UBC Theses and Dissertations
Essays on macroeconomics Zhang, Dongxiao
This thesis consists of three chapters that study various aspects of the interaction between macroeconomics, family economics, and labor economics, with a primary focus on the economic linkage between parents and children. Chapter 2 presents a theoretical study contributing to the literature on intergenerational occupational persistence. I develop an occupational choice model characterized by information friction and intergenerational transmission of ability to analyze the relationship between parents' and children's occupational choices and the consequence on workers' earnings over their lifetimes. In this model, workers enter the labor market with imperfect information about their innate abilities, learn their abilities from working, and optimize their occupational choices. The model is calibrated to a unique employer--employee-matched data source from Germany to match observed empirical moments and investigate how the information friction could improve the occupation-talent allocation in the labor force through a counterfactual experiment. In Chapter 3, I document a set of novel empirical facts characterizing occupational persistence across generations by using both survey and administrative-level panel data from Germany. The pattern of intergenerational occupational persistence against occupations' wage-premia ranking is identified as U-shaped: a worker is more likely to work in the same occupation as their father if their father's occupation is associated with a high or low wage premium. This U-shaped pattern can be consistently explained by the theory discussed in Chapter 2. The information friction regarding ability plays a critical role in delaying workers' learning processes and leads to occupation-talent mismatches, especially when workers are in their early career stages. Chapter 4 investigates how the one-child policy affects household-level saving and spending behaviors as well as aggregate-level savings and human capital accumulation in China. To answer this question, I propose a life-cycle model with intergenerational transfers and human capital accumulation. This life-cycle model provides channels to understand households' responses to fertility restrictions and the corresponding impact on savings and investments in per-child education. The present theory also provides a feasible approach based on demographic composition changes to understand the linkage between the household-level dynamics and the evolution of savings and human capital accumulation at the aggregate level.
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