Essays in Applied Microeconomics

Abstract

My doctoral dissertation consists of three empirical investigations in economics. Using dataset from the United States and India, I investigate the impact of law changes on labor market outcomes, effect of early classroom intervention on test

scores, and estimate an important measure of elasticity.

In the first chapter, I investigate the effect of joint custody laws on children's future well-being. In a joint custody regime, both parents are given equal preference by the court while granting the custodial rights of their children in the event of divorce. Using 50 years of census data for the United States' population, I show that growing

up in a joint custody regime leads to lower educational attainment and worse labor market outcomes. My results are robust to different model specifications and apply to both males and females.

In the second chapter, I explore the impact of corporal punishment on young children's academic outcome. In many parts of Europe and the United States, corporal punishment is banned in schools. However, in many developing countries that is not the case. Even if corporal punishment in schools is banned in a developing country

such as, India, the law may not be adequately enforced. It is argued that corporal punishment produces bad outcomes in both the short run and the long run. Instead of instilling good behavioral traits in children, corporal punishment leads to more delinquent behavior. Corporal punishment in schools does not make students more

attentive or motivated. However, so far there is no comprehensive empirical study that shows how the application of corporal punishment at schools affects children. Using a dataset from India, I show that corporal punishment in schools has a significantly

negative impact on children's academic performance. To tackle the problem of endogeneity, I use an instrumental variables method.

In the third chapter, we use a large panel dataset covering the years 1988 to 2010 to estimate county specific total wage elasticities of labor demand for four highly aggregated industries in the United States. Our industries are construction, finance/real

estate/service, manufacturing, and retail trade, which together employ on average over 80% of the U.S. national labor force per year. We use both the conventional constant coefficient panel data model and a random coefficients panel data model to estimate labor demand elasticities in various industries. We find the labor demand

curves in all the industries studied to be downward sloping. We also find significant evidence that the total wage elasticity of labor demand exhibits regional variation. The labor demand estimates obtained in this study are useful to investigate the differential

impact of various shocks and policy changes on the labor market. As an example, we use the estimated county specific labor demand elasticities to identify the impact of union membership and right to work laws on labor demand. We show that labor demand tends to become less elastic with higher union membership rates. We also find that labor demand becomes more elastic if a right to work law is in place.