Doctor of Philosophy / Department of Economics / William F. Blankenau / This dissertation consists of three essays focusing on wage inequality and education policy. Essay 1 considers growth in the variance of wages. Prior work has documented that the college premium plays a major role in explaining wage variance growth. This essay examines the extent to which this role can be attributed to an increase in the dispersion of occupation-specific returns to post-secondary education. Using the variance components approach and CPS data between 1979-1981 and 2003-2005, the essay shows that the variation in the college premium across occupations has increased over time, and this variation expansion explains about five percent of the growth in wage variance across the two periods. By dividing the sample workforce into professional and nonprofessional groups, the results suggest that the increased variation in the return to post-secondary education particularly caused the wage gap between the professional and non-professional workers to increase. Essay 2 applies quantile regression methodology to the study of the determinants of the wage distribution among natives and immigrants in the U.S., using PUMS from 1990 and 2000, and ACS from 2006. Among other findings, the immigrant/native wage gap is concentrated at the lower end to the median of the wage distribution, and the primary source of the wage gap is the relative lack of labor market skills among immigrants. A cross-time comparison shows that the recent immigrant/native wage gap after controlling for skill variables first decreased from 1990 to 2000 and then expanded from 2000 to 2006. The growth is concentrated at the two ends of the wage distribution, and the reason for growth is that the recent immigrants in 2006 are younger and thus have less market experience than their counterparts of 1990. Essay 3 is coauthored with Dr. Blankenau. We analyze the impact of changes in college admission standards on the skilled labor distribution, skilled firm distribution, and the match of skilled labor with skilled firms. We propose a model of schooling with heterogeneous labor and firms, in which firms’ decisions in creating skilled jobs are conditioned on the supply of skilled labor. The model shows that lowering standards without providing incentives to acquire skills does not necessarily motivate accumulation of human capital or expansion of skilled industry. Lower standards tend to create a mismatch of educated labor with unskilled positions. In some specifications, lower standards can lower firms’ willingness to create skilled positions, leaving more skilled workers underemployed.

Doctor of Philosophy / Department of Economics / Dong Li / The first essay tests whether the returns to education are different between entrepreneurs and regular employees. If the signaling model of education is correct, entrepreneurs should receive lower returns from education (relative to employees) because they have no need to signal their productivity to an employer. However, this result should only hold if the researcher is able to control for selection into self-employment and the endogeneity of ed- ucation. This is illustrated using a stylized model of signaling. The relationship between self-employment and the returns to education is tested using data from the 1996 Survey of Income and Program Participation. This rich panel dataset makes it possible to control for many business-specific characteristics, like business equity, that have been previously unaccounted for in the literature. Ordinary least squares regressions find the correlation between education and earnings to be weaker for entrepreneurs. To control for selection, I utilize a Heckman selection model using spousal health insurance and housing equity as instruments. It shows that selection biases downward the correlation between education and income for entrepreneurs. Finally, a fixed effects model is employed to control for any time invariant unobserved heterogeneity. This approach indicates that education is as valu- able, if not more valuable, to entrepreneurs as it is to employees. This does not support the signaling hypothesis. The finding is robust to different measures of entrepreneurial earnings. The second essay explores whether unemployed workers make successful transitions into self-employment. It is well established that unemployed workers are more likely to transition into self-employment than individuals coming from paid employment. A growing body of literature suggests that these formerly unemployed entrants tend to exit self-employment earlier than typical entrants. It is tempting to attribute this result to differences in ability between the two groups. However, using an adapted version of Frank (1988)’s Intertemporal Model of Industrial Exit, I show that this is not the case. In this model, entrants to self- employment receive noisy information about their true entrepreneurial ability from their earnings in the market. I show that low ability entrants to entrepreneurship should be no more likely to exit self-employment than high ability entrants to self-employment. This is because although low ability entrants will earn less as entrepreneurs, their outside wage in paid employment will also be proportionately lower. Survival in self-employment, therefore, is a function of how initial expectations match reality. This leads me to suggest that the high exit rates out of self-employment for the formerly unemployed may be because this group systematically overestimates their entrepreneurial ability at entry. This hypothesis is justified by evidence from the psychology literature that low ability individuals tend to overestimate their performance. Duration analysis on data from the 1996 and 2001 panels of the Survey of Income and Program Participation confirms that the formerly unemployed are more likely to exit self-employment. I also find preliminary evidence consistent with the hypothesis that the unemployed overestimate their likelihood of success in self-employment. These findings should give policymakers pause before incentivicing the unemployed to enter self-employment.

