ESSAYS ON LABOR ECONOMICS

ESSAYS ON LABOR ECONOMICS CAI XIQIAN ( B.A. XIAMEN UNIVERSITY, M.A. NATIONAL UNIVERSITY OF SINGAPORE ) A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY DEPARTMENT OF ECONOMICS NATIONAL UNIVERSITY OF SINGAPORE 2015 Declaration I hereby declare that this thesi s is my original work and it has been written by me in its entirety. I have duly acknowledged all the sources of information which have been used in t h e t h esi s . This thesis has also not been sub m i tt ed for any degree in any university previously. Signed: Date: 25 May, 2015 i Acknowledgements First and foremost, I would like to thank to my Ph D advisors, Assoc. Prof. Hu Guangzhou, Alber t and Lu Yi, for supporting me during these past four years. It would not have been possible for me to complete my thesis without their supervision and collaboration. A/P. Hu Guangzhou, Albert is a very nice advisor. He has given me the freedom to pursue various projects without objection a n d also provided insightful discussions about the research. A/P. Lu Yi is always available and wil l i n g to hel p . He shows great patience to me, and guided me through each step of research. Moreover, he is a great life mentor, and always gives invaluable suggestions on academic and personal development matters. I would like to express my heartfelt gratitude to both of them. It is my honor to be under their superv i si o n . Secondly, I would like to tha n k Assoc. Pr of. Davin CHOR, Alberto SAL- VO, Dr . Gong Jie, Jessica PAN, and Zhong Songfa, for thei r generous guid- ances and valuable co m m ents on my work. I would also like to thank Assoc. Prof. Luo Xiao, Liu Haoming, Zeng Jingli, Dr. Song Changcheng, Yi Junjian, and Zhu Shenghao for their h el p and suggestions during my study at NUS. Thirdly, I would like to thank all my Ph.D colleagues for making my stay in NUS that much more pl e asu r a b l e. Thanks Xie Huihua, Zhou Yinke, Zhu Lianming, Li Yunong, Mun Lai Yoke, Liu Xuyua n , Sun Yifei, Shen Bo, Shao ii Lei, Yang Guangpu, Yang Songtao, Wang Jianguang, Liu Bin, Zeng Ting, Lu Yunfeng, and others for all the insp i r a ti o na l c onversations and unselfish help. Last but not th e least, I would especially th an k my fam i l y, especially my grandparents and parents fo r their unparalleled love and constant support and my wife Lin Yujia, who is always there for me with her unwavering love and encouragement. Their l ove and support have accompanied me along th e journey and hel ped me get cl os e to my dream . This thesis is dedicated to them. iii Contents 1 Gender Gap under Pressure: Performance and Reaction to Shocks 1 1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Institutional Background . . . . . . . . . . . . . . . . . . . . . 7 1.3 Data and Descriptive Statistics . . . . . . . . . . . . . . . . . 10 1.4 Gender Gap in Performance on Mock Exam vs. Gaokao . . . 13 1.4.1 Empirical Strategy . . . . . . . . . . . . . . . . . . . . 15 1.4.2 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.4.3 Gender Differences in Effort Provision . . . . . . . . . 19 1.4.4 Do Males and Females Respo n d Differently to Pressure? 25 1.5 Gender Gap in Reaction to Shocks . . . . . . . . . . . . . . . 28 1.5.1 Are the Results Driven by Unobservables? . . . . . . . 32 1.5.2 Placebo Tests - Role of Ext er n al Shocks . . . . . . . . 37 1.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 iv 2 Recover Overnight? Work Interruption and Worker Produc- tivity 42 2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 2.2 Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 2.2.1 Workplace . . . . . . . . . . . . . . . . . . . . . . . . . 48 2.2.2 A Stylized Model . . . . . . . . . . . . . . . . . . . . . 50 2.3 Estimation Strategy . . . . . . . . . . . . . . . . . . . . . . . 54 2.3.1 Data, Variables, and Specification . . . . . . . . . . . . 54 2.3.2 Identifying Assumption and Validity Checks . . . . . . 57 2.4 Empirical Findings . . . . . . . . . . . . . . . . . . . . . . . . 64 2.4.1 Validity Checks . . . . . . . . . . . . . . . . . . . . . . 64 2.4.2 Economic Magnitude . . . . . . . . . . . . . . . . . . . 67 2.4.3 Interpretation . . . . . . . . . . . . . . . . . . . . . . . 68 2.4.4 Additional Results: Heterogeneity and Social Comparison 71 2.