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Abstract
This dissertation consists of two parts. The first part studies the effects of flexible work scheduling policies typically used by employers to efficiently manage their staffing operations in the context of variable customer demand. In particular, I study how such policies impact the quality of frontline work arrangements, the extent to which they are associated with higher employee turnover and quantify the value of such arrangements to employees. To this end, I construct and analyze a matched employer-employee dataset with precise information on employee scheduling arrangements from 10 million worked shifts. I motivate my empirical analyses with a model of workforce scheduling in which managers internalize the fact that employees jointly consider their work arrangements and wages when evaluating whether to remain with their current employer. I use my results to simulate the effects of shocks to customer demand on employee turnover.
In the second part, we study the link between household consumption decisions and earnings dynamics. We use the enhanced consumption data in the Panel Survey of Income Dynamics (PSID) from 2005-2017 to explore the transmission of income shocks to consumption. We build on the nonlinear quantile framework introduced in Arellano, Blundell and Bonhomme (2017). Our focus is on the estimation of consumption responses to persistent nonlinear income shocks in the presence of unobserved heterogeneity. To reliably estimate heterogeneous responses in our un-balanced panel, we develop Sequential Monte Carlo computational methods. We find substantial heterogeneity in consumption responses, and uncover latent types of households with different life-cycle consumption behavior. Ordering types according to their average log-consumption, we find that low-consumption types respond more strongly to income shocks at the beginning of the life cycle and when their assets are low, as standard life-cycle theory would predict. In contrast, high-consumption types respond less on average, and in a way that changes little with age or assets. We examine various mechanisms that might explain this heterogeneity.