WORKING PAPERS
Underemployment and the Business Cycle [PDF]
Abstract: I document key empirical properties of involuntary part-time employment in the US and provide a model that explains them. I find that involuntary part-time employment is volatile and strongly countercyclical, and show that wages of involuntary part-time workers are more flexible than those of full-time workers. To understand this evidence, I develop a tractable model featuring search and matching frictions and imperfect substitutability between full-time and part-time workers. The model successfully captures the dynamics of key labor market variables. Relatively high flexibility of part-time wages is key for matching the countercyclicality of involuntary part-time employment because reallocating workers into part-time contracts becomes more profitable during recessions. Using the model, I find that increased substitutability between full-time and part-time workers, explained by innovations in workforce management practices, makes involuntary part-time employment more sensitive to aggregate productivity shocks.
POLICY WORKING PAPERS
An Assessment of the Exchange Rate Pass-Through in Angola and Nigeria (2016), with Moataz El Said and Misa Takebe, IMF Working Paper WP/16/191.
China’s Rebalancing: Opportunities and Challenges for LAC Exporters (2020), with Nitya Aasaavari, Fabio Di Vittorio, Rui Mano, Yuebo Li and Pedro Rodriguez, IMF Working Paper No. 2020/239.
Chinese Investment in Latin America: Sectoral Complementarity and the Impact of China’s Rebalancing (2021), with Ding Ding, Fabio Di Vittorio and Yue Zhou, IMF Working Paper No. 2021/160.
Inequality in the Spanish Labor Market During the COVID-19 Crisis (2022), with Lucy Liu, IMF Working Paper No. 2022/018.
OTHER POLICY PUBLICATIONS
Crime and Punishment in Central America (2019), with Dmitry Plotnikov and Joyce Wong, Chapter 6 in Beaton, K., Garcia-Saltos, R., and Figliuoli, L. (Eds.). Paving the Way to Sustained Growth and Prosperity in Central America, Panama, and the Dominican Republic. USA: International Monetary Fund.
High Frequency Monitoring of the Salvadoran Economy (2018), IMF Country Report 18/152.
European Labor Markets and the COVID-19 Pandemic: Fallout and the Path Ahead (2022), IMF Departmental Papers / Policy Papers 2022/004.
Active Labor Market Policies to Support the Recovery of the Spanish Labor Market (2022), IMF Country Report No. 2022/046.
Estimation of Andorra’s Potential Output (2022), IMF Country Report No. 2022/180.
Andorra’s Banking Model and Associated Vulnerabilities (2022), IMF Country Report No. 2022/180.
Labor Market Implications of Green Investments and Carbon Pricing in Spain (2023), IMF Country Report No. 2023/034.
Assessment of the Effects of Spain’s 2021 Labor Market Reform (2024), IMF Country Report No. 2024/153