Research

Abstract: Labor mobility in the United States has fallen steadily since the 1980s. I examine the role of slower labor force growth in this long-run decline, specifically for employer-to-employer (EE) transitions. I develop a general equilibrium model of firm dynamics with on-the-job search along a wage-indexed ladder. In the model, job creation at higher rungs triggers EE moves and costless replacement hiring that cascade down the ladder. When labor force growth slows, firm entry declines, the firm distribution shifts toward slower-growing incumbents, job creation—especially in high-wage positions—falls, workers’ search incentives weaken, and EE declines. Using the calibrated model, I find that the observed slowdown in U.S. labor force growth since the 1980s accounts for more than 60% of the decline in EE, with meaningful implications for wage growth. A decomposition attributes the bulk of the decline (79%) to lower job creation, with smaller contributions from reallocation away from top rungs and an endogenous fall in search effort. Counterfactual exercises on immigration, aging, and female participation link labor supply policies to job creation, mobility, and wages. Halting immigration since the 1980s would have lowered EE transitions by about 20% and further slowed wage growth.

Abstract: We study household expenditure responses to Argentina’s Aguinaldo, a predictable bi-annual bonus that generates large and recurrent income shocks in a high-inflation environment. Using a rich administrative dataset from one of the country’s largest banks, we document three main findings. First, the Aguinaldo triggers sizable but short-lived spending: we estimate a marginal propensity to consume (MPC) of 0.13 for nondurables and 0.03 for durables. Second, MPCs vary systematically with balance sheets: households with low assets or liquidity, or with higher liabilities, consume a larger share of the bonus, consistent with binding liquidity constraints. Third, inflation reshapes responses through two distinct channels: (i) greater relative inflation exposure—measured as deviations of household-specific inflation from the sample average—reduces MPCs, while (ii) higher inflation levels increase MPCs, especially for durables, consistent with intertemporal substitution and hedging motives. Together, these results highlight how inflation interacts with household heterogeneity to shape consumption responses to predictable income shocks.

Abstract: We study how labor mobility shapes regional tax capacity and population sorting within a federal system. To do so, we develop a general equilibrium model that consists of multiple regions that differ in productivity, amenities, and tax policies. Heterogeneous agents differ in labor productivity and make dynamic decisions over locations, housing, and savings. The model is calibrated to match both U.S. aggregate and regional moments, and is consistent with migration behavior across incomes and demographics. Counterfactual experiments reveal that labor mobility substantially limits the long-run revenue potential of regional income taxes: migration responses can fully offset tax increases, leaving total revenues unchanged even as per-capita revenues rise. The model thus provides a quantitative, macroeconomic explanation for why state and local tax systems in the U.S. are less progressive and rely more on property taxation than the federal system.

Abstract: In Paraguay, an employment protection law (EPL) sharply increases firing costs for formal sector workers once they reach 10 years of tenure with an employer. Using administrative data, we document a sharp rise in separation rates immediately before the 10-year mark, followed by a substantial decline afterward. While prior research has examined the labor market effects of similar policies in other settings, we extend the analysis to a context with widespread informality and a contributory pension system. In Paraguay, workers must accumulate at least 15 years of formal sector contributions to qualify for a pension upon retirement, regardless of whether these contributions are continuous or with the same employer. Workers who fail to meet this threshold receive no pension and effectively face a labor income tax without corresponding benefits. We hypothesize that the EPL, by raising early-career separation risks, reduces workers’ ability to accumulate the necessary years of contributions, discouraging formal sector participation and reinforcing reliance on informal employment. This paper lays out a framework to study these dynamics and explores the broader implications of employment protection laws in economies with large informal sectors and contributory pension systems.

Abstract: We study how uncertainty, instrumented by national and local elections, affect individual consumption, debt, and savings using administrative data from the largest bank in Buenos Aires Province, which includes detailed information on monthly transactions, expenditures, credit use, and savings balances. Contrary to most of the existing literature, we initially find that uncertainty is associated with increases in both consumption and debt. However, the bank often releases promotional campaigns during electoral periods—offering discounts and installment payments at fixed interest rates—that may alter household financial behavior. Once we account for the compounded effect of these promotions, the relationship reverses: at the election date we observe lower consumption and reduced borrowing, consistent with a precautionary savings motive. Our results suggest that the apparent expansion in spending around elections is driven not by optimism or political uncertainty per se, but by promotional incentives that temporarily ease liquidity constraints. We further explore heterogeneity in responses by age, income, and other sociodemographic characteristics, highlighting differences in the transmission of political and financial shocks across groups.

Abstract: Since 1994 Argentina has failed to honor its Constitution by not passing a law that fully determines intergovernmental fiscal transfers at a national level. This paper uses an innovative structural framework to estimate, and ultimately propose, a new distribution scheme for such transfers. The structural approach allows for the recovery of deep parameters to accurately estimate the expenditure needs for each province, which can then be used to establish the distribution rates that should be assigned to each jurisdiction.