I am a postdoc at the University of CHicago and a researcher at Statistics Norway.
Unemployment Insurance and Worker Reallocation. (Revise & Resubmit, American Economic Review)
with Michael Simmons.
Abstract: Does Unemployment Insurance affect how employed workers search for new jobs? We provide novel evidence by combining administrative data on the universe of Norwegian workers and firms with a regression kink design. A marginal increase in benefits lowers job-to-job transitions, increases unemployment incidence, and lowers future earnings. These effects are stronger for workers with higher predicted unemployment risk and align with job search models where workers systematically move towards safer jobs. In an equilibrium job search model calibrated to match these empirical effects, employed workers’ responses account for 45 percent of the net fiscal costs of a marginal benefit expansion.
Presentations: Nordic Summer Symposium in Macroeconomics (August 2022), Society of Labor Economics (SOLE) May 2023, EEA-ESEM (August 2024)
Transaction Sequencing and House Price Pressures. (Revise & Resubmit, Management Science)
With Plamen Nenov, Espen Moen and Artashes Karapetyan.
Abstract: We use a unique data set of individual transaction histories from Norway to show that temporary shocks to the buyer-to-seller ratio (or market tightness) caused by the transaction sequence decisions of moving homeowners – whether to buy first and then sell or vice versa – impact house prices. Using a novel shift-share IV design motivated by a simple theoretical model, we estimate that a 1 percentage point increase in the aggregate buy-first share causes house prices to increase by around 0.5 percent, time-to-sell to decrease by around 5 percent, and market tightness to increase by around 12 percent more in a local housing market that has a one standard deviation higher share of locally moving owners. Our empirical strategy allows us to estimate an elasticity of price to market tightness of around 0.1 and an elasticity of matching with respect to buyers of 0.6.
Make it or break it: Corporate Bankruptcy and Management Careers.
with Andreas Kostøl and Kasper Roszbach.
Abstract: The extent to which a corporate bankruptcy can shift the career trajectory of managers has important implications for high-skilled labor markets but has proven difficult to measure. By combining an instrumental variable approach with the random assignment of judges who differ in their propensity to liquidate firms, this paper offers novel evidence for small and medium-sized business CEOs’ careers. We show that these CEOs, when displaced in bankruptcy, are 30 pp less likely to remain in the executive labor market, experience a temporary fall in labor earnings, and a persistent, near elimination of capital income. However, displaced CEOs are quickly re-employed and move to better-paying firms, although often in lower-ranked positions. Taken together, our evidence shows that CEOs can make or break their careers due to bankruptcy events that are outside their control. We explore heterogeneity in effects and find that bankruptcy is most detrimental for longer-tenured CEOs and when a case is petitioned during times at which bankruptcy rates are low. Our findings are consistent with models of firm-specific human capital and statistical discrimination, where the labor market uses bankruptcy as a (negative) signal of managerial ability.
Layoff Costs and Learning About Employer Financial Distress.
with Andreas Kostøl and Matthew C. Merkle.
Abstract: While many employees risk losing their job and having their career disrupted due to employers’ financial distress, it is widely recognized that many leave their employer in anticipation of layoff. In this paper, we assess how employee costs of financial distress depend on employees learning and acting on future layoff risk. To this end, we use random assignment of bankruptcy judges as an instrument for employer shutdown and administrative data on petition and quit dates to examine how earnings costs are shaped by employee reallocation. We show that shutdown causes a 24% fall in earnings over a five-year period despite one-quarter of employees having already left their firm. We document substantial heterogeneity in reallocation and earnings losses, typically displaying an inverse relationship, with higher reallocation in strong labor markets and from high-wage firms. The reallocation attenuates earnings losses by about 50%, approximately equal to the insurance from taxes and transfers. To assess the value of information, we estimate a model where risk-averse workers learn about distress, search for jobs, and access public insurance. Using the model, we calculate that employees’ willingness to pay for their current job increases by 14% when the firm is liquidated without any advance information. Our findings suggest that making firms’ financial risk information more accessible to employees can yield important benefits.
Green Waste: (Mis)allocation of Green Investment Subsidies.
with Ingvil Gaarder, Magne Mogstad and Tom Meling.
Abstract: We test for and measure misallocation of public subsidies for green investment projects in private firms. The context of our study is a major green investment subsidy program in Norway over the period 2012-2022. Combining a model of optimal subsidy allocation with detailed data on project-level carbon emissions and subsidy amounts for both marginal and inframarginal investment projects, we find that policymakers could have achieved the same level of carbon emission reductions for 42\% less expenditure. Leveraging unique data on both ex-ante expected and ex-post realized carbon emission reductions for each project, we isolate two distinct sources of misallocation: Prediction errors and intentional over-allocation to specific, favored green technologies and sectors. Finally, we show that relying on average, as opposed to marginal, returns when testing for and measuring misallocation introduces substantial bias.