Essays in Labor Economics.

Abstract

This dissertation is composed of two essays, both which use data from original survey projects to examine issues related to work choice.

The first essay examines the labor supply effects of the wealth losses during the stock market crash of 2008 and 2009. A life-cycle model incorporating both consumption and retirement timing implies that exogenous wealth losses should delay optimal retirement timing. Using data from the Cognitive Economics Study and the Health and Retirement Study, this essay quantifies the wealth losses suffered by older Americans in terms of the additional length of time they would have to work to maintain the pre-crash consumption plan implied by their wealth holdings and expected retirement timing. Using these measures, Tobit regressions and a novel method for reducing the impact of error-ridden observations are used to examine the relationship between this measure of wealth loss and retirement planning. Several potential sources of heterogeneity in individuals' reactions to the crash are also examined. Results imply that wealth losses of 2008 and 2009 are associated with an increase in planned retirement age on the order of a few weeks to a few months for the average older American, but up to several months for some segments of the population. These results are consistent with results of recent studies and the life-cycle model, but stand in contrast to other examinations of wealth shocks on the general population of older Americans.

The second essay is a product of the Job Seekers Study. The essay extends Mincer's seminal theory of family migration to allow couples to adjust to migration constraints by living apart, and examine the ways in which new PhD economists adjust to migration constraints imposed on them by their spouses or partners. Both the impact of migration constraints on job outcomes and the impact of job considerations on relationship outcomes are analyzed. The essay finds that migration constraints result in small costs in terms of job outcomes, relative to many existing studies, and that adjustment through living apart is common. These results imply that existing studies may overestimate the job impact of migration constraints.