Job Finding (mis)Perceptions and Where Searchers Look for Work (Job Market Paper)
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.
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%.
Abstract: The presence of on-the-job leisure, that is, non-work at work, drives a wedge between measured hours of work and actual hours of work. If actual hours of work are lower than measured hours, productivity and wages are actually higher than those calculated by the Bureau of Labor Statistics, for example. Technological innovations, while making an hour of work more valuable, may also make it easier to engage in on-the-job leisure. We document the extent of on-the-job leisure and embed it into a model of technological change with imperfect monitoring to examine its effect on productivity and wages. Using the American Time Use Survey we show that those workers who engage in OJL spend about 50 minutes per day doing so. We use the model to create a time series of actual hours of work and calculate actual output per hour.
Works in Progress
The Sharing Economy and Housing Rental Markets (with Daniel Cullen)
Abstract: How does the sharing economy affect home rental 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 markets, and what this means for landlords and tenants. Specifically, we examine how the introduction of sharing platforms (e.g. Airbnb) affect the listing decisions of vacant property owners 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-term 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.
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.