Economics of Human Capital
Paper Session
Sunday, Jan. 3, 2027 8:00 AM - 10:00 AM (EST)
- Chair: Ming-Jen Lin, National Taiwan University
Identifying Uncertainty, Learning about Productivity, and Human Capital Acquisition: A Reassessment of Labor Market Sorting and Firm Monopsony Power
Abstract
We examine the empirical content of a large class of dynamic matching models of the labor market with ex-ante heterogeneous firms and workers, symmetric uncertainty and learning about workers’ productivity, and firms’ monopsony power. We allow workers’ human capital, acquired before and after entry into the labor market, to be general across firms to varying degrees. Such a framework nests and extends known models of worker turnover across firms, occupational choice, wage growth, wage differentials across occupations, firms, and industries, and wage dispersion across workers and over the life cycle. We establish intuitive conditions under which the model primitives are semiparametrically identified solely from data on workers’ wages and jobs, despite the dynamics of these models giving rise to complex patterns of selection based on endogenously time-varying observable and unobservable characteristics of workers and firms. By relying on this identification argument, we develop a constructive estimator of the model primitives, which builds on common methods for mixture and extremal quantile regression models and displays standard properties. Through the lens of this framework, we investigate how well typical empirical wage measures of matching assortativeness and firms’ wage-setting power detect the degrees of sorting and monopsony power in the labor market, respectively. We show that usual measures of sorting severely understate its importance because they ignore the option value of worker human capital and the information about worker productivity acquired through employment, in terms of higher future wages and improved future sorting, which is priced into current wages thus depressing them. We also demonstrate how the markdown of wages relative to output largely overstates firms’ labor market power by ignoring that this option value, which captures future returns from acquired human capital and information, generally lowers wages. We find evidence of both of these features in U.S. data.From Parental Homes to Parenthood: Housing Inheritance and Fertility Decisions
Abstract
We study how access to housing shapes family formation in the context of ultra-low fertility. Using population-wide administrative data from Taiwan between 2007 and 2021, we analyze the event of house inheritance and compare heirs who experience inheritance earlier with those who inherit later. Our staggered Difference-in-Differences design allows us to trace dynamic effects, and we benchmark results against income shocks from Taiwan’s receipt lottery to distinguish the role of wealth from that of housing access. We find that house inheritance increases both marriage and fertility: among unmarried heirs, marriage rates rise by 2.8 percentage points and fertility by 0.016 children per heir, with comparable effects for married couples. These responses are strongest for younger and less wealthy heirs. We show that wealth effects alone cannot explain these patterns, underscoring that homeownership plays a central role in shaping demographic behavior and suggesting that policies improving housing access may help mitigate fertility decline.Gender Income Gap vs. Gender Welfare Gap: The Role of College Majors and Education Policy
Abstract
This paper examines how higher-education policy impacts gender inequality when studentsdecide both college attendance and major selection. We develop a quantitative life-cycle model incorporating endogenous college enrollment, college major, saving, and fertility. Policies can shift Gender Income Gap and Gender Welfare Gap in opposite directions by altering student sorting across fields. Universal free tuition may widen the income gap while narrowing the welfare gap. Conversely, gender-based affirmative action has minimal effect on earnings gaps but can worsen welfare disparities. Evaluating policy solely through earnings gaps may be misleading when there exists gender heterogeneity by major.
Discussant(s)
to be added To be added
,
To be added
JEL Classifications
- I0 - General
- J0 - General