Download or read book Three Essays on the Role of Imperfect Information in the Labor Market written by Xizi Li and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using the sample from the NLSY, my dissertation examines the role of imperfect information in the labor market. The papers document factors that determine the wage rate. The first chapter documents a nonlinear relationship between early wages and true ability (AFQT) for high school graduates. More specifically, the return to AFQT is strong at low ability levels, but flat or decreasing at high levels. Much of the observed increase in return to AFQT as potential experience increases is associated with a change in the shape of this non-linear relationship. We also find that high AFQT workers without four years of college select into occupations that provide more training, perhaps sacrificing initial wages to build skills. The second chapter compares the changes in the black-white wage gap between the NLSY 79 and the NLSY 97 cohort. I find that the black-white wage gap for the 97 cohort is no longer sensitive to the controls for education because blacks no longer get higher education levels than their white conterparts. The results also indicate black male workers in the 79 cohort were positively selected during recessions. The black-white wage gap should have been larger for the 79 cohort. The third chapter studies the evolution of the black-white wage gap between the NLSY 79 and the NLSY 97 cohort. Previous studies have found that black workers face more cyclical wage rates and unemployment rate and are positively selected over the business cycle, so it is important to control the variations in economic circumstances. 245 variables capturing variations in economic cirsumtances are constructed using CPS cross-sectional design and panel component. By applying double selection LASSO to the econometrics model, I select the most relavent controls. The results suggest black male workers in the 79 cohort were highly positively selected. The black-white wage gap should have been more than 20%.