he assumption of a purely self-interested supervisor in a three-tier hierarchy (a principal-supervisor-agent framework) gives rise to the possibility of supervisor-agent collusion which lowers the principal's profits. It has also been shown that the transfer of information in side contract negotiations between the supervisor and the agent may hinder collusion and maintain high principal profits. In chapter 2, I show that imposing "credible" updating of type beliefs during negotiations can guarantee one of two outcomes that are Pareto superior for the supervisor-agent coalition. I further refine the equilibria by endogenizing the decision of who makes the side contract proposal, and a unique collusive equilibrium results. In allowing the principal to form a collusion-proof incentive contract, I find that the only plausible solution is for the principal to ignore the supervisor. It is clear that there is no value at all to the principal in hiring a self-interested supervisor. This casts doubt on the validity of the assumption that the supervisor is self-interested, and I discuss some possible alternatives. Chapter 3 studies job matching inefficiencies under two-sided uncertainty. I examine these inefficiencies in a setting of a single-stage, simultaneous-offer bargaining situation, where the applicant does not know his productivity with the firm, and the employer does not know the applicant's reservation wage. I compare linear bid strategy equilibria between the cases where the applicant is uninformed of his productivity and where he is informed. I find that the payoff to the applicant is higher if he is informed. He is thus willing to collude with an informed person within the firm, paying him up to the difference in payoffs to obtain his productivity information. It is noteworthy that the collusive equilibrium is always more efficient than the non-collusive equilibrium, and that most types of employer prefer the applicant to have the knowledge. In the cases that the employer does not wish the applicant to possess the information, I examine possible reward schemes for the employer to use to deter collusion. I find, however, that a successful reward scheme is too costly to the employer, and coalition formation always occurs in equilibrium. Chapter 4 studies the strategic choice of job tenures to maximize lifetime earnings. A worker's salary typically increases with tenure, and the possible net starting salary at a new job depends on such factors as search costs, training period duration, rate of human capital accumulation, and experience. The worker thus wishes to choose appropriate tenures considering the levels of these factors for the industry in which he works. I set up a general framework for the problem, and solve using specific functional forms for salary increments and the new starting salary. I find that these factors are important in determining the optimal number of jobs to work, and the optimal distribution of tenures among the jobs. It is easy to see how variations in these factors across industries can help explain variations in turnover rates and tenure choices of individuals at different points in their working lifetimes. Also, we see how realistic variations in these values over the course of a worker's lifetime yield results consistent with empirical findings. / Ph. D.

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This dissertation studies the determinants of the spatial distribution of economic activity and how such activity is affected by public policy. The dissertation contains three chapters. In the first chapter, we ask: what role does labor market competitiveness play in determining the location decisions of firms and workers, and the resulting spatial wage distribution? To answer this question, we develop a model of monopsony power in spatial equilibrium. Workers and firms are free to locate in any labor market, and the degree of market power a firm enjoys depends on the number of competing firms in its location. We show the model can rationalize concentrations of economic activity and the city-size wage premium through an endogenous labor market competitiveness channel: in larger labor markets, endogenous firm entry increases labor market competition, decreasing wage markdowns and increasing equilibrium wages. To estimate the magnitude of labor market competitiveness differences across space, we utilize matched employer-employee data from Germany. Using a canonical empirical methodology from the labor economics literature on monopsony, we estimate that labor markets are significantly more competitive in larger cities. Calibrating the model to match this reduced-form evidence, we find endogenous labor market competitiveness can explain 37% of the city-size wage premium and 14% of all agglomeration. In the second chapter, we use the new framework developed in Chapter 1 to study the spatial and welfare implications of the 2015 German national minimum wage law. We first show a traditional spatial model that ignores variation in monopsony power across space predicts large unemployment effects in smaller, lower-wage labor markets, contradicting the reduced-form evidence on the effects of the law. Turning to our monopsony framework, we note that in the calibrated model, monopsony power is strongest in smaller, lower-wage labor markets: exactly those that the perfectly competitive model predicted would have the largest unemployment effects. Imposing the minimum wage in the calibrated monopsony framework, we find results in line with the reduced-form evidence — minimal unemployment effects, even in the lowest-wage labor markets, and therefore significant convergence in regional nominal wage inequality. Accounting for spatially-varying monopsony power, we find the enacted national law outperforms an alternative policy with a lower level of the minimum wage in East Germany, while a law that takes into account variation in productivity and competitiveness significantly outperforms both. In the third chapter (joint with Pablo Ernesto Warnes and Timur Abbiasov), we examine the effects of pedestrianization on business visits. There are significant debates in urban planning on the use of road space in cities. Should (some) streets be pedestrianized? Critics suggest closing streets to vehicles can harm local businesses by reducing access. The effect of pedestrianization on business visits has been difficult to assess due to the lack of an appropriate experiment and lack of systematic data on foot traffic. We examine a unique recent experiment, New York City's Open Streets program, which closed hundreds of street segments to cars, and utilize new anonymized cellphone geodata to measure visits to businesses. Using a matched difference-in-differences design, we find small effects of the program on visits overall, with sufficient precision to rule out significant negative effects, contradicting critics' predictions. We find significant positive effects on visits for Open Streets further from the Central Business District, especially for restaurants and bars. For such businesses, we find a 14% increase in visits as a result of the program.

