Research

Working Papers

• The Effects of Labor Market Integration: Evidence from Germany’s High-Speed Rail

• Labor Market Concentration and Wages in China, with Hongbo Cai, Chien-Liang Chen, and Carl Lin

A growing literature has emphasized the existence of labor market monopsony power stemming from employer concentration within local labor markets, which deviates from the conventional view of labor markets as perfectly competitive. We use firm-level data from the Chinese Annual Survey of Industrial Firms (CASIF) to analyze how employer concentration affects wage behavior. We first verify that local employment concentrations decrease between 1998 and 2007, coinciding with China joining the WTO in 2001. Then we show a negative relationship between labor market concentration and wages. We also provide empirical support for a monopsony explanation of the lack of negative employment effects of minimum wage policies in China, by showing more concentrated labor markets experience less negative minimum wage-induced employment changes.

• The Labor Market Effects of Immigration Enforcement: Evidence from the 2007 Legal Arizona Workers Act (LAWA)

Based on the evidence that LAWA has significantly reduced the proportion of the Hispanic noncitizen population in Arizona, this paper explores the labor market effects of LAWA with a focus on changes in the composition of the labor force and industry heterogeneity. I first show that a synthetic control has similar concurrent economic trends with Arizona, and verify that changes in employee composition are due to the replacement of Hispanic noncitizen workers by workers of other subgroups, especially the non-Hispanic whites and the low-educated of other subgroups. In response to LAWA, firms tend to reduce both the new hire rate and the separation rate. Several robustness checks are conducted to test the accuracy of the estimates and several mechanisms are considered that may drive the results.

Work in Progress

• Trade Liberalization with Imperfect Labor Markets in China