TWO PAPERS IN APPLIED MICROECONOMICS

Date

2022-08-09

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Abstract

The dissertation consists of two papers on applied microeconomics.
In the first paper, I estimate the effect of entry economic conditions on the careers of economics Ph.D. recipients from the top 32 programs in the U.S. who graduated between 2004 and 2012. I use natural language processing (NLP) to match degree holders with the career information scraped from various data sources. A simple theoretical model of task-specific human capital formation reveals the possible mechanisms driving the permanent effect of the entry condition on their careers. I empirically test the model's predictions using nearly complete employment histories and find that entry conditions cause an occupational mismatch at graduation. Poor entry conditions are associated with a decreased probability of getting a full-time position in an R1 university in the U.S. both in the short run and long run. I also find that a one standard deviation increase in the unemployment rate would result in 2.31 percent fewer publications. The primary mechanism through which entry conditions have a long-term effect is immobility across occupations.

In the second paper, I examine the response behaviors in the Health and Retirement Study. There is a growing interest in the cognitive decline of the old population, but not enough is known about its consequences and implications. The major challenge is insufficient measures of one's cognition in most survey data. The objective of the paper is to estimate a cognitive proxy from survey responses. Note that taking a survey requires a series of cognitive tasks. I propose a standardized measure of characterizing responses to open-ended financial questions. The resulting proxy shows appealing characteristics and aligns with the cognitive measures directly available in the Health and Retirement Study. I apply the method to the Panel Study of Income Dynamics, and the proxy performs similarly.

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Keywords

Microeconomics, Job mobility, Cognitive declines

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