Research

"The Role of Training for Technology Diffusion" (Job Market Paper) [Paper]

with Ruben Piazzesi

Abstract: We study a dynamic model of new technology adoption in a labor market with search frictions, where worker training boosts the productivity gains from adopting the technology. Once trained, workers acquire general skills that can be used by any firm operating the new technology. As a result, firms can free-ride on the training investments of others, which inefficiently delays technology adoption and workforce training. We apply the model to the diffusion of Enterprise Resource Planning (ERP) systems in Portugal—a leading software technology currently used by 43% of European firms—whose adoption requires training workers in transferable skills. Using matched employer–employee data, we show that as the technology diffuses, firms train fewer workers upon adoption, consistent with the model’s free-riding mechanism. The calibrated model implies a 14% present-value loss in net output due to underinvestment in adoption and training. Finally, policy counterfactual analysis shows that training subsidies introduced at the onset of the diffusion process are about 10% more effective than those enacted ten years later.

"The Labor Demand Implications of Brand Capital: Evidence from Trademark Transactions" [Paper]

with Jaime Arellano-Bover, Matteo Paradisi, and Liangjie Wu 

[VisitINPS Scholars Program]

Abstract: Brand capital—an intangible asset that differentiates a firm's products—has grown in recent decades, alongside the rise of intangible investments and the decline in the labor share. Trademarks are legal claims on brand capital and are actively traded across firms, providing a setting to study how reallocating brand capital reshapes firm behavior and aggregate outcomes. Leveraging a novel link of Italian administrative data on trademark ownership, firms' financial statements, and employer–employee records, we exploit firm-to-firm trademark transactions to identify the effects of brand-capital investments. Guided by a model in which firms combine production labor, expansionary labor, and brand capital, we use an event-study design to estimate firm-level effects and quantify their aggregate implications. Acquiring a trademark increases intangible assets by 19%, sales by 8%, and employment by 6%, while leaving weekly earnings unchanged and reducing the firm-level labor share. Employment gains are concentrated among marketing and sales workers, indicating that brand capital is not skill-neutral. Accounting for both buyers and sellers, trademark transactions reallocate brand capital toward larger firms, raising sales and lowering the labor share. Calibrating the model to our estimates, we find that this reallocation generates a one percentage-point decline in the aggregate labor share in the long run.

Publications

"Unbundling the Effects of College on First-Job Search: Returns to Majors, Minors, and Extracurriculars" [Paper]

with Jaime Arellano-Bover, John M. Nunley and R. Alan Seals

Forthcoming, Labour Economics

[Online Appendix] [Journal Link]

Abstract: We analyze the initial job-market matching of new US college graduates with a large-scale audit study conducted during 2016 and 2017, in which 36,880 résumés of college seniors were submitted to online job postings for business-related positions. We simulate the experience of US college students by incorporating variation in curricular and extracurricular activities. Our analysis reveals significant variation in callback rate returns to majors, with Biology and Economics majors receiving the highest rate, particularly in occupations involving high intensity of analytical and interpersonal skills. However, minors in History and Mathematics have precisely estimated zero effects on callback rates. Internship experiences that are social skills-oriented positively influence callbacks, yet this is not the case for analytical internships. Study abroad experiences enhance callback rates, predominantly in high interpersonal skill-intensive occupations. Listing both programming and data analysis skills significantly boosts callback rates. Our study provides a comprehensive characterization of which features of the college experience are more and less valuable during the high-stakes, first-job matching process.

Selected Work in Progress