These essays are my attempt to answer a big picture question in economics "why some countries are richer than others?". In the first chapter, I document that for a group of 38 countries ranging from low to high income, managers in richer countries are more skilled, and the relative income of managers to non-managers along with skill premium is lower in richer countries. I use a model of investment in skills and occupational choice in which countries differ in productivity level and size-dependent distortions. I find that exogenous productivity differences alone can produce the abovefacts qualitatively, but size-dependent distortions are needed to account for these facts quantitatively. Chapter two accounts for the sources of world productivity growth, using data for more than 36 industries and 40 economies. Productivity growth in advanced economies slowed but emerging markets grew more quickly, which kept global productivity growth relatively constant until 2010. World productivity growth is highly volatile from year to year, which primarily reflects shifts in the reallocation of labor. Deviations from Purchasing Power Parity account for about a third of the shifts. Though markups are large and rise over time, they only modestly affect measured industry-level productivity growth. In chapter three, I document that the mean and dispersion of pre-tax labor earnings grow faster over the life-cycle in the U.S. than in some European countries and individuals with at least a college degree are key for these facts. I use a life-cycle model of human capital accumulation and elastic labor supply which features non-linear taxation and a college choice and investments during college. The model economy is consistent with earnings distribution among college and non-college individuals in the U.S. Non-linear taxation suppresses pre-tax earnings, reduces college attendance and investments during college. More generous subsidies for college exacerbate labor earning inequality. Differences in taxation and college subsidies account for 94% of the differences in mean earnings, and 80% of the differences in inequality over the life-cycle across the U.S. and European countries.

Previous studies about the effects of regulatory institutions on the outcomes of regulation have resulted in a lack of consensus on the nature of these impacts. This paper seeks to resolve some of this ambiguity by analyzing two dimension of electric utility regulatory outcomes, prices and reliability, with a broader panel of explanatory variables and with a Hausman-Taylor regression technique. The results suggest that elected regulators and deregulated electricity markets result in worse reliability outcomes for consumers without strong evidence that either institution secures lower electricity prices. Incorporating these insights into a theoretical model of regulation could give more detailed insight into how to create regulatory institutions that can optimize the outcomes of governance.

Sanctuary jurisdictions are jurisdictions that do not enforce one or more aspects of federal immigration policy in regards to unauthorized immigrants. Some states maintain state-wide sanctuary policies while others are adamantly against them. Estimates of taxes that unauthorized immigrants pay and estimates of the amount of state funding that unauthorized immigrants can access (education, financial aid, corrections, and welfare) reveal that regardless of sanctuary status, unauthorized immigrants may “pay in” more than they “take out” from the system. The status of “sanctuary jurisdiction” does not appear to have much if any effect on the net state budget. However, unauthorized immigrants are able to access more welfare programs in sanctuary states.

This dissertation consists of three essays on modern economic growth and structural transformation, in particular touching on the reallocation of labor across industries, occupations, and employment statuses.

The first chapter investigates the quantitative importance of non-employment in the labor market outcomes for the United States. During the last 50 years, production has shifted from goods to services. In terms of occupations, the routine employment share decreased, giving way to increases in manual and abstract ones. These two patterns are related, and lower non-employment had an important role. A labor allocation model where goods, market services, and home services use different tasks as inputs is used for quantitative exercises. These show that non-employment could significantly slow down polarization and structural transformation, and induce significant displacement within the labor force.

The second chapter, coauthored with Bart Hobijn and Todd Schoellman, looks at the demographic structure of structural transformation. More than half of labor reallocation during structural transformation is due to new cohorts disproportionately entering growing industries. This suggests substantial costs to labor reallocation. A model of overlapping generations with life-cycle career choice under switching costs and structural transformation is studied. Switching costs accelerate structural transformation, since forward-looking workers enter growing industries in anticipation of future wage growth. Most of the impact of switching costs shows on relative wages.

