Thesis (Ph. D.)--University of Washington, 2000. / Vita. Includes bibliographical references (leaves 119-129).

This thesis consists of three essays which provide a detailed empirical investigation of the returns to education, gender wage gap and public-private wage differential in Bulgaria, Serbia, Russia and Tajikistan - countries that have received little attention in the literature. The studies are based on rich data sets which allow the most up-to- date analysis of the specific labour market outcomes. All three essays go a step further than the existing empirical literature since in each one the quantile regression results showed a much broader picture than the ones based on central tendency measures such as Ordinary Least Squares (OLS). The first essay looks at what had happened to the returns to human capital in Bulgaria over the period from early 1986 pre-transition to 2003. The study also contributes to the literature by estimating returns to education across the entire wage distribution, providing further evidence from Serbia, Russia and Tajikistan. Moreover, it deals with endogeneity and sample selection biases in a quantile regression framework. The second essay estimates gender wage gaps in the selected countries by applying a decomposition method that simulates marginal distributions from the quantile regression process. The study seeks to extend the popular Machado and Mata (2005) distributional approach by addressing the 'index' number problem suggested by Neumark (1988) and Oaxaca and Ransom (1994 and 1998). The gender wage gap decomposition is performed for each quantile of the earnings distribution by using the pooled wage structure as a non-discriminatory structure and giving a much richer picture of the influence of the covariate and coefficient effects. The third essay provides a comprehensive empirical study on the public-private wage differential in Bulgaria, Serbia, Russia, and Tajikistan. The study seeks to understand whether the differential in the public-private sector payment is explained by differences in workers characteristics or the difference in the returns to these characteristics. The endogenous sector choice is also considered. The study further analyses what has happened to the public sector hourly earnings differential at different points in the conditional earnings distribution and over time by adapting the Donohue-Heckman time-wise decomposition.

This thesis uses a comprehensive data set to examine the relationship between Canadian labour market outcomes and several changes in the policy environment. The data set, spanning the period 1981-98, is compiled from a number of comparable surveys and contains information on the demographics and job characteristics of individual workers. The first chapter examines the impact that the tariff reductions of the Canada- U.S. Free Trade Agreement (CUSFTA) had on the inter-industry wage structure in the goods producing sector. Previous studies use industry-level data and consequently are unable to control for either differences in worker composition or divergent wage trends for different worker types. These studies find that tariff cuts either had no effect or increased the relative wages of workers in impacted sectors. In contrast, I use data with information on worker characteristics and find that the relative wages of non-union workers in impacted industries decreased. The second chapter investigates the link between the CUSFTA tariff reductions and several labour market outcomes that are potentially linked to industrial productivity. In particular, I examine whether tariff reductions are related to changes in the (i) the size of firm a worker is likely to be employed with, (ii) the probability that a worker will be represented by a union, and (iii) the mean skill level of workers. Although I find evidence that these outcomes have changed over time, none of them seem to be linked directly to CUSFTA. The final chapter, co-authored with David Green, examines the extent to which the declining market outcomes of successive cohorts of job entrants in Canada can be accounted for by changes in the minimum wage, unionization rate, and industrial composition of employment. A flexible density estimator is used, which allows for a comparison between cohorts across the entire wage distribution. The main findings are that for males, changes in unionization and industrial composition can account for about a quarter of the decline in wage outcomes for new job entrants between 1998 and 1981. Similar results are found for females; in addition, the minimum wage provides a "wall" against further erosion for more recent cohorts of entrants. / Arts, Faculty of / Vancouver School of Economics / Graduate

This dissertation consists on three essays, inquiring about the usefulness of disaggregated data and cross-sectional causal effects to improve our understanding of traditional questions in macroeconomics, both for economic fluctuations and long-run outcomes. In Chapter 1, I explore whether the large body of cross-sectional evidence that established the adverse effects of cuts in the supply of bank lending on firm outcomes and the allocation of credit is relevant at the aggregate level. I estimate this aggregate effect using a new general equilibrium model that incorporates multibank firms, relationship banking, endogenous credit dependence, and bank market power. I use a set of cross-sectional patterns to estimate the key structural parameters of the model. The effect of an aggregate lending cut on aggregate output is large: a 1 percent decline in aggregate bank lending supply reduces aggregate output by 0.2 percent. The structure of labor and credit markets is important in reaching this answer. Under an alternative parametrization of the model that ignores input market frictions, the response of aggregate output is three times smaller. Under my preferred parametrization, the cross-sectional effects survive aggregation in general equilibrium. Instead, with frictionless input markets the cross-sectional patterns over-estimate the aggregate response by a factor of five. In Chapter 2, written with Sergio Ocampo, we study how the efficacy of development policies---such as job-guarantee programs, unemployment insurance, and micro-finance---depends on the prevalence of low-earning self-employed individuals. To this end, we develop a new general equilibrium occupational choice model that is consistent with the behavior and composition of self-employment. Our model differs from previous work by allowing unemployment risk to shape the selection of agents into self-employment. Models that rely only on financial frictions are at odds with crucial features of self-employment in developing economies---in particular, the concentration of self-employed agents among the lowest earners in the economy, and their willingness to accept salaried jobs when offered to them. These features support the prevalence of subsistence entrepreneurs in developing economies, who play a critical role in shaping policy responses. Their willingness to accept jobs at market wages leads to a muted response of wages to labor demand shocks, such as the implementation of a job-guarantee program. In addition, offering small unemployment benefits reduces subsistence entrepreneurship, thereby increasing productivity and output. In contrast, micro-finance exacerbates subsistence entrepreneurship, thereby reducing productivity. Finally, in chapter 3, with Andres Drenik and Pablo Ottonello, we study the importance of information frictions in asset markets at the aggregate level. We develop a methodology to identify the extent of information frictions based on a broad class of models of trade in asset markets, which predict that these frictions affect the relationship between listed prices and selling probabilities. We apply our methodology to physical capital markets data, using a unique dataset on a panel of nonresidential structures listed for trade. We show that the patterns of prices and duration are consistent with the presence of asymmetric information. On the one hand, capital units that are more expensive because of their observable characteristics tend to have lower duration, as predicted by models of trading under a full information model. On the other hand, capital units that are expensive beyond their observable characteristics tend to have a longer duration, as predicted by models of trading under asymmetric information. Combining model and data, we estimate that asymmetric information can explain 21% of the +30% dispersion in price differences of units with similar observed characteristics. We quantify the effects of information frictions on allocations, prices, and liquidity, and show that the estimated degree of information frictions can to lead to 15% lower output due to low trading probabilities of high-quality capital.

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In many countries, migration is a high priority in both the public and political debate. Countries face continuous challenges to attract, retain and integrate migrants in their societies. In recent years, the economic crisis, the refugee crisis and the surge of populist movements and xenophobic violence have exposed countries to even bigger challenges. It is therefore crucial to understand what governments and societies can do to transform migration phenomena into opportunities for both destination and origin countries. In my dissertation I investigated empirically three topics in the economics of migration. First, the role of certificate recognition for the labor market integration of high-skilled migrants and the effects of a policy that facilitated certificate recognition for all immigrants. Second, the brain drain phenomenon and the effects of a policy that introduce tax incentives to return migration for high-skilled young Italian emigrants. Third, return intentions and labor market behaviors of immigrants, and the effects of home country socio-political conditions on these two outcomes. The dissertation aims at contributing to the growing literature on the economics of migration with novel findings on specific policies and channels, and to the policy debate on migration and integration policies.

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