A. Working Papers
Labor Market Responses to Unemployment Insurance: The Role of Heterogeneity (with Serdar Birinci)
Retitled from: How Should Unemployment Insurance Vary Over the Business Cycle?
R&R, American Economic Journal: Macroeconomics
We document considerable scope of heterogeneity within the unemployed, especially when the unemployed are divided along eligibility and receipt of unemployment insurance (UI). We develop a heterogeneous-agent job-search model capable of matching the wealth and income differences that distinguish UI recipients from non-recipients. Labor market responses to UI changes are non-monotonic in wealth because the poorest individuals exhibit weak responses due to the high value they attribute to employment. Differential elasticities imply that the extent to which structural models account for the composition of UI recipients is material to aligning predicted responses with empirical estimates and to policy evaluation.
Job Applications and Labor Market Flows (with Serdar Birinci and Shu Lin Wee)
Improvements in search technology have led to an increase in worker applications over time. Concomitantly, unemployment inflow rates have declined sharply, with no long-run change in outflow rates. To explain these patterns, we introduce a search model with multiple applications and costly information acquisition. When workers can send more applications, the model predicts that firms invest more in finding good matches, leading to fewer separations, while workers become choosier about which offers they accept, arresting the rise in job-finding rates. Quantitatively, the model replicates the empirical trends in unemployment flows both in the aggregate and across groups. To validate our model's mechanisms, we present new facts about trends in job offers, acceptance rates, and reservation wages.
Immigrant Misallocation (with Serdar Birinci and Fernando Leibovici)
We quantify the barriers that impede the integration of immigrants into foreign labor markets and investigate their aggregate implications. We develop a model of occupational choice with natives and immigrants of multiple types whose decisions are subject to wedges which distort their allocation across occupations. We estimate the model to match salient features of U.S. and cross-country individual-level data. We find that there are sizable GDP gains from removing the wedges faced by immigrants in U.S. labor markets, accounting for approximately one-fifth of the overall economic contribution of immigrants to the U.S. economy. These effects arise from both increased flows from non-participation to predominantly manual jobs as well as from reallocation within the market sector that raises productivity in non-routine cognitive jobs. We contrast our findings for the U.S. with estimates for 11 high-income countries and document substantial differences in the magnitude of immigrant wedges across countries. Importantly, we find differences in the distribution of immigrant wedges across occupations lead to substantial variation in the gains from removing immigrant misallocation, even among countries with similar average degrees of distortions.
The Heterogeneous Effects of COVID-19 on Canadian Household Consumption, Debt and Savings (with Jim MacGee and Thomas Pugh)
Accepted, Canadian Journal of Economics
This paper develops an agent-based model (ABM) to quantify the impact of COVID-19 on household debt and savings. To build a representative cross-section of households who vary by income, debt portfolios and consumption baskets, we merge data from the Survey of Household Spending (SHS) and the Survey of Financial Security (SFS). We construct paths for consumption and employment over the crisis, accounting for heterogeneous risk of unemployment across demographics, government transfers, and substitution between expenditure categories that vary in contact-intensity. Our simulations reveal heterogeneous effects across the income distribution. Low-income households face the highest risk of unemployment, but transfers provide generous income replacement. Middle-income job-losers see the fastest rise in debt, as transfers only provide partial income replacement. Most unplanned savings accrue to high-income households who face lower unemployment risk and larger declines in hard-to-distance spending. We find the rise in savings could generate a brief jump, peaking at nearly 6% of monthly consumption.
"Medicare for All": The Macroeconomic and Welfare Consequences of Public Health Insurance Reform
In the United States, employment and medical expenditure risk are tightly linked because of the prevalence of employer-provided health insurance. In this paper, I investigate the macroeconomic and welfare consequences of introducing a single-payer (universal) healthcare system using an incomplete asset markets model with labor market frictions and medical expenditure risk over the lifecycle, paying particular attention to the labor market effects of the reform. First, I compare the model-implied labor supply elasticities with respect to public health insurance generosity to existing empirical evidence. The model partially accounts for the puzzlingly wide range of estimates found in three microeconomic experiments conducted in Tennessee, Oregon, and Wisconsin. Next, I use the model to understand the general equilibrium effects of the policy reform. I find that it results in higher reservation wages, a corresponding reduction in firm vacancy creation, both of which lead to a quantitatively large decline in the job finding rate. The negative impact of the lower job finding rate outweighs insurance benefits of generous public health coverage, resulting in substantial welfare losses among low-wealth households for whom employment is most valuable.
B. Published Work
Labor Market Policies During an Epidemic (with Serdar Birinci, Fatih Karahan, and Yusuf Mercan)
Journal of Public Economics, 194, 104348, February 2021
What Do Survey Data Tell Us about U.S. Businesses? (with Anmol Bhandari, Serdar Birinci, and Ellen McGrattan)
American Economic Review: Insights 2(4), 443-58, December 2020
Paper Online Appendix Replication Files
Prior to Grad School
The Role of Education and Government Sponsored Programs in Limiting Family Size in Pasay, Eastern Samar, and Agusan Del Sur (with John Paolo R. Rivera)
De La Salle University Business and Economic Review, 21(2), 2012
C. Commissioned Research Projects
Labor Market Signaling in APEC Economies: An Approach in Addressing Manpower Mismatch (with Tereso S. Tullao, Jr. and John Paolo R. Rivera)
A project funded by the Asia Pacific Economic Cooperation (APEC) in 2012