Essays on youth's behavior and economic outcomes

Abstract

This dissertation consists of three separate empirical work on human resources especially focusing on how earlier decisions or behaviors of minors or young adults affect their economic outcomes in the later stages of their lives. In Chapter 1, I estimate the effect of marijuana decriminalization law on fertility. There has been a huge debate on regulations of marijuana over the past four decades. Possession of a small amount of marijuana was decriminalized in Nevada in October 2001 and in Massachusetts in January 2009. I find that there are about a 4.5 percent-age point increase in the probability of childbearing in Nevada and a 1.1 percentage point increase in Massachusetts after the decriminalization laws were implemented. Chapter 2 is a collaborative work with Dr. Sang-Hyop Lee. We investigate wage differentials between major switchers and stayers. U.S. universities allow students to change majors. Understanding this university policy is important because whether students make a right decision at the right time might have significant effects on future income. Individual's observed and unobserved characteristics affect self-selection mechanism of switching majors, which will also influence the labor market outcome. We find that for males, upward switchers gain pecuniary benefit from switching although they do not outperform stayers in a lucrative major. On the other hand, female upward switchers do not gain pecuniary benefit from switching. This suggests that ability sorting mechanism after entering college may explain earnings differential among lucrative graduates. In Chapter 3, I investigate the probability of having a STEM occupation after earning a bachelors degree. It has been well documented that workers in science, technology, engineering, and mathematics (STEM) fields affects economic growth and development, national security and innovation, and competitiveness in the global market. For these reasons, federal agencies have been making a billion-dollar investment every year to increase the number of students and graduates and to improve STEM educational programs. However, the linkage between educational attainment and employment in STEM fields has been little studied. I find statistical evidence that a non-trivial fraction of non-STEM graduates also work in the STEM fields after graduation.