Technological Impacts on Return to Education in Brazil
by Yirui Zhao
Abstract
The wage return to education has been studied for a long time. Acemoglu and Autor (2010) connect the decrease of medium-level job opportunities in the U.S. with technological advances. Their theoretical model predicts that if technology replaces routine jobs, workers with medium-level skills will experience decreases in wages relative to both high-skill workers (who become more productive with the improved technology) and low-skill workers (who can less easily be replaced since their work is not routine). Moreover, their theoretical model predicts that if medium-skill workers are closer substitutes for low-skill workers than they are for high-skill workers, the relative return of high-skill workers to low-skill workers should increase. Using education as proxy of skill (Acemoglu & Autor, 2012), this paper checks if these three predictions about relative wage returns to education also hold in Brazil. This paper finds that the impact of technological change on the Brazilian formal labor market between 1986 and 2010 is consistent with predicted changes in the return to education for medium-skill workers relative to both low and high skill workers. The impact is consistent with predicted changes in the return to education for high-skill workers relative to low-skill workers when Lula’s presidency is considered in the model.
Michelle Connolly, Faculty Advisor
Rafael Dix-Carneiro, Faculty Advisor
Daniel Xu, Faculty Advisor
JEL Codes: J24; J31; O33
An Analysis of the Labor Market Returns to Community College and Vocational Training
by Eli Levine
Abstract
Education and training are fundamentally linked with labor market performance. There is a significant body of work analyzing the role of education in wages with an emphasis on a comparison between a college degree and a high school diploma. However, as states have begun to shift their education policies to make community college and trade school more accessible, it is important to understand the expected labor market returns to these forms of education. In this paper, using data from the National Longitudinal Survey of Youth’s cohort that began in 1997, the returns for different levels of education using the Mincer equation are found. While there was a data limitation surrounding trade school, it was possible to analyze the impact of adding a vocational license or a training certificate to a high school diploma. When controlling for experience in three different ways, specifically by age, time at highest training and labor market experience, it was found that returns to a training certificate relative to high school are between 18.7% and 36.3% higher than a high school diploma. Furthermore for community college, the wage returns are between 26.4% and 45.8% higher relative to a high school diploma. These findings highlight that additional training and certification can be an effective tool for increasing labor market returns for high school graduates even without a bachelor’s degree.
Professor V. Joseph Hotz, Faculty Advisor
JEL Codes: I2, I26, J31
Labor Market Effects of the Minimum Wage in South Korea
by Alec Ashforth
Abstract
This paper analyzes survey data from businesses regarding individual worker earnings, hours, and characteristics from 1971 to 1998 in order to estimate the labor market effects of the minimum wage in South Korea. Since the minimum wage was only implemented in manufacturing, construction, and mining industries, we are able to compare earnings and hours of workers in these industries with workers in other industries using both a difference-in-differences and a synthetic control approach. Additionally, we test to see if the minimum wage had heterogeneous effects based on an individual worker’s gender, level of education, experience, and payment period.
Professor Arnaud Maurel, Faculty Advisor
Professor Kent Kimbrough, Faculty Advisor
JEL Codes: J31, J38, O15
For Love of the Game: A Study of Tournament Theory and Intrinsic Motivation in Dota 2
By YAO Shengjie
This paper studies the effect of intrinsic motivation on the extrinsic incentives specified by tournament structure in tournament theory in the context of e-sports. It incorporates tournament theory and motivation crowding theory in the same framework, something that past literature have hinted towards but never formally done so. It also uses an e-sports dataset, a type of dataset that few academics in the past have dealt with, but one that offers many interesting potentials. Results weakly show that crowding-in occurs in e-sports, but the effects of tournament structure on performance are inconclusive in the context of this paper. Implications of this paper lie mainly in the possibility for future academics to utilise e-sports data for research.
Advisors: Professor Grace Kim | JEL Codes: J31, J33, J41, M51, M52, Z20
Immigrant Workers in a Changing Labor Environment: A study on how technology is reshaping immigrant earnings
By Grace Peterson
This research determines how automation affects immigrant wages in the US and how closely this impact follows the skills-biased technical change (SBTC) hypothesis. The present study addresses this question using American Community Survey (ACS) data from 2012 to 2016 and a job automation probability index to explain technological change. This research leverages OLS regressions to evaluate real wage drivers, grouping data by year, immigration status, and education level. According to the SBTC hypothesis, high skill immigrant wages should be less negatively affected by technological change than low skill immigrant wages. Univariate analysis suggests that the SBTC hypothesis is even stronger for US = immigrants than native-borns, as high skill immigrants have a lower average probability than low skill immigrants of having their jobs automated, and the difference in effect on high versus low skilled workers is larger for immigrant than native-borns. However, multivariate analysis asserts that technological change affects low skill immigrants’ wages less than high skilled individuals’ wages, which counters the SBTC hypothesis.
