Sergio Ocampo

I am an Economics Ph.D. student at the University of Minnesota. My research interests are macroeconomic theory and heterogeneous agent macroeconomics. I will be visiting the University of Oslo during the Fall semester of 2019 before joining the economics department at the University of Western Ontario.

On the teaching tab you will find the syllabi of the courses I have taught, as well as additional materials for the math camp and stochastic calculus courses.

Link to my CV


Twitter: @socampdi

My Ideas page:

Job Market Paper

I develop an assignment model of occupations with multidimensional heterogeneity in production tasks and worker skills. Tasks are distributed continuously in the skill space, whereas workers have a discrete distribution with a finite number of types. Occupations arise as a bundle of tasks optimally assigned to a type of worker. The model allows us to study how occupations evolve—e.g., changes in their boundaries, wages, and employment—in response to changes in the economic environment, making it useful for analyzing the implications of automation, skill-biased technical change, offshoring, and skill upgrading by workers, among others. I characterize how the wages and marginal product of workers, the substitutability between worker types, and the labor share depend on the assignment. In particular, I show that these properties depend on the productivity of workers in tasks along the boundaries of their occupations. As an application, I study the rise in automation observed in recent decades. Automation is modeled as a choice of the optimal size and location of a mass of identical robots in the task space. The firm trades off the cost of the robots, which varies across the space, against the benefit of reducing the mismatch between tasks’ skill requirements and workers’ skills. The model rationalizes observed trends in automation and delivers implications for changes in wage inequality, unemployment, and the labor share.

Research Papers

Use it or lose it: Efficiency gains from wealth taxation, With Fatih Guvenen, Gueorgui Kambourov, Burhan Kuruscu and Daphne Chen (preliminary draft)

This paper studies the quantitative implications of wealth taxation (tax on the stock of wealth) as opposed to capital income taxation (tax on the income flow from capital) in an overlapping-generations incomplete-markets model with rate of return heterogeneity across individuals. With such heterogeneity, capital income and wealth taxes have opposite implications for efficiency and some key distributional outcomes. Under capital income taxation, entrepreneurs who are more productive, and therefore generate more income, pay higher taxes. Under wealth taxation, on the other hand, entrepreneurs who have similar wealth levels pay similar taxes regardless of their productivity, which expands the base and shifts the tax burden toward unproductive entrepreneurs. This reallocation increases aggregate productivity and output. In the simulated model calibrated to the U.S. data, a revenue-neutral tax reform that replaces capital income tax with a wealth tax raises welfare by about 8% in consumption-equivalent terms. Moving on to optimal taxation, the optimal wealth tax is positive, yields even larger welfare gains than the tax reform, and is preferable to optimal capital income taxes. Interestingly, optimal wealth taxes result in more even consumption and leisure distributions (despite the wealth distribution becoming more dispersed), which is the opposite of what optimal capital income taxes imply. Consequently, wealth taxes can yield both efficiency and distributional gains.

The macroeconomics of self-employment: Occupations of last resort, With Juan Herreño

We document three facts about self-employment in developing economies. First, self-employment is prevalent in the left tail of the income distribution. Second, transitions in-and-out of self-employment are common, with liquidity-constrained agents transitioning more to self-employment. Finally, when salaried work opportunities emerge, self-employment rates go down. Models that predict positive selection into self-employment are at odds with these facts. We augment a workhorse macro-development model with a mechanism supported by the data, generated by interacting unemployment risk and credit frictions. Low wealth, unemployed agents choose self-employment to earn subsistence income, regardless of their entrepreneurial ability. Low job-finding rates from self-employment make subsistence entrepreneurs stay self-employed. As a result, large shares of the labor force own low-productive businesses. Improving the generosity of safety nets in the model increases welfare by 2%. Also, self-employment goes down, salaried work goes up, the unemployment rate rises.

Robust contracts in common agency games, With Keler Marku - Online appendix

We consider a game between several principals and a common agent, where principals design contracts that are robust to misspecification of the agent's technology. The principals know a subset of the actions available to the agent, but other unknown actions could exist. Principals demand robustness and evaluate contracts on the worst-case performance over all possible actions of the agent. We show that a pure strategy equilibrium always exists, by constructing a pseudo-potential for the game. Equilibrium contracts are linear in total output and imply that all players (the principals and the agent) receive a share of total output. The higher the share of total output accruing to the agent, the more efficient the outcome of the game. We also consider a game where principals collude and offer a joint contract. The efficiency of the competitive outcome relative to collusion depends crucially on the ability of principals to offer side-payments to one another through the agent. Lastly, we consider an application of the model to the taxation of multinational firms and study the effects of tax competition among countries. We show that a flat tax on domestic and foreign profits with a full deduction of foreign taxes provides the best worst-case guarantee for each country.