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Work in Progress:

Growth, Skill Premium, and Firm Dynamics: The Role of High-Skill Labor Concentration

I analyze the role of high-skill labor concentration at large firms in Brazil in explaining lower growth rates even though high-skill supply soared and conclusions from the secular stagnation literature do not directly apply. I first present evidence using municipality-level data and a shift-share IV design that there is a non-monotonic, ''inverted-U'' relationship between high-skill labor concentration and growth, and between concentration and the skill premium. I also show how increases in high-skill supply explain the increase in high-skill concentration since 1999. I then propose a model of step-by-step innovation with high-skill labor demand and search that matches empirical observations. Finally, I show through counterfactuals that the three-fold increase in high-skill labor supply seen in Brazil between 1999 and 2017, though making high-skill labor cheaper, did not boost growth since high-skill concentration increased, reducing incentives to innovate. This increase in labor supply can lead to a low-growth steady state, a result that explains growth stagnation in Brazil and possibly other developing countries. The model also offers a micro-foundation to the reduction in innovation diffusion observed in other studies, along with a role for the social planner in boosting innovation catching-up.

Heterogeneous Fiscal Multipliers: New Shift-Share Evidence from the UK

The Fiscal Multiplier of Education Expenditures

joint with Maarten De Ridder, Simona Hannon, and Damjan Pfajfar, Federal Reserve Board

New Goods and Store Reputation: Evidence from Covid-19 

joint with Fraser Clark

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