Research

Job Market Paper

"Estimating Spatial Heterogeneity in the Labor Market Effects of Place-Based Business Incentive Deals"

Abstract: "This paper uses comprehensive and hand-collected microdata on business tax incentive deals – one of the most common forms of place-based economic policy in the United States – to provide the first evidence of how the labor market effects of these deals differ within county by proximity to the incentivized firms’ facilities. I use a novel nested matching algorithm that combines advantages of propensity score matching and covariate matching to identify untreated census tracts that are systematically similar to the tracts surrounding large incentive deals. I find that seven years after the incentive deals, the share of the population with college degrees and the median incomes in tracts closest to the deals increase by 4.54% and 2.92%, respectively. Effects on share college-educated and income, however, are negative for the tracts that are further from the deals. These divergent effects on share college-educated and income are primarily driven by incentive deals for non-manufacturing facilities and expansions of existing facilities. Additionally, effects on population are very negative, with the tracts nearest to the deals experiencing population declines of 14.46% seven years after the deals. Population effects are especially negative for manufacturing deals and deals that are targeting firms to build brand new facilities. Together, these results indicate that incentive deals for large facilities induce people to move away, particularly when the subsidized facility is new or a manufacturing plant. Deals subsidizing existing, non-manufacturing facilities draw in college-educated workers at the expense of lower-educated incumbent residents who leave the area, with areas further from the deals facing decreased incomes as a result."

Publications

"Effects of Emigration on Labor Markets in Migrant Origin Areas: Evidence from Internal Migration in Indonesia" with Marieke Kleemans

Forthcoming in the Journal of Development Economics

Abstract: "We study the effects of internal migration in Indonesia on labor market outcomes of non-migrants in origin areas. To address endogeneity of the decision to migrate, we instrument emigration rates with shift-share labor demand shocks in destination areas interacted with historical migration patterns. Using detailed longitudinal data from over 36,000 individuals, whom we observe over a 27-year period, we find that a one percentage point increase in the emigration rate leads to a 3.42% increase in hourly income for those who stay in origin areas. Given the high degree of informality in Indonesia, we then look separately at effects for formal- and informal-sector workers. In line with a dual-sector labor market model, we find that employment effects are concentrated in the formal sector and income effects are most pronounced in the informal sector. Even though emigrants tend to be higher-educated, lower-educated non-migrants benefit the most as they switch to formal sector work and benefit from higher earnings in the informal sector."

Works in Progress

"Workplace Racial Segregation and Wages" with David Albouy

We examine racial segregation in the places people work compared to in the places they reside, and we find that workplace “neighborhoods” are less segregated than residential areas. Given the endogeneity of work area segregation, we employ a shift-share instrumental variable approach using local occupation shares and national average racial compositions in those occupations to predict local racial segregation. Our preliminary analyses show that racial wage gaps are more correlated with work area segregation than residential segregation, and work area racial segregation seems to be a salient factor in explaining wage gaps.