WORKING PAPERS
The Great Accretion and the Great Depression, joint with Hal Cole and Jeremy Greenwood.
Abstract
The Second Industrial Revolution sparked a wave of new products and industrial processes, fueling an optimistic Roaring Twenties. But did excitement about technological progress contribute to an over accumulation of investment, despite a slowdown in new product development and satiated demand during the 1920s? And, was this over investment worsened by continuous process innovation? Could these factors have played a role in triggering the Great Depression? To explore these questions, a macroeconomic model that incorporates both process and product innovation is proposed. Proof-of-concept simulations are performed to assess whether these factors can help explain the Great Depression. The answer is yes.
WORK IN PROGRESS
Teams, Learning, and Endogenous Skills.
Abstract
This project studies how worker teams shape the evolution of workers’ comparative advantage and the aggregate skill distribution. To answer this question, I develop a tractable theory in which workers have multidimensional skills, produce in teams, and accumulate human capital through learning-by-doing. Team composition determines the division of labor among coworkers. Task assignment, in turn, changes both the location of workers’ comparative advantage and their degree of specialization. As skills evolve, so do the incentives to form different teams, generating a dynamic feedback between team formation, task assignment, and skill accumulation. The broader goal is to use data on inventor teams to discipline the model’s sorting and learning mechanisms and quantify how teammates and changes in the organization of production shape career paths, specialization, and the economy-wide distribution of skills among inventors.
Population Aging, Skill Composition and Technology Adoption, joint with Ruben Piazzesi.
Abstract
This paper studies how population aging affects aggregate labor productivity by changing the workforce skill mix. Aging raises accumulated experience, but might reduce the relative supply of current-technology skills that are more prevalent among younger cohorts and may be essential for technology adoption. The net effect is ex ante ambiguous and depends on how firms adjust technology, hiring, and training decisions to an aging workforce. Empirically, we use matched employer-employee data and establishment surveys from Germany to show that firms with younger workforces are significantly more likely to adopt advanced digital and automation technologies. In addition, following adoption, employment expands disproportionately through the hiring of younger workers, who also report larger productivity gains from new technologies. Motivated by this evidence, we develop a model of firm dynamics with labor market frictions and multidimensional worker skills. Skills evolve over workers’ careers: experience accumulates on the job, while current-technology skills can depreciate and be rebuilt through training. Firms endogenously choose whether to adopt frontier technologies, and population aging affects firm dynamics and aggregate productivity by changing the skill mix of the workforce. Going forward, we plan to calibrate the model to decompose the effect of workforce aging on productivity into channels related to firm size, technology selection, and worker reallocation, and to evaluate policies that shape workforce composition.
