Publications
"A Dynamic Model of Personality, Schooling, and Occupational Choice," Quantitative Economics, 11.1 (2020): 231-275. (with Petra Todd) Supplemental Material Online Appendix.
Abstract
This paper develops a dynamic model of schooling and occupational choices that incorporates personality traits, as measured by the “big five” traits. The model is estimated using the HILDA dataset from Australia. Personality traits are found to play an important role in explaining education and occupation choices over the lifecycle. Results show that individuals with a comparative advantage in schooling and white-collar work have, on average, higher cognitive skills and higher personality trait scores. Allowing personality traits to evolve with age and with schooling proves to be important to capturing the heterogeneity in how people respond to educational policies. The estimated model is used to evaluate two education policies: compulsory senior secondary school and a 50% college tuition subsidy. Both policies increase educational attainment and also affect personality traits.
“Personality Traits, Intra-household Allocation and the Gender Wage Gap,” European Economic Review, 109 (2018): 191-220. (with Christopher Flinn and Petra Todd) Supplemental Material
Abstract
A model of how personality traits affect household time and resource allocation decisions and wages is developed and estimated. In the model, households choose between two behavioral modes: cooperative or noncooperative. Spouses receive wage offers and allocate time to supply labor market hours and to produce a public good. Personality traits, measured by the so-called “Big Five” traits, can affect household bargaining weights and wage offers. Model parameters are estimated by Simulated Method of Moments using the Household Income and Labor Dynamics in Australia (HILDA) data. Personality traits are found to be important determinants of household bargaining weights and of wage offers and to have substantial implications for understanding the sources of gender wage disparities.
“Welfare Reform and Children's Early Cognitive Development,” Contemporary Economic Policy, 32.4 (2014): 729-751. (with Hau Chyi and Orgul Demet Ozturk)
Abstract
In this paper, we use a dynamic structural model to measure the effects of (1) single mothers’ work and welfare use decisions and (2) welfare reform initiatives on the early cognitive development of the children of the NLSY79 mothers. We use PIAT-Math scores as a measure of attainment and show that both the mothers’ work and welfare use benefit children on average. Our simulation of a policy that combines a time limit with work requirement reduces the use of welfare and increases employment significantly. These changes in turn significantly increase children’s cognitive attainment. This implies that the welfare reform was not only successful in achieving its stated goals, but was also beneficial to welfare children’s outcomes. In another policy simulation, we show that increasing work incentives for welfare population by exempting labor income from welfare tax can be a very successful policy with some additional benefits for children’s outcomes. Finally, a counterfactual with an extended maternal leave policy significantly reduces employment and has negative, though economically insignificant, impact on cognitive outcomes.
Working Papers
“Distributional Effects of Local Minimum Wages: A Spatial Job Search Approach,” This version Nov2022. (with Petra Todd) Cambridge Working Papers in Economics CWPE2265
Abstract
This paper develops and estimates a spatial general equilibrium job search model to study the effects of local and universal (federal) minimum wage policies on employment, wages, job postings, vacancies, migration/commuting, and welfare. In the model, workers, who differ in terms of location and education levels, search for jobs locally and in a neighboring area. If they receive remote offers, they decide whether to migrate or commute. Firms post vacancies in multiple locations and make offers subject to minimum wage constraints. The model is estimated using multiple databases, including the American Community Survey (ACS) and Quarterly Workforce Indicators (QWI), and exploiting minimum wage variation across state borders as well as time series variation (2005-2015). Results show that local minimum wage increases lead firms to post fewer wage offers in both local and neighboring areas and lead lower education workers to reduce interstate commuting. An out-of-sample validation finds that model forecasts of commuting responses to city minimum wage hikes are similar to patterns in the data. A welfare analysis shows how minimum wage effects vary by worker type and with the minimum wage level. Low skill workers benefit from local wage increases up to $10.75/hour and high skill workers up to $12.25/hour. The greatest per capital welfare gain (including both workers and firms) is achieved by a universal minimum wage increase of $12.75/hour.
"Labor Market Returns to Personality: A Job Search Approach to Understanding Gender Gaps," This version Aug 2022. Second Round R&R at JPE (with Christopher Flinn and Petra Todd) An ealier version: Human Capital and Economic Opportunity Working Group Working Papers 2020-010.
