WORKING PAPERS
Wealth and the Geography of Job Ladders [Job Market Paper]
Workers’ wealth shapes career dynamics by influencing job search and migration decisions. While economic opportunities concentrate in large cities, high living costs often prevent many workers from taking advantage of them. I develop a framework where wealth interacts with spatial search frictions to explain why some individuals remain stuck in low-paying jobs at the bottom of the ladder while others climb to the top. High living costs in productive cities amplify the trade-off between wages and unemployment risk, strengthening precautionary motives that lead low-wealth workers to accept lower-paying jobs. Using French administrative data, I document two facts that highlight the role of wealth. First, the spatial job ladder is steeper for low-wealth workers. Second, financial constraints limit upward mobility by reducing access to high-wage jobs in productive cities. Altogether, the calibrated model accounts for about one-third of the residual wage inequality observed in the data, of which roughly two-thirds is due to local job ladder heterogeneity. Relaxing borrowing constraints increases the share of low-wealth workers in the most productive cities by around 30%. Finally, place-based policies that improve insurance against unemployment risk in high-productivity cities raise welfare by enabling financially constrained workers to access steeper job ladders.
Presented at: EEA Congress 2025; XXVIII Vigo Workshop on Dynamic Macroeconomics (2025); 13th Warwick Economics PhD conference (2025)
Financial Market Participation and Earnings Risk (joint with Alberto Pobbe)
We study the role of earnings risk in shaping participation in financial markets. We document two facts, using data from Italy and the U.S., which serve to motivate our analysis. First, participation in financial markets has declined since the 1990s. Second, the variance of the persistent component of labor income has almost doubled over the same period. Using a life-cycle portfolio choice model with uninsurable labor income, borrowing constraints, and participation costs, we show that an increase in the persistent earnings risk reduces participation in the financial market. Meanwhile, an increase in the transitory risk has no effect. The effect of a higher persistent risk is weaker for younger workers, as they have a stronger incentive to accumulate wealth, and whenever they can afford it, they will prefer to participate.
Presented at: SAEe 2024
WORK IN PROGRESS
Technological Change and Within-Occupation Inequality (joint with Alberto Pobbe)
This paper studies how technological change shapes within-occupation wage dynamics. Using matched employer–employee data from France, we document new evidence on within-occupation inequality. Residual wage dispersion among abstract occupations has declined since the 1990s, driven primarily by falling wages at the top of the distribution. This decline is larger in local labor markets with a smaller share of abstract jobs. Over the same period, the employment share of abstract occupations has increased, especially in large cities, fueled by within-firm reallocation and net entry of firms. To rationalize these patterns, we develop a spatial model of firms’ competition for workers across cities and occupations. Routine labor and capital are substitutes, so a decline in the cost of capital reallocates employment toward abstract jobs and changes the intensity of local competition for workers. Equilibrium wages depend on firms’ competition for scarce workers, making wage dispersion within occupations endogenous to local labor market tightness and technological choice.