Publications
"Occupational Choice, Human Capital and Learning: A Multi-Armed Bandit Approach"
Accepted at Labour Economics, 2026
Joint work with Theodore Papageorgiou
Current version: LINK
Abstract: This paper introduces a model of worker matching at the occupation level. In our setup, young workers, while employed in an occupation, accumulate human capital and also learn about their underlying productivity in that occupation. Human capital is partially transferable to other occupations and similarly, the information acquired in one occupation is informative about a worker's productivity in other occupations. Workers with low tenure levels, as well as low-paid workers, are the ones most likely to switch occupations, consistent with our empirical findings. Though the model is quite general, we show that Gittins indices can be used in this setup to preserve tractability. We discuss potential applications ranging from assessing the impact of AI and automation to the evaluation of policies such as unemployment benefits, sector-specific subsidies, or minimum wages.
"Firm Wage Differentials and Labor Market Sorting: Reconciling Theory and Evidence"
Journal of Political Economy, 2018, vol. 126, issue 1, 313-346
Current version: LINK
Abstract: Why do firms pay different wages? Empirical evidence suggests the presence of substantial differences in firm pay controlling for worker skill. Moreover, these differences are uncorrelated with skills, indicating the absence of sorting. I show that the face value interpretation is inconsistent with evidence on coworker segregation. I interpret the evidence by applying a sorting model and show that the correlation is biased. I identify nonmonotonicities in wages as the reason for this bias and show that a measure of worker-coworker sorting is more accurate. By calibrating the model to US data, I confirm that the model matches many job market characteristics.
This paper circulated with the previous title "Sorting in the Labor Market: Theory and Measurement". This is an amended version of the paper to include citations to the work of Gautier and Teulings (2006) in sorting with comparative advantage.
Working Papers
"The Role of Industries in Rising Inequality"
Revise and resubmit at Review of Economic Studies, 2025
Joint work with Juraj Briskar, Edoardo Di Porto, Jose V. Rodriguez Mora, and Cristina Tealdi
Current version: LINK
Abstract: While the sharp rise in earnings inequality since the 1980s is well documented, its underlying structure and causes remain contested. This paper provides new evidence on the evolution of earnings inequality over several decades, based on exceptionally detailed Italian administrative data. We first offer a comprehensive decomposition of the inequality trend across sectors and firms, showing that the predominant component of the rise is sectoral rather than firm-specific. This shift is closely associated with increased sorting between worker skills and sectoral attributes, as well as heightened segregation of workers across sectors. To interpret these patterns, we develop a parsimonious Roy-style model of sectoral choice with assortative matching. Calibrating the model to the data, we find that the observed increase in segregation and sorting can be accounted for by a rise in the dispersion of skill-biased sectoral productivity. Our findings highlight the central role of sector-level heterogeneity in shaping long-run trends in earnings inequality.
Work in Progress
"How Firms Affect Wages: A Structural Decomposition"
Work in progress.
Older Working Papers
"Firm Heterogeneity, Sorting and the Minimum Wage"
Working paper, 2012
Current version: LINK
This paper shows how firm heterogeneity and labor market sorting help explain minimum wage effects on wage inequality, firm profits, and the political economy of minimum wage policy.
"The Implications of Search Models for Wage Dynamics: an Empirical Assessment"
Working paper, 2007
Current version: LINK
This paper tests central implications of job-search models using evidence on wage cuts after job-to-job transitions and shows that measurement error alone cannot explain the observed pattern.