The objective of this dissertation is to identify both individual and contextual characteristics that may affect the wage earnings of Chinese in the U.S. labor market. The major individual characteristics include education, labor experience, and English ability; the contextual factors include percent of Chinese Americans, percent of Asian Americans, percent of nonwhites, percent of Chinese-owned businesses, occupational and residential segregation between Chinese and whites, and unemployment rate. Using the combined data of one percent and five percent 2000 Public Use Microdata Samples for 70 metropolitan areas, hierarchical linear models (HLM) were run for three groups of Chinese: native-born, foreign-born U.S. citizens, and foreignborn non-U.S. citizens. The results show that the returns to education are highest for the native-borns but lowest for the non-U.S. citizens. A command of good English benefits recent immigrants more than the native-borns. Labor experience tends to bring positive gains to both native-born and foreign-born U.S. citizens but shows no effects on earnings of foreign-born non-U.S. citizens. The results support both the human capital and assimilation perspectives. The HLM results indicate that occupational segregation from majority whites tends to impose a strong and negative effect on the earnings of native-born Chinese; a higher percentage of Chinese-owned businesses tends to increase the earnings of only foreign-born U.S. citizens; unemployment rate is likely to depress the wage earnings of the foreign-borns but not the native-borns. This suggests that Chinese workers with a different immigration history face the labor market differently. Residential segregation, percent of Chinese Americans, percent of Asian Americans, and percent of nonwhites, do not show any direct effects. Occupational segregation, the percent of Chinese-owned businesses, and the representation of the Chinese population are found to impact earnings indirectly through the individual characteristics. All these findings suggest that contextual factors do not necessarily impose direct effects on wage earnings; however, they may transfer their effects onto earnings via individual characteristics. This study represents an attempt to bring new insights into earnings attainment models and an addition to the meager body of knowledge concerning both individual and contextual factors that may affect the earnings process of a minority group in the United States. The strengths of using the HLM techniques, the limitations of the study, as well as issues for future study, were also discussed.

The present dissertation develops some theoretical models which analyze the impact on wages of the financial and technological choices operated by firms. Chapter I considers the effects of technological change on efficiency-wages. We adopt Kremer's (1993) "O-Ring" production function, where technical progress can be represented through a change in the number of tasks to be performed in production. More complex production processes imply higher wage levels and higher general equilibrium unemployment. The model is extended to analyze within-group wage dispersion. In Chapter II, we adopt an alternating-calls strategic bargaining model where the incentive to reach an early agreement does not rely on time-preferences, but on intrinsic decay in the cake's size. When outside options remain positive and constant over time and the interval between calls shrinks to zero, the solution to this game converges to the Nash-solution, where the outside options take the status quo positions. This result contrasts with Rubinstein (1982), where outside options can matter only as corner- solutions. The model is extended to consider the role of market factors on wage determination. Chapter III considers the strategic role of debt in wage negotiations. Since debt provides a "credible threat" in bargaining, the entrepreneur can increase her profits by borrowing. Debt, thus, constitutes a (partial) remedy to Grout's (1984) under-investment problem. Chapter IV extends the model developed in Chapter III to analyze the implications that strategic borrowing can have on technological sophistication. We show that debt may have positive effects not only on the quantity of investment, but also on the degree of sophistication of the chosen projects. Chapter V (with G. Marini) analyses the role of foreign debt in promoting investment in Less Developed Countries that are subject to political risks. We show that, when default can trigger trade sanctions, foreign debt reduces the negative effects of political uncertainty on capital accumulation. Chapter VI (with F.Bagliano) contrasts the explanation for mark-up countercyclicality offered by the "price-war" model of Rotemberg and Saloner (1986) with the alternative explanation, based on "liquidity constraints", proposed by Chevalier and Scharfstein (1996).

This dissertation consists of three essays, which mainly talk about the wage inequality caused by outsourcing in the source countries like the US. The title of the first essay is “Does Outsourcing Always Benefit Skilled Labor? A Dynamic Product Cycle Model Approach.” To understand why outsourcing did not cause wage inequality in the 1970s, I build a dynamic product cycle model with three kinds of labor inputs, scientists, white-collar workers, and blue-collar workers. First, only a homogenous representative producer exists in the model and then the paper allows for producer heterogeneity. According to my theoretical model, outsourcing can hurt skilled labor and does not cause wage inequality if outsourcing industries are absolutely blue-collar worker-intensive compared to non-outsourcing industries. Only scientists who conduct research and development always benefit from outsourcing. The second essay is an empirical work. The title is “Outsourcing, Innovation, and Wage Inequality in the United States: What Happened to the Outsourcing Effect on Wage Inequality in the 1970s?” I find that, in the 1970s, white-collar workers’ wages deteriorated and blue-collar workers’ wages were non-decreasing. R&D workers always benefit from outsourcing. Except computers and high-technology capital, innovation expenditure on wage payment was an additional source of wage inequality in the 1980s. The last essay is named “Beyond the Wage Inequality, the Impact of Outsourcing on the U.S. Labor Market.” To understand the impact of outsourcing on employment, I examine laborers’ ages, gender ratio, years of education, and job tenure and retention rates. By employing the January Current Population Survey (CPS) data, the National Bureau of Economic Research (NBER) production data, and outsourcing data provided by Feenstra and Hanson, I find that outsourcing decreased blue-collar laborers’ average years of completed education; increased the hiring of females into white-collar workers, and increased job stability of unskilled and skilled laborers in the 1980s. Thus, outsourcing did not take away unskilled laborers’ jobs but hindered new hiring of young unskilled workers