Research

Working Papers:

Labor Push versus Comparative Advantage: Agricultural Productivity, Openness, and Structural Change (with Martin Fiszbein)

Agricultural productivity growth has two opposing effects on structural change. On the one hand, it increases income; given non-homothetic preferences, this pushes labor into non-agriculture. On the other hand, it shifts comparative advantage toward agriculture. The relative strength of these two forces depends on trade openness. We provide reduced-form evidence consistent with heterogeneous effects of agricultural productivity by levels of openness. Exploiting variation in agricultural productivity induced by the Green Revolution, we find that for over 15% of the countries in our sample there are negative effects of agricultural productivity on structural change. Moreover, due to increases in openness, this fraction increases over time. We develop an Eaton-Kortum model with non-homothetic preferences that features heterogeneous effects of agricultural productivity by levels of openness. We calibrate the model and show that it can explain a non-trivial portion of the observed changes in countries’ sectoral labor shares during the Green Revolution. We also calibrate the model for 1995 to analyze the effects of further increases in agricultural productivity, and find that such increases would have negative effects on structural change for over 35% of the countries in our sample.

Economic Growth and the Evolution of Comparative Advantage in a Network of Industries, Submitted.

Recent evidence suggests convergence in comparative advantage over time, a finding interpreted in the literature as inconsistent with the theory of learning-by-doing. In this paper I push against such an interpretation, using a quantitative model of trade and growth to show that learning-by-doing need not induce divergence in comparative advantage. Moreover, I provide empirical evidence consistent with occupational learning-by-doing, which partially diffuses across industries. Accordingly, the model features a network of inter-industry occupational learning diffusion, which is found to have quantitatively significant implications for the dynamics of comparative advantage and for aggregate growth.

Works in Progress:

Non-Homotheticity and the Cross-Country Migration of Manufacturing

The Gains from Industrial Diversification vs. Specialization: A Tale of Two Elasticities (with Ulrich Schetter)

Factor Endowments vs. Technology: A Quantitative Assessment (with Ulrich Schetter)