Essays in applied microeconometrics

This thesis is comprised of three chapters. In the first Chapter titled "Involuntary Unemployment, Wages, and the Signaling Effect of Interim Jobs", I investigate the interconnection between involuntary displacement, interim jobs, and future wage prospects. I estimate the signaling effect of taking up low-level interim jobs immediately after displacement on future wages. Using a novel approach and a rich data set of established workers from Austria, I decompose the long-term wage losses stemming from involuntary displacement into a channel due to this signaling effect and a channel which accounts for all other factors. I find that being employed in a low-level interim job has negative effects on long-term earnings over the whole wage distribution implying that future employers interpret these kinds of jobs as a signal of low productivity. My estimates indicate that there is considerable heterogeneity in the signaling effect with individuals at the lower and upper part of the earnings distribution relatively more affected. I provide evidence that the results are not driven by low-ability workers or those with short potential unemployment benefit duration. Assessing the sensitivity of my results, I show that they are robust to specific failures of my identifying assumptions.\par In the second Chapter "Grandmothers' Labor Supply and the Role of the Extended Family", which is joint work with Wolfgang Frimmel, Martin Halla, and Rudolf Winter-Ebmer, we examine the labor supply effects of becoming a grandmother. This topic has been only sparsely covered in the literature, despite its importance. Our results show that having a first grandchild increases the probability of leaving prematurely the labor market. We provide evidence that the response to a grandchild is stronger when informal grandchildcare is more valuable to the mother. Estimating the effect of additional grandchildren we find similar effects. These results highlight the important influence of the extended family on the decisions of older workers. Finally, in the third Chapter "Does Stress Shorten Your Life? Evidence from Parental Bereavement", I investigate the effect of stress on the mortality of parents using a child's death as the triggering event. This chapter is a completely revised version of my earlier work "The Fatal Consequences of Grief". Employing a propensity score weighted Kaplan-Meier Estimator I find a non-monotonic relationship between elapsed time since the stressful event and mortality risk. Exploring the main reasons, my results show that especially men tend to adopt adverse health behavior as a reaction to stress. The estimates for women are inconclusive. Checking the importance of possible mediating channels I find that stress induced changes in labor market outcomes can only explain a minor part of the long-term mortality risk for men.