This dissertation consists of three chapters that study issues related to workers and families, and the intersection of these two topics. The first chapter examines domestic outsourcing of labor services in Germany. This chapter uses a novel method to identify outsourcing in administrative data, and finds that outsourcing leads to a 10-15% drop in wages that is persistent, lasting at least 10 years. There is evidence that these wage losses are associated with the loss of firm-specific rents, suggesting that labor costs savings are an important consideration in outsourcing. Finally, the increase in outsourcing activity is tied to broader changes in the German wage structure, particularly increases in wage dispersion and occupational sorting. The second chapter analyzes the relationship between state abortion restrictions and the living circumstances of children living in these states. It uses data on 15 years of abortion laws in the US connected to individual level data on children and their family structure from the Census and American Community Survey, and finds evidence that low-income children who are born in states with more restrictive abortion laws are more likely to live with a single mother than similar children born in more permissive states. To address the endogeneity of these laws, data on nullified laws is incorporated; nullified laws have no impact, indicating that it is likely the hurdles faced by women seeking abortions in stricter states that impacts family structure. The third chapter develops a new method to identify married couples in administrative worker data that do not include a household identifier. Couples are identified using information on their geo-coded location, name, gender and age; using German social security records, about 3.3 million couples are identified. Consistency checks are provided using a subsample of the data for which marriage information is available, as well as a comparison to a known sample of married couples from the German Microcensus. These identified couples are then used to analyze patterns of relative income within households, where strikingly different patterns are found for couples who work in the same establishment and those who do not.

The present research aims at examining the interaction between transition from centrally planned economies to market based economies and its subsequent effects on populations’ happiness and life satisfaction in Algeria, Egypt and Morocco. It also aims at advising policy makers on how economic policies may affect population’s subjective well-being. It is widely accepted that economic reforms affect individuals’ lives. In contrast, the populations’ values, attitudes and perceptions may also play a major role in the success of these reforms. The first study examines the determinants of happiness and life satisfaction by gender in Algeria and their attitudes and perceptions towards economic policies’ reforms. The survey reports that the female population in Algeria is happier and more satisfied with life than its male counterpart. It has been found that healthier individuals and those in the medium level of income are most likely to be happier and satisfied with their lives. Also, happiness is inversely “U-shaped” in age for the female population contradicting previous studies. Although, both genders believe that rapid market reforms do not have a negative impact on national stability, and are confident with the major companies, privatisation is found to be most likely having a negative effect on the life satisfaction among the male population. The second study examines the changes in the levels of life satisfaction in Egypt and Morocco over the first decade of the present century. It has been found that Egyptian women’ satisfaction with life is “U-shaped” in age, whereas in income that applies only to those at the medium, upper-medium and high levels of income. By contrast, Egyptian men are satisfied at all income levels. In Morocco, unemployed men and women are found to be satisfied with their lives in the beginning of the decade contradicting previous findings. While in the late 2000s, among the employed populations, females and males at the medium and the upper medium levels of income are satisfied, along with the lower level for women and the higher level for men. The third study examines the effect of relative income on individuals’ self-reported life satisfaction, assuming that the individual’s subjective judgement of his or her life satisfaction depends on both absolute and relative incomes. Absolute refers to the individual’s income, relative is the income of others around him or her called a reference group. The findings are that Algerians and Moroccans feel ambitious when self-reporting their levels of life satisfaction and referring their income to others’ income, but Egyptians feel jealous.

This paper constitutes a first attempt to shed light on the role of income distribution in household debt, macrofinancial stability and financial market access in Central, Eastern and Southeastern Europe (CESEE). This issue has not been adequately addressed so far. Using data from the OeNB Euro Survey for the period from 2009 to 2017, we explore the question whether interpersonal comparisons affect a household's probability of having a loan. We use multilevel probit modeling to take into account the hierarchical structure of the data. Our results support the notion that the relative income position, along with absolute income, has an impact on households' likelihood of having a loan, but this is valid mainly for households above the median of the income distribution. We show this impact for almost all components of household debt, but evidence is strongest for mortgage and car loans. Interpersonal comparisons turn out to be a weaker predictor of a household's propensity to have a loan in CESEE countries with a more equal income distribution.

