Essays on Labor Economics

Abstract

Life cycle decisions regarding education, marriage, divorce, and labor supply form the foundation of individual economic outcomes. These interconnected individual choices also determine the evolution of the economy in various aspects. Understanding the mechanisms underlying these decisions presents substantial empirical challenges. The dynamic nature of life cycle choices, combined with unobserved heterogeneity, selection effects, and complex interactions between individual decisions and market equilibrium, makes it difficult to identify causal relationships and evaluate policy interventions using reduced-form approaches alone. Structural labor economics provides a methodological framework for addressing these challenges by explicitly modeling the behavioral foundations of life cycle decision-making. By combining economic models with detailed data and modern econometric techniques, structural estimation enables researchers to recover deep parameters governing individual preferences, account for dynamic selection and general equilibrium effects, and conduct counterfactual policy analyses where individuals respond optimally under the hypothetical conditions. This dissertation contributes to the structural labor economics literature by developing and estimating dynamic models of life cycle decisions and family outcomes across three empirical contexts. In the first chapter, I examine how socioeconomic and institutional changes influenced life cycle decisions in the United States from 1968 to 2018. I develop a general equilibrium overlapping generations model that incorporates educational, marital, and female labor supply choices, allowing for rich interactions between labor and marriage markets during periods of transition. The model addresses the empirical challenge of disentangling the effects of multiple sequential underlying driving forces—including shifting social attitudes toward marriage, rising college premiums, narrowing gender wage gaps, increasing wage volatility, and divorce law reforms. By proposing a methodology that estimates the model through fitting connected equilibrium transitional paths to time-series data and exploiting variation in state-level divorce law changes, the analysis decomposes the relative importance of these driving forces. The findings reveal that rising college premiums drove increased educational attainment for both genders and contributed to marriage delay, while declining social attitudes toward marriage emerged as the primary driver of both delayed marriage and increased divorce risk. The results document a shift from marriage market to labor market motivations in educational decisions among younger generations. This chapter provides an innovative framework for studying economic transitions initiated by multiple driving forces with complex interactions among them. The second chapter (joint work with Sebastian Galiani and Juan Pantano) focuses on how cash transfer programs affect life cycle decisions among adolescent girls in developing countries. We estimate a dynamic discrete choice model of schooling and marriage decisions using data from a randomized controlled trial in Malawi. The structural approach addresses the challenge of dynamic selection arising from program eligibility requirements (unmarried, enrolled girls) in the presence of unobserved heterogeneity in household preferences for girls' education. By estimating the model using data from control and unconditional transfer groups while reserving conditional transfer outcomes for out-of-sample validation, the analysis demonstrates how structural methods can complement experimental designs to enhance policy inference. The model enables evaluation of the effects of counterfactual policies that have never been implemented in reality. This chapter demonstrates how the dual-use of randomized controlled trials data and structural modeling helps develop more reliable and useful tools for policy evaluation. In the third chapter, I develop a life cycle model of marriage market participation that features an endogenous, limited-size matching market. The model incorporates search effort decisions and rational expectations about future partner availability, allowing individual choices to jointly determine population dynamics and equilibrium marriage market outcomes. Applied to Japanese demographic data, the model successfully replicates observed marriage timing patterns and reveals how delays in family formation can become self-reinforcing through expectation formation and behavioral adjustments. When fewer individuals marry at young ages, the increased availability of potential partners in future periods raises the option value of remaining single, creating incentives for further delay. Counterfactual analyses indicate that negative shocks to match quality and wage declines amplify marriage delay through belief updates and search effort adjustments, while monetary child support policies prove more effective due to these endogenous market dynamics. This chapter demonstrates how structural modeling can capture complex equilibrium market effects and predict individual responses to policy changes more accurately. Together, these chapters advance the structural labor economics literature by providing methodological tools and empirical insights for understanding life cycle decision-making and family outcomes. The work demonstrates how structural modeling can be used to conduct policy evaluation and counterfactual analysis across diverse economic contexts.