Essays in labor economics

In the first chapter, I investigate the effect of Right-to-Work (RTW) laws on unionization, labor demand, and wages. RTW laws ban unions from requiring employees in their bargaining units to pay dues, while the unions still represent everyone in the units. Focusing on the 5 states that have enacted RTW laws since 2010, I employ difference-in-differences design augmented by interaction with union density to identify the effect of RTW laws on highly unionized occupations. I use online job posting data from Burning Glass Technologies (BG), and complement the analysis with CPS MORG data. I find that RTW adoption increases the number of job postings from existing firms and attracts new firms to open more establishments in RTW states for occupations with high unionization rates. I also find a larger positive effect on the labor demand for high-skilled workers. The increase in the number of job openings is mainly driven by higher demand for middle-wage occupations. RTW also leads to increases in the mean and the range of advertised wages which is driven by the low-wage occupations. Lastly, I find that RTW adoption lowers unionization rates. When restricted to the manufacturing sector, I similarly find that RTW adoption increases labor demand, raises advertised wages, and lowers unionization rates. In the second chapter, which is coauthored with Jung Ho Choi and Yong Suk Lee, we investigate how Artificial Intelligence (AI) adoption in banks influence jobs and performances. The potential promises and fears of artificial intelligence (AI) are pervasive among academics and practitioners. Using the banking sector, which has actively adopted AI, this chapter examines how the workforce and performances change with AI. Using job-postings data to proxy for AI adoption, we find that the demand for jobs with more machine-learning suitable tasks (e.g., sales, teller, and customer service jobs) decrease, but the demand for jobs with less machine-learning suitable tasks (e.g., analyst, manager, and computer and software jobs) increase with AI adoption. In addition, AI adoption reconfigures the composition of skills demanded across occupations. In particular, demand for computer, strategy, and functional skills increase regardless of the changes in the demand for occupations. We do not find any meaningful improvement in credit management, customer satisfaction, or financial reporting accuracy with AI adoption. To better understand our OLS results, we analyze the banks' AI adoption decisions and use an instrumental variable approach exploiting the spillover of non-financial firms' AI adoption to financial firms' AI adoption. We find that large, profitable, low growth, and low equity banks adopt AI more extensively. Our IV analysis also indicates that AI adoption leads to employment growth and significant occupational changes mainly in large banks. In the third chapter, I study the impact of a youth dividend program in a South Korean city on the local labor market. There is a growing interest in universal basic income around the world. One of the main concerns about basic income, however, is that it may discourage people from working due to income effect, but little is known about its macro impact on the labor market. To examine the impact of basic income on the labor market, I focus on the case of the Youth Dividend program, which is a form of unconditional cash transfer targeted toward the youth, in a South Korean city, called Seongnam. Since there is no obvious choice for a city that is comparable to Seongnam, I use the synthetic control method, which allows me to find a set of weights among all South Korean cities and construct a counterfactual, synthetic control city. I estimate the counterfactual outcomes in the absence of the Youth Dividend payments as the weighted average of the actual outcomes in the control cities and compare those counterfactual outcomes with the actual outcomes from Seongnam. My results suggest that the youth dividend payments do not have any significantly negative impact on aggregate employment, youth employment, labor force participation, and wages in Seongnam

Keywords: Economics.
Advisor: Bloom Nick
Choi Jungho
Pistaferri Luigi
Sorkin Isaac