Available for interviews at
European Job Market for Economists (EEA)
Allied Social Science Associations (ASSA)
Macroeconomics. Market Power. Labor Economics. Search Theory.
Jan Eeckhout (Advisor) [email protected]
"How Market Structure shapes Entrepreneurship and Inequality" (Job Market Paper)
The US economy has experienced a secular increase in markups, declining entrepreneurship rates and increasing inequality since the 1980's. To reconcile with these secular trends, this paper proposes a theory of entrepreneurial choice with strategic competition among heterogeneous agents. Agents' decision to become either an entrepreneur or a worker is directly shaped by their competitors. Quantification of the model between 1988 and 2018 reveals that a less competitive market structure, increasing fixed costs and more dispersed technology can reconcile with these trends. Viewed through the lens of the model, the primary factor underlying these secular changes is the increasing dominance of highly productive entrepreneurs who actively discourage the entry of other productive agents, resulting in fewer entrepreneurs, higher markups and rising income inequality.
Publications / Forthcoming
“Market Power and Wage Inequality" (with J. Eeckhout, A. Patel and L. Warren)
Forthcoming at Econometrica
We propose a theory of how market power affects wage inequality. We ask how goods and labor market power jointly determine the level of wages, the Skill Premium, and wage inequality. We then use detailed microdata from the US Census Bureau between 1997 and 2016 to estimate the parameters of labor supply, technology and the market structure. We find that a less competitive market structure lowers the average wage of high-skilled workers by 11.3%, and of low-skilled workers by 12.2%, contributes 8.1% to the rise in the Skill Premium and accounts for 54.8% of the increase in between-establishment wage variance.
"What drives Wage Stagnation: Monopsony or Monopoly? (with J. Eeckhout, A. Patel and L. Warren)
Journal of the European Economic Association, 20 (6), 2022, 2181–2225
Wages for the vast majority of workers have stagnated since the 1980s while, productivity has grown. We investigate two coexisting explanations based on rising market power: (1) monopsony, where dominant firms exploit the limited mobility of their own workers to pay lower wages; and (2) monopoly, where dominant firms charge too high prices for what they sell, which lowers production and the demand for labor, and hence equilibrium wages economy-wide. Using establishment data from the US Census Bureau between 1997 and 2016, we find evidence of both monopoly and monopsony, where the former is rising over this period and the latter is stable. Both contribute to the decoupling of productivity and wage growth, with monopoly being the primary determinant: In 2016, monopoly accounts for 75% of wage stagnation, monopsony for 25%.