Research
Research
Working Papers
Unequal Recovery from Recessions: Skills Learning Among Young Workers
Graduating during a recession leads to wage losses—about 2% per one-point rise in the unemployment rate—with effects that diminish but persist for over a decade. However, these averages mask substantial heterogeneity: using NLSY data and quantile regression, I find that young workers in higher residual wage quantiles recover significantly faster. This heterogeneity can be attributed to some unobservable characteristics of workers. To quantify the role of endogenous skill investment in recovery and the sources of heterogeneity, I develop a life-cycle model featuring two-dimensional Ben-Porath skill accumulation with workers differ along three unobserved dimensions relevant for wage determination: true abilities, initial self-beliefs about true abilities, and initial stock of skills. This model extends the classical Ben-Porath model by accounting for workers' uncertainties about their skills accumulation and introducing aggregate fluctuations in the demand for skills. Counterfactual analysis shows that the endogenous change in workers' investment in skills accumulation due to the recession explains up to 23% of wage losses every year throughout the recovery period and 92% from the recovery periods even after the recession is over. Heterogeneity in wage losses is primarily driven by differences in true skill accumulation ability, with low-ability workers suffering the most—mainly due to slower recovery in the time they devote to skill accumulation.
Estimating Demand Shocks from Foot Traffic: A Big-Data Approach with Marina Azzimonti and David Wiczer
This study leverages high-frequency foot traffic data from SafeGraph to estimate demand shocks in customer-facing establishments across New York City’s retail, service, and health sectors. Recognizing that variations in foot traffic can arise from both unpredictable demand shocks and firm-driven strategies to attract customers, we present a theoretical framework that isolates establishment-level demand fluctuations from firm-level strategic choices. Implementing this empirically, we employ an unsupervised machine learning approach to classify establishments into distinct categories that are mostly orthogonal to location and sector. We find important heterogeneity in the persistence of shocks, important heterogeneity in their trends, and that estimation on a pooled sample importantly understates the variance experienced by some establishments.
Declining Defined Benefit Plan Inclusion and the Impact on Savings and Retirement Decisions with Rosemary Kaiser and Xiaohui Sun
U.S. retirement plans have shifted sharply from defined benefit to defined contribution setups. How has this change affected retirement and savings behavior? We show that two channels, longevity risk and uncertain return risk, result in different retirement timing choices, holding the present cost of establishing each plan constant. Our quantitative model replicates differences in savings and retirement observed in the data, and shows that the shift in plans alone generated roughly 87% of the decline in retirement by age 65 since the early 1990s. A decomposition reveals that while longevity risk plays a larger role in welfare effects, uncertain returns explain more of the fall in retirement rates.
The Breadth and Depth of College Graduates’ Employment in China: Insight from Online Job Posting Data with Fa-Hsiang Chang
This paper examines employment opportunities for Chinese business graduates with a bachelor’s degree using collected online job postings from 51job.com. We focus on two dimensions: breadth, measured by entropy-based indices of job dispersion across industry–occupation groups, and depth, evaluated through residual posted wages after controlling for experience, firm, city, and time effects. The results reveal substantial variation across majors. Economics, Finance, and postings open to multiple majors exhibit the broadest coverage across industries and occupations, while General Business and Administration and Marketing are much more narrowly concentrated. Accounting and Management fall in between, though with different sources of breadth. Accounting postings span a wide range of industries but are concentrated in fewer occupations, whereas Management postings involve greater occupational diversity within a smaller set of industries. Residual wage distributions show that Finance, Marketing, and Economics graduates enjoy stronger earning potential, whereas General Business and Administration and Accounting are skewed toward lower wages, indicating that breadth and depth need not coincide. Skill requirements overlap across majors, but differences in required skills explain little of the wage gaps, highlighting varying returns to similar skills.
Work in Progress
Who Suffers More? Heterogeneity in Labor Market Transitions During the Great Recession and COVID-19 with Fa-Hsiang Chang and Yijia Wu