This dissertation combines three contributions to the literature on the determinants of well-being and the social nature of preferences. Departures from self-centred, consumption-oriented decision making are increasingly common in economic theory and are empirically well motivated by a wide range of behavioural data from experiments, surveys, and econometric inference. The first two contributions are focused on the idea that reference levels set by others’ consumption may figure prominently in both experienced well-being and in decision making. In the first paper, the well-being question is addressed empirically through the use of self-reported life satisfaction and high-resolution census and survey data in Canada. Strong income externalities are found at multiple spatial scales after controlling for various confounding factors. The second paper explores the general equilibrium consequences of a utility function having an explicit comparison with neighbours’ consumption. The question is investigated in a model in which decision makers knowingly choose their neighbours — and hence their consumption reference level — as well as their own consumption expenditure, thereby helping to set the reference level for nearby others. For both discrete and continuous distributions of types in an economy with a heterogeneous population undergoing such endogenous formation of consumption reference groups, there exist general equilibria in which differentiation of neighbourhoods occurs endogenously. The novel welfare implications of growth in such economies are described. The final paper addresses econometric reservations about the use of subjective reports as dependent variables. The date and location of survey interviews are combined with weather and climate records to construct the random component of weather conditions experienced by respondents on the day of their interview. Standard inferences about the determinants of life satisfaction remain robust after taking into account this significant source of affective bias.

This dissertation combines three contributions to the literature on the determinants of well-being and the social nature of preferences. Departures from self-centred, consumption-oriented decision making are increasingly common in economic theory and are empirically well motivated by a wide range of behavioural data from experiments, surveys, and econometric inference. The first two contributions are focused on the idea that reference levels set by others’ consumption may figure prominently in both experienced well-being and in decision making. In the first paper, the well-being question is addressed empirically through the use of self-reported life satisfaction and high-resolution census and survey data in Canada. Strong income externalities are found at multiple spatial scales after controlling for various confounding factors. The second paper explores the general equilibrium consequences of a utility function having an explicit comparison with neighbours’ consumption. The question is investigated in a model in which decision makers knowingly choose their neighbours — and hence their consumption reference level — as well as their own consumption expenditure, thereby helping to set the reference level for nearby others. For both discrete and continuous distributions of types in an economy with a heterogeneous population undergoing such endogenous formation of consumption reference groups, there exist general equilibria in which differentiation of neighbourhoods occurs endogenously. The novel welfare implications of growth in such economies are described. The final paper addresses econometric reservations about the use of subjective reports as dependent variables. The date and location of survey interviews are combined with weather and climate records to construct the random component of weather conditions experienced by respondents on the day of their interview. Standard inferences about the determinants of life satisfaction remain robust after taking into account this significant source of affective bias.

This dissertation combines three contributions to the literature on the determinants of well-being and the social nature of preferences. Departures from self-centred, consumption-oriented decision making are increasingly common in economic theory and are empirically well motivated by a wide range of behavioural data from experiments, surveys, and econometric inference. The first two contributions are focused on the idea that reference levels set by others’ consumption may figure prominently in both experienced well-being and in decision making. In the first paper, the well-being question is addressed empirically through the use of self-reported life satisfaction and high-resolution census and survey data in Canada. Strong income externalities are found at multiple spatial scales after controlling for various confounding factors. The second paper explores the general equilibrium consequences of a utility function having an explicit comparison with neighbours’ consumption. The question is investigated in a model in which decision makers knowingly choose their neighbours — and hence their consumption reference level — as well as their own consumption expenditure, thereby helping to set the reference level for nearby others. For both discrete and continuous distributions of types in an economy with a heterogeneous population undergoing such endogenous formation of consumption reference groups, there exist general equilibria in which differentiation of neighbourhoods occurs endogenously. The novel welfare implications of growth in such economies are described. The final paper addresses econometric reservations about the use of subjective reports as dependent variables. The date and location of survey interviews are combined with weather and climate records to construct the random component of weather conditions experienced by respondents on the day of their interview. Standard inferences about the determinants of life satisfaction remain robust after taking into account this significant source of affective bias. / Arts, Faculty of / Vancouver School of Economics / Graduate

