Research
Work in Progress
Spousal Labor Supply as Insurance, with Yongsung Chang and Elin Halvorsen
Collateral Choice and Financial Frictions, with Patrick Macnamara, Horacio Sapriza, and Vladimir Yankov
Working papers
Disincentive Effects of Unemployment Insurance Benefits, with Andreas Hornstein, Andre Kurmann, Etienne Lale, and Lien Ta.
Unemployment insurance (UI) acts both as a disincentive for labor supply and as a demand stimulus which may explain why empirical studies often find limited effects of UI on employment. This paper provides independent estimates of the disincentive effects arising from the largest expansion of UI in U.S. history, the pandemic unemployment benefits. Using high-frequency data on small restaurants and retailers from Homebase, we control for local demand effects by comparing neighboring businesses that largely share the positive impact of UI stimulus. We find that employment in low-wage businesses recovered more slowly than employment in high-wage businesses in labor markets with larger differences in the relative generosity of pandemic UI benefits. According to a labor search model that replicates the estimated employment differences between low- and high-wage businesses, the disincentive effects from the pandemic UI programs held back the aggregate employment recovery by 4.7 percentage points between April and December 2020.
[pdf] , [slides], [Richmond Fed Economic Brief]
Publications
Regional Consumption Responses and the Aggregate Fiscal Multiplier, with Bill Dupor, Marianna Kudlyak and Saif M. Mehkari
Review of Economic Studies, 2023, 90 (6), 2982-3021
Income Volatility and Portfolio Choices, with Yongsung Chang, Jay H. Hong, Yicheng Wang, and Tao Zhang
Review of Economic Dynamics, 2022, 44, 60-95
Misallocation and Financial Frictions: the Role of Long-term Financing, with Patrick Macnamara
Review of Economic Dynamics, 2021, 40, 44-63.
[pdf], [Online Appendix]
Labor-Market Uncertainty and Portfolio Choice Puzzles, with Yongsung Chang and Jay H. Hong
American Economic Journal: Macroeconomics, 2018, 10 (2), 222-262.
A Roadmap for Efficiently Taxing Heterogeneous Agents
American Economic Journal: Macroeconomics, 2016, 8 (2), 182-214.
[pdf]