publications

working papers

  • Mid-Worklife Crisis (with Nicolas Jacquet and Serene Tan)

    This paper studies the labor market experience of male, college educated workers in the US. We document two new empirical facts: (i) unemployment rate for college graduates is U-shaped - it falls until middle age and then increases, whereas the unemployment rate of workers with less than a college degree decreases monotonically with age; and (ii) this U-shaped unemployment rate for college graduates has become more pronounced over time. We build a life-cycle search model of the labor market for college graduates with one novel feature: workers can both gain and lose skills while employed. We calibrate our model using CPS and NLSY79 data. Our model replicates key life cycle patterns, and reveals that a combination of skill gains and losses for college graduates while employed, both of which decline with age, can drive rising unemployment rates from middle age on, and changes in these shocks can match the more pronounced U-shaped unemployment rate over time. Our paper predicts that college graduates with the highest human capital levels at age 30 have a roughly 10% probability of falling to the lowest human capital levels by age 55. Two effects make older workers less attractive to firms as they have: (i) fewer years left to work; and (ii) smaller potential upside through lower skill gain shocks. We conduct two other counterfactuals; the first teases out the importance of these two effects. Our model predicts that raising retirement age from 60 to 70 reduces unemployment rate of old college graduates by 14%.

  • Declining Job-to-Job Transitions and Wage Dynamics, with Ismail Baydur

    This paper examines how declining job mobility affects young workers’ wages by developing a job ladder model with learning-by-doing and firm heterogeneity in productivity, separation risk, and learning environment. The model is estimated separately on the National Longitudinal Survey of Youth 1979 and 1997. Our results suggest that shifts in search frictions and reallocation shocks explain most of the drop in job mobility. Counterfactual exercises indicate that these changes have led to higher starting wages due to workers beginning their career higher on the ladder, slower wage growth, and ultimately, slightly higher wages after 20 years of potential experience.

  • Uncertainty, Learning, and the Unemployment-Education Gap over the Life Cycle, with Jie Duan

    Revise and Resubmit, The Economic Journal

    We propose that college graduates enter the labor market with less uncertainty regarding which career they are most productive in, and study how this characteristic contributes to the unemployment-education gap. We document several novel facts to support our hypothesis. Notably, college graduates predict their occupation more accurately than those without a college degree. We then develop and calibrate a life cycle search model featuring differences in uncertainty by education and learning about one's best career fit. Our quantitative analysis suggests large disparities in uncertainty by education, and that such differences can explain a sizeable portion of the unemployment-education gap.

  • Inflation, Skill Loss During Unemployment, and TFP in the Long Run, with Fan Liang and Bessy Liao

    We develop a search model with frictional goods and labor markets to study the long run relationship between inflation, unemployment, and TFP when workers lose skills during unemployment. As inflation increases, fewer jobs are created, workers experience longer unemployment durations and lose human capital, causing TFP to decline. Our calibrated results show that transitioning from the Friedman rule to 10% annual inflation lowers TFP by 4.3%. A stochastic version of the model demonstrates that prolonged periods of inflation can have lasting negative effects on productivity.

Work in progress

  • Lifelong Gains from a Strong Start: Early Career Fit, Learning, and the College Wage Premium (with Ismail Baydur and Jie Duan)

Hibernating papers

  • The Impact of the Great Recession on Educational Attainment: Evidence from Florida

    This paper estimates the effect of labor demand shocks caused by the Great Recession on high school dropout, high school graduation, postsecondary enrollment, and postsecondary completion rates. The analysis leverages a rich administrative data set from Florida that contains thorough information on student's background and human capital investments. I find little evidence to suggest that the Great Recession affected educational attainment or that these effects vary across characteristics of students and colleges. I interpret these findings within the context of Florida's educational institutions that provide students opportunities to continue progressing towards a college degree while adjusting to economic shocks.

Discussions

  • “Job Search, Job Findings, and the Role of Unemployment Insurance History” by S. Rujiwattanapong. Search and Matching in Asia Pacific Workshop, Singapore, 2024. [Slides]

Banner picture: Crater Lake National Park, Oregon, 09/11/2016