Job Market 2025

As climate risks intensify, governments increasingly subsidize insurance against weather shocks. While these subsidies improve financial protection against extreme weather events, they may reduce incentives for long-term adaptation to climate change. In this paper I study how U.S. crop insurance subsidies impact agricultural adaptation. I develop and estimate a dynamic land use model that incorporates beliefs on climate, crop insurance, and government subsidies. I use the model to simulate future paths of production under alternative designs of crop insurance subsidies. Under the current design, funds increasingly flow to high-risk regions. As a result, farmers in riskier areas are more resistant to adaptation, which leads to higher public spending and more volatile output. I show that targeted subsidies—which adjust generosity based on regional climate trends—foster stability of agricultural production by encouraging crop switching patterns adapted to climate risk and increase welfare by 0.6 percentage points relative to the total value of agricultural output. Despite achieving better outcomes in aggregate, targeting penalizes farmers in the southern half of the U.S., which may lead to political resistance. I then consider an alternative in which subsidies are redistributed within states. This policy achieves 15% of the benefits obtainable under unconstrained targeting.

This paper analyzes the link between state-dependent pricing and cost-push inflation in a multi-sector new-Keynesian model with input-output linkages and state-dependent price rigidity. Empirically, I estimate sector-specific price flexibility and the degree of its state dependence by fitting the model to sectoral price and wage series for the US. I find a significant degree of state dependence in most sectors of the US economy. Theoretically, I show that state-dependent pricing can change the size and reverse the sign of cost-push inflation compared to the non-state-dependent pricing model. Based on the empirical estimates of sector-specific state dependence, I evaluate the quantitative importance of state-dependent pricing for the cost-push inflation in the US over time. State dependence substantially affects model-implied cost-push inflation during particular historical episodes- after the Great Recession and during and after the Covid crises.

We study a general equilibrium search model with jobs differing in productivity and unemployment risk. Risk-averse workers, searching off and on the job, self-insure against labor income risk via a non-state-contingent bond. On-the-job search mitigates, undoes, or even reverses the risk-aversion-induced inefficiency of search out of unemployment. The interplay of imperfect insurance and unemployment risk heterogeneity creates a new distortion: employed workers climb the job ladder overcautiously. More generous unemployment insurance can increase job creation by kickstarting the job ladder. Quantitatively, these forces improve the equity-efficiency tradeoff and we find the welfare-maximizing replacement rate to be high, in line with current US policy.

The distinctive traits of early settlers at initial stages of institutional development may be crucial for cultural formation. In 1973, the cultural geographer Wilbur Zelinsky postulated this in his doctrine of “first effective settlement”. There is however little empirical evidence supporting the role of early settlers in shaping culture over the long run. This paper tests this hypothesis by relating early settlers’ culture to within state variation in gender norms in the United States. I capture settlers’ culture using past female labor force participation, women’s suffrage, and financial rights at their place of origin. I document the distinctive characteristics of settlers’ populations and provide suggestive evidence in support of the transmission of gender norms across space and time. My results show that women’s labor supply is higher, in both the short and long run, in U.S. counties that historically hosted a larger settler population originating from places with favorable gender attitudes. My findings shed new light on the importance of the characteristics of immigrants and their place of origin for cultural formation in hosting societies.

Despite experiencing disproportionate poverty, young adults encounter barriers to the implementation of targeted transfer programs due to policymakers’ concerns about potential adverse effects. This paper introduces a comprehensive framework for comparing the local welfare effects of increasing government transfers to young adults versus older individuals. It encompasses various age-dependent behavioral responses to changes in government transfers, including educational and labor supply decisions, as well as interactions with parents-to-child private transfers from parents to children. Leveraging bank transaction data, I find that the social marginal utility of a policy targeting young adults compared to a policy targeting older individuals is 2 to 4 times larger, depending on the tagging of young adults. Accounting for fiscal costs, I find that the welfare effect of increasing government transfers to students from low-income families and young workers is 6 and 2 times higher than that of targeting older individuals, respectively. These findings suggest redistributing resources from older to younger individuals would be highly welfare-enhancing.

How should monetary policy react to aggregate and sectoral disruptions in a world in which consumption baskets and hence inflation rates vary across households? We present a multisector New Keynesian with generalized, non-homothetic preferences and realistic heterogeneity in wealth, income, and consumption of different goods. Despite its richness, the model is computationally tractable. We highlight two novel wedges emerging in the New Keynesian Phillips Curve, which fluctuate with the distribution of consumption expenditures. We find that these wedges can have profound implications for the joint dynamics of inflation and the output gap, and hence policy trade-offs, in particular following sectoral shocks. Moreover, shocks and policy changes are found to have vastly heterogeneous effects on different households. Finally, we find that the optimal policy reaction to negative productivity shock is relatively loose, as compared to standard policy prescriptions, due to distributional concerns. The model is applied to the United Kingdom and disciplined by micro data from the Living Costs and Food survey.

