Research Interests : Macroeconomics, Labor Economics, Social Networks, Inequality, and Economic Theory

Papers

"Job Search Composition and Recruiting over the Business Cycle" [Paper] [Online Appendix] 

Abstract: Using the Current Population Survey over 2001--2023, I document that the share of active unemployed job seekers combining market and referral search rises during downturns, while the shares using either method alone fall. Greater referral participation therefore reflects broader search rather than greater reliance on referrals alone. I develop a quantitative search-and-matching model in which workers choose search methods and firms allocate recruiting effort across channels. In the model, weaker labor-market conditions lower search costs, including the additional cost of combining market and referral methods. This cost reduction supports a shift toward combined search and away from market-only search despite fewer employment opportunities, consistent with the observed pattern. To assess how workers' search responses affect unemployment and job finding, I compare the model with an economy in which unemployed workers' search probabilities remain fixed. Search adjustment lowers unemployment's standard deviation by 16\% under aggregate activity shocks alone. When independent referral-effectiveness shocks are also present, search adjustment raises this standard deviation by 65\%. At the assigned search-cost elasticity, search adjustment can therefore dampen or amplify unemployment fluctuations depending on the source of disturbances. The effect also depends on how strongly search costs respond to labor-market conditions: at a lower elasticity, search adjustment increases unemployment volatility even though more job seekers combine market and referral methods during downturns.

"Market vs Referral Hiring: Implications on Aggregate Welfare, Match Quality and Wage Inequality with Yun Pei (PDF)

Abstract: Empirical evidence from the Survey of Consumer Expectations (SCE) suggests that, in the U.S., between 2013 and 2021, on average, about 50% of workers were hired by a firm through employee referrals and the market channel during a given survey year. This paper builds and calibrates a deterministic Diamond-Mortensen-Pissarides (DMP) search and matching model to study what governs a firm’s optimal market and referral hiring decisions. At the calibrated steady state, we find that, relative to the market channel, the referral channel is more likely to produce a good match, is associated with a lower hiring cost, but also has a lower probability of a match. These trade-offs eventually imply that each channel is equally profitable to hire for a firm. Furthermore, the model is simulated to show that the market hiring rate decreases and the referral hiring rate increases with labor productivity, implying higher aggregate match quality and expected wage gap, favoring referred applicants. Regarding the policy implications of the model, higher unemployment benefits decrease vacancy postings, which in turn increase the unemployment rate, reduce market tightness, encourage market hiring, and discourage referral hiring.

Work in Progress

"A Dynamic Model of a Firm's Market and Referral Hiring"

"Optimal Unemployment Insurance and Firm's Market & Referral Hiring "