The use of performance-based payments to compensate rank and file workers in the U.S. has increased substantially since the 1980s. This dissertation presents three papers that examine the empirical implications of these compensation structures on the U.S. labour market. The first paper investigates whether performance pay is contributing to the difference in residual wage inequality between the March and the Merged Outgoing Rotation Group (MORG) samples of the Current Population Survey (CPS). Lemieux (2006) and Autor, Katz, and Kearney (2008) show 1) that residual inequality is about 30% higher in the March CPS than in the MORG CPS, and 2) that this measure of inequality grew between 1970 and the late 1990s in the March CPS but was relatively stable in the MORG CPS. Understanding why there should be such a substantial difference in residual inequality between the two CPS samples is important because they differ in their support for widely accepted theories of wage inequality. Drawing on detailed earnings information contained in the Medical Expenditure Panel Survey, I present results that suggest that performance pay is indeed playing a role in the discrepancy in residual inequality between the March and MORG CPS samples. The second paper examines whether employers that pay for performance learn more quickly about their workers' unobserved skill (such as ability). According to models of employer learning this is likely to be the case if paying for performance generates cleaner (less noisy) signals of worker productivity. Using job spells constructed from the Panel Study of Income Dynamics I show that faster learning occurs in performance pay jobs than in non-performance pay jobs. This result is in line with Lemieux, MacLeod, and Parent's (2009) finding that performance pay tends to be more closely linked to unobserved measures of skill than pay that is not based on performance. The third paper investigates whether more risk-loving workers sort themselves into jobs that pay for performance and, whether this plays any part in the observed positive relationship between performance pay and uncertainty in output - a relationship which agency theory predicts should be negative. If more risk-loving workers are sorting into performance-pay jobs, then failing to control for heterogeneity in risk preferences will lead to a positive performance pay-output uncertainty relationship. Results obtained using data from the Panel Study of Income Dynamics and Compustat North America show that, although more risk-loving workers are more likely to be found in performance pay jobs, this sorting behaviour only plays a small role in the positive relationship between performance pay and output uncertainty. / L'usage de paiements à la performance pour compenser les salariés non-cadres aux Etats-Unis a largement augmenté depuis les années 1980. Cette dissertation présente trois études qui examinent les implications empiriques de ces structures compensatoires sur le marché du travail Américain. La première étude enquête si une plus grosse quantité de paiements à la performance dans les mesures de salaire de l'échantillon de Mars du Current Population Survey (CPS) que dans celles de l'échantillon Merged Outgoing Rotation Group (MORG) du CPS contribue au niveau plus élevé et aux tendances divergentes dans l'inégalité salarial résiduelle entre les deux échantillons. Lemieux (2006) et Autor, Katz, et Kearney (2008) démontrent que, non seulement l'inégalité résiduelle dans le CPS de Mars est approximativement 30% plus élevée que dans le MORG CPS, mais aussi que malgré la croissance de cette mesure d'inégalité entre 1970 et la fin des années 1990, elle était relativement stable dans le MORG CPS. Il est important de comprendre l'origine de cette large différence dans l'inégalité résiduelle entre ces deux échantillons vu qu'ils diffèrent dans leur soutien des théories de l'inégalité salariale. Par le biais d'information détaillée sur les gains, contenue dans le sondage Medical Expenditure Panel Survey, je présente des résultats qui suggèrent que le paiement à la performance joue en effet un rôle dans l'écart dans l'inégalité résiduelle entre les échantillons de Mars et du MORG CPS. La deuxième étude examine si les employeurs payant à la performance apprennent plus rapidement les compétences non observées de leurs travailleurs (comme la capacité). Selon les modèles d'apprentissage des employeurs, ceci est probable si le paiement à la performance engendre des signaux plus clairs quant a la productivité des travailleurs. En utilisant les périodes d'emplois construites à partir du Panel Study of Income Dynamics I, je démontre que l'apprentissage est plus rapide dans les emplois rémunérés à la performance. Ceci est cohérent avec les résultats de Lemieux, MacLeod et Parent (2009) selon lesquels le paiement à la performance est plus étroitement lie aux compétences non observées que le paiement non basé sur la performance. La troisième étude examine si les travailleurs avec préférence pour le risque se trient dans les emplois qui paient à la performance et si cela joue un rôle dans la relation positive observée entre le paiement à la performance et l'incertitude dans la production – une relation que la théorie de l'agence prédit négative. Si les travailleurs ayant plus de préférence pour le risque se trient dans les emplois rémunérés à la performance, ne pas contrôler pour l'hétérogénéité dans ces préférences conduira à une relation positive entre le paiement à la performance et l'incertitude dans la production. Les résultats obtenus à travers le Panel Study of Income Dynamics et Compustat North America démontrent que, bien que les travailleurs préférant le risque sont plus probablement dans des emplois payes à la performance, ce triage ne joue qu'un rôle mineur dans la relation positive entre le paiement à la performance et l'incertitude dans la production.

