| dc.description.abstract | This thesis contains four chapters that cover topics in macroeconomics and labor,and in theoretical asset pricing. Chapters one, two and three contain theoretical and quantitative work on macro and labor. Chapter one, written with Árpád Ábrahám, Ramon Marimon and Lukas Mayr, contains an evaluation of a policy proposal discussed by European Union policy makers and researchers over the last decades on the creation of a European Unemployment Insurance System(EUIS). Building on previous literature, we use a dynamic general equilibrium model to characterize the heterogeneous labor markets across EU countries. Our analysis shows that labor markets differ greatly across EU countries, implying different degrees of exposure of workers to unemployment risk, and different costs of providing unemployment insurance. With this model, we assess the potential benefits of a EUIS. We calculate the potential welfare gains from insuring against country-specific cyclical fluctuations in unemployment expenditures, and from joint lyre forming currently national unemployment benefit systems. The results show that the potential gains from insuring short-term country-specific fluctuations at the European Union level are small, and that there could be significant positive improvements in all the countries studied in reforming the existing national unemployment insurance systems to a common EUIS, with country specific contribution rates to prevent long-term cross-country transfers. The second chapter studies trends in schooling and lifetime labor supply in the United States. Life expectancy increased dramatically by almost 20 years for men born between 1850 and 1970 in the US. The allocation of time during the life also changed greatly. Hours worked per week for the population under 18 years old went from 20 hours to 5 hours on average, during the 1900s. Almost all the difference is explained by the increase in time spent in school. Later in life, despite the large increase in lifespan and years spent in school, total lifetime hours worked fell. The average length of retirement period increased five fold to more than 10 years for the 1970 cohort. This chapter shows that the long-run trends can be rationalized with a life-cycle human capital acquisition model, where individuals optimally choose the years of schooling and of labor force participation. The observed increase in life expectancy alone would imply, according to the model, an increase in schooling years and in years of participation in the labor market, which is counter factual. The analysis shows that in the model, an increase in the returns to schooling, in wages, and life expectancy, drives individuals’ optimal time allocation decisions as in the data. In the chapter, I revisit empirical evidence on wages and on the decline in the cost of schooling during the first half of the 20th century, with the expansion of public provision of secondary education in the United States. In the third chapter, in joint work with Julián Díaz-Saavedra and Ramon Marimon, we study how the introduction of an employment fund can enhance production efficiency and social welfare, and how it complements, and in part substitutes, the two classical systems of public insurance: pay-as you-go pensions and Unemployment Insurance (UI). The employment fund is akin to the system introduced in Austria in 2003, that was planned to increase in job mobility and flexibility in the labor market. We investigate the effects of this "Austrian Backpack" in a dynamic general equilibrium model with heterogeneous agents calibrated to the Spanish economy in 2014. A backpack (BP) employment fund is an individual (across jobs) transferable fund, which earns the economy interest rate as a return and is financed with a small payroll tax (a BP tax). The worker can use his BP savings if becomes unemployed or retires. The results in this chapter show that to complement the existing Spanish pension and UI systems with a 2% BP tax would be preferred to the status quo by more than 90% of the households of the calibrated economy; a percentage that can be higher with a more substantial BP (i.e. higher BP tax). The model presented in this chapter is a frame work where other reforms (e.g.a partial, or complete, substitution of current unsustainable pension systems) can be quantitatively assessed. Finally, the fourth chapter contains work developed with Fabian Schuetze about equilibrium conditions in the canonical Lucas asset pricing model. We provide conditions on investor’s preferences, and the persistence and volatility of the dividend process under which equilibrium in the economy exists and is unique. The original paper of Lucas shows existence and uniqueness of equilibrium under the assumption of a bounded utility function. This chapter shows how to extend the argument in the case of constant relative risk aversion preferences and log-normally distributed dividends. | en |
