-2018, the results suggest a significant response of the major choice to changes in the local labor market with the effect being largest between freshman and sophomore years. A decomposition of the effect suggests a larger response to changes in the occupational composition than to changes in the major composition within occupations. The third chapter studies occupational decisions when workers' abilities are overestimated or underestimated and employer differ in the speed in which they learn about workers, which is called employer learning rate. Due to asymmetric information, individuals who are more (less) productive than what their observables reveal, will be underpaid (overpaid) at the beginning of their careers. In this paper, I develop a two-period, two-occupation model which analyzes the occupational decisions in an asymmetric information game where workers differ on whether their productivity was underestimated or overestimated and occupations are heterogeneous with respect to an employer learning rate proxy. Lastly, I use data from the National Longitudinal Survey of Youth 1979 (NLSY79) and Current Population Survey (CPS) Merged Outgoing Rotation Group(MORG) to directly test model predictions separately for workers with less than college degree education and for college graduates."--Pages vii-viii.
