Essays on wage risk, job mobility and income uncertainty

This dissertation studies labor market dynamics and its implications. This paper shows that job mobility is a valuable insurance channel against labor market risk for employed workers. I construct a model of wage dynamics jointly with a structural dynamic model of job mobility. The key feature of the model is the specification of wage shocks at the worker-firm match level, for these shocks can be insured against by job mobility. The first result is that the variance of match-level shocks is large, and the consequent insurance value of job mobility is substantial. The second result is that true wage risk is twice as large as the wage variance observed after job mobility, which is what other papers in the literature have called wage risk.;Chapter 2 begins by providing empirical evidence on job turnover and wage growth for young men and young women. I then build and estimate a dynamic search model where workers make decisions on job turnover and labor supply jointly. The model is able to capture the dynamics of changes in jobs, employment status, hours and wages for both genders in early life. I apply the estimated model to evaluate the role of "constraints" (differential wage policy prior to choices) and "choices" (reflect heterogeneous preferences for part-time work) in explaining the wage gap between genders and between part-time and full-time jobs. I find that most of the empirical part-time wage gap can be attributed to workers' choices. Most of the observed gender difference in hourly wages, however, stems from labor market constraints.;Chapter 3 analyzes a panel of urban Chinese households from 1989--2006. We document a sharp increase in income uncertainty over this period, largely due to an increase in the variance of transitory shocks. We then calibrate a buffer-stock savings model to assess the impact of rising household-specific income uncertainty as well as another shock to household income---the pension reforms that were instituted in the late 1990s. Our calibrations suggest that rising income uncertainty and pension reforms account for over half of the increase in China's urban household savings rate and the U-shaped age-saving profile.