Financial Frictions and Firm Labor Adjustments: Evidence from a Retirement Policy
Journal of Human Resources, R&R.
In this paper I study how cash constraints affect firm response to labor market policies. I use administrative data from the Netherlands to assess firm adjustments to labor and capital in the context of a change in the effective retirement age for individuals born in 1950 or after. Exploiting this sharp cohort boundary, I find that - for each retained older worker - firms on average employ 0.6 fewer younger workers and reduce investments in machines and equipment by 6,000 EUR annually. All of the labor and investment adjustments are concentrated in cash constrained firms, and only these firms experience declines in revenue and profitability. For every 1 EUR increase in wage costs for older workers, such firms reduce their younger workforce by 0.7 EUR in terms of payroll and investments by 0.2 EUR. As a potential policy avenue to alleviate cash constraints, I show that more time to anticipate a policy may help firms smooth adjustments and reduce negative profit effects. Altogether, the results imply that firm response is driven by direct cash flow effects from retaining more older workers rather than the substitutability between older and younger workers. Failing to account for these constraints leads to estimates of the substitutability between different production inputs that are biased by an order of magnitude.
Changes in Household Diet: Determinants and Predictability - with Emily Oster
Journal of Public Economics, Forthcoming (February 2022)
We use grocery purchase data to analyze dietary changes. We show that households – including those with more income or education - do not improve diet in response to disease diagnosis or changes in household circumstances. We then identify households who show large improvements in diet quality. We use machine learning to predict these households and find (1) concentration of baseline diet in a small number of foods is a predictor of improvement and (2) dietary changes are concentrated in a small number of foods. We argue these patterns may be well fit by a model which incorporates attention costs.
Determinants of Dietary Choice in the US: Evidence from Consumer Migration
Journal of Health Economics (July 2020).
I study the evolution of the quality of grocery purchases among migrants to learn how changes in the environment affect dietary choice. Using detailed household level panel data on food purchases I find that healthfulness of grocery purchases is very persistent in the short-run. Three to four decades after moving, however, households have closed about half of the gap in healthfulness between the origin and destination area. The results suggest that dietary habits are highly persistent, but may eventually shift in the face of different local environments.
A Field Experiment on the Role of Socioemotional Skills and Gender for Hiring in Turkey - with Efsan Nas Ozen, Victoria Levin and Ana Maria Munoz Boudet
World Bank Policy Research Paper.
This study investigates the importance of socioemotional skills in the hiring process for male and female job candidates. Using a large-scale randomized audit study in Turkey – in which we send fictitious CVs to real job openings - we find that socioemotional skills are valued positively only when an employer specifically asks for them in the vacancy ad. When not asked for, candidates can face a penalty in the form of lower callback rates. A significant penalty for unsolicited socioemotional skills is only observed for women. We do not find evidence of other gender differences in the hiring process
Journal of Human Resources, R&R.
In this paper I study how cash constraints affect firm response to labor market policies. I use administrative data from the Netherlands to assess firm adjustments to labor and capital in the context of a change in the effective retirement age for individuals born in 1950 or after. Exploiting this sharp cohort boundary, I find that - for each retained older worker - firms on average employ 0.6 fewer younger workers and reduce investments in machines and equipment by 6,000 EUR annually. All of the labor and investment adjustments are concentrated in cash constrained firms, and only these firms experience declines in revenue and profitability. For every 1 EUR increase in wage costs for older workers, such firms reduce their younger workforce by 0.7 EUR in terms of payroll and investments by 0.2 EUR. As a potential policy avenue to alleviate cash constraints, I show that more time to anticipate a policy may help firms smooth adjustments and reduce negative profit effects. Altogether, the results imply that firm response is driven by direct cash flow effects from retaining more older workers rather than the substitutability between older and younger workers. Failing to account for these constraints leads to estimates of the substitutability between different production inputs that are biased by an order of magnitude.
Changes in Household Diet: Determinants and Predictability - with Emily Oster
Journal of Public Economics, Forthcoming (February 2022)
We use grocery purchase data to analyze dietary changes. We show that households – including those with more income or education - do not improve diet in response to disease diagnosis or changes in household circumstances. We then identify households who show large improvements in diet quality. We use machine learning to predict these households and find (1) concentration of baseline diet in a small number of foods is a predictor of improvement and (2) dietary changes are concentrated in a small number of foods. We argue these patterns may be well fit by a model which incorporates attention costs.
Determinants of Dietary Choice in the US: Evidence from Consumer Migration
Journal of Health Economics (July 2020).
I study the evolution of the quality of grocery purchases among migrants to learn how changes in the environment affect dietary choice. Using detailed household level panel data on food purchases I find that healthfulness of grocery purchases is very persistent in the short-run. Three to four decades after moving, however, households have closed about half of the gap in healthfulness between the origin and destination area. The results suggest that dietary habits are highly persistent, but may eventually shift in the face of different local environments.
A Field Experiment on the Role of Socioemotional Skills and Gender for Hiring in Turkey - with Efsan Nas Ozen, Victoria Levin and Ana Maria Munoz Boudet
World Bank Policy Research Paper.
This study investigates the importance of socioemotional skills in the hiring process for male and female job candidates. Using a large-scale randomized audit study in Turkey – in which we send fictitious CVs to real job openings - we find that socioemotional skills are valued positively only when an employer specifically asks for them in the vacancy ad. When not asked for, candidates can face a penalty in the form of lower callback rates. A significant penalty for unsolicited socioemotional skills is only observed for women. We do not find evidence of other gender differences in the hiring process