A. Working Papers
Job Applications and Labor Market Flows (with Kurt See and Shu Lin Wee)
Paper Accepted, Review of Economic Studies
Job applications have risen over time, yet job-finding rates remain unchanged. Meanwhile, separations have declined. We argue that increased applications raise the probability of a good match rather than the probability of job-finding. Using a search model with multiple applications and costly information, we show that when applications increase, firms invest in identifying good matches, reducing separations. Concurrently, increased congestion and selectivity over which offer to accept temper increases in job-finding rates. Our framework contains testable implications for changes in offers, acceptances, reservation wages, applicants per vacancy, and tenure, objects that enable it to generate the trends in unemployment flows.
The Allocation of Immigrant Talent: Macroeconomic Implications for the U.S. and Across Countries (with Fernando Leibovici and Kurt See)
Paper
We quantify the labor market barriers that immigrants face, using an occupational choice model with natives and immigrants of multiple types subject to wedges that distort their allocations. We find sizable output gains from removing immigrant wedges in the U.S., representing 25% of immigrants' overall economic contribution, and that these wedges alter the impact of alternative immigration policies. We harmonize microdata across 19 economies and exploit cross-country variation in immigrant outcomes and estimated wedges to examine the drivers of differences in wedges and gains from their removal. Finally, we relate the estimated wedges with external cross-country measures of immigrant barriers.
Labor Market Shocks and Monetary Policy (with Fatih Karahan, Yusuf Mercan, and Kurt See)
Paper
We develop a heterogeneous agent New Keynesian model featuring a frictional labor market with on-the-job search to quantitatively study the positive and normative implications of employer-to-employer (EE) transitions for inflation. We find that EE dynamics played an important role in shaping the differential inflation dynamics observed during the Great Recession and COVID-19 recoveries, with the former exhibiting subdued EE transitions and inflation despite both episodes sharing similar unemployment dynamics. The optimal monetary policy prescribes a strong positive response to EE fluctuations, implying that central banks should distinguish between recovery episodes with similar unemployment but different EE dynamics.
Uncovering the Differences among Displaced Workers: Evidence from Canadian Job Separation Records (with Youngmin Park, Thomas Pugh, and Kurt See)
Paper
We revisit the measurement of the sources and consequences of job displacement using Canadian job separation records. To circumvent administrative data limitations, conventional approaches address selection by identifying displacement effects through mass-layoff separations, which are interpreted as involuntary. We refine this procedure and find that only a quarter of mass-layoff separations are indeed layoffs. Isolating mass-layoff separations that reflect involuntary displacement, we find twice the earnings losses relative to existing estimates. We uncover heterogeneity in losses for separations with different reason and timing, ranging from 15 percent for quits after a mass layoff to 60 percent for layoffs before it.
Spousal Labor Supply Response to Job Displacement and Implications for Optimal Transfers
Paper
I document a small spousal earnings response to the job displacement of the family head. The response is even smaller in recessions, when earnings losses are larger and additional insurance is valuable. Using cross-state differences in transfer generosity, I find that generous transfers substantially crowd out the spousal earnings response. To study its policy implications, I develop an incomplete markets model with family labor supply and aggregate fluctuations, where predicted labor supply elasticities to taxes and transfers are in line with empirical estimates both in aggregate and across income groups. Counterfactual experiments indeed reveal that generous transfers in recessions discourage spousal earnings. I show that the optimal policy features procyclical means-tested and countercyclical employment-tested transfers, unlike the existing policy that maintains generous transfers of both types in recessions. Abstracting from the incentive costs of transfers on the spousal labor supply changes both the level and the cyclicality of optimal transfers.
B. Publications
Heterogeneous Responses to Job Mobility Shocks in a HANK Model with a Frictional Labor Market (with Fatih Karahan, Yusuf Mercan, and Kurt See)
Paper AEA Papers & Proceedings, (forthcoming), 2024
Labor Market Responses to Unemployment Insurance: The Role of Heterogeneity (with Kurt See)
Retitled from: "How Should Unemployment Insurance Vary over the Business Cycle?"
Paper AEJ Macro, 15(3), 388-430, July 2023
Labor Market Policies During an Epidemic (with Fatih Karahan, Yusuf Mercan, and Kurt See)
Paper Summary Journal of Public Economics, Vol 194, February 2021
What Do Survey Data Tell Us about U.S. Businesses? (with Anmol Bhandari, Ellen McGrattan, and Kurt See)
American Economic Review: Insights, 2(4), 443-458, December 2020
Paper Online Appendix Replication Files Response to Bricker, Moore, and Volz (2022)
Growth and Informality: A Comprehensive Panel Data Analysis (with Ceyhun Elgin)
Journal of Applied Economics, 19(2), 271-292, November 2016
Paper
Trade Openness, Growth, and Informality: Panel VAR Evidence from OECD Economies
Economics Bulletin, 33(1), 694-705, March 2013
Paper
Job Applications and Labor Market Flows (with Kurt See and Shu Lin Wee)
Paper Accepted, Review of Economic Studies
Job applications have risen over time, yet job-finding rates remain unchanged. Meanwhile, separations have declined. We argue that increased applications raise the probability of a good match rather than the probability of job-finding. Using a search model with multiple applications and costly information, we show that when applications increase, firms invest in identifying good matches, reducing separations. Concurrently, increased congestion and selectivity over which offer to accept temper increases in job-finding rates. Our framework contains testable implications for changes in offers, acceptances, reservation wages, applicants per vacancy, and tenure, objects that enable it to generate the trends in unemployment flows.
The Allocation of Immigrant Talent: Macroeconomic Implications for the U.S. and Across Countries (with Fernando Leibovici and Kurt See)
Paper
We quantify the labor market barriers that immigrants face, using an occupational choice model with natives and immigrants of multiple types subject to wedges that distort their allocations. We find sizable output gains from removing immigrant wedges in the U.S., representing 25% of immigrants' overall economic contribution, and that these wedges alter the impact of alternative immigration policies. We harmonize microdata across 19 economies and exploit cross-country variation in immigrant outcomes and estimated wedges to examine the drivers of differences in wedges and gains from their removal. Finally, we relate the estimated wedges with external cross-country measures of immigrant barriers.
Labor Market Shocks and Monetary Policy (with Fatih Karahan, Yusuf Mercan, and Kurt See)
Paper
We develop a heterogeneous agent New Keynesian model featuring a frictional labor market with on-the-job search to quantitatively study the positive and normative implications of employer-to-employer (EE) transitions for inflation. We find that EE dynamics played an important role in shaping the differential inflation dynamics observed during the Great Recession and COVID-19 recoveries, with the former exhibiting subdued EE transitions and inflation despite both episodes sharing similar unemployment dynamics. The optimal monetary policy prescribes a strong positive response to EE fluctuations, implying that central banks should distinguish between recovery episodes with similar unemployment but different EE dynamics.
Uncovering the Differences among Displaced Workers: Evidence from Canadian Job Separation Records (with Youngmin Park, Thomas Pugh, and Kurt See)
Paper
We revisit the measurement of the sources and consequences of job displacement using Canadian job separation records. To circumvent administrative data limitations, conventional approaches address selection by identifying displacement effects through mass-layoff separations, which are interpreted as involuntary. We refine this procedure and find that only a quarter of mass-layoff separations are indeed layoffs. Isolating mass-layoff separations that reflect involuntary displacement, we find twice the earnings losses relative to existing estimates. We uncover heterogeneity in losses for separations with different reason and timing, ranging from 15 percent for quits after a mass layoff to 60 percent for layoffs before it.
Spousal Labor Supply Response to Job Displacement and Implications for Optimal Transfers
Paper
I document a small spousal earnings response to the job displacement of the family head. The response is even smaller in recessions, when earnings losses are larger and additional insurance is valuable. Using cross-state differences in transfer generosity, I find that generous transfers substantially crowd out the spousal earnings response. To study its policy implications, I develop an incomplete markets model with family labor supply and aggregate fluctuations, where predicted labor supply elasticities to taxes and transfers are in line with empirical estimates both in aggregate and across income groups. Counterfactual experiments indeed reveal that generous transfers in recessions discourage spousal earnings. I show that the optimal policy features procyclical means-tested and countercyclical employment-tested transfers, unlike the existing policy that maintains generous transfers of both types in recessions. Abstracting from the incentive costs of transfers on the spousal labor supply changes both the level and the cyclicality of optimal transfers.
B. Publications
Heterogeneous Responses to Job Mobility Shocks in a HANK Model with a Frictional Labor Market (with Fatih Karahan, Yusuf Mercan, and Kurt See)
Paper AEA Papers & Proceedings, (forthcoming), 2024
Labor Market Responses to Unemployment Insurance: The Role of Heterogeneity (with Kurt See)
Retitled from: "How Should Unemployment Insurance Vary over the Business Cycle?"
Paper AEJ Macro, 15(3), 388-430, July 2023
Labor Market Policies During an Epidemic (with Fatih Karahan, Yusuf Mercan, and Kurt See)
Paper Summary Journal of Public Economics, Vol 194, February 2021
What Do Survey Data Tell Us about U.S. Businesses? (with Anmol Bhandari, Ellen McGrattan, and Kurt See)
American Economic Review: Insights, 2(4), 443-458, December 2020
Paper Online Appendix Replication Files Response to Bricker, Moore, and Volz (2022)
Growth and Informality: A Comprehensive Panel Data Analysis (with Ceyhun Elgin)
Journal of Applied Economics, 19(2), 271-292, November 2016
Paper
Trade Openness, Growth, and Informality: Panel VAR Evidence from OECD Economies
Economics Bulletin, 33(1), 694-705, March 2013
Paper