The Productivity Puzzle and the Decline of Unions

Abstract: What explains the sudden vanishing of the procyclicality of productivity in the U.S. during the 1980s? Using cross-sectional evidence from states and industries, this paper argues that lower costs of hiring and firing workers due to rapid de-unionization can help explain the productivity puzzle. Lower cost of changing employment prompts firms to rely less on labour hoarding, thereby making productivity less procyclical. In a model with endogenous worker-effort and costly employment adjustment, allowing the hiring cost to decrease by the same amount as the decline in union density can match almost the entire drop in cyclical productivity correlations. [Link to paper]

Presentations: Canadian Economic Association Annual Conference, European University Institute, University of Queensland, Shiv Nadar University, Ozyegin University, Indian Institute of Technology Kanpur, Ashoka University, Nazarbayev University, Bucknell University, University of Manchester, Brock University, Delhi School of Economics Winter School, University of British Columbia, Bank of Canada Graduate Student Paper Award Workshop, Western Economic Association International Annual Conference, CIREQ PhD Students’ Symposium

Consumption and Income Inequality across Generations (with Giovanni Gallipoli & Hamish Low)
Revise & Resubmit at Journal of Political Economy

Abstract: We characterize the joint evolution of cross-sectional inequality in earnings, other sources of income and consumption across generations in the U.S. To account for cross-sectional dispersion, we estimate a model of intergenerational persistence and separately identify the influences of parental factors and of idiosyncratic life-cycle components. We find evidence of family persistence in earnings, consumption and saving behaviours, and marital sorting patterns. However, the quantitative contribution of idiosyncratic heterogeneity to cross-sectional inequality is significantly larger than parental effects. Our estimates imply that intergenerational persistence is not high enough to induce further large increases in inequality over time and across generations. [Link to paper; HCEO; CEPR; NEP-DGE Blog]

Presentations: Dynamic Structural Econometrics Conference, University of Bristol, Rimini Centre for Economic Analysis, University of Chicago, University of Manchester, Econometric Society Virtual World Congress, University of Naples, Barcelona Graduate School of Economics Summer Workshop, Canadian Economic Association Annual Conference – Bank of Canada session, Deutsche Bundesbank International Conference on Household Finance, University of Cambridge, University of British Columbia, NBER Summer Institute, Society for Economic Dynamics Annual Meeting

Award: Best 2nd Year PhD Research Paper (2016) at the Vancouver School of Economics for a single-authored version


Inclusive Growth: Economics as if People Mattered, Global Business Review, 2018 (with Debasmita Das)

Abstract: This article provides a holistic working definition of inclusive growth. We measure inclusive growth through a newly proposed index, named as the Inclusive Growth Index (IGI), based on 24 developmental indicator variables (categorized into expansion, sustainability, equity in access, and efficiency of economic activities and institutions) as its components. We have employed two kinds of weighting schemes in constructing the index: an ad hoc weighting scheme and a weighting scheme based on principal component analysis (PCA), performed differently on variables under each dimension. This index helps one to rank countries or regions according to their respective inclusive growth achievements and to potentially track the time trend of a particular country. In our study, we have calculated IGI for 16 Asian countries and compared the IGI scores across the nations. [Link to paper]

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