Institutions, Markets, and Household Behavior

Institutions and markets play a big role in households decisions. Broadly, this dissertation studies how households respond to incentives and changing markets to better understand how to design policy. The first chapter of my dissertation studies how the cross-sectional correlation between hours worked and the hourly wage has changed over time in the U.S. and Germany. I find that the cause proposed in the U.S. cannot explain the trend in Germany and further exploration is needed. The second chapter of my dissertation examines how increased foreclosure delay has changed household default decisions. My findings suggest policy that broadly increases delays introduces a moral hazard effect but that a better designed policy, only targeting distressed homeowners, could reduce mortgage default. Finally, the third chapter of my dissertation proposes linking the cost of student debt to major choice and evaluates the effects this might have on major choices and student loan markets. I show how separating the cost of debt by majors improves equilibrium allocations and reduces overall debt costs.