Essays on Labor Economics and Advertising Auctions.

Abstract

This dissertation contains three essays. The first is about an experiment with an advertising auction to determine its effects on a company and its main competitor. The second is about the role of preferences and skill in determining whether lawyers choose to work in the nonprofit or private sectors and their pay. The third is about the impact of immigrant computer scientists on the labor market.

The first essay describes the design and results of an experiment in which one company temporarily suspended its search advertising campaign in randomized locations in the U.S. The experiment demonstrated that the company gained less new business from its ads than naive non-experimental methods predicted. Using data from the company's closest competitor, the experiment revealed that spillover effects on the competitor's business and marketing campaigns were small overall, and unexpectedly, on searches for the company's name.

The second essay uses data from two different surveys of lawyers to document facts about their pay, in particular, pay differences between the nonprofit and private sectors. Private sector lawyers make higher wages, especially those who graduated from top tier law schools, whereas pay in the nonprofit sector is lower and flat across law school tiers. A wage equation model estimated using this survey data suggests that nonprofit lawyers would earn more in the private sector and thus pay an opportunity cost to do nonprofit work.

The third essay develops and calibrates a dynamic structural model of the impact of high-skilled immigration on the labor market for computer scientists (CS) in the U.S. during the dot-com boom and bust. Workers choose whether to study and work in the CS field based on wages, preferences and expectations about the future. Employers choose how many domestic and foreign workers to hire considering their productivity and hiring costs. Counterfactual simulations suggest that American CS employment and wages would have been modestly highest in 2004 if firms could not hire more foreigners than they could in 1994. However, total CS employment would have been 3.8% - 9.0% lower.