Essays in labor and transition economics.

Abstract

In <italic>Employment-based Health Insurance and Earnings in Households </italic>, I study the workers' demand employer sponsored health insurance in the context of households. Husbands' and wives' are found to coordinate their employment-based health insurance coverage. We observe that most households are covered by only one employment-based health insurance plan. Because both husband and wife are covered by one employment-based health insurance coverage, one of them shall find a job without health insurance coverage but earn more than what they would have earned if such coverage is not available. Evidence from the Health and Retirement Survey verifies the existence such wage gains. It is shown that for women who are covered by their husbands' employment-based health insurance earn more than women who are not. However, this differential is not as significant for men. In <italic>Health Risk, Liquidity Constraint and Early Retirement</italic>, I revisit the question of why many workers retire at age 62 when there is no clear evidence of financial incentive to do so. The restriction to early retirement in the Social Security law changes workers' behavior if workers are liquidity-constrained. Some workers need to borrow during their working life. But they can not borrow against their social security wealth. Workers will have access to their social security benefits only after they turn 62. Therefore, these workers are forced to wait until age 62 to retire to access their social security wealth. In <italic> Causes of the Soft Budget Constraint: Evidence on Three Explanations</italic>, we study the causes of the <italic>Soft Budget Constraint</italic> problem facing the state owned enterprises (SOEs) in socialist economies and transitional economies. <italic>Soft Budget Constraint</italic> problem refers to the phenomenon that unprofitable investment projects or firms are expected to be re-financed. It has been recognized the major cause of inefficiencies in socialist economies and transitional economies, and sometimes even in market economies. In recent years, researchers have come up with many novel theories to explore the causes of soft budget constraint. However, none of these theories have been tested empirically. This essay will present the first empirical examinations of these proposed theories of the causes of soft budget constraint using a large data set of Chinese state owned enterprises in the market economic reform. Three representative theories are tested. Empirical evidence provides us with first hand experience of the relative importance of each of the three theories.