Related papers: Income Inequality, Cause and Cure
The standard wage Phillips curve aggregates away from which workers reset wages when. I show this aggregation omits a first-order term: the covariance between workers' cost-push exposure and their reset frequency. I introduce two sufficient…
Individuals with similar qualifications and skills may vary in their demeanor, or outward manner: some tend toward self-promotion while others are modest to the point of omitting crucial information. Comparing the self-descriptions of…
The personal income distribution (PID) above the Pareto threshold is studied and modeled. A microeconomic model is proposed to simulate the PID and its evolution below and above the Pareto income threshold. The model balances processes of…
We study a dynamic labor market in which a risk-averse worker with career concerns chooses each period between self-employment, which generates publicly observed binary output, and employment at a firm, which pays a flat wage but keeps…
The potential for machine learning (ML) systems to amplify social inequities and unfairness is receiving increasing popular and academic attention. A surge of recent work has focused on the development of algorithmic tools to assess and…
We examine how career concerns influence the behavior and mobility of financial advisers. Drawing on a uniquely comprehensive matched panel that combines employer-employee data with a longstanding national ranking, our study tests…
A firm can complete the tasks needed to produce output using either machines or workers. Unlike machines, workers have private information about their preferences over tasks. I study how this information asymmetry shapes the mechanism used…
The uniqueness of human labour is at question in times of smart technologies. The 250 years-old discussion on technological unemployment reawakens. Prominently, Frey and Osborne (2017) estimated that half of US employment will be automated…
When information acquisition is costly but flexible, a principal may rationally acquire information that favors one group over another. The former group faces incentives to invest in becoming productive, while the latter is discouraged from…
We present a macro-finance model with innovation and knowledge spillover. Skilled agents engage in R&D activities (establish firms) or work in the knowledge-intensive sector. Unskilled agents work in the traditional sector. Knowledge…
Recent conversations in the algorithmic fairness literature have raised several concerns with standard conceptions of fairness. First, constraining predictive algorithms to satisfy fairness benchmarks may lead to non-optimal outcomes for…
Artificial intelligence (AI) is widely promoted as a promising technological response to healthcare capacity and productivity pressures. Deployment of AI systems carries significant costs including ongoing costs of monitoring and whether…
Recent research has documented a significant rise in the volatility (e.g., expected squared change) of individual incomes in the U.S. since the 1970s. Existing measures of this trend abstract from individual heterogeneity, effectively…
Accurately estimating income Pareto exponents is challenging due to limitations in data availability and the applicability of statistical methods. Using tabulated summaries of incomes from tax authorities and a recent estimation method, we…
The long-term impact of algorithmic decision making is shaped by the dynamics between the deployed decision rule and individuals' response. Focusing on settings where each individual desires a positive classification---including many…
Developing a scientific understanding of cities in a fast urbanizing world is essential for planning sustainable urban systems. Recently, it was shown that income and wealth creation follow increasing returns, scaling superlinearly with…
We use multi-class machine learning classifiers to identify the stocks that outperform or underperform other stocks. The resulting long-short portfolios achieve annual Sharpe ratios of 1.67 (value-weighted) and 3.35 (equal-weighted), with…
The rapid advances in automation technologies, such as artificial intelligence (AI) and robotics, pose an increasing risk of automation for occupations, with a likely significant impact on the labour market. Recent social-economic studies…
We study the role of correlation in matching markets, where multiple decision-makers simultaneously face selection problems from the same pool of candidates. We propose a model in which a candidate's priority scores across different…
Structural change consists of industrial diversification towards more productive, knowledge intensive activities. However, changes in the productive structure bear inherent links with job creation and income distribution. In this paper, we…