Research

This paper develops a tractable quantitative framework for analyzing sectoral labor reallocation and unemployment. The framework features analytical sectoral wages, employment and unemployment dynamics, as well as aggregate unemployment, which allows fast model estimation from labor market transition data and convenient counterfactual exercises to quantify the impact of sectoral shocks and the relevant labor market institutions. In particular, the framework accommodates two important features of the data: (i) heterogeneous response of sectoral labor market dynamics to shocks; and (ii) persistent unemployment accompanied by persistently depressed wages  for the most unproductive sectors. I apply the framework to test the sectoral shifts hypothesis and find that a 1% increase in sectoral shock dispersion would raise aggregate unemployment by 0.55%. The result is consistent with the observation of slow employment recovery post recent recessions with job polarization. 

Using multiple uniquely rich high-frequency datasets from a major two-sided online platform in Hong Kong, we investigate the price setting behavior of sellers in online platform markets covering a wide range of products. We document similar levels of price stickiness to existing literature in both online and offline markets in various countries, but a larger differential between posted prices and regular prices that filter out temporary sales. We examine various empirical moments of price setting of interest to the literature, including the frequency and size (distribution) of price changes, synchronization rate of products within sellers, predictors of price stickiness and pricing policies of sellers. Many sellers engage in countercyclical pricing and price discrimination in response to high-frequency intraweek variation in demand from platform-level members-only consumer subsidies. However, they show muted responses to low-frequency surges in demand from fiscal stimuli and pandemic lockdowns. These empirical results provide valuable insights on the responsiveness of the economy to monetary and fiscal policies in a New Keynesian framew

We examine how workforce aging affects wage, employment, productivity and growth in the manufacturing versus service sectors in the United States. We find that regions with younger workforce tend to have higher manufacturing employment share, higher manufacturing wage premium, and higher job market transition rates for both manufacturing and service firms. To understand these phenomena, we use a rich set of firm, work and firm-worker-match level micro data from the U.S. Census Bureau to examine the impact of workforce aging on various measures of wage, employment and productivity at the firm level and find differential impact of aging across the manufacturing and service firms. We then build a multi-sector labor market model with search friction and comparative advantage of age groups in the two sectors to account for these empirical findings.

Digital platforms facilitate creative destruction by improving the matching efficiency between consumers and products. In this paper, we study this channel both empirically and theoretically. Using a comprehensive dataset from a dominant retail platform in Hong Kong, we find that the overall match quality between consumers and products on digital platforms rapidly increase at the beginning of the product life cycle and decays gradually overtime. New and better-quality products replace existing product slowly while platform algorithms affect the speed of the creative destruction. We write a model of consumer search where products differ in vertical quality and consumers differ in their horizontal match quality with the products. Consumers learn about their match quality with a product through repeated purchases. Algorithms affect the speed of learning and direct consumers to new products of better quality. The model rationalizes the product life cycle patterns of match quality and helps evaluate the effect of digital platforms on economic growth.

This paper provides new evidence on capital-skill complementarity from immigrant survey data. Given that immigration changes not human capital instantaneously, wage gain upon migration reflects the change in macroeconomic environment. In particular, the wage gain of a skilled immigrant relative to the capital price gap between her home and destination countries reflects the difference in capital supply relative to skill supply between the two countries. Similar relationship holds for unskilled labor. I exploit the relationships to test the hypothesis of capital-skill complementarity. I show that capital-skill complementarity has strong implication for growth accounting of human capital: although the consensus is that human capital contributes to growth, that magnitude is closely related with the degree of capital-skill complementarity and capital intensity thereof.