We conduct two survey experiments to examine gender differences in generative AI adoption and potential labor market consequences. First, we document a substantial gender gap among students at a top business school in Norway, with female students, particularly top students, opting out of AI use. Second, a survey of managers shows acquiring AI skills significantly enhances job prospects for top female students currently opting out. Finally, we provide causal evidence on policy tools to close this gap. Our findings show generative AI could widen existing gender gaps in the labor market, but appropriate encouragement and policies can prevent this outcome.

We model electoral competition between two parties when voters can rationally learn about their political positions through flexible information acquisition. Rational voter learning generates polarized and aligned political preferences, even when voters’ true positions are unimodally distributed and independent across policy issues. When parties strategically select their positions, voter and party polarization mutually reinforce each other, and both rise as information costs decline. Because voters learn exclusively about the axis of party disagreement, party positions respond to only one dimension of aggregate shocks to voter preferences. We adapt our model to a market setting with horizontally differentiated goods when consumers learn about their product preferences. Lower information costs increase product differentiation and moreover enable firms to charge higher markups, reducing consumer welfare. These results show how lower information costs can reduce welfare in both political and economic contexts.

The transition to electric vehicles (EVs) shifts the complementary market for passenger transport from oil to electricity. We develop and estimate a joint equilibrium model of the German electricity and automobile markets, emphasizing the timing of EV charging, as electricity generation costs and pollution vary intraday. Our results show that under Germany’s current electricity pricing scheme, EVs create a significant pecuniary externality: electricity expenses rise by €0.66 for every €1 spent charging. Exposing charging to wholesale price variation eliminates the pecuniary externality, makes EVs greener, and increases adoption—a triple dividend.

This paper studies whether polarization offsets the well-documented positive effect of communication on trust. In an experimental setting, we vary the degree of polarization and the participants’ ability to communicate. When participants are polarized enough, communication no longer improves trust and even harms trustworthiness. Using unsupervised machine learning, we document that a substantial fraction of individuals focus their communication on being polarized. This leads to a destructive effect of communication on both trust and trustworthiness.

Social learning is an important source of knowledge diffusion in low-income countries. However, because developing country markets are often highly localized, individuals with social ties may compete more directly for the same economic rents, creating incentives for individuals to “hoard” their knowledge. This paper studies the impact of knowledge hoarding on the diffusion of profitable skills and technologies in rural Burundi, and measures its aggregate and distributional consequences for the village economy. In a field experiment covering 223 villages (labor markets), workers skilled in high-return agricultural technologies are encouraged to share their knowledge with unskilled individuals. We randomize at the local labor market level whether the unskilled worker is a competitor (i.e., someone from the same labor market) and whether the training is about a technology with rivalrous rents (row planting, which commands a wage premium in the labor market). We first establish that knowledge hoarding indeed reduces social learning. When incumbents are matched with an individual from the same labor market, knowledge transmission occurs only 3% of the time but reaches 43% if the unskilled worker is not a competitor. In contrast, transmission of technologies with nonrivalrous rents (e.g., composting) is high regardless of the unskilled worker’s identity. Next, we show that knowledge hoarding creates winners and losers: by hoarding knowledge, incumbents earn 6% more, and the skilled equilibrium wage is 3% higher. Instead, unskilled workers’ earnings and farm output are 7% and 20% lower, respectively. Altogether, knowledge hoarding reduces technology adoption by over 20%, suggesting substantial yield losses. Finally, our results suggest that fear of social sanction is a mechanism that sustains knowledge hoarding among the incumbents, highlighting how social ties can foster social learning but also inhibit it when knowledge diffusion threatens incumbents’ rents.

This paper estimates a political equilibrium model to disentangle demand factors (voters) from supply factors (politicians) in shaping political outcomes, focusing on the recent realignment of blue-collar voters away from left-wing parties. I jointly evaluate the impact of changes in voter preferences and voter demographics (demand side) and party positions and party discipline (supply side) on voters’ partisan realignment in U.S. House elections between 2000 and 2020. To measure candidate ideological positioning, I estimate a multimodal text-and-survey model from campaign websites. To estimate voter preferences, I build a new panel of precinct-level election results (N=1.3 million), which allows me to exploit congressional districts’ border discontinuities for identification. The paper ultimately identifies parties’ stronger polarization on cultural issues compared to economic issues as the main driver of voters’ partisan realignment. In contrast, shifts in voter preferences—particularly the increasing preferences of blue-collar voters for progressive economic policies—have mitigated their defection from the Democratic Party. Absent these demand-side changes, voters’ partisan realignment would have been even more pronounced. Within specific policy domains, the environment emerges as the topic where parties diverge most in economic versus cultural emphasis: Democrats frame it culturally, while Republicans focus on economic aspects. Simulations reveal that a progressive, economically focused environmental policy would gain greater blue-collar voter support than a culturally focused one.