Working Papers & Works in Progress
Working Papers & Works in Progress
Job Transformation, Specialization, and the Labor Market Effects of AI (with L. Mann) -- NEW!
[CESifo WP] [Minneapolis Fed OIGI WP] [Slides | SITE 2025]
Upcoming presentations: Columbia U, Minneapolis Fed, BSE Summer Forum, SED, SITE, Boston U, Boston Macro-AI Workshop, Harvard U, Philly Junior Macro Workshop, Fed SF Micro-Macro Conference, Fed St. Louis Macro-Labor Conference, HEC Paris
Who will gain and who will lose as AI automates tasks? While much of the discourse focuses on job displacement, we show that job transformation—a shift in the task content of jobs—-creates large and heterogeneous earnings effects. We develop a quantitative, task-based model where occupations bundle multiple tasks and workers with heterogeneous portfolios of task-specific skills select into occupations by comparative advantage. Automation shifts the relative importance of tasks within each occupation, inducing wage effects that we characterize analytically. To quantify these effects, we measure the task content of jobs using natural language processing and estimate the distribution of task-specific skills. We construct projections of automation effects due to large language models (LLMs), exploiting a mapping between model tasks and automation exposure measures. Within highly exposed occupations, like office and administrative roles, workers specialized in information-processing tasks leave and suffer wage losses. By contrast, those specialized in customer-facing and coordination tasks stay and experience wage gains as work rebalances toward their strengths. Our findings challenge the common assumption that automation exposure equates to wage losses; and highlight that AI, through job transformation, may be disruptive even absent job displacement.
Superstar Teams -- New version! Submitted.
[Latest version (v2.1), incl. Online Appendix | June 2025] [Supplemental Appendix] [Janeway Institute WP 2235 | June 2025]
Econ JM Best Paper Award, European Economic Association/Unicredit Foundation
Companion note "Human Capital at Work: Five Facts about the Role of Skills for Firm Productivity, Growth, and Wage Inequality" (with C. Criscuolo & P. Gal) [OECD WP]
Firms as Foragers: The Origins of Breakthrough Innovations (with V. Carvalho)
Supported by a ~£38,000 grant from the Keynes Fund.
Workers, Capitalists, and the Government: Fiscal Policy and Income (Re)Distribution, with C. Cantore
Journal of Monetary Economics, Vol. 119, pp. 58-74, 2021 [Published version - open access], [Online appendix], [Replication files], [Slides]
A capitalist-worker two-agent New Keynesian model to study the interaction of fiscal policy and household heterogeneity in a tractable environment. The model is consistent with micro data on empirical intertemporal marginal propensities to consume and it avoids implausible profit income effects on labor supply. Relative to the traditional two-agent model, these features imply, respectively, a lower sensitivity of consumption to the composition of public financing; and smaller fiscal multipliers alongside pronounced redistributive effects.
Volatile Hiring: Uncertainty in Search and Matching Models, with W. Den Haan and P. Rendahl
Journal of Monetary Economics, Vol. 123, pp. 1-18, 2021 [Published version - open access], [Online appendix ], [Replication files], [Short slides | April 2021], [VoxEU column | Sep 2021]
We study the hypothesis that heightened uncertainty leads to higher unemployment because firms prefer to adopt a "wait-and-see" approach to posting vacancies. Contrary to common belief, option-value considerations play no role in the standard search-and matching model with free entry. Constructively, we show that when the mass of entrepreneurs is finite and there is heterogeneity in firm-specific productivity, a rise in perceived uncertainty robustly increases the option value of waiting and reduces job creation.
The Risk-Premium Channel of Uncertainty: Implications for Unemployment and Inflation, with H. Lee and P. Rendahl
Review of Economic Dynamics, Vol. 51, pp. 117-137, 2023 [Online Appendix], [Replication files], [Slides for SITE | Sep 2022], [Cambridge INET Special Feature]
This paper argues that a risk-premium mechanism plays an important tole in the transmission of macroeconomic uncertainty shocks to the labor market. In a quantitative model, this channel accounts for a significant fraction of the uncertainty-induced rise in unemployment, and it implies that uncertainty shocks are less deflationary than regular demand shocks, nor can they be fully neutralized by monetary policy.