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"Kramer vs. Kramer: On the Importance of Children and Divorce Filings for Understanding Divorce Rates in the U.S."
R&R American Economic Journal: Macroeconomics
PDF version [pdf]
U.S. divorce rates followed a hump shape from 1960 to 2015 while wife filed divorces fell from 70 to 56 percent. I use filing records to identify marital quality by gender in a model of endogenous marriage and unilateral divorce. Disciplining the model to 1970 filing moments, the hump and decline in wife filings emerge as out of sample predictions. Rising female wages drive two effects: a direct effect raising women’s divorce value in the first half and selection into better marriages in the second. Paternal custody explains wife filing trends. Ignoring filing moments fails to generate the hump.
"Stage-Based Identification of Policy Effects" with Christopher Busch, Alexander Ludwig and Raül Santaeulàlia-Llopis
PDF version [pdf].
Online Appendix [pdf].
We develop a method that identifies the effects of nationwide policy, i.e., policy implemented across all regions at the same time. The core idea is to track outcome paths in terms of stages rather than time, where a stage of a regional outcome at time t is its location on the support of a reference path. The method proceeds in two steps. First, a normalization maps the time paths of regional outcomes onto the reference path—using only pre-policy data. This uncovers cross-regional heterogeneity of the stage at which policy is implemented. Second, this stage variation identifies policy effects inside a window of stages where a stage-leading region provides the no-policy counterfactual path for non-leading regions that are subject to policy inside that window. We assess our method’s performance with Monte-Carlo experiments, illustrate it with empirical applications, and show that it captures heterogeneous policy effects across stages.
"A Quantitative Theory of the HIV Epidemic:Education, Risky Sex and Asymmetric Learning" with Daniela Iorio and Raül Santàeulalia-Llopis
PDF version [pdf]
A post about this article appeared in the Barcelona SE Focus blog.
We explore learning about HIV infection odds from risky sex as a new mechanism explaining the Sub-Saharan Africa HIV epidemic. Our novel empirical evidence reveals a U-shaped relationship between education and being HIV positive across the epidemic, which prompts the idea of asymmetric learning: more educated individuals potentially learn faster and update their (latent) beliefs about infection odds more accurately than less educated individuals, inducing earlier sexual behavioral change among the more educated. Our non-stationary model incorporates three HIV epidemic stages, chronologically: a myopic stage where agents are unaware of how risky sex causes infections, a learning stage where agents update beliefs on infection odds, and an ART stage reflecting treatment introduction. Anchored to the micro evidence— the U-shaped HIV-education gradient—we find that our learning mechanism is powerful: a 5-year earlier learning reduces new AIDS deaths by almost 45%, and a 10-year earlier learning results in a 60% drop. Removing learning all together reveals that under full information, i.e life expectancy asymmetries present only through education, play a much smaller role than learning.
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"Compensation, Talent Allocation, and Firm Dynamics: Theory and Evidence from Egg Freezing Packages" with Fane Groes, Mariya Il'ina ,Raul Santaeulàlia-Llopis
We study how compensation packages shape firm dynamics by attracting and retaining high talent workers. We use egg freezing (EF) benefits as a key compensation innovation adopted heterogeneously across firms. EF alters internal wage distributions, labor force attachment, the composition of talent within firms, and other key demographic margins such as age at first birth (AFB). We develop a model in which firms optimally choose the degree of EF cost subsidization to compete for high human capital women whose career family trade off is relaxed by this technology. The model predicts that firms with high capital-skill complementarity gain disproportionately from EF adoption, attracting talent at the top of the human capital distribution while crowding out lower skill workers. We match employer employee data to document how EF adoption reshapes within firm wage distributions, worker selection and fertility outcomes. Our findings speak to a broader question in corporate finance: how non-standard compensation packages function as strategic instruments for talent allocation, with measurable consequences for firm value and workforce composition.
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"The Ozempic Economy: Sugar Addiction, Labor Market and Optimal Subsidies" with Fane Groes, Veda Narasimhan, Raul Santaeulàlia-Llopis and Tetyana Surovtseva
A post about this article appeared in Nada es Gratis blog.
Using linked Danish administrative data on medical prescriptions and firm records, we examine the effects of weight-loss pharmacotherapy — such as Ozempic and Mounjaro — on employment, hours, and labor earnings. Our contribution is twofold. First, we document empirically the significant and robust effects of weight loss drugs on labor market outcomes using a battery of alternative identification strategies in diabetic and non-diabetic population. Second, we build a quantitative macroeconomic model with endogenous sugar consumption and pharmacotherapy uptake to assess optimal public subsidies and alternative regulatory frameworks such governing pharmaceutical pricing.
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"Employment and Human Capital Investment Responses to Payroll Tax Reductions" with Pranav Mimani, Etienne Wasmer and Raül Santaeulàlia-Llopis
To counter the negative effects on employment for low-skilled workers, some countries have developed policies that reduce social contributions for low wage workers. We examine the effects of such policies on employment, the incentives to invest in employee training, and salary progression. We propose a model featuring dual heterogeneity of workers and firms, as outlined by Shimer and Smith (2000), to which we add specific human capital accumulation. We calibrate the model on France, where the policy of tax relief, initiated in 1993, has reached a record of 80 billion euros (2.5% of GDP).
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"Double Selection in Causal Inference" with Christopher Busch, Raül Santaeulàlia-Llopis and Tanya Surovtseva
A long-standing question in research using natural experiments for causal inference is the appropriate functional form of the outcome variable, often involving a choice between level or logarithmic formulations. This choice is crucial because the assumption of a single constant selection bias (CSB)—or, equivalently, a parallel time trend—for identifying the policy effect cannot hold simultaneously in both formulations. To address this issue, we propose a double-selection (DS) approach, in which units face two types of selection: a level shifter (single CSB in levels) and a proportional shifter (single CSB in logs). We show unique identification of the DS and, consequently, the causal effects. We propose a DS estimator in levels and conduct inference.