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Author: Yang, Guanyi
Resulting in 1 citation.
1. Yang, Guanyi
Essays on Labor Market Frictions and Macroeconomic Welfare
Ph.D. Dissertation, Department of Economics, The Ohio State University, 2018
Cohort(s): NLSY79
Publisher: ProQuest Dissertations & Theses (PQDT)
Keyword(s): Educational Attainment; Family Resources; Human Capital; Income Dynamics/Shocks; Wealth

Permission to reprint the abstract has not been received from the publisher.

Chapter 1 investigates constraints to individual's lifecycle human capital accumulation decisions and its implications from the labor market on income volatility. In particular, how much does inequality in life depend on conditions established at age 18? What role does post-18 higher education play? I use an education choice model with exogenous conditions from family wealth, established human capital at age 18 and shocks to human capital to examine these questions. Family wealth and established human capital at age 18 determine the post-18 education choices. Education builds up human capital and reduces future earnings volatility. Absent this transmission channel, previous studies dramatically underestimate the importance of initial family wealth in explaining lifetime earnings inequality. My model finds that family wealth at age 18 explains up to 15% of lifetime earnings inequalities, and human capital at age 18 explains 72%. Policy counterfactuals that encourage college education by providing financial aid reduce inequality and improve welfare.
Bibliography Citation
Yang, Guanyi. Essays on Labor Market Frictions and Macroeconomic Welfare. Ph.D. Dissertation, Department of Economics, The Ohio State University, 2018.