The third chapter establishes that job polarization is a global phenomenon. The analysis of polarization is extended from a group of developed countries to a sample of 119 economies. At all levels of development, employment shares in routine occupations have decreased since the 1980s. This suggests that routine occupations are becoming increasingly obsolete throughout the world, rather than being outsourced to developing countries. A development accounting framework with technical change at the \textit{task} level is proposed. This allows to quantify and extrapolate task-specific productivity levels. Recent technological change is biased against routine occupations and in favor of manual occupations. This implies that in the following decades, world polarization will continue: employment in routine occupations will decrease, and the reallocation will happen mostly from routine to manual occupations, rather than to abstract ones.

Students in an online course can face diminished incentives to exert effort and focus without the structure of instructor-paced material. To introduce new motivation to spend more time with course material, this paper examines the use of A/B split test content experiments. One group of students is exposed to a set of hidden hyperlinks ("Easter Eggs") within the course and earns trivially small amounts of course credit for finding them. While controlling for demographics and initial effort, finding each additional Easter Egg is associated with a 0.8 percentage point increase in final grade. This effect is even stronger for low performers: for those below the median grade before the first Easter Egg, each find increases final grade by 1.3 points. The treatment advantages low-performing students more than their high-achieving counterparts, thus helping to reduce the education gap at extremely low cost to course developers.

On September 11, 1973, Augusto Pinochet became the leader of Chile after a violent coup d’état, which left the economy in shambles. The previous president and ruling party, Salvador Allende and the Popular Unity coalition respectively, were moving the country towards socialism and in doing so increased the government presence in the economy, nationalized copper and other industries, and redistributed agricultural land. Soon after nationalizing the copper industry, prices fell and the large expenditures being made by the government lead to a recession characterized by shrinking GDP, failing nationalized businesses, US economic sanctions, high inflation, and unfavorable exchange rates. Pinochet turned to the Chicago Boys, Chilean economists educated at the University of Chicago’s School of Economics by Milton Friedman, to formulate an economic plan that would reduce inflation as well as limiting government involvement in the economy. This paper will examine the neoliberal free market principals instituted by the Chicago Boys, the immediate and delayed effects in the Chilean government, and how these principals have been and can be utilized to provide stabilization and growth in other Latin American economies.

Yearly changes in the consumer price index are used to adjust social security benefits in order to keep the purchasing power of social security beneficiaries the same. Currently, social security benefits are adjusted using a fixed-weighted price index that reflects the purchasing patterns of workers. However, some believe that a price index that captures the spending habits of the elderly should adjust monthly social security benefits, while others argue that a chain-weighted price index is a more accurate indexation technique. This report finds that if an elderly or chain-weighted price index were implemented this year, there would not be a significant change in the projected insolvency of the social security trust fund, but there could be a substantial decrease in the social security trust fund's yearly cash-flow deficit. Therefore, changing the indexation of social security benefits should not be seen as a short-term solvency fix. Instead, adjusting monthly social security benefits should be about keeping the purchasing power of beneficiaries relatively the same.

This dissertation contains a portfolio of papers in economics. The first paper, ``Vehicle Emissions Inspection Programs: Equality and Impact," presents the results of a study of the Arizona Vehicle Emissions Inspection Program. Using a unique data set, I find that the Arizona Vehicle Emissions Inspection Program is regressive in that it constrains the vehicle repair decisions of people on the low end of the income distribution more than those on the high end. I also find that the social cost of the program in Arizona is more than twice the social benefit, assuming a \$7 million value of statistical life. The second paper is ``Fiat Value in the Theory of Value." Because of advances in information processing technology, it is now technically feasible to have a currency-less monetary system. This paper explores one such system. In the model, prices are in units currency-less fiat money called fiat value, fiat value is a form of government debt, and the services of the stock of fiat value are a factor of production. In this system, the National accounts must be revised to account for money as a production factor, Friedman satiation is possible even with positive inflation, and various monetary policy regimes are explored. The third paper, ``Unconventional Monetary Policy in a Modern Paradigm of Money," uses the model developed in ``Fiat Value in the Theory of Value" to evaluate quantitative easing and interest on reserves policies as a response to liquidity shocks. I find that quantitative easing is an effective response to liquidity crises because it drives the marginal product of money to zero. When the marginal product of money is zero, the business sector does not have to pay to rent the services of money, a production factor that is free to create. I also show that a positive interest on reserve policy hampers the effectiveness of quantitative easing, and that quantitative easing does not cause a high inflation rate.