ESSAYS IN INTERNATIONAL TRADE AND PUBLIC ECONOMICS

Abstract

This thesis consists of three essays in international trade and public economics. The first chapter identifies the productivity gains from trade by studying the bunching behavior of firms in response to regulatory policies on international trading in China. This chapter finds that participation in international trade leads to within-firm productivity gains. The second chapter investigates how firms adjust their employment structure in response to tax policies which set a deduction limit that is proportional to firm-level average wage. Using a stylized model, this chapter infers the elasticity of substitution between skilled and unskilled labor. The last chapter proposes a novel causal estimator under any kink setting. By applying the method to a kinked tax deduction policy on on-the-job training, this chapter finds that the productivity gains from training dominate the increase in wage cost due to workers’ increased bargaining power due to their training.