Essays on labor and development economics

The dissertation consists of two essays on labor and development economics. The first essay seeks to identify the main factors that contributed to the decline in gender earnings gap in Thailand's wage and salary sector from 1985-2005. Two parametric methodologies, Neumark's version of the Blinder-Oaxaca method and the Juhn-Murphy-Pierce method, are implemented in order to decompose gender earnings gap at a point in time and across time period. I also make a methodological contribution by proposing a way to modify the DiNardo-Fortin-Lemieux nonparametric decomposition method so that its results are comparable to those from Neumark's version of the Blinder-Oaxaca method. The key findings of this essay are as follows. First, I find that increases in female education and changes in unobserved factors, which were concurrent with modernization, were the main sources of the decline in gender earnings gap. Second, over time, improvements in the education of females in this sector surpassed that of males. However, the superior education of females did not result in higher female earnings because of the overwhelming effect of the unexplained factors that supported higher male earnings. Finally, the nonparametric investigation corroborated the results from the parametric methodologies.;The second essay investigates how the Wrongful Discharge Laws (WDLs), imposed during the 1970s and 1980s, affect workers in the United States. Most economists conjecture that WDLs increase firing costs for firms. In terms of employment, the literature found a negative or at best zero impact. In terms of wages, most papers found no impact. Thus the laws seemed to adversely affect an “average” worker. These papers implicitly assumed that labor force was homogeneous. They did not recognize the fact that labor can be heterogeneous and that firms may treat different types of labor as different forms of input. My study attempts to overcome this limitation. I treat labor as heterogeneous (high-skilled and low-skilled) thus allowing the laws to affect firms' decisions regarding not only the quantity of labor input but also the combination of different types of labor input. The key finding of this essay is that WDLs are associated with increases in employment of high-skilled labor, a result unacknowledged in early studies. WDLs, however, adversely affect employment of low-skilled labor, a result consistent with the literature.