Three Essays on the General Equilibrium Effects of Human Interactions

The overarching theme of this PhD thesis is human mobility and its externalities, particularly in the context of labour and health economics. Through rigorous modelling and analysis, the three chapters of the thesis demonstrate the potential benefits of policies that regulate human mobility.

In the first chapter of my PhD, I examine how language training can improve the functioning of the labour market, with a particular focus on immigrants with high skills who face language barriers. I argue that fully funding the cost of language acquisition for migrants can bring significant benefits to the economy and migrants, but may marginally worsen the labour market performance of low-skilled natives. Using a search and matching framework with two-dimensional skill heterogeneity, I model the effects of a language acquisition subsidy on migrants' labour market integration and its impact on natives' labour market performance. My study finds that subsidizing language acquisition costs may increase the GDP of the German economy by approximately ten billion dollars by decreasing the aggregate unemployment rate and skill mismatch rate and increasing the share of job vacancies requiring high generic skills.

The second chapter of my PhD explores the challenges involved in devising social contact limitation policies as a means of controlling infectious disease transmission. Using an economic-epidemiological model of COVID-19 transmission, I evaluate the effectiveness of different intervention strategies and their consequences on public health, social welfare and economic outcomes. The findings emphasize the importance of responsiveness in implementing social contact limitations, rather than solely focusing on their stringency, and suggest that early interventions lead to the lowest losses in economy and mental well-being for a given number of life losses. The study has broader implications for managing the societal impact of infectious diseases and highlights the need to continue refining our understanding of these trade-offs and developing adaptable models and policy tools to safeguard public health while minimizing social and economic consequences. Overall, the study offers a robust and versatile framework for understanding and navigating the challenges posed by public health crises and pandemics.

The third chapter of my PhD builds on the economic-epidemiological model developed in Chapter 2 to analyze the multifaceted effects of vaccine hesitancy in controlling the spread of infectious diseases, with a particular focus on the COVID-19 pandemic in Belgium. The study utilizes actual vaccination rates by age group until June 2021 and simulates the following months by incorporating realistic properties such as temporary immunity, age-specific vaccination hesitancy rates, daily vaccination capacity, and vaccine efficacy rate. The baseline scenario with an overall 27.1$\%$ vaccine hesitancy rate indicates that current vaccination rates in Belgium are sufficient to control the spread of COVID-19 without imposing social contact limitations. However, hypothetical scenarios with higher disease transmission rates demonstrate the high costs of vaccine hesitancy, resulting in significant losses in labour supply, mental well-being, and life losses.

Throughout this thesis, I have described the costs and benefits induced by mobility, and shown that mobility policies make winners and losers. In Chapter 1, subsidizing the cost of language acquisition for migrants can bring significant benefits to the economy and migrants, but may marginally worsen the labour market performance of low-skilled natives. In Chapter 2, stringent policies alleviate health losses, but they impact economic activity and mental health. In Chapter 3, the health externalities generated by human interactions impose a potential tradeoff between values, namely the freedom to move and the freedom to choose to get vaccinated. In each of these chapters, I quantify these tradeoffs.

Another important insight from this thesis is the need to incorporate behavioural aspects into macro models evaluating the consequences of policies related to human mobility. In the thesis, these aspects include individual investments in language training, decision-making on infection avoidance, social contacts, labour supply, and vaccination decisions.
can lead to more effective policies that balance the interests of various stakeholders.

Overall, this thesis contributes to the literature on human mobility by highlighting the potential benefits and challenges associated with it, and the need for nuanced and responsive policymaking that takes into account behavioural aspects and externalities. The insights gained from this thesis can be relevant for future research in economics on topics related to human mobility, public health, and labour market integration.