Four papers in labor economics

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Ma, Liyuan
Major Professor
Orazem, Peter F
Winters, John V.
Zhylyevskyy, Alex
Zhang, Wendong
Hoffman, Elizabeth
Committee Member
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The dissertation consists of four chapters in labor economics. Chapter 1 provides theory and evidence about how the traditional marriage expenditure paid by the bride’s parents (called dowry) and groom’s parents (called bride price) affects the marriage match in China. We also show how the payments by the bride’s and groom’s families change with the local ratio of men to women. We motivate the empirical work using a two-sided search model in the marriage market. Using dowry data from the 2014 and 2016 China Family Panel Studies and bride price data from the 2014 China Labor-Force Dynamic Survey, we find evidence supporting positive assortative matching based on the socioeconomic status of the bride and groom. Within that framework, marital transfers made by the bride’s and groom’s families can significantly improve the socioeconomic status of the spouse. We show that high-quality brides and grooms with wealthy parents will pay more to help attract a more favorable spouse while low-quality children from poor family are priced out of the market. As the ratio of marriageable aged men to women rises, the dowry paid by the bride’s family falls while the bride pride paid by the groom’s family rises. Chapter 2 estimates on the relative importance of family background, ability, school quality and the local labor market on children’s educational attainment and early-career earnings in the work career. We demonstrate how these factors have changed in importance over time, using longitudinal information on the high school graduating classes of 1972, 1980, 1992 and 2004. Over that period, family background has become less important in explaining child’s educational attainment and accounts for no more than 3.5% of the variation of earning across the four cohorts. Locational factors including school quality and the strength of the local labor market reflect a relatively lower power than family background in explaining child’s human capital accumulation. Individual ability has become more important for school attainment, rising from 2.6% to 13.1%, but it has little importance for inequality in earnings. Chapter 3 studies firm churning defined as simultaneous entry and exit of firms into a local market. We present a theoretical argument that churning implies that the same factors that would incentivize firm entry would also lead to greater rates of firm exit. We then present evidence supporting the theory in a variety of markets defined by industry, by market size ranging from metropolitan to remote rural counties, and by counties on either side of state borders. The churning rate is greatest in the most agglomerated markets and least in the most remote rural markets. Chapter 4 examines how observed work discrimination and demographic attributes such as gender, education, and marital status relate to employee perceptions of discrimination. I expand upon previous literature by introducing more general employees rather than a specific group and by clearly distinguishing between observed individual and group discrimination measures. The results indicate that observed individual wage discrimination measures are significantly associated with own perception of discrimination rather than with the group discrimination measure upon which the definition of discrimination is based, although the effect is relatively small.
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