Essays in Labor Economics

Abstract

This dissertation, in the standard three-essay format, studies three distinct but closely related aspects of the United States labor markets. Chapter 1 attempts to identify the main drivers of potential migration to the United States by using administrative data from the United States Diversity Visa Lottery. Estimating fixed effects panel data models that control for time-invariant unobserved heterogeneity in source-country level determinants of potential migration, I find that income levels in source countries and educational attainment of the source-country population play important role in determining migration intentions. Specifically, a one percent increase in per capita Gross Domestic Product of a source country decreases the potential migration rate from that country to the US by 1.36%. Similarly, a one percent increase in the educational attainment of source population (measured as the percentage of population with at least secondary education) decreases potential migration rate by 1.16%. The results obtained in this chapter improve our understanding of the composition of US labor markets by identifying the most important socio-economic variables that drive migration to the US. Chapter 2 estimates the causal impact of a change in supply of immigrant entrepreneurs on entrepreneurial propensities of natives. I draw data from the Annual Social and Economic Supplement of the Current Population Survey and use withinstate variation in supply of immigrant entrepreneurs for identification. To address concerns of endogeneity in the supply of immigrant entrepreneurs, I take advantage of a quasi-experiment provided by the State Children’s Health Insurance Program. I find that, on average, immigrants self-employed in unincorporated businesses have no discernible impact on self-employment propensities of natives. However, immigrants self-employed in incorporated businesses crowd in natives into incorporated self-employment. Specifically, a 1% increase in incorporated immigrant entrepreneurs increases the supply of incorporated native entrepreneurs by 0.11%. Furthermore, various sub-sample analyses demonstrate substantial heterogeneity in the impact of immigrant entrepreneurs on entrepreneurial propensities of natives. The results obtained in this chapter have important implications for policies related to immigration and entrepreneurship development. Finally, Chapter 3 exploits the State Children’s Health Insurance Program to investigate the impact of publicly funded health insurance coverage for children on labor supply of adults. Using data from the Annual Social and Economic Supplement of the Current Population Survey and triple difference identification strategy, the analysis demonstrates that public health insurance for children decreases labor supply of women, both at the extensive and the intensive margin, but increases that of men at the extensive margin. The estimates obtained in this chapter highlight the labor supply distortions associated with welfare benefits.