Three Essays on the Employment Effects of Policy Decisions

Public policy decisions designed to address a public need frequently have secondary effects, especially on hard-to-predict employment outcomes. In this dissertation, I study three laws or groups of laws and the effects they have on labor-related outcomes. Economic theory proposes that laws increasing the minimum wage should increase employment discrimination. Employers theoretically have longer queues of job applicants, allowing them to exercise their biases in hiring decisions. In Chapter 1, I exploit the wide variation in state minimum wage rates since 2005 to estimate the effect on discrimination, using 4.8 million allegations from publicly unavailable administrative data provided by the Equal Opportunity Employment Commission. I find overall discrimination allegations do increase with minimum wage changes. Higher rates of discrimination filings are driven by private sector firms; by allegations of firings and promotions; by alleged violations of Title VII of the Civil Rights Act and the Americans with Disabilities Act; and in states where discrimination reporting is already common. Consistent with human capital theory, age discrimination allegations do not statistically significantly increase following minimum wage changes. While economists and policy makers have comprehensively explored how minimum wage laws affect employment levels, there has been little research into labor force participation rates. In Chapter 2, I study the effects of wage floors on labor force participation, providing a new method of estimating labor supply elasticity. Typical measures of labor supply elasticity focus only on workers in existing jobs, a somewhat limited approach that is conditional on the decisions of an employer. Since the labor force includes active job seekers, not just workers, it more purely reflects individuals’ willingness to work. Using 14 million observations from the Bureau of Labor Statistics’ (BLS) Current Population Survey, I estimate an overall elasticity statistically indistinguishable from 0, but a great deal of heterogeneity across different levels of human capital. As predicted by theory, younger workers with lower levels of education drop out of the labor force, perhaps discouraged by new difficulties finding employment. However, I find a positive, statistically significant elasticity among workers with more human capital. Using BLS’s Quarterly Census of Employment and Wages and a triple-differences approach, in Chapter 3 I examine the employment effects of the Affordable Care Act’s Medicaid expansion, a policy that led to millions of newly-insured Americans. Exploiting differences among states’ participation and variation in federal aid they received, I find that the wide expansion of Medicaid insurance led to only small increases in employment rates across the health care and health insurance industries and a moderate 8.5% increase in jobs among home care providers. This small result was robust to a number of adjustments to my analysis and consistent with existing stimulus research.Doctor of Philosoph