"Trade and frictional unemployment in the global economy," Journal of the European Economic Association (forthcoming) with Céline Carrère and Frédéric Robert-Nicoud (GSEM, Geneva).
Abstract: We develop a multi-country, multi-sector trade model featuring risk-averse workers, labor market frictions, unemployment benefits, and equilibrium unemployment. Trade opening leads to a reduction in unemployment if it raises welfare and reallocates labor towards sectors with lower-than-average labor market frictions. We then estimate and calibrate the model using employment data from 31 OECD countries and worldwide trade data. Finally, we quantify the potential unemployment, real wage, and welfare effects of various scenarios. For instance, repealing NAFTA and raising bilateral tariffs between the United States and Mexico to 20% would increase unemployment by 2.4% in the US and 48% in Mexico.
Job Market Paper
This paper won:
- Best Paper Award at XVIII Doctoral Meetings in International Trade and International Finance (RIEF), 2018
- Unicredit & Universities Foundation Best Paper Award at the Young Economists Conference Belgrade, 2018
Abstract: Combining rich administrative data for Germany with representative workforce surveys, I find that job task content is robustly predictive of differences in urban wage premia across otherwise observationally equivalent individuals. Based on this, I propose a model where productive advantages of cities are inherently task-specific. Workers of higher ability have a comparative advantage in the tasks whose production benefits the most from urban spillovers. In equilibrium, bigger cities generate larger externalities for more able agents and urban wage premia is skill-biased. I estimate the model using German worker panel data on 336 districts, 331 occupations, 3 education categories and 3 tasks. I find that one standard deviation increase in abstract task intensity is associated with a 0.3 percentage point increase in the elasticity of earnings with respect to population size. Differences in task-specific urban wage premia remain significant even after controlling for skill premia of larger cities.
Work in Progress
"Jack of all trades, master of none – task specialisation and wage growth in cities"
“Learning hierarchies in space: theory and evidence,” joint with Diego Puga (CEMFI) and Frédéric Robert-Nicoud (GSEM, Geneva)
"History, institutions and persistence in spatial distribution of economic activity: the case of ex-Yugoslavia," joint with Ismir Mulalic (Copenhagen Business School)