The final essay looks at the impact of infectious diseases on social welfare. I exploit exogenous timing of the SARS outbreak in Ontario, Canada to examine the extent to which SARS distorted the behaviour of individuals in the market for medical services, and thereby affected social welfare. I find that SARS had a negative temporary impact on the utilization of medical services, but no long-lasting impact. About three quarters of the temporary impact is explained by the decline in the number of visits of patients per physician, indicating that SARS had a significant negative effect on the demand for medical services. This thesis consists of three essays on topics in labour economics. The first essay develops an equilibrium model in which the extent of outsourcing, wage inequality and the structure of firms are jointly determined. I describe the equilibrium relation among these variables, and their dependency on the market size. Using the data on the market for lawyers in the U.S., I find empirical evidence that provides support for the model---the extent of outsourcing, wage inequality and the promotion probability are positively correlated, and they vary positively with the marker size. The model can be used to interpret recent increases in the extent of outsourcing and wage inequality and the attendant changes in the structure of firms. The second essay studies the relationship between interethnic marriages and economic assimilation among immigrants. I evaluate two competing hypotheses---the productivity hypothesis and the selection hypothesis---within a model in which earnings of immigrants and their interethnic marital status are jointly determined. I find that the earnings of immigrants married to spouses born in the host country grow faster than the earnings of immigrants married to foreign-born spouses. However, this interethnic marriage premium is completely explained by the negative selection of immigrants into marriages with other foreign-born individuals.