Publications

"Recent Changes in the Nature of the Distribution Dynamics of the United States County Incomes ," with Donggyun Shin, Journal of Applied Econometrics, 2023, 38(7),1048-1067.

Inflation and Wage Rigidity/Flexibility in the Short Run, with Donggyun Shin, Economic Inquiry, 2019, 57(3), 1675-1697.

Two Birds with One Stone: Female Labor Supply, Fertility, and Market Childcare, with Jisoo Hwang and Donggyun Shin, Journal of Economic Dynamics & Control, 2018, 90, 171-193.

A Structural Explanation of Recent Changes in Life-Cycle Labor Supply and Fertility Behavior of Married Women in the United States, European Economic Review, 2018, 102, 129-168.

The Extent and Nature of Downward Nominal Wage Flexibility: An Analysis of Longitudinal Worker/Establishment Data from Korea, with Donggyun Shin, Labour Economics, 2017, 67-86.

Returning School for Higher Returns, Economics of Education Review, 2011, 30(6), 1215-1228.

Are Initial Wage Losses of Inter-Sectoral Movers Compensated for by Their Subsequent Wage Gains? with Donggyun Shin and Kwanho Shin, Macroeconomic Dynamics, 2010, 14(4), 501-526.

New Evidence on the Korean Wage Curve, with Donggyun Shin, Applied Economics Letters, 2008, 15(3), 221-224.

Explaining Procyclical Male-Female Wage Gaps, with Donggyun Shin, Economics Letters, 2005, 88(2), 231-235.

Other Publications (in Korean)

Study on Income Volatility: Measurement, Causes and Policy Implications, with Yongseong Kim and Donggyun Shin, December 2015, Korea Development Institute (Book)

Effects of Substitutability between Mother's Childcare and Market Care Services on Life-Cycle Labor Supply and Fertility Behavior, with Nayoung Kim and Donggyun Shin, Journal of the Korea International Economic Association, 2015, 21(2), 55-91.

The Nature and Extent of Nominal and Real Wage Flexibility in Korea, with Donggyun Shin, Korean Journal of Labor Economics, 2014, 37(2), 1-47.

Trend and Cyclical Patterns of Earnings Volatility, with Jongsoon Yoo, Korean Journal of Labor Economics, 2013, 36(3), 65-96.

Working Papers

"Welfare Consequences of Rising Wage Risk in the United States: Self-Selection into Risky Jobs and Family Labor Supply Adjustment," with Donggyun Shin (Review of Economic Dynamics, R&R)

Wages in the United States have become more volatile since the early 1970s. This paper quantitatively demonstrates that the welfare cost caused by this change is substantially overstated when heterogeneity in individual risk preferences and workers’ risk choices are neglected. Family labor supply adjustments reduce the welfare cost and do so most effectively when borrowing and saving behavior is allowed. It is also found that wives increase their labor supply significantly in response to increases in the variance of husbands’ permanent wage shocks, and this ‘add-worker’ effect is mostly accounted for by wives’ labor supply adjustments on the extensive margin. 

"Cyclical Patterns of Inter-Industry Wage Gaps: An Old Stylized Fact and New Evidence," with Donggyun Shin.

Analyses of a special data sets constructed from the National Longitudinal Survey of Youth reveal that survey wages are countercyclically biased by their tendency to pertain to high-wage stable jobs and to be more countercyclically biased in high-wage industries than in low-wage industries. Our new evidence of average hourly earnings - which are based on all jobs help during a year - shows that real wages are much more procyclical in high-wage industries than in low-wage industries. Overall, the results do not support the predictions of non-competitive labor market theories for the cyclicality of real wages nor government’s expansionary policy as a way of helping workers in low-wage sectors. 

Work in Progress

"Job Choice as an Insurance Mechanism against Wage Uncertainty," with Donggyun Shin (Under revision)

Existing studies often emphasize the role of family labor supply adjustments as an effective self-insurance mechanism against permanent wage shocks. This paper uncovers another important but overlooked self-insurance mechanism a household uses against wage risk: Relocation from a job with higher risk (risky job) to a job with lower risk (safe job). The results show that households are able to mitigate the welfare cost of permanent wage shocks significantly by relocating their jobs, and this welfare-improving effect is almost as great as the effect of family labor supply adjustments. The significant job relocation effect involves a large volume of workers switching jobs from the risky to safe ones. In addition, a sizeable proportion of women who stay out of the labor force in the complete market tend to choose safe jobs instead of risky ones as wages become uncertain. The tendency of switching from the risky to safe job is stronger at the earlier stage of the life-cycle where variances of permanent wage shocks are particularly high in the risky job, and the level of asset accumulation is low.

Job Polarization and Recent Trend Reversal of Female Labor Supply in the United States: Maturity of IT-Investment and Changes in Gender-Biased Demand.

I provide a model-based quantitative explanation of two salient facts in the US labor market: The job polarization since the late 1980s (e.g., Autor et al., 2006) and the recent trend reversal of women’s aggregate labor supply around 2000 (e.g., Aaronson et al., 2006). I provide a joint explanation of these two seemingly unrelated facts by a combination of maturity of IT-related investment (Beaudry et al., 2016) and gender-biased demand shift (e.g., Heathcote et al., 2010). A two-sector (goods and services) general equilibrium model is adopted with each sector combining different tasks (cognitive, routine, and manual) differently. My working hypothesis is that a rapid growth in IT investment coupled with female-biased demand shift explains both job polarization (more rapid employment growth in jobs at the bottom and top relative to the middle of the skill distribution) and women’s fast employment growth until around 2000. With IT investment entering the maturing stage around 2000, the substitutability between cognitive and routine tasks further increased, which accelerated the replacement of routine jobs by cognitive jobs. This in turn works in the direction of making US jobs more polarized and employment decline at a faster rate from around 2000. Concurrently with the maturity of IT investment, the upward trend in female-biased demand shift slowed down around 2000, which also contributes to the recent decline of female labor supply. 

Are Workers More Risk Averse after Job Displacement? with Donggyun Shin

A recent literature questions the stability of risk preference (e.g., Schildberg-Horisch, 2018; Hanaoka et al., 2018). To this date, however, little research has been conducted to explain how individual risk preference changes following economic events experienced over the course of the life-cycle. Using individuals’ responses to hypothetical income gambling questions addressed by the National Longitudinal Survey of Youth 79 at different stages of the life-cycle, we examine whether and how the ‘exogenous’ experience of job displacement caused by plant closing affects the person’s risk preference in both the short and long runs. 

The Extent and Employment Consequences of Labor Cost Flexibility, with Donggyun Shin

Using an employer-worker linked longitudinal data set that contains information on all workers hired in an establishment, we investigate if establishments having relatively more rigid base wages tend to lay off more workers (or hire fewer workers); whether employers use adjustments of other components of labor cost as substitutes or complements to base wage adjustments; and whether utilization of these alternative margins of labor cost adjustment reduces the negative employment effect of base-wage rigidities. To avoid the potential problem associated with employers’ choosing wage freezes and employment cuts optimally, we exploit the source of wage rigidity generated by minimum wages.