Three essays on labor markets

• Main Author: Tucker, Lee Chauncey
• Other Authors: Paserman, Daniele
• Language: en_US
• Published: 2019
• Subjects: Labor economics; Ethnic enclaves; Labor markets; Monopsony; Specialization
• Online Access: https://hdl.handle.net/2144/33192

The recent proliferation of administrative data sources has made it possible to examine numerous longstanding questions related to labor market functions. I make use of these data sources to provide new insights into three such questions; the extent of firms' market power in labor markets, the nature of gains from workers' skill specialization, and the role of job search networks in the locational choices of immigrants. In Chapter 1, I examine labor market monopsony, the extent to which markets deviate from perfect competition. Prior literature suggests two methods to estimate the extent of monopsony: studying the degree to which firms adjust wages in response to desired changes in employment growth, and measuring the degree to which workers' voluntary separations are sensitive to their own wages. Existing studies have found widely varying answers to these two questions in different contexts. I leverage unique features of Brazilian administrative data to demonstrate that these approaches provide very different results even on the same sample of employees, and I rule out a variety of alternative empirical explanations. These results suggest that labor market monopsony is primarily a function of workers' attachment to their current employers. In Chapter 2, I study the wage premium associated with skill specialization. While standard models predict that more technologically-advanced firms will hire more specialized workers, I show that higher-ability individuals may actually sort into less specialized occupations within firms. I test these predictions by constructing occupation-level measures of skill specialization from the U.S. O*NET database, matched to Brazilian administrative data. While I find that specialization among production skills is associated both with higher wages and with employment at higher-wage firms, I find no evidence of specialization premia in cognitive skills. Finally, in Chapter 3 I study the extent to which job search networks influence new immigrants' decisions to locate in ethnic enclaves. Using detailed data from the New Immigrant Survey, I show that immigrants to the U.S. who arrive without job offers are significantly more likely to locate in enclaves, even after accounting for a wide range of pre-migration and time-invariant characteristics.