Job Market Paper
- The Role of Social Capital and Intergenerational Occupational Mobility on Labor Market Outcomes
[paper] [Online Appendix] Abstract: This paper examines the causal effect of intergenerational occupational correlation on individuals' labor market outcomes in the U.S. I construct a new data extract by re-weighting and combining Panel Study of Income Dynamics (PSID) and Survey of and Survey of Income and Program Participation (SIPP) in order to correct the selection biases in these two data sets induced by children's endogenous moving behaviors after graduation. I exploit the recent Technological Revolution which causes significant changes in occupational skill compositions and helps to disentangle the comovements of intergenerational occupational choices and innate abilities. I observe around 30% of individual choose the same occupations with their parents as their first jobs. Those people rely more on their parents' social connections in job hunting and the regression discontinuity shows that they are about 5% higher in the percentile ranks of annual labor income on the entry-level jobs but this positive effect fades away slowly along with time.
Other Working Papers -- Applied Econometrics
- 1. Estimation and Inference of Semiparametric Models using Data from Several Sources (with Moshe Buchinsky and Zhipeng Liao) [paper] Abstract: This paper studies the estimation and inference of nonlinear econometric model when the economic variables are contained in different data sets. We construct a minimum distance (MD) estimator of the unknown structural parameter of interest when there are some common conditioning variables in different data sets. The MD estimator is show to be consistent and has asymptotic normal distribution. We provide the specific form of optimal weight for the MD estimation, and show that the optimal weighted MD estimator has the smallest asymptotic variance among all MD estimators. Consistent estimator of the variance-covariance matrix of the MD estimator, and hence inference procedure of the unknown parameter is also provided. The finite sample performances of the MD estimator and the specification test are investigated in simulation studies and an empirical example with real data.
- 2. Consumption Inequality and Partial Insurance: A Revisit with New Estimation Methods (with Moshe Buchinsky and Zhipeng Liao) [paper] Abstract: It is a long-standing problem in the empirical research that the economic variables are contained in different data sets. One well accepted solution to this problem is the imputation method, which serves as a crucial step in the seminal work, Blundell, Pistaferri and Preston (2008), to study the dynamic relationship between consumption and income, with consumption data from CEX and income data from PSID. While in our recent work, Buchinsky, Li and Liao (2016), we proposed a new semiparametric estimator for this scenario. In this paper, we first prove that the imputation method is biased and with the newly available PSID from 1999 which includes both consumption and income data, we show that in the BPP setting, the results based on the imputation method are significantly different from those based on the true data. Furthermore, we investigate the finite sample performance of our new method with this new PSID data and show that our method delivers comparable results with those based on the true data. Finally, we employ our method to revisit the partial insurance hypothesis proposed by BPP using the data from 1980 to 2010 and compare our results with theirs.
Other Working Papers -- Homeless
- 3. The Impact of the Homeless on Neighborhoods (with Moshe Buchinsky, Adriana Lleras-Muney and Yuan Tian)
- 4. The Effects of Low Income Housing Tax Credit Developments on the Homeless Migration Abstract: This paper aims at disentangle the interrelationship of low income housing projects (including homeless shelters etc.) and the concentration of the homeless and low income population by exploiting the qualification change the Low Income Housing Tax Credit (LIHTC), the largest federal project based housing program in the U.S. A change in "qualified census tracts" (QCTs) and "difficult development areas" (DDAs)
which are qualified for extra 30% tax credits generates discontinuity of probability of having new low income housing projects in similar sets of census tracts. We observe in the data that tracts where projects are awarded 30 percent higher tax credits receive approximately six more low income housing units on a base of seven units per tract. These additional new low income developments cause increasing number of low income people in declining areas but no significant changes in the number of the homeless people and in the mean time, reduce incomes in middle-income areas in neighborhoods near the 30th percentile of the income distribution.
Other Working Papers -- Social Network
- 5. Rent Seeking in Social Networks and Hierarchical Gift-exchanging in China (with Yuan Tian)Abstract: This paper aims at examining the nepotism effect of social network and the monetary investment of the social network formation. Using a unique data set on Chinese household in 5 big cities in 2009, we are able to observe detailed information about the role of social network in the job hunting procedure, and also the quality of resulting matching. We find that the more important is the role of social network, the more likely that the employee will be under qualified, or in other words, the larger the misallocation of talents. Also, we observe that households with less network resource spend more on gift-giving, suggesting a potential channel of the persistence of inequality between the high-resource family and low-resource family through social network investment.
Other Working Papers -- Public Economics
- 6. Economic Structure and Energy Consumption in China (with Xinye Zheng) [paper] Abstract: Energy demand forecast is the precondition for analyzing future pattern of energy demand and supply. Methods based on trend extrapolation emphasized too much on the influence of economic growth on energy consumption. In this paper we are trying to make up the inadequacies of the trend extrapolation, and suggest to understand the energy consumption in China more by the economic structure, represented by the industrial input-output network, than by the size of GDP. Our results show that there is a close relationship between the eigenvector centrality of the high energy intensity industries and the energy income elasticity, and energy consumption estimation without the high energy consuming industries, especially electricity, cement and steel, would lead to omitted variable bias. We found that "Rapid economic structure scenario" perfectly predict the energy demand in China from 2014 to 2016. Therefore, in order to achieve sustainable energy development, it is crucial to readjust industrial structure, especially regulating the development of high energy consuming industries.
- 7. Revisiting the Causal Effect of Natural Disasters on Economic Growth — Evidence from a Natural Experiment in China (with Xinye Zheng). Revise and resubmit at China Economics Review (second round). [paper] Abstract: This paper reexamines the net economic impact of natural disasters using a natural experiment in China — the 2008 Wenchuan earthquake. By studying the county-level data within a single province of one country, our method contributes to the controversial literature and solved the endogeneity problem suffered by previous empirical studies which utilized the nation as the unit of analysis. The results from a sample of 181 counties over 2004-2013 indicate that the earthquake promoted economic growth in the short term, but incurred negative economic impact in the medium term. In differentiating how the impacts of the earthquake transmitted into the economy, we found that the losses of both physical and human capital stocks stand out as the most important driving force. Besides the drops in capital and labor productivity were also very significant.