Three essays in labor economics and public finance

This dissertation consists of three essays. The first one brings together the areas of public and labor economics by developing a hypothesis that relates optimal taxation and time use. Using Mexican data on household time use and consumption, we find significant substitution between goods and time in home production and different elasticities of substitution for different house-hold commodities. Adding these findings to the optimal tax problem, we show it is optimal to impose higher taxes on market goods used in the production of commodities with a lower elasticity of substitution between goods and time. This is an analog of the classical Corlett and Hague (1953) result, differing in that we allow for the possibility of substitution between goods and time in the production of commodities. The second chapter is about international migration, in the area of labor economics. On one hand, surveillance of the border between Mexico and the United States by the U.S. government has increased dramatically over the last two decades. On the other hand, undocumented Mexican migrants often make multiple trips between the two countries. Thus, my hypothesis is that these migrants respond to heightened surveillance by increasing the length of stay of the current trip. I estimate a semi-parametric hazard model following Meyer (1990). Using data from the Mexican Migration Project I find no evidence that border enforcement affects the hazard of leaving the U.S. by undocumented Mexican Immigrants. The last essay is about mother's time and children related expenditures. Using data from the Mexican Time Use Survey and the National Household Survey of Income and Expenditure from 2002, I examine the time Mexican mothers dedicate to taking care of their children and the amount of money spent by the household in raising children. The main contribution of this paper is that it analyzes child care time use and child care expenditures simultaneously. The age of the youngest child is the most important determinant of both child care time and money expenditures. It is the case that more educated mothers spend more money on their children. With respect to child care time use, more educated mothers spend more or less time with their children depending on whether they are working or non-working mothers. At all levels of non-mother's income, working mothers spend significantly more money relative to time in child care than non-working mothers. For both groups the ratio of money over time increases at a decreasing rate; however, for non-working mothers the income expansion path is much flatter.