The relative income is often cited as a reason why happiness of nations does not grow in time with growing GDP. The study replicates the methodology of several different researchers from basic scatterplots, standard OLS and ordered probit models to hierarchical linear multilevel models (HLM). The results provide evidence that the happiness is actually rising with the growing GDP, although slowly and with the GDP measured in logarithm. On the contrary, the relevance of relative income to happiness is ambiguous through all the proposed models. Furthermore, the individual characteristics like marital status or employment status are proved to explain the differences in happiness much better than income. Finally it is shown that income has similar effects on different measurements of subjective well-being (health, happiness and emotional well-being).

This thesis consists of four empirical essays. The first essay evaluates the impact on crime of a large scale experimental scheme in which all state monopoly alcohol stores in selected Swedish counties kept open on Saturdays. We show that the experiment significantly raised both alcohol sales and crime. The effect is confined to Saturdays and tentative evidence indicates a displacement of crime from weekdays to Saturdays. The experiment had no significant impact on crime over the entire week. The second essay examines the effect of income inequality on health for newly arrived refugees. The results reveal no statistically significant effect of income inequality on the risk of being hospitalized. This finding holds for most population subgroups and when separating between different types of diagnoses. The conclusions do not change when we consider long-term exposure to inequality. Our estimates are precise enough to rule out large effects of income inequality on health. The third essay examines the effect of relative income differences on criminal behavior. There is a positive effect on the propensity to commit property crime. The effect is small and mainly driven by past offenders, low educated and young individuals. I only find weak evidence that relative income differences increases the likelihood to commit violent crime. The empirical analysis further reveals that differences in gross labor earnings are more strongly related to crime than disparities in disposable income. The fourth essay describes the patterns of intergenerational transmission of education among immigrant mothers and their daughters. The results show that the persistence is slightly lower among immigrants compared to natives, and that the relationship is weaker among those who start out disadvantaged. I find large variations across different immigrant groups, but these differences are partly explained by the fact that groups belong to different parts of the educational distribution.

This study explores the relationship between income inequality and household indebtedness using panel data on 17 OECD-countries over the time period 1995-2015. Motivated by relative income theory of consumption and previous empirical research we anticipate a non-monotonic relationship between changes in household debt and income inequality (measured by the Gini- coefficient), as dynamics between different groups of households in the income spread is expected to vary at different levels of inequality. Carrying out the empirical analysis we find notable indications of an inverse U-shape relationship between inequality levels and household borrowing. We locate an estimated turning point at a Gini-value of 28.84, which indicates a positive marginal effect on household borrowing as inequality grows from levels below this point, turning negative as inequality increases further. This suggests that as income inequality grows from relatively low levels households increase their rate of borrowing, while at higher levels of inequality households decrease their borrowing rate in response to growing income disparities. Results hold under a random effects model and a pooled OLS model, but fail to prove significant in the stricter fixed effects model, why we cannot draw any definitive conclusions about the magnitude of the effect. Nevertheless, the findings of further complimentary estimations lend credence to our hypothesis. Benefits and limitations of our data and empirical methods are comprehensively discussed, as well as the theoretical mechanisms explaining the relationship. Indicative but in the end inconclusive results leaves ample opportunity for further investigations with more advanced empirical methods. / <p>This bachelor thesis was awarded the highest grade, VG.</p>

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