Lecturer (Assistant Prof) in Economics at the University of Essex
Research Associate at the Institute for Fiscal Studies.
My research interest is in macro-labour.
In my job market paper, I find that workers with postgraduate degrees have smaller wage shocks than those only have undergraduate degrees over the business cycle. I argue the reason for this phenomenon is the adaptation costs due to the relatively low productivity of new hires who need time to adapt to their jobs. These adaptation costs reduce the value of workers’ outside options and thus the degree to which firms will offer contracts with smoother wages. I find robust facts that are consistent with the predictions of the theory: 1) Postgraduates need longer time to adapt to new jobs than undergraduates; 2) Postgraduates suffer larger wage loses from job displacement; 3) Postgraduates have lower job finding and job-to-job transition rates; 4) The difference in wage cyclicality between postgraduates and undergraduates is higher for workers with long tenure than new hires. To understand how adaptaion costs affect wage cyclicality, I develop an equilibrium search model with long-term contracts and aggregate shocks. I show the higher adaptation costs of postgraduates reduce the value of their outside options, increase their commitment to the current jobs and thus the degree to which firms will offer contracts with smoother wages and greater risk sharing. Also, I show that the unemployment insurance crowds out the firm insurance, but the effect is smaller for lower educated workers than postgraduates.
In my other research papers:
- We quantify the lemon’s problem in the quality of second-hand cars using Danish administrative data and study its implications for transactions and consumption smoothing.
- I study how the level of unemployment insurance changes labour force participation behaviour over the business cycle.