Essays in Labor Market Inequality

Abstract

This dissertation explores three topics in labor economics related to labor market inequality. In the first chapter, I provide updated estimates of black-white gaps in earnings, education, and employment. My estimates are the first to account for the substantial non-reporting of black men to household based surveys. I first demonstrate that previous estimates of the undercount are understated and provide estimates of the undercount of black men that are robust to under-coverage in vital statistics data. I then use variation in incarceration rates to show that 90 percent of the incarcerated population would have been non-reporting had they not been incarcerated. I argue that this suggests that non-reporting is almost entirely driven by the population at risk of incarceration. I then use data on labor market outcomes of inmates prior to incarceration to show that accounting for non-reporting meaningfully increases estimated gaps in black-white educational attainment, unemployment rates, and annual earnings. In the second chapter, I analyze the career effects of inducing single mothers into employment through welfare reform. Using the Survey of Income and Program Participation matched to Social Security Administration earnings data, I compare the career trajectories of a cohort of single mothers in 1984, before the major impacts of welfare reform, to a cohort of single mothers in 1998. Women in the 1998 cohort have higher labor market participation rates but the effect is not sustained once their children reach age 18. I develop a likelihood weighting technique with which I identify the single mothers who were most likely to be marginal employees. I find that 24 percent of marginal employees reach \$25,000 annual earnings. Women who obtained administrative jobs experienced greater earnings growth. In the final chapter I analyze the impact of changes to funding for State Mental Health Agencies (SMHAs) on incarceration. SMHAs provide services for mental illness including services directly targeting people with mental illness in the criminal justice system. I find that cutting SMHA funding by one percent leads to a .2 percent increase in admissions to state prisons. I then show that this is primarily driven by impacts on reincarceration and sentencing.