In this thesis I study how networks are formed and I analyse the strategies that well-connected individuals adopt in public good games on a network. In chapter one I study an artefactual field experiment in rural India which tests whether farmers can create efficient networks in a repeated link formation game, and whether group categorisation increases the frequency of in-group links and reduces network efficiency. I find that the efficiency of the networks formed in the experiment is significantly lower than the efficiency which could be achieved under selfish, rational play. When information about group membership is disclosed, in-group links are chosen more frequently, while the efficiency of network structure is not significantly affected. Using a job-referral network experiment in an urban area of Ethiopia, I investigate in chapter two whether individuals create new links with the least connected players in the network. In a first treatment, competition for job-referrals makes it in the player's interest to link with the least connected partners. In this treatment, links to the least connected players are significantly more likely than links to better connected individuals. In a second treatment, connections only affect the welfare of the new partner. Choosing the least connected player minimises inequality and maximises aggregate efficiency. This may motivate other-regarding players. In this treatment, however, links to least connected partners are not significantly more likely than links to other players. In chapter three I explore the characteristics that individuals value in the people they approach for advice. Using cross-sectional data on cocoa farmers in Ghanaian villages and a matched lottery experiment, I find an association between the difference in the aversion to risk of two farmers and the probability that one farmer is interested in the advice of the other farmer. In chapter four I study a one-shot public good game in rural India between farmers connected by a star network. Contributions by the centre of the star have a larger impact on aggregate payoffs than contributions by the spoke players. I use the strategy method to study whether the centre of the star contributes more than the average of the spokes. In selected sessions, I disclose participants' expectations about the choices of the centre of star. I find that the centre player contributes just as much as the average of the spokes, and that he is influenced by the expectations that other players hold about his decisions.

This dissertation studies the role of occupation-specific human capital in explaining the long-run decline in labor market dynamics observed in the United States for the past four decades. Chapter 1 presents empirical facts on labor market outcomes by required occupation-specific training. This is to provide evidence that (i) required length of occupation-specific training is a proxy for the specificity of human capital to perform the occupation and that (ii) increasing occupation specificity has led to the decline in labor market dynamics. First, I find from the Dictionary of Occupational Titles and O*NET that for the past four decades, within occupations, there has been an increase the amount of time needed to become trained in the occupation. I then find from the Survey of Income and Program Participation that the average wage loss experienced by occupation switchers after unemployment increases when their occupation held before unemployment has faced over time an increase in occupation-specific training. I take this as evidence that the observed increase in occupation-specific training over time has made human capital less transferable across occupations. I then proceed to use the Monthly Current Population Survey, combined with the required length of occupation-specific training by occupation from the Dictionary of Occupational Titles and O*NET, to do a shift-share decomposition of the decline in labor market outcomes. The decline in the aggregate job separation rate and the increase in unemployment duration is accounted for mostly by the increase in specific training within occupations. Motivated by my empirical analysis, in Chapter 2, I then build a search-and-matching model to learn how the increase in specificity within occupations explains the decline in the aggregate job separation rate. The main ingredients are endogenous job separations and occupation-specific human capital that workers acquire during employment and lose when they switch occupations. My model has two occupation specificity parameters: (i) the average duration of occupation-specific training and (ii) the output gap by which nontrained workers are less productive because they have not yet acquired the occupation-specific capital. To ask my model how much of a decline it predicts in the aggregate job separation rate when occupations become more specific, the occupation specificity parameters in the model are increased to match the increase in occupation specificity in the data. The increase in the average duration of occupation-specific training matches the required length of occupation-specific training from the Dictionary of Occupational Titles and O*NET. The increase in the output gap is informed by the estimated increase in the wage penalty faced by occupation switchers (relative to non-occupation switchers) when their previously held occupation requires more occupation-specific training, obtained from the Survey of Income and Program Participation. The model predicts 60% of the decline in the aggregate job separation rate. Chapter 3 relaxes the assumption that occupation switching is exogenous in Chapter 2, endogenizing occupation switching in addition to job separations. The model predicts a greater increase in the average unemployment duration in line with the data. In the model, the longer unemployment spells are due to the unemployed trained workers, whose human capital has become more specific to their previous occupation, choosing not to switch occupations. If they switch occupations, they could quickly end their unemployment spell. This would however come at the cost of larger wage cuts because their human capital has become less transferable to a different occupation. Occupation switchers would also have to earn these lower wages for a longer period of time until they become trained in their new occupation. Hence, despite a low probability of getting reemployed in the same occupation as before, previously trained workers increasingly choose not to switch occupations, which increases the average unemployment duration.

This thesis aims to provide new and useful insights into the effects that various tax, labour and product market reforms have on the overall economic performance. Additionally, it aims also to provide insights about the optimal monetary and fiscal policy behaviour within the economy characterized with various real labour market frictions. We analyze the benefits of tax reforms and their effectiveness relative to product or other labour market reforms. A general equilibrium model with imperfect competition, wage bargaining and different forms of tax distortions is applied in order to analyze these issues. We find that structural reforms imply short run costs but long run gains; that the long run gains outweigh the short run costs; and that the financing of such reforms will be the main stumbling block. We also find that the effectiveness of various reform instruments depends on the policy maker's ultimate objective. More precisely, tax reforms are more effective for welfare gains, but market liberalization is more valuable for generating employment. In order to advance our understanding of the tax and product market reform processes, we then develop a dynamic stochastic general equilibrium model which incorporates search-matching frictions, costly ring and endogenous job destruction decisions, as well as a distortionary progressive wage and a at payroll tax. We confirm the negative effects of marginal tax distortions on the overall economic performance. We also find a positive effect of an increase in the wage tax progressivity and product market liberalization on employment, output and consumption. Following a positive technology shock, the volatility of employment, output and consumption turns out to be lower in the reformed economy, whereas the impact effect on inflation is more pronounced. Following a positive government spending shock the volatility of employment, output and consumption is again lower in the reformed economy, but the inflation response is stronger over the whole adjustment path. We also find detrimental effects on employment and output of a tax reform which keeps the marginal tax wedge unchanged by partially offsetting a decrease in the payroll tax by an increase in the wage tax rate. If this reform is anticipated one period in advance the negative effects remain all over the transition path. We investigate the optimal monetary and fiscal policy implication of the New-Keynesian setup enriched with search-matching frictions. We show that the optimal policy features deviation from strict price stability, and that the Ramsey planner uses both inflation and taxes in order to fully exploit the benefits of the productivity increase following a positive productivity shock. We also find that the optimal tax rate and government liabilities inherit the time series properties of the underlying shocks. Moreover, we identify a certain degree of overshooting in inflation and tax rates following a positive productivity shock, and a certain degree of undershooting following a positive government spending shock as a consequence of the assumed commitment of policy maker.

Chapter 1: The Determinants of the Production of Research by US Universities<p>Chapter 2: Investment in Vocational and General Human Capital: A Theoretical Approach<p>Chapter 3: Urban Migrations and the Labor Market<p>Chapter 4: Local social capital and geographical mobility<p>Chapter 5: Social Supervision and Electoral Stability on the Geographical Scale in Belgium / Doctorat en Sciences économiques et de gestion / info:eu-repo/semantics/nonPublished