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 3 The Impact of Tempera t ure on Worker Productivity 75 3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 3.2 Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 3.3 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 3.3.1 Daily Productivity Data . . . . . . . . . . . . . . . . . 81 v 3.3.2 Weather and Air Quality Index Data . . . . . . . . . . 91 3.4 Estimation Strategy . . . . . . . . . . . . . . . . . . . . . . . 93 3.5 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 3.5.1 Main Productivity Results . . . . . . . . . . . . . . . . 95 3.5.2 Robustness Checks . . . . . . . . . . . . . . . . . . . . 97 3.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Appendices 137 Appendix of Chapter One 137 vi Figures and Tables for Chapter One 94 Figures and Tables for Chapter Two 105 Figures and Tables for Chapter Three 112 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Appendix of Chapter Two 144 Summary This thesis consists of three independent chapters. 1 The first chapter examines the gender gap in examination performance in response to competitive and performance shocks. By using a u n i q u e dataset from the College Entrance Examinatio n in China, We find that females per- form worse than males and are m or e r esponse to shocks under pressure. The second chapter investigates the effect of interruption on workers’ subse- quent productivity using plausibly exogenous incidents of machine breakdown. Using a dataset from a plastic printing company in China, we find that individ- ual worker productivity declines following a workday with machine breakdown. The last chapter provides the first evidence about how temperature affect- s worker productivity from a manufacturing firm in a non-climate-controlled environment in China. Using the exogenous day-to-day variations in temper- ature, we find an inverted U-shaped effect of the daily maximum temperat u re on worker produ ct i v i ty, and short-run avoidance behavior to tempe ra t u r es through absenteeism. 1 The first chapter is co-authored with Professor Lu Yi, Jessica Pan and Zhong Songfa, the second chapter is co-auth or ed with Professor Gong Jie , Lu Yi, and Zhong Songfa, while the third chapter is co-authored with Profes sor Yi Lu vii List of Figures 1.1 Distributions of Female and Male Performance on the Mock Exam and Gaokao . . . . . . . . . . . . . . . . . . . . . . . . 14 1.2 Relationship between Day 1 Afternoon Exam Score and Morn- ing Exam Score by Gender . . . . . . . . . . . . . . . . . . . . 30 1.3 Relationship between Day 1 Afternoon Exam Score and Morn- ing Exam Score by Gender and Distance from Reference Cutoff 33 2.1 Share of Machines that Broke Down (October 2012 March 2014) 56 2.2 Distribution of Share of Machines that Broke Down . . . . . . 56 2.3 Distribution of Number of Machines Used by a Worker . . . . 58 2.4 Placebo: Coefficie nts from Randomly Distributed Interruptions 66 3.1 Standardized Average Productivity For Each Of The Products 83 3.2 Variation In Product i vi ty By Job Tasks . . . . . . . . . . . . . 83 3.3 Variation In Product i vi ty By Workers . . . . . . . . . . . . . . 83 3.4 Variation In Product i vi ty By Day . . . . . . . . . . . . . . . . 84 viii 3.5 Daily Temperature, AQI And The Concentration Levels Of Each Individual Pollutents, By Year . . . . . . . . . . . . . . . 85 3.6 Relationship Between Temperature And Labor Produc ti v ity . 87 3.7 Relationship Between AQI And Labor Productivity . . . . . . 88 3.8 Robustness Checks- Same Machine and Same Product . . . . 89 3.9 Robustness Checks- Individual*Machine*Product FE . . . . . 90 3.10 Robustness Checks- Without Breakdown . . . . . . . . . . . . 90 3.11 Robustness Checks- First Time Using . . . . . . . . . . . . . . 90 3.12 Robustness Checks- Absence Yesterday . . . . . . . . . . . . . 91 3.13 Robustness Checks- Without Typhoon Events . . . . . . . . . 91 ix [...]