Department of Economics
579 Jane Stanford Way
Stanford, CA 94305
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: Stanford University
Information about this author at RePEc
NBER Working Papers and Publications
|September 2019||Granular Search, Market Structure, and Wages|
with Gregor Jarosch, Jan Sebastian Nimczik: w26239
We build a model where firm size is a source of labor market power. The key mechanism is that a granular employer can eliminate its own vacancies from a worker's outside option in the wage bargain. Hence, a granular employer does not compete with itself. We show how wages depend on employment concentration and then use the model to quantify the effects of granular market power. In Austrian micro-data, we find that granular market power depresses wages by about ten percent and can explain 40 percent of the observed decline in the labor share from 1997 to 2015. Mergers decrease competition for workers and reduce wages even at non-merging firms.
|March 2018||Bartik Instruments: What, When, Why, and How|
with Paul Goldsmith-Pinkham, Henry Swift: w24408
The Bartik instrument is formed by interacting local industry shares and national industry growth rates. We show that the typical use of a Bartik instrument assumes a pooled exposure research design, where the shares measure differential exposure to common shocks, and identification is based on exogeneity of the shares. Next, we show how the Bartik instrument weights each of the exposure designs. Finally, we discuss how to assess the plausibility of the research design. We illustrate our results through three applications: estimating the elasticity of labor supply, estimating local labor market effects of Chinese imports, and estimating the elasticity of substitution between immigrants and natives.
|November 2017||Reconsidering the Consequences of Worker Displacements: Firm versus Worker Perspective|
with Aaron B. Flaaen, Matthew D. Shapiro: w24077
Prior literature has established that displaced workers suffer persistent earnings losses by following workers in administrative data after mass layoffs. This literature assumes that these are involuntary separations owing to economic distress. This paper examines this assumption by matching survey data on worker-supplied reasons for separations with administrative data. Workers exhibit substantially different earnings dynamics in mass layoffs depending on the rea- son for separation. Using a new methodology to account for the increased separation rates across all survey responses during a mass layoff, the paper finds earnings loss estimates that are surprisingly close to those using only administrative data.
Published: Aaron Flaaen & Matthew D. Shapiro & Isaac Sorkin, 2019. "Reconsidering the Consequences of Worker Displacements: Firm versus Worker Perspective," American Economic Journal: Macroeconomics, vol 11(2), pages 193-227. citation courtesy of
|October 2017||Ranking Firms Using Revealed Preference|
This paper estimates workers' preferences for firms by studying the structure of employer-to-employer transitions in U.S. administrative data. The paper uses a tool from numerical linear algebra to measure the central tendency of worker flows, which is closely related to the ranking of firms revealed by workers' choices. There is evidence for compensating differential when workers systematically move to lower-paying firms in a way that cannot be accounted for by layoffs or differences in recruiting intensity. The estimates suggest that compensating differentials account for over half of the firm component of the variance of earnings.
Published: Isaac Sorkin, 2018. "Ranking Firms Using Revealed Preference*," The Quarterly Journal of Economics, vol 133(3), pages 1331-1393. citation courtesy of