Essays in applied microeconomics

Chapter 1 asks the question why do married black women work more than married white women. It first establishes that this is true even after controlling for their husbands' income and other possible explanatory variables such as children, education or wealth and that this relationship holds both for labor force participation rates and hours worked since at least 1970. The fact that black women face higher divorce rates, lower rates of marriage and remarriage, and greater volatility in their husbands' employment could account for the differences in work behavior by generating different expectations about the future. A dynamic model is developed to allow a woman's expectations about the future affect her work decisions today. Estimates of a discrete choice model with returns to experience using simulated maximum likelihood suggest that differences in expectations along with observable economic differences explain less than half of the observed labor supply differences between black and white women. I conclude by showing that black women have consistently more positive views of mothers choosing to work outside the home than either white women, black men, or white men suggesting that differences in beliefs and preferences may explain part of this labor supply gap.;Chapter 2 is co-authored with Andrew Schotter and is motivated by the literature on cognitive hierarchies. This literature tends to view subjects' cognitive types as determined before they come into the laboratory so that the distribution of types is exogenous and immutable across games. We view the choice of a person's cognitive level (here taken to be the number of steps of backward reasoning performed) as endogenous and explain it by focusing on subjects' expectations about the cognitive levels chosen by others. We run a set of experiments using the 2/3rd's guessing game where subjects receive advice offered by a set of advisors. We find that certain types of publicly announced advice---those that are commonly interpreted as meaningful---are capable of shifting the distribution of observed cognitive types indicating that the distribution is endogenous.