Master of Science / Department of Agricultural Economics / Jeffrey M. Peterson / State and local economic development policies are often created with the goal of stimulating local economic activity through employment growth. The success of these policies is commonly measured by the number of jobs they create. Because labor markets are not bound by county lines, commuting and migration are important factors to consider when measuring employment growth in a region. This study used county-level data from the 2000 Census to predict labor force participation, unemployment, in-commuting, and out-commuting. The model was estimated using Ordinary Least Squares regression and was simulated to predict changes in labor force, unemployment and commuting as a result of a change in employment for all 105 Kansas counties. An increase in employment was found to increase the labor force participation, in-commuting, and unemployment, while decreasing the number of out-commuters. The increase in in-commuting causes many of the economic benefits expected to accrue to the county where the job growth occurred to be essentially exported to the county where the in-commuters live. Failure to account for the proportion of new jobs filled by in-commuters would lead to significant over estimations of local impacts of employment growth. These results suggest that regional coordination of economic development policies, through the use of tools such as tax-base sharing, would provide substantial gains to otherwise competing local governments.

Master of Agribusiness / Department of Agricultural Economics / Allen M. Featherstone / This thesis analyzes the hiring and selection processes of five Farm Credit Services (FCS) Associations within U.S. AgBank to determine the effectiveness of potential employee testing and profiling practices as a predictor of success (defined as tenure and retention) within the organization. The data provided by the five FCS Associations were used to analyze whether that the results are a successful tool in predicting the success of a potential employee. Firm managers are acutely aware of the high cost of onboarding a new employee regardless of the industry in which the firm operates. Since employee training and education often takes months, and in some cases, years, it is critical that organizations select qualified, driven, and success oriented employees so that they can minimize the cost of hiring of new employees. To select the best candidates, many firms use personality profiling examinations to determine the candidate’s fit, not only for the job, but also for the company culture. Analyzing past results can assist managers in evaluating the outcomes of the time and cost spent seeking the best employee possible. Analysis was conducted by estimating a binomial logistic regression model using the test scores for loan officer hires from five Farm Credit Associations for the time period of 1999-2009. Each of the examined character traits was an independent variable, along with variables for gender and whether the candidate was a recommended-hire. The dependent variable is whether the employee is still employed with the Farm Credit Association. Results show that while some of the independent variables are statistically significant in predicting the success of an employee, others are not. The implications therein justify the value of the predictive index as an asset to hiring managers, and also provides direction on which traits are most highly correlated with one another and with the overall composite score.

Master of Arts / Department of Economics / James F. Ragan Jr / This paper examines some common explanations for the earnings gap between males and females. Over recent decades, the average pay of women has increased faster than the average pay of men; however, a substantial earnings gap remains. As of 2006, the U.S. Census estimated that for year-round full-time workers the earnings ratio of women to men was 77%; in other words, for every one dollar a man earns, a woman earns $0.77. The wage gap likely consists of both non-discriminatory and discriminatory aspects, and concern remains over how much of the gender wage gap is caused by discrimination against women. However, the part of the wage gap due to discrimination cannot be measured directly, so it is typically interpreted as the portion of the gap that is "unexplained" by other factors. Numerous economists and sociologists have studied this issue, but their conclusions differ vastly. This paper discusses various economic explanations for the gender pay gap, both discriminatory and non-discriminatory. It also briefly summarizes some sociological responses to economic arguments, as well as some policy recommendations and their possible implications.

