Essays on labor economics

This dissertation consists of three essays on policy studies. The first essay studies the effect of workweek policy on institutional investors' inattention to Friday earnings announcement. The second essay examines how people would respond to divorce waiting period once they file divorce. The third essay investigate the effect of bounty hunter regulation on released defendants' choice to use surety bond and their pretrial release misconduct.;The first essay uses stock market data from Korea to test the hypothesis that the five day workweek system is a key factor affecting investor inattention to Friday earnings announcements. It is well known that investors are less likely to pay full attention to Friday earnings announcements because of weekend distractions. Our test focuses on the scheduled attention of institutional investors to review earnings information released on Friday after market close. We use the introduction of the five day workweek system in November 2002 in financial sector of Korea as an exogenous variation to examine the effect of work schedule on relative attention paid to Friday earnings announcements. Indeed, we find that the immediate response to Friday earnings announcements is stronger, and post-earnings announcement drift is weaker under the six day workweek system. On the contrary, under the five day workweek system, Friday earnings announcements show relatively sluggish stock response in the short run and more drift in the long run. We also find the similar movement in trading volume around the earnings announcement day. There is relatively more active trading for Friday earnings news under the six day workweek system, while the trend is reversed under the five day workweek system. This confirms that the source of Friday inattention is not market close but the scheduled attention to work caused by workweek system.;The second essay examines the effect of divorce waiting period in Korea. Starting in 2005, couples who file consented divorces were given waiting periods to re-think their decisions in several jurisdictions in Korea. In the second essay, we use lagged adoption of divorce waiting period to examine the effect of divorce waiting periods on divorce filing rates and actual divorce rates. Our empirical results show that actual divorce rates significantly decreased about 8% after the introduction of waiting periods while divorce filing rates remained constant. We suggest that projection bias in divorce decisions is an explanation for our findings. If people have projection bias, their decision to divorce will be highly affected by the emotional state they are in when they file for divorce. And as they realize that projection bias influenced their decision during the waiting period they would eventually cancel their divorce, thereby lowering the actual divorce rate. Our empirical findings correspond to the predictions of projection bias theory and also suggest that a "cooling-off" policy can actually contribute to reducing sub-optimal decisions caused by projection bias.;The third essay examines the effect of bounty hunter regulations across states on pretrial release outcomes. Until very recently, bounty hunters hired by surety bond companies have been granted extensive power to pursue fugitives and arrest them at any time. Even though they are essential to the criminal justice system, they have been unlicensed and unregulated. After a tragic accident which innocent people were killed by bounty hunters in Arizona, many states enacted new regulation on bounty hunters. However, there also have been worries about overregulation of bounty hunters, because without them, complete responsibility to catch all fugitives will fall upon government law enforcement officials. I use lagged legislation of bounty hunter regulations as a source of exogenous variation to examine whether released defendants are more likely to use surety bond under the new regime. I also look at effect of regulations on pretrial release misconduct among who hire bondsmen to post bail. Estimation results using Difference-in-Difference estimation show that released defendants are more likely to choose surety bond to post bail after the enactment of regulation. However, it shows that there is no effect of regulation on the pretrial release misconduct such as probability to fail to appear, probability to become a fugitive, and likelihood to be rearrested for other crimes during release. These results suggest that the enactment of bounty hunter regulations are proper and do not cause inefficiency in the operation of bounty hunters.