Three essays on public policy and labor economics

This dissertation addresses three public policy issues involving the labor market: child labor, welfare time limits, and employment contract rules.;Two strong arguments often leveled against child labor are that it decreases schooling and damages the health of the child. However, child labor likely raises consumption levels in very poor families and may therefore be indispensable. Chapter I examines child labor supply, schooling, and anthropometric outcomes. Instrumental variables estimates indicate that child labor increases the body mass index of boys but not their height. The findings for girls are less precisely estimated.;In 1996, the United States embarked on sweeping welfare reform, the most controversial aspect of which was the imposition of a five-year time limit on the receipt of federal cash assistance. To gauge the response to time limits and separate this response from contemporaneous reforms, Chapter II exploits a natural experiment provided by the implied time limit that has always existed under AFDC rules. Households always became ineligible for cash assistance when the youngest child turned 18. I use California administrative data and the Panel Study of Income Dynamics to estimate welfare duration models. I find that households with younger children in the PSID became much more likely to end a welfare spell after time limits. No effect is found in the California data.;The common law doctrine of employment at will holds that unspecified labor contracts can be terminated for any reason. Beginning in the mid-1970s, state courts became increasingly willing to find exceptions to the employment-at-will doctrine. Some have viewed this development as an impediment to efficient contracts. Others have argued that employment-at-will exceptions facilitate efficient contracts. These scholars suggest that employment-at-will exceptions have dampened employer opportunism by providing a third-party enforcement mechanism to delayed-payment labor contracts. Chapter III uses two micro datasets on employer tenure and wages to evaluate the impact of at-will exceptions. Job tenure increased in states that adopted exceptions, but wages did not change in a manner consistent with the facilitation of delayed-payment contracts.