Research

Work in progress

In-house hiring versus staffing agencies (with Ann-Sofie Kolm, Per Krusell)
Nowadays, many producing firms do not hire workers, but rent them from ``staffing agencies'', whose main activity is to find, employ, and rent out workers. Thus, producing firms do not bear the direct costs of search. We employ search-matching theory to analyze this phenomenon. We find, first, that if producing firms have decreasing returns to scale, a pure staffing arrangement delivers lower employment and lower wages than a pure in-house hiring arrangement. Second, and most importantly, in a market equilibrium where producing firms can choose between hiring workers and renting staffers, the unique outcome is one where in-house hiring is not used. Intuitively, under decreasing returns, in-house workers' threat to leave is powerful, and committing to staffers limits this power. Our paper almost explains the staffing phenomenon too well: it leaves unanswered why not all hiring occurs this way.

Identity capital and wealth accumulation (with Per Krusell, Fredrik Paues)
We develop a theory of identity capital. Identity is built up around a  ``life project'' that can take many forms and in which individuals invest time and/or money; identity capital is a stock measure capturing these investments. In this paper, we focus on the life project of building a firm and its possible relevance for (i) the high propensity to save of rich entrepreneurs, and (ii) the rise of risky portfolio shares in wealth. To this end, we introduce identity capital into a dynamic consumption-savings model with uninsurable idiosyncratic risk. The key model feature is a utility asymmetry: we assume that decumulating, or losing, identity leads to a utility loss, while building it up renders no utility gain. We find that identity management makes individuals reluctant to downsize when the firm's financial prospects are weak as well as to invest when they are strong.  The model also implies that, at least in parts of the wealth-identity space, the risky portfolio share increases in wealth, a result that is hard to obtain in standard models with constant relative risk aversion.

Two-tier wage bargaining in a frictional labor market

Firm production, markups and misallocation (with Timo Boppart)