My dissertation consists of four chapters that are motivated by understanding the intended and unintended economic outcomes of public policy in the labor market. My particular focus is studying how individuals respond to incentives created by policy and welfare reform. The first chapter explores the effect of expanding dependent health insurance coverage to young adults. I study both the outcomes from state policies and the recent Affordable Care Act (ACA). In the second chapter I analyze the unintended consequences of a New Deal policy that paid farmers to reduce production. As a result, I find significant displacement of croppers and tenants in the Cotton South. The third chapter ties together the micro-foundations of the labor supply to the firm with the macroeconomic areas of on-the-job search theory and the business cycle. By using employee level data from two US manufacturing firms in the volatile inter-war period, I show that these two firms had significantly more wage setting power during recessions than expansions. My final chapter addresses the question of how does reduced immigration restrictions affect the composition of immigrants in the US.