Job Finding (mis)Perceptions and Aggregate Labor Market Behavior
Abstract: This paper explores how worker perceptions about job finding affect where unemployed searchers choose to apply for jobs and how this impacts the behavior of key labor market variables. Motivated by the observed prevalence of optimistic bias in searcher expectations about job finding, I develop a model of directed search where workers are uncertain about the matching technology, but can learn about it with experience searching for employment. I find that misperceptions dampen the volatility of labor market variables. For example, the standard deviation of the unemployment rate decreases by 10% when accounting for this uncertainty, while its correlation with labor productivity decreases by 12%. I show that optimistically biased job finding expectations increase wages by 0.3%, but also increase the average unemployment spell length by 1.5 weeks and the unemployment rate by 0.6pp.
The Sharing Economy and Rental Markets (with Daniel Cullen)
Abstract: How does the sharing economy affect traditional lodging markets? The advent of platforms such as Airbnb in 2008 has introduced a new channel of market interaction between those with space and those who seek it. This allows for transactions of lodging services that might otherwise be underutilized. This paper develops a framework to help think about how peer-to-peer transactions interact with traditional rental mar- kets, and what this means for property managers and tenants. Specifically, we examine how the introduction of sharing platforms (e.g. Airbnb) affect the listing decisions of managers of vacant properties and the lodging choices of dwelling seekers. The model features landlords who choose where to list vacant properties and renters who search for lodging. Renters can be either short or long-term, referencing how long they wish to occupy the property. Sharing platforms give landlords the option of accessing these short-term renters who would otherwise occupy hotels, affecting traditional, long-term renters. We find that Airbnbs decrease hotel prices by about $24 per night (about a 10% reduction) while they increase average rents by $39 per room, per month (about a 2.5% increase).
On-the-job Leisure and Work from Home: Measuring the Productivity of Work (with Christine Braun & Peter Rupert)
Abstract: We document a considerable rise in hours worked at home and a small decline in hours not working at work brought about by the 2008 recession. In 2019, workers spent on average 4.5 hours per week working from home and 2.15 hours not working at work. We show that the increases in working from home cannot be accounted for by by changes between occupations, but rather by increased computer use within occupations. We also document a substantial increase in the productivity of working from home relative to at the workplace. In 2003, an hour worked at home was about 2% less productive as an hour at the workplace, but in 2019 an hour at home was 12% more productive. The increase in relative productivity can be almost entirely accounted for by less work from home occurring while also providing childcare and more work from home occurring during standard business hours rather than in the early morning or late evening. Finally, 10% of the increase in labor productivity since 2009 can be attributed to the substitution of working at the office to working from home.
Works in Progress
State-dependent Skill Change, Directed Search, and Labor Market Dynamics
Abstract: In this paper I study how skill change affects where unemployed workers choose to search for work and, in turn, how this impacts the labor market. I develop a model of directed search where workers can lose skills when unemployed and can gain them when employed. The calibrated model finds that skill change dampens the volatility of labor market variables. These results are the opposite of predictions made in models of random search with Nash bargaining because agents are unable to adjust their search behavior to limit their exposure to the costs associated with skill decay. Specifically, I find that skill decay (and accrual) reduce the volatility of the unemployment rate by 4% and its correlation with labor productivity by 28%.
Contracts, On-the-Job Leisure, and Measured Productivity
Abstract: In light of recent research on the significant amount of time spent at work in non-work, this paper studies how contracting frictions can distort the hours worked measure and its implications for related statistics. I develop a modeling environment that more realistically captures aspects of the employee-employer relationship that are ignored by simple spot market approaches to the supply of (and demand for) labor. Drawing on the efficiency wage literature, I expand upon aspects of the standard models to allow for richer margins of adjustment by agents. This approach produces a clear, structural way of disentangling notions of actual and reported hours of work. Further, it provides straightforward ways of mapping individual data into the model.