Master of Agribusiness / Department of Agricultural Economics / Keith Harris / Inefficiencies in a warehouse that operates multiple zones can create bottlenecks in the order fulfillment process. This study’s focuses on the exploration of potential bottlenecks in an agricultural aftermarket company’s order fulfillment process and its multi-zone warehouse. Order fulfillment includes stages of order processing, SKU picking and staging from the conveyor zone and the “H” zone, and the final packaging and shipping of the order within the Truck Freight Department. A review of the company’s EOP program, and the effects of the program, provides additional insight into our understanding of bottlenecks within a dynamic the system. In doing so, the research will extend the existing knowledge on warehouse management with multiple zones. The conclusion of this paper offers solutions that will alleviate the bottlenecks and improve the overall efficiency of the order fulfillment process within a multi-zone warehouse.

Master of Science / Department of Apparel, Textiles, and Interior Design / Joy Kozar / This study examines colonization, development, and globalization in the Commonwealth of the Northern Mariana Islands (CNMI) with respect to the garment industry, the main industry of the islands. A broad-reaching analysis examined population, gender, economic factors, and import/export data in order to explore the repercussions of garment industry development and subsequent decline on the CNMI. A quantitative analysis was conducted utilizing data from the United States Census Bureau, the CNMI's Department of Commerce, and the U.S. Department of Commerce Office of Textiles and Apparel. This research illustrates how the effects of the garment industry in small developing nations are dramatically impacted by a trade arrangement, the Multi-Fiber Arrangement (MFA), which was a protectionist measure used to restrict manufacturing of certain product through a quota system. In addition, this study reveals the economic implications and societal outcomes for the CNMI after the collapse of the garment industry as a result of the 2005 MFA phase-out. Garment production orders shifted to large producer nations once quota restrictions were no longer in place. Factory closures, lost business revenue, and a loss of manufacturing positions affecting predominantly women plagued the CNMI as well as cost-of-living increases. Federalization of the CNMI took place in 2009 which further complicated the islands’ politics and guest worker population status. Tourism is now the CNMI's chief industry although its growth is dismal and heavily reliant upon world economies. A comparison between Mauritius, another small island nation, concludes the discussion with insight on women's development and future considerations for economic growth as a means of development and dependency in the CNMI.

Master of Arts / Department of History / David A. Graff / Michael Ramsay / In 1988, Irving Brown received the Medal of Freedom from President Ronald Reagan for playing a crucial role in breaking the hold of international communism over postwar Western Europe. By doing so, he can truly be called one of the architects of Western democracy. Brown also made extraordinary efforts to fight international Communism in French North Africa during the 1950s. This paper seeks to answer the question of why these efforts in North Africa failed, and it will show the limits of American labor‘s international influence during the Cold War, in particular in French North Africa. Irving Brown successfully strengthened anti-Communist unions in Europe, and had the financial backing of the Truman Administration for those projects. However, Brown‘s efforts to build anti-Communist trade unions in Tunisia and Algeria did not have the backing of the U.S. government under the Eisenhower Administration. Instead, the AFL-CIO, with Brown as its representative, attempted to use the non-Communist International Confederation of Free Trade Unions (ICFTU) to influence the nationalist movements of Tunisia and Algeria through their respective national unions, the Union générale tunisienne du travail (UGTT) and the Union générale des travailleurs algériens (UGTA). Disagreements within the ICFTU severely inhibited Brown‘s effectiveness and prevented him from fully realizing the AFL-CIO‘s policy goals in North Africa. Brown was overly dependent on Tunisia for his operations with the Algeria labor movement, and the ICFTU was incapable of providing adequate support to the Algerians to compete with its Communist rival, the World Federation of Trade Unions. To the extent that independent Tunisia was Western-oriented, Brown was successful in his efforts. However, in the long run, Brown failed as an architect of Western democracy, as Tunisia became a dictatorship with a socialist economy. In Algeria, the state of war forced the UGTA to turn to the Eastern bloc despite Brown‘s personal dedication to North African independence and development. Furthermore, in independence, Algeria‘s government embraced socialism and single party rule.