Essays on Labor Economics

Debasmita Das, Purdue University

Abstract

This dissertation is a collection of three papers, each one being a chapter. In the first chapter, I examine how career interruptions related to child-raising duties affect married women’s labor market trajectory, lifetime earnings, and Social Security retirement benefits. To address this question, I develop and estimate a dynamic life-cycle model of female labor supply, savings, and Social Security benefit claiming. I explicitly model the Social Security benefits system and the federal and payroll tax structure in the United States. The framework, thus, allows me to unravel the complex interdependencies between women’s participation decisions, accumulated work experience, lifetime earnings, and public pension benefits. I estimate the model using the Method of Simulated Moments and match data for the cohort born in 1943-1954. I use the model to simulate labor supply behavior of married women in a revenue-neutral counterfactual scenario where I introduce Social Security caregiver credit that covers the lost earnings during the first 5 child-rearing years through changes in retirement benefits. I find that the model predicts that introducing the provision of earning credits for child care in the Social Security system would reduce participation of married women during the child-rearing years, but the contributory nature of the caregiver credits creates incentive to work in the post-childrearing period.In the second chapter, I evaluate the implication of introducing Social Security caregiver credit by examining whether and to what extent implementing this child-related policy to the existing Social Security system would help reduce the motherhood earnings penalty over the life cycle. I utilize the dynamic lifecycle model developed in Chapter 1 and conduct revenue-neutral counterfactual policy experiments by introducing caregiver credits in in various settings. First, I analyze the effect of the policy at different generosity levels; and second, I implement the policy in the presence as well as in the absence of the marriage-based noncontributory Social Security benefits (spousal and survivors benefits). Third, I conduct an alternative counterfactual policy experiment where mothers could drop five additional work years from the average career earnings (or equivalently Social Security benefits) calculation. The model predicts that lifetime pre-tax labor earnings of married women increase significantly under when the caregiver credits are introduced in a setting where spousal and survivors benefits are eliminated, and there is a sizeable reduction in gender gap in average career earnings at the Social Security Early Retirement Age. The alternative policy of computing average career earnings based on a mother's 30 years of earnings has significantly smaller impact on offsetting motherhood earnings penalty through retirement benefits compared to the provision of Social Security caregiver credits.In the third chapter, I examine the effect of Supplemental Nutrition Assistance Program (SNAP) work requirement reinstatement on food insecurity outcomes of able-bodied adults without dependents (ABAWDs). The policy restricts SNAP benefits of ABAWDs to 3 months in a 36 month period if they are not working or participating in any work program for at least 20 hours a week. In the aftermath of the 2008 recession, the American Recovery and Reinvestment Act of 2009 waived work requirements nationwide, and many states reimplemented the work rule at different times beginning in 2011. I employ a difference-in-differences approach utilizing this cross-state variation in the reimplementation of the policy.

Degree

Ph.D.

Advisors

Gallen, Purdue University.

Subject Area

Economics|Labor relations|Public health

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