Gao, Han2022-02-152022-02-152021-12https://hdl.handle.net/11299/226409University of Minnesota Ph.D. dissertation. 2021. Major: Economics. Advisor: Ellen McGrattan. 1 computer file (PDF); 201 pages.This dissertation consists of three chapters. Chapter One studies how a potential policy change that raises women’s social security eligibility age from 50 to 60 would affect women’s employment, human capital, and earnings in China. I develop a dynamic model of female labor supply, featuring voluntary retirement; occupational choice; human capital accumulation contingent on occupation, age, and employment status; and child care using time inputs from parents, grandparents, and formal child care from the market. I estimate the model parameters by matching moments on employment, wages, and the time allocation of child care from micro data in China. The policy counterfactual raising women’s social security eligibility age yields two main findings. First, the policy change leads to only a moderate increase in aggregate labor supply because it affects the employment of old and young women in opposite directions. The reduction in social security insurance encourages women above the age of 50 to supply more labor. Yet low-skilled young women with children reduce their labor supply in response to the children’s grandmothers working more and providing less child care. Second, since human capital accumulation is faster on the earlier career path rather than later, the reduction in early career employment leads to persistent losses in human capital and earnings for low-skilled womenChapter Two is a joint work with Mariano Kulish and Juan Pablo Nicolini in monetary economics that revisits the quantity theory of money. In this chapter, we review the relationship between inflation rates, nominal interest rates, and rates of growth of monetary aggregates for a large group of OECD countries. If persistent changes in the monetary policy regime are accounted for, the behavior of these series maintains the close relationship predicted by standard quantity theory models. With an estimated model, we show those relationships to be relatively invariant to alternative frictions that can deliver quite different high-frequency dynamics. We also show that the low-frequency component of the data derived from statistical filters does reasonably well in capturing these regime changes. We conclude that the quantity theory relationships are alive and well, and thus they are useful for policy design aimed at controlling inflation. In Chapter Three, Lichen Zhang and I investigate to what extent changes in the personal income tax schedule have affected the choice to become an entrepreneur in the US. We develop a general equilibrium heterogeneous agent life cycle model with occupation choice and estimate the model using the method of simulated moments (MSM) to match data moments from from the Panel Study of Income Dynamics (PSID) and the Panel Studies of Entrepreneurial Dynamics (PSED). We simulate the path of population share of entrepreneurs over time by introducing to the model a sequence of tax schedule changes as in the real world and validate the model by showing that it replicates the differential impacts of tax schedules changes on individuals at different ages. Our simulation shows that income tax schedule changes alone explains most of the increase in entrepreneurship in the periods. We also highlight the importance of entrepreneurs and entrepreneurial choice elasticities by age in the design of optimal tax in a realistic quantitative life cycle model.enThesis or Dissertation