In this dissertation, I develop theoretical models and an empirical study of the role of social interactions, the evolution of social norms, and their impact on individual behavior. Although my models are consistent with individual utility maximization, they generally emphasize social factors that channel individual decisions and/or shape individuals' preferences. I apply this approach to three different issues: labor supply, fertility decisions, and intergenerational transfers, generating predictions that are more consistent with observed empirical patterns of behavior than standard neoclassical approaches that assume independent preferences, perfect information, and efficient markets. In the first essay, I explain the long-run evolution of working hours during the 20th century in developed countries: the substantial decline for the first three quarters of the 20th century and the deceleration or even reversal of the fall in working hours in the last quarter. I develop a model of the determination of working hours and how this process is affected by both the conflict between employers and employees and the employees' desire to emulate the consumption standards of the rich reference group. The model also explores the effects of direct and indirect policies to limit hours advocated by political representations of workers such as trade unions or leftist parties. In the second essay, I study the coevolution of gender norms and fertility regimes. Since the 1990s, a new pattern of positive correlation between fertility rates and female labor force participation emerged in developed countries. This recent trend seems inconsistent with conventional economic approaches that explain fertility decline as a result of the increasing opportunity costs of childrearing, predicting a negative correlation between fertility and women's labor force participation. To address this puzzle, I develop a model of the evolution of gender norms and fertility in various economic environments influenced by the level of women's wages. Randomly matched spouses make choices related to fertility—labor supply and the division of household labor—based on their preferences shaped by gender norms. In the model, norm updating is influenced by both within-family payoffs and conformism payoffs from social interactions among the same sex. The model shows how changes in economic environments and the degree of conformism toward norms can alter fertility outcomes. The results suggest that the asymmetric evolution of gender norms between men and women could contribute to very low fertility, explaining the positive correlation between fertility and women's labor force participation. Finally, I estimate the effect of exogenously introduced public pensions for the elderly on the amount of private transfers they receive. There has been a long debate whether public transfers crowd out private transfers. Previous empirical studies on this issue suffer from the endogeneity of income that contaminates estimates. I use an exogenously introduced public transfer, the Basic Old Age Pension in Korea, to test the crowding out hypothesis. A considerable proportion of the elderly population, especially women living without a spouse, do not experience the crowding out effect and moreover, among those who do, the size of the effect is relatively small. The results support the redistribution effect of the Basic Old Age Pension targeting the poor elderly in Korea.

<p> Human capital is an important mechanism that influences both the migration decisions of immigrants and the rate at which immigrants assimilate in the host country. Returns to human capital could be correlated with difficult-to-observe factors such as self-selection, and legal status, and these unobservables can affect the economic assimilation of immigrants into the host country differently. The objective of this dissertation is to investigate the returns to human capital for refugees and other immigrants during the first two decades after they come to the U.S. Refugees are a subset of immigrants who have different characteristics and face different constraints than other immigrants. For example, while refugees have greater legal access to the labor market, non-refugees benefit from greater ability to self-select into both migration and (pre-migration) human capital, and those relative advantages change during the years after individuals migrate. </p><p> The empirical results show that non-refugees receive a much larger crude wage return for human capital both at arrival and over time. Although the refugees&rsquo; return grows over time, they do not catch up with that of non-refugees. These findings confirm that non-refugees are not only selected on observable characteristics (as already documented in the literature) but on unobservables as well, and that the initial selection on unobservables will matter for their differential returns to human capital even after they remain a long time in the U.S. In other words, many refugees might not be well-suited for the U.S. labor market for some permanent but unobservable reasons, whereas this may not be the case for non-refugees because they would less likely move to a country for which they are poorly-suited.</p><p>