Publications

This paper examines the gender wage gap through the lens of skills, sorting, and returns. We decompose the gender wage gap into components attributable to differences in skill endowments, sorting across occupations, and differential returns to skills. Our findings reveal that while skill differences explain a portion of the gap, sorting patterns and differential returns play substantial roles in understanding gender wage disparities.

This paper develops a sufficient statistics approach for estimating the role of search frictions in wage dispersion and lifecycle wage growth. We show how the wage dynamics of displaced workers are directly informative of both for a large class of search models. Specifically, the correlation between pre- and post-displacement wages is informative of frictional wage dispersion. Furthermore, the fraction of displaced workers who suffer a wage loss is informative of frictional wage growth and job-to-job mobility, independent of the job-offer distribution and other labor-market parameters. Applying our methodology to US data, we find that search frictions account for less than 20 percent of wage dispersion. In addition, we estimate that between 40 to 80 percent of workers experience no frictional wage growth during an employment spell.

We document gender differences in the booking of business air travel among similar workers within a firm. Women pay consistently less per ticket than men after accounting for a large set of covariates. A large proportion of the lower fares paid are explained by women booking earlier. We find that gender differences increase with age but find no deviation from this trend during the childbearing years. We also find that country-level gender differences in reciprocity are associated with the documented gender differences. The documented gender differences have important monetary implications for firms and suggest an important role for workers' morale.

Leveraging data from Sweden and Chicago, we study the educational pipeline for STEM and economics majors to better understand the determinants of the gender gap, and when these determinants arise. We present three findings. First, females are less likely to select STEM courses in high school, despite equal or better preparation. Second, there are important gender differences in preferences and beliefs, even conditional on ability. Third, early differences in preferences and beliefs explain more of the gaps in high school sorting than other candidate variables. High school sorting then explains a large portion of the gender difference in college majors.

This paper uses networks to study price dispersion in seller-buyer markets where buyers with unit demand interact with multiple, but not all, sellers; and buyers and sellers compete on prices after they meet. The central finding of this paper is that price dispersion is determined by the structure of the network. First, for any given network we characterize the pairwise stable matchings and the prices that support them. Second, we characterize the set of all graphs where price dispersion is precluded. Third, we use a theorem from Frieze (1985) to show that the graphs where price dispersion is precluded arise asymptotically with probability one in random Poisson networks, even as the probability of each individual link goes to zero.

This paper defines and estimates returns to education for earnings, health, and smoking using a dynamic model of educational choice. We synthesize approaches in the structural dynamic discrete choice literature with approaches used in the reduced form treatment effect literature. We offer an empirically robust middle ground between the two approaches to estimate economically interpretable and policy-relevant treatment effects that recognize the dynamic nature of schooling decisions. Ability bias is a major component of observed educational differentials for most outcomes we study. Both cognitive and non-cognitive abilities play important roles in explaining observed differences in earnings, health, and smoking across all education levels.

This paper analyzes the non-market benefits of education and ability. Using a dynamic model of educational choice we estimate returns to education that account for selection bias and sorting on gains. We investigate a range of non-market outcomes including incarceration, mental health, voter participation, trust, and participation in welfare. We find distinct patterns of returns that depend on the levels of schooling and ability. Unlike the monetary benefits of education, the benefits to education for many non-market outcomes are greater for low-ability persons. College graduation decreases welfare use, lowers depression, and raises self-esteem more for less-able individuals.

This paper develops robust models for estimating and interpreting treatment effects arising from both ordered and unordered multi-stage decision problems. Identification is secured through instrumental variables and/or conditional independence (matching) assumptions. We decompose treatment effects into direct effects and continuation values associated with moving to the next stage of a decision problem. Using our framework, we decompose the IV estimator, showing that IV generally does not estimate economically interpretable or policy-relevant parameters in prototypical dynamic discrete choice models, unless policy variables are instruments.

We show that when frictions are present, the Peters and Severinov (2006) (PS) bidding rule is no longer efficient nor a PBE of the PS game. Researchers should be cautious when using the PS bidding rule in markets with frictions like eBay.