Dissertation
ESSAYS ON INFORMATION PROBLEMS IN ENVIRONMENTAL AND LABOR ECONOMICS
Washington State University
Doctor of Philosophy (PhD), Washington State University
01/2022
DOI:
https://doi.org/10.7273/000004551
Handle:
https://hdl.handle.net/2376/125135
Abstract
This dissertation is composed of three essays examining problems of incomplete information in the context of environmental and labor economics. The first essay studies regulation of firms that engage in hazardous activities under uncertainty. A theoretical model is developed for three cases: manager’s attitudes toward uncertainty are (1) risk averse, (2) risk loving, and (3) ambiguity averse. Ambiguity aversion is modeled using the smooth model of decision making. We show that uncertainty averse attitudes induce over-investment in precaution that reduces hazard. Our main result is in stark contrast to previous findings in which uncertainty causes firms to invest less in precaution. The second essay studies a job market signaling game between firms and three types of workers with heterogeneity in productivity and costs of working and acquiring education. Workers choose to enter the job market or not and if they enter whether to receive a productivity enhancing education or not. This is observed by the firm and acts as a signal to the firm but not the government. The government imposes a constant wage tax and rebates the revenue in lump sum transfers. We provide conditions on wages for ten possible sustainable equilibria that depend on productivity, costs, the tax rate, and transfers. The third essay extends the job market signaling game from chapter 2 between a representative firm and three types of workers with heterogeneity in productivity and costs of working and costs of acquiring education. Workers choose to enter the job market or not, and whether to receive a productivity enhancing education or not. Monopsonist firms choose wages to maximize profit. The government chooses linear taxes on wages and profits and rebates the revenue in lump sum transfers to maximize utilitarian social welfare function composed of the utility of the workers. Policy may offset the labor market power of the firm The optimal tax policy includes effective negative wage tax rates for workers and a positive profit tax rate which is facilitated through positive transfers to workers that includes a “basic income”.
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Details
- Title
- ESSAYS ON INFORMATION PROBLEMS IN ENVIRONMENTAL AND LABOR ECONOMICS
- Creators
- Casey Bolt
- Contributors
- Ana Espinola-Arredondo (Advisor)Felix Munoz-Garcia (Committee Member)Raymond Batina (Committee Member)Ron Mittelhammer (Committee Member)
- Awarding Institution
- Washington State University
- Academic Unit
- Economic Sciences, School of
- Theses and Dissertations
- Doctor of Philosophy (PhD), Washington State University
- Publisher
- Washington State University
- Number of pages
- 145
- Identifiers
- OCLC#: 1365397179; 99900898539201842
- Language
- English
- Resource Type
- Dissertation