Publications
A Retrospective Analysis of the Acquisition of Target's Pharmacy Business by CVS Health: Labor Market Perspective (with Enas Farag, Chris Compton, Anna Stansbury, Marshall Steinbaum) - accepted at The Review of Economics and Statistics
We analyze the labor market impact of CVS Health’s acquisition of Target’s pharmacy business in December 2015 using Lightcast job postings data. Using difference in- differences and triple-difference designs, we find meaningful negative effects of the merger on posted pay. In our preferred specification, we estimate that the acquisition reduced posted pay in affected labor markets by 2.9%. We test for heterogeneous merger effects by occupational characteristics, finding that the merger caused pay to fall by more in lower-paid occupations than in higher-paid occupations.
Working Papers
The Effect of Large Firm Entry on Local Skill Demand and Wage Distribution (with Layla O'Kane)
Big firms matter in big ways. They are high-wage employers, valuable invention producers, and early technology adopters. They matter so much that local governments spend $47 billion annually trying to attract and appease them in the name of job creation and future industrialization. And while there is empirical evidence supporting employment gains, there is little to no evidence exploring intensive margin effects like subsequent skill and technology adoption by other employers in the market. This project fills this gap in the literature by evaluating the spillover effects of large firms’ entry on local labor markets' wage distribution and skill demand. Using Lightcast vacancy data in a difference and difference event study model, we compare change in posted wages and skill demand in counties where a million-dollar establishment opened to counties of runner-up sites the firm was considering. Findings so far suggest that the entry of million-dollar establishments significantly shifts the hourly wage distributions downward and have a negative albeit insignificant effect on number of postings. They further prompt local firms to relax their demand for college degrees, such that we see a significant increase in high school degrees as the minimum education listed for many jobs. This downskilling in education is not counterbalanced with an increase in firms' demand for computer, cognitive, or social skills.
Hospital Mergers, Health Provider Concentration and Medical Debt (with Sergio Pinto, Marshall Steinbaum and Justin Wiltshire)
We leverage consumer credit panel data covering 2011–2019 to examine how hospital consolidation impacts individual medical debt. In our preferred event study specifications, exposure to hospital mergers causes significant increases in the likelihood of having medical debt in collections, the flow of new debt generated over the previous twelve months, and the total outstanding stock. These effects amplify over time: five years after treatment, the effects on our outcomes of interest range from 11% to 20%. We also find evidence that additional balances are carried on credit cards. In a placebo test, we find no effect of merger exposure on analogous outcomes for non-medical debt in collections. Using comprehensive county-level healthcare spending and utilization data from the Institute for Health Metrics and Evaluation’s Disease Expenditure Project (ultimately sourced to insurance claims), we investigate the mechanisms underlying these effects. We identify three complementary channels: hospital mergers raise the price of commercially insured care, expand the set of healthcare encounters for which
patients bear out-of-pocket financial responsibility, and shift the local payer mix away from Medicare and toward commercial insurance. Together, these channels increase both the cost and the breadth of patients’ financial exposure to healthcare.
The Effect of Labor Market Tightness on Recruitment Levers: Evidence from US Employers during Covid-19 (with Alessandro Caiumi) - submitted.
How do employers’ recruitment strategies adapt to labor shortages? Do they relax their skill requirements to draw from a potentially larger pool of candidates, or do they raise wages offered to price out competitors? This paper uses the unexpected and heterogeneous impact of Covid19 across industries to estimate the elasticity of employers’ posted wages and skill demand to labor market tightness. Taking advantage of the granularity of online job postings data, we propose a precise measure of local labor market tightness whose variation relies on an industry-based shift-share IV approach. We find that, during the pandemic years, tightness caused a statistically significant decline in the likelihood of employers listing education and experience requirements on job ads, but conditional on posting, they increased the levels listed. There is evidence of complementarity in recruiting levers for low-wage, low-skill jobs particularly exposed to tightness, where years of education and experience required by employers are constrained by a lower bound. For these positions, tightness also led to a statistically significant increase in advertised salaries, a response that contributed to the reduction in wage inequality observed in post-pandemic US labor markets.
Work in Progress
Catholic Hospital System Acquisitions and Reproductive Healthcare Access (with Sergio Pinto, Emma Reinsch, Marshall Steinbaum and Justin Wiltshire)
The Impact of International Students on Canadian Labour and Housing Markets (with Wifag Adnan, Jason Hicks, Justin Wiltshire and Fengyi Zhang)