Advisors: Professor Grace Kim | JEL Codes: J15, J24, J31, J61, E24
Incentives to Quit in Men’s Professional Tennis: An Empirical Test of Tournament Theory
By Will Walker
This paper studies the influence of incentives on quitting behaviors in professional men’s tennis tournaments and offers broader implications to pay structures in the labor market. Precedent literature established that prize incentives and skill heterogeneity can impact player effort exertion. Prize incentives include prize money and indirect financial rewards (ranking points). Players may also exert less effort when there is a significant difference in skill between the match favorite and the match underdog. Results warrant three important conclusions. First, prize incentives (particularly prize money) do influence a player’s likelihood of quitting. Results on skill heterogeneity are less conclusive, though being the “match favorite” could reduce the odds of quitting. Finally, match underdogs and “unseeded” players may be especially susceptible to the influence of prize incentives when considering whether to quit.
Advisors: Peter Arcidiacono and Grace Kim | JEL Codes: J41, J31, J32, J33, M12, M51, M52
Measuring the Long-term Effects of Orphanhood
By Nicholas Thomas Gardner
This paper works towards developing the narrative of orphans whose parent or parents died from natural disaster. By taking advantage of the unanticipated nature of death from the 2004
Indonesian tsunami, orphanhood can be treated as much closer to random than similar literature using data centered on HIV/AIDS related deaths. We use a community level fixed effects model to attempt to derive a causal relationship between orphanhood and both education and log wages. Our models suggest that orphaned males aged 14 and older at baseline complete 1-2 fewer years of education than their cohorts. The adverse effects persist in the long-term, as these orphans earn 26% less than non-orphan cohorts.
Advisors: Duncan Thomas and Kent Kimbrough | JEL Codes: I24, I25, I31, J24, J31
Obesity and its Impact on Job Quality
By Kelly Lessard
This study explores the relationship between body mass and job quality in the United States labor force using five variables to represent job quality: hourly wage, training in the past year, desire for training, expectations for success, and job satisfaction. I use the National Longitudinal Survey of Youth 1979 data from 1994 to calculate BMI and assess the job quality indicators. Like past research, I find BMI is negatively associated with wages for the obese population, most significantly for women. Women also suffer a greater body mass penalty for job training and demonstrate lower job satisfaction at a higher BMI.
Advisor: Alison Hagy, Tracy Falba | JEL Codes: J7, J31, J71 | Tagged: BMI, Job Quality, Labor Productivity, Obesity
Is the Blind Side Tackle Worth It?: An Analysis of the Salary Allocation of the NFL Offensive Line
By Kelly Froelich
The importance of the left tackle position in comparison to the other offensive line positions in the National Football League (NFL) has been widely debated amongst sports commentators, as the left tackle is traditionally the second highest paid player on a football team behind the quarterback; yet, this debate lacks empirical findings. This paper aims to quantify the impact of the individual offensive linemen on the chance of winning a game on a game‐by‐game basis and then compare the impact of the left tackle to the other offensive line positions. Using a conditional logistic regression and the marginal effects from that regression, the results do not dispute the NFL’s current trend in spending more on the left tackle in comparison to the other offensive line positions. The results show that optimal spending for the left tackle could extend to 15.976 percent of the salary cap. Thus, the possibility remains that the optimal spending for the left tackle can range up to fifteen percent of the
salary cap, seven percentage points above the next highest optimal offensive lineman spending.
Advisor: Peter Arcidiacono | JEL Codes: J3, J31, J44 | Tagged: Football, Left Tackle, NFL, Offensive Line, Salary
Capturing a College Education’s Impact on Industry Wages Across Time: An Analysis of Academic Factors that Affect Earnings
By Ian Low
Studying how a college education can impact one’s wages has always been an area of interest amongst labor and education economists. While previous studies have stressed using single academic factors (i.e. college major choice, performance, or college prestige) to determine the effect on wages, there has not been a focus on predicting wages given industries and a combination of these academic factors across time. Therefore, the crux of my thesis seeks to provide a new model which incorporates college major choice, GPA, industry selection across time, college type (private or public), natural ability (standardized test scores), and several demographic variables in order to predict percent increase/decrease in wages. My results show that college major choice, academic performance, natural ability, and industry selection (together) do have a significant impact on earnings, and they are appropriate measures to predict post-graduation wages.
Advisor: Peter Arcidiacono, Kent Kimbrough | JEL Codes: A2, A22, J3, J31 | Tagged: College, Industry, Wages