This dissertation contributes to a strand of literature on the economic integration of immigrants in Canada's labour market. My first essay examines the economic return to human capital acquired abroad using an improved identification strategy of foreign education and work experience. My second essay examines whether education-job mismatches, on the part of immigrants, possibly explain their poor labour market outcomes. My final essay provides new evidence on the economic assimilation of U.K. immigrants in Canada over the late 19th and early-20th-century.In my first essay I exploit the enhanced details on education attainment provided in the Survey of Labour and Income Dynamics (SLID) to decompose aggregate human capital variables into more precise measures of foreign and Canadian locations than those employed in related Census-based studies. I find that measurement error associated with using imprecise measures exaggerates the portability (in terms of economic returns) of foreign schooling and the degree of immigrant wage assimilation. However, the virtually zero returns to foreign work experience, commonly found in the literature, cannot be attributed to measurement error. Thus, this dimension of human capital receives virtually no recognition for immigrants and it is mainly responsible for the substantial estimated wage gaps in the standard human-capital-adjusted earnings function.The contribution of my second essay is an investigation of the importance of education-job mismatches in explaining the poor labour market outcomes observed for immigrants to Canada. Immigrants have a modestly lower incidence of working in jobs related to their education than do the Canadian-born, and there is a sizable wage penalty for working in unrelated jobs. The lower incidence of matching, found among immigrant workers, can explain a sizable portion of their lower returns to foreign education credentials, and also the immigrant-native wage gap among university educated workers. By contrast, foreign education and work experience acquired abroad is not discounted in the Canadian labour market for immigrants who are successfully matched.My final essay examines the economic assimilation of pre-war U.K. immigrants using recently digitized samples of the 1901 and 1911 censuses. These nationally representative samples allow for a more comprehensive examination of immigrant assimilation than existing published evidence which is limited to cross-sectional samples of Montréal and Toronto. Estimates of within-cohort earnings growth show that these newcomers, despite their cultural similarities with the Canadian-born, experienced sizable earnings disadvantages upon arrival coupled with slow subsequent earnings growth. However, most immigrant cohorts achieved earnings parity with comparable Canadian-born workers over their working life unlike that found for Montréal and Toronto. Thus, although the government's desire was to attract the most industrious and hard working immigrants, arrivals from the British Isles may have been negatively selected in terms of unobservable labour market characteristics. / Cette thèse contribue à la littérature qui examine l'intégration des immigrants au marché de travail Canadien. Le premier essai étudie le retour au capital humain acquis à l'étranger sur le marché de travail Canadien utilisant des stratégies améliorées d'indentification de ce dernier. Mon deuxième essai examine des conséquences économiques de l'absence de la correspondance parfaite des professions que les immigrants au Canada peuvent obtenir avec leurs disciplines d'études. Mon troisième essai produit des faits stylisés nouveaux au sujet de l'intégration des immigrants de provenance du Royaume-Uni au Canada durant la fin du 19ème au début du 20ème siècle.Dans mon premier essai j'exploite des détails améliorés de l'Enquête sur la dynamique du travail et du revenu à fin de décomposer le capital humain a des portions acquises à l'étranger et des portions acquises au Canada. Je trouve que l'erreur de mesure associée à l'emploi des indicateurs imprécis avait causé la sous-estimation de l'écart entre le retour sur le capital humain acquis à l'étranger et celui acquis au Canada dans les études précédentes. Je trouve, en revanche, que le capital humain acquis à l'étranger reçoit un retour nul au Canada et cela explique la quasi-totalité de l'écart de revenu entre les immigrants et les natifs.Mon deuxième essai examine l'importance de la correspondance imparfaite entre les disciplines d'études et la profession des immigrants au Canada pour expliquer leurs performances économiques inferieures. Je trouve que cette correspondance imparfaite est un peu plus fréquente chez les immigrants et qu'elle a cependant des conséquences négatives non-négligeables sur le salaire. Cette probabilité plus faible que des immigrants puissent travailler dans un domaine proche de leurs disciplines d'étude explique une portion considérable de l'écart de salaire entre les immigrants et les natifs comparables ainsi que leurs retours du capital humain plus bas. Mon troisième essai porte un regard nouveau sur la question d'intégration des immigrants de provenance du Royaume-Uni durant la fin du 19ème siècle au début du 20ème siècle en utilisant des données récemment numérisées des recensements de l'époque. L'échantillon que j'utilise dans cette recherche représente la distribution nationale de ces immigrants contrairement aux échantillons auparavant utilisés qui portaient seulement sur les immigrants résidant au Québec et en Ontario. Mes estimations montrent que ces immigrants, malgré leur similarité culturelle avec les natifs, ont subi un écart du salaire considérable ainsi qu'un taux de croissance du salaire plus bas en comparaison avec les natifs. Cependant, je trouve que la plupart de ces immigrants ont ultimement arrivé à un salaire équivalent aux natifs comparables durant leurs vies professionnelles. Je trouve aussi que le gouvernement, malgré son intention, a échoué d'attirer les immigrants industrieux et entreprenants en raison des facteurs inobservables conduisant à une sélection peu efficiente de ces immigrants.

