Chapter 1 studies wage contracts and their roles in workers’ employment and wage dynamics, as well as the implications on income inequality. I develop an on-the-job search model that allows for different types of wage contracts. Using indirect inference method, I am able to estimate the structural model and evaluate the impact of different productivity elements, including firm productivity, returns to routine task and individual effort. The model is able to capture key measures on worker’s labor market mobility, wage growth and distribution. It also allows me to evaluate the implications of productivity change on income inequality through counterfactual analysis. I show that these productivity elements have different implications on income inequality, and the use of performance based wage contract is an important channel for income polarization at the top percentiles. Chapter 2 studies the effect of overtime pay on workers’ working schedule and income. How overtime pay regulations affect the labor market is a controversial yet relatively under- studied topic. In this paper, I study the effect of the revision to statutory overtime pay in 2004 on worker’s income and hours of work. Using monthly panel data on workers’ working hours and income that covers the period of rule change, I find evidence that for workers who gained statutory overtime pay coverage under the new rule, hours and income increased. I also find spillover effects on overtime pay premium and overtime schedule for workers who are not directly affected by the rule change. My results suggest that the standard competitive model does not capture well the labor market for overtime work, and government regulations could reduce labor market frictions. Chapter 3 studies debt covenant violations and their effects on corporate innovation. Exploiting the state of debt contract covenant violation and the institutional feature that creditors obtain increased control right of the firm, the paper examines the effect of increased creditor governance well before the state of bankruptcy on corporate innovation. Consistent with the view that increased creditor monitoring has disciplining effect on the managers, I find no significant change in the R&D spending, significant but model decrease in the total patent counts two years forward as well as significant and large positive impact on the citation counts of the patents. The results demonstrate that increased creditor governance is overall beneficial to firm innovation.

More than one-third of US-listed companies had all-male corporate boards in 2015. Quotas are discussed as policy levers to increase gender diversity, but there is much controversy whether they can increase female representation without harming organizational outcomes. Using the passage of a California law in 2018 that required the presence of at least one woman on corporate boards by the end of the following year, in the first chapter of my dissertation I estimate the effects of gender quotas on firm performance. I find the quota reduced the share of all-male boards by thirty percentage points within one year, with no reductions in operating performance, firm values, or shareholder returns within three years. These results question why all-male boards were prevalent prior to the legislation. I find that women directors are less likely to possess top-level experience and employment connections with corporate executives, which both appear as viable explanations. These findings provide insight on why women continue to lack representation in corporate leadership. Non-compete agreements are provisions within employment contracts that prevent workers from joining competing firms. They are prevalent in the US workforce, with 38% of workers having signed such clauses at some point in their careers. Despite their vast usage, there is limited research on the incentives for workers and firms to use non-compete agreements. In the second chapter, we show that non-compete agreements can create one market failure – inefficient lack of job separation – while mitigating a separate market failure – inefficient provision of industry-specific investment by firms. The model yields the predictions that (i) non-compete agreements are more likely to be used in industries where employer training is more "general" and (ii) non-compete signers have longer job tenures and receive more firm-provided investment relative to similar workers without non-compete agreements. Using newly-released panel data on the usage of non-compete agreements from the NLSY97, we confirm the model's predictions. Non-compete signers are more concentrated in knowledge-intensive industries and remain with their employers for 3 more months than individuals without such agreements. Non-compete signers also receive more employer-provided investment, but do not experience higher wage growth. Non-compete agreements are provisions within employment contracts that prevent workers from joining competing firms. In the third chapter, using the Current Population Survey, 18 state-level non-compete policy changes between 1992-2014, and hand-collected data on workers exempt from non-compete enforcement, I study the effects of non-compete regulation on labor market outcomes using a triple-differences research design. I find that a standard deviation increase in non-compete enforcement raises hourly wages by 3-7%, with larger gains for job leavers than job stayers. Non-compete enforcement is not associated with job mobility, unemployment, or labor force participation decisions. The findings are interpreted through the lens of an incomplete contracting model. Under the model’s assumptions, non-compete agreements mitigate the market failure of underprovided firm-sponsored general training, thus increasing the worker’s productivity. The extent to which the worker is compensated for this increase in productivity depends on labor market competition at the time of contracting. The fact that increased enforcement raises the wages of job leavers more than job stayers is consistent with the model’s predictions.

