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Dissertation/Thesis Abstract

Four Essays on Labor and Development Economics
by Lu, Yiqian, Ph.D., State University of New York at Buffalo, 2019, 129; 13422408
Abstract (Summary)

This dissertation consists of four chapters on topics in labor and development economics.

Chapter 1 discusses innovation fluctuations in an aging economy. A three-stage overlapping generations model is constructed to simulate population trends and their consequent impact on innovation and economic development. Both the theoretical analysis and empirical verification show that countries with a low fertility rate have a higher innovation rate in a short period but a lower one in the long run. This chapter discusses the negative impact of an aging economy and yields the strong policy implication of providing a subsidy to boost the fertility rate, particularly for those developed European countries suffering from aging problems.

Chapter 2 focuses on the relationship between the unemployment rate, working efficiency, and working overtime. It is motivated by the widely observed phenomenon of working overtime in some East Asian countries as well as the consulting and investment banking sectors. Does working overtime indeed produce extra efficiency? I use data from the Panel Study of Income Dynamics (PSID) to answer this question. The answer is NO, and it has little impact on the unemployment rate. This chapter contributes to existing literature with a new empirical approach. It could also guide corporate management professionals in the enactment of proper overtime work policies.

Chapter 3 discusses the relationship between institutions and economic outcomes. The renowned MIT and Chicago political economists Daron Acemoglu and James Robinson argue that only inclusive political and economic institutions could lead to economic prosperity. Others dispute that their theory captures the whole picture. Bill Gates notably said that the theory of Acemoglu and Robinson must take into account other important factors. Chapter 3 contributes to this controversy. I find that economic prosperity could be harvested even by extractive institutions with immigrant-friendly policies. For example, countries like the United Arab Emirates, Qatar, and Singapore could enjoy a long-term economic boom due to a good immigration policy that attracts high-skilled and low-skilled immigrants from their neighbors.

Chapter 4 intends to determine the empirical relationship between income inequality and consumption inequality in China. Existing empirical literature shows that consumption inequality exceeds income inequality in China, which contradicts basic economic theory as well as evidence from the US, Canada, and Europe. I use the inverse relationship between necessity good consumption and income to derive the true income level of each individual. High-income communist party members and employees of government-related agencies tend to hide their grey income, and income inequality is thus underestimated. The relationship I uncover between income and consumption inequality is consistent with the empirical evidence on other countries.

Indexing (document details)
Advisor: Rao, Neel
Commitee: Li, Mingliang, Pei, Yun
School: State University of New York at Buffalo
Department: Economics
School Location: United States -- New York
Source: DAI-A 80/07(E), Dissertation Abstracts International
Subjects: Economics, Labor economics
Keywords: Consumption inequality, Human capital, Inclusive institutions, Income inequality, Low fertility, Working overtime
Publication Number: 13422408
ISBN: 978-0-438-94458-9
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