Research

Peer-reviewed

Reservation Raises: The Aggregate Labor Supply Curve at the Extensive Margin

with Benjamin Schoefer.

Forthcoming at The Review of Economic Studies. April, 2023.

We measure extensive-margin labor supply (employment) preferences in two representative surveys of the U.S. and German populations. We elicit reservation raises: the percent wage change that renders a given individual indifferent between employment and nonemployment. It is equal to her reservation wage divided by her actual, or potential, wage. The reservation raise distribution is the nonparametric aggregate labor supply curve. Locally, the curve exhibits large short-run elasticities above 3, consistent with business cycle evidence. For larger upward shifts, arc elasticities shrink towards 0.5, consistent with quasi-experimental evidence from tax holidays. Existing models fail to match this nonconstant, asymmetric curve.

Unemployment Effects of Stay-at-Home Orders: Evidence from High Frequency Claims Data

with Chaewon Baek, Peter McCrory, and Todd Messer.

published at The Review of Economics and Statistics. December, 2021.

We use the high-frequency, decentralized implementation of Stay-at-Home orders in the U.S. to disentangle the labor market effects of SAH orders from the general economic disruption wrought by the COVID-19 pandemic. We find that each week of SAH exposure increased a state's weekly initial unemployment insurance (UI) claims by 1.9% of its employment level relative to other states. A back-of-the-envelope calculation implies that, of the 17 million UI claims between March 14 and April 4, only 4 million were attributable to SAH orders. We present a currency union model to provide conditions for mapping this estimate to aggregate employment losses.

Replication Data. VoxEU.

Other

A Vacant Metric: Why Job Openings Are So Unreliable

Employ America. August, 2022.

The Federal Reserve has given job vacancy data center stage in assessing the strength of the labor market. The theoretical and empirical issues with vacancies data show that this is a mistake.

Cars, Reopening, & Housing Drove American Inflation While Natural Gas Heated European Inflation: Disaggregating Differences in US-Europe Inflation

Employ America. August, 2022.

When we disaggregate the aggregate inflation statistics, we find that the sources of high inflation in the US and Europe are different.

Proceed With Caution! Comparing Inflation Across Countries is Complicated

Employ America. July, 2022.

In this first piece of a series, we’re going to walk through an overview of the ways inflation statistics can diverge between countries and demonstrate just how difficult it is to establish apples-to-apples comparisons between aggregate inflation measures in different countries.

Inflation Expectations: Three Stories in Search of Evidence

Employ America. September, 2021.

Inflation expectations play a key role in many influential macroeconomic models. Commentators and policymakers often use the results of, or structures from, these models without delving too far into the underlying methodology. However, on closer examination, it becomes clear that the standard models of “inflation expectations” are sharply at odds with the underlying data. As such, great caution should be exercised when making policy recommendations in response to reports of elevated “inflation expectations.” An unthinking reliance on these models may lead one to prefer tighter monetary policy than would be optimal for securing a robust labor market recovery.