Essays in applied microeconomics [electronic resource]
Keywords: Economics

This dissertation comprises three chapters. Chapter 1 and Chapter 2 examine the impact of two large sets of reforms to U.S. divorce law on couples' economic behavior and welfare and on intra-household inequality between the late 1960s and the 1990s. Chaper 3 examines the effect of an episode of compulsory licensing of patents in the United States on domestic invention in the 1920s and 1930s. The common thread between the three chapter is the analysis of the impact of legal changes in property rights. Chapter 1, entitled ``Yours, Mine and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?" examines the impact of divorce laws which regulate when divorce is allowed and establish each spouse's property rights over household assets on the intertemporal behavior and the welfare of married couples. In this chapter, I build a dynamic model of household choice in which moving from a mutual consent to a unilateral divorce regime results in limited commitment and renegotiation of intra-household allocations. I estimate the key parameters of the model by exploiting panel variation in U.S. divorce laws across states from the late 1960s to the 1990s. In states that imposed an equal division of property, couples responded to unilateral divorce by increasing savings about 20% more than in states in which assets were retained by the spouse who had formal title to the property, suggesting that equal division may have been costly for primary earners. Furthermore, wives responded to unilateral divorce by temporarily reducing their employment by more than 5 percentage points, only in states in which the division of property was equal. These findings indicate that the threat of unilateral divorce and the leverage provided by the equal division of property allowed wives to appropriate a larger share of household resources (consumption and leisure). My estimates also suggest that equal division of property benefited divorcing women when it was first introduced, since they had a smaller share of resources in marriage and thus less assets in their name than their husbands. However, counterfactual experiments indicate that the equal division of property may be detrimental to women who consume as much as their husbands in marriage, but have lower wages. When spouses consume approximately equal amounts, secondary earners are better off under a separate property regime because they may need more savings than the breadwinners to smooth consumption when going into a divorce. Chapter 2, entitled ``Divorce Laws and Intra-Household Inequality", builds on the analysis of Chapter 1 by examining household survey data to document how the divorce law reforms of the 1970s and '80s were associated with significant changes in time allocations within the household and in other indicators of well-being for married women relative to their husbands. In addition to female employment, also hours devoted to housework, suicide rates, domestic violence rates, husbands' hours of work and household joint savings all respond to the introduction of unilateral divorce in states where spouses assets are divided equally upon divorce in a way that is consistent with an improvement of wives' position within marriage. These facts suggest that laws that regulate spouses' individual property rights can have a sizable impact on intra-household inequality. Chapter 3, entitled ``Compulsory Licensing: Evidence from the Trading with the Enemy Act" with Petra Moser, examines the impact on U.S. invention of an exogenous episode of compulsory licensing under the Trading with the Enemy Act. In 1919, following World War I, the U.S. government appropriated over 5,000 German-owned and Austrian-owned U.S. chemical patents. Between 1919 and 1926, these confiscated patents were licensed to U.S. firms at a nominal fee and without the consent of their original enemy assignees. Exploiting variation in the nature of confiscated and licensed technologies, our analysis indicates that between 1919 and 1939 the compulsory licensing of enemy patents increased U.S. invention in the chemical industry by at least 20 percent.