Dynamic Monopoly in the Rental Market: Evidence from New York City Housing (R&R at Journal of Urban Economics)
Housing affordability remains a pressing policy challenge. Addressing it effectively requires understanding the rental market structure: if landlords possess substantial market power, policies that counteract it may be socially beneficial. This paper introduces a new technique to measure the elasticity of the demand curve that individual landlords face - the residual demand. This elasticity measures landlords’ market power: the less elastic, the greater their pricing power. Drawing on methods from labor economics, I show that this residual demand elasticity can be decomposed into move-in and moveout elasticities. Furthermore, I provide the first estimates of these move-in and move-out elasticities. Using Craigslist vacancy data, I find that a 10% increase in rent leads to a 1.2-2.6% decrease in move-in rates, and using American Housing Survey tenancy data, I estimate that a similar increase in rent leads to a 2.5-3.4% increase in move-out rates. Taken together, these estimates suggest a very low residual demand elasticity and provide evidence of substantial landlord market power in New York City.
Employee Ownership and Worker Outcomes: Evidence from ESOPs, with David I. Levine and Jongook Kim (R&R at ILR Review)
This paper studies the effects of Employee Stock Ownership Plans (ESOPs) on worker attitudes and perceptions using data from the General Social Survey and the National ESOP Employee Survey. Employing double machine learning techniques to address endogeneity concerns, we find limited evidence that ESOP membership affects worker attitudes and perceptions. Most estimated effects are small in magnitude and not statistically significant after adjusting for multiple comparisons. While descriptive comparisons show that ESOP workers report more favorable workplace outcomes than non-ESOP workers, our analysis indicates that these differences are largely explained by observable characteristics of ESOP workers and firms rather than by ESOP membership itself. Our findings contribute to the literature by providing evidence that the apparent positive association between ESOP membership and job quality may be attributed to confounders.
Who Raises their Voice? New Evidence on Labor Standards Compliance and the Complaints They Generate, with Daniel Schneider and David Weil
Labor standards violations undermine job quality. However, evidence on violation rates and worker complaint behavior remains limited: inspection administrative data poorly covers violations when workers do not complain, and survey data does not cover a range of violations. We address this gap using the Shift Survey, surveying retail and food service workers about wage and hour violations and complaint behavior. Our data indicates violations are prevalent, affecting 38% of workers, with 31% experiencing serious violations such as minimum wage, overtime pay, and improper timekeeping. Despite this prevalence, workers rarely complain: only 26.5% of those experiencing violations make a complaint, and just 1.4% report to enforcement agencies. We further find that complaints are a poor signal of violations, and that unionization is associated with an eight-times higher complaint rates to enforcers. These results suggest enforcement should rely less on complaints and that policies supporting unionization improve complaint accuracy in signaling underlying violations.
Disarray at the headquarters: Economists and Central bankers tested by the subprime and the COVID recessions, with Francisco Louçã and Alexandre Abreu, Industrial and Corporate Change, Volume 30, Issue 2, April 2021 (Guest Editors: Giovanni Dosi and Joseph E. Stiglitz)
The article explores the discussions among economic modelers and central banks research staff and decision makers, namely on the adequacy of unconventional monetary policy and fiscal expansionary measures after the subprime crisis and as the COVID recession is developing. First, the article investigates the arguments, models and policy proposals of several mainstream schools of economics that challenged the traditional Chicagoan orthodoxy based on Milton Friedman’s views, and developed the Lucas Critique, the New Classical synthesis and Real Business Cycle approach that replaced monetarism as the main rivals to old-time Keynesianism. Second, the transformation of Real Business Cycle models into Dynamic Stochastic General Equilibrium (DSGE) models is mapped, as it extended the ideas of the iniquity of government intervention and unified academic and central bank research. Yet, a battery of criticism was levied against the DSGE models and, as the debate emerged over quantitative easing and other tools of unconventional monetary policy, the need for policy pragmatism shattered the previous consensus. The article then proceeds to discuss how the leading mainstream academic economists reacted to changes in central banks‘ practices, noticing a visible dissonance within Chicago-school and DSGE economists, as well as major contortions of central bankers in order to justify their new postures. The article concludes with a call for an extensive menu of fiscal, industrial and innovation policies in order to respond to recessions and structural crises.
Franchising Job Quality Gap with Daniel Schneider and David Weil
Regulating platform work: Evidence from the Iberian Peninsula, with João Narciso
Revisiting the Effects of the 1994 San Francisco Rent Control, with Anders Fremstad and Mark Paul