Essays on skills and labour market outcomes

Guide(s)

Das, Tirthatanmoy

Department

Economics

Area

Economics

University

Indian Institute of Management Bangalore

Place

Bangalore

Publication Date

3-31-2026

Year Awarded

March 2026

Year Completed

March 2026

Year Registered

June 2021

Abstract

This dissertation examines how workers’ skills interact with shocks and constraints toshape outcomes in both traditional labor markets and entrepreneurial settings. Guidedby theories from labor economics and entrepreneurship, and combining structural models of selection with quasi-experimental identification strategies, it studies three relatedquestions. Together, the chapters highlight the central role of skills in determining earnings, occupational choice, labor allocation, and inequality, with implications for policieson wages, employment, and entrepreneurship. The first chapter analyzes how unexpectedprice changes affect earnings, labor mobility, and inequality in a multisector labor market.It develops an occupational choice framework in which prices determine sector-specificskill returns, operating through wage bargaining and endogenous labor reallocation. Using data on Indian agricultural and non-agricultural workers and instrumenting for regional price variation, the chapter shows that nominal wages adjust incompletely to priceincreases, leading to substantial real wage declines. A one-percent increase in priceslowers real wages by roughly one percent in agriculture and by about half as much innon-agriculture. Labor mobility partially offsets these losses by reallocating workers toward sectors offering higher skill returns. However, the direct effect on wages dominates,leading to lower real wages and increased earnings inequality. The findings underscore theimportance of wage-setting institutions alongside mobility in shaping the distributionalconsequences of price shocks. The second chapter examines accumulated entrepreneurialexperience as a form of human capital and its effect on venture performance. Embedding habitual entrepreneurship within a human capital framework, the chapter allows fordiminishing returns to experience. To address selection and endogeneity concerns, theanalysis adopts a control-function approach based on bunching at zero prior experience.Using venture-level global data, the analysis identifies a causal inverted-U relationshipbetween accumulated experience and revenue: experience improves performance up toan optimal range, beyond which additional experience yields diminishing returns. Theseresults suggest that entrepreneurial skills are valuable but context-dependent, and thatmore experience is not always better. The third chapter studies how early motherhood affects women’s occupational sorting in the presence of caregiving constraints in the UnitedStates. It constructs a task-based index of occupations based on earnings-hours elasticityand instruments for motherhood using exogenous variation in local access to family planning centers. Both two-stage least squares and marginal treatment effect estimatesshow that motherhood leads women to sort into less time-demanding occupations, withparticularly large effects among women at the extremes of the fertility selection margin.The results indicate that the motherhood penalty operates not only through reducedlabor supply but also through changes in how skills are allocated across occupations.

Pagination

xi, 176p.

Copyright

Indian Institute of Management Bangalore

Document Type

Dissertation

DAC Chairperson

Das, Tirthatanmoy

DAC Members

Deb, Soudeep; Ilango, Akhil

Type of Degree

Ph.D.

Relation

DIS-IIMB-FPM-P26-09

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