In progress:

Direct and indirect effects of political violence on firms:

Evidence from Turkish transaction data

(with Michele di Maio,  Michele Imbruno, Seda Koymen Ozer and Daniela Maggioni)

In this paper, we use firm-to-firm transaction data for Turkey over the period 2006-2021 to estimate the direct and indirect - through firm-to-firm input-output linkages - effects of firms' exposure to conflicts on their economic outcomes. Firms in conflict-affected areas experience a reduction in sales and number of customers. The contraction in the economic activity of firms exposed to conflict propagates to their customers located in non-conflict areas. Moreover, firms with suppliers located in conflict-affected areas suffer a contraction in sales due to the higher cost of inputs.

Immigration and the skill premium

(with Daniela Maggioni and Federico Trionfetti)

We investigate the impact of immigration of low skilled workers on the skill premium. We expect to find a positive relationship due to the increase in the relative supply of unskilled labour. Using data for the Italian economy between 2008-2013 we find no significant impact. We rationalize this puzzle by introducing matching, screening, and firm-level wages in a two-sector, two-goods closed economy. In this model, immigration causes a reduction in the relative cost of matching with unskilled labour. As a consequence, firms reduce their skill-intensity as well as the relative severity of screening skilled workers. The latter effect follows from the fact that the benefits of the screening activity accrue to a relatively smaller number of workers. The relative ability of skilled workers then declines and may compensate and offset the increase in the skill premium induced by the decrease in the skill ratio. By estimating a proxy for relative ability of the skilled, we indeed find evidence that migration flows from low and middle income countries into Italian regions have caused a reduction in the relative ability of skilled workers within sectors.

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