Associate Professor in the Department of Economics at the University of Houston.
With risk-averse workers and uninsurable earnings shocks, competitive markets allocate too few workers to risky jobs. ... Using an equilibrium Roy model with incomplete markets, we show that in competitive equilibrium, risky occupations are inefficiently small and hence talent is misallocated.
Read moreThis paper studies how coordinated work schedules across jobs contribute to the gender wage gap.... Using US time diary data, we construct occupation-level measures of coordinated schedules. Higher coordination is associated with higher wages and a larger gender wage gap. Empirically, women with children allocate more time to household care and are penalised for missing work during peak hours. An equilibrium occupational choice model generates a gender wage gap of 8.9%; most of the gender wage gap is within occupations. If coordination is set to the value of healthcare support across all occupations, the within-occupation gender gap halves.
Read moreWe focus on the timing of labor supplied during the day and its interaction with home care responsibilities.... Using the American Time Use Survey, we measure the incidence of household care activities between 8 AM and 5 PM (the prime time of the day). Women experience more work interruptions during that time. These work interruptions imply wages that are about 9 percent lower. This result is consistent with occupations offering more flexibility but also a lower wage. We offer suggestive evidence that missing work due to household demands has a larger penalty in occupations with more coordinated work schedules.
Read moreThis article studies how insurance from progressive taxation improves the matching of workers to occupations.... We propose an equilibrium dynamic assignment model to illustrate how social insurance encourages mobility. Workers experiment to find their best occupational fit in a process filled with uncertainty. Risk aversion and limited earnings insurance induce workers to remain in unfitting occupations. We estimate the model using microdata from the United States and Germany. Higher earnings uncertainty explains the U.S. higher mobility rate. When workers in the United States enjoy Germany's higher progressivity, mobility rises. Output and welfare gains are large.
Read morePublic capital is sizable and its share in total capital is higher in poor countries. The standard development accounting approach does not distinguish it from private capital, ignoring its public good features.... The goal of this paper is to measure public capital stocks for a wide range of countries, and then develop and implement a development accounting framework that explicitly includes its non-rival aspects. The paper finds that factors of production account for a significantly greater share of cross-country differences in output per worker compared to the standard framework. With both non-rivalry and congestion, the contribution of factors of production decreases.
Read moreWe find a strong, robust, and positive correlation between average earnings and the standard deviation of both temporary and permanent idiosyncratic shocks to earnings across 19 US industries... Is this compensation for risk or for unobserved abilities? To answer this question we embed a Roy model into an incomplete markets equilibrium framework that features risk averse individuals who face industry-specific idiosyncratic shocks to their labor earnings. The interaction between earnings shocks and an individual's comparative advantage determines the optimal industry choice. Compensation for permanent shocks to labor earnings represents about two thirds of the observed correlation. There is no compensation for temporary risk. Compensation for risk explains about 40% of observed cross-industry differences in residual labor earnings. Additionally, workers accumulate different levels of wealth depending on their chosen industry.
Read moreIn this paper I document cross-country gaps between gross domestic product (GDP) per capita and GDP per worker.... The gaps are driven mostly by a lower female labor force participation (LFP) in developing countries. Females began to participate more in the labor markets of these countries when more households acquired access to basic infrastructure and when distortive policies affecting the prices of household appliances were partially removed. I use a model of home production with endogenous labor force participation to account for these facts. I find that the prices of household appliances and access to infrastructure are quantitatively important in explaining cross-country labor supply differences.
Read moreWe develop a theory of labor quality based on (i) the division of the labor force between unskilled and skilled workers and (ii) investments in skilled workers.... In our theory, countries differ in two key dimensions: talent and total factor productivity (TFP). We measure talent using the observed achievement levels from the Programme for International Student Assessment (PISA) scores. Our findings imply that the quality of labor in rich countries is about twice as large as the quality in poor countries. Thus, the implied disparities in TFP levels are smaller relative to the standard growth model using a Mincerian measure of labor quality. In our model, the resulting elasticity of output per worker with respect to TFP is about 2.
Read moreWe studied labour productivity growth in Ecuador from 1998 to 2006 by using firm-level data from the annual survey of manufacturing and mining.... This period is characterised by the economic crisis in 1999 and important economic reforms. During the crisis, there was a two percent annual decrease in productivity in 1998–2000, but the recovery was strong with a five percent annual productivity growth in 2002–2004. Our productivity decomposition indicated that the main source of productivity growth came from firms with increasing productivity gaining market shares. Within-firm productivity decline was substantial during the crisis, but its growth was secondary in the post crisis recovery. Firm entry and exit only had minor impacts on labour productivity. Our distributional analysis further showed that labour productivity distribution increased in 2000–2002 and had remained at higher level for the rest of the sample period.
Read more