Three essays in quantitative labor economics

Park, Beom S.

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Park, Beom S.

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Thesis (Ph.D.)--Georgetown University, 2010.; Includes bibliographical references.; Text (Electronic thesis) in PDF format. In chapter 1, we construct a multi-sector labor search and matching model to investigate how economic shocks affect labor markets in developing countries. Workers in our model are heterogeneous in their productivity, and they can be employed either in high or low productivity urban jobs or in agriculture. In urban labor markets, job search frictions exist. Economic shocks can destroy jobs, and workers become unemployed when their job matches are dissolved. Identical workers in our model can be employed in different sectors with different earnings. We calibrate our model to Nicaragua's labor market and then simulate impacts of financial shocks on wages and employment shares. We find that the economic shocks tend to have modest impacts on total employment but generate significant relocations of workers across sectors.; We validate the multi-sector model in chapter 2. Our results suggest that the model closely matches an average skill distribution across sectors in Indonesia in 1997, and that high skilled workers are found in the productive formal sector, whereas low-skilled workers are located in production in either the agricultural or the informal sector.; In chapter 3, we use the theory of human capital investment developed by Becker and Tomes (1979) to quantify the impacts of human capital investment and the transmission of learning ability on intergenerational income mobility. Altruistic parents invest part of their income in their children's human capital accumulation. One's learning ability is formed partly by the ability of one's parents and partly by a random environment effect. We parameterize our model for 10 OECD countries and find that countries with high intergenerational income correlation tend to show high returns on per-unit human capital investment, while the process of learning ability transmission is mainly responsible for cross-sectional income inequality. Furthermore, we find that human capital subsidies can play a significant role in improving mobility. This mobility gain is obtained through higher returns from human capital investment among the poor.