"Optimal Taxation to Correct Job Mismatching", Review of Economic Dynamics, 2021 (article, WP version, github).

 

Working Papers:

Online appendix on Github with the code files

A recent strand of papers use sharp regression discontunity designs (RDD) based on age discontinuity to study the impacts of minimum income and benefit extension policies. This design challenges job search theory, which predicts that such RDD estimates are typically biased. Owing to market frictions, people below the age threshold actually account for future eligibility to the policy. This affects their search outcomes in a continuous way. Comparing them to people above the threshold is misleading because both groups of workers are actually treated. We quantify the theoretical bias on the datasets that have been used in the literature. Our results suggest that the impacts of minimum income policies are (significantly) under-estimated, whereas the impacts of benefit extensions are (not significantly) over-estimated.

We develop a model of joint job search and occupational choice in which job opportunities can be incompatible inside the couple. Typically, incompatibilities may arise because jobs are not in the same location. We show that the existence of incompatible jobs pushes some couples to sacrifice the career of one partner. The model predicts occupational switches throughout the career and at the time of couple formation. Gendered equilibria, whereby all women (or men) choose the accommodating occupation, may arise. Any element of ex-ante unfavorable gender gaps—for instance, due to discrimination or norms—is amplified and can generate large systemic differences in gender composition between occupations.

Regional unemployment rates are strongly persistent. Using a search-and-matching model of a local labor market with firm and worker migration, we study how agglomeration effects amplify labor demand shocks. When firms disappear in the model, productivity decreases which discourages incoming firms and slows regional recovery. Agglomeration effects amplify the magnitude and persistence of the unemployment response. We simulate the model to determine the critical factors responsible for the amplification. Amplification is stronger when firm migration reacts strongly to local conditions, and when labor migration reacts weakly. This implies that fixed wages greatly amplify the effect of agglomeration economies on regional shocks.

  • "A Dynamic Empirical Model of Frictional Spatial Job Search", with Christian Schluter (Aix-Marseille School of Econ.), upon request

This paper develops a general equilibrium life-cycle model of spatial job search across heterogeneous local labor markets in the presence of search frictions. US and European labor markets exhibit very low geographic mobility. This pattern has usually been framed as resulting solely from moving costs. However, to account for the observed geographic mobility, the implied moving costs should be extremely high. Stating the problem with a search-theoretic perspective, we establish a tractable model of location choice that accounts for the spatial dimension of search frictions. The model allows disentangling the different frictions that contribute to lowering geographic mobility, with a particular emphasis on the role of age. We estimate our model structurally using French administrative individual-level transition data.