Thesis (Ph.D.)--Lehigh University, 2007. / Adviser: Robert Thornton.

Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2006. / Source: Dissertation Abstracts International, Volume: 67-11, Section: A, page: 4288. Adviser: Kevin Hallock. Includes bibliographical references (leaves 100-109) Available on microfilm from Pro Quest Information and Learning.

The media narrative of the ‘contract year effect’ is espoused across all major professional American sports leagues, particularly the MLB and NBA. In line with basic incentive theory, this hypothesis has been shown to be true in baseball, but the analysis in basketball to this point has been flawed. In estimating the contract year effect in the NBA, this paper is the first to define rigorously the various states of contract incentives, the ignorance of which has been a source of bias in the literature thus far. It further expands on previous analyses by measuring individual performance more broadly across a range of advanced metrics. Lastly, it attempts to account for the intrinsic endogeneity of playing in a contract year, as better players get longer contracts and are thus less likely to be in a contract year, by using exogenous variations in the NBA’s contract structure to form an instrument, and by comparing performance to a priori expectations. In this manner, this paper produces the first rigorous finding of a positive contract year phenomenon. The estimated effect is about half that found in baseball, equivalent to a 3-5 percentile boost in performance for the median player in the NBA.

This paper studies the impact of a fragmented labor market on city structure to explain the spatial coexistence of formal and informal labor sectors characteristic of cities in developing countries. I explore reasons for structural differences among cities in developed and developing countries, which current models in urban economics and New Economic Geography have not yet considered. While existing models suggest that poorer people will live in the periphery of the city, I relax assumptions of uniform space requirement and commuting costs to show that clusters of informal labor will form within the city itself because of their dependence on the formal sector for employment. The plausibility of this spatial arrangement, and its consequences, is discussed with examples and supported with qualitative evidence. / Applied Mathematics

This paper considers how the probabilities of transitioning from joblessness to part- versus full-time work change with the duration of joblessness and labor market conditions. Using 1996-2013 Survey of Income and Program Participation data, I estimate these transition probabilities using a Cox proportional hazard model. I find that as the duration of jobless spells increases, the monthly probability of transitioning to full-time employment declines faster than for part-time employment. Additionally, a one percentage point increase in the national unemployment rate is associated with a ten percent decrease in the probability of transitioning to full-time work but unrelated for part-time work. Consequently, the share of individuals transitioning from joblessness to part-time work increases with the duration of joblessness and with increasing labor market slack. Additional evidence suggests these increases are due to behavioral changes rather than unobserved heterogeneity. Finally, compared to their previous employment, individuals who transition from unemployment to part-time work also experience decreases in real hourly wages, private health-care coverage, and occupational skill level. These results provide motivation for considering non-wage aspects of job quality when studying re-employment from joblessness. / Applied Mathematics

In this dissertation I examine the impacts of market forces and government programs on households' demand for human capital in India. The first chapter examines the impact of ITES Centers on school enrollment using administrative enrollment data from three states in India, and finds that when these centers open, enrollment in primary school increases significantly. The effects are very localized, and using supplementary survey evidence we argue that this is driven by limited information diffusion. The second chapter introduces a simple model of human capital production which predicts that wages can negatively impact human capital under reasonable assumptions. Using data on test scores and schooling from rural India, we show that human capital investment is procyclical in early life (in utero to age 3) but then becomes countercyclical. We argue that, consistent with our model, this countercyclical effect is caused by families investing more time in schooling when outside options are worse. The final chapter applies the findings from this study to understand how workfare programs (a common anti-poverty strategy in the developing world) can impact school enrollment through their effects on wages. We examine the effect of the largest anti-poverty workfare program in world: NREGA in India. Using a fixed effects estimator, I show that the introduction of NREGA caused increases in child employment, and decreases in school enrollment, particularly among children ages 13-17. / Economics

