Research
Publications:
Inequality in an Equal Society (Joint with Jochen O. Mierau and James Rockey) Oxford Bulletin of Economics and Statistics, Vol. 86 (4): 871-904, August 2024
A society in which everybody of a given age has the same income will exhibit substantial income and wealth inequality. We use this idea to empirically quantify inter-cohort inequality - the share of observed inequality attributable to life-cycle profiles of income and wealth - using data on male earnings and household wealth. We document that recent increases in income and wealth inequality in the United States and other developed countries are larger than observed rates would suggest due to favourable demographics. That is, while demographic change played a substantial role in the dynamics of income and wealth inequality until 1990, the stark increase in inequality in the US and elsewhere ever since is despite not because of demographic change
Short version of the paper included in:
Working Papers:
Using UCAS MEM in Contextual Offers (with Stephanie Jong and Myles Smith) Revise and Resubmit
Contextual admissions schemes are commonly used across the United Kingdom (UK) for admission into higher education (HE) institutions. These schemes consider an applicant's background and circumstances alongside academic achievement to provide a fairer evaluation of progression into university. Several contextual factors have been considered by HE providers and evaluated in the literature. However, the use of University and Colleges Admissions Service (UCAS) Multiple Equality Measure (MEM), introduced in 2018, is yet to be rigorously evaluated in contextual admissions schemes. This study evaluates the use of UCAS MEM data for contextual admissions at one mid-sized UK institution. The introduction of contextual offers using UCAS MEM data reduced the likelihood that applicants declined their offer. Applicants were more likely to place the offer from the university as their insurance option. It is suggested that the contextual offer increased the appeal of the institution as a solid insurance option, with a marginal increase in probability of study at the institution. This suggests that caution is needed when implementing a contextual admissions policy based on UCAS MEM.
Wealth, Quits and Layoffs (Joint with Alex Clymo & Piotr Denderski)
Using worker-level panel data we document that current wealth predicts the probability that a worker transitions from employment to non-employment. We find a surprising U-shaped pattern: Low-wealth workers face higher probability than the median worker, but so do the high-wealth workers. This result is robust to a battery of controls and suggests that wealth feeds back into the income process, creating a novel interaction between wealth and income inequalities. We extend the standard incomplete markets model `a la Aiyagari-Bewley-Huggett to include search frictions and jobs with heterogeneous unemployment risk and show that it can replicate our findings because i) low wealth workers optimally accept higher risk jobs in order to leave unemployment faster, and ii) high wealth workers voluntarily quit to enjoy more leisure. Accounting for the non-trivial interactions between wealth and non-employment matters for the quantification of the precautionary savings motive, wealth distribution, and wealth mobility.
The Declining Fortunes of (most) American Workers (Joint with James Rockey)
While real US GDP per capita has increased around 80% since 1980, median incomes have remained roughly constant. This paper documents that: 1) This stagnation masks an important intergenerational decline — more recent generations have earned less than less recent ones. 2) This decline is largest amongst white males without college educations. But, we find evidence for similar declines amongst those with college educations. The decline is also sufficiently large to more than offset reductions in the racial and gender wage gaps. 3) Quantile regression estimates suggest that on average only women and non- Whites in the lowest quantiles have seen growth in real incomes, the majority have experienced real declines. 4) Exploiting state and industry variation in workforce composition we obtain race and gender-specific labor share estimates. These data suggest that intergenerational declines in the labor share can account for much of the decline in earnings. 5) We find some evidence that intergenerational reductions in the labor share are due to increased import competition, but no correlation with unionization.
Selected Work in Progress:
Differential Effects of Parents Income on the Wages of Sons and Daughters
There is a substantial body of literature which tries to estimate trends in intergenerational mobility. However, it fails to appropriately take into consideration non-random selection into employment, which is especially critical in the female labour market. As a consequence, the literature has omitted an important analysis in the trends in mobility of daughters. This paper reconciles these issues with partial identification methods to apply bounds to the distribution of earnings conditional on parent income. We use the labour market attachment of the mother as a novel IV to tighten the bounds the distribution of earnings. We find that there are substantial differences between parent income groups and changes over time by sons and daughters. We find college to be important for all groups, but particularly for daughters. In addition, evidence of converging wages between sons and daughters for all parent income types.
Understanding the Effectiveness of University Access Agreements
Global (Local) Inequality and Promotion Contests (with Sebastian Cortes Corrales)
Challenging Stereotypes in Economics (with Arun Advani and Sarah Smith) (AEARCTR-0010148)
Working whilst studying: an exploration of the drivers leading students to seek employment over the course of their degree (joint with Fabio Arico, Ritchie Woodard & Stephanie Jong)