Essays on discrimination, welfare and labor supply

Abstract

This thesis consists of five papers in applied labor economics. The first two papers are related to wage discrimination between males and females, whereas the next two papers are related to labor supply and welfare participation, while the last paper analysis early retirement in Sweden. `Endogenous Schooling and the Distribution of the Gender Wage Gap' studies how the unexplained wage gap is affected by treating years of education in a traditional wage equation as endogenous. The result shows that the estimated wage differentials are substantial higher using OLS than using IV and panel data. We find that the gender wage gap differs substantially across different values of work experience and that the unexplained gender wage gap has increased over time. `Occupational Gender Composition and Wages in Sweden' analyzes the relationship between wages and occupational gender segregation in Sweden controlling for non-random selection into an occupation. The result shows that the unexplained gender wage gap is largest in female dominated occupations and smallest in male dominated occupations. Females' experience earnings profile is steeper for women in male dominated occupations. Ignoring occupational segregation produces considerable higher estimates of the unexplained part of the gender wage gap. `Household Labor Supply and Welfare Participation in Sweden' studies the joint effects of the tax and benefit systems on household labor supply. The estimates from the structural model yielded small wage and income elasticities. A tax simulation showed that reducing the progressivity in the Swedish tax system may have considerable welfare effects. The effect on working hours from the reform was quite small, while the evaluation of a change in the welfare system showed that the stigma-effect had a substantial impact. `Labor Supply and Welfare Participation of Single Mothers in Sweden' analyzes the effects of changes in income taxes, cost of childcare and social assistance on labor supply for single mothers households. The results show that there is a positive and significant stigma-effect associated with welfare participation. Fixed costs of working is an important factor in a single mothers' decision to enter the labor market. We find a negative covariance between social assistance and labor supply, which implies self-selection into welfare. Welfare effects from the childcare reform are quite similar across all income deciles, even if predicted increases in hours of work are substantial for the poorest single mother households. `Early Retirement in Sweden' studies the determinants of early retirement from the Swedish labor market for both males and females. The result shows that there is heterogeneity in the underlying preference structure and that the probability of a complete early withdrawal from the labor market increases with age. Blue collar workers have lower probability to take part time pension and full early age retirement than workers from other occupational schemes. Finally, we find that economic incitements affect the decision of Swedish workers to leave the labor market. Keywords: Gender Wage Gap, Endogenous Schooling, Panel Data, Occupational Segregation, Labor Supply, Welfare Participation, Unobserved Heterogeneity, Tax Simulation, Early Retirement, Occupational Pension.