Working Papers
“Wages, Taxes, and Labor Supply Elasticities: The Role of Social Preferences”, with Janjala Chirakijja, June 2024.
Paper (SSRN)
We show that social preferences (e.g. warm glow or spite) towards tax-funded government expenditures induce differences between the wage and net-of-tax rate elasticities of labor supply in canonical models. In a large-scale vignette experiment in the US, we find that wage elasticities of labor supply are meaningfully larger than their net-of-tax rate counterparts, consistent with positive social preferences. We show relevance for real labor market decisions by building on an existing meta-analysis of the elasticity of taxable income. Hence, models calibrated using net-of-tax rate elasticities when wage elasticities are more suitable understate the labor supply response of individuals.
“The Effect of Child Support on Fathers’ Labor Supply”, February 2024. (Revise and Resubmit.)
Paper (SSRN)
Child support frequently increases with the noncustodial fathers’ incomes. I study the effect on their work incentives. For identification, I exploit the end of child support when the children involved reach emancipation age. Empirically, child support paid drops to near zero on emancipation; fathers correspondingly increase their work hours and annual earnings. Formally, each 10 percentage point increase in the child support rate leads to an 8–11 percent decrease in labor supply conditional on working. I find weaker extensive margin responses. In a structural model, I map these estimates to the intertemporal elasticity of labor supply (Frisch elasticity).
“Technology Deskills Jobs, Reduces the Disutility of Work, Particularly Among the Low-Skilled”, with Ivan Png, December 2023.
Paper (SSRN)
How does technology affect the disutility of work and supply of labor among relatively low-skilled workers? In a simple analytical model, we show that technology increases worker well-being through affordances in raising production and reducing the cost of effort. The affordances vary with individual skill according to whether skills and technology are complements or substitutes. Guided by the model, we use discrete choice experiments to examine the effect of technology on cashiers and ride-hail drivers through the lens of compensating differentials. Overall, technology increased the well-being of both cashiers and ride-hail drivers. Among ride-hail drivers, both the production and cost affordances of the map app decreased with skill (road knowledge). Consistent with theory, less-skilled drivers exhibited stronger preference for the app. They valued the app (compensating differential) at 6.3 percent of income, or 85 percent higher than more-skilled drivers.
“The Riskiness of Owning Versus Renting Housing”, with Lee M. Lockwood, Scott R. Baker, and Lorenz Kueng, October 2019.
Homeowners and renters have mirror-image exposures to the substantial risks in housing prices. The costs of these exposures depend crucially on their correlations with other important exposures in household portfolios. Using over 70 years of data on local markets in the U.S., we find that rents and home prices are strongly positively correlated with wages at all horizons. As a result, renting insures earnings risk, and—contrary to widely-held views—for many households owning is much riskier than renting. Combined with evidence that many households view ownership of a home as a particularly safe asset, our findings suggest that the efficiency costs of the substantial tax preferences for owner-occupied housing are greater than previously thought.
Publications
The Mortality Effects of Winter Heating Prices, with Janjala Chirakijja and Seema Jayachandran, The Economic Journal, 2024, 134(657): 402–417.
Work in progress
“The Effect of the Supplemental Nutrition Assistance Program on Local Area Economic Outcomes: Evidence from the American Recovery and Reinvestment Act”.
“The Effect of Seasonal Unemployment on Substance Use”, with Jason Ward.