Worker Adjustment to Changes in Labor Demand: Evidence from Longitudinal Census Data, (Job Market Paper), January 2017
Abstract: Real wage growth for non-college educated workers varied greatly across US local labor markets during the 2000s. This paper investigates the extent to which this variation in local wage growth reflects workers' incomplete arbitrage of job opportunities in different locations, industries, and occupations. I combine novel data linking individuals between the 2000 Census and the 2010-2014 American Community Survey with labor demand shocks from exposure to trade with China and hydraulic fracturing. Without moving costs, worker adjustment to these shocks would eliminate differential earnings effects between directly exposed workers and others in the same skill group. I find evidence against the full-mobility benchmark, estimating that exposure to trade with China reduces earnings of non-college educated workers in exposed commuting zones by roughly 4%, and fracking increases earnings of the original residents of exposed commuting zones by roughly 7%. I then estimate a model of location, sector, and occupation choice to quantify the costs that rationalize this incomplete arbitrage. I estimate average moving costs of several times annual income for changing labor markets, sectors, and occupations. Simulations show that halving these moving costs would have reduced the effect of exposure to trade with China by 35%, underscoring the important role that immobility plays in explaining the earnings difficulties of the non-college educated.
"The Local Economic and Welfare Consequences of Hydraulic Fracturing" with Janet Currie, Michael Greenstone, and Chris Knittel, August 2016.
Abstract: Exploiting geological variation within shale deposits and timing in the initiation of hydraulic fracturing, this paper finds that allowing fracing leads to sharp increases in oil and gas recovery and improvements in a wide set of economic indicators. At the same time, estimated willingness-to-pay (WTP) for the decrease in local amenities (e.g., crime and noise) is roughly equal to -$500 to -$1,200 per household annually (-1.3% to -3.1% of median household income). Overall, we estimate that WTP for allowing fracing equals about $1,200 to $1,900 per household annually (3.1% to 4.9%), although there is substantial heterogeneity across shale regions.
Credit Reports as Resumes: The Incidence of Pre-Employment Credit Screening with Scott Nelson, March 2016.
Abstract: We study recent bans on employers' use of credit reports to screen job applicants - a practice that has been popular among employers, but controversial for its perceived disparate impact on racial minorities. Exploiting geographic, temporal, and job-level variation in which workers are covered by these bans, we analyze these bans' effects in two datasets: the panel dimension of the Current Population Survey (CPS); and data aggregated from state unemployment insurance records. We find that the bans reduced job-finding rates for blacks by 7 to 16 log points, and increased subsequent separation rates for black new hires by 3 percentage points, arguably contrary to the bans' intended effects. Results for Hispanics and whites are less conclusive. We interpret these findings in a statistical discrimination model in which credit report data, moreso for blacks than for other groups, send a high-precision signal relative to the precision of employers' priors.
Research in Progress