Essays in applied microeconomics

Wang, Yifan

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https://hdl.handle.net/2142/130121 Copy

Description

Title

Essays in applied microeconomics

Author(s)

Wang, Yifan

Issue Date

2025-06-03

Director of Research (if dissertation) or Advisor (if thesis)

Molitor, David

Doctoral Committee Chair(s)

Molitor, David

Committee Member(s)

• Osman, Adam Mohamed
• Song, Lena
• Weinstein, Russell

Department of Study

Economics

Discipline

Economics

Degree Granting Institution

University of Illinois Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• trade liberalization
• informal employment
• broadband Internet
• child mortality
• natural disasters
• political economy

Abstract

This dissertation examines how individuals and institutions respond to structural shocks—ranging from international trade and digital infrastructure to environmental disasters—through the lens of labor markets, public health, and political behavior. Each chapter employs quasi-experimental variation and micro-level data to uncover causal mechanisms that inform economic policy and social outcomes. In Chapter 1, I examine how local labor markets in Peru adjusted to increased import competition following the 2009 implementation of the United States–Peru Trade Promotion Agreement (PTPA). Exploiting exogenous variation in tariff reductions across regions, I find that areas experiencing larger tariff cuts exhibit a persistent rise in informal employment. These results are consistent with prior research suggesting that the informal sector acts as an employment buffer in response to trade-induced labor demand shocks. Using worker-level panel data, I show that individuals in high-exposure regions are more likely to transition into informal jobs and to work significantly longer hours. The effects are heterogeneous across gender, skill level, and employment history. While I find no significant changes in household income or poverty rates, there is a notable decline in household expenditures, suggesting that informal work may serve as a short-term welfare buffer. These findings provide new evidence on how trade liberalization affects employment and welfare in developing economies with large informal sectors. Chapter 2 investigates the impact of broadband Internet expansion on early-life mortality in Sub-Saharan Africa. I exploit quasi-experimental variation in Internet availability generated by the staggered arrival of undersea fiber-optic cables and the uneven inland rollout of national backbone networks. Using a difference-in-differences strategy, complemented by an instrumental variable approach that leverages exogenous variation in lightning strike frequency, I show that improved Internet access leads to significant reductions in both infant and under-five mortality. The effects are strongest in rural areas and among mothers with lower levels of education—groups typically facing greater barriers to health information and services. Mechanism analysis suggests that Internet access improves maternal health knowledge, promotes adoption of preventive health behaviors, and increases trust in formal medical systems. These results highlight the potential of digital infrastructure as a scalable, non-traditional tool for improving health outcomes in low-resource settings. Chapter 3 examines how natural disasters influence political outcomes, focusing on the electoral consequences of floods and the role of presidential disaster declarations in the United States. Using county-level panel data spanning 1940 to 2020, I identify the causal effects of flooding on incumbent party vote shares in presidential elections. The results show that flood events significantly reduce support for the incumbent party, with effects that attenuate over time. The electoral penalty is particularly large in flood-prone regions, suggesting that repeated exposure heightens voter sensitivity to disaster impacts. I propose a theoretical framework in which presidential disaster declarations serve as a signal of government responsiveness. Consistent with the model’s predictions, empirical evidence shows that such declarations significantly mitigate the negative electoral effects of flooding. Finally, using a difference-in-differences approach, I exploit the historical introduction of the federal disaster declaration policy in 1953 to demonstrate its long-term influence in reducing the political costs of disasters. These findings shed light on voter behavior under environmental stress and highlight the strategic role of federal relief in shaping electoral accountability. Together, these chapters contribute to our understanding of how economic, technological, and environmental shocks affect labor markets, public health, and democratic institutions in both developing and developed contexts.

Graduation Semester

2025-08

Type of Resource

Thesis

Handle URL

https://hdl.handle.net/2142/130121

Copyright and License Information

Copyright 2025 Yifan Wang

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