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PUBLICATIONS: Demographic Transition and Industrial Revolution: A
Macroeconomic Investigation, with ABSTRACT: All industrialized countries
have experienced a transition from high birth rates, land-based production
and stagnant standards of living to low birth rates and sustained income
growth. To develop a better understanding of these economic and demographic
transformations and the link between them, we construct a general equilibrium
framework merging the Hansen and Prescott (2002) model of structural change
with the Barro and Becker (1989) model of fertility
choice. We find that when the historical changes of youth mortality and sector-specific
productivity are introduced into the model, parameterized to capture key
moments of 17th century England, it does remarkably
well at generating the long-run patterns of economic and demographic
development of England, which suggests its potential usefulness in future
quantitative studies. Increasing the cost of children further improves the
model's fit. We also study the separate contributions of youth mortality,
productivity and the cost of raising children, finding that the influence exerted
through the productivity channel is largely decoupled from those exerted
through the youth mortality and the cost of children channels. Specifically,
the productivity channel has a negligible effect on birth rates but accounts
for nearly all of the increase in per capita output, industrialization,
urbanization, and the decline of land share in total income, while the
young-age mortality and the cost of children channels account for almost none
of the economic transformation but drive much of the demographic change. To
Work or Not to Work: Did Tax Reforms Affect Labor Force Participation of
Secondary Earners? with Link to the online
publication ABSTRACT: During the period 1960-2000, the proportion of two-earner couples among
married couples in the U.S. more than doubled, while tax laws underwent
numerous changes, with major reforms taking place in the 1980's (flattening
of the federal income tax schedule) and in the 1990's (major expansion of the
Earned Income Tax Credit (EITC)). We investigate the impact of the actual tax
reforms on married couples' participation through a model of heterogeneous
households. Theoretically, we elucidate what aspects of the tax reforms are
important for a family time allocation choice when the work choice is
discrete. Quantitatively, we show that even in the 1980's, changes in tax
laws account for only 8% of the increase in the proportion of two-earner
couples, although this small average impact masks a much larger impact
experienced by women with high earning husbands. Another important finding is
that the Earned Income Tax Credit substantially discourages work
participation among married couples with low-earning husbands. A notable
contribution of this work is the accurate incorporation of the complex U.S.
tax code into a model of heterogeneous households, which is done using
TAXSIM, a tax calculator software. WORKING PAPERS: Information
Asymmetries and an Endogenous Productivity Reversion Mechanism,
with Nicolàs
Figueroa (submitted) ABSTRACT: Several studies among recent empirical work have suggested that the systematic behavior of lending standards over the business cycle, with laxer standards applied during expansions and tighter standards applied during recessions, may be responsible for driving economic fluctuations. We build a dynamic screening model with informational asymmetries in credit markets that rationalizes these findings and generates endogenous fluctuations of total output and productivity via the lending standards channel. When the capital stock is high, which evolves endogenously, liquidity is high for all types of producers, allowing even the unproductive type to meet the early payments on the loan, and thus making signals about entrepreneurs’ quality, inferred from such payments, less informative. The early payment required to accomplish screening out the unproductive types thus rises. Because the early payment hurts productive entrepreneurs by lowering their investments, competition among lenders results in the emergence of pooling contracts with no early payment requirement. Low productivity entrepreneurs enter production along with productive types, the composition effect setting off a recession. The opposite happens at troughs. The Role of Adult Mortality in the Transmission of
Knowledge,
with Michael Bar (working paper,
feedback is welcome and appreciated) ABSTRACT:
We investigate, both theoretically and
quantitatively, a previously unexplored link between adult mortality and
growth. Our mechanism allocates a central role to individuals as carriers of
useful ideas and to personal contact as an important means of passing on the
useful ideas to future generations. It thus implies that disrupting a human
life will impede the process of knowledge transmission across generations. We
embed this mechanism in a simple model of endogenous growth and fertility and
use it to study its relevance in the application to the long-run growth
experience of England. Accounting
for Changes in Labor Force Participation of Married Women: The Case of the
U.S. since 1959,
with ABSTRACT: Using a model of family decision-making with home
production and individual heterogeneity, we quantitatively investigate the role
of changes in several aspects of the joint earnings distribution of husbands
and wives (gender earnings gap, gender-specific inequality and assortativeness of matching) and the decline in prices of
home appliances in accounting for the dramatic rise in labor force
participation of married women since 1959. The implications of the factors
examined are also tested against changes in participation for disaggregated
groups of couples and leisure trends of married individuals, documented from
the U.S. population census and time-use survey data. The key finding is that
changes in the distribution of potential earnings account for nearly 90% of
the observed increase in labor force participation of married females and in
a manner consistent with the change in participation for groups of females
differentiated according to the husband’s earnings and changes in
group-specific leisure trends. Closing of the gender earnings gap is the main
aspect of the distribution that underlies this result, although changes in assortative matching are partly responsible for the
greater rise in participation experienced by women with husbands at the top
of the earnings distribution. Closing of the gender earnings gap, through
increasing purchasing power, also generates a widespread use of home
appliances, thus driving the home production revolution, which is commonly
regarded as being a result of the fall in prices of home appliances alone. We
find the effect of the decline in prices of home appliances on female
participation to be quantitatively small. Other
Papers, not quite ready for dissemination Intergenerational
Links and Population Aging,
with Marika Santoro Growth and Fertility
Accounting, with
Michael Bar On the Malthusian
Trap, with
Michael Bar |