Essays in labor economics

This dissertation utilizes different empirical methodologies to answer fundamental questions in labor economics. Chapter 2 analyzes how immigration affects native's employment outcomes, Chapter 3 analyzes the sources of change in wage inequality in Mexico after NAFTA was enacted, and Chapter 4 analyzes how workers respond to subsidized health insurance.;In chapter 2, I use detailed establishment-level data from Germany to study the short- and longer-run displacement effects of increased immigrant hiring by firms after the fall of the Iron Curtain in 1989. I compare employment trends at firms in the same local labor market that either hired or did not hire immigrants using both a matching approach and an instrumental variables strategy that exploits pre-existing immigrant job networks. Over a 1-2 year horizon, hiring one additional immigrant displaces roughly 0.3 native workers. I show that these results imply an elasticity of substitution between immigrants and natives of between 10 and 15.;In chapter 3, I investigate the sources of the decrease in wage inequality in Mexico after NAFTA was enacted. Using a quartile decomposition. I show that the decline in wage inequality is driven by a decline in the returns to education and experience. Supply and demand are the main contributors for this change. The increase in supply of qualified workers was not met by an increase in demand for the highly educated. As a result, college educated workers put wage pressures in top qualified occupations.;Mexico created Seguro Popular in 2002 with the goal of providing subsidized health insurance coverage to uninsured people. Only individuals lacking the security protections granted to all formal sector workers and their families are eligible. Hence, one unintended consequence of the program could be an increase in the size of the informal sector. The introduction of the program was conducted in stages, across municipalities and time. Chapter 4 exploits this variation and implement a differences-in-differences approach in order to identify the causal effect of the program in formal employment outcomes. There is little evidence of any correlation between Seguro Popular and the decision of workers to be employed in the informal sector.