Alexandria Digital Research Library

Essays on labor economics and experimental economics

Shukla, Anand Jyotindra
Degree Grantor:
University of California, Santa Barbara. Department of Economics
Degree Supervisor:
Peter Kuhn
Place of Publication:
[Santa Barbara, Calif.]
University of California, Santa Barbara
Creation Date:
Issued Date:
Labor Economics
Experimental Economics
Dissertations, Academic and Online resources
Ph.D.--University of California, Santa Barbara, 2016

In this work, I present three essays on Labor Economics and Experimental Economics. In the first essay, co-authored with Ashwin Rode, we explore whether and to what extent differences in prejudicial attitudes can be associated with the variation in black-white labor market gaps across U.S. metropolitan areas. Prejudicial attitudes are quantified using novel data on racially charged internet searches. We find a racially charged search rate that is one standard deviation higher is associated with almost a 23% higher black-white gap in annual income and 35% higher hourly wage gap.

In the second essay, I explore the effect of the Dot-Com recession on college graduates. Recent recessions in the United States and other countries have been associated with large negative demand shocks to specific industries, such as finance and real estate in the Great Recession and information technology in the recession of the early 2000s. Such recessions can have highly disproportionate impacts on recent college graduates in the affected industries. This essay documents these effects by studying the labor market outcomes of science and engineering students who graduated before and after the burst of the Dot-Com bubble. Overall, scientists and engineers graduating in the bust had on average 13 percent lower earnings during the first year after graduation compared to those graduating during the boom; for IT-related majors such as computer science (CS) and electrical and computer engineering (ECE) majors, these losses amounted to 17 percent. Furthermore, the loss in earnings for these IT majors, associated with the bust, persists over a 10 year period even though other majors experience a narrowing of the earnings gap over the same time. I find strong evidence that the gap in earnings for the IT majors is largely driven by differences in hourly wages. Additionally, there is some evidence that the IT students graduating during the bust period were more likely to leave the IT field and to have lower job mobility, which may have contributed to their earnings losses over the long run.

In the third essay, I study the theory of Last-Place Aversion and delve into the deeper causes of this economic behavior. The theory of "last-place aversion" suggests that low-income individuals might oppose redistribution because it could differentially help the group just beneath them. However, distinctions in income groups aren't always clear in the real world, and whether individuals actually identify themselves with a certain rank can be a key factor in influencing behavior. I study the relationship between the behavior associated with last-place aversion and the salience of income rank in a laboratory experiment and using a US-wide voting survey. In a modified version of the dictator game with simple payoffs that are shown to each member in a group, I find no difference in the propensity to donate to the bottom-ranked individual among any of the other ranks. Additionally, using data from a nationwide election survey, I find the group making just above the minimum wage, but less than the median, oppose an increase in the minimum wage. More interestingly, the propensity to oppose an increase in the minimum wage increases across the states with a greater level of inequality. That is, when income categories are made salient due to higher inequality, it influences behavior that is suggestive of last-place aversion. The results suggest that group-associated behaviors are only valid to the point that groups are easily distinguishable.

Physical Description:
1 online resource (109 pages)
UCSB electronic theses and dissertations
Catalog System Number:
Inc.icon only.dark In Copyright
Copyright Holder:
Anand Shukla
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