In the first chapter,a harmonised linked employer-employee dataset is used to study the impact of firm-level agreements on the wage structure in the manufacturing sector in Belgium, Denmark and Spain. To our knowledge, this is one of the first cross-country studies that examines the impact of firm-level bargaining on the wage structure in European countries. We find that firm-level agreements have a positive effect both on wage levels and on wage dispersion in Belgium and Denmark. In Spain, firm also increase wage levels but reduce wage dispersion. Our interpretation is that in Belgium and Denmark, where firm-level bargaining greatly expanded since the 1980s on the initiative of the employers and the governments, firm-level bargaining is mainly used to adapt pay to the specific needs of the firm. In Spain, the structure of collective bargaining has not changed very much since the Franco period where firm agreements were used as a tool for worker mobilisation and for political struggle. Therefore, firm-level bargaining in Spain is still mainly used by trade unions in order to reduce the wage dispersion. <p>In the second chapter, we analyse the impact of the bargaining level and of the degree of centralisation of wage bargaining on rent-sharing in Belgium. To the best of our knowledge, this is the first study that considers simultaneously both dimensions of collective bargaining. This is also one of the first papers that looks at the impact of wage bargaining institutions on rent-sharing in European countries. This question is important because if wage bargaining decentralisation increases the link between wages and firm specific profits, it may prevent an efficient allocation of labour across firms, increase wage inequality, lead to smaller employment adjustments, and affect the division of surplus between capital and labour (Bryson et al. 2006). Controlling for the endogeneity of profits, for heterogeneity among workers and firms and for differences in characteristics between bargaining regimes, we find that wages depend substantially more on firm specific profits in decentralised than in centralised industries ,irrespective of the presence of a formal firm collective agreement. In addition, the impact of the presence of a formal firm collective agreement on the wage-profit elasticity depends on the degree of centralisation of the industry. In centralised industries, profits influence wages only when a firm collective agreement is present. This result is not surprising since industry agreements do not take into account firm-specific characteristics. Within decentralised industries, firms share their profits with their workers even if they are not covered by a formal firm collective agreement. This is probably because, in those industries, workers only covered by an industry agreement (i.e. not covered by a formal firm agreement) receive wage supplements that are paid unilaterally by their employer. The fact that those workers also benefit from rent-sharing implies that pay-setting does not need to be collective to generate rent-sharing, which is in line with the Anglo-American literature that shows that rent-sharing is not a particularity of the unionised sector. <p>In the first two chapters, we have shown that, in Belgium, firm-level bargaining is used by firms to adapt pay to the specific characteristics of the firm, including firm’s profits. In the third and final chapter, it is shown that firm-level bargaining also allows wages to adapt to the local environment that the company may face. This aspect is of particular importance in the debate about a potential regionalisation of wage bargaining in Belgium. This debate is, however, not specific to Belgium. Indeed, the potential failure of national industry agreements to take into account the productivity levels of the least productive regions has been considered as one of the causes of regional unemployment in European countries (Davies and Hallet, 2001; OECD, 2006). Two kinds of solutions are generally proposed to solve this problem. The first, encouraged by the European Commission and the OECD, consists in decentralising wage bargaining toward the firm level (Davies and Hallet, 2001; OECD, 2006). The second solution, the regionalisation of wage bargaining, is frequently mentioned in Belgium or in Italy where regional unemployment differentials are high. In this chapter we show that, in Belgium, regional wage differentials and regional productivity differentials within joint committees are positively correlated. Moreover, this relation is stronger (i) for joint committees where firm-level bargaining is relatively frequent and (ii) for joint committees already sub-divided along a local line. We conclude that the present Belgian wage bargaining system which combines interprofessional, industry and firm bargaining, already includes the mechanisms that allow regional productivity to be taken into account in wage formation. It is therefore not necessary to further regionalise wage bargaining in Belgium. <p> / Doctorat en Sciences économiques et de gestion / info:eu-repo/semantics/nonPublished

In this thesis, return to health is also estimated. We examine the effects of height on hourly wage, monthly earnings, working hours, and education level. Our results show that height has different causal impacts on women and men. Women benefit from height: taller women earn more, work less, and have more leisure time. However, taller men are more likely to land a job and work longer, largely because they are better endowed. Moreover, the positive effect of height on hourly wage for women is larger than that for men. In general, the findings have contributed new evidence to existing literature that estimates the return to health. / This thesis mainly investigates the intergenerational transmission of socioeconomic status. Specifically, it estimates the effects of family income and parental education on the health status and educational attainment of the next generation using unique twins data collected from urban China. By using twins strategy, we can largely control for unobservables, which may cause biases in estimations. Our results show that the positive correlations of family income and maternal education with child health are largely due to unobserved endowment and family background. However, family income and paternal education do have a positive effect on child education. Overall, our findings suggest that increasing family income and parental schooling do not help in improving child health. However, to reduce the educational gap of the next generation, redistributing income would prove beneficial. The design of government policies is dependent on the policy targets. / Xiong, Yanyan. / Advisers: Hongbin Li; Junsen Zhang. / Source: Dissertation Abstracts International, Volume: 70-06, Section: A, page: 2176. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2008. / Includes bibliographical references. / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest dissertations and theses, [201-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstracts in English and Chinese. / School code: 1307.