| This dissertation includes three chapters; the first is "The Role of Proximity in Financial Service Utilization and Implications for the Community Reinvestment Act". Consumers choose to transact using either traditional financial services, such as checking accounts at banks, or alternative financial services (AFS), such as check-cashers or money orders. Each service type has pecuniary and non-pecuniary transaction costs, which may include convenience. Each consumer presumably uses the lowest cost service type, but many low- and middle-income consumers appear to use both types interchangeably, implying that the total economic costs are similar. In this case convenience factors---including the physical proximity of providers---may induce substitution. I use survey and geographic information to construct measures of respondents' proximity to types of service providers and examine whether having a proximate bank branch correlates with lower utilization of AFS. I find a small, statistically significant effect of bank accessibility on substitution away from AFS, and use this estimate as an upper-bound on the benefits to consumers of bank proximity in a contemporary context. The second chapter, "Labor Demand Responses to Unemployment Insurance Incentives", is coauthored with Victoria Udalova. In the wake of the Great Recession many state unemployment insurance (UI) systems watched their financial reserves dwindle toward insolvency. Robert Topel proposed a statistic called marginal tax cost (MTC) as a measure of the future tax implications to firms of present layoffs. In empirical literature, MTC has been calculated using a number of simplifying assumptions which reduce estimation accuracy and introduce bias. We propose an alternative means of calculating MTC that does not rely on these simplifications. We investigate whether UI taxes substantially affect firms' labor demand and find that states have more flexibility than previously believed to raise revenue without significantly distorting labor demand. The final chapter is "Sources and Implications of Firm Subsidy and Cross-Subsidy in Unemployment Insurance". This chapter expands on the previous to examine the effects of incomplete experience rating on firm subsidy and cross-subsidy in Wisconsin's UI system. I find evidence that firms with particular characteristics are consistent beneficiaries of cross-subsidy but that tools exist for policymakers to correct these predictable imbalances. |
