|Abstract:||This dissertation contains three chapters on topics in the field of applied microeconomics. The first two chapters study the effect of international trade in developing countries while the third chapter examines the economic condition of elderly people in the United States.
In the first chapter, I study the response of manufacturing employment to the implementation of the Association of Southeast Asian Nations (ASEAN)-China Free Trade Agreement (ACFTA) in Indonesia. By comparing employment changes across industries before and after the free trade agreement (FTA), we see that industries affected by larger tariff cuts on Chinese imports experienced a greater employment loss. More specifically, a 1% decrease in tariff induces a 0.0068% reduction in the share of employment in an industry. On the other hand, some evidence suggests that a reciprocal tariff reduction of 1% on Indonesian exports to China increased employment by 0.0031%. In addition, the results show that the impact of ACFTA on employment varies according to factors such as employee education level and gender. Finally, this chapter shows that the implementation of ACFTA in Indonesia induces firms to hire workers with higher education levels, thus increasing the employee's average wage.
In the second chapter, I examine the impact of Vietnam's World Trade Organization (WTO) accession on labor productivity and employment in the manufacturing sectors. I compare labor productivity change across industries before and after Vietnam joining the WTO. The results suggest that industries that experienced larger tariff cuts due to the accession had a higher decrease in labor productivity in the short run. We can see that a 1% decrease in import tariff results in a 0.037% decrease in labor productivity. However, in the long run, a 0.026% increase in labor productivity due to a 1% tariff reduction is observed.
In the third chapter, using the longitudinal data Health and Retirement Study (1992-2014) and a fixed-effects model, I assess the relationship between entering widowhood and one's financial status for elderly Americans. The results show that entering widowhood is negatively correlated with one's household income, wealth, and mental health, especially for women. More specifically, becoming a widow is associated with a decline in household income of 54% and a decrease in household wealth of 9.5%. In the long run, however, a gradual recovery is observed in household income, with a 1.8% increase in each year after widowhood.