Publications
Accident-Induced Absence from Work and Wage Growth (joint with Anikó Bíró, Márta Bisztray and Tímea Molnár) [pdf][CIREQ WP][IZA WP]
Previously Accident-Induced Absence from Work and Wage Ladders
accepted at Journal of Labor Economics
The Housing Boom and Selection into Entrepreneurship (joint with Pierluca Pannella) [pdf]
Labour Economics, vol.85, December 2023
Spouses, Children and Entrepreneurship (joint with Charles Berubé) [pdf]
International Economic Review, vol.64, August 2023
Unemployment, Entrepreneurship and Firm Outcomes [pdf]
Review of Economic Dynamics, vol.45, July 2022
Match Quality and Contractual Sorting (joint with Giovanni Gallipoli and Yaniv Yedid-Levi) [pdf]
Labour Economics, vol.66, October 2020
Working Papers
Labour Market Tightness, Wage Inequality, and Workplace Amenities (with Anikó Bíró, Attila Lindner and Tímea Molnár)[pdf]
We study how compensating wage differentials vary with labor market tightness. Using administrative data from Hungary, we construct a firm-level measure of injury risk as a proxy for workplace disamenities and estimate a marginal willingness to pay for this amenity of 5%. We show that compensation for this workplace disamenity is strongly cyclical. As labor markets tighten, the wage premium at high-injury firms rises significantly. A five percentage point decline in the unemployment rate increases compensation by 1.1%, equivalent to about 20% of the marginal willingness to pay of the amenity. Despite this, high-injury firms experience persistently higher separation rate, indicating that workers are undercompensated in slack labor markets and reallocate toward higher amenity jobs as labor market tighten. Tighter labor markets widen wage differentials by increasing compensation for disamenities, while reducing utility dispersion across jobs at the same time.
Identifying Labor Market Power: A Quasi-Experimental Approach [IDB WP] (joint with Rogério Santarrosa)
We test whether firms react to changes in the wages and size of their competitors. We use a unique institutional feature of public procurement auctions in Brazil: the moment in which the auction ends is random. For close auctions, winner and runner-up are as good as randomly assigned. We first show that firm-specific demand shocks lead to increases in the size and wages of the firm receiving the shock. Then, we document that these firm-specific demand shocks lead to increased wages of other (competing) firms in the same local labor market. We do not find negative effects on competitors’ firm size. The effect on competitors is driven by firms with high labor market share.
How are wages determined? A quasi-experimental test of wage determination theories (joint with Rogério Santarrosa and Marcelo Carvalho) [latest version] [RCEA WP]
We use novel quasi-experimental variation to (i) test whether firm-specific demand shocks impact wages, and (ii) to disentangle predictions coming from wage bargaining and firm upward sloping labor supply curve (wage posting). We use a unique institutional feature of public procurement auctions in Brazil: the moment in which the auction ends is random. Under this setting, for close auctions in which firms are constantly outbidding each other by incremental amounts, winner and runner-up are as good as randomly assigned. Using this first variation, we find that winning a government contract increases wages. In addition, contract value is higher for auctions that (randomly) end earlier. We use these two sources of exogenous variation to disentangle the effect on wages that comes from changes in firm size (wage posting) and the part that comes from changes in contract value holding size constant (bargaining). We find direct evidence of bargaining.
Entrepreneurship, Outside Options and Constrained Efficiency (joint with Iain Snoddy) [pdf]
The literature on search often adopts the assumption of free entry. We forgo this restriction with a framework in which individuals are constantly making the decision whether to open a firm. Namely, business-owners and workers come from the same pool. We show that in this framework, the Nash bargaining parameter is crucial for internal dynamics. In particular, the wage is no longer unambiguously positively related to the value of unemployment. The constrained efficient solution coincides with the Hosios condition. However, at this efficient solution, changes in the unemployment rate are either exacerbated or muted depending on the match elasticity parameter.