Three essays on government policy, labor supply and income distribution

This dissertation uses econometric methods to investigate issues in labor market impacts of government policies, income distribution and inequality. The first essay estimates the impacts of U.S. tax and welfare policies on the labor market outcomes of single mothers. The second essay proposes a new method of calculating the maxent entropy density. The third essay extends the maxent entropy density method to grouped data and apply it to China's income summary statistics.; The first essay examines the effect of the Earned Income Tax Credit (EITC) and welfare programs on the labor supply of single mothers. The EITC is an earning subsidy to the working poor. I estimate nonparametrically a structural labor supply function, accounting for the nonlinear budget constraint under the EITC and welfare programs. I show that an expansion of the EITC increases the hours of poor single mothers, but decreases the hours of those not so poor. I also find that the recent EITC expansion and welfare reform significantly increase the hours worked by single mothers. Despite its disincentive effect on part of the population, the EITC improved the family income for all affected groups.; The second essay proposes a sequential updating method to calculate the maximum entropy density subject to known moment constraints. Instead of imposing the moment constraints simultaneously, the proposed method incorporates the moment constraints into the calculation from lower to higher moments and updates the density estimates sequentially. This method is employed to approximate the size distribution of U.S. family income. Empirical evidence demonstrates the efficiency of this method.; The third essay extends the maxent entropy density method to grouped data so that one can estimate flexible density functions from a limited amount of grouped summary statistics. The method is applied to the estimation of China's income distributions from 1985 through 2001, based on summary statistics of China's annual household survey. Various welfare inferences are drawn by comparing estimated inequality indices and examining estimated distributions directly. I found that income inequality and consumption inequality in China have risen substantially during the sample period in both rural and urban areas.