Job Market Paper

Information Asymmetry in Job Search (with Kai Zen)

Abstract: Standard models of rational job search assume agents know the distribution of offered wages when deciding which jobs to accept. We test if incorrect beliefs about wages affect real-world job search behavior in a field experiment with 1100 senior-year undergraduate students in the graduating Class of 2023 at the University of California, Berkeley. Partnering with the Career Center, we present personalized information graphics on school-and-major-specific salary distributions to students in the treatment group. We first document novel evidence that even prior to labor market entry, errors exist in wage beliefs – some students overestimate the available distribution, while others underestimate the available distribution. Post-treatment, we find that students treated with correct information update their beliefs towards the truth, and this is reflected in changes in reservation wages. At the end of the school year, we find that in comparison to the control group, students who increased their reservation wage after treatment had higher total and base salaries conditional on employment, a result significant at the 5\% level. However, these same students had a lower, but imprecisely estimated likelihood of being employed by June post-graduation. An opposite but symmetric effect occurred for students who decreased their reservation wage. Our results are consistent with job search models where workers with more optimistic expectations wait longer to accept a job, but accept higher wages. Our paper suggests an economically important role for subjective beliefs about labor market conditions and shows the effectiveness of a light-touch information intervention on employment and earnings for first-time job seekers.

Publications

Minority Turnout and Representation under Cumulative Voting: An Experiment (with Alessandra Casella and Jeffrey Guo)
Games and Economic Behavior 141: 133-155, September 2023, https://doi.org/10.1016/j.geb.2023.05.012.

Abstract: Under majoritarian election systems, securing the participation and representation of minorities remains an open problem, made salient in the US by its history of voter suppression. One remedy recommended by the courts is the adoption of Cumulative Voting (CV) in multi-member districts: each voter has as many votes as open positions but can cumulate votes on as few candidates as desired. Historical experiences are promising but also reflect episodes of minority activism. We present the results of a controlled lab experiment that isolates the role of the voting rule from other confounds. Although each voter is treated equally, theory predicts that CV should increase the minority’s turnout relative to the majority and the minority’s share of seats won. Our experimental results strongly support both theoretical predictions.

Working Papers 

“Layoff Shocks and Job Mobility: A Study on Labor and Networks”

Abstract: Traditional labor search models study worker productivity and wages, but do not account for how individual networks affect hiring. Recent literature suggests that networks play a larger role than previously expected; in particular, by cushioning negative labor shocks. The rationale is that having a larger network expands an individual worker’s information set about outside options, leading to higher bargaining power and subsequent job mobility. However, prior literature does not account for why worker separations may be endogenous; more skilled workers may be more mobile. To address this, I combine LinkedIn data with mass layoffs data from the Worker Adjustment and Retraining Notification (WARN) Act. Using individuals' indirect links as an instrument for their networks in conjunction with mass layoffs from WARN as exogenous shocks, I test the impact of network size on future employment in the biotechnology sector, which has frequent mass layoffs due to clinical trial failure on the margin. In doing so, I seek to answer the following question: Do larger or higher-quality networks cushion against negative employment shocks? I find that connections help workers find jobs more quickly. Across a variety of specifications, each additional connection leads to approximately 10 fewer days of unemployment; for one standard deviation, this is 4.8 less months of unemployment.

“Measuring the Returns to Diversity: State Variations in Affirmative Action”

Abstract: Measuring the returns to diversity is traditionally difficult due to student selection into colleges. To account for selection, I use the exogenous measure of state-year variations in affirmative action bans as an instrument for changing cohort racial composition. This allows me to employ a two-stage difference-in-differences strategy to study the impact of diversity on post-school labor market outcomes. I find that given a 1 percentage point increase in the share of white enrollment (a decrease in diversity), instrumented via the affirmative action ban, mean cohort earnings increase by $3000, while mean cohort employment decreases by 1 percentage point. The results persist across multiple years after graduation, and are robust across a variety of specifications and controls. My contribution to the literature is twofold. First, I examine post-school labor market outcomes such as earnings and employment, allowing me to analyze the long-term effects of increasing or decreasing diversity in student cohorts. Second, I build upon previous papers on the affirmative action ban by accounting for implementation of the percent plan, a policy which de facto partially reverses the enrollment effects of affirmative action bans. I show that this policy confounds enrollment results from previous papers.

“Postsecondary Supply and Unemployment Dynamics” (with Rajashri Chakrabarti, Michael Lovenheim, and William Nober)