Research
Working Papers:
"Fissured Firms and Worker Outcomes" with Diego Dabed, Ana Oliveira and Anna Salomons (uploaded: March 2024)
We consider how firms' organization of production relates to workers' wages. Using matched employer-employee data from Portugal, we document that, within detailed industries, firms differ starkly in terms of their occupational employment concentration, with some firms employing workers across a broad range of occupations and others being much more specialized. These differences are robustly predictive of wages: a worker employed in a specialized, i.e. 'fissured' firm earns less than that same worker employed in a less specialized firm. This wage penalty is observed across a wide range of occupations. Firm specialization helps account for the role of firms in inequality: over half of the wage penalty from specialization is explained by differences in firm productivity, and firm specialization is strongly negatively related to AKM firm fixed effects. However, the evidence does not support a large role for increased pay transparency or lower rent-sharing as mechanisms for the observed wage penalty from firm specialization.
"The Occupational Ladder: Implications for Wage Growth and Wage Gaps over the Life Cycle" with Kelly Foley and Henry E. Siu (updated: February 2024)
The idea that workers experience wage growth by climbing an occupational ladder is commonplace in the workforce development literature and among career counselling practitioners. How important is this in accounting for life-cycle wage growth? We develop a simple decomposition to show how much is attributable to changes in the distribution of employment across occupations - climbing an occupational ladder - relative to wage growth within an occupation - climbing a job ladder. The occupational ladder's contribution is greatest at low levels of labor market experience; climbing the job ladder becomes increasingly important later in workers' careers. We also use our decomposition to study gender and racial wage gaps. The widening of the gender wage gap over the life cycle is predominantly a "within occupation" or job ladder phenomenon. By contrast, the occupational ladder is important in accounting for the life-cycle dynamics of Hispanic-White wage gaps.
"Enrolling in Bad Times: College Persistence and Labor Market Outcomes" with Alena Bičáková, Kelly Foley, Jacopo Mazza and Peter McHenry (uploaded: October 2022)
Using administrative data covering the universe of student enrollments in public universities in Canada since 2009, we show that individuals who start an undergraduate degree when unemployment is high are less likely to graduate within five years. Compositional changes along observable student characteristics including gender, age at enrollment, and parental income do not account for this result, nor does sorting across universities or fields of study. While a simple model of negative selection into university during downturns can account for the decline in graduation rates, it would imply that post-schooling earnings should be lower among non-completers who enroll during high unemployment periods compared to those who enroll when unemployment is lower. Using a panel of administrative tax data linked to the student enrollment records, we show that higher unemployment rates at enrollment are not associated with lower annual earnings among non-completers. A model that features heterogeneity in the idiosyncratic costs of post-secondary education can rationalize this result.
"Product Market Concentration, Wage Inequality and Worker Sorting" with Leyla Gilgen and Jeanne Tschopp (uploaded: September 2023)
Product markets have become increasingly dominated by a smaller number of firms with high market shares. At the same time, wage dispersion between firms has been increasing. In this paper, we show that product market concentration is associated with higher wage dispersion between firms within industries. Using rich administrative data from France covering the near-universe of workers and firms over the period 2009-2019, we find a positive and statistically significant correlation between sectoral concentration and different measures of between-firm wage inequality. The relationship is driven by (i) increased sorting of workers in high-paying occupations towards more productive firms within industries, and (ii) higher wage differentials between more and less productive firms in more concentrated industries, even conditional on their workers' occupations. In a model that features wage heterogeneity between firms, a shock to consumer price sensitivity - which has been posited by Autor et al. (2020) as a driver of the rise in product market concentration - generates predictions that are consistent with the empirical patterns that we document.
"Technological Change, Firm Heterogeneity and Wage Inequality" with Adrian Lerche, Uta Schönberg and Jeanne Tschopp (updated: March 2024) [Link to IZA Working Paper Version]
We argue that skill-biased technological change not only affects wage gaps between skill groups, but also increases wage inequality within skill groups, across workers in different workplaces. Building on a heterogeneous firm framework with labor market frictions, we show that an industry-wide skill-biased technological change shock will increase between-firm wage inequality within the industry through three main channels: increased employment concentration in more productive firms, increased wage dispersion between firms for workers of the same skill type, and increased segregation and sorting of skilled workers in more productive firms. Using rich administrative matched employer-employee data from Germany, we provide empirical evidence of establishment-level patterns that are in line with the predictions of the model. We further document that industries with more technological adoption exhibit particularly pronounced patterns along the dimensions highlighted by the model.
Publications:
"Are Routine Jobs Moving South? Evidence from Changes in the Occupational Structure of Employment in the U.S. and Mexico" with Diego M. Morris, Journal of Human Capital, Accepted.
[Preprint (Ungated)] [Earlier Working Paper Version: UNU-WIDER]
"Rising Concentration and Wage Inequality" with Jeanne Tschopp, Scandinavian Journal of Economics, April 2024, Vol. 126, Issue 2: 320-354.
[Publication] [Preprint (Ungated)] [Online Appendix] [Replication Package] [Earlier Working Paper Version: IZA]
Media Coverage in: Ökonomenstimme (in German)
"Make Your Own Luck: The Wage Gains from Starting College in a Bad Economy" with Alena Bičáková and Jacopo Mazza, Labour Economics, October 2023, Vol. 84, Article 102411.
