University of Illinois Urbana-Champaign

Three essays in applied labor and public economics

Yang, Hesong

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YANG-DISSERTATION-2024.pdf

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https://hdl.handle.net/2142/127258

Description

Title
Three essays in applied labor and public economics
Author(s)
Yang, Hesong
Issue Date
2024-12-04
Director of Research (if dissertation) or Advisor (if thesis)
Forsythe, Eliza C
Doctoral Committee Chair(s)
Forsythe, Eliza C
Committee Member(s)
  • Powers, Elizabeth T
  • Akresh, Richard
  • Kleemans, Marieke
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
  • Hiring
  • Business Cycle
  • Recession
  • Gender
  • Two-track Employment System
  • Graduation
  • First Job
  • Employment
  • Wage
  • Unemployment Insurance
  • CARES Act
  • COVID-19
Abstract
This dissertation comprises three chapters studying how business cycle conditions affect workers' labor market outcomes in Japan and how public policies for the Unemployment Insurance (UI) system in the United States during recessions affect workers' UI recipiency rates across demographic and socioeconomic groups. The first chapter studies how female and male employment differs over the business cycle and how flows into employment, measured by hiring rates, play a role in explaining the employment cyclicality by gender in Japan. Japanese employment is characterized by strong norms for employment protections, however, these ''regular'' jobs are primarily held by men. Women are more concentrated in temporary, part-time, and contract positions (''non-regular'' jobs), with much fewer employment protections. I investigate how female and male employment differ over the business cycle in Japan. I find that while non-regular employment is more cyclical than regular employment, female and male employment exhibit similar cyclicality from 2000 to 2010. Motivated by this empirical finding, I examine how flows into employment, measured by hiring rates, play a role in driving changes in employment levels. I find that hiring rates for women are more cyclical than for men, which is driven by non-regular employment. I further investigate the channel that drives gender heterogeneity in non-regular hiring. I find that the non-regular share of new hires for men is more counter-cyclical than for women, suggesting that men crowd women out of non-regular employment when labor markets are slack. Despite the similar employment cyclicality by gender, I show that flows into employment during economic expansions increase more for women than men. This implies that outflows from employment must counterbalance the gender gaps in flows into employment over the business cycle. In the second chapter, co-authored with Eliza C. Forsythe, we investigate the reasons likely-eligible individuals do not receive the Unemployment Insurance (UI) benefits in the United States, using data from 2018 and during the Covid-19 pandemic. We find this is largely driven by erroneous beliefs about ineligibility, which are correlated with proxies for worker sophistication and information access. During the Covid-19 pandemic, we find misinformation about eligibility increased dramatically surrounding the expiration of the extra weekly UI payments in August 2020, suggesting uncertainty about UI program extensions contributes to misinformation and suppresses program take-up. The third chapter studies the effects of the initial labor market conditions on contemporaneous annual real earnings for workers in Japan who graduated between 1987 and 2007 across their first 20 years of employment and investigates the role of obtaining a regular first job upon graduation in mitigating the wage effects of the initial labor market conditions. It is well known that there are long-term earnings losses from graduating at a time when the unemployment rate is high. Japanese employment is characterized by firms' strong preference for hiring new graduates for entry-level permanent positions (''regular'' jobs). Using the variation in the unemployment rate at graduation across regions and over the years, I find that both young and experienced male workers, especially those without a college degree, suffered a large decrease in contemporaneous annual real earnings as one additional percentage point increase in the unemployment rate at graduation. Such adverse wage effects do not fade out across the first 20 years of employment, even conditional on a regular first job. Women exhibit smaller wage effects in magnitude that are not statistically significant. I find that both genders are not substantially less likely to be employed in a regular job upon graduation when the unemployment rate becomes higher, except for non-college women. Obtaining a regular first job upon graduation ''narrows'' the difference in the percentage change in contemporaneous annual real earnings between experienced and young workers for college men and non-college women, compared to their counterparts without a regular first job.
Graduation Semester
2024-12
Type of Resource
Thesis
Handle URL
https://hdl.handle.net/2142/127258
Copyright and License Information
Copyright 2024 Hesong Yang

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