Abstract
This paper investigates the effects of the Big Five personality traits on labor market outcomes and on gender disparities within a job search, matching and bargaining
model with heterogeneous workers. In the model, parameters pertaining to productivity, job offer arrival rates, job dissolution rates and the division of surplus depend on worker education, cognitive skills, personality traits and other demographic characteristics. The model is estimated using a representative panel dataset, the German Socio-Economic Panel (GSOEP). Results show that both cognitive and noncognitive traits are important determinants of wage and employment outcomes. Higher levels of conscientiousness and emotional stability and lower levels of agreeableness increase hourly wages and promote greater job finding rates. A decomposition analysis shows that gender differences in two personality traits - agreeableness and emotional stability - primarily account for the gender wage gap and that their effect operates largely through a reduction in the bargaining power of women. Using results drawn from the clinical psychology literature, we find that a mental health intervention targeted at individuals with low levels of emotional stability could reduce the gender wage gap by from 2 to 5 percent and reduce wage inequality.
model with heterogeneous workers. In the model, parameters pertaining to productivity, job offer arrival rates, job dissolution rates and the division of surplus depend on worker education, cognitive skills, personality traits and other demographic characteristics. The model is estimated using a representative panel dataset, the German Socio-Economic Panel (GSOEP). Results show that both cognitive and noncognitive traits are important determinants of wage and employment outcomes. Higher levels of conscientiousness and emotional stability and lower levels of agreeableness increase hourly wages and promote greater job finding rates. A decomposition analysis shows that gender differences in two personality traits - agreeableness and emotional stability - primarily account for the gender wage gap and that their effect operates largely through a reduction in the bargaining power of women. Using results drawn from the clinical psychology literature, we find that a mental health intervention targeted at individuals with low levels of emotional stability could reduce the gender wage gap by from 2 to 5 percent and reduce wage inequality.
"The Gender Gap in Household Bargaining Power:A Portfolio-Choice Approach," This version Dec 2022. (with Ran Gu and Cameron Peng) Cambridge Working Papers in Economics CWPE2130
Abstract
When members of the same household have different risk preferences, whose preference matters more for investment decisions and why? We propose an intrahousehold model that aggregates individual preferences at the household level as a result of bargaining. We structurally estimate the model, analyze the determinants of bargaining power, and find a significant gender gap. The gap is partially explained by gender differences in individual characteristics such as income and employment, but it is also driven by gender effects. These patterns hold broadly across Australia, Germany, and the US. We further link the distribution of bargaining power to perceived gender norms in the cross-section of households.
"Prospering through Prospera: CCT Impacts on Educational Attainment and Achievement in Mexico," This version Dec 2022. (with Jere Behrman, Susan Parker and Petra Todd) Cambridge Working Papers in Economics CWPE2178
Abstract
This paper develops and estimates a dynamic model, which integrates value-added and schoolchoice models, to evaluate grade-by-grade and the cumulative impacts of the Mexican Prospera conditional cash transfer (CCT) program on educational achievement. The empirical application advances the previous literature by estimating policy impacts on learning, accounting for dynamic selective school attendance and incorporating both observed and unobserved heterogeneities. A dynamic framework is critical for estimating cumulative learning effects because lagged achievement is an important determinant of current achievement. The model is estimated using rich
nationwide Mexican administrative data on schooling progression and math and Spanish test scores in grades 4-9 along with student and family survey data. The estimates show significant CCT learning impacts, inter alia, particularly for students from poorer households. School-choice decisions, especially whether to attend telesecondary schools, play crucial roles.
nationwide Mexican administrative data on schooling progression and math and Spanish test scores in grades 4-9 along with student and family survey data. The estimates show significant CCT learning impacts, inter alia, particularly for students from poorer households. School-choice decisions, especially whether to attend telesecondary schools, play crucial roles.
"Non-College Occupations, Workplace Routinization, and the Gender Gap in College Enrollment," This version Nov 2021. (with Amanda Chuan) Cambridge Working Papers in Economics CWPE2177
Abstract
Women used to lag behind men in college enrollment but now exceed them. We argue that changes in non-college job prospects contributed to these trends. We first document that routine-biased technical change disproportionately displaced non-college occupations held by women. We next employ a shift-share instrument for the impact of routinization to show that declining non-college job prospects for women increased female enrollment. Results show that a one percentage point decline in the share of routine task intensive jobs leads to a 0.6 percentage point rise in female college enrollment, while the effect for male enrollment is directionally smaller and insignificant. We next embed this instrumental variation into a dynamic model that links education and occupation choices. The model finds that routinization decreased returns to non-college occupations for women, leading them to shift to cognitive work and increasing their college premium. In contrast, non-college occupations for men were less susceptible to routinization. Altogether, our model estimates that workplace routinization accounted for 63% of the growth in female enrollment and 23% of the change in male enrollment between 1980 to 2000.