[Publication] [Preprint (Ungated)] [Replication Package] [Earlier Working Paper Version: IZA]
"The Growing Importance of Social Tasks in High-Paying Occupations: Implications for Sorting" with Nir Jaimovich and Henry E. Siu, Journal of Human Resources, September 2023, Vol. 58, Issue 5: 1429-1451. (Previously circulated as "The "End of Men" and Rise of Women in the High-Skilled Labor Market")
[Publication] [Preprint (Ungated)] [Online Appendix] [Replication Package] [Earlier Working Paper Versions: NBER, CEPR]
Media coverage in: The Wall Street Journal (and picked up by Fortune), The Guardian, Quartz, The Register, Bloomberg, Bloomberg View, Financial Post, Livemint, Calcalist (in Hebrew), Capoverso (in Italian), and The Sydney Morning Herald.
"Distributional Impacts of the COVID-19 Pandemic and the CARES Act" with Eliza Forsythe, Journal of Economic Inequality, June 2023, Vol. 21, Issue 2: 325-349. (Previously circulated as "Impacts of the Covid-19 Pandemic and the CARES Act on Earnings and Inequality")
[Publication] [Preprint (Ungated)] [Online Appendix] [Earlier Working Paper Versions: IZA, CLEF]
Media Coverage in: Fox Business. Link to summary on EconoFact.
Companion Paper: "Unemployment Insurance Recipiency During the Covid-19 Pandemic", by Eliza Forsythe
"Heterogeneous Labor Market Impacts of the COVID-19 Pandemic" with Eliza Forsythe, ILR Review, January 2023, Vol. 76, Issue 1: 30-55.
[Publication] [Preprint (Ungated)] [Online Appendix] [Earlier Working Paper Versions: Upjohn Institute, CLEF]
Media Coverage in: CardRates.com
"Between-Group Inequality May Decline Despite a Rising Skill Premium" with Imran Aziz, Labour Economics, October 2021, Vol. 72, Article 102063.
[Publication] [Preprint (Ungated)] [Replication Package] [Earlier Working Paper Version: IZA]
"Caught in the Cycle: Economic Conditions at Enrolment and Labour Market Outcomes of College Graduates" with Alena Bičáková and Jacopo Mazza, Economic Journal, August 2021, Vol. 131, Issue 638: 2383-2412.
[Publication] [Preprint (Ungated)] [Online Appendix] [Replication Package] [Earlier Working Paper Version: IZA]
Link to blog post on LSE Business Review. Link to CLEF Webinar Presentation.
"Do Technological Advances Reduce the Gender Wage Gap?" with Ana Oliveira and Anna Salomons, Oxford Review of Economic Policy, Winter 2020, Vol. 36, Issue 4: 903-924.
[Publication] [Preprint (Ungated)] [Minor Corrections to Figures and Tables] [Replication Package]
"The Dynamics of Disappearing Routine Jobs: A Flows Approach" with Nir Jaimovich, Christopher J. Nekarda and Henry E. Siu, Labour Economics, August 2020, Vol. 65, Article 101823. Special Issue on "Technology and the Labour Market".
[Publication] [Preprint (Ungated)] [Replication Package] [Earlier Working Paper Version: NBER]
Media coverage in: The New York Times, engadget, fivethirtyeight, The Washington Center for Equitable Growth, and The Globe and Mail. Link to summary on VoxEU.
"Delving into the Demand Side: Changes in Workplace Specialization and Job Polarization" with Andrea Salvatori, Labour Economics, April 2019, Vol. 57: 164-176. (Previously circulated as "Task Specialization within Establishments and the Decline of Routine Employment")
[Publication] [Preprint (Ungated)] [Online Appendix] [Earlier Working Paper Version: IZA]
"The Individual-Level Patterns Underlying the Decline of Routine Jobs", Travail et Emploi, Special Issue on Polarization(s) in Labor Markets, 2019, Vol. 157: 45-66.
[Publication] [Preprint (Ungated)]
"The Costs of Occupational Mobility: An Aggregate Analysis" with Giovanni Gallipoli, Journal of the European Economic Association, April 2018, Vol. 16, No. 2: 275-315.
[Publication] [Preprint (Ungated)] [Online Appendix] [Replication Package]
"Disappearing Routine Jobs: Who, How, and Why?" with Nir Jaimovich and Henry E. Siu, Journal of Monetary Economics, November 2017, Vol. 91: 69-87.
[Publication] [Preprint (Ungated)] [Online Appendix] [Earlier Working Paper Version: NBER]
Media coverage in: Financial Sense Podcast, Associated Press 1, Associated Press 2 (and picked up by The Washington Post, CBS News, and others), Bloomberg, Wall Street Journal
"Where Have the Middle-Wage Workers Gone? A Study of Polarization using Panel Data", Journal of Labor Economics, January 2016, Vol. 34, No. 1: 63-105.
[Publication] [Preprint (Ungated)] [Online Appendix] [Replication Package]
Media coverage in: de Volkskrant
Hibernating Papers:
"Changes in the Return to Skills and the Variance of Unobserved Ability" with Manuel Alejandro Hidalgo (updated: December 2015)
Changes in the variance of wages among groups of workers with common observable characteristics are often interpreted as reflecting changes in the return to unobservable skills. This interpretation relies on the crucial and highly restrictive assumption that the variance of these unobservable skills remains constant over time. We propose a new identification strategy which relaxes this assumption using longitudinal data, and requires only two observations per individual. Using data from the Current Population Survey's Merged Outgoing Rotation Group sample over the period 1982-2012, we find that relaxing the assumption of constant within-group skill variance is crucial. Contrary to the conclusion drawn when this assumption is imposed, we find that the return to skills has fallen over our sample period, and that increases in within-group wage inequality are driven by increases in the dispersion of unobserved skills, particularly among college graduates.