publications

working papers

  • The Underemployment Trap, with Jie Duan. Accepted subject to minor revisions, Journal of Monetary Economics.

    • Many college graduates are underemployed, i.e., work in occupations that do not require a college degree. We document that underemployed workers are less likely to transition to a college occupation the longer they are underemployed and that longer underemployment histories are associated with lower wages in college occupations. To explain these findings, we develop a directed search model with unobserved heterogeneity, occupation-specific human capital, and on the job search. Workers are uncertain about their suitability for college jobs and learn through search. Underemployment is generated by search and information frictions, as workers with a low expected job-finding probability in college occupations self-select into underemployment. Once underemployed, workers' college occupation-specific human capital decays. A quantitative decomposition shows that unobserved heterogeneity explains most of the duration dependence in underemployment, and that information frictions play a significant role in both the existence of underemployment and the resulting duration dependence.

  • Inflation, Skill Loss During Unemployment, and TFP in the Long Run, with 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 their skills deteriorate, 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, such as the 1970s in the US, can have lasting negative effects on productivity.

Work in progress

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.