Three essays in labor economics
This dissertation consists of three chapters analyzing labor markets of the United States, with a particular focus on the minimum wages, hours of work, and the relationships between wages and hours. In chapter 1, I study the effects of minimum wages on the labor market outcomes of the elderly. In contrast to the groups that are more typically studied (e.g., teenagers), I find small, positive employment effects of minimum wages on those in their late sixties by using a variety of empirical specifications commonly used in the minimum wage literature. The point estimates of employment elasticities fall in the range of 0.1 to 0.3. The positive effects are not limited to the minimum wage workers; a broader class of workers including those who are paid wages well above the minimum wage are affected. To explain the results, I provide two pieces of evidence on labor-labor substitution. First, the industry-level employment elasticities of the young and elderly with respect to the minimum wage are negatively correlated. Second, I directly estimate the elasticity of substitution between young and older workers using the nested-CES production function framework. 2SLS estimates suggest that young and older workers are substitutes for each other. Although the estimated elasticity of substitution is small, it suggests that labor demand is shifted toward older workers when minimum wages are increased. Chapter 2 examines short-run adjustments of working hours to minimum wage increases. By combining observations from the matched Current Population Survey and data regarding large-scale state-level minimum wage increases, I find negative effects on working hours. Large minimum wage increases reduce working hours by approximately 50 minutes per week. These effects are neither identical nor monotonic across working hours. Workers who worked part-time or overtime prior to the increases are negatively affected in terms of their working hours, while full-time workers are largely unaffected. Adjustments are related to a 40-hour workweek. There is a large shift from overtime to 40-hour per week positions for those working overtime in the previous year, while part-time workers are less likely to move to 40-hour per week positions after increases. These adjustments are consistent with the predictions from a labor demand model with a kinked labor cost schedule caused by the overtime pay regulation. Taken together, my first two chapters study how firms adjust their workforce in response to minimum wages. My results show that the adjustment of the headcount of teenage workers, the primary question in the minimum wage literature, may misrepresent the adjustments of the labor force to minimum wages. Chapter 3 is my joint work with Steven J. Haider. In this chapter, we try to answer the following question: To what extent do workers earn a higher hourly wage if they work very long hours? Based on four decades of data from the Current Population Surveys and the Panel Study of Income Dynamics, our findings regarding this fundamental question about labor supply incentives are three-fold. First, the wage gap between those working very long hours (50+ hours per week) as compared to those working a standard work week (40 hours per week) has gone from being strongly negative in 1980 to being strongly positive in 2018. Second, at the individual level, a long-hours premium currently exists for about 95\\% of hourly workers and 40\\% of salary workers within their current job because of overtime regulations, but relatively few workers earn overtime pay. Third, if were to define the individual premium to be the entire within-occupation long-hours premium, then most workers would earn an hourly wage premium by working more hours, but it is unclear whether such a broad definition is appropriate.
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- In Collections
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Electronic Theses & Dissertations
- Copyright Status
- Attribution-NoDerivatives 4.0 International
- Material Type
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Theses
- Authors
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Chung, Su Hwan
- Thesis Advisors
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Haider, Steven J.
- Committee Members
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Berg, Beter
Biddle, Jeff E.
Elder, Todd E.
- Date
- 2023
- Subjects
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Economics
- Program of Study
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Economics - Doctor of Philosophy
- Degree Level
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Doctoral
- Language
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English
- Pages
- 179 pages
- ISBN
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9798379535100
- Permalink
- https://doi.org/doi:10.25335/qrw1-1573