Essays in Macroeconomics
This thesis focuses on two themes in the field of Macroeconomics. First, the importance of family ties and insurance within the family for labor supply decisions, and their macroeconomic consequences (first and second chapter); second, the role of intangible capital and disclosure regulation in shaping firm financing decisions, output, and productivity (third chapter). The first chapter investigates how the increase in female labor force participation in the last fifty years has impacted the volatility of employment and consumption over the business cycle. I first show that non-participating married women respond to their partners becoming unemployed by entering the labor market and finding employment, and this effect is stronger for women with more previous labor market experience and higher income. I then develop a business cycle model with fluctuations in labor market flows of dual and single-earner couples and their changes over time, led by a shrinking wage gap. The calibrated model predicts that hours and consumption volatility respond non-monotonically to changes in the wage gap. I show that as the wage gap for women grows smaller, women become closer to the participation frontier and find it easier to enter during recessions, which dampens the severity of recessions. For levels of the wage gap lower than 20%, women's labor supply elasticity eventually looks more similar to men's, and the dampening effect wanes. The second chapter studies the spillover effects of parents' adverse health events on their adult children. Using information on family networks and parents' health conditions, I document that sudden deterioration of parental health has a significantly negative effect on their adult children's labor market outcomes and wealth. I also find that net monetary transfers towards parents and time spent providing care for parents increase. These findings provide evidence of the importance of family ties in shaping career, savings, time and monetary transfers in an aging economy. In the third chapter, I propose a new mechanism to explain the large drop in the number of public firms in the U.S. and its macroeconomic consequences: Firms with a high share of intangible capital place a considerably greater value on confidentiality and have a stronger incentive to stay private. As the overall share of intangible capital grows, regulation on public disclosure becomes implicitly more costly over time. Using a calibrated general equilibrium model of firm financing, I show that this mechanism contributed substantially to the decline of public firms and transparency. Moreover, the disappearance of public firms and overall greater opacity in financial markets substantially reduced technological diffusion across firms and overall productivity.