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This dissertation consists of three essays in applied microeconomics. The first and third essays are in the area of empirical labor economics while the second essay utilizes laboratory experiments to study labor market issues. The first essay investigates the effects of social ability on the earnings of employees. Using a microeconomic model in a two-firm setting, the effects of social ability on a worker's earnings are calculated and shown to be increasing with higher social ability levels. The results show that the more social workers, when compared to the less social workers, end up working a lower number of hours but at a higher hourly wage rate. Because of these offsetting effects, social ability had no net effect on annual earnings. The second essay of the dissertation addresses the same issue by using experimental methods. In the constructed experimental design, subjects are randomly selected and assigned to one of two groups, where the second group is the "control" group. A significant relationship is found between how much subjects earned and the ratings they get from their group members for the social group. The highest earnings of the social group are significantly higher than the earnings of the control group. When subjects are assumed to behave rationally, those in the group which spends more time together earn significantly more than those in the control group. The third essay of this dissertation analyzes the findings of Lazear about raiding, seniority within a firm, and job search during time not worked. Using the NLSY-79, a raiding dummy is included in the classical wage equation to better understand its effects. Seniority within a firm and search while unemployed are also included in the wage equation. Earnings of those who are not raided and stay with the same firm are also compared to those who are raided and switch firms. In both cases, statistically significant results are found confirming the theoretical findings of Lazear. Raiding is associated with higher earnings and staying with the same firm does yield lower earnings. Unemployed search is also examined, and the results support Lazear's statement that search while unemployed yields to lower earnings.

The Integrated Land Use, Transportation, Environment (ILUTE) modelling system simulates the activities of agents within the Greater Toronto and Hamilton Area (GTHA) as they evolve over time. However, in its currently implemented form, ILUTE lacks an endogenous treatment of the labour market and the associated wages. This is seen as the major weakness of the current model. This work describes a labour market framework to partially fill this gap and then develops the dynamic disaggregate model of year to year transitions of the labour force status of the people within the GTHA and the set of wage models components of this framework. The data used is a sample of individuals from the Toronto, Oshawa, and Hamilton Census Metropolitan Areas surveyed over twelve consecutive years between 1995 and 2007 in the Survey of Labour and Income Dynamics.

The Integrated Land Use, Transportation, Environment (ILUTE) modelling system simulates the activities of agents within the Greater Toronto and Hamilton Area (GTHA) as they evolve over time. However, in its currently implemented form, ILUTE lacks an endogenous treatment of the labour market and the associated wages. This is seen as the major weakness of the current model. This work describes a labour market framework to partially fill this gap and then develops the dynamic disaggregate model of year to year transitions of the labour force status of the people within the GTHA and the set of wage models components of this framework. The data used is a sample of individuals from the Toronto, Oshawa, and Hamilton Census Metropolitan Areas surveyed over twelve consecutive years between 1995 and 2007 in the Survey of Labour and Income Dynamics.

Šiame darbe aš apibendrinau informaciją apie pasirinkimo tarp tiesinio prognozavimo mikro ir makro-modelių problemą. Agregavimas suprantamas kaip sektorinis agregavomas, o modeliai yra iš vienmatės tiesinės regresijos klasės. Aš išvedžiau kriterijų pasirinkimui tarp makro ir mikro-modelių ir idealaus agregavimo testą tiesinio agregavimo su fiksuotais ir atsitiktiniais svoriais atvejais. Paskutiniu atveju idealų agregavimą rekomenduoju tikrinti permutaciniu testu. Rezultatai iliustruoju ekonominiu pavyzdžiu. Modeliuoju Lietuvos vidutinį darbo užmokestį agreguotu modeliu ir atskirose ekonominės veiklos sektoriuose. Analizės rezultatas parodo, kad modeliai yra ekvivalentūs. / This paper focuses on the choice between macro and micro models. I suggest a hypothesis testing procedure for in-sample model selection for such variables as average wage. Empirical results show that Lithuanian average wage should be predict by using aggregate model.

The object of this research is to assess the effects of Ontario’s new immigration policy on young non-permanent residents. In particular, it is to evaluate how the wage gap between young non-permanent residents and young Canadian citizens has changed in the labor market of Ontario from 2001 to 2006 to demonstrate influences of new policy. On November 21, 2005, the governments of Ontario and Canada signed the first Canada-Ontario immigration agreement that relaxed several requirements for temporary workers to apply for permanent residency. This paper selected data from the 2001 and 2006 population census to conduct a linear regression to analyze the wage gap and the effects of immigration policy. By using the difference-in-difference approach, this paper found that there was no significant positive effect of the new policy on the entry earnings of non-permanent residents in Ontario.

This thesis brings to the forefront of the existing literature the importance of analyzing transitional dynamics among different levels of schooling and to the labor market. I perform empirical analyses using confidential longitudinal survey data from Statistics Canada; employing program evaluation techniques, and regression modelling. The first chapter is joint work with Louis Christofides, Michael Hoy and Thanasis Stengos. We explore the forces that shape the development of aspirations and the achievement of grades during high school and the role that these aspirations, grades, and other variables play in educational outcomes such as going to university and graduating. We find that parental expectations and peer effects have a significant impact on educational outcomes through grades, aspirations, and their interconnectedness. Apart from this indirect path, parents and peers also influence educational outcomes directly. Policy measures that operate on parental influences may modify educational outcomes in desired directions. The second chapter estimates the wage returns to university quality. I distinguish between two distinct measures of university quality. The first is a survey-based university reputation ranking, and the second is a new ranking, which I construct from several university characteristics in order to objectively reflect the university quality. The findings indicate that the wage returns of having a Bachelor’s degree from a highly ranked university are 10.3% for women, and 13.4% for men. The returns are higher when comparing the wages in the top and bottom tails of the ranking distribution and gender differences are identified. The third chapter is a large-scale study on how students form and revise expectations. This affects their decision to drop out and/or change field of study once they have accessed post-secondary education. I find evidence that students change expectations and educational pathways as they are exposed to unexpected new information. This informs them about the quality of match between their own ability and the program that they are enrolled. Using non-parametric methods I show that this relationship is not linear.

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