Research

Research interests: Macroeconomics, Economic Development & Growth, Business Cycles, Population Aging, Labor & Demographic Economics, Applied Econometrics


Publications:


Working Papers & Work in Progress:

Abstract: We set up a real-business-cycle (RBC) model of a small open economy that is consistent with the main empirical facts of economic fluctuations in open economies. Open-economy RBC models lead to several counterfactual predictions including: an exaggerated variability of capital stock and investment, zero long-run consumption, and negative long-run assets. To avoid these irregularities, we extend the baseline RBC model with human capital, international credit constraints, and finite lifetimes. Specifically, the former two features work to slow down convergence and dampen business cycle movements, while the latter one is for producing a stable steady state for the model. Given its finite-lifetimes feature, our framework also allows us to study the effects of life expectancy on the cyclical volatilities of the aggregate variables within the context of a small open economy.  As a numerical exercise, we quantify how changes in life expectancy have impacted Canadian business cycle fluctuations over the past forty years. The fluctuations in physical capital, human capital,  and consumption are all found to decrease as life expectancy increases. On the other hand, the fluctuation of hours worked, output, and trade balance ratio are found to increase with life expectancy. 


Abstract: With its aging population, the U.S. federal government is facing significant increase in the costs of public pensions and health-care plans. In this paper, we construct a dynamic general equilibrium life cycle model with explicit residential asset choices to evaluate the macroeconomic effects and aggregate welfare implications of different social security reforms that can potentially be proposed to alleviate the increasing costs. Specifically, we consider the following policy experiments: (i) a permanent increase in social security contribution rate, (ii) a permanent decrease in pension benefits, and (iii) simultaneous eliminations of both the benefits and contributions.  The model economy is populated by heterogenous households with respect to age, income, and homeownership status. Most of the existing literature assumes inelastic labor supply by households and ignore leisure altogether. We hypothesize that each dollar you spent on residential capital provides more utility if you have more leisure time to spend at your home. Our objective is to highlight the potential complementarity between residential capital and leisure in a life cycle analysis of social security.   


Abstract: Using data from the Labor Force Survey (LFS) undertaken in each February of 2019-2021, this paper analyzes whether the first year of the COVID-19 pandemic has had differential impacts on the labor force participation and earnings of natives and immigrants in Canada. We document that, between 2020 and 2021, for both groups, employment absence, unemployment, and the fraction of people who are out of labor force all increased. However, the increase in unemployment is more pronounced for immigrants. Regarding hourly wages, during the first year of the pandemic, the average hourly wages increased for the both groups. Further, the difference-in-differences (DID) estimation results suggest that there is no evidence that hourly wages changed differently for the two groups due to the pandemic. Similarly, among immigrants, we find no evidence that COVID-19 affected hourly wages of immigrant employees who landed in Canada more than and less than 10 years ago differently.


Abstract: In this paper, using the waves 1-3—covering the period between May and June of 2020—survey data from the Canadian Mental Health Association (CMHA), we study the effect of COVID-19 on the reported mental health and well-being of Canadians. We observe that reported mental health is significantly lower among younger people, workers who lost their jobs due to the pandemic, less-educated workers, and women. We also document that pandemic-induced unemployment rate is higher for younger workers than for older workers and that the young were much more likely to be laid off during the pandemic. Lastly—based on difference-in-differences (DID) estimation method—we find no evidence that the impact of COVID-19 layoffs on the likelihood that an individual suffers from poor mental health and well-being differs across younger and older worker.


Community Engaged Scholarship: