Browsing by Subject "Employment (Economic theory)"

Now showing 1 - 3 of 3
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    Dynamics of health and employment : theory, evidence and policy implications
    (2007-05) Han, Xiaoshu, 1977-; Cooper, Russell W., 1955-
    This study involves the relationships between health, medical expenditure and labor force participation, and implement these relationships in policy evaluations. The first chapter examines the relationships between health, labor force participation and medical spending in a simultaneous equations model using data from the Medical Expenditure Panel Survey (MEPS). It finds a significant positive effect of health on labor force participation. The estimation results of medical spending equation show that healthier individuals spend less on their medical care and surprisingly, employment status has no significant effect on medical spending. Interestingly, employment status does impact health status positively. The most puzzling result is the significant negative coefficient on medical spending in the health equation. The puzzling result motivates this dynamic heterogeneous agent model of Chapter Two to study the relationships between health status, medical expenditure and employment. In this model, individuals value both consumption and health and they are heterogeneous in their health levels and employment status. Individuals choose how much to spend on medical care and consumption. Health can be accumulated from investment in medical care and this increases both job opportunities and quality of life. The structural parameters are estimated by an indirect inference procedure which matches the simulated regression coefficients to the data regression coefficients from the Medical Expenditure Panel Survey. This chapter finds that the simulated coefficient of medical expenditure in the health equation is negative even though in the health evolution equation of the structural model, medical expenditure impacts the health in the positive way. This paper also explains the basis for this result. Chapter Three is a policy application of the model developed in chapter Two. It builds on the model of Chapter Two and adds the employer-provided health insurance. It concentrates on measuring the welfare cost of mandating employer provided health insurance. It compares the welfare of the workingaged individuals before and after the mandate and finds a welfare loss of 0.7 percent of GDP.
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    Essays on heterogeneity in labor markets
    (2009-05) Sengul, Gonul, 1980-; Cooper, Russell W., 1955-
    My dissertation focuses on the heterogeneity in labor markets. The first chapter proposes an explanation for the unemployment rate difference between skill groups. Low skill workers (workers without a four year college degree) have a higher unemployment rate. The reason for that "... is mainly because they (low skill workers) are more likely to become unemployed, not because they remain unemployed longer, once unemployed" (Layard, Nickell, Jackman, 1991, p. 44). This chapter proposes an explanation for the difference in job separation probabilities between these skill groups: high skill workers have lower job separation probabilities as they are selected more effectively during the hiring process. I use a labor search model with match specific quality to quantify the explanatory power of this hypothesis on differences in job separation probabilities and unemployment rates across skill groups. The second chapter analyzes the effects of one channel of interaction (job competition) between skill groups on their labor market outcomes. Do skilled workers prefer unskilled jobs to being unemployed? If so, skilled workers compete with unskilled workers for those jobs. Job competition generates interaction between the labor market outcomes of these groups. I use a heterogeneous agents model with skilled and unskilled workers in which the only interaction across groups is the job competition. Direct effects of job competition are reducing skilled unemployment rate (since they have a bigger market) and increasing the unskilled unemployment rate (since they face greater competition). However number of vacancies respond to job competition in equilibrium. For instance, unskilled firms have incentives to open more vacancies since filling a vacancy is easier if there is job competition. Thus how unskilled unemployment and wages are affected by job competition depends on which effect dominates. The results for reasonable parameter values show that job competition does reduce the average unemployment rate. It reduces the skilled unemployment rate more, generating an increase in unemployment rate inequality. However, the employment rate at skilled jobs is unaffected. The third chapter focuses on skill biased technological change. Skill biased technological change is one of the explanations for the asymmetry between labor market outcomes of skill groups over the last few decades. However, during this time period there were also skill neutral shocks that could contribute to these outcomes. The third chapter analyzes the effects of skill biased and neutral shocks on overall labor market variables. I use a model in which skilled and unskilled outputs are intermediate goods, and final good sector receives all the shocks. A numerical exercise shows that both skilled and unskilled unemployment rates respond to shocks in the same direction. The response of unemployment rate to skill neutral shocks is bigger than the response to skill biased shocks for both skill groups. However, the unskilled unemployment changes more than the skilled unemployment rate as a response to skill neutral shocks. Thus, skill neutral shocks reduce the unemployment rate gap between skill groups.