Essays in applied microeconomics

Shappo, Mariya

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Description

Title

Essays in applied microeconomics

Author(s)

Shappo, Mariya

Issue Date

2021-04-19

Director of Research (if dissertation) or Advisor (if thesis)

Albouy, David

Doctoral Committee Chair(s)

Albouy, David

Committee Member(s)

• Bartik, Alexander
• Bernhardt, Dan
• McMillen, Daniel

Department of Study

Economics

Discipline

Economics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Housing
• Housing Prices
• Hedonic
• Cost Benefit
• Drilling
• Fossil Fuels
• Geographic Labor Mobility
• Immigrant Workers
• Environmental Equity
• Quality of Life
• Local Labor Markets
• Household Sorting
• Amenities
• Network
• Immigration Policy
• Undocumented Immigrants
• Earnings Distribution
• Wage Distribution

Abstract

In this dissertation, I explore three important topics in environmental, urban, and labor economics. In Chapter 1, I quantify the long-term consequences of oil and gas extraction. Pennsylvania has a long history of oil and gas extraction. When the production period ends, many wells are left behind and some remain unplugged. Unplugged wells impose serious environmental costs, including explosion hazards and risk of water, atmosphere, and soil contamination. This paper quantifies these costs by estimating the effect of unplugged wells on housing prices. I use rich data on oil and gas drilling, housing market transactions, and lease agreements to conduct difference-in-differences and instrumental variable analyses. I show that well abandonment reduces house prices. Old wells, left behind by oil and gas operators, affect house prices more than active, producing ones. However, this depreciation is reversible: if well site clean-up is completed, house prices recover almost entirely. I show that the benefits of proper well plugging are larger than the costs. This motivates environmental policies aimed at creating incentives for oil and gas producers to plug wells. These policies may include higher bankruptcy insurance requirements or environmental taxes. Chapter 2 examines whether amenities affect the location of immigrants within the United States. Immigrants to the United States live disproportionately in metropolitan areas where nominal wages are high, but real wages are low. This sorting behavior may be due to preferences toward certain quality-of-life amenities. Relative to U.S.-born inter-state migrants, immigrants accept lower real wages to locate in cities that are coastal, larger, and offer deeper immigrant networks. They sort towards cities that are hillier and also larger and networked. Immigrants come more from coastal, cloudy, and safer countries – conditional on income and distance. They choose cities that resemble their origin in terms of winter temperature, safety, and coastal proximity. Chapter 3 studies the impact of Secure Communities (SC)—a large U.S. immigration enforcement program—on the native earnings and wage distributions. Previous studies found that SC activation reduces the labor supply of likely undocumented immigrants by about 7% (East et al., 2020). Using unconditional quantile regression (UQR), I find the disproportionate impact of this policy on native workers across the earnings distribution. SC adoption reduces hourly wages for natives, especially for non-Hispanic workers below the median. However, this effect is at least in part mechanical—more workers take lower-paying jobs vacated by undocumented immigrants. At the same time, earnings increase at the bottom of the distribution. These results are likely driven by increased employment and suggest substitutability between lower-skilled natives and undocumented immigrants. Earnings at the middle and at the top of the distribution moderately decrease, suggesting complementarities between undocumented and higher-skilled native workers.

Graduation Semester

2021-05

Type of Resource

Thesis

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Copyright 2021 Mariya Shappo

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