Published Papers 

"IT Shields: Technology Adoption and Economic Resilience during the COVID-19 Pandemic",  joint with N. Pierri and Y. Timmer 

Labour Economics, Vol 81, 2023

Abstract: We study the labor market effects of information technology (IT) during the onset of the COVID-19 pandemic, using data on IT adoption covering almost three million establishments in the US. We find that in areas where firms had adopted more IT before the pandemic, the unemployment rate rose less in response to social distancing. IT shields all individuals, regardless of gender and race, except those with the lowest educational attainment. Instrumental variable estimates–leveraging historical routine employment share as a booster of IT adoption– confirm IT had a causal impact on fostering labor markets’ resilience. Additional evidence suggests this shielding effect is due to the easiness of working-from-home and to stronger creation of digital jobs in high IT areas.

"Did the Covid-19 Recession Increase the Demand for Digital Occupations in the United States? Evidence from Employment and Vacancies Data", joint with J. Soh, C. Pizzinelli, I. Shibata and M. Tavares 

 forthcoming at IMF Economic Review

Abstract: Did the Covid-19 recession increase demand for digital occupations in the US? Using O*NET to classify digital occupations, we find that regions hit harder by the Covid-19 recession experienced a larger increase in the share of digital occupations in both employment and vacancies. This result is driven, however, not by an absolute increase but by the smaller decline in the demand for digital workers. While digital workers, particularly those in urban areas and cognitive occupations, were more insulated during the pandemic, we did not observe a persistent shift in the demand for digital occupations.


Working Papers

"Migration, Search and Skill heterogeneity", IMF Working Paper No. 2023/136 (R&R at Journal of International Economics)

Abstract: Cross-border migration can act as an important adjustment mechanism to country-specific shocks. Yet, depending on who moves, it can have unintended consequences for business cycle stability. This paper argues that the skill composition of migration plays a critical role. When migration flows become more concentrated in skilled labour an important trade-off arises. On the one hand, migration releases unemployment pressures for the origin countries. On the other hand, it generates negative compositional effects (the so-called “brain drain” effects) and skill imbalances, which reduce supply capacity in origin countries. This paper analyses quantitatively the impact of cyclical migration in an open-economy DSGE model with endogenous migration flows, trade linkages, search and matching frictions, and skill heterogeneity. I apply this framework to the case of the Greek emigration wave following the European Debt Crisis. What I find is that emigration flows implied strong negative effects for capital formation, leading to a more than 15 percentage point drop in investment. Rather than stabilizing the Greek business cycle, labour mobility led to a deeper and more protracted recession.

"The Impact of Reduced Commuting on Labor Supply and Household Welfare: A Post-Pandemic Analysis", IMF  Working Paper No. 2024/094, joint with Y. Ji, C. Pizzinelli, I. Shibata and M. Tavares 

Abstract: This paper investigates the impact of working from home on labor supply and welfare, with a particular focus on the decline in commuting time identified by the American Time Use Survey. Using this data, we find that workers in teleworkable occupations experience a significant reduction in commuting time and subsequently increase their labor supply and leisure time. Specifically, these workers save an average of 2 hours of commuting time when comparing before and after the pandemic. To estimate the full welfare benefits of this decline, we develop a household model that accounts for the joint exposure of husband and wife to changes in commuting time. Our findings reveal that households, where at least one spouse benefits from the decline in commuting time experience welfare gains ranging from 1 to 4 percent of consumption equivalent, depending on the household composition. Our study sheds light on the potential welfare gains from working from home and emphasizes the importance of considering the joint impact of spouses when evaluating these benefits. Overall, our results provide valuable insights into the impact of working from home on labor supply and welfare, highlighting the significant benefits that can arise from the reduction in commuting time.

Work in progress

"Macroeconomic uncertainty: The role of endogenous job destruction"  

Abstract: COVID-19 and the subsequent crisis, which is promising to be the most severe crisis in our generation, has triggered an unprecedented increase in uncertainty and has highlighted the importance of understanding the mechanisms through which uncertainty affects the real economy. This paper explores the critical role that the labour market plays in the propagation of uncertainty shocks and focuses on the significance of the job destruction channel. To address this question, I build a DSGE model with search frictions in the labour market, price stickiness in the goods market and time-varying stochastic volatility, which I calibrate to match salient features of the US economy. I find that endogenous job separations can significantly amplify the reaction of the economy to uncertainty shocks. In a series of experiments with different monetary policy rules, I also find that the introduction of endogenous match separations can challenge the widely-held perception that uncertainty shocks behave like negative aggregate demand shocks, as the behaviour of inflation hinges on the Taylor rule specification.

 

"Endogenous producer entry, trade and uncertainty"  

Abstract:  In this paper, I examine the macroeconomic impact of uncertainty shocks on firm entry, trade and labor markets, through the lens of a small open economy model with endogenous producer entry and search frictions. I demonstrate that the precautionary savings behaviour of households propagates the uncertainty shocks through two mechanisms. The first one is the aggregate demand mechanism which is also at play in models with a fixed mass of producers. The second channel arises from the interplay of precautionary behaviour and endogenous producer entry. Precautionary savings from households lead to higher entry of relatively less productive non-trading firms, driving down aggregate productivity and creating inflationary pressures.