This dissertation consists of three empirical research studies that broadly pertain to the economics of collective bargaining, or the process by which employees act through labor unions to negotiate with employers over compensation, benefits, and other terms and conditions of employment; and of labor market power, which refers to the ability of economic actors to set wages and employment at levels different from those that would obtain under a theoretical ideal of perfect competition, wherein both workers and firms are atomized agents with no unilateral ability to influence a market equilibrium. The first chapter, entitled "The Effects of Union Membership on Inequality and Well-Being in Retirement," uses data from the Health and Retirement Study (HRS) and an empirical design based on comparisons of older workers who switch into or out of union employment in the years before retirement with otherwise similar peers to study the effect of union membership on various outcomes in old age, including pension income and income from other sources, wealth, consumption, time use, mortality, morbidity, and inequality. Our notable findings include a pension income premium for workers who retire as union members of approximately 10-20%, similar to estimates of the union wage premium; evidence of larger premia for retirees at lower quantiles of the pension income distribution, which mirrors existing research on how unions exert a compressive effect on the distribution of wages for current workers; and a reduction in the annual mortality rate for union retirees of around 1.25%, comparable to estimates of the mortality differential between the lowest- and highest-income individuals in the same age category. We further attempt to distill the multidimensional effects of union membership in retirement into a single measure of impact on well-being using the concept of "consumption-equivalent welfare," and estimate that the subsequent lifetime welfare of those who retire from nonunion jobs is on the order of 50-60% that of those who retire from union jobs, depending on the precise assumptions and methodology employed. The second chapter, coauthored with Leonard Goff, is entitled "Monopsony in Minnesota: Rent-Sharing and Labor Supply Consequences of a Nursing Home Reimbursement Reform." Models of static labor market monopsony predict that rent-sharing, or pass-through from firm productivity or marginal revenue shocks into workers' wages, is one consequence of labor markets being less than perfectly competitive. In this study we consider a 2016 reform to the state of Minnesota's Medicaid reimbursement scheme for residents of nursing homes that introduced so-called value-based reimbursement, and make use of data on facilities' wages, employee separations, and revenue from various sources to simultaneously estimate both rent-sharing and firm-level labor supply elasticities. In our most-preferred two-stage least squares specifications we find rent-sharing elasticities on the order of 0.10-0.25, suggesting that pass-through is substantially greater than indicated by naive OLS estimates of the same, and we confirm these results through an alternative methodology based on "seemingly unrelated regressions." With the same approach we also obtain an estimate of the average labor supply elasticity facing nursing homes of around 5, corresponding to an optimal wage markdown below marginal revenue product of roughly 15%. Furthermore, subgroup analyses by occupation, union status, and local labor market concentration show little evidence of an effect of collective bargaining on rent-sharing but more convincing indications that rent-sharing is greater in occupations or commuting zones that are characterized by lower labor supply elasticity - a fact that we show can be rationalized with a model of monopsony in which firms have isoelastic production functions. The third and final chapter, coauthored with Brendan Moore and Suresh Naidu, is entitled "Right-to-Work and Union Decline in the United States: Evidence from a Novel Dataset on County-Level Union Membership." Labor union membership and union density in the United States have fallen substantially in recent decades, in particular in the private sector. The causal contribution of state-level "right-to-work" (RTW) laws, which prohibit collective bargaining agreements from requiring union membership as a condition of employment, has been heavily debated. However, research on the role of RTW in accounting for these trends has been stymied by a paucity of data on union membership at a fine geographic level. Using a LASSO selection model and data from several different administrative and survey-based sources, we construct a novel dataset on county-level membership and density and use it to reexamine the consequences of RTW. We show that RTW has a highly significant negative effect in this regard, and we establish that the impact of these laws is felt most strongly in those counties that are the most highly-unionized at the start of our sample period. On average we find that density is reduced by about an additional 0.4 percentage points for every one percentage point increase in its initial value in 1991. However, counties at or below the median initial density see little to no change, while density declines by about 7 percentage points following the passage of RTW for those in the uppermost decile. We also present evidence from an event-study analysis which shows that the effect of RTW grows over time, with the full impact only being felt about a decade after enactment. Taken both individually and collectively, these three essays serve to advance an understanding of the determinants and consequences of union membership and monopsony power. In addition to making original contributions to the fields of applied labor economics and labor studies, it is our hope that they also offer frameworks upon which future research in these areas can build.