Public Policy Effects on Labor Markets Choices: Immigration Enforcement and Unemployment Insurance

The recent increase in interior immigration enforcement has reduced the number of low-skilled workers in the U.S. In my first chapter I study how this decrease in labor supply affects citizens' self-employment. I examine the impact of four immigration enforcement policies; each implemented with a staggered roll-out across the U.S. and different levels of adoption. I find that increased immigration enforcement had a negative effect on male and female citizens' self-employment. This is evidence that undocumented immigrants have a level of complementarity to self-employed citizens. The reduction of citizens' self-employment is concentrated among high school graduate natives. The lower levels of self-employment are not accompanied by an increase in the wage and salary sector, suggesting that there is no switching within sectors happening. The industries that are more affected are construction and wholesale self-employment. However, self-employment among Hispanic citizens' had the opposite effect. To enable comparison with previous studies, I estimate the effects of the immigration enforcement programs on the employment of citizens. I find that E-Verify mandates have a negative effect not accounted for in previous studies. The second chapter studies the effects of establishing an unemployment insurance (UI) program on workers' unemployment duration in a developing market economy. Mexico City was the first city in Mexico to provide formal government-funded unemployment benefits. A job search model with duration dependence predicts that workers stay longer unemployed but increase their search intensity when they approach UI benefits exhaustion. I exploit the UI program's temporal and geographical variation in a Differences-in-Differences framework and estimate an unemployment duration model, where the reemployment probability varies between major Mexican cities across time with the introduction of the UI program after controlling for individual characteristics, time and location fixed effects. I find no evidence of an effect on unemployment duration with the introduction of UI in Mexico City. Even workers with low education levels do not have a higher probability of staying unemployed with the introduction of UI. There are two potential explanations for these null effects: 1) UI benefits levels are low enough that staying on unemployment is an unattractive option, as the replacement rate after two months of unemployment was only 10\% in Mexico, compared with 60\% among OECD countries 60\% (2007) and 2) the program effectively enforces the requirement that the unemployed search for work, which leads them to find work quickly. Finally, in my third chapter, we examine the gender wealth gap, including pension wealth and statutory pension rights. The empirical basis of this examination is the Socio-Economic Panel (SOEP), which is one of the few datasets where information on wealth as well as on pension entitlements is collected at the individual level. Pension wealth data are available for 2012 only. Individual-level wealth data allows us to analyze the gender wealth gap between women and men across all households. Due to the longitudinal character of the underlying data on employment trajectories and family-related events, we examine how pension entitlements are affected by childbirth, marriage, divorce, widowhood, and other factors