UBC Theses and Dissertations

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UBC Theses and Dissertations

Essays in labour economics Sacchi de Carvalho, Marcelo


This dissertation is composed of three essays in Labour Economics. The first two essays evaluate wage determination, while the third evaluates how production and labour demand decisions are related. Chapter 2 uses quasi-experimental variation to show that firm-specific positive demand shocks increase wages. It also uses unique variation to disentangle predictions coming from two non-competitive wage setting models, wage bargaining and wage posting (firms facing a positively-sloped labour supply curve). The results point towards the presence of bargaining, but do not let us rule out that wage posting is also present. Chapter 3 investigates how high-ability bosses affect the wages of other workers in the same firm, using an estimator adapted from the peer effects literature. The estimates show that in small town markets and in labour markets defined by knowledge-intensive skills, the estimated effect is negative and statistically significant, which suggests that in these markets high-ability bosses are the ones that are able to decrease wages. In the market for low-skilled service sector workers, instead, the effect is small and not statistically significant, which is consistent with this labour market being more competitive. Chapter 4 investigates how the composition of a firm’s revenue in terms of products relates to the composition of its payroll in terms of occupations. Firms that are more specialized in the product market are found to also be more specialized, and changes in revenue composition are accompanied by changes in payroll composition. It is also shown that, for firms whose revenue composition remains relatively unchanged, higher revenue growth is accompanied by larger changes in payroll composition.

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