Essays on Labor Market Dynamics and Innovation

Abstract

This dissertation studies the relationship between labor market dynamics and innovation, with a focus on the impact of regulations on worker outcomes. Specifically, it investigates how regulations such as high-skilled immigration policies and noncompete agreements influence monetary wages, mobility patterns, and innovation outcomes within the labor market.In Chapter II, "Monopsony in the High-Skilled Migrant Labor Market - Evidence from H-1BVisa Program" (co-written with Seohee Kim), we assess the extent of monopsony power in the labor market for highly skilled immigrants, focusing on employer concentration and its impact on wages. Leveraging data obtained through a FOIA request for H-1B visa program petitions, we find that the H-1B labor market is significantly more concentrated than the broader U.S. labor market, with a steadily increasing trend over the past decade. Our analysis reveals that higher employer concentration leads to significant wage declines for H-1B workers. Furthermore, we establish a causal relationship between employer concentration and wage decreases, highlighting the importance of considering policy reforms to mitigate these negative effects on immigrant workers' wages and mobility.In Chapter III, "Innovation and the Enforceability of Noncompete Agreements" (co-written with Matthew S. Johnson and Michael A. Lipsitz), we investigate the impact of noncompete agreements on innovation. Using state-level law changes, we find that stricter enforcement of noncompete agreements substantially reduces patenting activity, indicative of a loss in true innovation. We also observe that stricter enforceability of noncompete agreements leads to reduced job mobility and hinders new business formation, suggesting broader negative implications for knowledge dissemination and entrepreneurial activity. Our findings underscore the need for policymakers to carefully consider the trade-offs between the private benefits of noncompete enforceability and the broader societal impacts on innovation and entrepreneurship.In Chapter IV, "Measuring Inventor Mobility from Online Professional Profiles", I investigate inventor mobility patterns by combining data from LinkedIn profiles and USPTO patent records. By integrating these datasets, significant disparities in mobility emerge. While USPTO data indicates a decline in mobility over time, LinkedIn data reveals a steady increase, particularly among younger cohorts. This highlights the necessity of utilizing multiple data sources for a comprehensive understanding of inventor mobility. Furthermore, a comparison with the general labor force underscores heightened mobility among inventors, prompting further exploration of policy implications and industry dynamics.Overall, this dissertation contributes to a deeper understanding of the regulatory landscape surrounding labor markets and innovation. By identifying the mechanisms through which regulations influence worker outcomes and innovation dynamics, it provides a foundation for informed policymaking aimed at fostering a more dynamic labor market conducive to innovation and economic growth.