Essays in Labor and Public Economics

248 pagesThis dissertation contains three essays, each of which uses high-quality data and rigorous econometric methods to further our understanding of key questions in applied labor and public economics. Chapter 1 uses novel data from a sales company whose workers sell pest control services door to door to test for what is called in the behavioral economics literature "reference-dependent preferences." I show that sales workers select daily sales targets based on long-run goals to achieve bonuses paid by the firm at the end of the sales season. I then show that, contrary to standard theory of labor supply, workers substantially reduce their likelihood of continuing to work after achieving their daily sales target holding constant other factors of their work day. This behavior is consistent with loss aversion where workers put forth effort specifically to avoid underperforming relative to their expectations. The results support the theory that narrow goal setting and reference dependence together may act as a commitment device rather than representing a cognitive mistake as standard theory would suggest. These results have broad implications for how firms motivate their workers and show how long-run contract incentives can drive short-run labor supply choices. In Chapter 2, I exploit the 2014 rollout of provisions in the Affordable Care Act to identify the effects of direct subsidies for the purchase of private health insurance on adverse financial outcomes, consumer welfare, and outside parties. I use administrative tax data and credit bureau data to compare outcomes in areas that had high per-capita receipt of these premium tax credits to areas that had low per-capita receipt. To control for pre-treatment differences in trends attributable to the Great Recession, I use a propensity score reweighting and stratification procedure. I find that the premium tax credits substantially reduced the rates of severe mortgage delinquency, consumer bankruptcy, and severe auto delinquency as well as the right tail of the distribution of third-party collections and other debts. I also show that the value of the risk protections against medical debt amount to approximately 10-15% of the cash costs of the subsidies, while the subsidies provided substantial indirect benefits to mortgage lenders, creditors, and hospitals that amount to approximately two-thirds of the subsidy costs. Chapter 3, which is joint work with Michael Lovenheim and Alexander Willén, examines the dynamics of the decline in private-sector unionization rates in the United States over the past 40 years. We take a skill-based approach to studying this decline by accounting for changes in the types of skills covered by unions. We document that, from 1973 to 2017, private-sector unionized jobs shifted toward more non-routine, cognitive skills and fewer routine or manual skills and that women experienced a more pronounced change over this time period than men. After decomposing the changes in skills within the unionized sector to their components, we show that most of the change in unionized worker skills has been driven by the composition of occupations that are unionized rather than within-occupation skill changes. We show how these changes are compatible with a model of skill-biased technological change when we specifically account for the institutional framework surrounding collective bargaining and frictions to union certification or decertification. Finally, we show that accounting for different skills in the unionized sector leads to slightly larger estimates of the union wage premium than shown in the prior literature and that the wage premium remains relatively large for men and women at approximately 20% despite having fallen by over ten percentage points since its peak in the 1980s