PUBLICATONS
The Skill Complementarity of Broadband Internet with A. Akerman and M. Mogstad, Quarterly Journal of Economics, 130(4), 2015 [online appendix]
Does adoption of broadband internet in firms enhance labor productivity and increase wages? Is this technological change skill biased or factor neutral? We combine several Norwegian data sets to answer these questions. A public program with limited funding rolled out broadband access points and provides plausibly exogenous variation in the availability and adoption of broadband internet in firms. Our results suggest that broadband internet improves (worsens) the labor market outcomes and productivity of skilled (unskilled) workers. We explore several possible explanations for the skill complementarity of broadband internet. We find suggestive evidence that broadband adoption in firms complements skilled workers in executing nonroutine abstract tasks, and substitutes for unskilled workers in performing routine tasks. Taken together, our findings have important implications for the ongoing policy debate over government investment in broadband infrastructure to encourage productivity and wage growth.
Incidence and Distributional Effects of Value Added Taxes, The Economic Journal, 129(618) 2019 [online appendix]
This article examines the incidence and distributional effects of value added taxes (VAT). A sharp change in the VAT policy on food in Norway is exploited. My findings suggest that taxes levied on food are completely shifted to consumer prices, while there is little spill-over effects to most other goods. To understand the distributional effects of the reform, one uses expenditure data and estimate the compensating variation of the tax induces price changes. I find that lowering the VAT on food attenuates inequality in consumer welfare, in part because households adjust their spending patterns in response to the price change.
WORKING PAPERS
Chasing an Elusive Target: Measuring Productivity Growth under Factor-Biased Technical Change with A. Akerman, 2025 [online appendix] (resubmitted)
We show that standard growth-accounting methods understate productivity growth when technological change is factor-biased. We document this bias in two settings. First, using the NBER–CES Productivity Database for U.S. manufacturing (1958–2011), we find that conventional estimates underreport TFP growth by 10 percent, with the gap nearly doubling after 2000. Second, exploiting the staggered rollout of broadband internet in Norway, we show that treating the technology as Hicks-neutral obscures substantial productivity gains, while accounting for factor bias reveals that broadband adoption raised firm-level TFP by about 3.5 percent. Across both applications, the common assumption of time-invariant, Hicks-neutral production functions leads to systematically downward-biased estimates of productivity growth.
The Welfare Effects of Marginal and Nonmarginal Changes in the Sales Taxes in the U.S., with L. H. de Frahan, 2025 (submitted)
We study the welfare effects of marginal and larger nonmarginal sales tax reforms in the U.S. We first construct a panel of sales taxes at the county and state level, and use this data to estimate the price and quantity impacts of observed changes in sales tax rates. We find that demand is relatively inelastic and that consumers bear the full incidence of the tax changes. Next, we show how one can use these estimates to point identify or bound the welfare effects of actual or counterfactual sales tax reforms. In contrast to existing work, we consider the welfare effects of both marginal and larger changes in sales taxes and analyze how these effects vary across states depending on initial prices and nonlinearities in the demand curve. We examine the robustness of the results to alternative assumptions about market structure and salience of the tax. We find that the marginal value of public funds for marginal changes is close to one. While the bounds for nonmarginal changes are wider, the total welfare effect on consumers and firms remains close to the amount of revenue raised. Thus we conclude there is relatively little welfare loss of small and larger changes to sales tax rates.
Green Waste with M. Grindaker, T. G. Meling, and M. Mogstad, 2025 (submitted)
We test for and measure green waste: the misallocation of public subsidies for green investment projects. Our context is a major Norwegian program for green investment subsidies. We develop a model of subsidy allocation and apply it to detailed project-level data on carbon emissions and subsidy amounts for both marginal and inframarginal projects. We find that decision-makers could have achieved the same level of emission reductions at less than half the cost. To isolate the sources of this green waste, we use data on both ex-ante expected and ex-post realized emission reductions for each project. We find that decision-makers are able ex-ante to identify the projects with the highest ex-post emission reductions but unwilling to select them.
Linear Supply and Demand in Heterogenous Markets, with L. H. de Frahan, M. Mogstad, A. Torgovitsky and O. Volpe, 2024 (submitted)
We modify the classic linear supply and demand system to allow for the coefficients on price to be unobservable random variables that vary across heterogeneous markets. Known conditions for point identification place strong requirements on the available instruments. We show how to construct and estimate bounds on scalar target parameters that are valid for any type of instrument, or even with no instrument at all. Numerical simulations calibrated to a well-known data set show that the model is not point identified. However, the bounds can be remarkably informative even under limited instrument variation. We apply our approach to study the welfare effects of sales tax.
WORK IN PROGRESS
The Distributional Incidence of Sales Taxes in the U.S., with L. H. de Frahan
Globalization and the role of labor market institutions, with O. L. Vestad