| Over the last several decades, the scale and scope of modern business have undergone significant change. As a result of increased geographic integration, firms face the constant struggle of finding innovative ways to retain comparative advantages. Workers also face a changing environment increased cross-border activity results in heightened anxiety as products continue to be imported, services become "offshorable" to other nations, and as domestic firms begin to alter the nature of contract design, placing a larger burden of risk on the employee.This dissertation examines several key elements in contemporary labor economics. In Chapter 1, I analyze the U.S. apparel-manufacturing industry. Since 1970, the industry's employment has fallen more than any other manufacturing sector. Despite this industry-wide decline in employment, the geographic variation in the rate of decline has been quite large. I exploit this variation to determine the principal factors associated with maintaining industry employment.According to several studies, 40% of the U.S. workforce is at risk of losing its job to offshoring. These results are speculative, however, because gaps in technology and education have prevented many "potentially offshorable" jobs from becoming actually offshored. In Chapter 2, I develop a more concrete estimate by examining the pattern of interstate employment trends, within the United States. I then extend the analysis to make a more precise forecast of the expected magnitude of employment change when offshoring services internationally.In Chapter 3, I examine the core contractual relationship between the employee and employer. Using data from a panel of National Basketball Association players, I estimate that effort-related productivity increases nonlinearly, by as much as 10% per year towards the end of a fixed-term contract. In spite of these adverse effort effects, the model lends a sound economic justification for the existence of multi-period contracts: with uncertain output, contracts act as insurance for the worker and, in return for bearing some of the risk, firms can benefit by paying a lower wage. The results have implications for determining the optimal contract length in changing contemporary labor markets. |
