Work in Progress

Coworker Learning with Firm Dynamics.
Paper available upon request.

In this paper I use a firm dynamics model to study coworker learning opportunities after accounting for endogenous workforce composition. The theory is a general equilibrium model with human capital spillovers among colleagues. The allocation of human capital across firms is efficient as it optimally trades-off learning and production complementarities by firm productivity level. Additionally, firms continuously hire and separate from workers of different human capital types so to respond to productivity shocks. The estimation strategy uses employer-employee data where I derive novel stylized facts on coworker spillovers conditional on firm growth and size. Ultimately, I argue that a large pool of small growing firms is essential to generate opportunities for coworker learning.

Firm Wage Inequality: Capital-Skill Complementarity and Labor Reallocation, with Cristina Lafuente.
Paper available upon request.

This paper studies how technological change affects labor reallocation in the economy and how the latter feeds into changes over wage inequality. In our model, the workforce is partitioned into white and blue-collars and, within each category, workers are heterogeneous in their quality. Firms operate by hiring both white and blue-collars and differ one another on their labor composition on two margins: the quality and the intensity of their labor factors. In addition, each firm chooses capital optimally to fit with its labor force. Technological change encourages firms to invest in more capital, which feeds back into their labor composition decisions, and ultimately in the distribution of wages across firms in the economy. We compare our simulated model to Italian data for 1998 and 2001. The model qualitatively replicates the data increased (decreased) inequality within (between) firms. We decompose inequality changes into three channels, namely worker-capital complementarity, worker-teammates complementarity and a compositional effect. Worker-capital complementarities are the dominant source of changes in inequality for the within firm component while all three channels are important to account for the shifts in the between firms component of inequality.

The Gender Pay Gap Between and Within Firms: Implications from Capital-Skill Complementarity and Sorting, with Cristina Lafuente.
Paper available upon request.

In this project, we intend to quantify the impact of capital subsidies on the gender pay gap. The first step is documenting how the gender pay gap is distributed between and within firms over time in Italy. The second step proposes a theoretical model that explains how the distribution of the gender pay gap is linked to firms. The levels of the gender pay gap distribution are explained with a competitive sorting and matching model with taste-based gender discrimination. The changes in the distribution are explained by augmenting the model with capital investment. Holding gender discrimination fixed, a reduction in the rental price of capital reduces the gender pay gap by letting female workers sort into better matched jobs. Finally we discuss how to use a calibrated version of the model to compare counterfactual scenarios with different levels of capital investment subsidies.


Corrigendum to Capital Investment in “Assortative Matching with Large Firms”

Econometrica, 2021, vol. 89(4), pages o11-o14
with Jan Eeckhout, Philipp Kircher, and Cristina Lafuente.

Link to paper.