Research
Research
Working Papers
Skill Obsolescence and the Consequences of Job Loss (Job Market Paper)
Abstract: This paper studies how changes in occupational skill demand shape the consequences of job displacement. I combine NLSY79 work histories with vacancy-text measures of cognitive, manual, and interpersonal requirements to classify workers' pre-displacement exposure. Primary-skill exposure occurs when demand shifts away from the worker's strongest skill. High exposure captures broader reweighting across skill dimensions. Using cohort-specific difference-in-differences, I find large first-year earnings and employment losses for all groups but little medium-run employment heterogeneity. The main divergence is in pay. Highly exposed workers are re-employed at persistently lower hourly wages, whereas primary-skill-exposed and non-exposed workers show little wage scarring. These wage differences are not accompanied by more frequent switching, larger occupational moves, or differential wage observability. Primary-skill-exposed workers show improved worker-occupation match quality relative to non-exposed workers, whereas highly exposed workers show no detectable improvement. Broad skill reweighting therefore predicts persistent wage losses after job loss.
Economic Growth and Employment under Innovation Policies
Abstract: This paper studies the impact of innovation policies on productivity growth and unemployment when job matching is frictional. I build a DSGE model of Schumpeterian creative destruction with search-and-matching frictions, featuring two opposing channels: a capitalization effect that spurs vacancy creation and a creative-destruction effect that raises separations. Calibrated to U.S. data (2003–2019), the model evaluates three instruments—direct R&D wage subsidies, incremental R&D tax credits, and corporate profit-tax cuts. Stronger, targeted innovation support raises long-run TFP growth but increases equilibrium unemployment, revealing a transparent growth–unemployment trade-off. Doubling direct subsidies lifts TFP growth by 0.04 percentage points and delivers a 1.5% consumption-equivalent welfare gain; doubling tax credits yields smaller growth and welfare effects but superior cost-effectiveness per fiscal dollar. Broad corporate tax cuts reduce effective R&D incentives, lowering growth and welfare despite slightly lower unemployment.
Worker-Level Exposure to Within-Occupation Skill Obsolescence
Abstract: This paper introduces a worker-level measure of exposure to within-occupation skill obsolescence and uses it to examine how workers' wages and occupational mobility are associated with changing occupational skill demand. The measure combines monthly NLSY79 work histories from 1978 to 2000 with vacancy-text-based measures of occupational skill demand, allowing workers in the same occupation to differ in exposure depending on their baseline cognitive, manual, and interpersonal skill endowments. I distinguish between primary-skill exposure, where the worker's strongest skill becomes less central while other skill dimensions gain importance, and high exposure, where multiple skill dimensions decline in relative importance within the occupation. High exposure is associated with approximately 2 percent lower hourly wages and a higher probability of subsequent occupational switching, while primary-skill exposure is not systematically associated with either outcome. Conditional on switching, high-exposure and primary-exposure workers exhibit smaller wage losses than non-exposed switchers, consistent with selective reallocation. The findings indicate that the breadth of within-occupation skill-demand change, rather than the decline of any single skill dimension, is the relevant margin for understanding worker adjustment to technological change.