... Afternoon Performance in Response to Relative Performance on Morning Exam on Day 1 x 31 1.11 Gender Difference in Afternoon Performance in Response to Relative Performance on Morning Exam on Day 1 - Positive vs Negative Shocks 2.1 36 Effect of Machine Breakdown on Workers Subsequent Productivity 64 2.2 Tests on Proficiency and Emotional Reactions... conflate gender differences in the response to high vs low-stakes with gender differences in the skills required in the high vs low-stakes settings 6 data used and the descriptive statistics The results on the gender gap in performance on the Gaokao relative to the mock examination are presented in Section 1.4 Section 1.5 examines gender differences in the reaction to performance shocks Section 1.6 concludes... while the female test-score distribution is to the right of the male distribution in the mock examination, for the Gaokao, the male distribution appears to converge to that of the female distribution Since we are presenting non-standardized scores in this section, it is important to distinguish between students in the Science and Arts stream as one of the exam components, namely, the combined science/arts... differences among them are mostly based on ranking of the intuitions and the duration of the programs (Davey, De Lian and Higgins, 2007) The Gaokao is ultimately under the control of the Ministry of Education and was once administered uniformly across the country Starting in 2001, some provinces or direct-controlled municipalities arranged separate exam papers while others still adopted the national exam... the distributions separately for students in the Science stream and Arts stream Among Science students, males appear to outperform females at almost all points of the test score distribution, and the male advantage becomes even more pronounced during the Gaokao In contrast, among Arts students, we observe a strong female advantage in the mock examination at all points of the distribution This advantage... distribution on the mock exam We find that, compared to males, females appear to underperform on the Gaokao relative to the mock exam in all three groups, with the relative performance declines more apparent among higher ability students For example, among students in the bottom third based on mock exam scores, females performed -0.09 standard deviations worse on the Gaokao relative to the mock examination... shocks.1 The Gaokao is widely regarded as one of the most competitive examinations in the world - it is practically the only route to admission into universities of higher education and further success in the test-oriented education system of China Furthermore, the number of exam takers typically exceed the available places for higher education The admission rate for candidates sitting for the Gaokao... afternoon), Combined subjects (Day 2, morning) and English (Day 2, afternoon) Two months prior to the Gaokao, a formal mock examination, administered by the province, is usually held to allow students to get a sense of the examination and their relative standing within the province The mock examination results are released about one week after students sit for the exam and the Department of Education in... information on the social and economic characteristics of Anxi county and Fujian province The 2008 Provincial Mock Examination of Fujian was held in mid-April and the Gaokao was held in mid-June The province administered both the mock examination as well as the Gaokao, therefore, the mock examination was a good indication of the degree of difficulty and subject material covered by the actual examination Furthermore,... examines gender differences in the reaction to performance shocks Section 1.6 concludes 1.2 Institutional Background The National College Entrance Examination (NCEE), commonly known as Gaokao, is an annual two or three day examination that is a pre-requisite for entrance into almost all institutions of higher education at the undergraduate level in China.4 There are different tiers of universities in China, . ESSAYS ON LABOR ECONOMICS CAI XIQIAN ( B.A. XIAMEN UNIVERSITY, M.A. NATIONAL UNIVERSITY OF SINGAPORE ) A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY DEPARTMENT OF ECONOMICS NATIONAL. Afternoon Performance in Response to Relative Performance on Morning Exam on Day 1 . . . . . . . 31 x 1.11 Gender Difference in Afternoon Performance in Response to Relative Performance on Morning. shocks. Section 1.6 concludes. 1.2 Institutional Background The National College Entrance Examination (NCEE), commonly known as Gaokao, is an annual two or three day examina t i on that is a