ESSAYS ON LABOR ECONOMICS AND PUBLIC POLICY
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Economics
Subject
households time allocation
labor
minimum wage
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Abstract
This dissertation comprises three independent chapters. The first two focus on Germany's introduction of the minimum wage policy, employing structural methods and reduced-form tools as empirical methodologies. The third chapter examines policy take-up from an applied theory perspective and provides motivational evidence using US data. The first chapter, "Household Time Allocation Decisions: Evidence from Germany’s Introduction of the Minimum Wage," evaluates how income, preferences, and productivity influence household time allocation decisions, with a focus on the effects of Germany’s 2015 minimum wage introduction. A difference in difference analysis finds that the minimum wage reduced household time spent on home production between 30-60 minutes per day. Next, the paper presents and estimate a structural model where spouses receive wage offers and jointly allocate time to supplying labor market hours and to producing a public good. Results show that men have a higher preference for leisure and women are more productive in providing the public good. Differences in wage offers largely explain disparities in paid working hours, while preferences and productivity account for most variation in home production hours. Chapter 2, "When Minimum Wage Meets the Female Workforce: Evidence from Germany," examines the impact of Germany's minimum wage policy on women's labor force participation. The paper employs a difference-in-differences followed by an event study to assess the reform's effect on the probability of women being employed full-time. Findings show a sustained 5-10% increase in the probability of women working full-time due to the minimum wage. Chapter 3, "Correlated Innovations and Biased Decision-Makers: A Tale of Policy Take-Up in US States" makes use of a theoretical model to explain policy adoption when both learning and ideological components are present. The model examines different states with potentially biased and privately informed decision-makers who can either adopt a policy or not. Decision-makers (DMs) care about re-election, and households vote for these DMs. The paper demonstrates that when innovations are correlated, DMs are more likely to act as an unbiased type. Finally, some features of the model are tested with US data.