In the first chapter, I study the effects of innovations in information technology on the housing market. Specifically, I focus on the improved ability of lenders to assess the credit risk of home buyers, which has become possible with the emergence of automated underwriting systems in the United States in the mid-1990s. I develop a standard life-cycle model with incomplete markets and idiosyncratic income uncertainty. I explicitly model the housing tenure choice of the households: rent/purchase decision for renters and stay/sell/default decision for homeowners. Risk-free lenders offer mortgage contracts to prospective home buyers and the terms of these contracts depend on the observable characteristics of households. Households are born as either good credit risk types--having a high time discount factor--or bad types--having a low time discount factor. The type of the household is the only source of asymmetric information between households and lenders. I find that as lenders have better information about the type of households, the average down payment fraction decreases together with an increase in the average mortgage premium, the foreclosure rate, and the dispersions of mortgage interest rates and down payment fractions, which are consistent with the trends in the housing market in the last 15 years. From a welfare perspective, I find that better information, on average, makes households better off. In the second chapter, I focus on the labor market behavior of couples. Search theory routinely assumes that decisions about the acceptance/rejection of job offers (and, hence, about labor market movements between jobs or across employment states) are made by individuals acting in isolation. In reality, the vast majority of workers are somewhat tied to their partners--in couples and families--and decisions are made jointly. This chapter studies, from a theoretical viewpoint, the joint job-search and location problem of a household formed by a couple (e.g., husband and wife) who perfectly pool income. The objective of the exercise, very much in the spirit of standard search theory, is to characterize the reservation wage behavior of the couple and compare it to the single-agent search model in order to understand the ramifications of partnerships for individual labor market outcomes and wage dynamics. We focus on two main cases. First, when couples are risk averse and pool income, joint-search yields new opportunities--similar to on-the job search--relative to the single-agent search. Second, when couples face offers from multiple locations and a cost of living apart, joint-search features new frictions and can lead to significantly worse outcomes than single-agent search. Finally, in the third chapter, I focus on the relation between house prices and interest rates. Although interest rates and housing prices seem mostly to have a negative relation in the data, the relation does not seem to be stable. For example, the recent run up in the global housing prices is generally explained by globally low interest rates. On the other hand, there have been periods where housing prices and interest rates moved together. Motivated by these observations, I formulate a two period OLG model to find out the form of the relationship between interest rates and housing prices. It appears that the distribution of homeownership is also important for housing price dynamics. I show that housing prices in the equilibrium do not always have a negative relation with interest rates. / text

Thesis (Ph.D.)--Baylor University, 2008. / Includes bibliographical references (p. 81-85)

Thesis (Ph.D.)--Baylor University, 2009. / Includes bibliographical references (p. 70-74).

Earnings loss due to both lower wages at the current job and the time forgone between two jobs is one of the major consequences of job displacement caused by plant closing, moving and downsizing in the 1980s. Is migration a solution? The present study attempts to answer this question empirically by exploring five waves of data on the displaced manufacturing workers from the CPS Displaced Workers Supplements. Human capital theory and neo-classica1 theory of labor migration both assert that migration should improve people's socio-economic status. They largely neglect social and economic structural constraints on the outcomes of individual behavior. From the dynamic segmentation perspective, this study hypothesizes that deindustrialization has been squeezing workers from the subordinate (lower-tier) primary segment down and thus such workers suffered more loss than their counterparts from the independent (upper-tier) segment; since deindustrialization primarily affected the core manufacturing industries, core workers suffered greater loss from displacement relative to their peripheral counterparts. In this context, this study further hypothesizes that migration will not benefit the workers from the subordinate primary segment as much as the workers from the independent primary segments. The empirical results confirm the main hypotheses of the present study: Workers displaced from the subordinate primary segment suffered more earnings loss and longer jobless duration than their counterparts from the independent primary segment. Workers from the core industries experienced longer jobless duration than their counterparts from the peripheral segment. Migration had no effect on the postdisplacement earnings and jobless duration for the displaced workers from either segment. The clear implication of these findings is that migration is no solution. Among other things, occupation/industry change when reemployed is an important factor causing earnings loss; formal educational attainment reduces earnings loss and shortens the jobless duration while work tenure on the pre-displacement job increases earnings loss and lengthens the jobless duration. / Ph. D.