Essays on Uncertainty in Labor and Financial Markets

Abstract

This dissertation empirically studies the role of economic uncertainty in shaping the option value of labor market opportunities. The first chapter documents a sharp rise in CEO age at appointment since 2000 and attributes this trend to the growing value of broad, adaptable skills in an environment with high uncertainty and organizational complexity. We causally link this shift not only to the greater demand for generalist human capital, but also to prospective CEOs increasing their job mobility in order to supply such skills. The second chapter investigates how the availability of labor market outside options affects risk-taking in the financial industry. Our results suggest that alternative employment opportunities insure bankers against adverse outcomes, lowering their effective risk aversion and leading to riskier lending decisions, with implications for systemic financial risk. The third chapter examines whether gig platforms provide an income buffer for recently unemployed workers in Germany. While job loss leads to an increase in gig work take-up, it does not reduce reliance on unemployment benefits, indicating that gig work supplements rather than substitutes for public unemployment insurance. Jointly, these chapters establish that the option value of labor market opportunities under uncertainty has aggregate consequences for business dynamism, financial stability, and the design of social security systems.