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Author: Lee, Marlena Iris
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1. Lee, Marlena Iris
Essays on Household Behavior
Ph.D. Dissertation, Graduate School of Business, The University of Chicago, June 2008.
Cohort(s): NLSY79
Publisher: Graduate School of Business, University of Chicago
Keyword(s): Home Ownership; Household Composition; Panel Study of Income Dynamics (PSID); Self-Employed Workers; Wage Dynamics; Wages; Wealth

Permission to reprint the abstract has not been received from the publisher.

The first chapter examines the relation between house prices and household consumption and provides evidence that the correlation between prices and consumption is mostly due to common drivers, not wealth or collateral effects. Using data from the PSID and the CEX, I show that consumption elasticities for owners with respect to statewide housing appreciation can be approximately halved with the inclusion of controls for per capita income and the unemployment rate. In a second approach, I use renters as a control group and show that owners and renters have similar consumption responses to housing appreciation.

The second chapter examines the return to self-employment experience in the labor market. There are two contrasting views of self-employment. First, there is the archetypal entrepreneur, who starts a business with the intention of ownership until failure or retirement. The second type describes the worker who enters self-employment when paid opportunities are poor and exits when a better opportunity arises. Using data from the NLSY from 1979-2004, I show that individuals with a single spell in self-employment, termed "non-repeaters," conform better to the career driven type of self-employment, while individuals with multiple spells in self-employment display characteristics consistent with opportunistic self-employment. Repeaters are more likely to be unemployed in the same year they are self-employed and have shorter durations in self-employment than non-repeaters. Non-repeaters are more educated and are more likely to be a professional. Evidence from repeater wages suggest that repeaters are not lower quality workers. Repeaters have higher wages than non-repeaters and non-entrepreneurs with similar characteristics. Additionally, the return repeaters receive for their self-employment experience is greater than both the return to wage experience and the return to self-employment experience for non-repeaters. Non-repeaters receive much lower returns to their self-employment experience, a pattern that can also be explained if non-repeaters are more likely to have career aspirations. Those with career intentions are more likely to exit due to failure. Alternatively, they are more likely to allow the skills required in paid employment to depreciate, or may have been lacking these skills altogether, thus requiring careers in self-employment.

Bibliography Citation
Lee, Marlena Iris. Essays on Household Behavior. Ph.D. Dissertation, Graduate School of Business, The University of Chicago, June 2008..