The first chapter in this dissertation discusses the results of a field experiment that lasted three weeks at a firm in Saudi Arabia where we randomized an attention to variability or mindfulness training program. We conducted a baseline and end-line survey 3 months post training, collecting measures on non-cognitive skills, beliefs, affect, and employee performance and productivity. The training program was incentivized as managers’ reports on employees’ performance get reflected in future raises and bonus pay. We converted the measures to z-scores (unit standard deviation, mean zero) to standardize the scaling across measures. We found that mindfulness improved by 0.485 standard deviations in the treatment group. This effect is mediated by an increase in employees’ engagement. The extent to which locus of control is internal improved by 0.344 standard deviations, meaning that employees who took the training gave a greater weight to effort verses luck in determining their life outcomes. On the other hand, we found that work locus of control became more external by 0.646 standard deviations, and that employees perceived a greater degree of ethnic discrimination. On average, employees’ performance improved by about 0.5 standard deviations as measured by managers’ direct reports and punctuality. We explain the improvement in general locus of control but decrease in work locus of control with the gains in productivity and performance through a compensating story. Being more aware of variability has arguably led employees to perceive more discrimination in the environment, resulting in employees perceiving their work locus of control as more external. But employees improved their performance as a compensatory measure for perceived discrimination. The second chapter discusses the results of two lab experiments where we measure the effects of a negative shock on wage under uncertainty on subsequent efforts decisions under certainty. We found that students in the negative shock treatment do not optimize their effort, decreasing their total payout. This is explained through a tax in beliefs on the relationship between effort and reward in life, and trust in life. Even though the lab experiment was local, the students generalize what they learnt to their life beliefs. Furthermore, we conduct a second experiment to test that it is the uncontrollability of the negative shock rather than the negative shock per se that caused this. While this is a lab experiment and it is likely that these effects do not last in the long term, these results can be put in perspective when one thinks about the uncontrollability of the shocks that the poor are exposed to in the long-term, and their effect on life beliefs and effort decisions. The final chapter provides support to how the poor are more likely to experience learned helplessness and larger magnitude of learned helplessness. The effects of initial levels of capital, institutions, and differences in expected utility on learned helplessness is explored. We also provide evidence that once learned helplessness occurs, it is more likely that it will occur in the future providing evidence for poverty traps. We discuss the effects of noncognitive skills in decreasing the probability that learned helplessness will materialize, and in breaking the cycle. / Public Policy

The first essay estimates the impact of a challenging, six-week-long summer program for rising high school seniors that is hosted annually at a selective private university which graduates a majority of its students in a science, technology, engineering, or math (STEM) field. Using applications to the program between 2005 and 2011, and records from the National Student Clearinghouse (NSC) and 31 universities, the analysis explores the effect of the summer program on college application, admission, matriculation, and STEM major rates. Records from the summer pro- gram’s selection process reduce bias when using OLS regression and propensity score techniques. The estimates show admission to the summer program increased enrollment at the host institution by 30 percentage points, and shifted students from less selective universities. There were no detectable differences in graduation rates, and STEM major rates increased. This indicates that interventions preceding college application season can influence application and enrollment at selective universities, and that matriculation and major choices are coupled in ways that are important for increasing STEM access. The second essay uses data from a randomized trial of three programs: the six-week summer program explored in the first chapter, a one-week version of the same program, and a program that takes place online over six months. Applicants in 2014 and 2015 were randomly assigned to one of the three programs or a control. Early results from surveys and host institution (HI) records confirm a large effect of the six-week program on application rates at the HI. The programs also improved application strategy beyond inducing application to the HI. For early outcomes such as college application and acceptance rates, there were no sharp distinctions between the one-week, online, and six-week treatments. If later outcomes do not diverge, this will have future policy implications. The third essay measures the effect of oversubscribed courses at a community college using a fuzzy regression discontinuity (FRD). The FRD relies on reconstructed enrollment queues, and exploits the discontinuity in enrollment at the waitlist cutoff. Using data from a large community college and the NSC, findings indicate that students substitute for unavailable courses with other courses in the same subject. We find no significant effects on later performance or transfer to other colleges. / Economics