Current Research

Research in Progress

Skills, Migration, and Urban Amenities over the Life Cycle (January 2024), with David Albouy

• We examine sorting behavior across metropolitan areas by skill over individuals’ life cycles. We show that high-skill workers disproportionately sort into high-amenity areas, but do so relatively early in life. Workers of all skill levels tend to move towards lower-amenity areas during their thirties and forties. Consequently, individuals’ time use and expenditures on activities we identify as leisure on local amenities are U-shaped over the life cycle. This contrasts with well-documented life-cycle consumption profiles, which are hump-shaped and peak during middle age. We present evidence that the move towards lower-amenity (and lower-cost) metropolitan areas is driven by changes in the number of household children over the life cycle—individuals, particularly the college-educated, tend to move towards lower-amenity areas following the introduction of their first household child. We develop an equilibrium model of location choice, labor supply, and amenity consumption and introduce life-cycle shocks to household composition that affect consumption choices and required home production time. Key to the model is a complementarity between leisure time and local amenities, which we estimate to be greater than one. Ignoring this complementarity misses the dampening effect child rearing has on urban agglomeration. Since the value of local amenities is capitalized into housing prices, individuals will tend to move to lower-cost locations to avoid paying for a good they are not consuming.

The Shifting Reasons for Beveridge Curve Shifts, NBER Working Paper No. 31783 (October 2023), with Gadi Barlevy, Bart Hobijn, and Ayşegül Şahin

• We discuss how the relative importance of factors that contribute to movements of the U.S. Beveridge curve has changed from 1960 to 2023. We review these factors in the context of a simple flow analogy used to capture the main insights of search and matching theories of the labor market. Changes in inflow rates, related to demographics, accounted for Beveridge curve shifts between 1960 and 2000. A reduction in matching efficiency, that depressed unemployment outflows, shifted the curve outwards in the wake of the Great Recession. In contrast, the most recent shifts in the Beveridge curve appear driven by changes in the eagerness of workers to switch jobs. We argue that, while the Beveridge curve is a useful tool for relating unemployment and vacancies to inflation, the link between these labor market indicators and inflation depends on whether and why the Beveridge curve shifted. Therefore, a careful examination of the factors underlying movements in the Beveridge curve is essential for drawing policy conclusions from the joint behavior of unemployment and job openings.

Job Search and the Gender Wage Gap (October 2021) ,with Andreas Mueller and Ayşegül Şahin

• We use a unique new survey on job search behavior, job offers, and other labor market outcomes to examine the contributions of gender differences in the job search and job offer process on the gender wage gap. We find significant differences in the search behavior and job search outcomes between men and women. Women exert more search effort than men, on average, though are more targeted in their search and place a relatively higher value on non-wage aspects of a job, such as commute time and hours. Men fare better in job offers received, despite lower search effort, receiving job offers that pay 29 log points higher wages in jobs that offer more hours and greater benefits. Men are also much more likely to receive unsolicited job offers (i.e., offers that required no search effort) regardless of employment status. Many of these differences persist regardless of marital status or the presence of household children, though there are notable and expected gender differences for those who are married with young children. Incorporating these results into a model of labor search implies that men and women searching on the job have similar search effort yields (offers per unit of effort), but that there are considerable difference by age. Younger women fare considerably better than younger men in generating job offers while older women fare considerably worse than older men. Women tend to do better than men when searching while non-employed regardless of age. 

The Persistent Effects of World War II Manufacturing Investments on the Location of U.S. Economic Activity  (July 2020)

• During World War II, U.S. government war spending accounting for about one-third of GDP, with a sizable portion spent on investment in manufacturing plants and equipment. These investments occurred across nearly all industries and involved financing methods that ranged from large subsidies to private investment to the construction and leasing of government-owned plants. These investments also occurred across a broad geography that included both traditional manufacturing centers, newer and emerging cities, and rural areas. In this paper, I examine whether these investments had a persistent effect on the geographic dispersion of U.S. manufacturing employment. Specifically, I analyze two competing, though not mutually exclusive, hypotheses. First, did a disproportionate amount of World War II investments, either in response to labor shortages or for war-strategy reasons, occur outside of traditional manufacturing centers and contribute to the growth of the Sun Belt regions of the U.S. following the war? Alternatively, did a disproportionate amount of World War II investments, in order to take advantage of local agglomeration economies, occur within traditional manufacturing centers, and therefore contribute to the rise and subsequent decline of the U.S. Rust Belt region? I use establishment-level data on plant and equipment investments from the U.S. War Production Board, and match the data to county-industry employment estimates from County Business Patterns and Census of Manufacturers data. I exploit within-industry variation in World War II plant investments to estimate its causal impact on local manufacturing employment in the subsequent decades. Notably, I also exploit variation in the types of financing used for these investments, since financing with less of a government footprint tended to be for war investments that firms could easily retool to peacetime production. Preliminary evidence suggests that World War II plant investments disproportionately occurred in the traditional manufacturing centers of the Northeast and North Central U.S., though sizable investments occurred in larger cities outside of these cities, particularly later in the war.  Regardless of the investments’ location, they had significantly positive effects on subsequent manufacturing employment for decades after the end of the war. For many, but not all, of these plant investments, the effects turn negative by the 1980s. 

Older Working Papers

Revisiting the Role of Home Production in Life-Cycle Labor Supply (FRB Chicago Working Paper No. 2015-02, April 2015)

• This paper examines the role of home production in estimating life-cycle labor supply. I show that, consistent with previous studies, ignoring an individual’s time spent on home production when estimating the Frisch elasticity of labor supply biases its estimate downwards. I also show, however, that ignoring other ways a household can satisfy the demand for home production biases its estimate upwards. Changes in this demand over the life-cycle have an income effect on labor supply, but the effect can be mitigated through purchases in the market and through the home production of other household members. When accounting all factors related to home production, I find that the “micro” Frisch elasticity is about 0.4 and the “macro” Frisch elasticity, which accounts for extensive margin adjustments, is about 0.9. If I only account for an individual’s own home production effort, I find that the “macro” elasticity is about 1.6. 

Quits, Worker Recruitment, and Firm Growth: Theory and Evidence (January 2011), with Éva Nagypál

   Earlier version: FRB Philadelphia Working Paper No. 08-13 (June 2008)

• We present a model of labor market search that characterizes a firm's decision to replace a worker as a nontrivial choice that can result in contraction through attrition. We present evidence from establishment data suggesting that this is a quantitatively important part of employment dynamics. In the model, a convex cost of job creation allows for multi-worker firms and workers can search while employed. When a worker quits for a better offer, the presence of search frictions makes the decision to replace her depend on the idiosyncratic productivity of the firm. The model equilibrium generates firm decision thresholds for shutdown, quit replacement, and expansion. Establishment-level evidence from the Job Openings and Labor Turnover Survey (JOLTS) shows that quits and recruiting behavior vary strongly with establishment growth, and that there is a strong, positive relationship between quits, hiring, and vacancies. This occurs despite the fact that the quit rate declines with establishment growth and hiring and vacancy rates increase with growth. A micro simulation of our model illustrates that it can replicate the findings from the data.