Search Results
Working Paper
Wage Inequality and Job Stability
How much wage inequality in Brazil is caused by firing costs? To answer this question, I develop and estimate a general equilibrium search and matching model with heterogeneous layoff rates among firms. Using matched employer-employee data from Brazil, I estimate the model, and I find that it replicates the observed residual wage inequality in the data. I simulate a counterfactual removal of existing firing costs, and I find that residual wage inequality drops by 26% as measured by wage variance and by 4.4% as measured by the p95-p5 ratio among 25- to 55-year-old males working in the private ...
Working Paper
Health Shocks, Health Insurance, Human Capital, and the Dynamics of Earnings and Health
We specify and calibrate a life-cycle model of labor supply and savings incorporating health shocks and medical treatment decisions. Our model features endogenous wage formation via human capital accumulation, employer-sponsored health insurance, and means-tested social insurance. We use the model to study the effects of health shocks on health, labor supply and earnings, and to assess how health shocks contribute to earnings inequality. We also simulate provision of public insurance to agents who lack employer-sponsored insurance. The public insurance program substantially increases medical ...
Working Paper
The Gender Pay Gap: Micro Sources and Macro Consequences
Using linked employer-employee data from Brazil, we document a large gender pay gap due to women working at lower-paying employers with better amenities. To interpret these facts, we develop an equilibrium search model with endogenous firm pay, amenities, and employment. We provide a constructive proof of identification of all model parameters. The estimated model suggests that amenities are important for men and women, that compensating differentials explain half of the gender pay gap, and that there are significant output and welfare gains from eliminating gender differences. However, ...
Journal Article
Can the IRA and CHIPS Act Reduce Labor Earnings Inequality? Lessons from the US Shale Boom
We study how the US shale boom decreased labor earnings inequality by increasing demand for low-skill labor in small labor markets. The similarities in the concentrated geographic distribution of investments and the labor needed to build capacity between the US shale boom and the manufacturing construction influx that has followed the passage of the IRA and CHIPS and Science Acts raise the possibility that these bills could also impact labor earnings inequality in a similar way.